Insurance Claim (1 Viewer)

I had a tree fall during a bad storm and it did some damage - took out part of a deck rail, crushed some patio furniture, some very subtle/minor dents on the aluminum siding the house.  I inventoried everything and sent pictures to my insurance company.  The claims representative seems to be an incompetent ditz for several reasons (and she NEVER answers her phone which drives me freakin' crazy, but that's a separate issue), but she said she couldn't really tell the extent of the damage from the pictures I sent her.  She wanted to send out a contractor to assess the damage and provide an estimate for repairs.  OK fine.  Insurance contacts a contractor who calls me and arranges a time to come look.  I was not home at the time.  Some time passes.   She sends me a copy of the contractor's estimate and the papers with all the claim details and such.  Well this contractor seems to have gone way over the top on the work he wants to do relative to the amount of damage that I have.   I would approximate that he has padded his estimate with a good $8k worth of stuff that isn't necessary.   What's my next move...

Do I look the other way and let the contractor do his thing?

Do I tell the insurance company to just cut me a check and I'll make arrangements for the necessary repairs and pocket the profit?

Do I expose this contractor and tell the insurance company about the significant discrepancy?

Oh, and can one of you insurance pros tell me what I would need to do to "recover depreciation" on the furniture.

Buy replacement furniture and submit the receipt, typically within a set amount of time (180 days to a couple years as established by contract).  If the furniture was $100 new and you were paid say $70 for actual cash value (after depreciation) you will need to spend the full $100 to get the $30 withheld back.  Sending in receipts for $70 likely wouldn't get you anything.

Option two is what I would do, it is the company established procedures estimate and if they are willing to pay off of that, I would just fall in line with it.  

Shark move (there are many) is if you did any cleanup yourself from the storm, ask about getting paid for those hours you and family worked at a general labor wage rate, some companies have this or you can throw out something maybe $25 per hour.  Ask first if they will reimburse you for your time spent, then set the hourly rate BEFORE you establish the hours.  You won't get paid for the time handling the claim but you could get paid for some of the labor if you did any.

Option B.  I got like 2K for a tree falling on my garage and ended up fixing it myself super cheap 

I would have them cut me a check and move on. You can fix or replace whatever you decide is best.

flranger said:

Buy replacement furniture and submit the receipt, typically within a set amount of time (180 days to a couple years as established by contract).  If the furniture was $100 new and you were paid say $70 for actual cash value (after depreciation) you will need to spend the full $100 to get the $30 withheld back.  Sending in receipts for $70 likely wouldn't get you anything.

Option two is what I would do, it is the company established procedures estimate and if they are willing to pay off of that, I would just fall in line with it.  

Shark move (there are many) is if you did any cleanup yourself from the storm, ask about getting paid for those hours you and family worked at a general labor wage rate, some companies have this or you can throw out something maybe $25 per hour.  Ask first if they will reimburse you for your time spent, then set the hourly rate BEFORE you establish the hours.  You won't get paid for the time handling the claim but you could get paid for some of the labor if you did any.

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I did do the clean up and they have factored in about $700 for that.

With regard to the furniture, I provided original receipts from 5 years ago.  They acknowledge a replacement cost of just under $1400 but have depreciated it down to about $350 with  recoverable depreciation a little over $1k.

Cjw_55106 said:

I would have them cut me a check and move on. You can fix or replace whatever you decide is best.

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No moral dilemma with the superfluous estimate?  

You can always get a bid or couple bids on your own and present it to the insurance company if you just don't want to give this guy the business.  

Insurance professional here (not claims) and this is a tough call.

I'd argue that option B could TECHNICALLY be considered aiding insurance fraud. Even if you there's no actual collusion between you and the contractor, they could argue that you knowingly allowed yourself to profit from a fraudulent estimate. Yeah, its their contractor, but that doesn't absolve you of guilt in my opinion  . And also, you'd take at least some sort of financial hit in the long run, as they might ding you more (in terms of your future rates) if they're paying $8k more to "fix your house". Personal lines is all a predictive modelling game, so a higher loss ratio may just kick you into a higher rate bracket automatically. 

That being said, I'm not sure what my next step would be. I wouldn't let the contractor just do his thing (because again, you WILL take a bigger rate hit at renewal) but I'm not sure I'd want to get in the weeds with turning the guy in either.

I think I'd probably send them an email (to make sure its all in writing) and suggest that you feel the estimate is high. At the end of the day, you're not an expert (unless you are) so they may just want to pay the guy and move onto the next claim. And that point, if they offer you a check in lieu of using their guy to make the repairs, (If you ask for it, I think you put yourself on shaky moral ground, if not legal ground) I'd chalk it up as found money and move on.  Sometimes you just can't save someone from their own stupidity/laziness.

Galileo said:

No moral dilemma with the superfluous estimate?  

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What in the estimate do you think is incorrect? 

