"Understanding Your Adjuster's Estimate."
Failure to fully understand the adjusters estimate has caused people
to throw away tens of thousands of dollars. Be knowledgeable! Don't
let this happen to you. Carefully Review these 5 points.
Some have asked me, “How can I know if my home's damages have been
properly estimated?”The answer is: if you are fully insured…. and your
coverage limits are high enough… and your loss is a covered loss, you should
have no expense but your deductible in restoring your home. You should
not have to do the repairs yourself. You should be able to hire professionals.
If you cannot do this then you are either (1)underinsured, (2)your claim has
not been properly estimated, (3)or you have left money on the table that
you did not know you were entitled to. Don't let this happen to you. Get
what you deserve!
Unless a person is a general contractor, the interpretation of an insurance
estimate of repair can be quite daunting. Oftentimes, the estimate will be
accompanied by a brief cover letter and sometimes with a check, usually made out
to the insured and your mortgage company if you have one. There are several
issues in regard to these estimates that are worth mention.
1 It takes time to create a good estimate:
The amount of time that elapses between the visit of your adjuster and your
receiving his/her estimate for repairs will vary. It depends upon several factors.
The first of those being the workload of the adjuster. If an area has been hit hard
by a storm or major event then the adjuster may have a stack of claims already on
his desk. Many adjusters try to work off of a first come first served basis. Although
insurance companies try to spread out the work load for their adjusters it can
become nearly overwhelming if the loss in a geographic area has been severe.
The best thing to do is to ask the adjuster when he is at your home, “How long
do you think it will be before I will hear back from you with an estimate?” A
normal response is usually somewhere between one and three weeks. Take note
of the adjuster date and write it down. If you have not received it by that time
then call the adjuster and inquire as to the delay. Don’t forget to call.
2 Once you receive the estimate, check it carefully!
Before you will really know if an estimate is complete or not you must do your own
homework. You can download a free home inspection checklist entitled “Damage
Checklist” at www How to settle your claim.com. If you have already done a
thorough walk around the outside and inside of your home and created a checklist
of damages, you can compare it to the insurance company’s estimate. Look
at the damages found throughout your home If it looks like all the issues are
covered then great! However, don’t fully assume that this is the case. It is very
wise to have a General Contractor look your home over or at least a roofing
company. If your roof has been damaged. This is always a good idea. Of course
doing your homework by creating your list of damages will be helpful to these
Since someone is going to have to perform repairs, you should immediately get a
licensed contractor to come out and give you a written estimate for repair. It is
possible that the contractor might find things that were overlooked by you or
the adjuster. You should submit this new information to your Insurance company
immediately. If there is no new information you will at least have a contractor that
can perform the work if you so choose.
In regard to the estimate:
Most of the time the insurance company's estimate will be broken down under the
following categories: Additional structures, Exterior, Roof, Debris removal,
Interior, and Personal contents. Another category of your claim may be “loss of
use” however this is usually paid as the expense is incurred by you. For more
information on loss of use you can read your policy. You can also read more about
“loss of use “and the collection of receipts for this expense at in the Book "How to
Settle Your Claim and Get the Money You Deserve!".
It is very important to read your policy because you may have purchased
additional coverages and not be aware of it and your adjuster may overlook it.
For instance you might have coverage for a screened porch enclosure but not
know it. I have seen this often in the state of Florida.
You may also have coverage for loss assessment. If you live in a neighborhood
with an association and pay yearly fees , Your community might want to levy an
assessment to get the neighborhood back in order, if trees, landscape or common
use buildings were destroyed. Your loss assessment coverage might pay for this.
Additional structures may include detached garages, sheds, gazebos or other
structures. Your policy will most likely provide further definition of these structures.
Your roof will not only include the roof surface itself, but also the waterproof
membrane or under-layment, decking, vents chimney, flashing and drip edges to
name just a few.
Your exterior will be comprised of wall materials, paint, siding, windows, screens,
shutters, trim, gutters, doors, porches and many other items. Some policies may
exclude paint. You will need to check your policy.
Debris removal may include removal of trees, shrubs, and wind or water carried
debris. If your home is flooded then the cleanup may be under debris removal.
This coverage also may have separate limits or endorsements.
The interior of your property estimate will most often be broken down room by
room. Take your own list of damages that you did as your homework and go
room by room to see if the adjuster has missed things. It is quite possible
that the adjuster may find some things that you have missed.
