Paid on "Incurred" Basis Only

[misterblue]

Hi All

Newbie here... My homeowners insurance has been giving me a big hassle as a result of HAIL DAMAGE from the spring. They were basically going to pay me for replacing my aluminum siding ,only the 1 side of the house which sustained damage. It has since been proven that the same color/style siding cannot be found, and the company is NOW willing to pay for the entire 4 sides of the house to be replaced. However, they will only pay for the remaining 3 sides on an "incurred basis." That is, they will only pay once I have a signed contract with a contractor, thus proving that I will have the work done.

Is this a common practice for homeowners claims for the company only to pay on an INCURRED basis? Thank you so much for any help!

-Blue

 

[djs]

Yes, very, very, very common.

They are only going to pay to replace it because due to a fluke (not damage) it has to be replaced. If the work isn't done, then there isn't a need to pay to have it done.

If the question really is, can they write me the check and I pocket the money, the answer is no.

Dan
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Ooops, I meant to add, I know nothing about New York insurance law and how settlements occur in that State. I do know a thing or 2 about California insurance practices and my answer is based on California. I doubt New York is that much different on the reason the pay after contract is committed to though....


Dan

 

[VolAgent]

Seems pretty reasonable. If you don't get it fixed, then it must not be that big a deal to you.

 

[Guest]

sounds like you want the money and not the house fixed....

 

[ECP]

My question as an adjuster would be how was it proven that the siding was no longer available or could be matched if a contractor was not already involved?

Its typical that an insurance company would either produce an estimate for the approved repair, pay off this estimate, but holdback depreciation until the repairs where actually completed, this of course depends on what policy you have. Or if there was no outside adjuster involved and you where dealing directly with an inside rep, I would require a signed contract with your contractor, and likely still hold back depreciation until the work is done.

Please note if you have a mortgage on your home the insurance company has the right to include them on the check to ensure their interest in your property is protected as they are also a named insured.

 

[misterblue]

Hello All,

While I appreciate the responses, it appears that you are sterotyping me JUST as the insurance adjuster did!!! I gues I kinda figured that would happen.

Long story short...

Back in APRIL I sustained serious hail damage to one side of the aluminum siding.... ins. company then sent over an adjuster and a roof inspector. The company separated the costs and mailed me a check of approx $1000 for the roof, and $4500 (minus $1000 deductible) for the siding damage. It had since come to my attention that the siding can't be replaced, they just don't sell anything similar, period. The adjuster came back to my house about 4 more times over the summer, taking pictures, making phone calls, until he conceded that they just can't find anything close.

Then the rules CHANGED. They grouped in the roof damage with the siding damage, although I had already obtained multiple estimates for the siding damage only. I planned on fixing the roof myslf, or waiting til next year. They came up with a number of $18,000 to pay for siding, soffit, facia, and gutter removal and replacement.

The problem is, through a battle between my contractor and the adjuster, my contractor NOW believes he is entitled to the entire $18,000 for the siding although a good $1000 of that is for my roof only. The insurance company will only pay me ONCE I GET A SIGNED CONTRACT. The contractor wants ALL THE MONEY because of the "incurred basis" rule; They know I can't get the insurance money until I sign a contract with them. And through their multiple conversations without me involved, the agent led him to believe that he would get all the money, completely ignoring the fact that the $1000 for the roof was separated at the beginning of the process, and that money should not go to the contractor.

So... NO, I am not looking for the cash. I want my house fixed!!!! But now I can't get it fixed for what the insurance company is willing to pay, because it took them 4 months to agree on a fair price to get all the siding replaced. I thought I had a good contractor lined up, but I can't trust him either. And due to approaching inclement weather in New York, I'm having difficulty finding another contractor right now.

And this is just part of it... I have aluminum, so I am entitled to aluminum replacement (per my agent) and a contractor will obviously put on vinyl but they aren't even agreeing to give me enough money for what a contractor wants to put on vinyl. Aluminum prices are sky high!

Bottom line is, I am very frustrated with the summer-long battle with the insurance company to repair what it would cost to get all of my siding fixed. They gave me a grossly low number right away, hoping that I would go away and use the money to buy a 4-wheeler or something. I just want my house fixed, but now I can't trust the contractor and I surely can't trust the insurance adjuster after 4 months of him fighting the cost tooth and nail.

I'v been a loyal home/auto customer for 20 years with no other claims, paid then tens of thousands of dollars in premiums, and I got very poor customer service when I needed them.

