Who pays for this water damage?

I own a carpet and tile installation business. I keep all of my inventory in a warehouse. Two weeks ago, the warehouse next to mine caught on fire due to a heat lamp that was kept on over night for a reptile. My warehouse has sustained water and smoke damage. Luckily no fire damage. However, thousands of dollars in inventory is lost. 

It is now two weeks later and no one, even my own insurance company, is willing to help me.

My insurance company instructed me to contact the neighbors' insurance company. My neighbors' insurance company tells me that they are not liable for the damage in my warehouse. My insurance company then refers me to the owners of the warehouse.  They tell me that they are not liable for the damage in my warehouse.

Who's is responsible in this case, based on the facts above? If I file a claim with my insurance company, will my rates go up?

We are unable to work in the office due to the smoke damage.  It triggers my asthma and my husband is oxygen dependent.

The water logged carpet is beginning to rot and mold.  We need to start cleaning up and fast! I am losing business and need help.  What can we do?

Answer:

This is an insurance horror story if ever there was one.

Based on a quick read of the facts as you state them, I would suggest that you will have to sue your neighbours for the damage, and their business liability insurance will cover the loss (if they have it). Otherwise, your neighbours will have to pay for your damages. But, it appears to me on first read that your damage is a result of their negligence, so they are responsible and payment will have to come from either them or their insurer.

Get a lawyer right away. I would think it's your only option, given the position taken by your insurer and your neighbours' insurer.

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