How to Read an Appraisal Award Letter

How to read an appraisal award letter RCV

RCV AMOUNT OF LOSS:

At some point, you may be looking at your actual appraisal award letter.  This is the document that will be signed by the appraisers and potentially an umpire, if your claim goes through the appraisal process.  

These appraisal awards are confusing for some, so the following is a simple breakdown of what your appraisal award is saying.

Assuming you have RCV coverage on your policy.

Look at the left column where it says, RCV amount of loss. This information on the left shows the appraisal award amount for RCV or “replacement cost value.” They are broken down as coverages A, B, C, D, and ordinance & law.  These amounts represent the amount of money you will get IF your policy allows for the replacement cost value of your lost or damaged property, AND you actually replaced the items AND spent up to the RCV amount and provide invoices or proof of your RCV costs.

The easiest way to remember what RCV is, would be to ask yourself what it will cost to “replace” your lost or damaged property in today’s real world marketplace.

In this case, if John Doe replaced his personal property and repaired his dwelling AND spent up to the RCV, then he would get $59,295.22 for damaged dwelling under coverage A, and $7,217.62 for lost or damaged personal property.  Again, these amounts are calculated based on RCV, or what it would cost to replace in today’s real world market- place, and requires John Doe to actually spend up to the RCV amount to get this amount from the insurance company.  

So, what does ACV AMOUNT OF LOSS MEAN?

How to read an appraisal award ACV

ACV AMOUNT OF LOSS

Now look at the column on the right labeled ACV AMOUNT OF LOSS.  These numbers are less than the amounts seen on the RCV side.  Why?  This is because ACV represents the “Actual Cash Value” of your lost or damaged personal property or dwelling.  The best way to remember what ACV stands for is that actual cash value is what your items are worth based on its depreciated value, or what it may be worth because of its age.  So, in the example on the left, your $7217.62 couch is depreciated to $4,330.57, because it is not new and is aged.

So, what will your payment be when your check finally arrives?

This is how you calculate it. 

  1. Add the numbers in the ACV column and what do you get?  $52,977.89 plus $4330.57 which totals $57,308.46
  2. Now take $57,308.46 and from it, subtract your deductible. (YES, even if they applied the deductible on the original payment.) Let’s say it was $2500.  So, $57,308.46 minus $2500 which is $54,808.46
  3. Now take $54,808.46 and subtract the amount that was originally paid to you  For example lets say they paid you $7,898.10.  So, $54,808.46 minus $7,898.10 which gives you $46,910.36
  4. So, $46,910.36 is your new check.

The ACV amount is less than RCV but most of the time, they give you the ability to get the RCV amount through a process called “recoverable depreciation“.

 

Recoverable depreciation. The difference between the ACV and RCV. How to Claim it!

Are you planning on replacing your damaged items and rebuilding your house?  It might seem obvious to most people.  Of course!  But there are many people who for one reason or another, decide to NOT replace damaged items and there are many people who can do repairs themselves or they decide to do a quick repair of their damage and save the rest of the money for something else.  Hey, maybe you now have the money to buy that new pickup truck you always wanted, or maybe you would rather just put the money in the bank and save it.  In any case, the insurance company wants to give you incentive to use the money for what it was intended.  If you do, the insurance company will then pay you up to the RCV amount.

So here is basically how it works.  The ACV in the example above is $54,808.46.  Count the deductible here.  

Now, what is the gross amount under RCV when you add the amounts in RCV?  $64,012.84  (taking out the deducible)

So, for every dollar you spend over $54,808.46(ACV) UP TO $64,012.84 (RCV) you can claim that dollar amount and get it paid to you by the insurance company.  The limit, in this case, would be $9,204.38

So, $9204.38 is what you can recover.  This is the additional money which would be owed to you if you spend up to the RCV and even more than the RCV.  Remember, the appraisal is final.  Even if you wind up spending more money, there is nothing you can do about it. 

Get Your Mortgage Company to Send the Full Settlement back

Each mortgage company has its own rules when it comes to processing your insurance claim check or settlement through their loss draft department. Read on and you will learn How to Get Your Mortgage Company to Send the Full Insurance Settlement Back.

Once set up your claim with the loss draft department at your mortgage company and you send your settlement check to the mortgage company, you will now have to hope they send you the funds back, so you can start the repairs on your house. The general rule regarding whether you will get the funds back right away or not is determined by the size of the settlement check. Many mortgage companies have a $40,000 threshold, so if you send a check that is $40,000 or greater to your mortgage company loss draft department, they will likely hold that settlement check and want to do an inspection of your property to make sure the work is underway. Again, this is because the mortgage company has an interest or lien in your property and wants to make sure you don’t use the settlement proceeds to buy a cruise to the Caribbean. Each mortgage company has its own rules when it comes to processing your insurance claim check or settlement through their loss draft department. Read on and you will learn How to Get Your Mortgage Company to Send the Full Insurance Settlement Back.

