How long can a homeowner’s insurance company hold out before actually agreeing to the cost of repairs?

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How long can a homeowner’s insurance company hold out before actually agreeing to the cost of repairs?

My insurance company has been messing around for the last 4 months regarding storm damage repairs. It took them a month to come out to check the damages. After they finally came out, they sent an estimate of $1,100. I had contractors come to give me estimates, and the estimates all range around $3,500. I sent the estimates into the insurance company and they tell me that the estimates are too high. I have black mold growing all through my ceiling now, and fear that my family will become ill as including my 6 year-old son.

Asked on July 12, 2011 under Real Estate Law, Pennsylvania

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

There is no defined time frame or deadline. However, insurers are bound a covenant (or duty) of good faith and fair dealing in executing or performing their obligations under their policies. This means pretty much what it sound like--they have to be fair in terms of  how much they pay and when they pay it. That does not mean they must accept the homeowner's estimate or requested amount at face value, if the homeowner, for example, has received higher-than-normal quotes; but it also means that they can't arbitrarily offer only a low-ball amount if there's not good evidence or back-up for it and they can't also tie up or delay payment indefinitely. To enforce the covenant, however, you may need to take legal action (i.e. sue), or at least make clear to the insurer that you believe they are not honoring their responsibilities and are prepared to take action. Before doing anything, please consult with an attorney, who can evaluate your situation in all its detail, and advise you as to what would be a reasonable settlement, what it might cost to obtain it, and then help you get it. Good luck.

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

There is no defined time frame or deadline. However, insurers are bound a covenant (or duty) of good faith and fair dealing in executing or performing their obligations under their policies. This means pretty much what it sound like--they have to be fair in terms of  how much they pay and when they pay it. That does not mean they must accept the homeowner's estimate or requested amount at face value, if the homeowner, for example, has received higher-than-normal quotes; but it also means that they can't arbitrarily offer only a low-ball amount if there's not good evidence or back-up for it and they can't also tie up or delay payment indefinitely. To enforce the covenant, however, you may need to take legal action (i.e. sue), or at least make clear to the insurer that you believe they are not honoring their responsibilities and are prepared to take action. Before doing anything, please consult with an attorney, who can evaluate your situation in all its detail, and advise you as to what would be a reasonable settlement, what it might cost to obtain it, and then help you get it. Good luck.


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