Insurer Offering Only ~10% of Repair Costs
This is my first experience with homeowner’s insurance (Liberty Mutual), and it’s turning into a nightmare. I’m looking for advice on my next steps. Here’s what happened: a local company installed a new appliance in my home and messed it up, leading to water damage in my kitchen and significant damage in the finished room directly below. After dealing with the appliance company’s insurer, I decided to file a claim with my homeowner’s insurance once I saw the extent of the damage during the initial water remediation, thinking they would handle the subrogation.
Right now, my kitchen is stripped down to the studs, with some cabinet boxes, trim, and the dishwasher piled in my sunroom. The counter is being propped up by a piece of scrap wood. There are some minor gaps appearing in the hardwood floor, but I’m hoping to let that slide for now. Meanwhile, the room beneath the kitchen is unlivable—one wall is down to the studs with no insulation, the LVP flooring has been removed, and there are holes in the ceiling from the water remediation equipment. A local contractor provided a repair estimate of $25,000 (in a high-cost-of-living area with my home valued at nearly $1 million). This estimate includes insulation, drywall, plaster, paint, baseboards, ceiling repair, new LVP flooring for the downstairs, reinstallation of existing cabinets, and plumbing, but it doesn’t cover new cabinets or countertops.
I’ve had my claim with Liberty in progress for 8 weeks now. A field adjuster came out 2 weeks ago, but I’ve heard nothing since. The contractor has also been following up with Liberty for updates. Today, I received a call from Liberty stating that the field adjuster estimated just $700 for the kitchen repairs and $2300 for the downstairs—a total of only $3000. I know this is an initial offer, and I expected to pay some costs out of pocket, but this barely covers materials, let alone the labor. Plus, there’s no guarantee my custom cabinets and countertops will survive the process unscathed.
What should I do next? Should I pay the $20,000 upfront and then pursue legal action against the appliance company to get reimbursed? I thought having homeowner’s insurance would protect me from situations like this, but I’m feeling overwhelmed. On top of everything, I’m expecting a newborn in less than 8 weeks, with my house in disarray and no dishwasher. I know these are first-world problems, but it’s all quite distressing. Any advice would be greatly appreciated.
I’m really sorry to hear about the situation you’re facing. It’s incredibly frustrating to deal with such a significant issue, especially with a newborn on the way. Here are some steps you might consider taking:
Review Your Policy: Take another look at your homeowner’s insurance policy. Understand the coverage you have, especially related to water damage and subrogation. Ensure that you’re aware of your rights under the policy.
Request a Detailed Breakdown: Contact Liberty Mutual and ask for a detailed breakdown of how the adjuster came to their figures. You can also request a copy of the adjuster’s report. This can help you understand their rationale and prepare for negotiations.
Gather Documentation: Collect all your evidence, including the contractor’s repair estimate, photographs of the damage, any correspondence with the appliance company, and records of your communication with Liberty. This documentation will be crucial in supporting your case.
Negotiate: Don’t take the initial offer as final. Use the detailed estimate from your contractor to negotiate with Liberty Mutual. Make sure to highlight how the damage is more extensive than what they assessed. Be persistent in your communications.
Consider Hiring a Public Adjuster: If Liberty is unresponsive or you feel overwhelmed, consider hiring a public adjuster. They work on behalf of the policyholder to ensure you receive a fair settlement. This might involve an upfront cost but can potentially save you money in the long run.
Explore Subrogation: If you decide to pursue the appliance company, document everything and consult with an attorney to understand your rights. Since their error caused the damage, you might have a good case for reimbursement after you pay for repairs.
Get a Second Opinion: If possible, consider getting a second opinion from another contractor. This could help in negotiations with your insurance company by providing further evidence that the damage and necessary repairs are more extensive.
Involve an Attorney: If negotiations stall or you believe you’re being treated unfairly, consult with an attorney who specializes in insurance claims or consumer rights. They can provide guidance on how to move forward.
Stay Organized: Keep all communication organized and document every step you take. This will be helpful if you need to escalate the issue or involve legal support.
Consider Temporary Solutions: While you’re navigating these issues, you might look into temporary solutions to make your home more livable as you prepare for your newborn.
I hope you find a resolution soon that works for you and that you can get your home back in order before your baby arrives. Best of luck!