Insurance Company Contractor
Hi all, We sustained major damage to our house in the tornado a couple weeks ago. The roof is getting replaced and now the top floor needs to be completely gutted from water damage. All said probably 75 to 100K damage. We were advised to hire a public adjuster as our insurance company (TSC) seems…
Hi all, We sustained major damage to our house in the tornado a couple weeks ago. The roof is getting replaced and now the top floor needs to be completely gutted from water damage. All said probably 75 to 100K damage. We were advised to hire a public adjuster as our insurance company (TSC) seems to have some conflict of interest. The Adjuster from TSC is the same as the contractor. TSC is telling me I am required to use their recommended contractor. This sounds illegal and underhanded. Does anyone know the law regarding this?
Stay far away from public adjusters. They take 10% or more of the budget and do almost nothing for it except delay and complicate the process. You are under no obligation to deal with the insurance companies recommended contractor.
If you have the time, stamina and can calculate what this will cost you to the tee you can fight the battle with the insurance company on your own. In my opinion (and I may be biased) the best way to handle this is to let the contractor of your choosing deal with the insurance company. Not many general contractors can succesfully do so but the ones that are well versed with how the insurance companies operate can make this process as pleasant and stress free as possible.
We perform around 15 insurance jobs per year and always end up getting our clients way more than the insurance company originally offered.
Two recent examples:
1. Tree fell on roof. Insurance company offered 11,000 for half of the roof to be repaird. We got the client 24,000 for an entire roof redo along with gutters and trim.
2. Kitchen fire, half of cabinetry destroyed. Insurance company offered 6,000 to replace only the damaged areas of kitchen (which would mean a mismatched kitchen). We got the client 36,000 which allowed her to do a full gut renovation of the kitchen including all new plumbing and electric.
Let us know if we can be of any help but whatever you do stay far away from public adjusters.
I agree with the poster above. The only benefit to hiring a public adjuster is that you can begin restoration work before the insurance company settles, and you don’t have to pay out of pocket. If you can afford the repair work yourself, there is absolutely no reason to hire an adjuster. Yes, the insurance companies will try to lowball you, but a reasonably savvy homeowner (read: any New Yorker) can push back with ease.
While I’m sure there are some good ones, our experience seems typical of the p.a. racket based on other people I’ve spoken with in similar situations. We had a fire on our roof last summer, and hired Joe Anton as our public adjuster. After a flurry of face time up front, he disappeared, and his presence as middleman between me and my insurer ended up slowing down the process. Reimbursement checks were lost, communication was nonexistent, and, yes, we were strong armed into using his contractor (which happens a lot). Overall, our adjuster added nothing but aggravation.
One other note, using the insurance company recommended contractor is not necessarily a bad thing. Because they have a relationship with the insurance company, they are often able to give preferred pricing over some contractor that has no relationship with them. That is probably why they are pushing for you to use their contractor.
Probably what will happen is your contractor will bid a higher price and the carrier will say they are only going to pay up to what their contractor would charge. Then you have to make some noise and either get your guy to agree to that price or have your contractor and theirs sit down and figure out why they are different and come up with a negotiated settlement.
All of this you can do no problem by yourself. A public adjuster often adds very little the equation other than making you feel like you have someone who knows what they are doing. It is very expensive (Usually 8-10%) to purchase this type of reassurance…
As someone who deals extensively in the insurance world, I can tell you 9 times out of 10 a public adjuster is an unecessary expense as they will only complicate the process and take a large percentage of your settlement for very little work.
I cant imagine what sort of conflict of interest your insurance company has, but there is no requirement to use their contractor to affect repairs.
You need to get 2 or 3 contractors over to review the damage and come up with their own proposal. Then the insurance company’s contractor and yours will look at the scope and agree on the cost. You can use whomever you want to make the repairs.
If you have any resistance from the insurance co. threaten to file a complaint with the state department of insurance and start dropping words like “Bad Faith” and “Unfair Practices”. This always gets them in a settlement type of mood and is exactly what a Public Adjuster would do.
That does sound particularly unethical.
Call Chuck Chernick of the Arthur Chernick Company. I refer my clients to him all the time and they always use his services. He’s a great guy and really willing to help out with advice and a lot of facts.
Chuck Chernick
(212) 697-2147
Jim Hill, RA, LEED AP
Urban Pioneering Architecture