Insurance Claims Step by Step Process - Part  2

The adjuster came out on Tuesday, as I had mentioned before I got this moved up a couple of weeks early which was great news.  The insurance inspector took a piece of siding to see if it will match in the siding match database.  He came on Tuesday and I spoke with the insurance adjuster today and he federal expressed it into the company to check on a match.  I have two options here, #1 it matches and we find the match and fix the pieces that the hail damaged.  Option #2 which is likely is that the siding was discontinued, we can’t find a match and I have to get all of the siding replaced.  The siding match company will receive the federal express probably by Monday at the latest. Then the insurance adjuster will talk to that person and get back to me on the outcome and decision.  If that’s the case more money will be sent to me.  I just got back from the post office and did receive my check today (Friday) for the initial insurance check to repair some siding and the roof, wraps around garage door, and gutter, etc.

I have spoken to the contractor and they assured me the roof could be done in 1 day, and that the siding could be done quickly.  It’s well known that in the current real estate market, that many contractors aren’t busy and are waiting to work. We expect to start the job very soon as we wait to patiently hear back.  I already had 4 roof vents put on that needed to be put on right away before the adjuster came out.   It’s really amazing how many storms keep coming through the same cities.  Also it’s amazing how few people go out ot visit their properties to really examine the damage that has been done. Hail just dings everything on almost every part of the outside of the house.

This whole process sounds exciting and fun doesn’t it?   Now I have a check from the insurance company that is made out in my name, but “and” also made out to the mortgage lending company.   What does this mean to me?  Well first the lender has a mortgage on the property, so they show as a ” loss payee ” on an insurance claim, which means we each are on the check, proceeds from damage.  This means , based on my tight timeline, I have to, overnight, or priority mail this check out to the lender so that they can endorse the check, and then mail it back to me quickly, so I can endorse the check and deposit it.  Then I’ll get the contractor started on the job and pay them some money to keep the work going.  I will be paying the contractor little by little as the work progresses or the majority at the end.  “Never” too much up front or all of it upfront.  Never.  I would maybe pay 1/2 up front or more if I was paying for materials or I have known the contractor for many many years and I trusted them very well.  This contractor I am using is a very solid guy and has worked with insurance claims.  My other interior contracting $20k+ which I just got done with was done by another contractor I have known since highschool, 13+ years, so I trust him, so no problems there.

The horror stories you hear to often about contractors is they need the money badly enough that they will take 1/2 of your money up front, either never buy the supplies, skip town, or simply start so many jobs, that they have no incentive to finish yours as they have money ahead of the work, or what’s even worse is that the main contractor starts work on your house and hires subcontractors, doesn’t have them bonded and insured,  or do a background check, putting the homeowner at risk.  The 2nd problem is if the contractor never pays the sub-contractors, they may come after you and put mechanics liens on the house.  I can write another post about mechanics liens some other time, their are timelines, laws, and title insurance for that kind of stuff when you buy.  The best thing you can do is get a contractor you trust, and the next best thing you can do is get contractors to sign lien waivers as early in the process as you can, protect yourself.  The contracting business has a very high percentage of dishonest people in that field, they aren’t all bad, some are good.  There will be future posts about working with contractors and maybe something about mechanics liens.

Insurance Claims Process My Info

Looking at my insurance claim that the insurance adjuster worked on, some info that I received was what my deductible is, and my policy limit. One thing you have to keep in mind with your policy limit when insuring a property is when the real estate market is going up for awhile, many years, you may need to raise it since your property should be worth more money over a period of years.  This has the date contacted and date of loss, as well as the date inspected.   The insurance adjusters contact info is also on the front page.    On the 2nd page their are a lot of numbers and pricing.  For example ice & water shield for a roof, parts of a roof, they really have a very detailed itimized list for the roofing components.  Next to that they have the quantity, and unit cost for each.  They come up with a Depreciation factor, which is their way of paying less upfront due to the fact that the items being replaced weren’t new and were already worn a little.   The sheet shows the dimensions and elevation of the house.  The 2nd page continues with calculations, unit cost and quantity as well as the size of the perimeter of the house.  Measurements of all the walls.