Aside From the Monetary Threshold, Why Else Would the Bank Hold My Money?

We have seen that sometimes the mortgage company will hold your “UNDER” threshold settlement and do what is called a “monitored claim” if for some reason you are not in good standing with your mortgage company. In other words, if you are in default, or pre-foreclosure or foreclosure, or possibly even if you are on forbearance of some sort, the mortgage company can hold your money and distribute it back to you on what they call a “supervised status.” They will typically send you 1/3 of your check so the contractors can purchase materials. Once the job is half completed, the mortgage company will release some more money. and when the job is complete, the repairing funds will be sent to pay the contractor. If there are any funds left over that the mortgage company is holing, they will release that amount to you, and you can keep it. We have seen many times that if you shop around, you can often times find a good contractor who will do the job for less money, and that means more money in your pocket in the end, to do some other repairs that you would like to deal with.

Why do Mortgage Companies Make it so Difficult to get Your Settlement Money Back?

This is the main reason: THEY own your house “technically” until you pay off your mortgage. As long as you have $1 dollar left to pay, and you don’t pay it, the mortgage company/bank, could start foreclosure and take the house from you. Because of that, if you get a settlement…let’s say $100,000, and you stop making payments and use the money for something else, when the bank takes over your house, they will wind up getting a house that is need of $100,000 of repairs. So, now they have to rehab the house which costs money, and then sell it. They don’t want that headache.

We Always Get Questions About This. We Can Help.

We always get questions about the settlement checks.  The most often asked question is, “How can I get around this issue where the bank controls the money.

Settlement Claim Check Trick

There is a trick, but not everyone can do it. Here it is: Quickly pay off the balance of your Mortgage. We realize that this is easier said than done, especially if you just started paying and the payoff balance is very high. But, we have come across clients who are nearly paid up on their mortgage, or the balance that is remaining is an amount the client has sitting in the bank. If you are lucky enough to have that money sitting around, we recommend paying off your mortgage, so the mortgage company will drop the lien on your home. Call us, FAPA, for any questions about this. We should be able to assist and answer questions. FAPA-Florida Allstar Public Adjusting, Inc. 954-659-8333.

Loss Draft Department Directory

We are building a loss draft department directory, bank by bank. Here is a partial list.

Whenever you receive a settlement check from your insurance company for a home or business related claim and your mortgage company is also listed on the front part of your check as a payee, you will need to go through the process of getting your settlement check endorsed by your mortgage company.  This is necessary if you want to be able to deposit or cash that check.  Little by little, we will be adding to this list of mortgage company Loss Draft Departments.  You will find their number and a link to their website.

Phone: 866.940.2335

Phone: 844.412.9720

How to Handle a Claim Settlement Check with the Mortgage Company’s Name on it.

Here are the basic steps to follow to Handle a Claim Settlement Check with the Mortgage Company’s Name on it. If you have a settlement check from your insurance company with your mortgage company name on it. The immediate issue is that you will not be able to deposit or cash the check if there are others listed on the “pay to” line on the check. You will need those people to sign the check over to you first. So, here are the steps:

1. Call your mortgage company and ask for the “Loss Draft Department.” All mortgage company’s have a department specifically for dealing with insurance claim checks. Here is a directory of Mortgage Company Loss Draft Departments.

2. Please make sure you have your loan number available and the last 4 digits of your social security number.

3. Once you have the loss draft department on the phone, make sure you have their direct line and also jot down the name of the person you are speaking with.

4. They will ask you how much the check is for. Tell them. Generally, if the check is under a certain amount, like $15,000, they will simply endorse the check and mail it back to you. Once the check amount crosses their threshold, they will probably want to supervise the work to your property. They want to make sure the work gets done on your house and you don’t use the money for soething unrelated.

5. Get their overnight address. You don’t necessarily have to send the check to them overnight, but you can send the check to them via priority mail or FedEx, and they check this mailbox more often. ALWAYS SEND VIA CERTIFIED MAIL OR FEDEX WITH A TRACKING NUMBER. They DO tend to lose checks and then you will have to go through the process of getting the old check stopped, and a new check reissued by the insurance company. I have seen this take months.

6. Find out exactly what needs to be in the enveope before you mail the check to them. Sometimes they want the adjuster’s estimate or worksheet. You will have to obtain this from your insurance company or from your public adjuster. Sometimes they want a signed contract with a contractor.

7. Ask them if they want the check endorsed before mailing it and ask them if there is a reference number and if so, place it on the check and all paperwork that you mail to them.

