Insurance check woes

[bankworking]

Having damage done to your property sucks.

Then you have to deal with your insurance company, who comes up with an adjuster report of the damages and, eventually, sends you a check... minus not just the deductible, but the "depreciation" as well. I don't work in insurance, but I guess the idea is that the house is now worth less due to the damage, so they take a depreciation amount out of the money you get, money you are able to get later AFTER the repairs have been completed. So, that process rather sucks too.

Then, you have the check, and it is made payable to both you and to your mortgage company. So, you take it in to the bank that has your mortgage and discover that you aren't done yet. The bank has their own paperwork that needs filled out, and if the check is large enough, there's a good chance you will NOT be getting the entire amount released. In fact,generally, you get 50% released upfront, with additional released after an inspection has been performed to prove that work has been done, and final release of funds when the work is completed. This sucks too. I admit it. And this is the part that I get to try to explain to customers who are, understandably, already frustrated.

But guess what? Yelling, screaming, demanding a detailed explanation of whhhhhy does not do a thing to change this. Fill out the claim packet. We will release half the funds--ONLY half--upfront. Get some of the work done, we can release more of the funds. You get it all done, we'll release the rest. That's how it works.

Why?

Maybe because of the stupid dingbat who used her insurance money for a trip to Vegas. Now, her insurance will NOT pay for the more recent damages to her roof and siding. She needs to replace those bad boys herself before they will insure them again. And the mortgage company now has a lien on a house worth less than it should be because it hasn't been getting proper repairs.

Do I think you're going to blow the money on something else? Do you really want me to answer that? (Sigh, wish I could say that, but I do think it.) Anyway, it doesn't matter. Some people DO blow the money, thus we have a whole pile of stupid paperwork and time delays that I have no choice but to force you to wade through if you want to get your money.


Some gems:

---A lady with $300,000 sitting in her next-to-nothing interest earning savings account telling me how she couldn't afford to pay the contractor their next payment unless we released all of the funds NOW. Final funds are not released until the work is completed. If YOU want to pay your contractor in full before he's done, then do it out of your own pocket. You will get reimbursed, at least up to the amount of the insurance check... after the inspection that proves the work is completed. Funny thing there. I talked with the contractor. He was FINE with half of the funds released upfront and the rest after the work was completed.


---A guy doing the work himself. Normally the paperwork requires a contractor's bid or contract for the release of the first half of the funds. If you are doing the work yourself, we need a materials bid. Basically, you can go to your local home improvement store, get a list of the materials you need with their costs, and bring that in. Then we release the 50%. That plus your deductible should be enough to cover the materials. If the materials costs are higher, we can put in an exception request.

Trying to tell me that the materials are going to cost the full amount of the entire insurance check does you no good. Even if I believed you, I have NO CONTROL over this process. Get us a list of the materials with prices. If it adds up to over 50% of the insurance check, we can put in an exception request and our claims department will compare that list with your insurance audit of the damages and see if all of the materials listed are actually required for the job.

Asking me why you have to go through this process over a dozen times, in various levels of pissed-off tones, eventually wears away my sympathy and makes me not inclined to even try the exception request, my one and only power in this process. Which I cannot do without the materials bid in the first place.


Let me get this through to you, one more time. I can do nothing but call Claims and pass on what they tell me to tell you. You are welcome to call them yourself, for the exact same result. I am only here so you can have an in-person face to talk with. Or scream at.

[earl colby pottinger]

At first I was going, WonE about the insurance rules, then I started to think about it. Insurance is to replace what you lost, not what you want.

Example, you have a small kitchen that cost $5000 to install twenty years ago, today it would be worth maybe $3000 because of the older style. You have a fire and want to replace stove, fridge, cabinets, counter. Insurance gives you $3000 dollars and when finished that $3000 dollars has raised the value of your house $6000 from what it was with the burnt-out kitchen. Even with less than the original worth you are ahead.

A SC will demand the money to buy what $5000 would buy twenty years ago.

And then I read that you customer instead spend the money on a vacation instead of fixing the damage. Dumb, dumb and dumb.

[Pixilated]

Ugh, I can imagine insurance claims bring out the absolute worst in terms of SCs.

I am pretty ignorant about it, so my primary goal in having contents insurance is so that if my apartment is somehow demolished, I at least have the wherewithal to buy the basics: bed, clothes, food, table, chair, etc. Much of what I've got literally cannot be replaced in any case (e.g. Grandma's good dishes) so that doesn't even factor into it. I just want enough to be able to start over.

So far, luckily, I've never had to use it ... *crosses fingers*

[Raveni]

The reason for these insurance hoops isn't very apparent until you consider extreme situations or dishonest people. People dealing with a loss like this are bound to already be emotional. Sucks to deal with the screamers though.

[barainga]

There is never any reason to pay a contractor the entire fee upfront. If a contractor is demanding thay either the customer is lying or they have a shady conractor.

[BeenThereDoneThat]

This makes me glad I take calls for a retail store and not an insurance company... *shudder*

[Andara Bledin]

There is never any reason to pay a contractor the entire fee upfront. If a contractor is demanding thay either the customer is lying or they have a shady conractor.

This.

I've got a contractor in to replace a half dozen windows. Got the estimate, ok'd it, and the contractor put the order in and requested a deposit of half, which won't even cover the materials cost (at least what we'd pay for them).

^-.-^

[TopEndDave]

Example, you have a small kitchen that cost $5000 to install twenty years ago, today it would be worth maybe $3000 because of the older style. You have a fire and want to replace stove, fridge, cabinets, counter. Insurance gives you $3000 dollars and when finished that $3000 dollars has raised the value of your house $6000 from what it was with the burnt-out kitchen. Even with less than the original worth you are ahead.

