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Village upholds denial of insurance claim for water main break

Board vows to put pressure on insurance company

May 21, 2013

Germantown — The Germantown Village Board on Monday decided to put pressure on their insurance company to reconsider paying a claim involving a water main break on Bridle Path Lane that caused damage to a home.

The issue has been discussed at three meetings in both open and closed sessions. Ultimately, in a 5-2 vote with Trustees Melvin Ewert and Al Vanderheiden opposed, the Village Board upheld the decision of the insurance company to deny the claim. The motion to uphold that decision was amended to include a provision that says village officials will send a letter to the insurance company asking them to review the details of the claim, with the hopes that it is paid in the end.

Germantown residents Ledale and Donna Peter filed a claim with the village, seeking coverage for water damages after a main broke on Bridle Path, pumping water into their home and damaging the basement and home's infrastructure.

The Peters and a few neighbors on Bridle Path said it took four hours to turn the water off and caused between $15,000 and $20,000 in damage. The Peters' insurance company does not cover that type of damage. They then filed a claim with Statewide Services, the village's insurance company, which also denied it.

Proof of negligence needed

In order for the village to be held liable, it would have to be proven that the village was negligent. According to letters sent from Statewide to the village and the Peters, the insurance company's investigation found that the village was not negligent.

On Monday, the Village Board had three options: uphold the insurance company's decision, pay the claim or do nothing. Since they decided to uphold the decision, a letter of disallowance will be sent to the Peters. This starts a six month clock for the residents to file a formal claim, meaning a lawsuit with the insurance company. During this time, the letter from officials will be sent to Statewide asking them to review the facts of the claim.

Village President Dean Wolter was opposed to doing nothing. He said doing nothing only extends the timeline, by statute of limitation, to three years for the company to review the claim and resolve the issue as opposed to starting a six month timeline that starts when the denial is upheld.

"I'd rather have it resolved," he said.

More pressure if not upheld

Vanderheiden said upholding the claim would not send a strong message to the insurance company, but choosing to not uphold it would. In six months, he said, the insurance company can still say they will not pay the claim.

"We need to step up and do something for these people," Vanderheiden said.

Resident Wyatt Wiehr said he had a similar situation a few years ago where the insurance company denied the claim. He said by remaining persistent and getting the Village Board at the time to put pressure on the insurance company the claim was ultimately paid. The village has since changed insurance companies.

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