by hirscs1 » Fri Jan 04, 2013 08:22 pm
Hello,
I am located in Massachusetts. About 1 month ago, we had a flood in our kitchen and basement caused by the ice maker in our fridge. It destroyed our kitchen cabinets, tile floor, drywall, baseboard, in our kitchen, and also did major ceiling and wall damage in our finished basement. I have filed a claim with our insurance, and had the adjuster out to look at it. We are in the process of getting quotes for the contractor work, new kitchen cabinets, granite, tile floor, etc. The adjuster is not providing us with any kind of estimate, they are just waiting for us to provide the quotes for all items listed. The adjuster has verbally said that all those things are going to have to be replaced. The adjuster has also brought up the holdback multiple times. I am trying to figure out how this will work, especially around the kitchen cabinets. I am having a quote done by one kitchen company, but I am not sure they are the ones I want to use yet. I am also looking into a couple of other companies as well. Obviously their prices will fluctuate. If I submit a quote to the adjuster for, let's say, $10K in cabinets, and they approve it, and hold back $2K (20%), and send me a first check for $8K, but the cabinet company I choose to do the work only costs me $9K, then I will only get $1K of the holdback, correct??
Does the insurance company care if I don't use the cabinet company that the estimate came from? My guess is no, but I am not sure. We were told by the adjuster that they would probably need cancelled checks after the work is done, so they will know how much we actually spent. Just trying to figure out this whole process. A few people I have talked to who have filed large claims tell me that they have ended up with all this extra money after the insurance....I don't really understand how. Any insight, suggestions, or information would be really appreciated!! Thanks!
I am located in Massachusetts. About 1 month ago, we had a flood in our kitchen and basement caused by the ice maker in our fridge. It destroyed our kitchen cabinets, tile floor, drywall, baseboard, in our kitchen, and also did major ceiling and wall damage in our finished basement. I have filed a claim with our insurance, and had the adjuster out to look at it. We are in the process of getting quotes for the contractor work, new kitchen cabinets, granite, tile floor, etc. The adjuster is not providing us with any kind of estimate, they are just waiting for us to provide the quotes for all items listed. The adjuster has verbally said that all those things are going to have to be replaced. The adjuster has also brought up the holdback multiple times. I am trying to figure out how this will work, especially around the kitchen cabinets. I am having a quote done by one kitchen company, but I am not sure they are the ones I want to use yet. I am also looking into a couple of other companies as well. Obviously their prices will fluctuate. If I submit a quote to the adjuster for, let's say, $10K in cabinets, and they approve it, and hold back $2K (20%), and send me a first check for $8K, but the cabinet company I choose to do the work only costs me $9K, then I will only get $1K of the holdback, correct??
Does the insurance company care if I don't use the cabinet company that the estimate came from? My guess is no, but I am not sure. We were told by the adjuster that they would probably need cancelled checks after the work is done, so they will know how much we actually spent. Just trying to figure out this whole process. A few people I have talked to who have filed large claims tell me that they have ended up with all this extra money after the insurance....I don't really understand how. Any insight, suggestions, or information would be really appreciated!! Thanks!
Posted: Mon Jan 07, 2013 04:37 am Post Subject:
we had a flood in our kitchen and basement caused by the ice maker in our fridge
First off, this is not a "flood". If it were, you would probably not be covered. It is, instead, a sudden, unexpected failure, and is a covered cause of loss.
The insurance company does not have an interest (or a say) in which contractor you use. They may recommend one (or more) to you, and if they "supply" the contractor, they bear liability for the quality of the work performed.
Your homeowners policy probably provides "replacement cost", but this does not entitle you to take advantage of the insurance company. The "holdback" is simply a portion of the expected total cost that will be paid upon completion of the job. The purpose is to cause you to make the repairs.
But you need to know what the insurance company has valued the total loss at -- they have to tell you. If they have determined it to be $10,000, then you are entitled to the entire $10,000, even if you only spend $9,000 on the work. You are being asked to submit estimates for the work to assist in valuing the loss. As long as the estimate is for replacing LIKE FOR LIKE, you are free to submit the highest estimate you have.
If the loss is valued at $8,000, but the actual cost to replace LIKE FOR LIKE (no upgrades at the expense of the insurance company) is $10,000, a replacement cost policy will pay that amount, assuming it is lower than your total limit of liability. If the insurance company agrees to pay $10,000, but you get the work done for $9,000, then you may keep the difference.
REMEMBER! The deductible will be subtracted from the total loss valuation. So if the loss is valued at $10,000, and the deductible is $500, your total claims payment will be $9,500.
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