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KileAnderson
USA
875 Posts |
 Posted - 10/11/2003 : 12:40:13
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Bob,
Unless they have some sort of proprietary building material or technique I wouldn't think you are owed any more than it would take to rebuild a house with similar styling, squarefootage and finish. If all they do is deliver pre cut wood it sounds like they are making a heck of a lot of money. When you bought the house, did it come with a set of plans? Unless they are using some special material other than lumber or steel framing or some kind of patented technique I don't see how it would make a difference.
Maybe it's a regional thing but where I'm from there's no such thing as a name brand home (unless it has wheels and a hitch). If I was purchasing a home I wouldn't pay a premium because someone calls it an Acorn or a Walnut or a Pecan. A house is just a building. It's either well built or it isn't. It's just my own opinion but if a local homebuilder can build the exact same house for 25% less than your name brand I think that is all that is owed. |
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Wes
USA
62 Posts |
Posted - 10/11/2003 : 14:12:36
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| Dang there is some good stuff coming up on this site lately. I actualy get anxious waiting for new posts. Ok here is my take on the new topic. If I wreck my Cadillac I sure don't want it replaced with a replica. Now if the poster has a Acorn Home and it is a total loss who better to give the most accurate estimate to rebuild than Acorn Homes. I think this guy is due a Acorn Home. Here in Florida many housing developments advertise their builder to indicate quality and reputation. |
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khromas
USA
103 Posts |
Posted - 10/11/2003 : 14:55:50
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Other issues which may affect the perceived "value" of a home can be the reputation of the builder,the warranty offered, location (location, location!), tax rate of the property, etc., etc.... none of which can really be considered 'insurable interests'. What may become a question of fact for a jury is "Were those intangibles used in the underwriting process to determine the premium rates and if so, how did they relate to the policy limits?"
Something that was not posted in the original query - are policy limits at risk?
Kile makes some good points in his remarks regarding proprietary building materials. A #2 grade pre-cut stud should not cost more simply because there is an "Acorn" stamp it. Some of the costs involved in the 'Acorn' package may be similiar to what a contractor would charge for doing much of the same work i.e. ordering, assembling, designing, etc. If a local contractor can do those same 'hard-cost' items at a lower amount, then that may be the legitimate payable amount under the insurance contract.
Please do not take this personally, but maybe you got hosed in the original purchase of the "Acorn" home with some slick marketing! (We all have at some time or another!) |
Kevin Hromas |
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Catmandale
USA
67 Posts |
Posted - 10/11/2003 : 15:22:01
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Oh boy, what a can of worms.
In my limited review of the Acorn website, they seem to be designers/developers rather than builders. Their partner firm, Chandos appears to be the builder firm, and they seem to be more focused on multi-, institutional and industrial work. It would appear the value lies at least in part on the design of the Acorn home.
The information at hand does not indicate how bad the loss is from a structural viewpoint. Total loss can mean a lot of things. Economic total loss or pile of ashes? Can they rebuild/repair based on what remains, or does the Acorn $400K bid include design of a new(possibly different?) structure?
What does prefab mean in the earlier post? Specialized wall/truss/other components?
The everyday HO policy is a package offered to meet the needs of the many, and should be priced accordingly. HO insurance is still the best deal around for what you get. Add a PLUP and you are golden.
Because of interpretations and case law, the carrier may be required to respond outside what they meant to provide. That is an underwriting/agency issue...they should not have written it if the package don't fit.
If it is just two by fours and nails, the repair firm price should be appropriate, if the finishes and details are equal.
We need more information.
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"When we thought that we had all the answers,
suddenly all the questions changed."
Mario Benedetti (1920); Uruguayan writer.
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CCarr
Canada
1200 Posts |
Posted - 10/11/2003 : 16:27:00
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In the absence of the b-dog responding to my questions with the qualifying or clarifying of the issues I raised; I'll plod on making several assumptions along the way.
This is a Canadian loss, occuring in British Columbia, in the early fall, as a result of the wild fires that swept through an area and destroyed many homes.
B-dog owned a home in a typically nice subdivision. The subdivision development which became a neighbourhood, was developed by Acorn Communities Ltd, and the homes were constructed by building trades under contract to Acorn and as per the Acorn building plans. Many states or provinces have residential developments of this nature. It is not uncommon (in other than cookie-cutter template homes) for someone to say I live in a Richfield Home, or a Sunrise Home, etc.
