State Farm is back at again, this time in Iowa in 2017 as they go up against a company named 33 Carpenters.
A bit about the situation: homeowner had an issue that needed repairs, so they made a claim. The insurance company sent out a representative to assess the damage. After State Farm made an estimate, the homeowner then hired a roofing company, 33 Carpenters, to come in and fix said damage.
Contention arose when the contractor ran into costs that ran over-budget. Naturally, the contractor looked to State Farm to cover the extra costs. When State Farm refused, the contractor then had no choice but to sue State Farm, otherwise they would lose money on the project.
In court, 33 Carpenters claimed the project cost more than State Farm initially estimated it at. No real surprise there. Major insurance companies are notorious for under-estimating a claim. When 33 Carpenters brought this issue up in court, State Farm argued that 33 Carpenters was not a licensed public claims adjuster.
This fueled a discussion regarding whether auto body shops can be considered licensed public claims adjusters, since they assess damages and charges accordingly.
The decision: auto body shops were not considered public claims adjusters.
It doesn’t take a genius to estimate costs. Experienced contractors don’t need licensing to assess how much time and labor a particular project costs. The court agreed with this sentiment.
State Farm later argued that 33 Contractors “pretty egregiously” violated their contract when they approached State Farm about more money, but what drew the ire of the panel of judges was when the judges asked State Farm’s attorney about the claim.
One judge said that if the homeowner was paid an amount that was less than acceptable to complete the job, they would turn around and sue State Farm. It would become an issue of who ultimately goes after State Farm, because either way, State Farm’s estimate was off.
Go to 32:03 to see State Farm’s attorney left speechless after being told it doesn’t matter which party gets shorted on compensation, they’re still going after the insurance company.
State Farm countered by listing a number of expenses they deemed excessive. This included a portable toilet and person to watch the roof for security, a list the judge ultimately denied.
This case was a win for small contractors who usually get intimidated by State Farm into not disputing claims. But challenging the giants in insurance is often one way to make sure dicey situations find justice.
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