Home Insurance:What exactly is guaranteed rebuilding cost?

3 Replies

Hi,

I just wanted to better understand what exactly it means when an insurance company indicates 'Guaranteed Rebuilding Cost' in their policy. I had a water leak incident that partially damaged the flooring I had to file an insurance claim to remediate and  avert the secondary damage as well as fix the partial damage flooring. So far so good in terms of  addressing disaster recovery.However the flooring now looks patchy and it doesn't look the same  as it was before the incident.The water damage restoration company told me 'Guaranteed Rebuilding Cost' addresses this patchy scenario to payout and redo the entire flooring and the insurance company is supposed to pay me to redo the entire flooring but the insurance company never came back to me after the initial disaster recovery. Appreciate inputs from experienced members.

Thanks

I used to be an Estimator/Project Manager for Property Restoration. An insurance Adjuster may be a better source but this is what I can share:

1) You have a claim, there are two steps: 1 - Emergency work (get the water/damage rectified and dried) 2 - Rebuild. Insurance will pay for emergency work as long as you don't have a limit on your policy. (sometimes people cheap out and instead of getting full coverage, they pay for only a small portion of their dwelling cost)

2) Once emergency work is complete - a contractor will submit an estimate to the insurance company for REBUILD. The insurance company will ask you if you want to proceed with them and have their preferred contractor do the work... OR ... take a cashout equivalent to what the contractors quoted insurance (less their 10 & 15% profit & operating costs and tax). 

3) I'm not sure what you mean by Patchy... but if you can confirm if this was installed by the insurer's contractor then you should absolutely most definitely call your insurance adjuster assigned to your file OR if you mean as a result of a few days/weeks the floor has shown signs of water damage, then that means the insurers restoration contractor did not do their job properly in mitigating the loss and you need to let your insurer know you still have water damages. They will come out to site and inspect 

Best of luck!

@Dylan Earl

Thank you so much for replying back.

In my case the insurance company gave me a check to fix things after everything got dried out,the check amount from the insurance company based on few quotes I got from the local contractors.The insurance company never offered me a contractor. When I say patchy flooring I mean it's a cosmetic issue onlookers can easily distinguish that a particular area was repaired as it's not in sync with the remaining flooring inside the apartment.Technically flooring is not the same

for example before I bought the property during closing and after the water incident that happened two months after closing.So I was wondering if guaranteed rebuilding would come into picture to bring everything back in shape,hope I made it clear.