Property loss, claims, and contractor questions (first post)
Hi all,
This is my first post on BP! I’m still new and only recently discovered and listen to the podcast and find the wealth of information on here very valuable. I realize my questions below are going to cover a wide swath of topics, and wasn’t quite sure where to post this. If the moderators want to move the thread, please feel free. This post doesn’t pertain to real estate investing per-se, but I realize a lot of people here might have experienced similar situations. Any advice you guys can provide would be greatly appreciated!
Last week on 6/17, my wife and I closed on our first home (2 story townhome built in 1997, 3BR 2.5 BA in the Houston area). We did your standard inspections and all professionals that came by agreed that the home was in fantastic condition. We came by the next morning to let some contractors do some measurements for flooring and everything was still fine when we left. We hadn’t planned on moving in immediately since we still had an apartment lease that we couldn’t break until late July. We didn’t check up on the home Friday and Saturday since we both are incredibly busy and were working long hours. On Sunday morning, we got a call from the neighbors saying that there was a lot of water coming out of our garage! The service line from the master BR upstairs had broken and water had gotten everywhere. By the time we came into the home, the first floor was completely destroyed and all of the flooring upstairs was also destroyed. We were absolutely devastated.
Where we stand now: we immediately called Nationwide (our homeowners insurance) to file a claim, got a mitigation company to come out and they’ve basically ripped out the house down to studs on the first floor. They have also removed all of the areas that sustained water damage on the second floor as well. A large loss adjustor is going to come meet us on Monday with one of their preferred contractors to assess the damages and give us an estimate.
It seems like the next step, which is probably the most important part of this process is to find a good contractor that can give both us a fair estimate to make sure the insurance company isn’t going to try and lowball us and perform quality work to restore the house. When we met with the core adjustor this past week, she also brought the preferred vendor and it seemed like she was selling them hard to try to get us to use them. I’m not really sure how to proceed because it seems like there’s an inherent conflict of interest here for the contractor: they have an incentive to keep the estimate low to minimize the payout from the insurance carrier and win the bid from us. I do understand there are advantages for using preferred vendors as well, but given that it’s clear I know very little about real estate, insurance, and construction, I’m worried that we’re going to be taken advantage of. Any insight would be greatly appreciated here. Thanks!
-David
Thanks for reading and for the advice Ratho. I am definitely trying to be even-keeled about this (it's hard though, seeing your first home almost completely destroyed), and calling more contractors to get a quote.
You are entitelled to use whatever contractor you wish to use. I would prefer to get my own contractor rather then deal with the insurance company contractor.
I would rather be in charge and selecting my own materials. I am sure you are entiteled to living expenses and what ever else you need to make you whole.