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How To Deal With A Claims Adjuster When You Disagree On Price or Scope


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A reader sent this question to us about a water damage claim she is dealing with that occurred in her home. I was a claims adjuster for three years, and I definitely know that adjusters and insurance companies love to pay the least amount possible for a claim, and they try to get away with as much as possible, hoping that the homeowner won’t push back or question their decisions. It’s the job of the insurance company and the claims adjuster to “indemnify” you, which means they have the responsibility to put you and your home back to its original condition. Here is the question from the reader:

My water heater busted and flooded my kitchen, living room, and den. I had a restoration company come out and remove the water and dry the area. The water only got 1 to 2 inches in the kitchen, but my cabinet warped a little due to the water. The insurance company only wants to repair the side of one cabinet and paint the bottom cabinet. They only want to replace carpet in the den and living room. I cannot match up my carpet with the correct carpet. The adjuster told me to get estimates, so I got several estimates. Later I contacted him and he stated that they were not the correct estimates and he could not understand them. Then he told me to call this Service Master and they gave me an estimate for $3,500. They stated that the cabinets did not need to be replaced however, I have had several contractors tell me that they do need to be replaced. My adjuster sent me a check for $2,500 and I got an estimate for $9,700. I was thinking about hiring an attorney or a public adjuster. Please help me. This is my first home, and I am a single 25 year old female. I think my adjuster is trying to take advantage of me.

This is a common situation, but it can easily be settled without the use of an attorney or a public adjuster. If you hire an attorney or a public adjuster, they will take anywhere from 20 to 40% of the claim settlement. Of course, they’ll guarantee that they get you so much money that it’ll pay for their commission, but they cannot really guarantee that, and it’s not ethical in the first place.

The insurance company sent you money, which is a great thing. This means that they agree with you that the claim is covered under the policy. So, the only difference you have is on price and scope. You disagree on how much the claim is worth, and you disagree with how and what should be replaced and repaired (scope of the loss). Scope and price can be negotiated with the claims adjuster, but you must put time and effort into it, and you must be persistent while maintaining a professional demeanor. As long as the claims adjuster didn’t get you to sign a release of liability form, then the check you received means nothing. All it means is that $3,500 is the “undisputed amount”, meaning that you and the adjuster both agree that the claim is worth AT LEAST $3,500. You can deposit that check without it being an admission of liability. But never sign anything saying that you agree that the $3,500 is the final settlement.

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As far as the cabinets, you’ll probably need to concede thiis point. Cabinets can easily be repaired without requiring them to be fully replaced. Any good cabinet repairman can put your cabinets back to their original condition. Regarding the carpet, this is the area where you can negotiate with them. If the carpet runs continuous from the living room and den to other parts of the house without a break in the carpet, then the insurance company owes to replace all of the continuous areas. They cannot expect you to accept a “patch job” on carpet. Tell them that this isn’t indemnifying you. That word will get their attention that you know what you’re talking about.

The point is that you can negotiate the claim yoursef and continue to get competing bids. If they continue to be stubborn, then threaten to file a complaint with the state financial department. They will then give you the option of going to an “appraisal” which is a dispute of price and scope with a neutral mediator. This mediator often sides with the policy holder as long as you have legitimate reasons for your dispute.

I hope that answers your question! Anyone else want to weigh in on this?


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Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.