Claim Insight: The first settlement may not mean you’ve fully settled!

A property insurance settlement is a negotiation. A lot of people don’t realize this and, happy or not, just accept the initial settlement offer, which is the way the insurance companies like it since it saves them money.

Cashing the check does not mean you agree to the offered settlement!

The first check and estimate from your insurance company is typically for the “undisputed” amount of damages. This a deliberately confusing way of saying that neither you nor they are in “dispute” over the fact that your covered damages will cost at least this much to repair. In reality, that first check is just an initial payment on an usually low-ball estimate. This kicks off the negotiations. 

In fact, the insurance company has very likely, in addition to your deductible, already withheld some amount of depreciation they still owe for (recoverable depreciation). They also may have estimated some items as PWI (Paid When Incurred), which means they’ve determined that they only owe for these after you’ve shown receipts for them. All this to say, there is nothing final about that settlement check. So please, don't be afraid to use the money to get the repairs started; that's what it's for. And if more damage is found once repairs are started, supplements can be filed.

Ok, so now that you know a property insurance claims and settlement is a negotiation process, here’s the single best way to increase your settlement:

Get a good contractor!

If you’re early in the process and your contractor can meet the adjuster on-site for the inspection, great! If not, submitting a professional estimate from someone who is actually doing the work is a good place to start bringing your insurance company’s estimate into alignment with reality. Also, in our experience, it’s best not to use the insurance company’s contractor. Get a second estimate from an experienced and trusted contractor; if you need help selecting one, become a Tugboat member and get access to our preferred network of expert contractors. 

It's not over til it's over

In most cases, your insurance claim remains open for a year or more. The journey to restoring your property can be a long one, and there are bound to be changes to construction costs, permits, hotel stays, increased eating out, and missed damages that weren’t accounted for by the insurance company. So remember to collect all receipts along the way and communicate with your adjuster about adding these costs as they come up.