Homeowners Claim- Insurance Fighting Invoice

[Waterfall9856]

Need help please. A tree fell on our home, I reported the claim and was told to remove the tree from my house and it was my responsibility as the policyholder to protect the home and minimize damage. I removed the tree and now the insurance company is saying that the invoice for the tree removal is too high and they will only pay a “reasonable” amount.

There have been many disagreements between the adjuster and the contractor, reassignment of a new adjuster, blame placed on me by the adjuster for not getting multiple estimates when I was told by the insurance company to get the tree off my house and save any receipts. It was on July 4th weekend and it was raining and I was worried about roof and water damage. This was the only contractor that answered his phone on a Sunday of a holiday week (looking back, I am sure he took advantage of me).

Do I try and get more help in coverage from the insurance company? The contractor already reduced the invoice to help me I have since paid the tree contractor and now understand that was a mistake (and that’s another story with bad information by the adjuster). But there is still the difference of $6,994 that I have paid vs what the insurance wants to reimburse me.

I feel like I was misled by the insurance company telling me to get the tree removed and putting the pressure of responsibility on me to secure the house but now holding me responsible that I should have known the contractor’s price was high?? I’ve never been in this situation before and everything the tree contractor explained to me about emergency service, needing a crane, minimizing damage to the chimney in removing the tree, etc seemed reasonable to me as a homeowner so I went ahead with the removal.

I would appreciate any guidance on my rights that I should be aware of as a policy holder. I feel like I have hit a wall in the negotiation process and I’m not sure if I should hire and attorney, get a public adjuster, ask for mediation, etc.

Thanks for any insight.

 

[Josh]

How much was the tree removal to begin with and any particular reason it's so expensive? I've only had two trees removed and I don't think I paid more than a few grand each (though I know I was getting a deal).

 

[adjusterjack]

I would appreciate any guidance on my rights that I should be aware of as a policy holder. I feel like I have hit a wall in the negotiation process and I’m not sure if I should hire and attorney, get a public adjuster, ask for mediation, etc.

An attorney will cost you $300 per hour so that's not a good idea, a public adjuster will take 10% to 15% of whatever he gets for you which won't be more than your bill (regardless of what he promises you), and it's not mediation - it's "appraisal" which is in your policy and looks something like this:

Appraisal
If you and we fail to agree on the amount of loss,
either may demand an appraisal of the loss. In
this event, each party will choose a competent
and impartial appraiser within 20 days after
receiving a written request from the other. The two
appraisers will choose an umpire. If they cannot
agree upon an umpire within 15 days, you or we
may request that the choice be made by a judge
of a court of record in the state where the
"residence premises" is located. The appraisers
will separately set the amount of loss. If the
appraisers submit a written report of an
agreement to us, the amount agreed upon will be
the amount of loss. If they fail to agree, they will
submit their differences to the umpire. A decision
agreed to by any two will set the amount of loss.
Each party will:
1. Pay its own appraiser; and
2. Bear the other expenses of the appraisal and
umpire equally.

It's toward the end of the Property section of the policy.

That, unfortunately, costs you money to invoke.

So, before you do anything like that, can you post photos of the tree on your house along with a copy of the invoice for its removal (redact identifying information) and also tell me what state you live in.

I may be able to make some helpful suggestions.

 

[Waterfall9856]

Thanks so much for your help adjusterjack.

We live in Georgia.

The contractor feels very justified in his price and when he was talking to the adjuster he mentioned and showed him invoices of other tree removals he says were similar to mine that were paid by insurance (he showed him the actual check- i could see it). They specialize in "emergency tree removal" and do a lot of work in the area. I found them on google (only reason I mention that is the insurance company keeps making a big deal about that and asking how I found him).

The insurance company is saying their estimating system is accurate and the invoice is too high to pay- who is right, I don't know?? But I am the one stuck with the bill so of course I'd like more help from the insurance company.

I am posting a pic of the tree on hour home and then once it was removed and also the invoice for removal.

The tree fell right on the chimney which is why the tree contractor explained to me that they needed the crane they needed (to lift it off the way it fell and protect the chimney, etc). he said it was a holiday weekend, we kept getting pop up showers all day and I was worried water was coming in the house, etc. it was heavy rain with lightening during the actual removal. Insurance is fighting that saying the crane they used was too big, charges are to high, it was monday and not the holiday, etc.

