Insurance Adjuster Challenge

[Ron Brady]

Appreciate BP assistance on a problem. New investor/first property.

House was REO and winterized. We had plumber come out to turn on furnace for first time. He shared that the flame was orange, indicating furnace not getting hot enough. Said he needed to come out the next day to further assess. Plumber returned second day, we were not present at the property. He fired up the furnace and then went to lunch. When he returned, the furnace had sent water through pipes to third floor radiator which flooded third, second and first floors.

Plumbers insurance company and adjusters are offering $1,500 where we think repairs will run approx. $7,000.

Should we:

a. Take the $1,500 and accept, as the plumber's insurance company argues, that we were at fault for not being on site (but the plumber left the site--we never authorized him to)

b. Reach out to our insurance company and file a claim (I understand that doing so raises our rates and would not be a good thing for our first of what we hope to be many properties.

c. Reach out to an attorney to represent us

d. Some other option.

[Colleen Esposito]

Ron - 

I suggest that you contact your insurance company and file the claim, and let them contact the contractor's insurance company for reimbursement.  The process is called subrogation, and if your insurer has grounds to collect on this they will do so more readily than you can.  $7,000 is a significant amount of money, and even though you may have an increase in rates in the future it's likely to be considerably less than the claim payout.

Do you have an agent?  If so, you should discuss with her or him, they should be providing this type of guidance as part of the services they provide.