Insuring Your Home
Dealing with Insurance Companies and Their Adjusters

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Insuring Your Home: Dealing with Insurance Companies and Their Adjusters

You should check out your policy before you need it!

Many insurance agents sell a policy that covers fire damage only. Many homeowners think they are covered for other damage when they are not. Read Your Policy Make sure you understand what it says. Contact your insurance agent if you need help understanding your policy. It is best to have your agent explain everything covered by your policy and what is not covered as well.

Also have your agent explain all optional available coverage and don't be afraid to compare the different insurance companies. Different companies offer different types of policies. Look over all your options and choose what is best for you. Make sure it will cover your needs.

The area you live in will determine some of your needs. If you are in an area that gets snow, make sure you have snow and ice damage coverage. If you get a lot of severe storms, you should have hail and wind coverage. Consider your weather when choosing your coverage.

Make sure you have replacement cost coverage and not actual cash value (ACV) coverage. The cost of materials and labor is constantly changing.

It is also important to have code update, building codes change often. Your insurance company only has to pay actual damage. Building inspectors will require your house to meet code. If you do not have code update, the insurance company does not have to pay for repairs that will be needed to have your house meet code. You will be required to pay these costs. If you have code update, then the insurance company will have to pay for the improvements to meet code. This could even be more money than the repairs themselves.

These last two, replacement cost and code update, are very important to have, otherwise you may be paying the bill. Insurance is there to protect your property. Make sure you have the proper coverage to do that. If not, its money being wasted. Protect yourself!

What is a Claim?

When you have damage occurring from a sudden problem (not a long term problem) then you have a valid claim.


A sudden break in your plumbing. This is a valid claim. A leak is a maintenance problem, not a valid insurance claim.

The wind blows your roofing off. This is a valid claim. You can make a valid claim for any damage to your house caused by the wind. You can make a valid claim for damage caused by ice, snow or water; an exception is made for flooding in which you need flood insurance.

Your roof has been needing to be replaced. Now it is leaking. Leaks caused from a worn out roof is not a valid claim. However, sometimes the insurance company will pay for the damage to your ceiling.

Your house has problems resulting from settling. This is not a valid claim.

It snowed and the weight on your roof broke your trusses or rafters. This is a valid claim.

A hail storm came through and did damage to your house. This is a valid claim.

A pipe breaks and undermines the bracing or support under your house. This is a valid claim. As stated, any damage that is caused by a sudden happening is a valid claim. Anything that deals with an ongoing problem is maintenance and not a valid insurance claim.


Make sure that you and the contractor doing an estimate check the entire house. Look everywhere top to bottom. A simple checklist is provided. You will need to go around the entire outside of the house and on the inside do a room-to-room inspection. You need to check in the attic and in your basement if you have one. You will be looking for cracks, stains, broken rafters or trusses, sagging ceiling, "rollercoaster" effect in walls or ceiling, mildew, soft spots in floor, doors and windows that don't open and close properly, floor creaking, and anything and everything that was not there prior to the incident causing damage. Remember you must be able to justify any and all damage.

The contractor has to measure everything and itemize his (or her) estimate. The Insurance company will require accurate measurements and itemization of everything being done. If you are going to handle the estimate yourself, you will not get as much money that most good contractors should be able to get. You may want to hire a contractor that has worked with insurance companies before. Not all contractors know how to work an insurance claim to get all damage taken care of. Make sure you ask the contractors you call about the insurance work they have done. A contractor that has done a lot of insurance work will have more knowledge on how to work an insurance claim. This is not to say that this contractor will be better than one that hasn't, but should know more about what the insurance will pay for. It is important to check out any contractor you are interested in hiring before you hire them. Check with your Better Business Bureau and ask for references from the contractor. Ask the contractor if he (or she) has any pictures of jobs they have done.

When an insurance adjuster works with the homeowner, they will try to pay for as little as possible. That is one reason for hiring a good contractor. However, if you feel you will be able to do the work yourself, be aware that the insurance adjuster is not there on your behalf. He is working for the insurance company. Make sure you do your inspection well, and are prepared to show the adjuster everything you have found. A Contractor will receive 10 percent profit and 10 percent overhead as well as sales tax if it is applicable in your state. The insurance company will not pay this to the homeowner if the homeowner is doing the work him or herself. You should still be able to get a fair settlement. Make sure you are prepared when the adjuster comes out and are ready to be able to justify all your damage.