8. Ask them how long the turn around time is. Remember, if the check is under a certain amount, they will endorse it and mail it right back to you. If the check is over the limit (each mortgage company has their own limit) then they will send you back only some of the money and will supervise the construction by sending an inspector to your property. Each time the inspector sees the work, he will approve a little more money. This way they control the repairs and make sure you do it.

HINT. If you have had a recent refinance or your mortgage company has changed names or was bought out, before you mail the check, you will need to make sure the settlement check was issued correctly by the insurance company. Banks change names all the time….especially mortgage company names.

Mortgage Company on Your Settlement check!

Did your insurance company put your Mortgage Company on Your Settlement Check? This is very common when your homeowner’s claim settles. If you have a mortgage, remember, the bank has an interest in your house. We always tell people that the mortgage company name is on the check because the bank actually owns your house, not you. Well, you will own the house once you pay off the mortgage, but until then, you are not the owner… at least in the eyes of the mortgage company. If you would like to test this out, stop making your mortgage payments and see what happens. Yes, they will foreclose on you and sell your house and keep the money. They can do that even if you owe a dollar on your house and default on your loan.

Unfortunately, there is not much you can do to remove the lender’s name from the check if you have a mortgage.  The insurance company would be in trouble if they purposely left the mortgage company name off the check. We have seen that sometimes you can get luck and the insurance company forgets to do it when they issue your check, but usually not. By doing this, the lender maintains control of what you do with the money. They don’t want you to spend the money on a vacation, on credit card bills, a new set of cool rims for your car, or that trip to Las Vegas you have been dying to go on. In other words, they want you to spend it on that damaged property.

Insurance Claim Check Trick

There are some tricks, however.  If the settlement check is under a certain amount, then the lender will likely endorse it and return it to you.  If it’s over that certain amount, then they are likely to hold your money and distribute it slowly to you as the work is done.  And yes, they will do periodic inspections of your property to see that you are actually doing it. Read about the process of handling a claim settlement check with the mortgage company’s name on it.

We do have one suggestion that will allow you to get your claim check back in one piece from the lender instead of them paying it out to you in portions.  Call FAPA and we would be happy to explain it to you.

Florida Allstar Public Adjusting, Inc. Main office Florida 954-659-8333.

Homeowners Insurance Claim Tips

If you are looking for homeowners insurance claim tips you came to the right place.  Florida Allstar Public Adjusting has almost a decade and a half of experience handling property damage claims, and because of that, we have picked up many tips along the way which help to get these tough property damage claims settled for the highest amount possible.

We have developed a method for successful insurance claim outcomes and it has many parts.  To start with, it takes a very experienced and careful eye to make sure nothing is missed when it comes to damage.  

  • A perfect estimate which is gone over multiple times for accuracy is created.  Our estimates are not padded with nonsense.  Everything on the estimate makes sense and can be defended if necessary. 
  • Perfect photography with proper camera angle and lighting in order to catch or eliminate shadow, to see the damage is a very important part of the process.  
  • Creating a working relationship with the insurance company adjusters is extremely important because, at the end of the day, it comes down to a couple of people on the phone who simply want to have a resolution to the claim. In other words, everyone has to be happy, even the insurance company claims adjuster.  If you make him feel like he is getting a bargain, you can get high-quality settlements when you use a little finesse.

Call me and I am Happy to give you more Homeowners Insurance Claim Tips.

We are available to answer questions: Please call our main office in South Florida at 954.659.8333 Alan Himmel, Public Adjuster.

Can You Cash an Insurance Claim Check?

Can You Cash an Insurance Claim Check?

Many of my clients ask me, can you cash an insurance claim check?  My answer that is, “it depends.” There are a few factors which you have to look at before that question can be answered.  Does the home have a mortgage? Who is the check made out to? Who will be doing the repairs?

Whether you can cash an insurance claim check may depend on your lender.

In most cases, you are going to be required to use the money for repairing the property.  After all, that was the point of the claim in the first place. If there is a mortgage on the property, you can expect the mortgage company to come and do an inspection to see if the repairs were done.  Remember, since the mortgage company is technically an owner of your property until you make your last payment, they want to make sure that you actually do the repair, because in case you decide to walk away from your mortgage and abandon the house, the bank does not end up with a property that they have to rehab in order to sell.  

Public Adjuster Secret Strategy for Cashing an Insurance Claim Check

This is my advice:  Since the biggest pain is dealing with a lender who wants to give you your money in small increments, what you need to do is get 100% of the work done and THEN call the lender and tell them its finished.  Now, I get it, in certain cases you just don’t have the money or the job is way too big.  However, a good way to get the lender to sign the check over to you is to show them the work is all done.  Don’t have them come to your house to inspect the job to see that you are partially done.  When you have them come and inspect, you should be able to show them it’s COMPLETELY done.  You can do this by getting a line of credit from the bank, getting a personal loan, or even a disaster assistance SBA loan.  The SBA usually has a fantastic payback deferment of several months without interest, which is enough time for you to get the work done completely.

