# home insurance claim flood questions



## banjopete (Feb 4, 2014)

Hi everyone, we had the unfortunate luck of flooding our basement due to a leaking hose bibb/sillcock. It flooded a vintage 50's basement with 50 year old carpet and real (fake) wood styled panel walls with no insulation behind the 2x4 walls. The only real damage was the carpets in two rooms, the mdf type panel board walls, and miscellaneous items in the basement. 

My wife and I laboured from saturday night on when this happened with a dehumidifier, and a bunch of air movers, we've removed all the soaked carpets and underlay. We have exposed all the walls by cutting a 1 foot section out of the bottom of each affected wall as well as removing the vapour barrier to get the airflow behind the wall structures. So that's the background.

We don't care about any of the basement parts that were damaged, and frankly getting paid for old carpet and panel board seems like a winning situation, but we were only concerned with mold problems which I think we've got licked now. We're going to run all the equipment through wednesday evening to be sure.

The insurance appraiser and adjuster are in the loop, and we've been told a contractor can fix all of this, or we can lump sum and proceed how we wish. We're more DIY'ers than watchers so given the vintage of the basement we're better off planning a basement reno/fix than just getting someone in to replace what wasn't all that great to begin with.

This might be a great time to insulate the basement completely once we go back to just the wall studs and foundation.

Going this route for the lump sum, my question is that will our time be considered in the payment? for the replacement of the carpets, will they include a reasonable installation cost as well as the pad and carpet costs? Any other tips for maximizing our lump sum? Don't misread my intention, I'm not looking for scams, just to make sure we get full value from our insurance claim and to make it cost effective going forward.

thanks for reading the small novel thanks for your input ahead of time,


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## carverman (Nov 8, 2010)

banjopete said:


> Appraiser and adjuster are in the loop, and we've been told a contractor can fix all of this, or we can lump sum and proceed how we wish. We're more DIY'ers than watchers so given the vintage of the basement we're better off planning a basement reno/fix than just getting someone in to replace what wasn't all that great to begin with.





> Going this route for the lump sum, *my question is that will our time be considered in the payment? *for the replacement of the carpets, will they include a reasonable installation cost as well as the pad and carpet costs? Any other tips for maximizing our lump sum? Don't misread my intention, I'm not looking for scams, just to make sure we get full value from our insurance claim and to make it cost effective going forward.


The short answer is NO. Your time even though you value it at X$ per hour is worth NOTHING to the insurance company.
They want to see a commercial invoice, from a QUALIFIED CONTRACtor that can:

1. Remove all the moisture.
2.Coat the walls with mold protection/inhibitor...as black mold in large quantities can be health affecting.
3,.Restore the walls and floors to original condition that meets current building codes for basements.

Unfortunately (like most home owners) ,once you make a claim, even if that claim ends up ZERO DOLLARS to the insurance, (because you decide during the claim to do the work and supply the materials yourself), you have submitted ONE valid CLAIM to the insurance company against your home owner policy.

You should be careful about making any more claims in the future as too many claims in a short period of time could result in
your insurance policy not being renewed by the same company.

A few home owners have found themselves in this predicament in the past.

Follow through now..get your quotes, submit to the insurance adjuster, take the deductible which can be substantial and
get on with it.


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## banjopete (Feb 4, 2014)

Thanks Caverman, that is more or less what I expected. We are still considering whether or not the claim is worthwhile but for our situation we're going to be going back to the foundation and completely exposing the all the surfaces through this process one way or another. I do see the point of the future coverage liability though but I also believe in the "nobody cares as much about your stuff as you do" philosophy of things as well. 

Our intention and efforts will be to do exactly as you stated in your 3 points, including the antibacterial spraying, and complete drying. My intention of not having it all done by a contractor is that we don't necessarily want back what was there. 

We're not planning on making regular home insurance claims and I'm not sure how this would affect us for our future insurance costs but aside from total loss coverage what's the point in home insurance if it's not accessible when things like this happen but that's another topic entirely.

I am curious though you said be careful about making claims like this in the future, do you mean this probably wouldn't be the best time to use up one of our claim lives because of the small severity? What you're also saying is that at this point after speaking with the appraisor and adjustor whether we follow through with it, they see it as a claim regardless? This seems wrong ethically to me but again, it's insurance. I would imagine we'd have to pay the deductible and take the money for them to penalize us?


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## Mukhang pera (Feb 26, 2016)

I agree with carverman. Insurance companies don't make money paying claims. People who make claims are seen as undesirables. My own rule of thumb is that unless a claim is worth about $25,000 or so, I'll keep my mouth shut and absorb the loss myself. I like to keep insurance for the big ticket items, like a total fire loss. A few small claims can see you cancelled, with no insurance. That can also be a problem if you want to finance a real estate purchase. Banks like to be shown as first loss payee. I know some here who say the bank does not care, but I would not take that to the bank.


