At the end of February 2013, a pipeline in Mr. K’s house, located in the Northwest area of the Orange County region, was ruptured. Due to this rupture, the kitchen cabinets, the cooking appliances and the high-quality wooden kitchen floor were all damaged. At that time, the insurance broker told Mr. K that if he filed a claim, it could result in future disadvantages such as none renewal and spike of future premiums. The broker suggested that it would be better to repair the damages through his own expenses. Mr. K called the plumber according to the agent’s advice, but the plumber gave Mr. K the opposite advice.
“Since the facilities including the sink, cabinets, etc are showing some signs of collapsing, the scale of repair is too big to fix through your personal expenses. It would be safer to file claim through the insurance company,” he said. Mr. K thought that the plumber had a point, so he filed a claim through the insurance company, ignoring the advice of the insurance broker. Soon after, the insurance company sent the water restoration contractors, and while they were working on the facilities inside the kitchen, the sink eventually collapsed. The compensation was paid at the beginning of April based on the estimates of the contractors appointed by the insurance company.
The details of compensation payment were as follows:
- 50% of the collapsed sink is reusable, so only 50% of the damaged cabinet portion should be paid.
- The total compensation for the wooden floor and paint on the wall, etc. will amount to about $12,000.00.
As soon as Mr. K received the compensation, he called several local contractors and requested for construction to commence, however, the contractors refused to accept the job. The problems they pointed out were as follows:
- It is impossible to recreate the color or appearance of half the sink to match the other half, so the entire kitchen cabinet should be replaced.
- The kitchen floor also should be completely replaced.
- All construction costs including other paint jobs seemed to be over $30,000.00.
In other words, it is not possible to repair the damages solely with the compensation provided by the insurance company. So Mr. K requested for additional compensation to the insurance company and the insurance company denied his request. Mr. K was confused by his current unexpected situation and asked for solutions from many insurance industry professionals including the first insurance broker who had given him advice, but all their answers were consistent – there were no other measures that could be taken. Now, Mr. K had to repair the damage with a large amount of his own expenses. He was stunned.
Greatly saddened, Mr. K was introduced to me by chance, through the floor contractor who visited the flood site. This occurred after one month of suffering, with only his first compensation paid out. I swiftly handled this case within only 8 days after accepting the job, and Mr. K received the second compensation to the sum of about $22,000, concluding the case. Until this case was complete, Mr. K felt regretful that he did not receive any critical information from insurance agents and brokers.
The position of the PA has been in the public domain for a long time, but majority of general public who do not know about this position. If Mr. K knew about the PA in advance, he could have closed this case stress free. I suggest that readers should advise the people around them to subscribe to our office’s monthly case review column for the purpose of obtaining important information regarding their home and business insurance policy and insurance claim adjustment process.