Claim proceeds are too low, what to do?

Question

Hi BP Experts,

We had a roof leak that basically destroyed most of the inside of a house we own.  Our contractor said repairs will cost $24k but the insurance company is only paying out $6k towards repairs.  How do we get the insurance company to pay enough to fix the damages? Do we need to sue them?

Any info would be appreciated.  Thank you.

Wayne Brooks · Answer

Sounds like part of the damage your contractor is estimating is pre existing water damage, over time from maybe a roof leak, and Not damage from the "sudden event" which is all that is covered under your insurance?

Gabe K. · Answer

@Keith Harris@Brandon Stevens

Hi Keith and Brandon, thanks so much for your input.  We are going to have our contractor meet with the field adjuster to reach an agreement.

Timothy W. · Answer

"Hi Wayne, yes, we are the lender and had FPI."   I think it's fair to re-examine what the buyer presented to you as the condition of the property upon obtaining the loan.

Timothy W. · Answer

I read through your documents and checked historical satellite and google imagery of your property.   Your contractor is claiming damage from a July 2015 wind loss that's visible in 2013 photos of the property.  Your claims settlement check is generous.

Gabe K. · Answer

Hi Wayne, yes, we are the lender and had FPI. Agreed on the dump part.

Brandon Stevens · Answer

As an adjuster, its clear there is plenty of unrelated items in the contractors estimate. Items caused by long term water entry into the risk that the carrier is simply never going to touch.

Do you know how old the roof is?

My initial thought in looking at the estimate is that 4 missing shingles did not cause all of that damage to the interior of the home. I'd try to confirm exactly where all the water is coming from and/or if there is additional shingles that have been compromised.

I would call and ask for a re-inspection as your contractor was not afforded the opportunity to meet with the adjuster so they can go over their scope of work together. I don't think you getting anything else on the interior of the home but they did leave money on the table in regards to the debris removal allowances that should be higher and overhead and profit which should be included in the carriers estimate if you are actually using a GC given the multiple trades. This would add about $1,500 to the estimate, than if you can convince them to buy the roof you might be in a better position to get done what you need to.

I'd hold off on a public adjuster, let the carrier do a re-inspect, if there is still a disagreement on the roof, they'll send an engineer out. If he says it can be repaired your pretty much outta luck on that front. Unless you find additional damage you'd basically be tasking a PA with trying to convince the insurance company that 4 missing shingles "destroyed your house"...GL

Keith Harris · Answer

I did not initially notice the forced placed insurance.  If you are not the lender, you may want to get it insured under your own policy as soon as possible.  Talk with an agent

Keith Harris · Answer

So I looked through the documents and based on the pictures from the contractor, it does look like some of the damages are not related.  I understand how you are confused as the home needs a lot of work and unfortunately not all of it will be covered.  It also looks like your contractor believes the roof should be replaced.  The estimate from the insurance company reflects replacing a couple of shingles.  If your contractor does not believe the roof can be repaired, then this is likely to require a re-inspection by the adjuster.  Make sure the contractor is present so that they can discuss whether the roof is repairable or not.

Overall, this whole claim looks to be a bit of a mess and it may be easiest to request a re-inspection, especially since the roof is an issue.  This way the adjuster and contractor can go through and document and discuss the contested items.  This also gives the adjuster the opportunity to document each item that is being denied so that you can more easily understand what is not covered.

One additional item I did note is that the property is very likely under insured.  This means that the policy limits are not sufficient to fully repair or replace the buildings in the event of a loss.  This leaves you very exposed as the cost will have to come out of your pocket once the policy limits are reached.  It is too late for this claim but you may want to consider having this revised to ensure that you are fully covered.

Please understand that I am simply providing my opinion based on a very basic snapshot of your claim.  I have not seen the property and am not familiar with the insurance laws within the state your property is located.  Please take my advice with a grain of salt and be sure to seek counsel from and attorney or Public Adjuster before proceeding with any legal action.

Wayne Brooks · Answer

Yep, looks like the contractor is quoting repairs for a lot of unrelated, preexisting damage/neglect.  Force placed insurance...are/were you the lender on this?  Frankly, looks like a dump that's been neglected for some time.

Gabe K. · Answer

@Keith HarrisHi Keith, thank you for your offer to look at the docs, as they are difficult for me to interpret. This should bring you to the docs:

https://www.dropbox.com/sh/fuv34peyc521iqa/AAAoBUl...

Claim proceeds are too low, what to do?

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