There is a distinction between this Acorn Home and that of a Viceroy Home, for example. Again, the Acorn home is built by contracted trades of Acorn's. Whereas, a Viceroy Home is a pre-packaged trailer load of materials that gets left at your building site - for you to build yourself, hire your own trades, or hire the Viceroy Homes crew. I look for b-dog's clarification of that.
So b-dog's home in an Acorn Homes developed community burnt down, and we'll assume left a pile of ashes.
Back to b-dog's post - there are original plans, therefore the scope is not an issue, nor was it mentioned; in fact b-dog goes on to say the carrier contractor "used LKQ principals to guide his estimate". But, b-dog's lowest contractor is $100K higher than the carrier.
Again, there should be no "apples - oranges" issues, there is the same set of plans for each to use.
Rebuilding an Acorn designed home, as b-dog says, "using materials of LKQ", will still result in an Acorn designed home. I fully disagree with b-dog's assertion otherwise.
If the Acorn entity we are faced with is either of the two I mentioned, contrary to b-dog's comment, you can not buy the building package from them and have it dropped on your lot. Regardless, it makes no sense that the Acorn quote of $300K is just for materials; given the concensus b-dog portrayed re LKQ being satisfied by all quoting.
I further disagree with b-dog re his assertion he could not sell the $300K rebuilt home as an Acorn Home. It is an Acorn designed product and will retain those design characteristics if rebuilt according to the original plans.
Therefore, in my opinion, to answer b-dog's last question, based on my assumptions which I would welcome clarifications to, LKQ would be satisfied by the $300K replacement value quoted, and no you are not entitled to purchase those same LKQ materials from Acorn to rebuild this Acorn designed home. |
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bobdog127
3 Posts |
Posted - 10/11/2003 : 16:38:49
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Thanks for the great posts. Here's some additional information:
Acorn is located in Massachusetts. Acorn homes are characterized by open floor plans, lots of glass, etc. My home was located in New England. The structure is still standing but will need to be razed. While I did not build the house I have the original plans. We plan to rebuild the same house.
I believe the way it works is that Acorn designs the house based on the customer's input. They'll put together a materials package for the house. The customer buys the materials package and hires a contractor to build it. Acorn has its own stable of recommended builders.
Sorry to say that policy limits are at risk in this case. The $300,000 estimate is about 5% below the policy limits.
Hope this helps. Thanks again.
Bobdog |
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CCarr
Canada
1200 Posts |
Posted - 10/11/2003 : 19:59:37
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Okay then b-dog, my apologies for heading down the wrong trail with my incorrect assumptions.
What you are now clarifying is much the same as a Viceroy Home or similar packages.
Whether you have "guaranteed replacement cost" as part of your policy wording for building, is now quite important to you.
Without it - GRC - you will "meet the wall" at $300K plus 5%, which makes your arguments with the carrier about the merits of your quotes rather redundant. |
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khromas
USA
103 Posts |
Posted - 10/11/2003 : 20:35:22
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Sounds like we have a situation that is like a "Rolex vs. Timex" comparison. Besides having 3 different letters, they both tell you the time. Although a Timex will tell you when it is beer-thirty and a Rolex will tell you when it is time for drinks at the club! Issues that get raised regarding 'replacement' value desperately need to be addressed at the policy underwriting phase. The Rolex gets scheduled instead of grouped with other contents. You pay the additional premium with regards to the extra protection. I am not totally familiar with the flexibility offered on the sales side of the equation, but I do know you can get a policy for just about anything and at any value - IF you got the dough!
I am afraid that if push comes to shove in the situation with the 'Acorn' home, the replacement cost that will get upheld is what the company is maintaining UNLESS Bobdog can prove that the special circumstances of his home were known and considered as part of the underwriting decision. Then it becomes a question of fact for others to make the decision on. |
Kevin Hromas |
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KileAnderson
USA
875 Posts |
Posted - 10/11/2003 : 20:58:21
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I don't think the two examples of a Rolex or a Timex or the one with the Cadillac truly apply. In the watch example only Rolex can build a Rolex. If anyone else does it then it isn't a Rolex. It is a design that is pattented and no one else can make it or market it. In the case of a Cadillac it would be way more expensive to have someone build you a handmade replica of a Cadillac than it would be to just go on down to the show room and purchase another de'Ville.
