Help! Contractor issue with Insurance - need advice

7 years ago

last modified: 7 years ago

Hi,

Our contractor messed up day one of demo and didn't turn off the water before demoing. Of course, hit an old pipe in our 1920 coop apartment and caused water damage to the neighbors' bathroom below us. The entire time our contractors assured us that this was their clear mistake and insurance would cover it. Cut to 6 weeks later, the contractors presentation of the facts has caused their insurance to deny the claim. The neighbors hate us, the board hates us, and we just want the contractor to go back to his insurance company and rectify the situation. Pay the deductible and move on from this. He is refusing, saying that paying out of pocket so his premiums do not go up is the way he wants to go instead. We are stressing out and feel helpless/angry. Do we demand he go back to the insurance company? Is paying out of pocket a normal alternative? Any advice is appreciated! Thanks!

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User

7 years ago

The neighbors's insurance company need to sue the contractor's insurance company.

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Comments (16)

PRO
Christopher Nelson Wallcovering and Painting
7 years ago
Paying out of pocket is not unheard of, getting him to do it, well, IDK.
PRO
MDLN
7 years ago
Hire an attorney to represent you (speaking from experience of having a contractor who "messed up").
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freeoscar
7 years ago
I'm not following - if his insurance company is denying the claim, paying the deductible is irrelevant - the deductible only kicks in when the claim is approved. So he has no choice but to pay out of pocket. I'm not sure why you would care either way, assuming of course that he does pay.
MR
Original Author
7 years ago
Yes, I am saying I wish he would go back to the insurance company, correct the facts as they happened, pay the 1k deductible, and we can all move on. Instead of trying to pay out of pocket (and yes, then no deductible).

You're right we don't really care either way, as long as it gets paid rightfully out. It's more that our neighbors, who now hate us, feel that this is shady and it's a reflection on us somehow. I wasn't sure if out of pocket was a practice used given the deductible difference to the total damage cost (estimated 7k) or how "shady" this was. First time renovator!
freeoscar
7 years ago
If he was willing to go through insurance the first time, and isn't now, maybe it's because the insurance co. was correct in denying his claim, so there is no point in re-addressing it. I don't think that paying out of pocket is shady - our contractor in a previous reno in a co-op did that, though the damage to the neighbors was only $2k or so.
MR thanked freeoscar
PRO
Trinity Builders & Design, Inc.
7 years ago
While there are a lot of factors to consider here, it is not completely unheard of to pay out of pocket.

Insurance companies are very strict, and because it is a condo/apt there are most likely many clauses on the contractor's insurance, HOA insurance and your neighbor's insurance that might have come into play with the decision of the insurance company. Usually, the policies are very specific what is covered under which policy, and although his insurance might have declined it, the HOA insurance might cover.

Having said that, if he is willing to correct and pay for the damages (assuming that he actually does pay) that might avoid a lot of headaches. Just make sure to draft up an agreement stating that they will cover and remediate all damages that were caused by his mistake.

Good Luck!
Pipdog
7 years ago
last modified: 7 years ago
Did you ask him what the insurance company's basis of denial of the claim was? If you don't already have it, ask him for the letter from his insurer that denies the claim. If you have any friends or relatives that are attorneys, ask them to review the letter.

Did you make a claim with your homeowner's insurance? You could get sued by your neighbor and if you don't make a claim and notify your insurance company in a timely manner, they could deny your claim.
MR thanked Pipdog
PRO
MDLN
7 years ago
last modified: 7 years ago
Pipdog has a good point, that happened to someone I know.

Have you considered asking to speak directly with his insurance company?
MR thanked MDLN
klem1
7 years ago
The contractor has no insurance and has no intention of paying. He feel's that the more time go's by,the less responsibility he has to make it right. Sue the bum.
MR thanked klem1
PRO
Joseph Corlett, LLC
7 years ago
I flooded a kitchen last year with a broken pipe, (Faulty CPVC pipe, it couldn't even stand forensic testing to see how bad it was, but that's a different story.) I was informed by my customer's homeowners insurance company that they were subrogating their expenses to my insurance company. They did, and my insurance paid the claim. No one asked me anything or gave me any choices.
MR thanked Joseph Corlett, LLC
PRO
Chris Riggins Construction Inc
7 years ago
Contact your insurance company and make a claim. They will handle and collect from the contractors insurance company. That is what you pay your HO insurance company to do.
MR thanked Chris Riggins Construction Inc
greg_2015
7 years ago
last modified: 7 years ago
While I agree with everyone who says that you should contact your insurance and let them handle it, I'm a little curious about what your contractor is offering to pay.

Is he offering to fix the damage himself? There by only having to pay for materials out of pocket? There is absolutely no way I would allow that if I was your neighbour.

Or is he saying that if your neighbour gets it fixed by someone else, he'll pay the bill?
MR thanked greg_2015
MR
Original Author
7 years ago
Thanks everyone! I will try to provide as much color to the above:

1. Denial of Claim - we have the letter from the insurance company as to why it was denied. Although the contractor was demoing the apartment they were in the room near the bathroom and apparently the vibrations caused an old 1920's pipe to snap. I guess there was a clear break to a connection where it came undone, so the contractor didnt accidentally hit it, etc. and was not IN the bathroom. So the insurance said given this, this is a building issue for having old pipes and the buildings insurance should cover it.

2. The contractor did offer to repair the damage (neighbors denied and insisted on letting insurance cover it). He offered not just materials but to repair in its entirety to which neighbor said (before he slammed the door in my face) I'm not chasing shit with shit. Got it, off to a great start.

3. The neighbors already had the damage repaired. Unfortunately, they had a previously boiler water damage issue (building issue) and the damage from which event is muddled. The claim is for 8k to repair small bathroom ceiling, hallway damage and closet damage. We think this is high but again if the contractor pays and/or insurance pays, at the time, we werent in the position to argue it. The contractor is willing to pay this full 8k out of pocket.

4. I will look into contacting our insurance company and make a claim. The last thing I want is to get sued over this.

Thanks again everyone, I really appreciate the insight!
PRO
Trinity Builders & Design, Inc.
7 years ago
Michelle,

this is a tough position to be on. I am not sure why your neighbor is not accepting to settle it if the contractor is willing to pay the full amount.

Sounds like the issue is exactly what I thought it was, the contractor's insurance will usually only pay if it was directly a fault of the contractor. To make matters worse, in a condo everything gets more complicated.

I have had a situation very similar to this in my personal condo a few years ago and the three insurances (ours, neighbor's and HOA's) were "fighting" amongst themselves to figure out who would pay. It took quite a few months for it to be settled.

Having said all that, yes get your insurance company involved.

Good Luck!
MR thanked Trinity Builders & Design, Inc.
PRO
Joseph Corlett, LLC
7 years ago
My insurance company paid out 20K and then dropped me. My new insurance company charges about 1% more in premiums. It is insane to pay insurance premiums and then pay claims yourself.
Pipdog
7 years ago
last modified: 7 years ago
The insurance company's denial of coverage raises questions. The contractor should look into getting an attorney and threatening to sue his insurer for bad faith/wrongful denial of coverage.

Help! Contractor issue with Insurance - need advice

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