Overthinking the plumbing

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September 7, 2011 by falcon7204

(All names have been changed to protect my insurance claim. :-))

Well, it’s been an interesting almost three months. On June 25, we discovered a leak under our kitchen sink. You’d think it was the pipes connecting the sink to the drain, right? So we checked – nope, that wasn’t it. We noted that the floor plate in the cabinet was pretty soaked and had collapsed, and some of the wallboard was wet. Not good. This can only lead to something big.

The next thing to check was the drain pipe inside the wall. So I got out my trusty wallboard saw and discovered I’d have been better off with a butter knife. The wallboard disintegrated, so it was easy to get through and feel the pipe.

Oddly enough, it wasn’t wet. Uh oh, bigger problems.

So we called a plumber. Long story short: Slab leak. $$$. Thus begun our three-month odyssey.

After we got the diagnosis (and a pretty healthy estimate) we contacted our insurance company. This is where things got interesting. The adjuster wanted to bring another plumber out for a “second opinion.” So I said okay. The guys came out and first thing they did was to run a camera down the pipe. But they couldn’t see anything because, since we discovered the leak, we stopped using the sink so there was no water in the pipe (and there shouldn’t have been anyway, but I didn’t discover that until later). So they ran a drain snake down the pipe, but before they could get very far they snagged it on something. Turns out it was the hole in the pipe. So they said, yeah, you’ve got problems. (Duh.)

Next step was an estimate from the other guys. Turned out it was less than half of what the first plumber estimated. Huh? Why so cheap? Well, because they misdiagnosed it as a wall leak, for one. And for another (and this is just my suspicion) the plumbers were “buddies” with the adjuster. At any rate, we scheduled a meeting between myself, the adjuster, and the plumber, and discussed the first diagnosis. I also gave the adjuster a copy of the first plumber’s estimate, which I thought he’d give serious consideration. He said he’d discuss it with his manager and get back with me in a couple of days. I figured the process would be fairly smooth, but I was wrong.

A couple of hours later, the adjuster called me back – while I was driving. He wanted to discuss the claim, but I told him I’d call him back when I was off the road. As I thought about it, I decided to put my concerns into an email so I could have some documentation of his responses. You gotta have documentation, right?

His response? He’d rather discuss it over the phone. The red flags went straight up at that point. Anyone who won’t commit his responses to writing is, in my opinion, someone who can’t be trusted. So I emailed him back and told him I wanted to make a paper trail. He then called me and left a voice mail saying he’d rather talk about it. I ignored his voice mail, and the two subsequent attempts. I was going to stick by my guns and demand an email, and called my agent and told him as much. He said he’d talk to the adjuster, but that apparently didn’t happen.

The next day, he said he had prepared an estimate and cut me a check, and put it in the mail. But he didn’t say how much it was for. And when I saw it, I hit the roof. He had disregarded the first plumber’s estimate completely. Not only that, he had not included the mortgage company on the check (which he’s required to do, but in retrospect I almost wish I hadn’t brought that up). He was trying to bully me into accepting his estimate, which was totally inadequate. And when he’s in charge of your insurance estimate, it’s time to start climbing the ladder.

I got the name and phone number of his supervisor, and called my agent to get his email address. I wrote a three-page letter detailing everything that had happened up to that point, expecting I’d just get lip service and probably have to start looking for an attorney.

To my surprise, the claims manager was not only willing to talk (and email), but was very helpful. He not only acknowledged the fact that the leak was misdiagnosed, but reiterated that we could use any contractor we wanted to get it repaired, and also discussed at length the difficulty of making a lasting repair, showing me his knowledge of plumbing and slab leak repairs.

In a couple of days, he had assigned a new adjuster to the case. She came out and met with me and the plumber, took some pictures, and that afternoon had cut me a new check for a greater amount, and properly made out. Smooth sailing from this point forward, right?

You obviously haven’t met my mortgage company.

Their policy for insurance checks is: You send it to them (the quickest way possible, natch) and they spend five to seven business days “processing” it, then they send you three “disbursements” to pay your contractor. That’s if the “entire loss” is over $10,000. I learned first hand the difference between “entire loss” and the check. The actual amount of the check was less than $10,000, but the check didn’t include depreciation or the deductible. So, since the check was less than $10K but the loss was over $10K, the mortgage company held onto my check. Of course, it took a week for me to discover this, because the mortgage company was not going to volunteer the information.

Time to climb the ladder again. The “customer service” department provided nothing of the sort, so it was time to start talking to supervisors. After a polite yet firm and frustrated conversation, I got an assurance that the check would be on its way back to me soon for my and my wife’s signature, and then we’d send it back for yet another 5 to 7 day processing and we’d get the first disbursement.

Oh, if we wanted it to get back faster, we needed to send them $10. We didn’t see any information about that on their website, even though they claimed it was there. I went to the page they indicated, and never saw the info. Well, okay, it’s time to play their game. So I sent the check back, along with a $30 check (since there were three disbursements) and told them, okay, it’s on its way. I figured, another week, and we’d have the first check.

Not so fast, optimist boy.

I learned that the 5 to 7 day processing period doesn’t include the two days it takes to get the check from the mail room to the processing desk. ARE YOU KIDDING ME?!?

Time for another phone call.

After leaving daily voice mail messages, the supervisor finally called me back. It’s headed my way via FedEx. Yay! Got a tracking number and a promise the check would be in my hand the next day. Wow, finally some progress!