You can call us direct: 954.659.8333 Alan Himmel, Public Adjuster.  I will do my best to Help you.

Using Home Insurance Claim Money

Using Home Insurance Claim Money

Do you need to know the rules when it comes to using home insurance claim money?  I see many people get in trouble after they receive their insurance settlement. What they do is they take their check and deposit it.  Once they do this, they use the money to pay off their car, some credit cards, buy a boat, or even take a cruise!

Well, I am sure you can see the problem with this.  First of all, the claim settlement money was not intended for this.  Its purpose is to do the necessary repairs to your property in order to bring it back to pre-loss condition.

It is highly recommended that you don’t do this with the money for a few reasons:  You need to know that if you have a mortgage on your property, the lender will probably not release the money to you until you either start the work on your house or have a signed contract for repairs on your house.  Here is a directory of mortgage loss draft departments. If your claim check has your mortgage company name on the pay to line, then you need to call your mortgage company loss draft department. If you call the loss draft department of your mortgage company, they will tell you if they will need to monitor your claim with inspections. And even when they do see you are actually doing the work, they are likely to only release a small part of the settlement as the project moves along.

How Are You Using Home Insurance Claim Money?

Assuming you don’t have a mortgage on the property, you are still obligated to do the repairs.  If you don’t, then all those areas of your property that you didn’t repair would be denied on any future claim that would arise.  The insurance company does this because they won’t agree to pay for the replacement of something a second time when the damage was not fixed from the first time.

Florida Allstar Public Adjusting is a public adjusting firm handling claims throughout the state of Florida. The firm was founded in 2007 and maintains an excellent record with its clients. The company’s job is to help people with their insurance claims and to get them the best settlement possible.  You can reach FAPA at 954.659.8333.

How do Insurance Companies Pay Out Claims?

How do Insurance Companies Pay Out Claims?

Here is a good question: How Do Insurance Companies Pay Out Claims?  Well, there is a little guy sitting at his desk with a checkbook and he wants to know your name because he wants to make the check payable to you.  Of course, that’s not exactly true.

There are many steps to finally getting a check mailed to you, but more importantly, there are even more steps to getting a check mailed to you with the full amount of the damages covered.  In most cases, homeowner claims are paid incorrectly or are paid too low. When I say incorrectly, I am saying that some of the damages related to the loss are completely missing from the insurance company estimate.  And, when I say they are paid too low, what I am saying is that the insurance carrier knows about the full damage, but it’s part of the job of the insurance company desk adjuster to try and diminish the value of the claim in order to save the company money.

The process actually involves first determining whether the policy can provide coverage for the damages.  Once this liability has been accepted by the company, the next step is for them to document and measure the damage and create an estimate. This estimate will go back to a person sitting at a desk and this person will usually pick apart the estimate in order to reduce the value of the claim to save the company money.

You Can Influence How Insurance Companies Pay Out Claims

Because of this, we highly recommend all property damage victims in Florida use a public adjuster to negotiate your final settlement.  A public adjuster such as myself is your advocate. We are trained, licensed, and bonded. We only get paid upon successful settlement of your claim.  And, we only get paid a small percentage of your claim upon successful completion.  So, we are motivated to settle your claim for the highest amount possible because your success means our success.  

I am available to answer questions or take a look at your property directly.  You can call me direct: 954.659.8333 Alan Himmel, Public Adjuster.

Claim Closed Without Payment

denied insurance claim

It’s a very common complaint.  “My claim closed without payment.” Or, I called the insurance company and they told me my claim was closed. Well, you may be asking what does this mean?

Is it possible to reopen a closed or denied claim?

Maybe.

FAPA has a lot of success with reopening denied claims Please let FAPA review your claim for free, and see what they can do to have the claim reopened. There is no charge for this. Oftentimes, your denied claim can be reopened.

What is one reason a claim is closed?

Sometimes, insurance companies will tell you that your claim was denied or closed when they simply take the assigned adjuster off the file. They do this sometimes when there is an extended period of inactivity on the claim file. If there is no adjuster assigned the claim, then the insurance company categorizes the claim as “closed.” Florida Allstar Public Adjusting is very successful in having claims reopened. Don’t simply accept that your insurance company has closed your claim and there is nothing that you can do. Let FAPA help you. They know what to say and who to talk to.

Florida Allstar Public Adjusting, Inc., has been fighting big bully insurance companies since 2007.  Their job is to help people with their insurance claims to get them the best settlement possible.  Call them and let them answer your questions.  Don’t take the word of the insurance company as gospel.  When you call, you can speak directly with a licensed adjuster. They are standing by to speak to you: 954.659.8333. 

Learn More About FAPA.


Learn More About FAPA

Florida Allstar Public Adjusting, Inc

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