My unattached garage was just destroyed in a storm. How will the adjuster determine the replacement value?

Question

I had an unattached, 2 car garage, which was just destroyed in a storm. I had it insured under my homeowners policy for $12,500.00, and it is a total loss. I am interested to know how the adjuster will determine value? If it is deemed irreparable, am I entitled to the entire amount of 12,500, or will he try to offer a lesser amount, if he feels that it is not worth 12,500?

Any advice would be very much appreciated.

Thanks in advance.....

Answer 1

The adjuster will write an estimate to rebuild the garage.  If the estimate exceeds the amount of coverage - then the max he will pay is the coverage limit.

If the cost to rebuild the garage is less than the coverage limit -that is the amount that will be paid -less your deductible.

Since I don't know what type of policy you have - I can't tell you if there would be other costs - such as deprecation that could come into play.

Your adjuster will be able to explain it.

Answer 2

As usual MSAD gave another good answer. I'll give a shot at trying to further explaining how this should play out. Knowing what state you are in and what type of policy you have. (normally something that starts with HO) would be a big help for us.

The adjuster will come out and photograph/measure the garage. They will write a repair estimate based on the materials used in the original garage.

If the estimate if more than $12,500 then you will be paid $12,500 because the garage will be considered a total loss. However, as MSAD stated your policy may apply depreciation which would reduce the payment based on age and condition prior to the damage.    

You seem concerned about an "absurdly low estimate." Not likely to happen, trust me it is not worth an adjusters time to write an unfairly low estimate. That creates much more work than any adjuster has time for.

Let's say the adjuster writes an estimate to repair the garage for $7800.00.  The garage will be considered as repairable and you will not receive the $12,500 coverage limit.

The adjuster will give you a copy of the estimate. Then you can have a contractor come out to look at the garage and the estimate. If the contractor takes the job they will talk to the adjuster about any additional money needed to cover hidden damages etc.  

Odds are this will go smoother than you think. Good Luck.

Answer 3

The adjuster will more than likely use the "average cost to rebuild" in your geographic area. They are going to compare your garage to others in your area.

If it would cost the company less than $12,500 to rebuild, they will give you that lower amount. However if the garage would cost MORE to rebuild, your insurance company could actually penalize you for underinsuring it.

This company is a leading estimator in the industry:

http://www.marshallswift.com

Answer 4

Fair market value to  replace or repair is what is owed to you.

Have a contractor prepare an estimate for you.  Compare that to the adjusters estimate.  Now, some contractors as in any business are over priced.  So you may need to have a couple of more estimates from contractors.  If no one can do the work that the  carrier paid then go back to the adjuster with the estimates.  He can and may pick the lowest estimate and pay you the difference.  Or hire a public adjuster who will  work the carrier for more money.  A public adjuster works for you not the carrier.    Good luck to you.

Answer 5

Be wary of the way the claim is paid.  Sometimes, the adjuster will cut you a check for the depreicated value of the damaged building until you actually replace it or have it reconstructed.  

If you think they are just going to cut you a $12,500 check, think again.  They will either pay the contractor directly or pay you enough to put down a deposit and then pay the balance when the work is completed.  

This is common to most "replacement cost" contracts.