Summary

• This article should explain the process of reaching a settlement with an insurance company, including negotiation tactics, understanding fair compensation, and the role of claims adjusters.

🏚️Hopefully most of you will never have an insurance claim!  But, if you are reading this, you’re needing help on decoding the settlement information that was sent to you.

As I have said in many of my other blogs on structural damage, the insurance company will write you an initial estimate. Let’s review what you should be looking at on that initial settlement estimate. Always remember an estimate is only an estimate and is subject to change. This might be because your first estimate might have incorrect materials listed, the square footage might be off, or there might be damage the adjuster did not see. These are just some examples.

🪜Your contractor and you...

Here are some points that need to be considered when reading your structural damage estimate.

• Remember, your first payment will be the ACV, (actual cash value), payment. This will be shown on the first, or second, page of the estimate. The ACV payment reflects the deduction of a recoverable depreciation which is held back by the insurance company, but will be paid to you once the repairs are completed.
• Tip: If you have a signed contract with a trusted contractor at the time of inspection, there will be a great chance that you will get the RC (replacement cost) payment up front, as long as the insurance claim adjuster and your contractor agree on the scope of damage.
• When you are looking at your estimate, if you add your ACV payment to your depreciation amount listed on the settlement sheet, it should equal your total loss estimate.
• Get with your contractor and go over the estimate that your insurance adjuster gave you. Many times, there are discrepancies between the measurements, and you need to make sure all the measurements on the damage are correct.
• Always check the description of the material used in the estimate. If there is a disagreement of the type, or grade, of material used, then you may request that your insurance adjuster get a sample of your damaged material and have them send to an expert to confirm it’s being replaced with exactly the like, kind and quality of the material you previously had. This is a common practice for insurance companies.
• Tip: Always keep a small sampling of what is being taken out, or off, of your house. Good examples are, wood flooring, carpet, siding, etc. This will support exactly what you had and will be correctly listed in the estimate.
  • Please note, you can always upgrade your materials, but the insurance company will not pay for upgrades. You can always take the insurance payment and pay the difference for any upgrade you want to do.
• If you have a contractor, come into your home to mitigate, (someone to do some kind of temporary repairs to prevent further damage), make sure that their cost is included in the estimate.
  • A good example would be if wind blew off shingles on your roof and you pay to have a tarp put on to cover where the shingles were lost. Make sure you keep up with the invoice so that this cost can be added to your estimate, and give a copy to your claim representative at the time of inspection.
• My last point is always your deductible with your agent. Do this either before any loss, or at the onset of your loss. Your actual policy hard copy normally does not show your deductible. The estimate settlement page will show the deductible, make sure its correct and confirm.

Remember trying to decode an insurance company’s estimate can be a daunting task.  Use your resources; your agent, your adjuster, and most importantly, a trusted contractor.  A good way to find a good contractor is through your agent.  Most agents have a list of good, and not so good, contractors. Trust him.