Is My Insurance Companies Estimate Wrong?

A question that many people ask themselves after they suffer a loss is, “did the insurance company adequately estimate my damages?”. The answer can be both more simple and complicated than you might think, so lets go over some ways to identify issues:

The simple: 

Does the insurance estimate accurately reflect your damages? Simply put, is the property damage being acknowledged and provided for in the estimate?

Example: The roof over your garage was damaged in a storm along with the fencing around your home. The insurance adjuster came and took a look at the place, took some pictures and then provided you with an estimate a month later stating your claim is “covered” and itemizing the damage costs to the inside of your garage, including the walls and ceiling, and the fence surrounding the house to be $5337.58.

So is there anything missing from the insurer’s estimate? Yes, it appears that the damaged roof, which caused the damage to the inside of garage, has been left off of the estimate.

When confronted with such a situation you should make a list of the damages which you, and the property, sustained that were not reflected in the estimate so that you, or your attorney, can dispute these omissions.

Another simple thing to check is the measurements for which an appraisal is based whether that be room size or the length of a certain fence section that blew down. Building material costs that are itemized in your estimate are multiplied by the square footage or yardage so if that figure is off then so will be the total cost.

Last thing worth checking is the taxes, including what items included sales taxes, or other taxes, and at what percentages.  If the tax numbers aren’t adding up then don’t be afraid to ask how they came to that number and dispute it if neccesary.

A Little More Advanced:

Getting a little more advanced requires a close look at your insurance policy and the language within it. Digging into your policy may find you all types of “goodies” or things you didn’t even know you have insurance for.

Example: A category 4 hurricane battered Florida’s East Coast for two days. Along with sustaining certain damages to the family home your neighborhood lost power for three nights and four days. You elected to stay in the home to safeguard your valuables due to looting in the area. You had one small generator which would only run one of two of your refrigerators, a couple lights, and a small window-unit air conditioner.  Your wife and two kids couldn’t take the heat and stayed in a local motel the third night.

So in the above example are you entitled to reimbursement of the costs incurred? If so, which ones? The answer of course can only be found in your policy.  There are policies out there that cover the gas of the generator, lost food, and the cost of a motel. That said, you won’t know until you examine the policy. Don’t expect your insurance company, or its agents, to inform you of these special provisions after a loss so do your homework.

Another point of contention or haggling in the insurance adjuster’s estimate will be overhead and profit, often designated as “O&P”. Overhead and profit is just what is sounds like, an amount that a contractor, in the area, might reasonable charge on top of the necessary costs of a certain project. Replacement cost insurance includes overhead and profit where the insured is reasonably likely to need a general contractor for repairs. See Trinidad v. Fla. Peninsula Ins. Co., 121 So. 3d 433 (Fla. 2013).

O&P is normally reflected as a percentage of the replacement cost value so you’ll want to know what percentage was used. The exact percentages are different depending on what region of the state your property is located.  You might expect the combined amount to be anywhere from 15 to 30 percent of the replacement cost value. Where there is ambiguity there is of course room to negotiate.

Leave it to the Experts:

You might also ask what if I miss something that what damaged but I didn’t see it and the insurance company either failed to see it or just failed to list it in their report?  Latent damages can create a lot of trouble for the strength of a home’s structure (i.e. foundation, retaining walls) and/or the health of its occupants (i.e. mold). As such, I’d recommend that anytime you can afford to do so that you have a professional give a neutral and thorough evaluation of the property before signing any documents with the insurance company that might prevent you from making a claim for such latent damages in the future.

These evaluations can not only reveal latent damage to the home but it might also reveal to the homeowner that the insurance company is undervaluing your claim by not accounting for permits and/or other state or ordinance laws that are in place.

Just as helpful as a neutral appraisal is retaining an attorney should it become apparent that the insurance company is playing games, delaying your claim, or undervaluing your claim. Hiring an attorney can take the stress away from you; provide leverage in the negotiations process and allow you to have helpful incite in forming an appropriate figure for settlement.