Appraisal vs. Another Rebuild Estimate Meg Hamill asked 2 years ago
Appraisal vs. Another Rebuild Estimate

Hi there!

After an electrical fire, which led to a total loss of our California home in April, 2021, we still feel as though we have not received a fair settlement from State Farm. We plan to purchase a home elsewhere instead of rebuilding. Our public adjuster prepared a rebuild estimate that the insurer would not take seriously. He has said that we need a “local builder” to provide an estimate. We have lost some faith in our public adjuster and while we see the flaws in State Farm’s argument here, we also aren’t sure we can trust the public adjuster is willing to defend their estimate and go to bat for us. We seek information on the nitty gritty of how this last leg of the journey actually works. We find ourselves with a few options:

  • Hire a local builder to create a 3rd estimate and defend it (We have someone who will)
  • Deliver an appraisal of the home we want to buy to State Farm, with a clear request for more money and reasons why.

    We do not fully understand how this appraisal will be read, and compared with the settlement already received. What are they looking for? What #’s are they paying attention to? In particular, what is the deal for deducting land value in this case, as we are not wildfire victims? If we go with the first option, will State Farm potentially pay more money at this point, or only after seeing close-of-escrow on a new home?Any support here would be helpful.

    Warm thanks,


1 Answers
Denise Sze Denise Sze Expert answered 2 years ago

For the purposes of getting your matter settled, you may want to talk to the public adjuster and have them work with your potential contractor to create another estimate that a contractor would be willing to back. What your public adjuster did for your claim is not wrong so long as they created a reasonable estimate that they could back with a proper licensed contractor.

Ask the carrier to continue to adjust and come back out with their adjuster to go over the new estimate. Remember that in California the carrier must also provide a reasonable estimate of repair and cannot just lowball. They must be able to produce a contractor that would be willing to perform the rebuild for the amount they paid. If they cannot, then obviously the amount paid on the repairs by the carrier is too low for a proper rebuild.

While your suggested method of providing the carrier with an appraisal of the home you want to buy may be a viable option, it is fraught with many issues that confuse the matter. Your goal is to obtain funds from the carrier that you are legally entitled to under your policy. The carrier owes the proper amount for rebuild. You may roll those funds received into a new property but the bottom line is that sticking to the method that produces what the carrier actually owes you may be preferred.