Fire Damage

[oozze]

What is the name of your state (only U.S. law)? California.

Hi everyone,
I need help your help. Excuse for my English because english isnt my 1st language. And, please ask me if i didnt make this question clear.

To start, We had fire damage to our home back early this year. We had structural cleaning done by restoration company (ABC company) and we hired our own contractor to fix the house (XXX company).

In original, We planned to give ABC company to do structural clean up as well as remodeling our kitchen. However, considering my tight budget, high deductible and small amount for replacement personal properties (stoves, rangehood and etc), I was looking for constructor that will fix my house cheaper and did additional works that fit into that budget.

In mid March, we received some money from our insurance company. We called our adjuster to ask for the purpose of this money. He told me that this money will get me going to remodel my home. I told him that the structural cleaning up alone is as much as the check he gave me. Then, he said he havent received the final bill from ABC company yet. And, he said he will assign a local adjuster to discuss further with ABC company.

Much of the wordings in his estimates are remodeling kitchen, paint living rooms and etc, and i can see a small amount of cleaning and he based on the square footage of the home.

He did asked me if i will be using ABC company to do remodeling. I said I was considering other company. He then said, that cause you should work on his estimates. If i discounted the small cleaning service, his estimate is a little lower than ABC Co.'s remodeling estimates.

So, we use that money to hire contractor to work on parts the we feel important such as on his estimates, he estimated some painting jobs. We didnt do it, we just did ourselves and did touch up. But, we did fix all the damages in the kitchen.

So, now the claim is handled by a different adjuster. And the new adjuster kept telling ABC company that the insurance has overpay me for payment to ABC company.

Now, he is asking me to provide him estimates to remodel the house, actual invoices as well as proof of payments to fix the house.

First of all, I have some of this. However, I will be lower toward the estimates. The reason for me doing so, so i have money that i can allocate elsewhere. For example: my stove was only paid for $200. The new one I have to buy at $900+tax and etc.

My questions:
1. How can i point out that I take the 1st adjuster estimates to remodel the house?
2. now, ABC company wants to put lien in my house because based on new adjuster claim i have been overpaid to pay ABC company.
3. Is it illegal to accept 1st adjuster estimates and finding cheaper constructor to fix your home??

Help please!!!

Sincerely,


oozze

 

[justalayman]

The reason for me doing so, so i have money that i can allocate elsewhere. For example: my stove was only paid for $200. The new one I have to buy at $900+tax and etc.

I can only understand about half of what you are trying to say. It is a bit confusing but a couple basics you should understand:

unless you were insured for replacement cost and not simply current value, you will not get enough money from the insurance company to buy new items. They are only paying you for the depreciated value. With that, you should be able to replace the damaged items with a like item (same age, same condition).

If you want new, you have to pay the remainder from your pocket.

so, to the allocating funds. With the payment for market value, you do not get to allocate those funds and then expect more because you used the money you got for one thing to add to the money you got for another item so you do not have to pay anything out of your pocket.

as to overpaying ABC company; it sounds like the insurance adjuster was under the impression they were doing more work than you actually contracted them to do and the insurance company paid for more work to ABC than they deserved. Not real sure due to the confusing info from you.


as to taking the money and hiring a cheaper contractor: If the insurance company paid based on their estimates or calculations, yes, you can hire whoever but they insurance company is only going to pay what they calculated.

If they insurance company is paying based on estimates you sent them, then no, you cannot simply go find a cheaper contractor. That would be insurance fraud.

You need to sit down with your insurance adjuster and have him explain all of this to you so you do understand why they are only going to pay a certain amount for items that cost much more for a new replacement (like the stove situation) and whether their payments are tied to your estimates or their estimates/calculations.

 

[JETX]

1. How can i point out that I take the 1st adjuster estimates to remodel the house?
2. now, ABC company wants to put lien in my house because based on new adjuster claim i have been overpaid to pay ABC company.
3. Is it illegal to accept 1st adjuster estimates and finding cheaper constructor to fix your home??

Your insurance company is only required to pay to return you to the condition you were in prior to the loss. This means that they can require that you show ALL the actual costs.... and reimburse you for the same.

