Since I am not one to always believe the insurance company always has my best interest in mind, I would like to hear the contractors (or from an adjuster) point of view on how the claims process works or should work. My in-laws had a home fire claim, but since I am not the point of contact with the adjuster I’m having a difficult time understanding how the process works, and since the information I have recieved seems to be unclear, I’m confused. Just so you know, the work involved will most likely max out the delling replacement limit of the insurance policy.
It has been decided by the family to pick our own contractor/general to do the work, this seems to not be a problem with the adjuster, but what should happen next? Is this name just supplied to the adjuster and the adjuster contacts the contractor and together they hash things out and come up with a price, or does the contractor we choose come out to the house work up an estimate first and then submits this to adjuster to either accept or deny the estimate? <!—-> <!—->
If the contractor must supply an estimate to the adjuster how detailed should it be?
How much are we involved in the process once the contractor and adjuster meet? <!—->
Will contractors typically require money up front to start? <!—->
Once the work starts how does the contractor get paid?<!—->
If we are happy or unhappy with the work, how is it handled? <!—->
How are changes or additions to the work handled?
I seem to many questions, I hope you don’t mind!!
Maybe you can awsner some I didn’t think of?
Thanks, <!—->
Andy
Replies
I seem to many questions, I hope you don't mind!!
What I seem to remember is that it varies by insurance company and by state.
With some companies in some states, the adjuster (generally) determines the dollar amount of damage, and that sets the (general) repair budget. In other cases, a contractor(s) set(s) the dollar repair value, and then you (& the adjuster) pick the best price.
Some times, some places, insurance co gives you the check, others, the check goes to the contractor. My recollection is that generally, insurance pays you, then you pay.
Now, if you schedule up other work while the contractor is there, that's a separate matter entirely. That could be as simple as a simple Change Order to as complicated as a complicated Change Order. That may sound obtuse, but I'm betting a few readers mentally cringed at the difference <g>.
So, recent example, hail storm roars through north Dallas. Adjuster says roof is a total loss. "Book" says that's X (ok, XX,XXX) dollars, you'l be getting a check soon (for $xx,xxx - the deductible). The fascia & soffit need abit of work, and the chimney could stand having a cricket for the first time, ever.
Mr Contractor, I need a roof stripped & reroofed, can you do that for $XX,XXX? While you are here, how much to fix these three fascias & those 4 soffits?
Repeat above until there's a "yes" to the first, then see if you can afford the yes to the second. It worked for my dad (both times, since another hail storm roared through right after the repairs from the first).
But that can differ from place to place.
If the loss goes to policy limits, the adjuster will handle the estimate paperwork to simply show that you will get the max the policy allows. Sometimes your policy will pay for an additional 5% for demo and debris removal over the policy limit. There is no point in your contractor writing a repair estimate to put it back the way it was if
#1. it goes to policy limits
#2 you aren't putting back the way it was
It is especially true in cases where the limits are hit- work with the insurance companies adjuster, do not hire a public adjuster. They can't get you any more money than your policy limits.
You will need to get a contractor to write you a repair estimate to repair it the way you want it. The adjuster will write a check typically for the ACV ( actual cash value ) of the policy on the dwelling. That check will have the owner's name and the mortgage holder ( bank ) if there is one. You can use the check to repair the house in any manner you desire. It doesn't need to be put back the way it was. If the check has a bank name on it, they will want you to sign off so that they can hold the money and pay in draws after performing their own inspections. A pay schedule will need to be done with them.
carpenter in transition
I had a house fire in calif in 93 and a barn -shop horse stall fire in utah in 2001. ....don't stand next to me in a lightning storm.. the utah farm policy was for full replacement but the replacement cost was more then the policy.. i had just got divorced and had to have everything appraised. the policy was for more than the appraised value but not the cost to buy everything new. the adjuster asked what i was going to replace and i said everything. normally they give you a check for the cash value of the loss( new price minus age, wear and tear etc) then when you bring in your receipt for the replacement they pay you the difference. after I gave the adjuster the firsT 10 k bills he got tired of the paperwork and paid me the policy limits .. a fair settlement After the world series california fires in the late 80's i went in to my agent and raised the policy added full replacement, building code up grade requirements. all the options, In 93 christmas i had a major fire in the Calif house. I am a gen contractor, journeyman carpenter and have a bs in engineeting. I was running the facility dept for a computer co in silicon valley. the bedroom wing baths, family room burned thru the roof and the tops of the walls. the rest of the house burned in the attic and the walls above the dropped ceilings. State Farm sent out their adjuster for inspection then they wrote the rebuild instructions for contractors to bid on.. I had done work for the agent before but i gave the adjuster my engineering business card. My son who did drafting in school (Won and award) made up a new set of blueprints for us to use> he is now an Elect contractor. when we got back the adjusters estimate. they were way off in their favor. I did a line by line correction for them, called for another walk thru and review. the item costing was on the low side. insurance pricing of $35 per elect device , the company my son was working for charged $50. using their costing their were off 20 k just for mis measurements or missing items. they took 2 months then sent me a check for $5 k and had scrambled the estimate I demanded a meeting with their supervisor and that they use the original estimate format and answer yes or no on every red line i sent them, at the meeting we argued for a while, they wanted to leave the water damaged sub floor, mold growing by then, and leave the roof and ceiling framing which had 1/8 inch of charcoal burned off the wood. I then asked them for their licensed civil engineering stamp of approval on their rebuild instructions. their reply was that they do this all the time, burned wood was ok they didn't use engineersI then pulled out my contractors lic and told them the civil eng who i used said no way. tear it all down. I then said calif real estate law states in a sale of the property i would have to disclose the insurance company did a mickey mouse job of rebuilding in my professional opinion as an eng and contractor. they agreed that they would pay some additional money for some items but since i was a contractor and going to rebuild myself would only pay 80% of other contractors bids. i argued got a lawyer who wrote them letters but didn't get me any money. I had insurance inspections when i started rebuilding, sent them bills for stuff the building department had me do, additional earthquake stuff, more insulation but i never got any more money from them. I should have shopped for a good lawyer (if their is such a thing) when I started who handles insurance claims. It all depends on the company and your adjuster. STATE FARM STINKS
bs in engineeting.
Guess they don't teach punctuation or paragraph breaks huh?
Eric
my friggin eyes are burning................I Love A Hand That Meets My Own,
With A Hold That Causes Some Sensation.
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