When doing your initial inspection, remember to check everywhere. You may want to copy the checklist so you can check each item as you go. You will probably want to do this for each room.

Inspection Checklist

Pitched Roofs

[ ] Missing Shingles
[ ] Loose Shingles
[ ] Cracked Shingles
[ ] Pipe Flashing
[ ] Chimney Flashing
[ ] Valley Flashing
[ ] Step Flashing
[ ] Edge Metal
[ ] Sags In Roof
[ ] Lumps, Bumps, Ripples in Roof

Flat Roof

[ ] Cracks In Seams
[ ] Nail Holes
[ ] Sags, Lumps, Bumps and Ripples


[ ] Stains
[ ] Rot
[ ] Cracked, Broken
[ ] Areas Missing


[ ] Stains
[ ] Rot
[ ] Cracked, Broken
[ ] Areas Missing


[ ] Bowing
[ ] Loose
[ ] Nails Loose
[ ] Cracks
[ ] Rot
[ ] Stains

Trim (Door, Window, Corner, Etc.)

[ ] Missing
[ ] Rot
[ ] Broken

Foundation and Brickwork

[ ] Cracks
[ ] Missing Areas
[ ] Stains

Interior (Check Each Room) Ceiling

[ ] Stains
[ ] Holes
[ ] Cracks
[ ] Bulges and Bowing


[ ] Stains
[ ] Holes
[ ] Cracks
[ ] Bulges, Bowing

Opening Up Your Claim

If something has happened to cause you to suspect damage, do your inspections. Remember you are looking for damage caused by a sudden occurrence and not an ongoing maintenance problem. If damage is found, then it is time for you to open an insurance claim. The first thing you will need to do is call your insurance agent.

Tell your insurance agent all the information you have about the damage and tell the agent you want to open a claim. The agent may try to tell you that the insurance company will not pay for your damage. Be insistent and tell the agent you want the claim processed anyway. The agent is required to process the claim for you.

Your agent will then pass this information on to the claims department of the insurance company. Your claim is then opened. The claims department will assign the claim to one of their adjusters or they may hire an independent adjuster.

The insurance company will also ask you to get estimates from a contractor on the needed repairs. Make sure when you have a contractor come out to your house that they cover all the damage found. Have them inspect as well. They may find something you missed.

Remember the agent doesn't determine damage, they basically just sell the insurance. The adjuster will settle the claim on the damage you or your contractor shows him (or her). The adjuster will not pay for damage if you do not show it to him, even if it is blatantly obvious. This is why your inspection is so important.

The Adjuster

The adjuster is not your friend. I cannot say this enough. He (or she) will tell you that he (or she) is there to help you but don't be fooled. Adjusters work for the insurance company not you. I have seen many people given $900.00 to $3,500.00 for a claim settlement. I would then go back and get them $20,000.00 to $60,000.00 to repair their homes. I have been called every name in the book by the insurance adjusters behind my back, but when it came down to paying, they paid the customer every time.

You do not have to take the adjusters word for the amount it will take to do the job. They will see damage but not write it down if you don't show it to them. A good example I had of this was a house I did work on that the adjuster was thinking it would only take $600.00 to repair and I got the owner $21,000.000 to properly fix the damage. Make sure you are getting the damage properly repaired and not just getting a band aid put on the problem. Most insurance companies will pay if you show them the damage and ask them to pay for it.

Getting Estimates

The insurance adjuster will ask you to get estimates, usually three. This is only to help him (or her), not to help you. Most contractors will see the damages differently. This can and will cause you problems. All the estimates will be different and their prices will vary. The adjuster will most likely take the least expensive route even if the repairs are not all done.

The best way to go is to hire a general contractor that you trust and that is very through. Not all contractors work with adjusters. You will want one that does if you are going to have a contractor do your work. Ask if the contractor has experience working with adjusters and put it in writing that the contractor will do the work the insurance company settles on and for that amount. This is very important. If the contractor is unwilling to do the work for what they get the insurance company to settle at, then they are not getting you a proper settlement. You do not have to accept this. You can get another contractor to help you. A contractor should be able to get enough money to pay for all the repairs. If they sign an agreement with you, they will most likely fight harder with the insurance company for you.

