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Last Post 12/17/2007 10:14 PM by  HuskerCat
What Is The Definition Of Replacement Cost Coverage?
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BobH
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12/16/2007 1:00 PM
Is there any rational reason that he has not provided his version of the estimate to the home owners or to me as of yet?

No. I know you aren't in California, but here it is LAW that the estimate has to be provided to explain the settlement. It is just common sense really.  

You are dealing with a staff adjuster from Allstate. He should have full authority - or be able to get authority directly from his manager. I am an Independent Adjuster. I work for lots of different Insurance companies, some are very full assignments where you negotiate an agreed repair figure with the insured or contractor, subject to the carrier's final approval.

Other carriers just want us to do an inspection and send them our estimate, without going over it with anyone else (less work for the adjuster, less pay, and the carrier can make any coverage or estimate changes they wish). If we do one of those, where we don't share the estimate with the Insured or his contractor, we put the following comment in our report:

[Please note that we have not sent a copy of our estimate to the insured. Section 2695.9 (d) of
the California Regulations requires the insurer to provide a copy of the estimate upon which
settlement is based to its insured. We can provide a copy to the insured if you so advise us.]

Here in California this particular law is only a few years old - but it has been my practice for over a decade in every state I have worked because it is just the right thing to do.  State Farm requires a copy of the estimate go out with the settlement.  If you have a fairly large loss - how else is the Insured going to know what is (or isn't) included in the scope of repair you are paying for?  Explaining that stuff over the phone without having everyone reading the same sheet of music is maddening. 

Even with a simple loss, you need a written estimate sent to the Insured.  They can take it to a carpet store, explain that the insurance company is paying up to the closed doorway - but he wants to pay the difference to carpet the undamaged rooms.  Same with roofing - what slopes are being considered.  This is just a basic and standard action.  What if depreciation is held back prior to completion of repair?  That stuff has to be explained too - and you cannot do it without a line-item estimate.  Are you 100% certain that the dollar amount "verbally" relayed to the Insured is the full Replacement Cost Value, and not the initial check at ACV?  Do you know the starting point before deductible?  All of that will be found on the estimate.  When it gets complicated by advance payments, and supplements, it is spelled out on the Statement of Loss.

BTW, if the Insured is working with a contractor, and it is not one of those super-limited assignments, I will share my findings and negotiate an agreed figure directly with the contractor and inform the Insured as things progress. It makes no sense to try and cut the contractor out of the loop - the claim will never settle.

Bob H
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Dales Consuelo
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12/17/2007 3:00 PM

Ed,

As was mentioned on page two, Allstate's special version of MS/B IntegriClaim's 29% "Contractor's O&P" line item does not reflect a singular general primary contractor's overhead and profit cost factors, but rather all of the singular specialty trades O&P.

(The word "Contractor's" (singular sense) verses the word "Contractors" (plural sense), and their two very different meanings, financially, can muddy up staff or independent adjusters replacement scope and cost when one is misusing IntegriClaim). MS/B can verify that fact.

The 29% cost factor the "adjuster" disclosed to you relates to the individual specialty trades contractors O&P, NOT a general contractor's O&P. They "allow" another 20%, or more, on top of the sub-trades 29% when a general contractor is involved. I have Allstate estimates that show 49% O&P cost factors.

Too, Allstate supporters contradict themselves a lot. The following multi-trade loss estimate they have disclosed to the public shows sub-trade contractors 29% O&P loss values, not a loss value per primary general contractors' O&P of 49%.

Notice how the "OP" column does NOT show a line-by-line sum. Now why is that, and, how many of their clients actually know about these loss value issues?

Replacement cost values of a structure estimated at insurance agents desks may be very different replacement cost values estimated by an adjuster.

www.allstate.com/content/refresh-attachments/cat-claim-estimate.pdf

Bob,

People do not pay insurance for patchwork indemnification effects that devalue their property.

