Storm damage line item ACV vs. total ACV Amanda Leisinger asked 3 months ago
Storm damage line item ACV vs. total ACV

Our residence was damaged in a hail storm. We needed a new roof, new siding, new garage doors, several other exterior home repairs, a new rural outbuilding roof, and replacement of a few personal property items that were outside. This is our second large claim due to weather within 3 years, but with two different companies as we switched insurance companies after the first claim as they were downgrading various parts of their policies.

While we were handling the first claim with the first company, everything was handled as line item specific. If we were under the ACV on the roof, for example, but went over the RCV on the siding, the roof ACV that went unspent was ours to keep, but they still paid the replacement cost (after estimate approval by the adjustor) that went above the original estimated RCV.

When we found ourselves needing to handle a very similar claim due to weather less than three years later with a different company, I spoke with several people including the adjustor, our insurance rep, and the office assistant, to understand exactly how line items would be handled. I spent considerable time with each one providing several examples and hypotheticals to make sure I completely understood and was on the same page as them as to how it would be handled. Each one explained to me that each line item would be seen on its own. If the garage doors were over the RCV, the approved estimate amount would not be taken from another item to cover it.

I emailed our adjustor estimates, which were from the same contractor I used on the first claim. He emailed his approval. The work was completed, and the invoice was sent to the adjustor to be paid. Upon receiving the invoice he called me upset at how high the invoice saying it was thousands higher than he had approved. Upon further discussion, he realized had misread the invoice. Up until this point, he was very friendly and I got the feeling he was trying to be as helpful as possible. After this, I felt like every time we talked, he was trying to cover his own mistake. He said he needed more detailed information from the contractor, for example the exact cost per foot for the siding, labor costs, etc. The contractor sent out slightly more detailed information, but not what he had originally indicated to me that he needed. Two months went by and I finally got a claim update from the adjustor. He walked me through how he had just added up all the contractor expenses, then taken away the deductible and payment already made, and would be sending out a check or the remainder.

I protested saying each payment was supposed to be handled per line item on the claim per our previous discussion. He said, essentially, that’s not how it works. The shop building is handled separately from the residence, but all the ACV/RCV from the residence is pooled together when determining the final check. I am very frustrated by this because we probably would have made different decisions of what and how to replace and repair items if we knew this was how it was going to be handled.

Do line items in the residence claim need to be handled separately and individually? Or can the insurance company decide to lump everything together?

Thank you for your help

1 Answers
Chris Rockers Chris Rockers Expert answered 1 month ago

As the insured, you are to submit and support your claim – which it appears you did utilizing information provided by your chosen contractor. It is unclear if you have a Homeowners policy, a Farm policy or other type of policy – hail damage from a storm is to be captured as one claim with damages to your residence covered under your Dwelling coverage and damages to an Out Building/Barn covered under Other Structures coverage. With written approval of your contractor’s estimate from the adjuster, as noted in your inquiry, you are free to proceed with required repairs. After applying the deductible, you should receive an ACV payment allocated under the Dwelling coverage and an ACV payment allocated under the Other Structures coverage – if repairs are completed and costs incurred consistent with the approved estimate(s), the insurance company should have released the full amount withheld as recoverable depreciation. Communications with the insurance company representative/adjuster will be needed throughout the process if there are changes to the scope of repairs – but the company nor its adjuster should withhold funds or renege on an approved estimate. You can request the opportunity to discuss discrepancies with a Supervisor – without reviewing the estimates/invoice and the carrier’s allocation, it is difficult to provide input. If you incurred costs for required repairs based upon an approved estimate, you should receive all withheld funds. As the question is a bit complex, I welcome a call to further discuss. We wish you well.