Once the adjuster comes out, he (or she) will do an estimate of his (or her) own. The insurance company requires the adjuster to do this and you are entitled to a copy of it. At this point you will be able to see what the insurance company plans to settle on.

You need to go through the settlement with the contractor and agree to what will be done for that amount of money. Make sure you put it in writing. This will make sure that you, the homeowner, and the contractor both know exactly what is going to be done. You want to make sure that you understand each other before any work begins. Miscommunication only leads to problems.

Do not give the contractor all the money up front. No contractor should ever ask for all the money up front. If they do tell them you will pay 1/3 when they start, 1/3 when they are half done, 1/3 when the job is completed. Most common is for a contractor to ask for half up front and the remaining half upon completion.

Getting An Engineers Report

When you have problems in the structure, getting an engineer may be the best way to go. Many adjusters will use an outside consultant to come in and write a report in their favor. This will usually be used to decline your claim. You have a right to use a local engineer. I have been involved in may repairs where the insurance adjuster brought in an outside consultant to write a report stating there was no damage. The claim would then be denied. I would bring in an engineer to report on the damage and make the insurance do the necessary repairs.

Make sure the engineer is licensed. Ask if he (or she) is an engineer and not just a consultant. Ask if he (or she) can make the designs for the needed repairs. If the engineer cannot do the designs so you can get a building permit approved you do not want to hire him (or her). Always make sure you deal with qualified people. You want to hire someone that will be able to inspect for damage and design the needed repairs.

Terms and Abbreviations On Your Settlement

R.R This can mean two different things 1. Remove and Replace
2. Remove and Reset

Make sure you understand which is to be done.
1. means the original will be removed and replaced with new.
2. means the original will be removed and then put back. It will not be replaced with new.

P.P Means to Prime and Paint.
T.T Means to Tape and Texture. This is used for drywall.
Jack, Shore Means to jack up the area that has been damaged and shore means to brace it so the area will be safe to work on and repair the damage.
Cover and Protect Means to put plastic down to protect carpet or other belongings from paint or other debris.
10% PROFIT 10% OVERHEAD. This was designed for the general contractor. If is given when at least three trades are involved. Example: Roofing, Drywall and Painting. It is not given when the homeowner is doing his (or her) own repairs.

What Should Be on My Settlement?

Remember that the insurance adjuster will be making his (or her) own estimate on the repairs needing to be done. There are many things that the adjuster can put on the estimate if they are asked for. When getting the estimate from your contractor, make sure it is itemized. It is best to have the contractor talk to the adjuster as well. The insurance company will pay for many items that most people and contractors alike do not know about.

Here is a list of items to look for. Make sure these are covered on your settlement. (This is a general list. Check those items that pertain to your area of damage.)


Remove Roofing *Each layer should be paid for separately. Count them.

R.R. Pipe Flashing
R.R. Roof Vents
R.R. Felt Paper *This is the tar paper under your roofing material, 15 pound for pitched roofs, 30 pound for flat roofs.
R.R. Edge Metal *Should be by foot
R.R. Antenna *List each separate if you have more than one.
R.R. Basketball Hoop
R.R. Decking *Sometimes called sheeting, the wood under your roof.
R.R. Rafters (or Trusses) *Insurance company may choose to jack and shore instead of replacement, depending on the severity of your problem. This is where an engineers report is important.
R.R Fascia
R.R Soffit
Replace Roofing *Insurance will pay to put back the type of roofing you already have. It is very important to be sure it is the same on your claim if you have a shake roof or a high dollar roof. Do not let them talk you into a cheaper roof.
R.R. Chimney Flashing
R.R Valley Flashing
R.R. Step Flashing
P.P Fascia
P.P Soffit *Make sure when painting house or garage, that each door and window is included separately.
P.P Trim
R.R. Light Fixtures *This will be remove, reset.
R.R. Soffit Vents
Two tone paint (exterior and interior)


R.R. Insulation
R.R. Drywall
R.R. Ceiling *This will vary by the type of ceiling you have.
R.R. Light Fixture
R.R. Drapery Hardware
R.R. Crown Molding
Clean Carpet
R.R. Carpet and Pad
R.R. Electrical Covers
R.R Shelves
R.R Room Contents
R.R. Sub-Flooring
R.R. Floor Joists
R.R. Mini Blinds (window covering)
R.R. Ceiling Fan (or fan and light combo)
R.R. Heating Ducts (ceiling or floor)
R.R. Doorbell
R.R. Paneling
R.R. Smoke Detector
R.R. Trim (ceiling, wall, door, window)
**When doing bathroom sub-floor these things should be removed and reset
R.R. Toilet
R.R. Shower Tub
R.R. Sink
R.R. Vanity Cabinets
The insurance company will also pay for the building permit. Be sure to include it on the estimate. If hiring a contractor, also include all applicable taxes for your area.

