Mitigation is when the party suffering a loss in an insurance claim takes reasonable actions to prevent additional losses. As a homeowner, you have an obligation to mitigate losses after an event as a condition of your coverage. If you’re a homeowner, it’s important to understand the meaning of mitigation as it applies to your home insurance policy, your responsibilities in the mitigation process, and what happens if you don’t fulfill your duty to mitigate.
What Is Mitigation in Insurance?
Mitigation of damages is a legal doctrine that prevents the party with a loss from being compensated for damages they could have avoided through reasonable efforts. This basic principle applies to many types of insurance claims, and policyholders must comply with the duty to mitigate damages to get the maximum claim reimbursement they’re entitled to.
The duty to mitigate damages means it’s your responsibility to take common-sense steps to minimize additional losses after the initial loss. This duty may be written explicitly in your policy documents or implied by the general law of contracts. What your duty to mitigate looks like depends on the nature of the loss you’ve suffered and the specifics of your policy.
How Mitigation Works in Home Insurance
In general, mitigation doesn’t require extraordinary measures on your part—just logical actions to stop secondary damages after an event. These don’t include actions that endanger you or others, or that go beyond your current abilities or skills. Prudent steps to prevent additional losses include:
- Covering a broken window with a plastic tarp to keep rain from coming in.
- Getting rid of fallen trees and branches on your roof or property.
- Putting out a kitchen fire or immediately calling the fire department.
- Drying out wet or damp areas in your home to stop mold growth after a pipe bursts.
Depending on the amount of damage or the difficulty in preventing further losses, it may be necessary to hire experts to help with your mitigation efforts. Plumbers, contractors, restoration companies, and other professionals can provide expert assistance.
How To Comply With Your Duty To Mitigate
The first step is to assess and document the property damage through photos and videos, then report all damages to your insurer as soon as practically possible. As your claims process progresses, keep a phone log of calls to professionals or service providers. If there are numerous other claims in your area, it may take time for the insurance company to send an adjuster to your home.
Regardless, you must take reasonable and timely measures to reduce secondary losses while waiting for the adjuster. If you’re not sure what damage mitigation looks like for your situation, your claims representative can offer ideas and suggestions.
An Example of Loss Mitigation After Water Damage
Say a burst pipe floods your home. After documenting the property damage and filing a claim, you may take some of these actions to mitigate further losses:
- Shutting off the water for the line that burst.
- Removing wet items like carpets, clothing, and furniture from your home.
- Using a portable wet vacuum on small areas to extract water from and dehumidify the space.
- Contacting a water-damage restoration service to do the same for larger areas or those with extensive damage.
- Making temporary repairs like placing a tarp or bucket under any remaining leaks.
Only do permanent repairs after the adjuster inspects the resulting damages and approves any bids you’ve received.
If you’re worried about the financial burden of sensible mitigation, know that many home insurance policies reimburse reasonable mitigation tasks. That said, it’s essential to review and understand your policy documents for details about what efforts your insurance covers.
Consequences if You Don’t Mitigate Risk
Failure to do your part in mitigating risk could result in not being fully compensated for your property loss, depending on your policy terms and the jurisdiction the claim falls in. For example, the insurer may not cover additional losses that occur if you fail to mitigate the primary loss.
In a worst-case scenario, neglecting to mitigate the risk of further damages could completely void coverage for your claim because your insurer could argue that determining the original damage is too speculative.
In both situations, the common denominator is that you’d have to pay more out of pocket than you would have if you took precautions to safeguard, salvage, and protect your property after the primary loss.
- Mitigation is doing what’s reasonable and within your abilities to prevent further loss after an event calls for filing a home insurance claim.
- As a homeowner, it’s your duty to mitigate the risk of further losses. If you don’t, your insurer may not cover any secondary losses—or even the original loss.
- It’s not uncommon for insurance policies to include reimbursement language for reasonable mitigation measures. Check your insurance policy to see what it covers.