A house on the other hand, is something that by it's very nature is custom built, on site. It is a collection of wood and brick and concrete and whatever other ammenities you wish to include. Unless Acorn has a pattented process, or uses some proprietary material or process, their house is no different than any other house built of the same materials to the same plans to the same level of craftsmanship.
From what you've said, I think the company owes you a house built the same way, of the same materials to the same level of craftsmanship that you had before. Like Clayton said, unless you have GRC in your policy this is pretty much all accademic anyway. |
Edited by - KileAnderson on 10/11/2003 22:01:10 |
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CCarr
Canada
1200 Posts |
Posted - 10/11/2003 : 21:53:06
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Kile, generally I agree, but Kevin has raised a point I was going to let lie because there are so many variables to it.
My take on what Kevin was getting at, is how was the policy amount originally determined or the last renewal policy amount agreed to?
Kevein's comments made me think of an old claim regarding a serious loss on a custom built home that the carrier insured for $500K. That figure was based on an evaluation from an national "inspection" company, determining the RC based on the best available data from their attendence to the dwelling and available technology at the time. Like anything else, us included, the data is only as good as the person extracting and interpreting it. The dwelling was no where near a total loss and we were fretting over a $500K reserve that could /should be more. The policy contained a GRC wording, but that and the loss really screwed up the carrier's treaty reinsurance and net retentions. Another evaluation was performed after the loss, after the inadequacy of the first was apparent, and the RC came in at $1.2M. To make it clear, the original was garbage - wrong measurements and totally inadequate specialties detailed in the home. The carrier had ordered / hired the 1st evaluation at the time of the application for a policy, as standard practice, and accepted the report; they had no one to kick but the "inspection" vendor and the underwriter who put their stamp on the report and issued the policy for the suggested $500K RC. Pictures came with both inspections, the inadequacy of the first one was visually clear even looking at the pictures from the 1st report.
So, in that case, the insured was never aware of the infighting and corporate duelling over a $100.00 inspection / evaluation report that wasn't worth the paper it was on.
Therefore, as per Kevin's suggestion, can b-dog prove or become aware of what steps the carrier took to satisfy themselves with the RC policy amount? B-dog may well have contributed solely to that end, or perhaps, the carrier did some work and developed / suggested an RC amount, which seems it could be inadequate.
An awful lot could be going on about this claim beyond the reach of the handling field adjuster. We used to call these "back room claims", where we (claims) would sit back and let upper management fight and yell at underwriters and eventually send us a memo on what they decided about coverage or limits.
Could be b-dog's last hope to keep his custom home design integrity arguments alive. Sometimes the back door also leads to the cashier's window. |
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JWill
USA
28 Posts |
Posted - 10/13/2003 : 18:51:20
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Something hasn't been touched on here...The assured is entitled to a contractor of his choice and discrepancies or adjustments are the responsibility of the carrier with that contractor. With the carriers providing their own contractor implies a relationship which for most, means less. How many times have we heard, “the more work from you I get, the price will get better?
Saying this is with the assumption that b-dog has his coverages inline, perhaps the adjuster should review the spec sheets for the differences if any. It may boil down to an O&P issue, flooring, glass availability, and so on. What about the $20K in improvements he mentioned? Doesn't the carrier have a duty to examine this to nail down the obvious difference or are they sitting back and stating, "sorry, I've found someone to do it cheaper"? We all have crossed this issue many times; our estimating software somehow has become the boulder that holds King Sword. I believe that an audit of the material list and local labor, not an average, would reveal where the difference lies. One-system states "x" amount, yet, if you want quality repairs, you must hire quality tradesman. Their worth isn't in the system and the perceived value that b-dog has of his home and the pride of the "Acorn" name has value, much like all the developers around the world. Can it just be the price of the "Name", even that has value? If b-dog wishes to remain loyal to the Acorn name, he's entitled. Comparing wood to wood won't cut it, the audit should reveal all.