You aren't looking the other way, you are accepting their proposal.

when I looked at the title quickly, it looked like "Insurance Clam". so I got the visual of a clam in a tie sitting at a desk, taking phone calls. "Hello, this is Insurance Clam!"

also, for some reason, he had Rip Taylor's voice.

get the check, contract everything out yourself for cash

We recently had a small kitchen fire, one cabinet caught fire and needs to be replaced

Our agent came out and estimated the damage, including cleanup and cut a check on sight.

Wife and I were shocked at how over the top the estimate was

Consider the extra money as payment for loss of use.

Cjw_55106 said:

What in the estimate do you think is incorrect? 

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780 linear feet of 2"x 6" treated lumber @ $2600...I assume to replace decking, but the floor boards of the deck do not need to be replaced.  Exactly one board has a scuff/dent on it...that is about an 8 ft plank.   40 ft of deck rail @ $1370 ... about 6 ft of a 9 ft section sustained damage.  The wood is actually in good shape, just needs to be screwed back together and the spindles reattached.  Spindles were knocked of the rail, but none of them are actually broken.  $4200 for 618 SF of aluminum siding + $300 to remove same amount of siding... There is about a 2 SF section that got some minor dents.  OK, maybe they want to replace a bigger section for matching purposes?  But 618 SF?  Oddly they also have line items to "pressure/chemical clean" 618 SF and a line item to prime and paint 618 SF of metal siding ~ $700 for those.  If new stuff is going up does it need to be cleaned and painted?  And if we are painting it (presumably to match to old), then why not just do this for a much smaller area?  There are some other questionable odds and ends for smaller amounts, but you get the gist.

My wife is saying take the money and use the extra towards re-siding the entire house which is something we have been contemplating doing.

I think it’s just a way of thinking. You are thinking like a guy that has to pay for work to be done. No contractor is going to reuse anything. I’m sure they over charge for some things, but the insurance company knows the game. 

Does the insurance company have a moral dilemma when they raise your rates?

I also disagree with the worrying about your rates going up angle some people have said, if you accept their offer and they cut you a check and you end pocketing 5k after everything is done, it is going to be a very, very long time before they make up that money and yoi could switch companies and find a lower rate then. 

A closed claim is a good claim.  Signed:. Claims adjusters everywhere

msudaisy26 said:

Does the insurance company have a moral dilemma when they raise your rates?

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This is pretty faulty logic. If a company raises your personal insurance rates,(not talking about health insurance here) they generally arent doing anything shady. They have to file these increases with the state (to get them approved) and they have to give you notice. And if you aren't happy with it, you usually have many other competing options. There's nothing immoral about it. They're offering new terms on a contract the renews annually and the customer is more than free to take their business elsewhere.

Taking money you know you aren't entitled to (which the OP clearly feels) because a 3rd party is trying to trick the insurance company is very much a moral gray area. Don't get me wrong.... insurance companies do some crappy stuff sometimes (personally, I think charging depreciation on patio furniture is pretty silly) and I understand how some might feel it's ok to stick it to them when they leave themselves open. But it's this sort of behavior (the rising cost of claims combined with lower investment income) that necesitates rate increases in the first place. 

Obviously 1 contractor skimming an extra 8k isn't even a drop in the bucket, but it's just one example of the fraud that helps drive up prices for everyone.

flranger said:

A closed claim is a good claim.  Signed:. Claims adjusters everywhere

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As I said earlier, this may very well be a factor here. I see it all the time as an underwriter.  I'm guessing the contractor knows it too. 

Yep, I've spent time as claim adjuster, homeowners underwriter, underwriting manager, and Special Investigative Unit manager for the last 12 years.

I'd cash the check.  It's not impossible that estimates are overwritten intentionally, especially in storm damaged areas.  If its enough to keep it closed and people can start repairs its a good thing.  They actually do want you to get your home back to normal.  So a little is left over.  Beats fighting over every inch of siding and shingle.  Because trust me, if insurance overpaid 10-20% on a claim it might never come back up.  But by God, if you are $3 short it will come back up and you'll have more things to fight about.  

I've seen after Floyd brushed Florida where all roofers in a specific county essentially banded together and said we will do no repairs.  Replace only.  And property owners had minimal damage, but not one single contractor could be found that would repair roofs.  And so with that, lots of repairs became replaces.  

Trust me, they want you to take the check, get the repairs done, and get back to life as normal.  If they accidentally included a little extra, don't worry about it, they will get it back.

TLEF316 said:

This is pretty faulty logic. If a company raises your personal insurance rates,(not talking about health insurance here) they generally arent doing anything shady. They have to file these increases with the state (to get them approved) and they have to give you notice. And if you aren't happy with it, you usually have many other competing options. There's nothing immoral about it. They're offering new terms on a contract the renews annually and the customer is more than free to take their business elsewhere.

Taking money you know you aren't entitled to (which the OP clearly feels) because a 3rd party is trying to trick the insurance company is very much a moral gray area. Don't get me wrong.... insurance companies do some crappy stuff sometimes (personally, I think charging depreciation on patio furniture is pretty silly) and I understand how some might feel it's ok to stick it to them when they leave themselves open. But it's this sort of behavior (the rising cost of claims combined with lower investment income) that necesitates rate increases in the first place. 

