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The proper documents such as: Public Adjuster Contract, Letter of Engagement and Disclosure have to be filled out. Only the Public Adjuster has the authority to represent policyholders in a claim process and meet with insurance adjusters on site during home inspections
Payment Determination: Replacement Cost Value, Actual Cash Value vs. Depreciation:
Providing that you have a Replacement Cost Value policy, your payment is based on the following formula:
(RCV) Replacement Cost Value = (ACV) Actual Cash Value + Depreciation.
The following example does not account for deductibles for calculations clarity:
Let us assume that before a loss a kitchen has just been remodeled, everything is brand new and the total cost of remodeling was $10,000. Correlation between ACV and Depreciation is close to 100% - 0% because everything is new.
With every yearthe kitchen (appliances, materials, etc) depreciates by a certain amount due to age.Therefore, after some time of use, ACV to Depreciation ratio is 95% to 5%.Assuming that the kitchen is 15 years old, the typical ACV to Depreciation ratio is 60% to 40%(the older the property, the more Actual Cash value decreases and Depreciation increases).
The payment schedule would look as follows: $6,000 in ACV Check and $4,000 Depreciation.
After the negotiation process, the settlement is completed and the policyholder receives payment as follows:
- Actual Cash Value Check (ACV). Typically, it is about 50%-65% of the total amount
- Supplemental Check/s (should some additional items need to be addressed during restoration)
- Depreciation Check (final payment after restoration work is completed)
Every check includes the following parties as a payee:
-Policyholder-Mortgage/s (if any)-Public Adjuster Firm
In order to deposit a check all parties have to endorse it. Additionally, some mortgages may hold each check and release the funds partially as restoration work progresses.
At this point customer shave two options:
-Pay Commission to Progressive Adjustments and hire their own contractor to do the restoration work.
- Use a preferred contractor recommended by Progressive Adjustments. This way the commission is waived and all the funds go towards restoration. Progressive Adjustments get paid by the contractor in the form of a referral fee.
- Using a recommended contractor has several advantages. We have great resources of licensed specialists in every trade needed during construction processes (Plumbing, Electrical, Roofing, etc), who:
-guarantee to use high quality materials and professional workmanship -are licensed, insured and bonded contractors who have served Chicago's homeowners since 1995
-take care of all permits, city inspections and make sure everything is done with accordance to local building regulations
-provide the necessary paperwork required by your insurer and mortgage companies for reimbursement
-save you time by dealing with mortgage companies and putting our own money upfront to complete restorations