Property & Casualty Insurance/Property Damage
QUESTION: Hello, I am currently working with an insurance company to settle a claim for property damage to my home. A home that was bank owned directly behind my property had a water pipe burst in January, water had ran for a number of days directly into my home causing major damage to the kitchen portion and foundation of my home. The insurance company has admitted negligence on the part of the bank to insure the foreclosed property they owned was properly maintained and have agreed to pay for repairs. In addition to repairing the foundation the cabinets must be removed and replaced along with the flooring. The insurance company is saying they will depreciate the flooring based on my receipt from when the flooring was installed 8 years ago and they will also depreciate the replacement of new cabinets. They wont tell me how they determine this depreciation only that it is a calculation the insurance companies use to pay claims such as this. My question is, is the right, I was not looking to purchase new cabinets or replace my 8 year old flooring, it was damage because of negligence on the part of their insured, why wouldn't they pay for the replacement?
PS, I live in Wisconsin and the Bank that owns the other property is in California as well as the insurance company, if that makes any difference.
If you haven't already done so, give your insurance agent office a phone call and ask them if you have an actual cash value policy or a replacement cost policy. With an actual cash value value policy (ACV), the adjuster will calculate the replacement cost for your loss and subtract the depreciation. That depreciation is not recoverable. If you have a replacement cost policy, the adjuster will still likely take out depreciation, however the depreciation will be recoverable. When you have a replacement cost policy, most insurance companies will pay you the ACV up front, less your deductible. They will then reimburse you the depreciation portion after you enter into a signed contract with a contractor/builder, however some require that the work be completed and then the adjuster will add up all of your receipts before releasing depreciation. As for your deductible, I would call the owner of the property that caused your loss (the bank in your case) and ask that they cover your deductible and any expenses related to your loss that have not been reimbursed to you by your insurance carrier.
At any point, you may want to hire an attorney. These issues are stressful at the very least. Your attorney will likely represent you against two parties -- both your insurance company and the bank that owns the neighboring property. The right attorney will take this matter to court if necessary or at the very least negotiate a fair settlement from both parties with your best interest in mind.
I hope this information helps. Keep me posted with any updates.
---------- FOLLOW-UP ----------
QUESTION: Thank you, for your quick and helpful response. I did go to my insurance company first, they would not cover my claim, because they found it did not fall under my policy since the water came from an outside source. I have received very little if any support from my insurance company in regards to the damage to my home. I was told I had to do directly through the home owners (bank's) insurance company, that is who I have been working with, thus far. I had hoped I wouldn't have to contact an attorney but it looks as though I just might have to. Again I do thank you for your help and will keep you posted.
In most cases, the insurance companies that I've worked for in the past would cover all of your expenses, less your deductible. At the very least, I feel that you should get a free consultation from an attorney. There's a strong possibility that you are being misled by your own insurance company representative(s). Another option for you is to reach out to a public adjuster in your State. They often charge less then attorneys and can assist in reviewing your policy and negotiating a fair settlement with your insurance company if there is coverage for the loss. They may also have a list of 5-10 attorneys to refer to you if necessary.