Negotiation with insurance after big water leak ... help me!

[Anonymous]

What does that mean underinsured or over insured?

If you are argumentative or aggressive with an adjuster, does that affect your future coverage?

If we hire an independent adjuster, would they drop us?

[Anonymous]

Anonymous wrote:Hi! I am the OP. I know the insurance company won’t pay for a new house. The question is what if I use the money to purchase a new house after selling my house. My house is old so I would probably sell it in as-is condition to a builder who would build a big new house. I was wondering if the insurance settlement can only be used for the specific repairs in question vs. adding to my own funds to a newer home purchase. Basically I am worried about living in an older home and having continuous maintenance issues.

What insurance company?
There is a lot of fraud like this going on, I recommend that you are more careful.
When my roof had to be replaced my insurance company paid the contractor directly and needed to see the quote for the work done
It is not uncommon for adjusters to report insurance crimes, sometimes the claimant agrees to drop the claim, other times it doesn’t matter as the person is going to be arrested anyway

[Anonymous]

Anonymous wrote:We went through this recently. Prepare to be lowballed. You can argue with the insurance company, but ultimately they control how much they will reimburse you.

We got three quotes on the repair work, including one from a company that was on the insurance company's list of contractors. Insurance gave us less than the lowest estimate -- substantially less, with us being on the hook for $10K+, depending on the estimate. They also sent out their own estimator/adjustor in addition to the three quotes we got. DH wrote an angry letter with documentation of costs of even very basic materials, and I think they ultimately adjusted the amount upwards slightly, but still not enough to cover the actual cost of repair/materials/labor in the DMV. They have their own tables of what they say everything SHOULD cost, and based on number of square feet and so on, that's what they give you--regardless of how much the actual cost is where you live.

Since the area affected by the leak was original to our mid-aughts house, none of the materials are easily replaceable, and we had the choice to do a barebones fix and a full upgrade later when we got around to it, or do the upgrade now, understanding that we're taking on a lot of additional cost OOP. We're biting the bullet and doing the repair + renovation rather than do it twice. So the insurance payout is basically helping to defray the costs somewhat, but not even the full cost of the repair work. It sucks and luckily we can afford it.

If they are coming in below even their own estimates, you complain to the state insurance commissioner and start the arbitration process.

[Anonymous]

Anonymous wrote:What does that mean underinsured or over insured?

If you are argumentative or aggressive with an adjuster, does that affect your future coverage?

If we hire an independent adjuster, would they drop us?

Why would you be aggressive with the adjuster?

[Anonymous]

I haven't read the whole thread, and I'm sorry if you've already mentioned this, but where are you located? We are in Baltimore and had something similar happen in our 100-year-old row house. The insurance estimate was initially about 12k. We worked with a contractor (Unique Resources, if you are local) who was very skilled in dealing with old houses and with insurance claims. The final tally of insurance payments came to about $200k.

One thing to look for in your insurance policy is something called "code compliance." This basically says that in the event of damage, the insurance company has to pay to bring the area damaged up to current code standards. Thus, because there was water damage to our kitchen wall, the insurance company had to pay to upgrade my kitchen outlets. The insurance company will not point these things out to you, but if you have a savvy contractor (or an outside adjuster) they will help you navigate this. Good luck! It took a long time of bickering with the insurance company, but about 18 months after our flood we returned to a beautiful house!

[Anonymous]

I'm a contractor (HVAC) who has been involved in more than a handful of water leak/ water damage claims over the years. I also had a toilet supply line in my home break last year that ended up doing $25k worth of damage in the 2 minutes before we could get the water turned off. First, the only thing worse that can happen to a home is a fire. These situations suck and it can turn into a royal pain in the ass to get things back to what they where. Thoughts are with the OP.

Your experience is going to greatly vary depending on the level of service in claims handling your insurance provides. I assume there's already a remediator (typically ServePro or Servicemaster) already at your home drying everything out. They follow a set of rules regarding what can be remediated or has to be removed based on the type of water that leaked, the material that got wet, how long it was wet, etc. After their phase the industry standard is the adjustor making an in home visit and the homeowner then getting estimates from 3 different contractors. Some insurers offer a concierge type option with vetted contractors being able to come in to do the work immediately. I chose this option for my leak and was impressed with the quality of contractors that ended up doing the repairs in my home. Keep your adjustor in the loop as work is being done. In my case the carpet we installed ended up being about $1800 more than the adjustor initially quoted. We submitted the invoices showing the carpet we chose was similar in construction to what was damaged and they quickly adjusted the claim upward.

Again, depending on the insurer, they typically send a check for about 1/3 of the estimated cost of the damages. The balance gets paid out after the repairs are completed. The check will also have your mortgage company as a payee. This is one of the areas that can turn into a lot of headaches depending on the lender. In my case I had to go to a bank branch to have a manager endorse the check. They also provided me a letter to give to my insurer saying they didn't need to be included in future payments to the claim. On the opposite end of the spectrum I have seen lenders that required the check be sent in to them and the funds held until proof of the repairs being completed before releasing them back to you.

In your case I would push to have any floors adjoining areas that will be replaced to be refinished so everything is uniform.

[Anonymous]

We have started the drying out process in a similar situation. However it appears the damage is more extensive than we thought, and the repairs will be much more extensive and take longer. Is it an option to receive the insurance payout and either build a new home on the same land, or sell the house and purchase a new house?