I was consulting with a client who had some serious water damage in a very, very nice home. A pipe burst in one of her walk-in closets in the master suite, flooding that closet, the master bedroom, the other walk-in closet, the master bath, a hall, and a large den off the master suite. All total, about 2000 square feet of area was affected. Most of the damage was to a nice parquet hardwood floor that covered all this area except the bath, which was tile.
Her home was insured with Allstate Insurance. She called Allstate, made a claim, and an adjuster came out to look at it. He assured her that she had coverage in place and he would get everything worked out. What she didn't know was that "worked out" meant that a flooring company of Allstate's choosing would replace her hardwood floors. It just so happens that Allstate has a contract with CCA Global, a very large company that owns other companies, including Flooring America and Carpet One. The adjuster sent Carpet One out to look at the floors, and then he made the Carpet One estimate for the hardwood replacement a part of his estimate for the repairs. He even went so far as to say that while the client was free to hire anyone she wished for the hardwood replacement, he wouldn't pay any more than the Carpet One estimate.
Well, you might say, what's wrong with that? Carpet One is a national franchise and our local Carpet One franchise happens to be Burgess Carpet, a Macon icon in the flooring business with a good reputation. So why not reach an agreement with them to do the floors? The problem here was two-fold; one, she wanted a general contractor to do all the work and stand behind it. She didn't want to have to keep up with and pay multiple contractors. Two, when she signed up for Allstate, she didn't sign up for CCA Global. No one told her that buying Allstate insurance meant that she would lose the freedom to choose her own contractor if her home became damaged. To make matters worse, the agreement with CCA Global apparently calls for reduced pricing that they don't give to the general public, and in exchange they get to do all the flooring work for Allstate. That means that while she is technically free to choose anyone to install her floors, in reality she can't get anyone else to do them for the pricing that CCA Global has apparently agreed to with Allstate.
The insurance policy says that the insurance company will pay the "reasonable cost" to "repair or replace" any covered items that become damaged. A deep discount given in exchange for a volume of work does not establish the reasonable cost for that work in an area. Look at it this way: Allstate surely does not pay the same price for their company cars that you and I pay at the dealership. That's because they are buying a large quantity of cars. Does that discounted rate establish the reasonable cost for that car if you go to buy just one? Of course not!
When you choose your insurance company, choose wisely. My client found out that those "good hands" can wear boxing gloves!