So I started tracking the delivery. And I got a message saying the delivery had been scheduled, but not picked up. Okay, I figured, it’s early in the day. The mail room will probably get it out that afternoon.

I got the same message for two days. I called FedEx thinking their online information might have been wrong, but no, the package hadn’t been picked up yet. More phone calls. (Good thing long distance is included with my cell phone plan.)

I left another half-dozen messages over the next day or so, and finally got fed up and asked for a supervisor above the supervisor I’d been talking to. Surprisingly enough, I actually got connected to a real live person. So I asked where the check was.

Turns out it went out in the regular mail, despite the $10 I sent to expedite it. But it actually did get to me two days after it was sent, so at least that part worked out OK.

Meanwhile, the plumber had marked off my kitchen floor, removed the water damaged cabinetry, pulled up some of the vinyl floor, and proceeded to jackhammer a trench in my floor. A fourteen-foot long by tw0-foot wide trench. And the pipe he uncovered was amazing. The first five feet of pipe was missing the bottom. It wasn’t just a hole in the pipe, it was a trench in and of itself. Pipes are normally O-shaped – this one was C-shaped. No wonder it didn’t hold water.

The rest of the pipe was similarly corroded. So no chance of finding good pipe to tie onto to complete the repair.

Things started to get a little frustrating and scary. I was looking at the prospect of having my home destroyed and no real way to repair it, unless insurance came through with additional money.

That’s when I started praying in earnest. This was way bigger than me.

Thank God things are beginning to work out. The plumber told me he’d probably have to tunnel under the house to repair the rest of the corroded pipe (which cameras showed were also leaking) in order to complete his kitchen leak repair. That was the scary part – would insurance do what the policy says they should do?

Thankfully they came through with the approval yesterday. So we’ll have a tunnel trench under my house for a couple of weeks. And the money to do it. The only thing insurance won’t pay for is the actual pipe and installation itself – which will probably still total somewhere in the neighborhood of $5,000. But that’s better than the $33,000 job he just finished.

The big delays are still getting the check and then turning it around with the mortgage company, but I feel pretty good about things so far.

Of course, after this is done the kitchen will need to be restored – again, though, this is funded by my insurance policy.

There are some pretty important lessons that might help folks who find themselves in similar situations. First, if it does turn out to be an insurance claim, find your policy. Most times, when people get homeowner’s insurance all they get is the declarations page, which lists the limits on their coverage, their deductible, and any endorsements they may have added. But it doesn’t include the actual policy language. So if you find yourself in this situation (or even if you don’t), call your agent and ask for a copy of the policy jacket. This has the actual coverage language in it, and it’s vital you know what it says, because it can keep you from being bullied by your adjuster. Sometimes your contractor is familiar with the language, and may know some tips or tricks that will help. But don’t rely on your contractor for insurance information.

If you wind up in a difficulty with your adjuster, get the name and number of the claims manager and talk to him or her. Be polite, but firm, and stick to the facts. You might find that you’ll get more help from the manager anyway. But if you don’t, don’t be afraid to climb the ladder further up. And if you get stonewalled or they refuse to give you that name or number, get with your state’s department of insurance and see what your options are.

Make sure you understand the requirements your mortgage company imposes on any insurance claim proceeds (or as they may be called, “loss drafts”). Try and plan for the delay, make every attempt to expedite the delivery, and make sure you get the name and number of a higher-up supervisor to talk to if necessary (and it’ll probably be necessary). Understand that the mortgage company keeps those funds in a special holding account (which probably earns a significant amount of interest, so don’t be surprised if they try and hold on to it) until they’re disbursed to you. And know the difference between “entire loss” (which is the estimate including depreciation and deductible) and the amount of the check (which doesn’t have those things in it). And be prepared to be stonewalled initially by the customer service drones, who rarely (at least in my case) deviate from their script.

Also, don’t let your plumber talk you into any expensive upgrades, because those are on your nickel. And remember that, typically, insurance doesn’t cover the actual leak itself. Most basic policies will cover immediate water damage repair. The endorsement we purchased also covers the work required to get to the leak (including jackhammering and/or tunneling) and what it takes to put things back to pre-damaged condition (backfilling the trenches, new concrete for the slab, and replacement of any water damaged cabinetry, wallboard, or carpet). It WILL NOT cover the cost of the new pipe or the installation of the pipe, so be prepared to either cough up some bucks or look at some financing options.

And don’t let the plumber bully you into paying something you shouldn’t have to pay. Not that mine has done that, but he has mentioned that the company he works for will put pressure on him to try and get the money, and then he says he’ll be forced to put pressure on me. But as long as you (a) keep pushing the insurance company and the mortgage company to do what they have to do, and (b) keep the plumber updated with progress, then you won’t have any problems, even if they do try and lean on you. After all, you’re at the mercy of outside forces, and they have to allow for that. Plus, even if they don’t, they can’t do anything until you’re 90 days past due. One thing they will tell you, though, that is correct is that the contract is between you and the contractor, not the insurance company and the contractor. So it’s in your best interest to stay on the insurers and make sure they come through. There are also state laws that regulate how much time they can take between initial claim and the claim check – make sure you familiarize yourself with them.

The best advice I can offer is to be a pest. Stay calm, stay polite, but be firm and push. Get correct information – don’t go off half-cocked because you heard something somewhere or because you didn’t fully read the requirements or the insurance policy. You’re a lot more effective if you have the facts on your side. But this is your home we’re talking about, and you can’t just lay back and assume things will just develop like they’re supposed to. YOU are responsible for making that happen.

I’ll update as we get closer to completion.

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