Out upstairs neighbor’s hot water heater blew up and ruined our furnace and caused other damage. The furnace replacement alone was $6800. The mitigation was several thousand more. Their insurance company offered about $5800. What should I do? Is suing my neighbor in small claims court the best option? It seems like even if their insurance offers us more it won’t be enough to cover all of the expenses we incurred. It’s pretty disappointing, their property damaged our property, why should it cost us anything to have it fixed? Doesn’t make any sense to me and I would love some insight. Thank you
Neighbor’s insurance just offered far less than the damages incurred, what should I do?
byu/today_sponje inInsurance
Posted by today_sponje
8 Comments
Why did they only offer that much? I am guessing it could be because they do not owe to give you a new furnace and probably took depreciation, but that is just a guess.
Send them documentation showing your expenses? Or use your own insurance? Suing is an option but not the first one I’d go to.
I give up.. where is the difference?
You also need to realize that they owe you for replacement cost less depreciation. That is, what they pay for is the depreciated value of items. Why should this cost you money? Because you are getting something better then what you had.
Use your insurance. You will usually get full replacement cost instead of a depreciated amount. You have to show the work is completed.
Don’t listen to the others. Depreciation is typically factored into something like this for first party claims. 3rd party claims are a whole other beast – in most jurisdictions they will be legally required to make you whole. Depreciation for the 3rd party claims are only defensible in instances where it is reasonable for you to replace your depreciated unit with another depreciated unit. One example is cars. You can replace a used car with another used car. It is not reasonable to expect somebody to replace a used furnace with another used furnace.
Third party insurance will always lowball you. You have to itemize and demand and be willing to take them to court or go through your own insurance. But I would not settle for a dollar less than what you had to pay to replace and mitigate the issues
you didn’t say how your neighbor was negligent, which would be necessary for you to prevail in small claims court on a personal lawsuit.
My guess is they are calculating the value of your loss rather than the replacement cost. So, for example, if you had a 10 year old furnace with an expected life of 20 years you get half the cost of a new one since that’s what you lost. I’m not saying that’s right, but that’s probably their logic.
Appreciate all the responses, it’s a hard thing to navigate when you haven’t been through this before so any advice is appreciated