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J. Williams |
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KileAnderson
USA
875 Posts |
Posted - 10/13/2003 : 22:21:21
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| JWill, you are right, the insured does have the right to use the contractor of his choice, but the carrier isn't obligated to pay whatever price that contractor wishes to charge. If everyone else is charging x for the same job the carrier does not owe x+25% just because the contractor of choice wants to charge it. They owe what is reasonable, not what is desired. That's the reason adjusters write estimates. Otherwise we could just say "OK, it looks damaged to me, get it fixed and send me the bill". Knowing what we know about human nature and situational ethics a company who tried that form of claims handling wouldn't be in business for long. |
Edited by - KileAnderson on 10/13/2003 22:24:19 |
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JWill
USA
28 Posts |
Posted - 10/14/2003 : 22:32:35
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| I completely agree with you Kile, that's the prime reason some us are called adjusters and there is that word again, (reasonable), seriously, how many carriers really check what's available locally? How many times have we showed for the cat meeting and was handed a local pricing for the various labors/materials we estimate? Look at the invoice/bids we receive from vendors and don't usually jive with the systems we use, yet they pay. Another example, and the doozy, what about the low pricing in these systems, that generate the headaches and re-inspects, roofing, interior painting, can one really get 600 sq ft painted for .45 a foot and call it quality? The shingle pricing is a joke, here I go, rambling. A meeting of the minds is our goal I believe. I'm sure this situation could be resolved. We need the nitty gritty, this is simalar to csring.(shivering about now) |
J. Williams |
Edited by - JWill on 10/14/2003 22:42:27 |
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ajennings
1 Posts |
Posted - 11/13/2003 : 15:32:22
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Back to the roofing issues....I've been looking at storm damaged roofing for over two decades now as both a contractor, and as an adjuster. There is another issue concerning spot repairs or "partial roofs" which comes into play on the liability side for the carrier/adjuster, and that is:
Especially with modern composition roofing, with it's integral "seal-down" strip, designed to fuse the shingles together, trying to perform individual shingle replacement or partial elevations isn't a very good idea. In most cases, IF the shingles can even be pried apart, (particularly in hot climates it will just rip a hole in the shingle above it) the seal down strip on the first row of "saved" shingles, is likely to not bond with the new shingles, resulting in both a voiding of the original warranty from the manufacturer, and increased liklihood of more damage should any high wind gusts occur.
With cedar roofs, it is difficult to remove one shingle without loosening the nails holding the shingle above it. Same problem.
It's best to replace an elevation, which also solves the aesthetics problem in most cases.
I've gotten into most arguments with owners (and adjusters) over roofs which were hail damaged by large hail, but with less than the "benchmark" 10 hits per square. You simply can't go into a comp roof and start replacing individual shingles.
On other matching issues (upper and lower kitchen cabinets for example) some carriers here in Texas now have specific exclusions regarding matching of materials.
While I agree with many of the opinions above, and looking at things from the standpoint of what a jury would think is perhaps a good idea, the bottom line is it's the carrier's decision.
It's always best to just ask the carrier how they want it handled. They usually have a staff of attorneys that know the specific laws from state to state, and usually have a policy in place (written or unwritten) on whether they want to try the cheapest way out, or pay for an all-new [whatever].
There are carriers here who don't want any trouble from insureds, who will pay for total replacement, and that's how they want their claims handled. There are others here who will fight nine out of ten claims, and try to get away with the least amount of money possible, even if the insured threatens to take them to court.
While cyclical, and dependent on other factors, insurance will always be an unsolved "tug-of-war" between insureds and carriers. Insureds want everything like new, but also want low rates. Carriers always want the lowest amount paid out on claims, but also don't want the unfortunate results sometimes rendered by a court decision or jury award.
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Ghostbuster
476 Posts |
Posted - 11/13/2003 : 17:27:28
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Here we go!
With regard to modern 3-tab comp shingles, I do it all the time on my roof, and it happens to be 15 years old. The shingles are worked loose with a large putty knife and the nails with a thin pry bar. NO BIG DEAL. Reseal? No sweat, G.I., that's why God invented roofing tar in caulk gun tubes. Will a strong wind damage the replaced shingles? Not yet. Does the new shingle stand out from the older ones? Yep, for about a month until it accumulates a layer of dirt and blends in with the rest of the shingles.
I contend the whining objections from the roofers has a lot to do not with the repairability of the shingles, but with the lack of outrageous profit to be derived from entire slope or entire roof replacement.
From a technical standpoint, it is easy work. From a carrier standpoint that must deal in public relations with the Insureds, this kind of common and simple repair may cause more problems than it is worth. |
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