CT Watchdog: The price of peace of mind

Insurance is supposed to buy you peace of mind. But that is not what happened for Eugenia Zayas of Hartford, an X-ray technician and the single mother of three, who has been unable to collect from storm damage and from a major fire at her home.

Her tale starts in the summer of 2011 when heavy rainstorms damaged the roof of her home. When she went to her insurer, State Farm, she was denied coverage because the insurer said the damage from the rains was not severe enough.

Her policy, according to the lawsuit she filed, had a 1 percent deductible. Since her home was insured for $210,400, the damage from the rains had to exceed $2,104 before any coverage kicked in.

Three roofing contractors told her that her roof was in such bad condition that it had to be replaced. Zayas, in a telephone interview, said she went back to State Farm with the information from the contractors, but the insurance company insisted that the rain caused less damage than her deductible.

Using her credit cards, savings and retirement funds, Zayas replaced her roof at a cost of about $7,000.

To help rebuild her finances, she downsized to an apartment she was able to rent for $750 a month and she rented her house out to a friend who needed temporary housing for eight months at $1,750 a month.

By this move, says the suit she filed in Hartford Superior Court, she was able to save enough money to help pay for the repairs. She also used the deposit to help pay for the roof.

On Jan. 17, tragedy struck. A fire broke out in her basement as a bag near the water heater caught fire. The fire caused $190,000 in damages, says the suit, and her home is unlivable.

State Farm sent a contractor to her home to board it up but three weeks later told her it would not cover the fire, even though the fire department's records show it was accidental.

Why? According to the suit, State Farm said it did not have to pay because Zayas was no longer residing in her home. She should have had renter's insurance instead of a homeowner's policy, Zayas says she was told.

"According to State Farm's interpretation of its policy, any homeowner who owns or rents a vacation home, second property, or even stays in a hotel is subject to losing their homeowner's coverage if a loss happens when they are away," says the suit in which she is represented by Theresa A. Guertin of Hamden.

Even though she moved to a temporary apartment, the suit maintains that Zayas legal residency was her home.

"Despite her temporary relocation, Ms. Zayas maintained the Zayas Home as her primary residence; she did not change her legal address and continued to receive her mail at the Zayas Home," says the suit.

Arlene J. Lester, State Farm spokeswoman, declined to comment because the suit is in litigation.

Attorneys for State Farm have filed a motion to have most of the suit dismissed on the grounds it does not provide specific enough allegations that State Farm breached the "covenant of good faith and fair dealing in terms of wanton and malicious injury with dishonest purpose and moral obliquity. Instead she merely alleges, in a conclusory manner, that State Farm acted in bad faith when they denied the plaintiff's claim and failed to investigate the claim in a timely manner."

Zayas says she doesn't know what she will do if she loses her lawsuit.

"I am working around the clock to pay the mortgage and vacant home insurance," she said, adding that she is now insured by another company as State Farm dropped her as in April.

"I think they are unfair," she said. "I am not asking for anything more than to fix my home. This is all I have and this is what I bought for my kids. I just hope for the best and pray to God it works out."

You can reach The Watchdog at george@ctwatchdog.com and www.ctwatchdog.com.

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