There are a lot of dimenions and measurements on the adjustments.    For example on mine they found damaged siding which they will try to match, I know this siding is discontinued, so it’s hard to find.  I am told after 4-5 years siding is often discontinued.  The 3rd page talks about the wraps around the windows, garage, near gutters and front posts, and has some cumultive totals for everything.   After they come up with their amount, they will deduct(less) the deductible and also the depreciation amount. I believe each insurance company is different, but when the roof and siding are fixed, that difference for depreciation is paid upon inspection it’s been finished.    They provided me a Replacement Cost Agreement.  This Replacement Cost Agreement has the itemized numbers for everything from full replacement cost, to actual cash value, to deductibles, etc.   I didn’t sign anything at the time the adjuster was out there.  I am going to have my contractor review these numbers for accuracy.   My policy # and claim # are listed on this Replacement Cost Agreement.  Your contractor may also want you to sign a contract with them as well before they get started. Most contractors will want 1/3 or 1/2 money down for supplies and to get started on the job.  I would advise you never to let your money get too far, or ahead of the work that the contractor is doing, for example paying for the hole job while only 1/3 is done, that’s dangerous, I have met too many experts that strongly advise against this.

I was also provided a color brochure, about 7 pages long, it looks well written, but I haven’t had a chance to read it yet.  I am going to read it carefully and consider the source who is writing it.  Lots of nice full color photos and the front of it has a nice logo on it also.   Do some research before you sign anything on an insurance claim, and look very carefully when their is a chance of damage, don’t miss anything, you pay for insurance every month, make sure you get things fixed when broken.

Insurance Claims Step by Step Process - Part  1

The last few days I have been working on an insurance claim for my twin home rental property in Maple Grove Minnesota.  About 1 week ago we had some very bad storms and hail damage to many different cities.  To my surprise Maple Grove was one of them.  For those of you that don’t remember there was one of the worst storms I remember about 2 years ago in Maple Grove, I also had storm claims back then on a different properties.  You learn a little bit each time you have storm damage and an insurance claim.  Hail damage, high powered winds, and rain really can cause a lot of damage to a property, more than you can imagine.  It’s not uncommon for $10,000 to $50,000 in damage easily just from a good size hail and wind storm.  When this happens you will see contractors out with their signs trying to help homeowners with their insurance claims.  I have to say I can’t remember a summer and spring in Minnesota ever on record like the one we are having. I think we had two very big storms in just the same week.

I heard Otsego, Forest Lake, Hugo, Albertville, Maple Grove, Coon Rapids and many other  cities got hit hard from the storms.  Keep in mind even if and when you get an insurance claim it takes a lot of time and effort to go through the process, it’s not very fun, especially if you have to take your time out from being landlord and other job related activities in real estate just to get your houses repaired back to their original condition.  I believe most claims won’t leave your property any better off than it was before.   The hail chipped my siding in many spots.  The hail damaged my roof pretty bad.  We had to put 4 roof vents on.  All my wraps around my garage door and gutters, etc in the front got hurt bad.  We are fixing all of it with the help of the insurance company.  We are working on finding replacement siding, but the chances of the siding being discontinued after only a few years is pretty good, so we are likely going to find it hard to replace.  This is a twin home, so I need to have the neighbor be on the same page as me and want the same stuff and fix it at the same time.  When you have damage to your property, I would inspect it ASAP.  Check the inside for water damage, my property luckily we could not find anything inside for water.  You also want to check for damage everywhere, I mean everywhere, you may want a contractor to even look at it, as he/she does this for a living and may be able to find stuff you were not able to see.  Also you will want to call in your claim ASAP.  That’s where I made a mistake and waited a few days to call in the claim and waited a couple of days for the adjuster to call me back.  By that 5 day lapse, the adjuster who came up from another state because the insurance company was so busy, actually told me he was booked 2 1/2 weeks.  Well I was on tight timeline due to selling the property and some other stuff, so I had to have it moved up a lot.  We did the claim tonight, and got the schedule rearranged to an earlier time.   When you meet your insurance adjuster, as you can imagine many adjusters work for the insurance company, so you can imagine their job is to find as “little” wrong with the house as possible, and find all the “quick fixes” they can.

It’s very important you bring a good contractor with you that knows how to work with insurance companies.  Not any contractor, one that works with insurance companies.  This way you can have someone in your corner.  We are still going to work on this claim and have my contractor keep the dialogue going to make it a win-win-win for everyone.    Storm damage is expensive, due to how many storms we have in Minnesota, you definately want insurance.  I have talked to contractors in the business who have fixed the same things on the same houses 2-3 times in the same 12-18 month period because of the storms.  I had a $1000 deductible, I would highly recommend that deductible amount or less.  Make sure to have adequate insurance.  I spoke to an insurance salesperson today who agreed to write a valuable informative post on the different types of insurance and why people need them, so that I can educate you all on what insurance can do for you.