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Old 03-03-2016, 08:35 AM
Location: Massachusetts
294 posts, read 513,150 times
Reputation: 106


Hi, so this is my first home owners insurance claim so I'm not sure exactly how it is supposed to go? But we went to Florida a couple weeks ago and during that time there was a very cold few days where the 'feels like' temp said -47! My sister was watching my cats and would come and feed them daily. Then one morning she came and said my house felt really cold and she wasn't sure why. I told her she prolly had to fill the boiler with water by pulling up the handle. Which I was shocked because we just did that and it usually lasts a week when we're home and that's with heat, showers, laundry, and dishes using oil so I found it odd that after 3 days it was already out? Well...that was because a pipe burst behind my wall using hot and cold water because where it burst was at the connections so both the hot and cold water pipes were flowing freely behind my walls and it used up nearly all my oil that I had just filled two weeks prior! Not to mention the ridiculous water bill I'm sure I will receive. ANYWHO I called my insurance company they told us to do what it took to stop the water, which we had to rip out our jetted tub to get to the pipes and capped them off. Then we ran fans for days until the adjuster came. When he was here he said that the insulation felt like mush inside the walls, he felt the exterior siding looked to be bowed and said he felt the water traveled into kitchen under the floors etc. we can see water stains in the ceiling in the next room adjacent to the bathroom and on some of the walls. Fast forward to almost a week later insurance company calls us and says they will give us $4,700 for the repairs...$4,700???!!!!!! I'm sorry but I'm not sure what they have written in their report because they have not sent it to me yet, but I can't see gutting my bathroom, replacing my jetted tub because the motor has blown, replacing all the walls, floors, possibly the exterior siding etc that was damaged from the water costing only $4,700! What should I do about this? I feel like I'm being screwed here!
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Old 03-03-2016, 08:58 AM
Location: Wasilla, AK
7,448 posts, read 6,648,853 times
Reputation: 16456
If you think you're being screwed now, just wait until it's time to renew your policy. That's assuming they'll even renew it. Most likely they'll dump you. And your claim will be in the industry database, so every other insurance company will know about it and will charge you accordingly, which will be much more than you paid for your current policy.
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Old 03-03-2016, 09:04 AM
Location: Huntsville, AL
2,852 posts, read 1,424,985 times
Reputation: 5444
Call your agent and arrange for him/her to come to your home and see the result of your burst pipe(s).
I'm betting he/she is your insurance agent for your home and auto and maybe life? Let them know how displeased you are with their first estimate, and have them work their magic. As your agent, he/she is supposed to do what they can do to get your property back to pre-damaged condition in a timely and manageable timeframe.

I wish you the best (and no, I'm not an agent).
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Old 03-03-2016, 12:26 PM
Location: North Idaho
30,862 posts, read 42,390,904 times
Reputation: 71450
Because that is what insurance companies do.

There are independent insurance adjusters. I suggest that you hire one. If they feel the settlement is unfair, they can act as an arbitrator and make the insurance company be more reasonable.
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Old 03-03-2016, 01:37 PM
7,770 posts, read 9,146,554 times
Reputation: 21445
Sounds like they left off a zero or two. Anything which was wet....floors, walls...anything...has to be removed. It will NEVER dry out properly.

Have your agent come over and have a practical conversation. Then have him work with the adjuster to get the right amount calculated.

Usually they are pretty good if you "work with them". Sounds like yours had no idea what he was doing.
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Old 03-03-2016, 07:52 PM
458 posts, read 2,154,911 times
Reputation: 410
Most homeowners property policies are written so that the insurance company is only required to make a actual cash value (ACV) payment until the repairs are completed. Actual cash value is defined as the replacement cost less depreciation, so age and condition of your home are important variables to know in your situation as depreciation is closely correlated to both. Your deductible is also subtracted from this ACV payment and you haven't indicated what your deductible is.

In a typical situation where the cost to repair is more than the initial ACV payment, the insurance company pays the remainder at the completion of the repair, provided the cost of repair is within your policy limits and provided you are able to furnish contractor invoices for the repairs.

Last edited by pepe1; 03-03-2016 at 08:55 PM..
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Old 03-03-2016, 08:57 PM
Location: Los Angeles>Little Rock>Houston>Little Rock
6,487 posts, read 8,267,954 times
Reputation: 17495
We have USAA homeowners insurance. In our house in Texas, the water heater in the attic burst and caused $22k in damage. Walls, ceilings, flooring, tile, you name it...major damage. They sent ServPro out and the entire thing was taken care of with no increase on our premiums.

