Insurance/Contractor Question

Hello, everyone,

I hope I'm posting this in the correct forum. I'll try to keep it brief, but at the same time not leave out any relevant information.

We've had some water damage to our house, and our insurance company has accepted the claim but is lowballing us very badly on the proposed settlement. Short version is, they claim that according to Xactimate the workcan be done for around 20 K. we've had over a dozen contractors look at it, and none of them will touch it for anything short of the low 40s. So obviously we're at an impasse here, but the insurance company is refusing to budge off of their 20K offer.

We've currently got a contractor that we feel really good about, but the problem is, the estimate that he submitted is not itemized - he lists everything that needs to be repaired, but does not attach a specific cost to each item; just "Total cost: $43,684" at the end of the estimate.

The insurance company's estimate (while badly flawed) is at least itemized with the cost of each individual repair. I feel that if we submit this estimate to the insurance company, it will just give them an excuse to reject it out of hand for being too vague. Our relationship with the insurance company on this is already adversarial, and I don't want to give them any excuses to throw up any more roadblocks. So my question is - is this sort of thing normal? Submitting a non-itemized estimate like that, with just the total cost of the estimated repair rather than the cost of each item? We've never been in this situation before, and have no idea what is standard practice and what is not.

Thank you!

Does the insurance company have a contractor who will do the work for that cost, or just an estimator?

Thanks for responding, but I'm not sure what you're asking here. They have "suggested" several contractors with whom they have a relationship, and some of these contractors have said they will do the work for that - but we don't want them. We want our own contractor. The estimate they've given us was made by their adjuster, using Xactimate. All I'm trying to find out is whether or not it is standard practice for a homeowner's contractor to submit to the insurance company an estimate that is not itemized line by line.

I am not a contractor but I have seen it done both ways. I would think some contractors may give you the blanket figure because they don’t want the home owner to then cherry pick the list and say I want this but not that. I also think some home owners just want to make it simple and see one figure. Have you went back and asked them to break it out in line items? What did they say?

What was there about the contractors the company suggested you didn’t like? If you did go with them you should stipulate to your ins provider you will require each step done to some level of quality and you won’t except anyone that’s doesn’t meet certain standards. Such as being bonded etc.

IF the insurance company has a contractor who will do the work for a price they agree to, good luck getting them to pay more to someone else. They not in business to payout money they don't have to.

If that contractor is not licensed or does not pull any permits that need to be then you might have an agruement.

Perhaps a talk with a lawyer will help?

HopelessAmateur said:

Thanks for responding, but I'm not sure what you're asking here. They have "suggested" several contractors with whom they have a relationship, and some of these contractors have said they will do the work for that - but we don't want them. We want our own contractor. The estimate they've given us was made by their adjuster, using Xactimate. All I'm trying to find out is whether or not it is standard practice for a homeowner's contractor to submit to the insurance company an estimate that is not itemized line by line.

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Frankly, the disparity sounds suspicious, as does the reluctance to Itemize an estimate and the insurance CO., since they are the payee, can require it.

The insurance Co. is only required to repair and replace to the previous standards, using readily available standard building materials.

If you are expecting to upgrade or have indicated or your "selected" contractor has offered upgrades, you can expect to pay for them, no matter who accomplishes them.

No matter who does the work, they are responsible for all required insurances, licenses, and permits.

Thanks. But as I said, we've had over a dozen contractors bid on this, and none of them will touch it for less than 43k. Average bid is just under 50. Of the 3 contractors that were recommended by the insurance company, all of them admitted that the only way the work can be done for that price is by skipping some key repairs and not restoring the house to the original condition. It's not the contractors that are the problem; it's the insurance company. We've caught them several times just flat-out lying about how they arrived at their estimate, and the tests they supposedly ran on carpet, flooring, wallpaper, etc.

There's a lot more to it than that, but that's just the short version. The issue with the insurance company is a long story, and a separate one, but with all due respect that's not the question I'm asking. I appreciate people trying to be helpful, and taking the time to post lengthy replies, but the only thing we're really trying to find out right now is whether it's an acceptable practice for a contractor to submit a lump-sum bid to an insurance company. Because even though our insurance company is my mortal enemy at the moment, I have to admit that looking at it from their point of view, I'd see this as a golden opportunity to crumple the estimate and toss it into the trash can.

All the other contractors we had basically walked off the job because they couldn't work with this insurance company. This contractor is new to us, and what I'm doing here is looking for third-party opinions on whether he's following proper procedures. So far, it sounds as though the consensus is that at the very least, this isn't really the best practice. Thanks, everyone, for your help so far.

"I appreciate people trying to be helpful, and taking the time to post lengthy replies, but the only thing we're really trying to find out right now is whether it's an acceptable practice for a contractor to submit a lump-sum bid to an insurance company."

No, no competent insurance adjuster, or for that matter, any lucid homeowner would give a contractor the blanket ability to say, " that wasn't included," or "we bid on this product not that."

Have you received any of the bids from the insurance Co. referred contractors and if not ask to review them for completeness.

Of the areas of discrepancy by the insurance Co., are they in writing?

Hire an attny. specializing in property insurance.

Few big contractors have enough business to have all the trades in house so they hire sub trades. The contractors that specialize in insurence work are big enough and have most trades on staff and often do the job cheaper to keep that one customer happy, the insurence company, will not be sending people out who have givin them problems in the past. I would spend time checking out those people for quality of work and forget about the general contractors.

Have your contractor itemize his bid. I itemize all my bids so there is no grey area. If he won't than I wouldn't do business with him.

Get three qualified bids and submit them to the insurance company. If they still won't deal than I would call a lawyer.

Remember they are in business to pay out as little as possible.

Hire a public insurance adjuster. They will take a % , no more than 10% , of the money you get. They will take it from there. Since you already have money from the insurance company , make sure the public adjuster puts in writing he gets none of that , only additional money.

I just went through this. I should have researched my adjuster better , but I did get more money. If you deal with a lawyer often. , I'd call him and ask for a recommendation on an adjuster. I did this and I ended up not going with his choice , I should have.

They go of a % , so if you don't get a dime more , you owe them notbing.

Having dealt with a lot of insurance companies over the years, one thing you have to remember, all insurance companies have differing policies and procedures for restoration work. I'd suggest getting your policy out and reading all the print and see just how your policy reads, many homeowners assume what is covered and how.

You always have the right to go over the adjusters head if you don't think you're getting the best deal, and don't be afraid to ask for their supervisor.