WEST PALM BEACH, Fla. — Every day, WPTV is working to answer one of your biggest concerns and financial headaches: the rising cost of insurance.
WATCH BELOW: 'Consumers have very little power to negotiate,' Insurance attorney Aaron Bass tells WPTV's Kate Hussey
Now, a WPTV investigation has uncovered another layer of the crisis — coverage is quietly shrinking, potentially leaving homeowners and business owners on the hook for tens of thousands of dollars in damage.
In our previous investigation, WPTV introduced viewers to “4 You Cycling,” a West Palm Beach fitness studio that flooded after a construction accident. The owner filed a claim but was denied, because of a policy exclusion that could be hiding in your own insurance coverage.
“I cried. I put a lot of time and sweat and tears and life savings into this place, and to see it like this, it sucks…It’s really hard," owner Justin Pomasl told WPTV.
Cell phone footage shows water pouring into his studio on May 1, soaking bikes, frying electronics, and drenching Pomasl's dream. He now faces $360,000 in damage.
“Chaos," said Pomasl, standing in the wreckage.
He thought insurance would save him, but insurance denied his claim.
WPTV Investigates
'I CRIED': Fitness studio faces closure after insurance claim denial
The denial letter from the company confirms a contractor working on the unit above Pomasl's studio struck a sprinkler line, causing the leak — but his insurance company said “sprinkler leakage” is not covered.
“I don’t know what my first thought was. I was just sad. To know everything I put into it… gone," said Pomasl.
Insurance attorney Aaron Bass says it’s not surprising.
“Consumers have very little power to negotiate. And that’s a problem," said Bass. "There’s a ton of these things that people do not know about.”
Bass says most Floridians carry an “all-risk” policy, which, in theory, should cover your building for any damages. Yet in reality, that's not the case.
“As a consumer, you have little choice about what's in there," said Bass. “How these policies are written, they're very legalistic, so sometimes it's really, really difficult for people to figure it out.”
Aside from sprinkler damage, common insurance policy exclusions include:
- Damage from faulty or negligent construction
- Interior water damage without visible roof damage
- Mold and wet rot
- Sewer and drain backups
- Flooding, which is never covered under standard homeowner’s insurance
“We've talked about this coverage crisis, about rising premiums, that's half the story. The other part of the story is the premiums are going up for less coverage, for more exclusions," said Bass.
State data from the Florida Office of Insurance Regulation backs that up. Of the 111,150 Hurricane Milton claims that were closed without payment, about a third were denied due to lack of coverage. That includes 5,000 claims with no flood insurance — and more than 27,000 denied for other exclusions.
“It’s a mess," said Bass.
A study from the Environmental Defense Fund found that as natural disasters worsen, some companies are even excluding wind and fire coverage. Others are raising deductibles or capping payouts.
WATCH RELATED COVERAGE BELOW: 'The longer we're closed, the more the bills pile up,' Justin Pomasl tells WPTV's Kate Hussey
This year, Florida also approved a clause that allows insurance companies to limit matching repairs — like flooring — to just 1% of your total coverage.
“It's a rock and a hard place, and homeowners and property owners and business owners are getting caught in the middle of that rock," said Bass.
"Let's say you find an exclusion in your policy you're not comfortable with. What options do you have?" asked Investigative Reporter Kate Hussey.
"Not a lot, and that’s the problem," replied Bass. "What consumers can do is they could call their state representatives, and they can call their state senators, and they can complain about this.”
WPTV reached out to Florida’s Chief Financial Officer about the issue.
In the meantime, Bass recommends reading your policy’s fine print, choosing coverage with as few exclusions as possible, and hiring an attorney if you need help understanding what’s in — and out — of your plan.
As for Pomasl, he’s holding out hope that the contractor’s insurance will step in and cover the damage caused by the sprinkler leak.
