Challenging the Insurance Company

One of the most important rules to remember in negotiating an insurance settlement is to never accept the first offer. I challenged the first offer sent to me with a long letter detailing

exactly why the estimate was too low. It is rather long (welcome to the wonderful world of insurance negotiation), but the main things to remember as your read it are to: 1) Identify every single gap or error in the insurance company’s estimate, 2) Gather hard dollar repair estimates for every item to include in  your response and 3) Provide photos to support your argument. By the way, I didn’t send the following letter to the insurance adjuster. I sent it to her boss.


Dear Bill:


Thank you for your letter and estimate regarding the structural repairs to my home.   As indicated on February 11th, I have thoroughly reviewed the document and have also discussed the project with several potential contractors.  This evaluation has identified some items that appear to be excluded from your estimate.  To that end, I am requesting consideration of the following in order to ensure that I will be able to restore my home to its pre-flood condition:


     Electrical: Your contractor estimates electrical repairs at $3,120.00.  In the document, that charge is included in the $14,826.58 total for emergency services.  However, none of these repairs were actually made, nor are they “emergency services”.  Rather, they represent an estimate of what it would take to make the electrical repairs during the construction phase.  It would seem that the $3,120.00 should have been added to the total repair estimate payable to me so that I can compensate my contractor for this work.  (Additionally, as your letter mentions that you’ve paid your contractor directly for the full $14,826.58, it would appear that your contractor has been overpaid by $3,210.00 for work which they did not actually perform).

     Living Room:

a.    Provision for the mirrors adjacent to and above the fireplace (photograph attached).  Your contractor’s estimate provides for replacement of the large mirror on the opposite wall, however, it excludes replacement of the mirrors surrounding the fireplace.   These mirrors would have to be removed in order to restore the fireplace, the replacement of which is acknowledged in your contractor’s estimate.  A local glass company estimates that it will cost $782.000 to replace these mirrors once they are destroyed and removed during the fireplace replacement process.

b.    Hardwood Floor Installation.  Your contractor’s quote for the hardwood flooring is right in line with the cost of the materials as provided to the inspector, however, it does not cover installation of the flooring.  I have been quoted $5.00 per square foot for installation of the wood flooring and molding, or a total of $1,200.00 to install the new floor.

c.    Gas Fireplace Insert Gas-piping, Electrical and Installation Labor: Your contractor’s estimate provides for $666.50 for the fireplace screen, gas log set, and grate, but it does not appear to include any amounts for the installation, gas-piping and electrical hook-up.  I have been quoted $833.50 for these items. 


a.    Compensation of $298.000 (actual cost paid on 12/6/06) to replace the mirrored backsplash in the kitchen.  The $69.00 estimate provided by your contractor considers replacement for the mirror, but not for the extra charges for cut-outs to accommodate the light switches and electrical outlets.   The receipt for the mirror has also been provided to your office as part of the property damage documentation package. 

b.    Replacement of the sink, sink grid, faucet, soap dispenser and garbage disposal in the kitchen, rather than detaching and resetting of these items.  The estimate already provides for replacement of the appliances, cabinetry and granite, as they were brand new at the time of the flooding.  The sink, sink grid, faucet, soap dispenser and garbage disposal were also brand new.  Additionally, they are already showing signs of discoloration (see attached photograph).  The total cost of these items is $1,321.78, the receipts for which have been provided to your office as back-up to the personal property damage spreadsheet.

c.    As the estimate does not appear to include installation charges for the cabinets and appliances, I am requesting $1,090.00 to cover the cost of installing these items ($690.00 for cabinet installation and $400.00 for appliance installation performed by an authorized Thermador technician).

      Paint: Adequate coverage for paint costs.  All contractors I’ve considered for the project are seeking a minimum of $1.00 per square foot (rather than $.67 per square foot) to properly paint the dry wall with a grade of paint that is suitable to withstand the elements associated with living near the ocean.  They have all indicated that a minimum of one coat of sealer and two coats of paint will be necessary. Applying the incremental $.33 per square foot to the 1,718.50 square feet of dry wall identified in the estimate translates to an additional $567.00.

      Clean-up, Debris Removal and Hauling: The contractors I’ve met with have all indicated that there would be additional clean-up and hauling fees of $4,500.00-$5,500.00 to carry materials into and out of the unit.   This is due in large part to the fact that the location of the unit makes carrying building materials into and out of the unit significantly more difficult and time-consuming.  Materials (including but not limited to the electrical fixtures, fireplace insert, mirror glass, cabinetry, appliances, windows, interior doors and bathroom fixtures) must either be carried up or down stairs (elevator does not go all the way down to my unit on the first floor), or 400 yards around the building from the back slider to the street curb. 

      Interior Doors: Your contractor’s estimate assumes that the three interior doors and door jambs will be painted, rather than replaced.  I am requesting full replacement of the doors, door jambs and corresponding hardware based on visual damage to these items, including cracking and buckling (photos attached).  Contractors estimate the total cost to replace all three of the doors/door jambs at $650.00-$700.00.

      Crew Supervision: All contractors I’ve considered for the job require a labor supervision fee ($5,000) to keep crews organized and on schedule, handle subcontracting appointments, control quality, and retrieve unforeseen needed supplies.

      Pack-out: The pack-out fee of $6,022.80 appears to have been included in the total repair estimate, even though it is not an actual repair charge.  This artificially inflates the compensation being provided to me for the repairs, meaning that when backed out of the total, the amount allotted to repairs is definitely well below the contractor quotes I’ve received.  I request that the packing fee be broken out as a separate item, incremental to the total repair figure.

      Open items:  Can you provide an explanation of how the open items, including the water heater, security system and permit costs will be handled?  Will they be provided in a separate estimate, or included in the personal property damage settlement?  With regard to the security system, I’ve provided documentation verifying the original cost of the security equipment at $700.00, which my security company has confirmed with me they would honor when they come to restore the service.  Your office  is in receipt of that documentation.  Further, as the water heater is housed in the hallway closet that was “quarantined” by your emergency services crew, there is no question that it will need to be replaced in its entirety.

      Asbestos and mold testing reports:  I had requested a copy of the asbestos and mold testing results from your contractor, which was used to determine the scope of work reflected in its vendor’s asbestos abatement estimate, however, I was informed by your contractor that you would need to approve the release of that data to me.  I am formally requesting a copy of that report from you via this letter.


Thank you for your consideration of these items, which I am sure you will agree are reasonable, necessary and well-researched.  I am eager to move forward and begin the repair process, and just want to be sure that the compensation for structural repairs will fully cover the cost of restoring my home to its pre-damage condition.



One Response to “Challenging the Insurance Company”

  1. John Says:


    Great point on not accepting the first offer. They always try to low-ball you hoping you will take it. Waiting for the book to come. It is a must need for all……………

    John – Forest, VA

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