Insurance Claim Questions

Coffeefan said:

Need help from FOH bros.

1st claim with insurance (water damage from people upstairs in our 1000sf condo, need repairs on walls, ceilings, new flooring, base, door trim, paint). The adjuster issued 15k in damages to rebuild and repair. If we provide him with proof of repairs, they will issue another check for $900.

I have 3 quotes. Every GC wants me to provide materials for 4k (flooring, vanity, toilet etc).
Their bids are not itemized. It's just a list of jobs that need to be done and one number at the end.
Q1 19k + 4k = 23k
Q2 21k + 4k = 25k
Q3 23k + 4k = 28k

- vs 15k that insurance pays.

Not going to list everything (30 pages heh), but here is an example from his estimate:

Wall repairs Quantity Unit RCV Dep% Deprec. ACV

1/2' drywall - hung, taped, ready for texture 8sf 3.56 28.48 0 0 28.48
Texture drywall - machine 15sf 1.44 21.60 0 0 21.60
Seal/prime (1 coat) then paint (1 coat) 15sf 1.44 21.60 0 0 21.60
Paint the walls - 1 coat 206.67 1.00 206.67 13.33% (27.56) 179.11​

Dumb question: How do they arrive at these numbers? Is this material+labor+overhead+profit all together? Does insurance even include overhead and profit?

Should I give my insurance estimate to the contractor and have him write me an itemized quote and send it to the adjuster? I realize contractors need to make $$. I feel the insurance offer is low. It is not realistic someone would do the job for 15k.

How to approach this?

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You need to go back to your adjuster and have them actually itemize out a scope for the project via xactimate. That's lazy BS when an adjuster tells you to go get three estimates.

You can conceivably can get raked over the coals via change orders because it's a renovation, and if the contractor is a little dicey, a common tactic is to lowball it, but then swing around and say hey I need more money for this. However you can go back to the insurance company and supplement additional changes, but then you got to potentially battle with them for the additional funds.

Do not accept anything and don't submit any of the bids.

Simply tell them why aren't you estimating this. The reason being that's in your best interest is that the average numbers in xactimate should be higher potentially for your area for whatever contracting services and materials you require. It's pretty rare that the numbers will come back lower than what stuff is currently charged in an area.

Is it a staff adjuster or is it an independent adjuster? They're literally trying to lowball it, and that's pretty typical with residential projects, where they get the insured to go out and do the leg work, because they know they're going to get a much cheaper price than what exact the mates going to calculate.

If it's something that's pretty important to you, I would honestly suggest finding a public adjuster if it's a significant amount of repairs. It won't cost you anything. Typically they'll get paid 10% of the net claim, but they'll typically factor in whatever they have to to cover their cost as well as making certain you have plenty of money to the job. Shouldn't cost you a dime but they can navigate policy, and they're basically your advocate. Also they will go through and scope and estimate everything out, that way you're making certain the project is correct and you'll have the funds needed.

That sounds like you have an RCV policy though, and if it costs more and you go out and find a quality general contractor, they should be able to provide the invoices and typically should submit them to the insurance company in order to release that depreciated amount.

Honestly I'd go get a PA if you're having a battle with them at all. Just sounds like you're getting fucked. Just don't sign off on anything until you get it squared away. If for some reason you did I think you can still go to a public adjuster and get things switched around if necessary.

Coffeefan said:

When I asked the adjuster about condo association insurance involvement, he said that they have a waiver. I've been reading bylaws and policies yesterday and today and can't find anything about it.

How is restoration pricing done? Does that include overhead and profit for contractors?

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Typically three trades or more is the industry standard for overhead and profit which is 10% on both. There's no law that states that but that's just kind of how the industry, and I have to fight that stuff all the time because there's a GC, I always have overhead and profit because I'm subbing everything out. I've lost count of the number of times I've had that argument with insurance companies.

You'd really have to dig into your policy to see if maybe they have some sort of weird exclusion to not allow your estimate to include o&p for your selected contractor. I've never heard of that before, so that seems pretty odd, but it might be something goofy that the companies are starting to write into policies.

DP

Who is your carrier?