House insurance/claim question.....

[lucky]

We had a 10 yo soft-sided hot tub that started on fire last Friday morning.  It was a total loss as one whole side of the thing actually melted.

We filed a claim, etc., etc.  and the adjuster came out and did his thing yesterday.  Here's where it gets interesting....

We have replacement cost on our home AND contents.  We called a dealer of the Softub brand (like we had) and were told that a new one that is the same size as ours was retails at $4100.00.  Ok, well the insurance adjuster has informed us that they are going to depreciate the tub and will pay us whatever they determine it was worth prior to it burning up.  

When we asked about the replacement cost coverage we were told that when we replaced the tub and submitted a receipt, then we would get the remainder of the funds.  First problem here -- there is NO WAY that we can come up with four grand to buy a new one, reimbursed or not!  The check would bounce to high heaven!  

Second problem, we had pretty much decided that we were going to try getting a fiberglass tub and enclosing a portion of our deck into a 3 season porch around it and were going to use the funds to put toward THAT and TRY financing the rest instead of getting a Softub again -- if we couldn't swing the financing, we'd look at an alternative -- the Softub again, but we'd definitely need a hefty down payment with our credit which we couldn't get until AFTER we'd paid it.  In addition, dh was told that they will only pay us the replacement cost if we replace it with the same style of hot tub.

Is this right?  The total claim (if you look at what it'll cost to replace what we had, repair the deck and patio & clean the mess up -- that isn't done yet either) is about $5100 - $5500 and dh was told that we'll get somewhere around $500-$1000 (including what the ins. company pays direct for cleaning, etc.) after our $500 deductible.  What the hell are we paying insurance for???

We're in Minnesota and the company is Farmer's if that helps any.

Almost forgot!  Here are the parts of our policy regarding the settlement of claims and stuff: [em]
3.  Loss Settlement

Property Other Than Buildings.  Covered loss to the following types of property will be settled at Actual Cash Value:  
(1) Personal property and structures that are not considered buildings.  
(2) Carpeting, including wall-to-wall carpeting, domestic appliances, awnings, outdoor equipment and antennas, all whether or not attached to buildings.

 Payment will not exceed the amount actually needed to repair or replace the damaged property, or the limit of insurance applying to the property, whichever is less.

....
13.  Our Options.  We may repair or replace the damaged property with equivalent property.  We may also take all or part of the damaged property at the agreed or appraised value.  We shall give you written notice of our intention within 30 days after receipt of your signed sworn statement of loss occurs.[/em]

[KAT]

Yes, that is what they are doing now. They will pay you part now, then upon your submitted reciept for the rest. You paid for replacement cost, you will get replacement cost when you replace it.
Personally, I wouldn't have claimed this item. I wouldn't have even called them to check on coverage these days!!! I'm afraid you are going to find yourself in cancellation. I'm not saying this to be mean, but as a former insurance claims agent, I did auto but still... One for the claim which they could find was a maintance issue & another one if your house is older, possible bad wiring...ummm, okay, let's see, water damage possible mold from the tub leaking..have any green stuff on your house (?) stuff piled against your foundation, rot, standing water? hows the roof look (?). See what I'm getting at here? With a cancellation on your record, locating another insurance company to take the policy might cost you hundreds if not thousands extra a year.
My suggestion is to raise your deduct to 1,000 make sure you have liability of at least 500,000 & don't claim nutting that can't be covered with a few months paycheck. Save it for the big stuff..flood, fire...It's just NOT worth it anymore. People are even being denied coverage due to claims made by FORMER owners. Such as my sister. She pays 4,000 a year, unable to find insurance due to water claim by the previous owners....
Good luck enclosing your deck!! I just got an estimate for my little 10x12...10 g's!! Sizzle!! YIKES.
KAT

[lucky]

Fortunately it was an outdoor tub -- totally separate from the house AND it's made to be indoor OR outdoor.

And I read through ALL the stuff we received and according to what they gave us, they will surcharge our policy -- we get three claims within 3 years before they cancel.  

But I will keep what you said in mind regarding future claims (fingers crossed that there AREN'T any).  It sucks, we pay for exactly this type of thing, but if it happens you get screwed for it.  Perhaps our legislators should look at THAT!  They wonder why people can't afford homes, it isn't the mortgage that's the problem, its the property taxes and insurance that come WITH the mortgage.

[KAT]

We've had hurricane damage 2x that has cost us several grand out of pocket. Can't claim it because without a doubt the insurance company will make up the difference with surcharge or cancellation so either way you pay!!
It has really gotten bad lately. I've heard of insurance companies doing drive-bys. Some people remodeling getting cancelled another family had ivy growing up one side..bye, bye (mold hazzard). Here is a good one, there was a hail storm, owner didn't check the rood. Sold the house, bought a new one....contacted insurance company as to the change of residence. Agent says, you didn't claim hail damage 6 months ago, owner says, didn't notice any. Agent sends adjuster out, they replace the roof for the NEW owner & then CANCEL the guys new policy due to the claim!!! Doooo whaaattt?
Let us know how it goes!!
KAT

[wendl]

Lucky,
I am an insurance agent for another state.

You don't want to turn in insurance claims, this sounds silly but it is better to turn in one $20,000 claim then 3 $1,000 claims. Many insurance companies look at claim frequency.  Also NEVER turn in a water loss if you can avoid it, many here in WA have had their insurance cancelled because of it.

If you have a problem with the way your claim is being handled, you can go to the adjusters supervisor or file a complaint with your local Insurance Commissioner, they have so many days to ask questions to the insuranc carrier then the insurance carrier must respond in a certain amount of time.

Good luck, when it comes to claims on homeowners policies it can be hell.  
**These are my opinions, they are not legal advice**