A SC will demand the money to buy what $5000 would buy twenty years ago.

And then I read that you customer instead spend the money on a vacation instead of fixing the damage. Dumb, dumb and dumb.

Replacing items under extended warranty at Hardley Normal would produce a similar SC. For example, two years ago they spent $1000 on a camera but a similar camera now costs on $500. Their camera breaks and they think that they are getting a new $1000 camera and get very sucky when they only get a $500 camera that has the same specs as the broken camera.

Sometimes, due to age of the item (warranty can be extended upto 4 years) it is impossible to supply a new item with the same specs. So they would get the cheapest item available with superior specs. They would still throw a hissy fit about.

Worse things is that we were just the agent for the extended warranty company. Screaming at us couldn't change anything. I would call the extended warranty company and get them to explain to the customer why.

[bankworking]

Yeah, I have nothing really to do with claims, so I have no control over the process. But since our mortgage claims department is in another state, part of my job description is handling customers who think that sitting down with someone "in-person" will yield better results. All I really can do is call up the claims line for the customer and talk to them on the customer's behalf. Makes some people feel better to have me do it though.

[thehuckster]

Yeah, I have nothing really to do with claims, so I have no control over the process. But since our mortgage claims department is in another state, part of my job description is handling customers who think that sitting down with someone "in-person" will yield better results. All I really can do is call up the claims line for the customer and talk to them on the customer's behalf. Makes some people feel better to have me do it though.

I can understand that, actually... if you got damage to the house, I'd actually find it more comfortable to have someone from the insurance company actually come to my house and see the damage for themselves. I'm sure the end result is the same, but from a psychological perspective, I'd kind of feel better that a representative of the insurance agent is reporting tree damage to the roof instead of myself.

[auntiem]

I'm confused - do insurance companies all do this or do they do it if the money is over a certain amount? Because we got a check directly and only had to have the inspector out to verify that "yup, you got claimable damage". No one came to check that it was actually completed. Our bank was only involved long enough to deposit the check so we could turn around a pay for the work.

[sirwired]

I'm confused - do insurance companies all do this or do they do it if the money is over a certain amount? Because we got a check directly and only had to have the inspector out to verify that "yup, you got claimable damage". No one came to check that it was actually completed. Our bank was only involved long enough to deposit the check so we could turn around a pay for the work.

You need a couple grand in roof repairs? The insurance company is just going to cut you a check. A tree crash through your attic? Sewer backup fill your basement with sludge? You aren't getting all the money up front because the bank is going to want to protect their collateral. They will likely send out an inspector. (This, by the way, is why your bank is listed as a "loss payee" on your insurance policy. This prevents you from pocketing the entire value of your house if it, say, burns down, and then skipping town.) If you were "upside down" on your house, I imagine it would be real tempting for some folks to do this.

[earl colby pottinger]

Upgrading

Replacing items under extended warranty at Hardley Normal would produce a similar SC. For example, two years ago they spent $1000 on a camera but a similar camera now costs on $500. Their camera breaks and they think that they are getting a new $1000 camera and get very sucky when they only get a $500 camera that has the same specs as the broken camera.

Had that happen to me. I had posted about this before, customer had a Mac 512 destroyed by lightening which has to following specs:

CPU: 8Mhz 68000
Memory: 512K (note that is K, not mega-bytes, not giga-bytes)
Display: 9 inch, 512 * 384 Monochrome (note not gray-scale, just black and white)
Storage: 1 internal floppy, one external floppy - both were 400K or 800K, I can't remember which.

Specs of the Mac IIc we wanted to replace it with because his insurance approved it as it was cheaper ($1400) than the original cost of the Mac Plus($2000):

See http://www.everymac.com/systems/appl...mac_lc_ii.html

CPU: 16Mhz 68030 at-least four(4) times faster.
Memory: 4MB or eight(8) times the memory.
Display: 12inch, 1024*768 in 1, 8 or 16 bits of colour.
Storage: 1 800K floppy plus a 40MB hard drive.

Good trade up you would think.

Except he insisted that since his Mac 512K was the most advance Mac at the time he wanted it replace with most advance Mac possible: The Macintosh Quadra 840AV at $4100!

He made such a stink the insurance adjuster took a second look at his contract, which said the insurance company HAD TO REPLACE/REPAIR the EXACT model he insured or replace with the closest equivalent machine. Once he confirmed that I would swear in court that the Mac LC was the closest machine presently available and that the customer refused that replacement.

He had me repair the original machine! Over $1000 in parts but the customer got what his contract said, his exact original machine back.

[bankworking]

You need a couple grand in roof repairs? The insurance company is just going to cut you a check. A tree crash through your attic? Sewer backup fill your basement with sludge? You aren't getting all the money up front because the bank is going to want to protect their collateral. They will likely send out an inspector. (This, by the way, is why your bank is listed as a "loss payee" on your insurance policy. This prevents you from pocketing the entire value of your house if it, say, burns down, and then skipping town.) If you were "upside down" on your house, I imagine it would be real tempting for some folks to do this.

Exactly that. We don't have to worry about the claims process unless the check is over $10,000. (Though even the smaller checks have the bank's name on them; we're just able to sign off on the smaller ones and send you on your way.)

[auntiem]

Thanks for clarifiying. Our claim was for much less than $10,000 (thank goodness!).
I would assume that contractors prefer the bank has the money to make sure the homeowner's don't skip out on paying them for their work. Thankfully, ours trusted us and the check came the day after he was finished so we could pay him quickly.