Fountain man finds holes in insurance coverage after hail, asbestos damage

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DENVER -- Hail damage is bad enough, but if you've got home insurance, you're covered, right? A Fountain, Colorado man reached out to Contact7 when he found out that's not the case if there is asbestos involved.

"It all started on June the 13th,” said Miguel Paniagua about the night softball-sized hail came down along with his ceiling in the City of Fountain. "You can see where the hail came through the roof."

The holes in his roof, soon revealed holes in his insurance coverage that caught him by surprise.

"They did a test and they came back and said that, yes, it’s positive for asbestos," said Paniagua. "They said the insurance company should be paying for the restoration of the home, they just weren’t going to pay for the abatement of the home."

He said the fine print in his policy excludes a long list of pollutants, such as asbestos. Paniagua saw that his agent made a mistake claiming his home was built in 1994 instead of 1974, and he believed that is why he wasn't offered asbestos coverage.

So we reached out to American Family Insurance. A company spokeswoman said they have made significant payments for hail damage repairs and paid for two months of hotels. But the bottom line is that asbestos abatement is not covered, no matter when the home was built. 

The company started asbestos exclusions in Colorado in 2015, and Paniagua bought his policy in 2017.

So, Paniagua was looking at an estimated $39,000 in repairs.  

"I don’t want anyone else to go through what we’re going through," he said. "Any family goes through something like this thinking you’re insured, thinking things will be OK and then finding out they’re not."

Asbestos abatement is an evolving issue for many insurance companies that are concerned about cost and liability.

The Rocky Mountain Insurance Association states: "Most homeowners insurance policies exclude damage resulting from pollutants or contaminants, and since asbestos falls under that category as a toxic material, there is a good chance is it excluded under the terms of your policy."

Bottom line for homeowners: Check with your insurance company to find out if your policy covers any costs associated with removing or abating asbestos.

Meanwhile, Paniagua has hired someone to do a partial abatement and is doing some of the work himself. He's still worried about long-term health effects, but said his family needs a place to live.

"Full abatement would have consisted of removing all walls, leaving the home in studs and throwing away everything we owned," he said. "And we could not afford that." 

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