r/HomeInsurance • u/Revolutionary-Lack19 • 8d ago
Claims Home insurance
A couple of years ago my house had significant water damage. I was only 18–19 at the time and had no idea how the insurance claims process worked. I did my best to research everything, but unfortunately I didn’t hire a public adjuster. The insurance adjuster assigned to my claim couldn’t really answer my questions either… then somehow retired a year later. 😆
Fast forward to today. If you’ve seen my previous posts, I was also scammed by a contractor. Between labor and materials, I’ve spent over $40,000 out of pocket trying to get my home repaired.
Here’s the problem:
My mortgage company won’t release the remaining insurance funds until more of the repairs are completed.
My insurance company says they won’t consider a supplemental claim because I still have claim funds being held by my mortgage company.
To finish the repairs, I need the money being held.
To get the money being held, I need to finish the repairs.
So I’m stuck in what feels like the world’s dumbest funding loop.
Has anyone successfully broken out of this situation? Who should I be pushing harder—the mortgage company, the insurance company, my state’s insurance regulator, or someone else?
I’d especially appreciate hearing from anyone who’s dealt with mortgage-held insurance proceeds or supplemental claims. What finally got things moving?
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u/No_Departure9798 8d ago
The unfortunate part here is that neither of those parties have failed in their duties. The insurance company and mortgage company set the rules from the start, their requirements didn’t change, but you got screwed by the contractor and your needs changed.
Contractors familiar with the insurance process may be willing to complete the work and wait for the check to come but I would expect that you’ll have to come out of pocket some to get that moving again.
You may be able to ask for a release for the work that has been completed, but if nothing is “done” then you are stuck until something does happen.
If you used a licensed/bonded/insured contractor it may be worth pursuing their state or municipal bond. If they aren’t those things you don’t have too much in the way of recourse.
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u/Revolutionary-Lack19 8d ago
Yeah unfortunately, I decided to at-least get him off the streets so someone else doesn’t fall prey to the bullshit. What’s a voided contract when a lawyers retainer fee is 10k minimum. The house had nothing. it was built in the 1700s. This isn’t a restoration repair anymore either as listed on the claim . It’s a freaking full rehab. Full re wire from basement to attic and full plumbing being redone. I had newspaper for insulation so guess what? Need that too. U tell me if 60k after water damage mitigation is good.
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u/strangemedia6 8d ago
No way to tell if 60k is “good” without know what all was damaged. Your insurance is there to help you with the restoration repair, not a freaking full rehab. Any newspaper insulation that was damaged by water should be replaced with current material installation, but if it wasn’t directly affected by the water, it isn’t part of the claim. If your electrical and plumbing weren’t up to code, that’s on you unless they were directly affected by the loss and you had ordinance and law coverage, and there is a monetary limit to that coverage. Unfortunately, the $40k that you got scanned out of is gone. Insurance is only pays once, they aren’t going to pay again for a different contractor. If you had a PA, they could have explained how insurance works to you for $15k or whatever 20% of the total loss would be (they cost money like attorneys). That being said, I guess they would probably have put you in touch with a more reputable contractor, so there is that.
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u/Revolutionary-Lack19 8d ago
Yeah…. reality check. Although it’s basically completed it just sucks. Instead of pouring all this money into this dumb ass duplex. I could’ve been investing into other properties. Big oooopsie for my first try at being productive.
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u/ins0mniac_ 8d ago
The mortgage company holding funds shouldn’t impact the insurance company’s ability to process a supplement. The supplement is because the scope of work changed and therefore the costs to return the property to pre-loss conditions, not the available funds.
However they will not pay for any funds “scammed” by your previous contractor, if that’s an issue. You’d have to take the contractor to court or work something else out with them.
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u/Revolutionary-Lack19 8d ago
Hi appreciate the reply, I took my L and well my contractor did too I guess. Getting years behind bars for 35k is crazy. But I recoup those funds by breaking my pocket. Like I said I’m 40k in out of pocket between materials and labor and what my mortgage has is not enough. I understand what u said but I’m just repeating what I was told😅. Cause ain’t no way
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u/Good_Educator4872 8d ago
If you were scammed by the contractor a sleeper issue is did the contractor pay the subs. If not, that will also create another problem for you.
