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Gas-Out Finances: The Cost of Turning the Gas Back On

Carol J. Ott in Legal/Financial on October 12, 2015

New York City

Red Tagged Part 3
Oct. 12, 2015

Basically, if your building's gas is shut off, be ready to get out a big checkbook. "Every job is different," says Philip Kraus, president of Fred Smith Plumbing. "You might have an idea of why they shut the gas off, but you don't know the condition of the rest of the piping." And the cost of finding out and then fixing it can decimate your bank account. In a very large building, you could spend close to a million dollars to get the gas turned back on.

In Mitch Firestone's six-story condo, he estimates that the fix could cost up to a quarter of a million dollars.

While you would like to be able to turn to your building's insurance policy for relief, you're not likely to find much help there. The reason is "wear and tear." A total gas shutdown is usually triggered by one event. Fixing what caused that event might be covered by insurance, particularly if it was a result of someone's misstep.

But often the events occur because of age — pipes, risers, and lines simply wear out. "Most policies, ever since Hurricane Sandy, put in an exclusion for wear and tear," says attorney Lisa Smith, a partner at Smith, Gambrell & Russell. For example, the little pinprick holes that often turn up during pressure testing are caused by age.

In Firestone's condo, despite the gas shut-off being the fault of the contractor, the work required to have the gas turned back on was much more than fixing the damage he caused. "Certain things that break might be two subsystems down the line," Firestone says, adding: "Call it collateral damage. Insurance doesn't cover it."

His advice? "Do not labor under the fantasy that litigation and insurance are going to make you whole." Nevertheless, say experts, it's important to report the event to your insurance company.

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