Well it would seem to be a case where a house had old
wire, a fire and the insurance company paid to bring it up to code.
He did say they paid for GFCI's and insulation when the house
was not insulated at all. It's not 100% clear what he meant about
the GFCI's, but I think his meaning was that it had knob and tube
and no GFCIs, yet they paid for a complete rewire.
Totally different case and I seriously doubt the
Oh, I see. It makes sense to spend to put in a new electrical
system that is up to code, because it may avoid future costs
for the insurance company. But not ice dam material? What's
up with that? Ice damming costs little and could avoid BIG
claims for water damage.
Which doesn't have anything to do with what's right or the
premiums I've been paying.
Yeah, I know they are trying to screw me. That doesn't make it
They are only required to do what is in the contract. Many policies are
written such that they pay only for the current value. If the paint job
is ten years old you get that value and not a new paint job. If the
building has say 40 year old wiring with a knob and tube wired outlet in
each room you get that value not the cost to wire the building to
Again, it's *not* what I want. It's what code requires. How about
this. I'm paying replacement cost coverage for the whole house,
$400K limit. If the house burns down, I'm entitled to a new house
that has the same square footage, same style, same number of
floors, etc. So, 25 years ago:
GFI was not required in a kitchen, outside, in a garage, basement, etc
Insulation was typically say R-12, today min by code is R-18
Arc fault was not required in bedrooms, living area, etc, today it is
So, while Allstate is saying the house is covered for $400K
replacement cost, you think they can say we're deducting X,
from the electrical work, Y, from the insulation, etc? Even though
that is the min that is required today? Then why am I paying
for $400K in coverage, which is what it takes to actually replace
the house, which both I and Allstate agreed to, if they are going
to subtract out stuff and then say it cost $375K to replace?
The simple fact is you can't replace it without complying with
code, that's an implicit part of the whole thing. Now if it costs
so much to comply with code that it exceeds the agrees insured
value, then that's another thing.
IMO, they are trying to have it both ways. I'm paying for
replacement cost capped at $400k and then they are
trying to be cheap and not build to min codes. Is expecting
it to be built to min codes so unreasonble? WTF am I
unless the insurance contract actually
They aren't strawman arguments, they go precisely to the point.
That is the strict interpretation of replace. I paid for replacement
coverage of the roof. I'm entitled to it being replaced. The fact
that code today requires that it cost a little more money isn't my
problem. And Allstate knows damn well what the code requires
when they agreed to replacement coverage.
One more time, IT CANNOT BE REPLACED WITH ORIGINAL
because min code does not allow it.
On 3/23/2013 12:37 PM, email@example.com wrote:
One more time, that doesn't mean the replacement policy covers the
differential cost; only the cost to the _original_ condition.
They're not telling you that the repairs won't be to Code; only that
their liability is limited to the state of the existing building prior
to the damage.
Look up "law and ordinance" riders/policies. As noted above, AFAIK,
only FL mandates them (and that only after the big hurricane season when
it became such an issue).
And, again, check w/ the State--if there is any such requirement in your
locale they'll know it and be able to tell you your recourse under the
law. W/o that knowledge you're just blowin' hot air into the teeth of
I commiserate w/ the problem but w/o some ammo in your gun I think
you'll continue to shoot blanks at the target, unfortunately. What you
think should be isn't necessarily so.
Oh, do you have a local agent you know well? If the national folks are
sending in contract employees and aren't living up to the terms this
dude should be able/willing to help. At least he can explain the
limitations of the policy coverage. He certainly ought to be able to
explain the question of what "replacement" means and whether the newer
Code requirements are covered or not. Ask him if they sell the above
riders--to late for this claim, of course, but will show the difference
in coverages if not included in yours as I suspect is (unfortunately) so.
I think the fundamental disconnect here is that you are
looking at the insurance company's obligation as replacing
a bunch of pieces, individual components. Shingles, nails,
wiring, plumbing, etc. It doesn't work that way. If for
example I had a house that burned up, with replacement
cost coverage I'm entitled to a new house that has the
same functionality as the old one. That is a house with the
same square footage, same number of rooms, that
has a kitchen bedroom, etc. The fact that today more
insulation is the min to code, and that gfci, afci are
required, ice daming for the roof, etc and that you can't
replace it without it isn't my problem. Without doing that
I have no replacement house period.