So THAT'S why I was asking if it was common for claims to be paid on an incurred basis. Thank You.


-Blue

 

[ECP]

Still not sure what the whole incurred basis thing is about or what the issue is there.

Bottom line, have the contractor you wish to use produce an estimate for aluminum siding. If they only do siding work have the a roofer provide you a quote for the roof repair needed, the quote should be free. Take both items and present them to the adjuster advising this is the cost you have received to complete the insurance approved repairs from your contractor of choice. Any descent insurance company will review those estimates against theirs and determine where the differences are and work to resolve.

Make sure the contractors separate out material versus labor on their estimate and provide itemized pricing.

The adjuster is not out to get you, they are just trying to justify in paper any additional payments or payments period. You have to understand there is a lot of red tape on the adjusters end that has to be met before they can just pay something.

Speaking for myself, when it comes to a claim you can only adjust what is in front of you. You cannot look at the premium one person brings in or how long someone has been insured with your company and issue a check solely on that. So take that out of the equation, because it really doesn't matter when adjusting the claim. We have to treat everyone fairly and ethically legally. This means I have to be just as fair to the person that has only been insured with me for 1 year versus 20 years. Now in the case where coverage is questioned and its a grey area, well then I might look at someones claim history or how long they have been insured etc.

 

[djs]

Problem is, contractors are famous for changing their prices depending on what they think they can get by with, rather than what the job is really worth. The insurance company isn't responsible for contractors inflating their prices.

Just tell your contractor to give you a firm quote and you'll shop the quote and work with the insurance company.

Also, what I missed in your story is if the total work is $18000 for siding + $1000 for roof, $19K total. They write a check for $18K, they have paid. (19K - 1K deductible = 18K).

Dan

 

[misterblue]

Thanks Again,

Well, my numbers weren't exact. Bottom Line: THe INSURANCE COMPANY first DID have the roof separated from the siding, and I did get a SEPARATE estimate.

After it was determined that they could not find comparable aluminum siding (and boy they searched for weeks!) then they agreed on the incurred basis payment. They also then COMBINED both areas of damage, although they were initially separated. I was not getting the roof repaired right away and was keeping the $1000 separate.

In effect, the insurance company says they will pay $17,500 for EVERYTHING COMBINED. ($18,500 total cost minus $1000 Deduct.)

The contractor, who I thought was on my side, wants all the money b/c they insist the cost will be $18,500 for the siding (includes soffit, facia, and gutter replacement which the insurance company has also finally agreed upon). The insurnace company only believes the siding job is worth $17,500. The contractor knows that I must sign a contract to get all of the money, and now they want it all. At first they told me we could work later to lower the cost later if need be; Now, after they see the situation has dragged on and they see all the money on the table, the contractor is forgetting that conversation we had in my dining room. You can't trust anybody when it comes to home repair.

What screwed me was trusting both sides to come to an agreement. Instead, the contractor now sees all the money involved and they want it all for the siding only. The insurance adjuster apparently forgot to tell them, and hoped I would forget also, that $1000 of that money is for my roof, which is damaged and is not to be included in the incurred amount.

The whole INCURRED thing has intentionally caused confusion among all 3 of us, in my opinion.

I specifically asked the adjuster to keep the amounts separated, and he got flustered and said he would just mail me their estimate for the whole thing. They are not working in my best interest. This is State Farm insurance. At this point, I certainly believe without a doubt that they were looking at every angle to not pay me a fair amount.

I'm back to square one as far as figuring out a fair settlement. I need to get new contractor estimates, and it is not easy to do in September. They will surely inflate their prices this time of year.

Thanks for listening. By the way now that I've explained the situation more thoroughly, where are all those people who stereotyped my and said it looked like I just wanted the cash??? I WANT MY HOUSE FIXED!!!!

 

[Guest]

Sounds to me YOU screwed this up, if you arent happy, then call a different contractor, I would bet my life there is more than one, especially if he wants all the money upfront, kick em to the curb,

OR, you have the option to let State Farm use one of their contractors.

Things sound like they were dont right, but YOU dont understand insurance terminology, Have you called your STATE FARM AGENT yet?

You wrote this.......I planned on fixing the roof myslf, or waiting til next year. But now your bitching that you want it fixed. well, appears you cant make up your mind now can you.

I am sorry, if the insurance company wants to pay 17,500 and you want more just because of your hassles, well, whatever, you get what you get.