And here is the other issue at hand that has gotten me into a mess bc now I really can't go back and ask the tree contractor for any help. The adjuster and I spoke about a week ago and went over coverage. They did come up on what they were going to pay and he reviewed it all line by line with me. I asked specifically how much of the money I was responsible for bc I needed to know that when I spoke with the contractor and worked out payment and he said "None, this is what XXX insurance is giving you for the tree removal." So I went back to the tree contractor with this figure and we met in the middle and I paid the invoice. Check is cashed. Well, friday I get the statement and check and it is reduced by $3994. I call the adjuster and he starts going on about how they only pay $500 on my policy for debris removal and the total was $4400 and they are "absorbing my deductible in that". I stated that he told me that is how much they were covering and it was what I used to pay the contract and he he nothing to say. He had no answer for why he didn't share this information with me the first time, just that "it is what it is". That is how I am now arriving at the $6994 that I am out of pocket- and really can't go back and ask for any more help from the tree contractor. I get that I have to pay my deductible and I also understand the $500 debris removal but on the contractors invoice it was $1400 for debris removal and they are saying $4400. It seems like a shell game to me where they get to pick and choose and move the numbers around to their advantage. Do I have any recourse in this situation? I feel he totally misled me. He knew exactly what I was asking about the money they were covering.

The reason that I was having these discussions and not the adjuster is because there was so much arguing bw the contractor and the adjuster, the adjuster told me that I would have to call the tree guy and discuss it bc the tree guy said he would no longer discuss it with him and to talk to his attorney. So it left me in a bind to try and work out something I know nothing about. I don't want to be involved in any lawsuits or anything like that. Contractor was telling me he was suing them, insurance was telling me they were going after him with suit and would subrogate (entirely different issue with drive being damaged by crane), etc. I don't want to be involved in a lawsuit.

Thanks for your help and for listening Sorry for the long post.

 

[adjusterjack]

I'm a little confused about something. The original invoice was for $17,850. How much was it after the contractor adjusted it downward and which items did he adjust?

And how much has the insurance company actually paid you toward the bill?

Meantime, I don't have too many issues with the original invoice. He's probably getting a hefty mark-up on the equipment rental but that's normal. You could call around to equipment/crane rental companies and see what it would cost per hour on a Sunday for an emergency.

The $1400 just for hauling it away is probably reasonable and, yes, there is a limit of $500 for just that on your policy (standard HO-3 or its equivalent) unless you have some sort of "Increased Limits" optional endorsement on your policy.

The way that works is the deductible is applied to the $1400 leaving $900 and then the limit is applied leaving you with $500 for that item so you pay $400 and the deductible disappears.

That being said, I don't believe that applying "tree removal" to the $1400 was correct.

In St Paul v. Snitzer the GA Court of Appeals ruled:

The material removed from the Snitzers' property was undisputedly primarily from trees, shrubs and soil not originally a part of their property. Hence, the endorsement language would not apply, but the debris removal would.

The word "property" referred to the dwelling.

Google Scholar

Of all the items on the invoice the one I don't like is $50 per hour for each flagman. I'll bet they didn't get paid more than $10 to $15 per hour but I don't suppose arguing that is going to help much.

As for coverage, see Duties After a Loss:

In case of a loss to covered property, we have no duty to provide coverage under this policy if the failure to comply with the following duties is preju-dicial to us. These duties must be performed either by you, an "insured" seeking coverage, or a representative of either:

4. Protect the property from further damage. If repairs to the property are required, you must:
a. Make reasonable and necessary repairs to protect the property; and
b. Keep an accurate record of repair expenses;

Then see Additional Coverages - Reasonable Repairs:

a. We will pay the reasonable cost incurred by you for the necessary measures taken solely to protect covered property that is damaged by a Peril Insured Against from further damage.

And Debris Removal:

a. We will pay your reasonable expense for the removal of:
(1) Debris of covered property if a Peril Insured Against that applies to the dam-aged property causes the loss; or
(2) Ash, dust or particles from a volcanic eruption that has caused direct loss to a building or property contained in a building.
This expense is included in the limit of liability that applies to the damaged property.

Both of those coverages are unlimited within Coverage A - Dwelling.

Anyway, I don't see where you had any choice but to do what you did and I think it's reprehensible that the insurance company is quibbling after the fact.

