I have an old mobile home on a commercial lot awaiting a development project. It’s rented to a residential tenant who is living there. I suffered a $5000 loss to the property because of vandalism. The adjuster is now saying that the property value is nearly 100k and my coinsurance provision must make him reduce the amount of the claim by 77% because of it. I don’t think I am underinsured on the value of the structure, but they are using the total property value to reduce the claim to nothing. What recourse do I have to contest the overall value of the property?

Need more information. How old is the policy? What is the deductible? What is ‘coinsurance?’ Is this an add-on to your basic liability policy? What exactly was insured? Was the mobile home vandalized, or property or something else on the property?

Glad I’m not the only one that hasn’t heard of this.

Nine months ago I took out a standard liability homeowners policy (for a rental). The agent goes and looks at it and says “it looks kind of rough. What do you think, maybe $20k?” I agreed that the value of the structure couldn’t be more than that number, so he wrote me a policy for $20k. This is a several acre commercial parcel on a busy intersection though. So a few weeks ago the tenant calls and says someone vandalized the ac unit. It’s bent in and inoperative. The tenant filed a police report. So I make a claim. Call and get a quote and it comes in at $5100. It’s a heat pump and they need to upgrade the air handler.

So the adjuster comes and looks. He says it appears to be vandalized, but it’s an old unit that needs to depreciated, so lowers it to $3300 or so. Then he says the property value is $86k so the coinsurance clause requires him to adjust the multiply the depreciated amount by .23, then subtract the $1000 deductible. The net claim comes to negative $300.

I don’t see it. It’s not the nicest place in the world, but the tenant is happy there and they are keeping up on mowing and keeping the power on. This is almost half a years rent though to fix this thing. The trailer will eventually be torn down, I don’t even think it’s worth moving. This is what I bought insurance for though, I don’t want to be on the hook for big ticket items that might pop up. This coinsurance thing appears to be a way to get out of paying for something that happens, because the can pick any arbitrary value they want and deduct the ratio from my claim. I have to wonder what would happen if there were a total loss, would they just pay out $5000?

May I cut to the chase here?

Refuse everything the adjuster says. Be irrational. Refuse the depreciation, refuse the deductible, and refuse the inclusive valuation, which is so bogus, I can’t breathe. Talk about irrational. Refuse to accept anything that lowers the settlement amount of $5,100.

Or, be slow to accept anything less than 5,100…

Nothing has changed since the policy was written 9 months ago. That’s when you and the representative (at the salesman’s suggestion (hopefully recorded)) agreed that the improvements being insured were valued at $20,000, which covered the property in it’s entirety. Period. End of discussion.

Never mind the arbitrary depreciation quote on the compressor. A/C units can operate indefinitely if they’re maintained properly.

One of my properties has a compressor that’s still going strong after 52-years. They’re exactly like refrigerators. They just work and work.

If this were me, I would literally be a pain in their neck until I got what I wanted. I would threaten small claims; negative internet reviews with names, dates, and a description of the scam they’ve tried to pull, and remind them why I bought their insurance in the first place. And it wasn’t to be presented with bogus, negative, settlement statements.

Also, if this were me, I would have a figure of $4,100, that I wouldn’t budge from. That reflects no arbitrary depreciation whatsoever, and no inclusive valuation non-sense, but acknowledges the $1,000 deductible.

Of course, as soon as I settled, I would adjust the policy accordingly, so that the next A/C compressor the renter busts is covered in full.

The adjusters work on guidelines, not absolutes. They have leeway, and most want to reduce friction with both the customer and their reputation as a ‘closer’ with their management, as much as possible (usually), if not settle quickly. So, take advantage of these conditions, and demand you receive what you deserve out of this claim, or you’ll string this out until Moses comes back.


Did the $5,100 replacement estimate include delivery, set up and installation, etc.

I’ve used this argument successfully to get more settlement money from an insurance company:

“My time is worth something. I’ve got to spend hours bidding, supervising, monitoring and traveling to get this situation resolved. I’m not willing to settle only for the cost of the equipment, but my time screwing with this situation. Not to mention the time I’m spending, so far unsuccessfully, with you, to get this settled. If we can settle this today, I’ll accept “x” as full payment.”

$5100 was complete, and likely the high bid.

I realized I forgot to update all of you. The insurance company flat out refused to do anything. I threw a fit with the agent and he finally wrote me a check from his own company for $2000. I proceeded to get other bids for the repair and was able to make the repair on the amount he gave me.

I still feel confident that I would’ve gotten somewhere with the insurance company had I pushed it further, but this seemed to be the most palatable solution to everybody involved.