On 3/23/2013 12:54 PM, firstname.lastname@example.org wrote:
_I_ think the disconnect here is that you're looking at the insurance
company's obligation to have provide a level of replacement beyond that
of the original building condition. It doesn't work that way.
See previous comments explaining more about why and how to deal with it
There's a (I think very slim) chance an adjuster is being overly zealous
here, but I really do think the actual legal financial obligation will
be determined to be only to the existing condition prior to the damage
(unfortunately, and I'm sorry, but that's what I think will be the end
The cost of then meeting the additional code reqm'ts, while real, are
almost certainly not going to be covered in a policy that doesn't have
the explicit rider.
Again I have no way to get to the internal information to determine it
is so, but I suspect another thing that has happened goes along w/ my
previous supposition re: large-scale disaster coverage--that the
insurance companies became much more restrictive in the interpretation
after the Gulf debacle when it became clear their rate structure just
wasn't computed on the basis of such widespread simultaneous claims but
rather treated each individual policy holder as an independent risk.
That works pretty well for the random fire or even for (relatively)
small disasters like tornadoes but when entire states/regions are
impacted at the same time it breaks down entirely.
When I got HO insurance State Farm explained to me some options:
Replacement Cost on Contents (I think that's standard with them, at least i
n NY, and it's a darn fine thing to have)
Build to Current Code on the house itself- exactly the issue here- that if
my house wasn't up to current code and there was damage to be repaired, the
extra cost of bringing it up to current code would be or wouldn't be inclu
ded, depending upon whether I chose that (more expensive) option.
If that was an option when you bought insurance and you didn't choose it, t
hat was your choice.
When I got insurance I asked what I thought was a reasonable question- what
options am I paying for that I might not want, and what additional options
are available (such as jewelry, furs, etc. that have sublimits, plus home
business equipment coverage, higher liability limits...).
In your case it sounds like you didn't pay for something so you didn't get
it. You will have an improved roof vs. what you had before the disaster, bu
t you'll have to pay the additional cost for the improvement.
On 3/23/2013 2:16 PM, email@example.com wrote:
Ayup, what he doesn't want to hear is likely the case.
I still think it would be interesting to be able to see into the
rate-setting/coverage boundary processes internal to the underwriters to
see how the coverages have been squeezed over the years ('cuz I've no
doubt they have been for various reasons most notably the aforementioned
obvious one of the heavy losses sustained after the successive Gulf
Just a slim chance? The same adjuster that looks at a wall with
7 windows and two doors and takes out the area for them because
they don't have to be painted, then applies a cheap per sq ft painting
cost? Any painter knows that cutting in around all those windows,
doors ADDS to the cost instead of decreasing it. The same
adjuster that says it only takes one coat to paint water damaged
walls and ceilings? The same adjuster that says that a power attic
roof fan with ripped up top can be fixed by buying a new top for it?
You ever see those sold? For a 25 year old fan? That adjuster and
On 3/24/2013 7:07 AM, firstname.lastname@example.org wrote:
Yeah, that one... :)
What you've not provided is any specific details on the policy, your
relationship w/ and support (or lack thereof) of the agent, etc., etc.,
only your (understandable) frustration based on what you believe should be.
There's been much good advice given but little sign of follow-up (or at
least relating the results of any).
I'd reiterate what I've said earlier and then look into the independent
adjustor as others have suggested. Do you know how this adjustor got
assigned? Is he/she as I suspected an out-of-area itinerant
specializing in disaster-area adjusting? They show up here in hordes
like locusts after large hails and are, indeed, a plague I will agree.
The thing is that you need to get factual first on what your policy does
indeed say rather than just repeating that what it is that you think it
_should_ say. I know I'm repeating myself but it doesn't seem to be
He's been told that innumerable times to check and see what is in place
in his jurisdiction, yes. So far, no indication he's done so.
But, in the end, it will be what his specific policy terms are that will
have final say-so, I expect.