Your problem is that you ordered the work and are obliged to pay the contractor regardless of how much the insurance company pays you. The issue is not whether what the contractor charged you was reasonable but whether it was reasonable for you to incur that cost due to the emergency nature of your situation.

In other words you don't argue the amount of the bill with the contractor. You pay it.

The issue is then between you and the insurance company as to whether the costs you incurred as a result of the emergency were reasonable.

Besides, it's better to have paid the bill and argue the cost with your insurance company than argue over something you haven't paid yet.

I've always hated the word "reasonable" when it appears in an insurance policy.

In fact, in that same Snitzer case, the court said:

"Exceptions, limitations and exclusions to insuring agreements require a narrow construction on the theory that the insurer, having affirmatively expressed coverage through broad promises, assumes a duty to define any limitations on that coverage in clear and explicit terms." U. S. Fidelity &c. Co. v. Gillis, 164 Ga. App. 278, 281 (296 SE2d 253)

That was not a first party property related claim but the rule applies to all insurance policies and was reiterated in First Financial v. Am. Sandblasting (also not first party property):

It is well settled that insurance policies, even when ambiguous, are to be construed by the court, and no jury question is 392*392 presented unless an ambiguity remains after application of the applicable rules of contract construction. Alley v. Great American Ins. Co., 160 Ga.App. 597, 599, 287 S.E.2d 613 (1981). "Because insurance policies are contracts of adhesion, drawn by the legal draftsman of the insurer, they are to be construed as reasonably understood by an insured. Exceptions, limitations and exclusions to insuring agreements require a narrow construction on the theory that the insurer, having affirmatively expressed coverage through broad promises, assumes a duty to define any limitations on that coverage in clear and explicit terms." (Citation and punctuation omitted.) St. Paul Fire, etc., Ins. Co. v. Snitzer, 183 Ga.App. 395, 397(1), 358 S.E.2d 925 (1987).

I don't believe that your insurance company met that burden by limiting coverage using the word "reasonable." Unfortunately, I don't find any specific case decisions regarding the word "reasonable" in this context.

Your options are limited:

1 - Lawsuit. You have a year from the date of loss. Unfortunately, you are contractually obligated to first exhaust your options under the policy. The option that applies is:

2 - Appraisal. Invoke the Appraisal provision of the policy (in writing to your claim rep). You'll have to hire an appraiser, the insurance company will have to hire an appraiser and if the two appraisers can't resolve the issue, both you and the insurance company will have to hire an umpire.

3 - File a complaint with the insurance department. Not really a good idea as the insurance company isn't really doing anything that could result in sanctions and it could take you a month or two to get the inevitable response that the insurance department isn't going to do anything.

So, it looks like you are left with the Appraisal process.

 

[Waterfall9856]

THANK YOU Adjusterjack! This is SUPER helpful- truly, I can’t thank you enough.

Sorry that my numbers are all over the place (I still don’t fully understand what all this means). I am going to post the estimate from the insurance. Please note, there is coverage for damage to the roof, gutter, driveway, etc but I am keeping this all to the tree. This has been such a mess I am not doing any other repairs (home is tarped and secure) until I get the estimates and the insurance fully agrees with those estimates. Same for appraisal, I fear the roof and chimney are also going to be issues for coverage so I don't want to open anything up until it is all on the table. I am giving them the benefit of the doubt for now that they will do the right thing, fingers crossed.

I am still confused on how the contractor invoiced me $1400 for debris removal and in their estimate they are showing the charges around $4464? Is debris removal just for taking the tree away? I feel like they are putting some of the cost for getting the tree off the house into “debris removal”. Will you educate me on how this works?

I paid the tree contractor $15,800. He didn’t give me specifics on what he was reducing. I’ll explain below how I think he came up with this number but it is a presumption on my part.

Here is the breakdown…
Check paid to tree contractor $15,800
Net Payment from insurance- $9697
My net loss- $6103

Is it “reasonable” for me to ask my insurance company that I should pay no more than $3,272 ($2372 deductible and $900 debris overage)? They would pay the difference of $12,528 ($15,800- $3272= $12,528).