Obviously 1 contractor skimming an extra 8k isn't even a drop in the bucket, but it's just one example of the fraud that helps drive up prices for everyone.

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So if THEIR contractor is gauging them on a price I should feel morally obligated to tell them to help them save money and not be an accomplice to insurance fraud, but if competing insurance companies have a lower rates they shouldn't feel obligated to just lower my rates because, you know help the company out. So it is my responsibility to save them money and save myself money.  Got it, thanks.

msudaisy26 said:

So if THEIR contractor is gauging them on a price I should feel morally obligated to tell them to help them save money and not be an accomplice to insurance fraud, but if competing insurance companies have a lower rates they shouldn't feel obligated to just lower my rates because, you know help the company out. So it is my responsibility to save them money and save myself money.  Got it, thanks.

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Again, not even close to the same thing.  But if that makes you feel better about taking advantage of a company that is honoring their contract and repairing your home, than go nuts. Again I FULLY realize that nobody is going to feel sorry for the big bad insurance company (and that the $8k wont hurt them in the slightest) but come on.....

Different insurance companies have different expenses (some of which are brought on because of poor business or underwriting decisions. Others due to poor long-term strategy and others just from #### luck or fraud) , different cost structures and different obligations to their stock holders and employees (which, while probably not as important as their customers, are pretty important). And sometimes that means that prices are going to go up. (and I got news for ya, they go down sometimes too. Most of the time actually)

Does Publix have an obligation to charge you less for milk if they find out that the wal-mart down the street is 50 cents per gallon cheaper? No, they dont.  Its your job as a cost-conscious consumer to find the best combination of price and product. That's how the free market works. But if some dopey kid running the cash register accidentally gives you change for a 50 instead of the 20 that you paid with, and you notice it before you leave the register, I do believe you have a moral obligation to let them know.  Yeah, that's part of the cost of doing business for a company that hires teenagers (just like dealing with a shady contractor or two is part of doing business for insurers) but that doesn't mean you should treat it like you pulled the "bank error in your favor" card in monopoly.

Again, if the OP tells them he feels their estimate might be high and they give him the $$ anyway, I'd chalk it up to the "a closed claim is a good claim" theory and go on with my life. And if they weren't obscenely high (which the OP clearly feels they are) I might chalk it up to the difference of opinion or understanding of the cost. The fact that he's asking clearly shows that he feels its a gray area.

And you call my analogies bad. 

In Texas acts of god cant be used to raise your rates. 

Fwiw and all that

TLEF316 said:

Again, if the OP tells them he feels their estimate might be high and they give him the $$ anyway, I'd chalk it up to the "a closed claim is a good claim" theory and go on with my life. And if they weren't obscenely high (which the OP clearly feels they are) I might chalk it up to the difference of opinion or understanding of the cost. The fact that he's asking clearly shows that he feels its a gray area.

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I am not out to fleece anyone or any company.  I almost didn't even report it as a claim thinking it wouldn't be a whole lot more than my deductible.    I never imagined repairs to the extent in the estimate, but it is not my area of expertise either.   I have basically taken your advice and sent an email to the claim rep expressing that it seemed like it may be a high estimate but that I will defer to the professionals.

culdeus said:

In Texas acts of god cant be used to raise your rates. 

Fwiw and all that

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Well, I am an atheist, so there's that.  

Is your insurance good enough that you can just burn the house down and start fresh?

Galileo said:

I am not out to fleece anyone or any company.  I almost didn't even report it as a claim thinking it wouldn't be a whole lot more than my deductible.    I never imagined repairs to the extent in the estimate, but it is not my area of expertise either.   I have basically taken your advice and sent an email to the claim rep expressing that it seemed like it may be a high estimate but that I will defer to the professionals.

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I know all states are different, but even if the estimate is lowered a bit your insurance is still going to go up roughly the same amount.

 I'm in the insurance restoration industry. That estimate is completely normal. If you replace one board on your deck it won't match the others, that's why they're gonna replace all of them. It's pretty normal. 

 Same thing goes for your siding. If you replace two pieces it will be pretty obvious that you replaced two pieces so they are going to replace all of it on that side of the house. 

Some insurance estimators will allow you to paint the entire house just because one wall got affected, some insurances don't.

 Also, those prices aren't "high".  There's a lot more that goes into repairing or replacing damaged building materials than ust the cost of the material in a couple hours labor.  

Sometimes you need permits, sometimes you have lots of paperwork that has been done behind the scenes, you have a supervisor to pay for, you have fuel, what you think is high really isn't that high and often times we go back to the insurance companies for much more than what you see there.

So when i want to put up new siding on my house, I should have a tree fall on it?

Yeah, take the cash and get it fixed yourself.  Listen to the wife.

Siding is super expensive.  My house had Al siding on it and we got hail.  It was beatup pretty bad, between the siding and the roof and other crap the final payout was 57k.  That's probably 30 years of premiums for me.