Third party fire adjust

[Aqil Dharamsey]

Over the weekend I had a fire in my investment property. (What a way to start a new year!). Anyhow 2 apartments were damaged. I have placed a claim with the insurance company which they are giving me an estimated cost this week. My question is, has anyone hired a third party adjuster to battle with the insurance company on your behalf ? I got a call from a local fire adjustment company who is saying they can help me with the claim and can get me more money to make sure I don't have to cut corners when repairing the damage because of limited funds allocated by the insurance company. Thanks!

[Michael Norris]

It depends on how much work you are willing to put in making calls and reading your policy. I would suggest getting estimates from a couple contractors familiar with fire repairs and comparing those with the estimate from your insurance carrier.

The third party adjuster will try to get you more on the claim but they will also take a portion of the entire claim for their services.

If you get your own estimates you may find out that "battling the insurance company" isn't necessary. For example - if your company says the damage is $10k and two contractors both say something close to that number than there isn't much to fight about. However if both contractors say the damage is $25k then show their written estimates to your carrier and ask why there is such a difference?

The type of coverage you have also matters a great deal. If you have Actual Cash Value (ACV) coverage your insurance company will estimate the amount of damage then adjust for depreciation on the age of your units. If you have done any recent renovations start digging up those receipts now for proof of the work being done. It will help off set the depreciation.  

Depending how your policy is set up you could also have co-insurance involved if the property is insured for less than 80% or 90% of the estimated replacement cost. 

If you don't already know those details call your agent and ask what type of coverage you have (Replacement Cost? or ACV?) And is there any co-insurance clause applied to your policy?