Puzzled by Insurer's Decision
Dear Mr. Marvin and Mr. Miller,
After a year of trying to convince my insurer that it would be cheaper for them to cash me out rather then repair, they remained firm on the repair, even after we went through 4 hours of the FDFS Mediation session. Even the mediator was puzzled why the insurer would want me to repair after I proved to them that their minimum financial obligation/exposure if I proceed with grouting, underpinnig, and cosmetic repairs would be above my policy limit. To top all that, they are even willing to pay for me to move out for minimum of 9 months.
Can you make sense of my case and the reason for their decision. Is there anything in the insurer's tax provisions that allows them to expense the total loss payment to insured with sinkhole claim only after the stabilizatin work has begun and geotech engineer confirms that repair will cost more then estimated due to excessive grouting volume needed?
A sinkhole has been confirmed on my property and the insurer requested for me to get multiple estimates for remediation plan which included grouting and underpinning stabilization and replacement cost for all restoration repairs that are associated with the sinkhole damage. The lowest estimate for ground/foundation stabilization and structural/cosmetic restoration repairs came to $279K, highest was $309k. Neither estimate included cost to repair additional structural/cosmetic damage that may be caused by the stabilization process, which usually happens due to excessive settling.
My policy limit on Dwelling - Coverage A = $236K. My Coverage limit on Increase Dwelling - Coverage B = $47.2K, - basically providing me with $283k allowance for all repairs, excluding $50K in Low Ordanance. My insurance company also agreed to pay Loss of Use Coverage to allow my family to relocate while stabilization and restoration work is performed. Also, they agreed to pay for geotech engineer to monitor on site activities and certify the work. I have submitted to them total estimated cost for all above expenses to run approximately $351k, which didn't include possible replacement of my pool, which they confirmed as damaged due to sinkhole. During Mediation, I have offered them to settle the claim at = $266K and told them that I was not sure if I wanted to put my family through hardship of moving out and moving back in during the invasive process of grouting and underpinning, especially knowing that they will run out of coverage before all work is complete. I also thought this was very beneficial for them, since this was a much cheaper alternative for them in settling this claim and also allow me the option to sell the house to a builder or real estate investor as is.
During the Mediation they offered me $90k to settle, which I declined. When I asked them what is their reasoning for wanting to repair, they informed me that they want me to proceed with the repairs because they anticipate that the grouting will cost a lot less then the minimum called out in the estimates by 3 contractors. Also they said that if the grouting contractor tells them in the middle of the job that it will cost a lot more then their lowest estimate, they will have the option to stop work, pay the contractor for work completed (which they told me would be approx. at $50k limit trigger) and then pay me the full policy limit $236k. I questioned their reasoning, and informed them that I didn't feel comfortable with this approach. I further explained to them,- since I would have to move out before work begins what assurance do I have that if they stop the work and pay the policy limit, that the dwelling will be inhabitable. I further questioned, what if the grouting process damages my house to a point that I couldn't afford to complete the repairs with $236k, not be able to move back into the house, and not be able to sell it. They told me that it is very unlikely that this would be the outcome. I have pleaded with both, their claim adjuster and adjuster's supervisor for hours. All they did was quoted the June 2005 Florida Statutes 627.707:
So, as of today, I am scheduled to move by the end of June, for 9 months, and stabilization contractor is scheduled to start on July 1.
Do you know of any reputable restoration contractors?
My appologies for the long posting.