Dealing with insurance claim due to water damage

Parent Cafe
1

Curious for all those who have been through this. We had a water leak that caused about 8k in damages. Initial damage was abated by a company to dry out the space. Now it is time to repair. Insurance adjuster assessed the damage and paid out approx… 2/3 of the claim, and the remaining ‘depreciated’ amount to be paid when the work is complete. Prices seemed conservative, but fair. Letter states I can choose any contractor(s), but of course if their estimate is higher, it must be pre-approved. I had two contractors that said the scope needed to be increased (slightly). I submitted, but frankly am ok with just paying the difference.

I’m okay with the assessed amount, especially since I can do some of the work myself. I actually like to do the work. There are not a lot of trades involved for the work I cannot do, so while it will take some coordination, I’m fine doing that as well.

BUT! I originally thought I just had to prove the work was complete before they would release the remaining payment. When I talked with the adjustor recently, he told me I must submit ALL invoices to be paid the final amount. He also informed me that I cannot be paid to do the work myself. If I don’t use a contractor, and therefore don’t incur the full cost, it would be considered ‘fraud’. Only a contractor can be paid the overhead and profit amount. He also said the withheld depreciated amount is for materials only, and I can only be paid for that portion upon proof of purchase. (That is clearly not the case, as the painting portion withheld was 3x the amount paid).

So, I said to myself ‘forget it’. Why should I coordinate the work, or do anything myself, if I cannot be paid for my time, or use the difference to hire better quality for the parts I cannot do. I called one of the ‘approved’ contractors (they only give one name at a time), and was not at all impressed. Not only were they poorly rated on the BBB, when I asked who they used for their subs, the answer was ‘mostly guys who work out of their home’, and they would not know who until start of the work.

So I’m back to choosing my own subcontractors, but irked that if I do a lot of the work myself, that I won’t be able to claim the withheld portion. My time is just as valuable. My work in some cases even better.

Is there an accepted way to deal with this? Can I literally submit my own invoice for the time and materials used to complete my portion of the work? I’m not asking for any more than what the adjustor estimated – just no less because I chose to do some myself.

2

Dealing with insurance companies can be a major PITA. Their suggestion that there would be something “fraudulent” about a homeowner doing some of the work is absurd, but not surprising.

My suggestion is to carefully read the insurance contract. That’s precisely what it is, a contract, and they can’t, after the fact, impose restrictions or terms outside the letter of the contract.

It may well be that there isn’t even a requirement that you undertake the repairs, but that they are simply required to reimburse you for your loss. If that’s the case, and you are willing to accept their estimate as a payout, you’d be free to take the money and do whatever you wanted with it, whether that was hiring a contractor, doing it yourself and pocketing the profit, or living with the inconvenience in perpetuity.

3

It’s a decision you have to make. If you can’t find an “approved” contractor that you like you may be better doing it yourself. Sometimes it hard to find people who will perform to your standards.

4

Wow - very different from my experience with the insurance company when my refrigerator leaked and ruined my wood floor. I’m pretty sure the insurance claims guy came out and gave the specst to 2 or 3 different companies - they would receive the same amount from the insurance company, I just had to select which one I wanted to work with. They were well known contractors with great reputation and the one I selected did a terrific job. BTW, my insurance company asked me to keep the bad part from the refrigerator when I got it repaired and return it to them in a special package they provided (it was all very CIS"ish" with a “chain of evidence” type of packaging. They said they were going to get GE to reimburse them…I’m not sure if it actually went to court or not but 6 months later (which I had totally forgotten about) I received my deductible back in the mail with a letter from my insurance company stating GE was reimbursing for total loss due to a known part failure on my refrigerator model.

5

That doesn’t sound right. We’ve only had 2 claims in all the years we’ve owned our house, and both times we received a check. My husband did the repairs, and we saved whatever was left over.

Read your contract. Just because the insurance people say you can’t do the work doesn’t mean it’s true.