My tree invoice presumption…. When the tree contractor went over the contract we discussed that I would be responsible for my deductible and any overage for debris removal. I incorrectly thought my deductible was $1000 (it is really $2372). And based on the contract I would pay $900 for extra debris. That would make me responsible for $1900. I told him that the insurance was paying me $14,161 for the tree. He told me if I could pay $15,800 he would consider the invoice paid in full. Maybe he was trying to help m and keep it around the number we originally discussed???? Note, I gave him the $14,161 figure bc I had just gotten that figure from the adjuster- he left out the $3994 coming off for debris overage… he just went on and on about how much they were covering, he adjusted for the crane and added for holiday hours, he can’t justify anymore for the marketplace, and how happy I should be and they were absorbing my deductible, etc… it was like he was doing me this huge favor. I specifically asked “how much of the $14,141 am I responsible for? He said, none, this is what XXX insurance is covering you for the tree removal”.

Thanks again Adjusterjack. I greatly appreciate your guidance and expertise. Also, thank you making me feel like I am not losing my mind. They have made me feel as if I am being out of line and unreasonable about the whole thing when all I did was get a tree off my home to try and save my roof and chimney (as my policy required me to do). Thank you!!

 

[Waterfall9856]

Thank you so much Adjusterjack! This is so helpful, I truly appreciate your taking the time to respond and sharing your knowledge. I posted a reply yesterday but must have done it wrong because it's not here, hopefully I do this right.

To answer your questions, the tree contractor reduced the invoice to $15,800 which is what I paid him. He did not provide a new invoice so I don't know what was reduced- he just said if I could pay $15,800 he would consider it paid in full.

I am attaching the estimate from the insurance so you can see the breakdown. Please note, there is coverage for roof, gutter, chimney, driveway damage, etc so I tried to just keep it to the tree.

Will you educate me on how the tree debris removal applies? It is only to remove the tree from the property? The contractor invoice is $1400 and that is what we discussed, but the insurance estimate is over $4400 and bc of the $500 limit the overage falls back to me. It seems like they just moved some of the labor over to "debris removal" to push some of the money my way.

Also, is it reasonable for me to ask the insurance to cover the invoice in full minus my deductible and the $900 that should be the extra debris removal?

They keep saying they "can't" pay the invoice bc it is over marketplace prices but I think it's more that they don't want to pay the invoice- which I understand because I don't really want to pay any of this either but I have too and they should too.

Thank you again for your help, I sincerely appreciate it and can't tell you how helpful this information is for me.

 

[adjusterjack]

Here's how I see it.

If the tree had just fallen in your yard you would have $500 for tree removal regardless of how much the contractor charged.

By falling on, and damaging, your house it becomes debris removal and should not have any limitation.

Beyond that, I don't think the tree vs debris question should be an issue at all because the entire invoice was to protect the property from further loss and you had no choice but to pay it due to the emergency.

I can't guarantee anything but, at this point, I suggest that you send a written demand to the adjuster that the contractor's invoice be paid in full under the "protect property from further loss" provision and not get bogged down in discussion about tree vs debris.

Then, if it doesn't get paid, invoke the appraisal provision and approach the appraisal process based only on the "protect property from further loss."

 

[Waterfall9856]

Thank you so much Adjusterjack!! Your advise has been most helpful. I will keep you posted where things end up.

Here's how I see it.

If the tree had just fallen in your yard you would have $500 for tree removal regardless of how much the contractor charged.

By falling on, and damaging, your house it becomes debris removal and should not have any limitation.

Beyond that, I don't think the tree vs debris question should be an issue at all because the entire invoice was to protect the property from further loss and you had no choice but to pay it due to the emergency.

I can't guarantee anything but, at this point, I suggest that you send a written demand to the adjuster that the contractor's invoice be paid in full under the "protect property from further loss" provision and not get bogged down in discussion about tree vs debris.

Then, if it doesn't get paid, invoke the appraisal provision and approach the appraisal process based only on the "protect property from further loss."

 

[Waterfall9856]

Hi Adjusterjack! I wanted to update you with some good news and also thank you again for all your help and guidance.

In response to the letter I sent my insurance company responded that they will be paying the invoice in full for the tree removal, less my deductible of course.

I sincerely appreciate you sharing your knowledge and guidance, you saved me thousands of dollars!!

If you are ever in Atlanta I'd love to treat you to dinner

Thanks again for all your help!! It's people like you who are willing to take the time to help others that make the world a better place.