3 Check you deductible(s).
Your deductible is the amount that you must pay before you insurance
company will pay. It's important to check your policy because some items may
have their own deductible. This is sometimes overlooked. If you are satisfied
that the adjuster has been thorough and you are not aware of missed items and
your damages are below your deductible then your damages are probably not
extensive. However, you will have to pay for these repairs out of your own pocket.
Don’t delay in getting these repairs done. If you don’t do them and the
damage gets worse and then you later want to file a claim because you have found
more extensive damage, then your insurance company could argue that you
failed to mitigate the damages and that it is not their responsibility.
If paying your deductible is a huge pill to swallow, then consider visiting with
your agent to get a new and lower deductible in case you have a new claim in the
future. Generally the lower the deductible the higher the premium. You have to
way the risks and consider your own financial situation.
4 Depreciation and Recoverable Depreciation
Depreciation is used to determine the actual cash value (ACV) of an item. For
instance, brand new carpet in your home has a higher value than six year old
carpet. The same is true for your roof and many items in your home. You will have
to look at your policy to see if you have an ACV policy ( Actual Cash Value) or
RCV (Replacement Cost Value) policy. Look at your policy and if unsure talk to
In dealing with a replacement cost policy an adjuster will often total all the
damages and then take off recoverable depreciation for some of the items in
the property. This recoverable depreciation is then withheld by your insurance
company. Although your policy may be for Replacement cost, most insurance
companies hold this recoverable depreciation until you actually do the repairs
and furnish the receipts.
Once receipts are turned in matching the recoverable depreciation, the
insurance company will then reimburse you. Usually when you receive your
estimate from the adjuster a letter will accompany it describing this recoverable
depreciation. Don’t overlook this amount as it can easily be thousands of
dollars and you are entitled to it. You must follow up on this. Don’t expect
the insurance company to chase you down for receipts so they can pay you
more money. In my years of experience this is a major failing of property owners
and much money has been left uncollected from insurance companies. Don’t let
this happen to you!
It is sad to say but often times property owners look at the check that they
first received and realize that it is not enough to get the work done. They do
not understand recoverable depreciation and no one takes the time to
explain it to them. So, they then try to do repairs themselves so that they don’
t have to spend more money out of pocket. Don’t try to save money. If you hire
someone and collect and keep your receipts you can get that recoverable
depreciation! Don’t forget this one. Many times it is worth thousands!
5 Overhead and Profit
This is another one in which people have lost tens of thousands merely out of
ignorance. If your adjusters estimate for property damage was estimated at
$50,000 for materials and labor but there is no overhead and profit written on the
adjusters estimate, then you would normally be entitled to another $5,000 for
overhead and another $5,000.00 for profit. That is $10,000 more do that you
could have received. Some insurance companies routinely put the O&P on the
estimate while I have seen many others leave it off.
In order to qualify for O&P, the repairs to your property usually must include at
least three different trades people. That is where the overhead and profit
comes in. O&P is to pay the overhead and profit of a General Contractor. General
Contractors must estimate your work, provide liability and other insurances,
warehouse tools and materials, and select and hire these various trades people.
Sometimes they are sub-contractors and sometimes they are directly on the
ongoing payroll. These trades people may be roofers, plumbers, electricians,
carpenters, painters, heating/AC, landscapers, etc.
Again I have seen tens of thousands of dollars lost because the property
owner thought they didn’t have enough money after receiving his/her first
check that accompanied the estimate. So they began to do the work themselves or
hired family or the kid down the street. They simply did not understand or
were educated in how to obtain O&P
In order to receive O&P most insurance companies will require you to provide
them with a signed contract with a General Contractor. Do this. You can then get
typically 20% more than if you did not receive the O&P. You will probably have
enough then to hire a qualified contractor. You will get the work done quicker,
more professionally and be able to get on with your life!
This article is an excerpt from the book “How to Settle Your Claim and Get All
The Money You Deserve". by Richard L. Carter. Jr. BS, MA. Mr. Carter’s
company has helped hundreds successfully settle their claim with their insurance
company. To download helpful claims information or purchase his book go to www.
How To Settle Your Claim.com..
visit here for more Book info
|This article is a
partial excerpt from
For more information
buy the book.
How to Settle Your Claim.com