 

 

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Dales Consuelo
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12/17/2007 4:20 PM

Ed,

As for more insight regarding Allstate, and actual replacement cost values before a contractor is considered by someone insured, consider the following;

www.state.wv.us/wvsca/docs/fall06/33172.htm#Footnote2

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Ed The Roofer
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12/17/2007 5:05 PM
Posted By Dales Consuelo on 12/17/2007 4:20 PM

Ed,

As for more insight regarding Allstate, and actual replacement cost values before a contractor is considered by someone insured, consider the following;

www.state.wv.us/wvsca/docs/fall06/33172.htm#Footnote2

 

Dales,

Both of your provided links led to extremely eye opening causes of concern in the typical methodology abused by AllState in regards to paying the O & P. 

I take note regarding the ommission of the O & P amounts on their form.  Intentionally deceiving both their adjusting staff and the insureds on where line items should be placed.

I see that they paid for the entire home in the case history footnotes, which was more than 3 times the amount of the initial claim being rebuked, even if it were to have included the O & P.

Do you have any case records of the actual matter at hand, regarding what a replacement cost should be?  Is it the amount they estimate it to be?  Or, is it the actual contracted amount for the work performed?

 

By the way, from the Friday e-mail to the adjuster insisting that his version of the estimate be forwarded, there has been no response, yet again.

I have left a message for a supervisor to contact either me or the homeowner, if they once again state that they need the home owners permission to discuss the claim with me.

Thanks a lot,

Ed

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BobH
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12/17/2007 8:13 PM
Posted By Dales Consuelo on 12/17/2007 3:00 PM

Bob,

People do not pay insurance for patchwork indemnification effects that devalue their property.

Hi Dales, if you are referring to my example of not paying for carpet beyond a closeable doorway that isn't damaged by a covered loss, or non-damaged roof slopes, I suppose we should start another thread - as those are standard industry procedures. I just mentioned them as one of many reasons why things go off the rails if the adjuster doesn't provide a copy of his estimate to the insured - and I always send one to the contractor if one is involved.

It's like pulling string on a ball of yarn.  Where do you stop?  It isn't reasonable to re-carpet the entire house when a small area is affected.  I always include any area that doesn't have a closing door.  Let's not mess up this thread - if you disagree with this practice then we can start another thread. 

In California, we have strict requirements to allow for a "reasonably uniform appearance" and I agree that patchwork (usually) is not OK.  Judgement lies in where to stop the bleeding, where to draw the line.

With a focus on Ed's grief - it will remain a mystery until a copy of the estimate is made available.  That is adjusting 101, and as a bare minimum it should have been sent to the homeowner.

Bob H
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HuskerCat
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12/17/2007 10:14 PM
Posted By Bob Harvey on 12/17/2007 8:13 PM

Posted By Dales Consuelo on 12/17/2007 3:00 PM
With a focus on Ed's grief - it will remain a mystery until a copy of the estimate is made available.  That is adjusting 101, and as a bare minimum it should have been sent to the homeowner.

Ok, still haven't figured out quote/posting...so changing font to separate :

Ed's original post on this matter was back on Nov 2nd ( different thread re: 2nd layer T/O, etc), and the insured/Ed still haven't seen the adj estimate?  They should have been screaming at someone a long time ago.  We've all gotten behind before, but I can't believe someone hasn't lit a bigger fire under some adjuster's ass by now.  Pardon my French, but this has not been a "busy" overburdening season or year for the staff people that have the luxury of writing the ests & the checks on the spot, with supps as needed later. Plus, it's only a roof!  I'd throw out a guess to say the field adjuster(s) are running scared under micro-management, and have become afraid to pull the trigger on this one. I've seen it happen.

Ed, call your latest adjuster and tell him you don't want to make him your problem.  And that you don't want to get him in trouble, but that you want to keep him (or her) out of trouble.  This adjuster may have a problem with his direct manager approving payments, especially if this one has been "dogging" their office for awhile.  See if the adjuster can escalate it to a higher form of authority & bypass his own boss. It is eventually going to get there anyway, the way things are going...and the adjuster may have an easier time dealing with it this way if there is a personality conflict with his current boss.

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