 

[oozze]

I can only understand about half of what you are trying to say. It is a bit confusing but a couple basics you should understand:

unless you were insured for replacement cost and not simply current value, you will not get enough money from the insurance company to buy new items. They are only paying you for the depreciated value. With that, you should be able to replace the damaged items with a like item (same age, same condition).

If you want new, you have to pay the remainder from your pocket.

so, to the allocating funds. With the payment for market value, you do not get to allocate those funds and then expect more because you used the money you got for one thing to add to the money you got for another item so you do not have to pay anything out of your pocket.

as to overpaying ABC company; it sounds like the insurance adjuster was under the impression they were doing more work than you actually contracted them to do and the insurance company paid for more work to ABC than they deserved. Not real sure due to the confusing info from you.


as to taking the money and hiring a cheaper contractor: If the insurance company paid based on their estimates or calculations, yes, you can hire whoever but they insurance company is only going to pay what they calculated.

If they insurance company is paying based on estimates you sent them, then no, you cannot simply go find a cheaper contractor. That would be insurance fraud.

You need to sit down with your insurance adjuster and have him explain all of this to you so you do understand why they are only going to pay a certain amount for items that cost much more for a new replacement (like the stove situation) and whether their payments are tied to your estimates or their estimates/calculations.

Hi justalayman,
Thank you for your prompt reply, really really appreciate it.
Yes, I understand about the replacement facts about my personal properties. That is portion of the the reason I am seeking other contractors to do the remodeling my house to supplement the short in money.

We never submitted any estimates to my adjuster. I believe ABC Co's restoration division did submit to my adjuster but i am not sure. I started remodeling my home after I received payments from my insurance and based on his estimates. On his estimates, the wording are mostly for replacing cabinets, replacing stoves, replacing backsplash, paint and etc. There is a section stated cleaning and that amound is so small, under 5k as opposed ABC company is billing for significant amount (over 20k).

The reason i proceed with the remodeling because if i calculated his estimates, his estimates is less from ABC restoration division, but not that much (around 3k). So, I seek my own contractor to fix the house based on his estimates. Like i mentioned earlier, on his estimates, he estimates some new painting jobs because of smoke damages. I didnt do all inside house painting, instead I go and touch up on the section that i feel i need to fix. And, I use that money to supllement to buy my personal properties. I proceeded to remodel because I am pretty satisfied with his remodeling estimates. However, I didnt accept his cleaning estimates because it is far from what ABC company told us. When we got the check from our insurance, ABC company has not submit finally billing yet. Because the amout is such a diferent gap (5k vs over 20k) he told me that he will assign a local adjuster to discuss with ABC company.

But now, the fact is turned around with the new adjuster and kept telling ABC company that they have overpaid us. I cant fully understand the estimates but just compare side by side, you can tell it is 2 different estimates.

Hope that will make it clearer.

So to summarized, I think it is not illegal to work under his estimates and allocated the money for something else since i never provided the estimates. I use his(adjuster) estimates. But, does depositing the check meant I also accepted the cleaning estimate as well???

Please help!!

 

[oozze]

Your insurance company is only required to pay to return you to the condition you were in prior to the loss. This means that they can require that you show ALL the actual costs.... and reimburse you for the same.

Ok i understand your statement.
how about this situation where I have a very expensive kitchen that was build by the 1st owner. I got burned down...then they (insurance) estimated to replace the kitchen cost $50000. However, I am not too happy with the old kitchen. I am happier to minimalist. So, cost for me to replace the kitchen is only 20k. I am still entitled for 30k right?

For my situation, i use the adjuster estimates for example 50k, find contractor and do some works myself for 30k, and the rest 20k is to buy a better stoves, better ranges or do other things.

 

[justalayman]

do you have a mortgage on this house?

 

[oozze]

do you have a mortgage on this house?

Yes by BofA.
Now I worried that by depositing the check, I accept his cleaning estimates. Thats not the case right?

 

[justalayman]

You may not be able to make the changes you are considering. BofA loaned the money on a house with $XXXXX value. The changes you are considering can materially alter the value of the home and reduce the value of their security. You might want to refer to your mortgage loan agreement as to maintaining the value of the home.

 

[oozze]

You may not be able to make the changes you are considering. BofA loaned the money on a house with $XXXXX value. The changes you are considering can materially alter the value of the home and reduce the value of their security. You might want to refer to your mortgage loan agreement as to maintaining the value of the home.

