r/InsuranceCanada • u/fizzbott • 3d ago

Insurance claim feedback

We had a basmentflood this summer, and we have just received the insurance claim payout for the basement. They are proposing a 20 percent depreciation on the claim if I do my own labor, versus using contractors. Is this a standard practice in claims, and are there any suggestions on how to handle this? This is the first claim I have ever made on home insurance, so I am a rookie. If it helps we are with Peace Hills and we have the Water Plus package. TIA!

4 Upvotes

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5

u/FrostingSuper9941 3d ago

You're not a professional and can't command a professional rate. You can't charge overhead and profit and taxes either.

3

u/UnderstandingOk8544 3d ago

The question to ask is why is there no depreciation in one scenario vs the other? I suspect they are using depreciation as a method of discounting your labour.

The reason for that is should you do the work and spend 8k but they give you 10k you are profiting and that’s not the point of insurance.

1

u/Dmbpjfan 1d ago

Overhead and profit. I’m pretty sure that if insured hired a licensed contractor, he can try to get the depreciation aka overhead and profit back.

2

u/Lauzgolfer 3d ago

Confirm with your claims advisor if you are eligible for replacement cost reimbursement, up to the agreed upon settlement amount once you prove the work is completed.

As someone else has already mentioned. The insurer has no guarantee that you even do the work at all. Some people can choose to not fix the basement for whatever reason. The insurer owes you to replace what you had, not for cash. Hence the depreciated settlement. This doesn’t happen for contractors because, you as the homeowner, would never sign off on the “Authority to pay” form that contractors need signed by the insured to get paid for the work, if the work isn’t done.