Your experience is dated. See earlier posted links and DAGS on 'law and
As pointed out there and AFAIK at this time in the US only FL has state
law that mandates that new policies contain the clause/coverage by
default. If it's been incorporated into statute/regulation elsewhere,
And, as noted, it seems it started being a tactic after the spate of
gulf coast disasters and it's only after that that FL instituted their
reg's/laws. I'm pretty sure one eventual side-effect of Sandy will be
to cause such to happen in the NE as well.
Ultimately the adjusters job is to settle claims as cheaply and
quickly as possible for the company...
I have delt with some, they like fast and cheap/
I still believe they MUST meet and pay for code requirement upgrdes,,
Bob, I agree with you in concept. The way you and I see
it, if you're paying for replacement cost coverage and
your bedroom burns down, the insurance company should
be responsible for paying for a new bedroom that is the
same size, same functionality as the old one. That code
now requires arc fault, more insulation, ice damming on the
lower roof, etc, is their problem. You paid for replacement
of a bedroom, they have to replace it.
But DPB is right that the clever insurance companies have
exclusions in most policies that say they don't have to pay
for it. Or at least they think it means they don't have to pay
for it. Did you see that Colorado case I posted the link to?
The policy in that case had exactly that, an exclusion.
The house burned down and Allstate said they were not
required to pay for things now required by code.
The lower court agreed with the insurance company.
On appeal, it was reversed, because the appellate court
cited case law where if the overwhelming verbage of
the policy would lead a reasonable person to believe that
it was covered, tricky exclusions can be ignored. They said
the overall policy was clearly to put the homeowner back
in the position they were in pre-fire. That means they
had a bedroom then, they are entitled to a bedroom now.
The fact that some code changes mean it costs more
does not mean the homeowner winds up in any better
position than they were pre-fire. They still only have
a min code bedroom. That was the essence of the finding.
And following that, they probably crafted the policies better
so as to still be able to deny it. In short, at best it's a grey
area and could vary from state to state depending on the
laws there, the court rulings, etc. And in my case it's a
couple hundred buck, if the insurance company won't
cover it, it's not worth a big fight. BUT, I think it is worthy
of discussion for two reasons:
1 - I don't think it's right
2 - Anyone that has replacement cost coverage should be
aware of this. Worst case, let's say you have a house that
you've been paying for replacement cost on for 25 years.
It covers the house to $300K. The house burns down.
The insurance company could total up what they say it
takes to build a new one, that isn't up to code. Suppose
that can be done for $250K. So, even though the policy
says they will pay to replace the house, they give you a
check for $250K and refuse to pay the other $50k,
because that is for code required items that were not
required when the original house was built.
On 3/26/2013 8:26 AM, email@example.com wrote:
I had missed the end result in the CO case before indeed...that's
interesting that the court did strike the exclusion down owing to the
preponderance of implied coverage to make whole. If undoubtedly help
the insured in that case to have been in what is now a very
liberal-leaning State in making the appeal.
As noted, I'm sure the underwriters' lawyers have studied that (and any
similar) decisions _very_ carefully and have wordsmithed the language to
try to ensure it will be enforceable in the future.
As you, I think it's a despicable ploy; nothing I've written previously
should be interpreted as being supportive of the idea; only that it's
definitely not a given that coverage will be automatically given to
cover additional Code or other occupancy reg's in place since the time
the original structure was built.
As noted earlier, I think there was a big problem in the casualty models
used in setting rates for catastrophic losses in that they forgot
about/essentially ignored common-cause and the magnitude of the possible
damage area affected by these events as the population and particularly
evaluations in these coastal areas grew exponentially over the years w/o
any major events. After that, they were left with such massive losses
they've resorted to whatever could to try to limit liability.
Also as I noted before, I believe one upshot of Sandy will be that
FL-like legislation will follow in the NE and along all the Atlantic
coastal areas w/ time that will mandate that policies include the rider
by default and homeowners will have to explicitly decline it if choose
to not pay the additional premiums that it will entail. And, of course,
while it will provide coverage, "there is no free lunch" and rates will
rise to cover it. Of course, they're rising anyway to cover the
problems the last few years have uncovered in the actuarial rates were
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