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Question DetailsAsked on 8/3/2016

who could help me to fight an Insurance co. besides a public adjuster? I need help fighting an insurance co.

I have a claim for a electrical fire. From day one my insurance company did not want to pay to make repairs because they argue that what I needed was to upgrade my electrical wiring. A fire started inside a wall and the fire department could not find the spot where it started to burn. The insurance co. closed my claim without even sending someone to look at the house. I hired a contractor to find the problem. When they found the problem I called the insurance co. and a Claim adjuster did the survey and he decided to pay for the repairs only where the wired burned and not for the whole electrical wire. Now I need someone to help me fight the insurance co. to get my money back. I paid about $17,000.00 I was reimbursed about $3,500.00 and they would not pay anything else.

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Sounds to me like Allstate from their response.


For that $ amount versus what they paid you, sounds like ultimately you may need an attorney speciailizing in insurance claims to let them know you are serious - so you should get him on board ASAP to direct the collection of evidence to fight them, if the following items don't convince you that their treatment was actually in accordance with the policy. That assuming the low payment was not due to uncovered depreciation or code upgrades, as in 2) and 4) below.


One problem you are likely to have also - since you say you paid $17,000 sounds like the repairs have been made - which means the evidence has been destroyed (hopefully you have good photos of the damage and a good itemization from the contractor of what work was done and that only repairs were done, no upgrades unrelated to the fire) so proving the actual damage as wee=ll as the reasonable repair cost is going to be quite difficult at this time - though your attorney should be able to get access to the insurance company adjuster notes and photos. The time to fight it would have been BEFORE accepting payment and BEFORE fixing it.


One thing working in your favor is that if they did not send out an adjuster after a significant fire and closed the claim - this could be used by the attorney either in court or with the state insurance commission/board as evidence of gross negligence and neglect of their responsibilities under the insurance contract.


From my experience in claim situations here are some thoughts - but an attorney should give you the detailed skinny on claim allowances and denials:


0) if their payment to you was marked Payment Of Claim in Full or such and you cashed/deposited it rather than appeal their payment first, your recourse might be very limited.


1) unless you had done something illegal or contrary to terms of the insurance policy (like in some cases they do not cover work done in violation of law or without building permits as required in your area), their adjuster should have covered all costs to repair/replace fire damage to the condition covered by your contract - either replacement cost or depreciated value as applicable.


WHETHER OR NOT your wiring was defective or outdated, if they provided insurance on the house they should pay for the fire damage, subject to the terms of the contract. They might refuse to carry it going forward after the repair if you don't replace/upgrade your wiring (which would probably mean your hosue would be blacklisted by all insurance companies) - but your wiring needing upgrading does not let them off the house for the contractual coverage under your policy as long as it was in force - they had the option of requiring upgrades before they would renvew if they wanted (subject to state insurance regulations and modifying the contract to include such a provision).


On the electrical wire specifically - they should have paid for the replacement of the burned sections and any legally required junction boxes to repair it (all swplices have to be in a junction box), but they would not pay to replace undamaged sections - replacing substandard sections of wiring that were not fire damaged would be normal household maintenance, not their responsibility.


2) Some policies are depreciated or amortized value coverage - they figure the cost to repair/replace the damaged property, based on the current value of it - the depreciated or amortized value - not the actual replacement cost. For instance, a clothes dryer that caught fire might be assumed to last 15 years, so if new they would pay replacement cost - but if 10 years old would pay only 5/15 or a third of the cost, if 15 or more years old would pay nothing or maybe a minimal 10% of replacement cost. So - if your house was figured at 50 year life say and was 40 years old, they might pay 10/50 or 20% of replacement/repair cost for the damaged parts - which coincidentally is about the percentage they paid you.


Some policies use a variation called something like "Used Replacement Cost" - what it would cost to buy another like item of equivalent quality and age.


3) Other policies are Replacement Cost coverage - about 50-100% more expensive premiums (about 80% in my case, usually not 100% more because that change does not affect the Liability coverage part of the premium) and pay for the actual current replacement/repair estimated amount, without depreciating for age of the items.


4) Another factor that comes into play is Building Code Updates coverage - if your policy does not have coverage for upgrades needed by modern building codes during repairing/replacing the damaged parts of a building, then they would estimate the cost to repair/replace your damages the same as they are now - and you would pay the additional cost to come into compliance with current code. Major areas where this comes into play is in basically total rebuilds after a total or near total loss where changes in building or zoning codes require actual changes to the footprint or layout of the home, upgrades to or elimination of septic systems, seismic or hurricane resistant upgrades, major energy code upgrades, major upgrades to electrical system (like having to upgrade to breaker box from fuse box and upgrade ALL house wiring regardless of whether damaged in the fire.


Many locales have mandatory code upgrade laws that if you are replacing more than 50% of a system or spending more than 50% of the value of the building on a remodel or rebuild you have to bring the ENTIRE property into modern system or overall code compliance at that time. This sort of update coverage omission can be particularly devastating with very old homes where the construction is far from meeting current codes and the value of the house is substantially less than the cost to rebuild to modern code, and in cases where modern codes/zoning would no longer allow that type of construction - like certain foundation or chimney systems in seismic zones, requirements for highly elevated floor levels and flood-resistant foundation and supports in floodplains and hurricane surge areas, requirements for fire-resistant siding and roofing in wildfire areas even if they were not damaged in the claim event, etc.

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If you want to reply back using the Answer This Question yellow button right below your questions (just as if you were answering uyour own question) with a bit more detail on specifically what the did and did not cover, and if the $3500 was the total damage adjusted amount or was a deductible-reduced or code-upgrade-cost reduced amount from a higher total damage estimate, I can give you a better feel for whether or not I think it might have been fair or not.

Answered 2 years ago by LCD




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