It was a huge hassle. It took almost a month of professional water and moisture removal and then floor replacement, painting, and whatnot. Not to mention how much the whole thing freaked out the cats.
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Old 03-03-2016, 09:24 PM
Location: Silicon Valley
18,814 posts, read 30,109,070 times
Reputation: 38402
You could talk to an insurance lawyer to help you negotiate with the insurance company.

You can ask questions for free on this website and usually several lawyers will answer you, and you can call and talk to one for only $40, or so:

Ask a Lawyer and Get Answers from Legal Professionals at Avvo.com

This website looked interesting, too:

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Old 03-03-2016, 10:05 PM
458 posts, read 2,154,911 times
Reputation: 410
I still get the sense a lot of folks who have replied are not understanding how property insurance is typically written. The $4700 you have been offered is the actual cash value of the repair. This is what your insurance company has calculated to be the cost of the damage, less depreciation for the age and condition of your home and less your deductible. The $4700 is your money to keep no matter how you proceed at this point (you could choose to do nothing and leave the bathroom as-is and pocket the $4700). If you elect to have the damage repaired, the insurance company will pay the additional cost of the repair that is above this Actual cash value payment, provided the cost is within policy limits and provided you can furnish invoices for the repairs.
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Old 03-04-2016, 01:48 AM
Location: Caverns measureless to man...
7,588 posts, read 6,143,240 times
Reputation: 17941
Of course you feel as though you're being screwed - because that's exactly what is happening.

The very first thing you need to know in this - and NEVER let yourself forget it - is that the insurance company is not your friend in this issue, and will do everything they can to pay as little as possible. They are literally your enemy. I guarantee you that $4700 is not even a fraction of what it would cost to make that right, and no, it is not the "cash value" of the damage. Cash value of the damage you're describing is many times that. Based on your description, without even seeing a photo I can promise you that your damages are already in the tens of thousands of dollars, and will go much higher if that water that's still trapped behind the walls and in the floors and insulation allows mold to set in.

How do I know this? Because we went through the same thing with our insurance company for two years, and I could literally write a book about water damage claims, their true costs, and all the ways the insurance companies try to cheat you on them. I agree with Ted Bear that your adjuster left off a zero, but I don't agree that it was because he didn't know what he was doing - he knew exactly what he was doing, and if he's lowballing you this badly from Day One, a simple conversation with him is never going to make it right.

First thing you need to do is read your policy very carefully, and see what your insurance company is obligated and not obligated to do. Depending on the state, you'll probably find that they are responsible for all emergency mitigation services, separate from your final claim. What this means is that they need to pay an emergency water damage mitigation contractor to come in and dry your house out, and whatever they pay is separate from the damages to your home. Also, as long as you're studying the policy, look for any and all language pertaining to "mold, fungus, bacteria" and similar terms. You'll need to know what your mold limits are, because given the time frame, there's a good chance you already have mold.

First thing tomorrow, start calling contractors and get them over there ASAP. Those fans you turned on did absolutely nothing. Did they blow behind the walls? No? Then how could they have dried out the water that you know is behind the walls? Answer is, they didn't. It's still there. As well as the water in the ceilings and under the floors. You need a mitigation contractor to come out and start tearing out drywall and flooring.

While the contractors are on their way, call your insurance agent and ask him specifically if your policy obligates them to pay for emergency mitigation services. If he says yes, call the adjuster immediately and demand to know why he did not inform you of this. I already know the answer - it's because he thought he could get away with it. Put him on notice that he can't, and tell him that you are bringing in mitigation specialists and you expect him to work with those contractors. If he gives you the slightest amount of pushback, demand to speak with his supervisor immediately.

Oh, and while you're talking to your agent, see if you can casually and nonchalantly ask him if he knows what the "reserve" is on your claim. He should know, and while the adjuster knows better than to tell you, an agent sometimes might. In simplest terms, the reserve is the amount of money the company has already calculated they may possibly have to pay out on the claim before it's all done - repairs, emergency mitigation, even possible legal action and settlement. If they set a reserve of, say, 60 to 80K (which wouldn't be unreasonable on a claim such as you're describing), and only offering you $4700, it's the equivalent of coming home and finding your wife in bed with the landscaper. There's no way to deny the company is screwing you at that point. If the agent does let it slip, DOCUMENT that. Your future attorney will thank you later for making it easier for him to write up the suit.