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## banjopete (Feb 4, 2014)

Mukhang pera said:


> I agree with carverman. Insurance companies don't make money paying claims. People who make claims are seen as undesirables. My own rule of thumb is that unless a claim is worth about $25,000 or so, I'll keep my mouth shut and absorb the loss myself.


All points noted. Thanks Mukhang pera. I hope our options are still open at this point, and I do hope our bail out option on the insurance claim is still there once they get back to us. If this weren't the case I think we were misled by the first point of contact with them. When we called the emergency number to explore our options we were told to proceed how we wanted and to keep receipts should we eventually claim it, and that the decision to make a claim or not would still be there as we assessed the options with our provider. As I related this conversation and other parts to the adjuster and appraiser they both were surprised by different parts. This is a first dealing with home insurance for me so it's all new and learning points. I don't imagine our reimbursement will be much beyond $5k if I were guessing. It would be our first claim in nine years with them, but we've only been in this new house for us since last summer so this one looks like a fast claim on a new (big) addition to our policy.


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## Mukhang pera (Feb 26, 2016)

banjopete said:


> It would be our first claim in nine years with them, but we've only been in this new house for us since last summer so this one looks like a fast claim on a new (big) addition to our policy.


You fairly long claims-free history counts in your favor. Do your best to preserve it.

I have had at least one property continuously insured since 1976, including a principal residence from 1976 to about 1996 when I moved to the U.S. and had a principal residence there, which later became a rental. Then I moved principal residence for a few years to southeast Asia, where I did not insure my residence, choosing to self-insure rather than trust my luck to the few local insurers. 

When I moved back to Canada in 2003 I rented a home for a few years, then built a house on land I owned. In shopping around for insurance for the new house, I found the insurers _very_ interested in my insurance and claims history, including continuity. They asked about properties I had owned and who insured them. They checked with my U.S. insurer to verify that I was indeed continuously insured there and had no claims, as I had reported.

My only insurance claim came in 1980. I had then several Vancouver houses insured with an outfit called Elite Insurance Co. At one, a five-unit rental, there was a 2-car garage and a concrete pad beside it that would take 3 cars. At one point, a tenant's car parked next to the garage caught fire while being worked on. The fire scorched the garage wall and damaged the garage eaves. The repair bill was about $500. I claimed and Elite paid it. Had I known then what I know now, I'd have got out my paint brush and fixed it up without saying anything to the insurer.


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## banjopete (Feb 4, 2014)

Well I found out a little more to answer my own question. Notification isn't viewed as a claim _per se_ but they duly note it and increase the future liability of covering your property going forward. We're going to get an independent contractor to come in and appraise the damage and replacement costs to have something to come back with at least but it seems we've already bough the ticket so we're probably going to take the ride and chalk it up to an expensive learning experience. The things you don't know though eh?


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## carverman (Nov 8, 2010)

banjopete said:


> Thanks Caverman, that is more or less what I expected. We are still considering whether or not the claim is worthwhile but for our situation we're going to be going back to the foundation and completely exposing the all the surfaces through this process one way or another. I do see the point of the future coverage liability though but I also believe in the "nobody cares as much about your stuff as you do" philosophy of things as well.
> 
> Our intention and efforts will be to do exactly as you stated in your 3 points, including the antibacterial spraying, and complete drying. My intention of not having it all done by a contractor is that we don't necessarily want back what was there.
> 
> ...


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## RCB (Jan 11, 2014)

Beware contacting your insurance company for water damage unless your claim will be $20,000+. You WILL be screwed.

Two winters ago the city had one of many watermain breaks, two blocks away. Middle of the night. It travelled down my block, and our driveway was the first one the water met that was cleared of snow to the concrete. A river of water, six inches deep poured down the drive, hit the garage, turned and flooded my backyard...including a $12,000 hot tub. Everything in the garage a foot up was damaged, including excess flooring for our home, and two rental properties, various building tools, woodworking equipment, etc.

We have a standard $2,000 deductible. They replaced the hot tub with new (damaged one was 2 years old). The garage contents, however, were another story. Have receipts...for everything. We got only 75% of what we had receipts for. We were good and truly screwed, no fault of our own, and then of course they raised our premiums.

Insurance companies certainly don't exist for their customers.


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## Eclectic12 (Oct 20, 2010)

^^^^

YMMV ... once I price out the few things to replace as they could not be cleaned, I suspect everything will come in around $15.5K (dry wall, laminate and vinyl flooring plus cleanup included) for a Dec 29th backup.

I forget whether the deductible is $1K or $2K but where I was expecting to pay it out of pocket, the agent said it was being waived as I had such a long history with no claims. Time will tell on the rates but so far, the first chance they had to raise them - it is the standard COLA amount.


