Last week at the Insurance Claim Workshop at National Lumber (Mansfield, Mass) several contractors brought in copies of low insurance claim estimates. One estimate showed $8,000 for repairs while the real damage is over $40,000.00.
After our workshop I received numerous calls about incomplete claim offers that left out damage that was in plain view. On Friday, I was asked to help a contractor's client in the Concord, Ma area deal with a ridiculously low estimate. The job will require ripping out outside walls and ceilings in 7 rooms, including a kitchen and bathroom. They will have to move out for this work. The insurance offered $25,000 and the actual repairs will be over $60,000.00 for same condition and code upgrade will be $15,000-$20,000.00.
(Insurance tip from our insurance claim workshop; if the homeowner has to move out because the house will be uninhabitable, before the work begins, the insurance pays for the Additional Living Expense.)
The independent insurance adjuster is from Arizona and either has little or no experience working with housing in Massachusetts or is low balling the claim. The offer is a slap in the face to the consumer and I will be sure to fight tooth and nail for every last nickel and dime to insure that this homeowner receives a fair settlement to restore his home to the pre-loss condition.
On another claim in Arlington, Ma an independent adjuster from Florida wrote an estimate to replace a tile surround on three sides of the tub/shower. I asked him about replacing the rest of the contiguous matching tile on the walls in the two damaged bathrooms. He replied "the insurance company instructed me to only write for the damaged area and leave the rest of the bathroom tile as be". I asked him if he would accept that in his house and he said "of course not, the new tile will not match the existing".
The claims are starting to roll in and from what I am seeing and hearing insurance companies are mostly offering low claim amounts hoping that consumers will accept the first claim. I recommend that you tell all of your customers and friends DO NOT ACCEPT THE FIRST INSURANCE CLAIM OFFER! Have the offer carefully reviewed by a professional contractor familiar with insurance work and claims.
A few weeks ago we saw on 60 minutes how insurance companies altered flood damage engineer reports on homes destroyed by Hurricane Sandy. The Attorney General in New York seized the records of these claims and started an investigation.
Now we are seeing a similar type of treatment from insurance companies here in New England. Do not be afraid to report a flagrant claim offer to the division of insurance. Homeowners will need help from contractors who know the insurance process to prove their losses.
TIP from our insurance claim workshop; How to bill for Mitigation Work
If a homeowner had you remove snow and ice or deal with a pipe burst prepare a bill separately from the claim repairs. This work is called mitigation. The homeowner has a responsibility to make reasonable attempts to prevent further damage. For example if you removed snow and ice to prevent further damage that work is paid under mitigation. The insurance company is obligated to pay for this work in full.
Bill for Mitigation Work; Remove snow and ice from house, 2 story colonial 4 hours
- 1 Foreman 4 hours at $65.00 per hour...$260.00
- 3 Laborers 4 hours @ 45.00 per hour.....$540.00
- Staging rental ....................................$150.00
- Trucking and hauling equipment........... $100.00
- 50 pounds of ice melt ............................$35.00
- Profit and overhead 20%.......................$217.00
- Total mitigation expense........................$1302.00