Hi,
I changed the kitchen as similar as before or better. But what i did was finding contractor that will the the work for less than my adjuster estimates and use the difference to supplement in cash short (deductible, difference in replacement and actual and etc).

Accepting the remodeling estimates doesnt mean i accept the cleaning too right? otherwise, why would he assign local adjuster to talk to ABC company?

 

[justalayman]

you just got done saying you were spending $20k to replace a $50k kitchen because you liked a more minimalistic approach to design. That is not: I changed the kitchen as similar as before or better.

estimated to replace the kitchen cost $50000. However, I am not too happy with the old kitchen. I am happier to minimalist. So, cost for me to replace the kitchen is only 20k. I am still entitled for 30k right?

Now it sounds like you are involved with insurance fraud and in the process, are attempting to defraud your mortgage lender.

I'm outta here on this one.

 

[oozze]

you just got done saying you were spending $20k to replace a $50k kitchen because you liked a more minimalistic approach to design. That is not: I changed the kitchen as similar as before or better.


Now it sounds like you are involved with insurance fraud and in the process, are attempting to defraud your mortgage lender.

I'm outta here on this one.

hi justalayman,
I am sorry if i gave you the wrong impression. I was point out to JETX about his statement about providing insurance my actual receipts. I was only giving him example, but not what I did to my house.

My final kitchen is exactly the same as old one, except now, I have light inside cabinets, glassdoors and 1 wine rack on one of the cabinet (instead of shelf), thats all.

Sorry about that.

 

[oozze]

Almost the end of this case

Hi everyone,

Just want to give a follow up on my case.
5/12 - Mess started.
5/13-5/14 - posted here; contacted the contractor again, my insurance agent and finally contaacted the local adjuster's boss.
5/17 - Local adjuster did new comparison (revised the invoice sent my cleaning company, there are few typos)
5/19 - supplement check issued.
5/24 - check arrived and deposited into bank (5 days fund hold).

I update every single significant time with the cleaning company AR. However, my property still goes into lien. So, i am still pissed-off.

On the notice of lien, she wrote that I can pay with credit card. I am thinking to amend this, I want to get some rewards. Not bad, 23k worth of rewards.
Now, she wants to charge 3% fee if I use credit card fee because of the amount so high.

Is that legal?
I dont see that written anywhere.

 

[justalayman]

the fact is, the do not have to accept a credit card. as such, they can impose a fee to allow you to use it. Do you realize that it does cost the merchant to allow you to use the card?

the only entity that could prevent them from charging would be Visa or MC or whatever kind of card it is. If they are not allowed to charge such a fee per their merchants agreement, then they cannot charge it. It is not a legal issue between you and them but the merchant and Visa, MC, etc.

 

[oozze]

Hi,
I am a little confused. So, they only can do that if the merchant agreement says they can? Why would they want to show me that? hehehe

Notice intent to lien letter:
Thank you for choosing ABC company. Enclosed please find an invoice in the amount of $23k for services rendered. I have spoken to your insurance and they advised you were paid directly for our services. You will be responsible for payment in full. If payment is not received by May 20, 2010 a Mechanic’s Lien will be placed on the property to secure the debt. Please remit payment to ABC company address. If you would like to make a payment via credit card, please contact our office.

Thats the end.

I want to excercise that option. Now she is saying:
Unfortunately since the amount owed is such a large sum we are not able to take a credit card. The transaction fees would be too expensive. We can take a credit card payment if you will assume the transaction fees which will be 3% on top of the actual bill using a Mastercard or Visa. The transaction fee would be an additional $699.89.

No where in the original letter she said about 3% fee. Now she knew i got the payment (i update here every time i heard something), she wants the payment in check.


So, my question is it legal for her to charge me 3% now when she didnt mentioned anything in her letter?

 

[justalayman]

oozze;2569646]Hi,
I am a little confused. So, they only can do that if the merchant agreement says they can? Why would they want to show me that? hehehe

they probably wouldn't want to bother but you can call the credit card company and ask them about it yourself. Most likely it is allowed. Not that it is proof but I see this very commonly on purchase orders when I shop on the internet.