Cheers


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## banjopete (Feb 4, 2014)

Thanks everyone for the information and we have a clause in our policy that if the total damage is valued over $10k they will waive the deductible so we'll see how it goes. So far though I've learned a lot and being informed will give me something to work from when I speak to them next about our situation. For now we'll itemize our damaged items and make sure we're following their process correctly to enable the 2nd opinion on the damage replacement. As I said we're lucky we didn't have much down there and like caverman mentioned the cleanup should be on the easier side considering the lack of drywall, lived in rooms, insulation, flooring, etc. I'll keep this updated with info as we go along as there wasn't much on this topic when I searched initially so it might serve as a good reference for the next person.


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## banjopete (Feb 4, 2014)

Alright well I heard from our appraiser for the damages to the property, they came back right at $5k essentially, and they'll have one of their preferred network contractors do all the work for this price or pay us to do it ourselves at the same price. I suggested the second opinion on the appraisal and was told that they (TD Meloche Monex) subscribe to an estimate software platform which is an industry standard for canadian home insurers. The prices given are good enough and standardized in a way that their preferred providers will accept this work and make their money within the quote, regardless of whether I can find someone that will say it's a higher value damage, they have a long list of contractors they're familiar with that will do the work for their estimated price. Also more crucially they (TD) doesn't set the price for any of the items, it's all from the software program so that sort of duping or influence is out of their hands.

Along the lines of is it a claim or not aspect, it was explained further that once we recruited and used the services of their personnel (an appraiser and adjuster) we've "used" the insurance service so our premiums will reflect that whether we pay a deductible or not, and whether we receive a payment or not.

Interestingly too, to caverman's point about valuing our time as zero, it wasn't true in our case. We are allotted time and labour costs just as a contractor would for all the demo work we've done so far and all the labour involved for the repairs going forward just the same way as their preferred network contractors would. So literally there is $5k for us or a contractor to do the same work with, and 0% depreciation involved in the rates between the contractor and us DIY'ing it.

So it's not a high value claim at this point and with the additional incidental items that were damaged as well we might be looking at $6k+ all totaled, so far from the $25k floor for a claim Mukhang pera suggested. We get the plumbing fixed today with that all important invoice to prove we remedied the situation officially, then we can move on with our proper fixes. 

Interestingly I also found out that despite our insurance documents plainly saying that if our damage is >$10k the deductible is waived from just this past summer, it's now $25k for this waiver. They probably notified us of this change but that's a big change. Oh insurance industry, you're an interesting bunch.


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## RCB (Jan 11, 2014)

banjopete, get that info in writing. Again, get that in writing. Trust no one involved with an insurance company.

We were told our deductible would be "absorbed" by the adjuster. It was not. Years ago my parents had a fire damage claim, we were told our labour for cleanup would be paid at same rate as contractor (washing soot-covered walls, cleaning carpets). My parents didn't get a single dime after my mom and I worked like dogs.


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## banjopete (Feb 4, 2014)

RCB said:


> banjopete, get that info in writing. Again, get that in writing. Trust no one involved with an insurance company.
> 
> We were told our deductible would be "absorbed" by the adjuster. It was not. Years ago my parents had a fire damage claim, we were told our labour for cleanup would be paid at same rate as contractor (washing soot-covered walls, cleaning carpets). My parents didn't get a single dime after my mom and I worked like dogs.


Yep thanks, it's all detailed in their estimate that we have in writing. Very interesting dealing with them for sure. Too bad it's such a part of life we're somewhat forced to deal with.


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## carverman (Nov 8, 2010)

banjopete said:


> Interestingly too, to caverman's point about valuing our time as zero, it wasn't true in our case. We are allotted time and labour costs just as a contractor would for all the demo work we've done so far and all the labour involved for the repairs going forward just the same way as their preferred network contractors would. So literally there is $5k for us or a contractor to do the same work with, and 0% depreciation involved in the rates between the contractor and us DIY'ing it.


Well maybe you been lucky to find an insurance company that will give you a lump sum for the estimate and be done with it. 

Most of there will require some kind of contractors receipt for the work performed on the repairs. 

As the poster above indicates..get that in writing..Do not trust any verbal assurance you will get compensated if you DIY.



> insurance industry, you're an interesting bunch.


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## banjopete (Feb 4, 2014)

I will keep you posted as things progress but so far everything seems to be as I described still. What the actual terms of payment are etc are what remains to be seen.


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## banjopete (Feb 4, 2014)

a little more information;

We're getting paid for our time for the actual water cleanup. Not much but $15/hr for our estimated time to suck up the water and a few other things after discovering the water indoors. So despite some people's experiences we've been fortunate that most things have gone as we would have hoped so far. We're still in talks with our adjuster but we've got 6 months to finish the contents claim, and 2 years to finish the home damage claim so they're pretty hands off at this point.


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