It is a well known practice for a homeowner to request three or more estimates from three different contractors before selecting one them and going with that contractor to do the work. However, this can be a trip wire event to the benefit of the insurance company and against the interest of the homeowner.
Stupidity in Estimating!
“I thought I was supposed to get three estimates and then pick one and send it to my insurance company. I didn’t know I was giving up so much by doing that. It really makes a person feel like this is nothing more than stupidity in estimating!” Nelly Oviedo
Most Policies Will Tell You in Great Detail What’s Excluded
If you’ve ever followed that process, you are not alone as most people understand this to be the proper procedure. Even news outlets and many of their contractor related stories come with advise stating they should get three estimates. What may surprise many is that most insurance policies will tell you specifically in their 50 to 80 pages of documentation what is excluded, and not exactly what is included. You see, when you select one of those estimates and turn it over to your insurance company, what you are effectively doing is telling the insurance company, “this is what I want,” instead of “this is everything I deserve.”
By Turning the Knobs They Pay Less in Claims
If you have a full replacement policy, and you tell your insurance company, “this is exactly what I want” then insurance law says you are entitled to everything that full replacement covers. However, when you deliver a document stating by your actions “this is what I want,” then that is all you will get. In Post and Courier, former Allstate adjuster Mark Romano said, ‘by turning the knobs’ [they pay] less in claims than they would have otherwise…” And this may come as a big surprise to many homeowners, because a lot of the emphasis is placed on selecting the contractor, while the focus and attention is taken away from the full benefit under replacement coverage they may be entitled to.
Additionally, most estimates provided by contractors are as narrow as a one-line “amount” and description. And while some will break down some of the estimate items, countless detailed items such as remove and reset light fixtures (to properly paint the wall) may go un-itemized. As such, and although the policy states full replacement and all things related to full replacement, that short estimate fails to deliver the necessary breakdown. Now many times the adjuster will create something longer then the short-lined estimate for adjustment purposes, but because they are usually running around adjusting several properties at a time during a catastrophic event, they may end up writing something that doesn’t go into the full level of detail necessary. The difference being as little as a few hundred dollars to several thousands to even tens of thousands of dollars.