Did the insurance company specifically tell you to use fans to dry out your property? If so, document that immediately. That could be used later as evidence of bad faith, because an experienced adjuster knows that this is not sufficient to address the damage you're describing. In fact, document every detail of every conversation you have with your adjuster, and when you are finished talking to them, immediately send them an e-mail saying "just to reprise what we discussed on the phone, my understanding is that you said...". Documents, document, document. Every single conversation, every single promise, every single excuse. Date and time of every phone call, and name of person with whom you spoke. Don't trust anything to memory, because this could go on for years. You will forget a lot of very important details, no matter how good your memory is. Don't just scrawl notes on pieces of scratchpaper; buy a notebook, and write each day's date in the top margin of each page as you take notes. Don't use the notebook for anything else; that's nothing but your insurance claim. Again, your future attorney will thank you later.

When the mitigation contractors get there, don't let them start work until you've seen their license and proof of insurance or bonding. Also demand references. If they can not or will not provide any of these, don't even let them in the door. Call someone else. It's important to know that in some states, as soon as a mitigation company starts work - even so much as tearing off a single chunk of drywall - he is your contractor, and legally entitled to invoice your insurance company for emergency services performed. We actually had one show up where 3 men got out of the truck - one man walked up to us on the porch and introduced himself, the second walked past us into the front door and started to plug in a machine he was carrying, and the third man - who was carrying a hammer in his hand as he got out of the truck - walked past us into the house and was getting ready to swing it at one of our walls. I told him to stop what he was doing immediately, and then told all three of them to get back in the truck and get it the hell out of our driveway.

Once you've checked their bona fides, discuss with them the scope of their work. What do they propose to tear out, what sort of drying equipment do they plan to use, how do they plan to coordinate with your insurance company, etc. You won't understand much of it, so make sure they keep explaining it in detail until you do. TAKE NOTES. If possible, do a walkthrough with a video camera with the sound turned on. Be careful of contractors who keep saying things like, "oh, that won't matter" or "that's not that big of a deal," "ah, we can just paint over the water stain." I would highly recommend not using a contractor referred to you by your insurance company. We vetted three and every one of them admitted they did not plan to do a complete job. One of them even came right out and said, "we can get your house back pretty close to what it was, but it won't be the same." Pick your own contractors.

Once you have the mitigation work underway, start thinking about getting your house put back together. Often, the mitigation contractor is also a general, who will want to do the repair work as well. If so, get an estimate. Then get three or four other generals out there and ask them for estimates, too. I'll tell you right now they're all going to be a hell of a lot higher than $4700. Ask every contractor if they are used to fighting with lowball insurance companies, and ask them if they are skilled at using Xactimate software. That's the program that most insurance companies use to set their estimates, and your best bet in a contractor is almost always going to be one who uses the same program to generate his own estimate. Those contractors are usually better qualified to attack your adjuster's lowball estimates and force him to justify why he refuses to pay what he really owes you.

If they don't know much about Xactimate, I would not use them, because when they try to argue with your adjuster they'll be bringing a knife to a gun fight. It's been proven in many lawsuits that adjusters are often trained in how to manipulate the Xactimate program to generate the lowest possible number for your loss. The number that comes out the back end depends entirely on the data the adjuster chooses to enter on the front end - for example, if you have premium carpet pad and the adjuster enters "standard," you just got screwed out of a couple hundred bucks. If you have custom cabinets and they enter "contractor grade," that may be a thousand right there.

Is your drywall 1/2 inch or 5/8 inch? Was the carpet glued down, or tacked? Did the water flow into your ductwork? Then it needs to be professionally cleaned and inspected for mold. Is that in the adjuster's estimate?

Does the estimate pay you for wood molding, or plastic? Are they paying to "detach and reset" the countertop, or "replace" it? How many people even know to look for that? Not many, and that's what they count on when they do it. But good contractor, skilled at using Xactimate, can catch them at it. If you do, then again - document it for your future attorney.

