{"id":896489,"date":"2019-09-25T14:08:14","date_gmt":"2019-09-25T20:08:14","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=896489"},"modified":"2019-09-25T14:09:35","modified_gmt":"2019-09-25T20:09:35","slug":"insurance-regs-prohibit-insurer-using-low-insurance-estimate","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/insurance-regs-prohibit-insurer-using-low-insurance-estimate\/","title":{"rendered":"Insurance Regulations Prohibit an Insurer From Just Standing By Its Repair Estimate When An Insured\u2019s Estimate Demonstrates the Cost to Repair Is More \u2013 Another California Practice Tip"},"content":{"rendered":"\n

Victor Jacobellis | Property Insurance Coverage Law Blog<\/a> | September 21, 2019<\/p>\n\n\n\n

In California, the moment an insured obtains a repair estimate that exceeds the insurer\u2019s estimate, the insurer must either pay the difference or adjust its original estimate. This rule is set forth in the\u00a0Fair Claims Settlement Practices Act,<\/em>\u00a010 Cal. Code Regs. \u00a7 2695.9(d). Generally, whenever anyone makes an insurance claim, the insurance company will create a scope of work to repair the damaged property and an estimate of what that cost to repair is. The insurer\u2019s estimate does not atomically mean that is the amount of the claim. An insured has the right to get his or her own estimate and the insurer is required to consider that estimate.<\/p>\n\n\n\n

The Fair Claims Settlement Practices Act<\/em> states:<\/p>\n\n\n\n

If the claimant subsequently contends, based upon a written estimate which he or she obtains, that necessary repairs will exceed the written estimate prepared by or for the insurer, the insurer shall:<\/p>

(1) pay the difference between its written estimate and a higher estimate obtained by the claimant; or,<\/p>

(2) if requested by the claimant, promptly provide the claimant with the name of at least one repair individual or entity that will make the repairs for the amount of the written estimate. The insurer shall cause the damaged property to be restored to no less than its condition prior to the loss and which will allow for repairs in a manner which meets accepted trade standards for good and workmanlike construction at no additional cost to the claimant other than as stated in the policy or as otherwise allowed by these regulations; or,<\/p>

(3) reasonably adjust any written estimates prepared by the repair individual or entity of the insured\u2019s choice and provide a copy of the adjusted estimate to the claimant.<\/p><\/blockquote>\n\n\n\n

The insurer has three options: (1) pay the insured\u2019s estimate; (2) negotiate with the insured to rectify the insurer\u2019s and the insured\u2019s estimate or (3) provide a vendor that will make repairs for the amount of the insurer\u2019s estimate. It is important to note that if the insurer recommends a vendor to perform the repairs, it essentially must guaranty that vendor\u2019s work. Thus, the insurance company will undertake an obligation above and beyond its original policy duties.<\/p>\n\n\n\n

Whenever an insurer prepares its own estimate there are additional rules imposed on the insurer:<\/p>\n\n\n\n