Home Insurance Adjuster Estimate Too Low? Tips & Advice

Most homeowners assume when they file an insurance claim, the estimate from the insurance adjuster will cover damages and repairs. Unfortunately, that’s not always the case. Sometimes the home insurance adjuster’s estimate is too low.

You may be entitled, subject to the terms of your policy, to receive the cost to restore your home to its pre-loss condition. But many factors can influence the outcome of your claim.

Read on to learn why you might receive a low estimate and what you can do if you feel it’s not justified.

Man unhappy after receiving bad news

Understanding the Insurance Adjuster

When you file an insurance claim for a covered event, your insurer will appoint an adjuster to investigate and adjust your claim. They will either appoint an internal “staff” adjuster or hire an independent adjuster on a contract basis.

An insurance adjuster receives payment from your insurer and acts in their best interests to mitigate their liability.

The insurance adjuster is not your friend and won’t do you any favors at the expense of your insurance company. They want to adjust your claim in the shortest period so they can move on to the next one.

Costs to repair damage to structures are typically obtained using specialized software programs. The most popular insurance claims estimating software for restoration jobs is Xactimate.

If you receive a home insurance adjuster estimate that’s too low, the following tips and advice can help secure a higher estimate.

Understand Your Coverage

Before you complain about a low estimate, familiarize yourself with your homeowners insurance policy. You may not have sufficient coverage.

Here is a typical scenario where you may receive a low estimate due to no fault of the insurance adjuster.

Being Underinsured

You may be underinsured, and your policy only covers a portion of your covered losses in a claim.

For example, you insure your home for $1,000,000. It suffers catastrophic fire damage, and you find out that, due to new building regulations, rebuilding it will cost $1,200,000. To rebuild it the way it was, you have to pay the difference. That’s unless you have building code upgrade coverage.

Building code upgrade coverage is not included in a standard homeowners insurance policy. You need a building code upgrade endorsement to cover the additional costs associated with making your home compliant with current building codes.

Meet Your Insurance Adjuster

You know your home better than anyone else. Be there when the insurance adjuster arrives to inspect the damage and point out things he may miss.

For example, your costly engineered wood or linoleum flooring might be destroyed in a fire or covered with rubble. Unless you inform the adjuster, they may not list it in their estimate.

A lack of information typically results in a lower estimate.

If you could not meet the insurance adjuster or forgot to mention certain things, send them proof or request another inspection. For example, you might not have a receipt for your flooring but the flooring contractor who did the installation can help you.

Speak to Your Insurance Company

Insurance adjusters, especially independent adjusters, can be hard to reach. After adjusting your claim, they quickly move to the next client on the list. They may also be reluctant or take long to revisit your claim.

If you don’t have any joy with an insurance adjuster, speak to your insurance company. If you feel your insurance estimate is too low, your insurer might be willing to appoint a new insurance adjuster to look at your claim.

Ask your insurance company to provide you with reasons for the low estimate and a breakdown of their calculations.

Get Quotes From Contractors

Get multiple quotes (at least three) from contractors to support your claim that the home insurance adjuster’s estimate is too low. Ask the contractors to provide you with a free quote and break down their calculation per cost item.

For example, an insurance adjuster might forget to include a self-leveling screed for flooring in their estimate or deem it unnecessary. However, flooring contractors might feel self-leveling screed is necessary to give your flooring a smooth, level appearance.

Staying with our flooring example, ask your insurance company how much waste is included in their estimate. Insurance claims estimating software, such as Xactimate, allow for waste. But a flooring contractor will have a better idea than an insurance adjuster of the percentage waste.

Get Professional Help

If you can’t reach an agreement with a home insurance adjuster, you have a couple of options, namely:

File a Complaint With Your State’s Department of Insurance

Filing a complaint with your state’s Department of Insurance might help resolve a stalemate but is often not effective. It should typically be considered as a last resort.

For example, filing a complaint with the California Department of Insurance is straightforward. You can complete and submit a Request for Assistance form or call them at 1-800-927-4357 for assistance.

They investigate complaints against insurance companies and can audit claim files to determine compliance with legal requirements. When you file a formal complaint, they will approach your insurer to get their side of the story. However, they will typically not adjudicate (act as a judge) your case.

Hire an Insurance Appraiser

If your homeowners insurance policy contains an appraisal clause, both you and your insurer can hire an insurance appraiser – a party who has no interest or stake in the outcome.

The two appraisers will choose an umpire. Should the two appraisers be unable to agree on the amount of loss, they will submit their respective reports to the umpire. A decision agreed to by any two of the three parties (the two appraisers and the umpire) will set the amount of loss.

Hiring an insurance appraiser might help resolve a dispute. However, an insurance appraiser will not fight for you and can only assist you with the amount of a loss, not coverage issues.

Note: Many insurance policies do not contain an appraisal clause. However, in California appraisal provisions are provided for under Insurance Code §2071(a).

Hire an Attorney

Hiring an attorney is an expensive and often unnecessary option.

Attorneys typically charge a contingency fee of 33% to 40% of the settlement amount. It’s significantly higher than you might expect to be charged by a public adjuster. So before hiring an attorney, first discuss your case with a reputable public adjuster.

For more information, refer to our article on attorneys versus public adjusters.

Hiring an attorney might be your best bet if the only way forward is to pursue litigation.

Hire a Public Adjuster (Best Option)

A public adjuster looks after YOUR best interests, not the best interests of your insurance company.

The advantages of hiring a public adjuster might include:

  • Makes the Claim Process Less Stressful
  • Helps You Fight a Bad Settlement Offer
  • Saves You Time
  • Cheaper Than Hiring an Attorney
  • Negotiates on Your Behalf
  • Faster Claim Resolution
  • Likelihood of a Higher Settlement Offer

That's a Wrap

If you receive a home insurance adjuster estimate that’s too low, don’t panic. It happens to many homeowners. The tips and advice in this article might help you secure a higher estimate.

For large or complex claims, we recommend you hire a licensed public adjuster who can look after your best interests. A public adjuster can help you overcome the challenges of managing your claim and can assist you in getting the best possible settlement offer you’re entitled to.

Avner Gat, Inc. has 17+ years of experience as a public adjuster in Los Angeles, covering Southern California. We protect homeowners from the games and fine print that insurance companies are known for.

Call us at (818) 917-5256 to find out how we can assist you.

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