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Insurance Law/What coverage pays the increased utility and water bills?


QUESTION: My insurance wrote an estimate and then issued a check for the mitigation of the water damage, repair and personal property. I told the adjuster I need time to review and I have not agreed with it. But, the adjuster still sent out the check and said he would leave my area in one week. After I receive the check, what should I do if I do not agree with the insurance company about the amount of damage, return the check, hold it or just cash it? Please provide advice. Thank you.

ANSWER: Eathan,

In many states, the Carrier is required to issue a payment within a certain number of days once they adjust the loss. This doesn't mean that this would be the only chance of recovery that you have.

Because you mention that the adjuster said "he was leaving the area within the week", he was likely what is known as an "independent adjuster" hired by your carrier to inspect and report on the loss. You should have received a letter or other notice from the Carrier at the very start on who their internal file handler (adjuster) would be and that is the person you need to contact with any questions. If you didn't get that information, just contact the Carrier's main claim office and give them your claim number and they will direct you to the person who ultimately handled your claim.

Just let them know that you haven't had a chance to have your contractor look at the estimate yet but that you are accepting the initial claim check only as an their initial payment and that by doing so, you are not relinquishing any rights you have. (That is perfectly legitimate and legal.) They cannot put a statement like "full and final release of all claims" on the payment.

If the first adjuster had you sign a document called a "proof of loss", make sure that the Carrier knows that it was signed BEFORE you had your own contractor review the estimate.

If it comes down to it, there is a provision within your policy called "appraisal" which outlines a procedure for resolving disputes. Before you enact that, be aware that you would have to pay the cost of your own appraiser as well as 1/2 of any umpire fee. These costs cannot be based on the size of your loss (a contingency fee) but must be a negotiated hourly of set fee so that can get expensive for you.

The policy states that they will pay the reasonable and necessary costs of repairs (or something like that) and says nothing about just paying an "estimated cost". Be polite and professional with the Carrier adjuster you talk to and I am sure it can be worked out amicably.

Hope this helps.

Kevin Hromas
Kevin Hromas & Associates
... A Division of US Insurance Information LLC

---------- FOLLOW-UP ----------

QUESTION: Thanks for the detail info. Do I have to sign the release form; otherwise, the case cannot be closed? In the auto insurance, I knew the insured does not have to sign the release form but the case will be automatically closed if the check is cashed and no further communication? How about the home insurance, working the same way or differently?

ANSWER: You don't lose any rights by accepting the check as issued.
Just make sure that they know you are NOT accepting it as "full and final release of all claims".

Also, be aware that "closing a claim" is just something that they are doing internally and does NOT affect any of your rights.

---------- FOLLOW-UP ----------

QUESTION: Thank you for your reply. May I ask you a last question? My insurance policy has the Property Coverage, Dwelling, Other Structures, Personal Property, Loss of Use and Liability Coverage, Personal Liability and Medical Payments. The insurance has allowed a reimbursement of the increased utility bill due to the mitigation after the house water damage. Can the insured request the reimbursement of the increased water bill too due to the burst pipe? If so, what coverage will pay the increased utility and water bills? Thank you for your answer.


Sorry it took a while to get back to you on this. I thought I had answered it previously but it is still in the line-up of questions so I guess it didn't go through.

Unless it involves a matter of a sub-limit, the application to a particular coverage is more of an internal assessment by the carrier. Even if you have an ACV policy and they decide to apply it to the Dwelling/Structure coverage, water doesn't depreciate in value so that amount of recovery would change.

Just tell them what this additional loss is and let them figure out where it goes. I usually applied it to the dwelling since that is where the largest portion of the loss was.

Hope this helps.


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Kevin Hromas


I am a licensed, executive general adjuster currently holding a Texas resident P&C license (614250), New Mexico non-resident all lines license (248774), Oklahoma non-resident P/F/M license (A299561), Florida non-resident P&C license (E117051) and a National Flood Insurance Program certification (06040100). My areas of expertise involve property and casualty issues in both residential and commercial policies with regards to claims practices and issues. I deal extensively with Lloyd's of London commercial policies and various domestic carriers for residential policies.


After a 20 year career as a General Contractor, I was employed by Allstate Insurance as an adjuster in Texas, holding various postitions within the property claims department. After leaving Allstate, I specialized in handling losses associated with major catastrophes through-out the country. (Hurricanes Isabel, Charlie, Wilma, Katrina, Ike, etc., hail storms, floods.) I am currently retained as an expert by multiple insurance defense firms in Texas for issues in litigation. I am also a certified Umpire for formal appraisals.

Member - Society of Registered Professional Adjusters Fellow - Council on Litigation Management Member - Property and Casualty Association Member - Texas Independent Insurances Adjusters Association Member - National Association of independent Insurance Adjusters Member - Houston Claims Association

Claims Magazine ( and then search 'Kevin Hromas' for a full listing of articles and quotes.),,

JD - University of Houston Law Center - 1992 BA - Southwest Texas State University - 1980 AA - South Plains College - 1977 PLCS - Personal Lines Coverage Specialist

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Certain Underwriters at Lloyd's, London, Fulbright & Jaworski (Law Firm), Bracket & Ellis (Law Firm) Thamm & O'Briant (Law Firm) Sheehy, Ware & Pappas (Law Firm) Walker, Wilcox and Matousek (Law Firm) Financial Guarantee Underwriters

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