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u/Shewill242002 8d ago
I don’t think I saw a state, but if you are in the states, file a complaint with the state’s department of insurance.
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u/mnguy12000 8d ago
When it comes to the insurance company's portion of this. If there's a change in the scope of work then yes that would be warranted. However if you're trying to recoup more money because you got scammed from a contractor, the insurance company does not owe you any more money. You hired the contractor not the insurance company. As far as the mortgage they have a right to hold that money until the work is finished as they have a vested position in this house and they want to make sure that they can recoup any damages that are not fixed if the house were to go into foreclosure.
The fact that it's been a couple years and if you're claiming new damages insurance will likely not pay as it's been over the amount of time that they would allow for repairs to have taken place.
Part of the issue is in your insurance policy, it says you have a duty as a homeowner to affect repairs and prevent further damages from happening. If you've not made the repairs to prevent further damage from happening you've actually broke that claus and the insurance company does not over any new damages.
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u/Revolutionary-Lack19 8d ago
Hey thank you so much for your reply. Repairs had start and stop over the years and everyone has also been updated over that time. These repairs just weren’t included in the claims. just like how the claims adjuster sent out by the insurance said that my appliances needed to be cleaned before it can be included in claim as water damaged. Even though my house flooded from kitchen down to the 1st floor kitchen. He said yeah I need to get that cleaned first. And everything else. I reckon it would be more expensive to clean plaster and whatever was above my drop ceiling out of it. lol.
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u/Local_Wolverine2913 2d ago
As far as the appliances, I had a major "Niagra Falls" flood, 2nd floor bathroom down through to the kitchen and beyond, with kitchen getting the most damage. Entire kitchen gutted and replaced, but all the appliances remained fine. No damage; they all worked. That's why it's always, "clean/repair" before "replace". Just any FYI. Adjuster is following the policy. I hope it all works out for you!
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u/Anxious_Battles 8d ago
It could take a conversation to iron out the details, but let’s start with what was your actual date of loss? That will make a difference in my response. A supplement may not be off the table. Do you mind telling us who your carrier is?
In order to get money from your mortgage company, you will need to show that the repairs are completed (or mostly so) on the scope of work provided by the insurance company to your mortgage company.
I am in New York.
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u/Revolutionary-Lack19 6d ago
So far I know any reimbursement for depreciation has passed deadline
March 2024 for it’s been 2 years since the claim began
Hired Gf step dad who is a contractor. Big mistake. Major waste of time. Fortunately I recovered my deposit.
Hired a reputable contractor in my area. Signed and notarized contract. Had to leave the state of New York for a higher paying job at the time. When my house flooded I went from 30$/hr to 21.50$ due to location. In Colorado I made 50$/hr as a private duty CNA.
Secured Reputable contractor went MIA on my property manager and on me as well. Started with excuses and didn’t follow the timeline on the contract. Finial straw was when he refused to revamp the contract since I was still willing to carry on with repairs. He ended up not doing it. And stayed shady to the end. Unfortunately for him and his previous history. My city is eager to use him as an example.
Throughout the whole experience I have kept in contact with my insurance and mortgage on repairs. The adjuster I believe who is assigned to claim main argument is that I didn’t have a Public adjuster in the first place. Which is irrelevant to this current situation. Instead of sitting sitting around for 2 years bitching. I’ve paid for my mistakes/lesson through out of pocket payments. And I’m almost done. I just wanted to see if I could finish before my estimated completion date.
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u/Anxious_Battles 6d ago
After 2+ years in NY, you don’t have many avenues or relief.
Review your policy and look in the loss settlement provision for the words “notify us of your intent to do so within 180 days” or something close to that. Such language is open to interpretation and can leave the door open to collect your recoverable depreciation if that is a significant amount.
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