Many of the estimates you receive will not have everything on it that should be. Make sure you look it over carefully. Make sure that if your contractor doesn't put some of the items on the estimate for the insurance company, that the contractor is not going to bill you for them separately. Be very up front with the contractor about what is being done and what is not. Protect yourself.

If the contractor doesn't put everything on the estimate, go to the adjuster yourself and ask for the items to be covered. A good example: You need a wall replaced. You have two electrical outlets, a light switch and a window blind that are going to have to be removed and reset. Make sure these things are on the estimate. If not, ask the adjuster to pay for it. Make sure all the things that have to be removed and reset are in the estimate. Check the area and make a list. Remember, get written estimates. Get the adjusters estimate. Go over it carefully, making sure everything is included. You want to be sure that your house will be repaired properly. You also want to make sure you won't be receiving any surprise bills when the work is completed.

Do You Have A Mortgage Company?

Most people have a mortgage company. If the settlement is more than $5,000.00, the insurance company will most likely put the mortgage company's name on the check. You will need to contact your mortgage company and let them know you had damage that the insurance company has settled on. Inform them that you are sending the check to them. You will need to endorse it before sending it.

You need to send a copy of the insurance settlement. You will also need to send a copy of the contract from your contractor. The mortgage company will want to know how much the contractor is charging for the repairs and how much the total of the damages are. Send this with the check.

The mortgage company will then put the money into an escrow account. This protects the mortgage company as well as yourself. The mortgage company may want to see proof that your contractor is a licensed, bonded and insured company. If not they might want you to go with another company, but you have the right to keep the contractor you have. They will then send you 1/3 of the money for the contractor. The contractor can opt to have 1/3 sent when the job is half completed and the remainder sent when the job is complete. Or the contractor can have the remainder paid in full when the job is complete and not receive a payment in the middle of the job.

When the job is complete, your mortgage company will have you sign a form that the job was completed to your satisfaction. Most mortgage companies will also send someone out to inspect the work. They will also send a waiver of lien for the contractor to sign.

If you have replacement cost insurance, you will also need to send a copy of the contract with your contractor and a copy of the form that states the job was done to your satisfaction to the insurance adjuster. The insurance company has held back money that they call depreciation. When the job is complete they will send a check releasing this money. You will need to sign it and send it to your mortgage company.

Once the Mortgage company receives all their conformation that the repairs has been completed, they will send the final payment. If you do not have a mortgage company, you can skip this process. The insurance company will make the checks out to you directly. Be sure to protect yourself. Put the money in the bank. Give no more than half the money up front and make sure you get a waiver of lien when the job is complete before paying the final payment to the contractor.

Do I Need A Building Permit?

Most home improvements and repairs require a building permit. Contact your city or county building inspector to find out. It is best to have one. The insurance company will pay for it. They will pay for the engineers report as well.

Some contractors will "pocket" this money and not get a permit. Make sure one is gotten for your job. It is to be posted at all times at the job site. This will insure that your job is done right. The local inspector will inspect your job and make sure that it has been done properly and that it meets code. This will add a few days to the time frame of getting your job done, but it is worth it.

Protect yourself. Get a building permit.

What Is A Supplemental Settlement?

When you or your contractor find hidden damage that was not covered on your original settlement, you may file for a supplemental settlement with the insurance company. You or your contractor will need to call your insurance adjuster before the damage is repaired. He (or she) will most likely want to see the damage before authorizing payment, especially if it amounts to a lot of money. At this time the adjuster will either approve it or deny it. If it is approved, you will receive another settlement sheet and check. The insurance company calls this a supplemental settlement.

A good example of this is finding broken trusses while repairing a roof. This is quite common if you live in an area with heavy ice and snow load. The weight on the roof will break down the trusses.

Written by Darryl Franklin


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