Should I Perform All of the Repairs That Were Paid By My Insurance Company, Or Should I Forgo Some or All of The Repairs and Keep The Money?

Let’s face it, there’s a bit of larceny in everyone’s heart.  After all, the insurance company has sent their adjuster to your home, and you have received a check in the amount of $9,000, and you think that you can live with the damage and keep the money, buy a new TV, pay off bills, or take a trip.  What would be wrong with doing that?

The answer is not always that easy, but there are a few things that you should consider before doing that.  First, is that your insurance company paid for an adjuster to prepare an estimate of damages.  While I would not say that every claim is underpaid,  I will say that in my experience, most claims are underscoped.  Let me be a little more clear on this.  An adjuster is going to write an estimate from his perspective, and it is based upon his initial visual inspection.  It is highly likely that he or she might miss a few things that need to be repaired, that were damaged in your water loss, or fire.  Essentially, claims for damages are often underestimated.

I am not going to say that your adjuster intentionally leaves things out of his estimate, but he is typically directed to write an estimate for what he sees, with regards to damages. Insurance carriers are well aware that additional damages me be found upon closer examination, or once the repair work has commenced, and so, when they write up a claim, they will often underscope, or underestimate the amount of damages.

In addition, the recent changes in insurance law, allows the insurance carrier to pay the actual cash value of the claim, that is, they deduct depreciation from the payment.  If the repairs are not performed, therefore, the carrier does not have to pay for full replacement value.  If the repairs are done, and this is documented by a contract with a contractor, or receipts that have been paid, your carrier should pay the balance amount due for the repairs.

If you suffer a water loss at your property, and you chose not to use the insurance proceeds to make all the repairs, you might pay for the repairs sometime down the line, when you go to sell, for when you sell a property, you are required by law to disclose any damage history, or defects. The buyer is sure to hire an inspector to prepare a list of problems that need to be repaired before closing, or the price of the repairs will be deducted from your selling price.

If you had taken the insurance proceeds back when the event happened, you might be paying back a great deal more than you had kept in the past, when you discount the price at the sale.  When you take everything into consideration, it makes the most sense to get paid for everything that is damaged, and make all the repairs that had been included in the insurance loss.  You will live with a fully restored property, and might even be increasing its value when you go to sell it.

A reputable Restoration Contractor is often the best pick for such services. They understand the insurance business, and what is required for a proper restoration project. They know how to deal with adjusters, prepare documents, and deal with your mortgage company as well.

Posted in Water Damage
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