Also, pay close attention every time they revise their estimate. Some companies are notorious for adding something that you point out to them, but then backing out something that was already in there and not telling you about it because they hope you won't notice it. Ours tried that several times. We did notice. Our attorney cackled like the Wicked Witch of The West. I believe it's Items #88, #93, and #105 in our lawsuit.

If any contractor says he isn't willing to get in an adjuster's face to demand they pay for necessary repairs, or even seems hesitant or reluctant about it, get him out of there and bring in the next one. You're going to need a contractor who is not intimidated by an insurance adjustor or afraid to fight with them.

Also, steer way clear of contractors who promise you the moon with things like, "oh trust me, you'll get your whole house rebuilt by the time I'm through," or "I know that wasn't damaged, but I can slip it past the adjuster - you do want a new one if you can get it, right?". If they're that willing to screw the insurance company, they won't hesitate to cheat you either - plus, adjusters usually know who most of these guys are, and if they found out you've hired one, they'll be suspicious of everything you try to claim. Resist the temptation to cash in; just hire an honest, hardworking contractor who wants do an honest day's work for an honest dollar, and is willing to fight for you. Word of mouth is a good way to find contractors, and another trick I've used is to go down to the neighborhood Lowes or lumberyard and ask the foreman or the supervisor of the contractor department if they know someone reliable. These guys deal with the local contractors all the time, and they know who's a good guy and who isn't - plus, the good contractors spend a lot of time cleaning up the mess made by bad contractors, and word gets around.

Even if you decide to go with the first contractor, get several more estimates. Trust me, you'll need them. Once you've picked your contractor, and have several other estimates in hand, contact your adjuster again and submit your contractor's estimate. When he pretends to be outraged, tell him you have several other estimates in the same range (if the contractors are good, they should all be within roughly 10% to 20% of one another, and many times higher than your insurance company's estimate), and ask your adjuster to explain why his is so low. Again, document document document, and again demand to speak with his supervisor and tell him that you have paid your premiums in good faith and now expect them to honor their contract in good faith. I would specifically use that language, because when a claims department supervisor hears that it immediately makes him think of the words "bad faith," which is the last thing they want you to be thinking about. Do NOT threaten yet, and do not even strongly imply. Just drop the occasional strategically chosen word at the occasional right moment, and let him wonder if that was an accident or if you really knew the significance of that phrase.

I hate to tell you this, but in all honesty I doubt this is going to be enough. It might possibly work by serving notice to the company that you're not going to take this crap, but if they're screwing you this badly already I doubt they'll go up much. Your best next move would be to contact a good licensed public adjuster, and once again, get references and business licenses. I would also begin vetting attorneys immediately, because there's a good chance you're going to need one before this is over.

In fact, you may be well advised to pay a good attorney (one who is skilled at insurance and contract law) a couple of hundred bucks to go over your policy right now and explain to you what it says, because very very few people actually know that or are able to fully understand it. I don't know what the value of your home is, or what your finances are, but you could literally be at risk of losing your house if the repairs run 30 or 40K and the insurance company only pays 7 or 8. I'm not trying to scare you, but you need to take this very seriously, and get some experts on your side immediately before this becomes a mold problem.

It's a pity that Massachusetts is a two-party telephone recording state. We live in a one-party state, which means we recorded every single conversation we had with an adjuster or other employee of the company. We recorded literally hundreds of hours worth of conversations, and it's obvious they never even suspected it. Our attorney alternated between stunned and orgasmic (and sometimes both at the same time) as he listened to some of the things these idiots said on the phone. It's a priceless tool to be able to use, and it will be worth many tens of thousands of dollars to us before this is all over. I wish you were able to use it as well.

Good luck to you, and try not to lose heart. This is very common practice for insurance companies, so there are a lot of professionals out there who are experts at fighting back against it. The prevalence of these types of practices has literally created an entire industry employing thousands of people who make a living fighting insurance companies and forcing them to pay what they owe.

Oh, one more thing - I would contact your state's insurance commission immediately. Do not file a complaint, but just tell them that you had a covered loss at your home, you're already getting some serious red flags from your insurance company, and you just want to be prepared and know what your options are. They'll probably steer you toward some information and other resources to help you educate yourself on how to go forward, and let you know what you'll need to do to ultimately file a complaint (which I think there's a good chance you're going to be doing.)

Last edited by Mr. In-Between; 03-04-2016 at 02:29 AM..
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