Concerns About Our Homeowner’s Insurance Claim
We recently submitted a homeowner’s insurance claim due to ash and smoke damage that forced us out of our home. The insurance company provided a $15k advance under our “loss of use” coverage to cover hotel stays and meals during our displacement. Initially, they sent a “trusted vendor” to evaluate the damage, who estimated the total cleanup and insulation replacement for both our home and garage at $35k. However, the insurance company wasn’t satisfied with that figure and subsequently dispatched an adjuster for a second assessment. This adjuster claimed the entire job would only cost $8k, significantly lower than the vendor’s original quote and estimates from other companies we’ve consulted.
Based on the adjuster’s assessment, the insurance company issued us an additional $8k check. Now, we have a few questions:
-
The insurance company seems to acknowledge that their adjuster’s valuation is low, yet they insist that if we want more than the $8k, we must hire a vendor to complete the work first. Only then will they consider paying any additional costs. Is this practice permissible? It feels unfair that they would minimize the claim’s value to limit their upfront payment. For reference, we have extended replacement cost (RCV) coverage, and the adjuster’s report indicates 0% depreciation for all recommended services.
-
The insurance company has informed us that any unused portion of the $15k advance for loss of use will be redirected to cover our dwelling or personal property losses. This means that even if they find our dwelling loss exceeds $8k, they plan to use the funds from the loss of use advance to settle that amount. Do they have the legal right to do this?
We appreciate any insights regarding these issues.
I’m sorry to hear about your situation; it sounds frustrating and stressful. Here’s some information that might help address your questions:
Adjuster Valuation and Claim Payments: Insurance companies often have specific policies regarding how they handle claims. While it’s not uncommon for different assessments to yield varying estimates, if you believe the adjuster’s valuation is unfairly low, you have the right to challenge it. Many homeowners choose to get independent assessments from contractors to provide a counter-valuation. You might consider documenting and presenting these estimates to your insurance company to argue for a higher payout. Additionally, reviewing your policy documentation can clarify how such situations should be handled. If you feel the insurance company is acting in bad faith, you may want to consult a professional, such as an attorney specializing in insurance claims, who can provide guidance specific to your situation.
Reallocation of Loss of Use Payments: The way insurance companies allocate funds can often be complex. Typically, the loss of use coverage is designed to compensate for additional living expenses incurred due to damage to your home. However, if the insurance company is stating they will use any unused loss of use funds to cover dwelling losses, this may be stipulated in your policy. It’s essential to check your policy details regarding the use of these funds. You may be within your rights to question this approach, especially if it seems to limit your ability to recover fully for both the loss of use and damage to your property. Consulting your policy and possibly getting legal advice can help clarify your rights and options in this scenario.
Given the complexities involved, consider engaging a public adjuster or legal expert if the insurance company continues to be uncooperative. They can advocate on your behalf and help ensure you get a fair settlement.