Settling with an insurance company on restoration costs took 20 months longer than rebuilding the home.

August 31, 2003


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Jim Henderson's summer of 2000 getaway was a lot shorter than he had planned. No sooner had he pulled into his parents' driveway in Maryland than he was back in the car racing home to Levittown, Pa., where his house had just burned to a crisp.

He, his wife, four daughters and two cats wouldn't spend another night in their house for about 22 months.

Reconstructing the house took only four months. The rest of the time was spent in an eddy of price negotiation and restoration planning debate that had Henderson and contractor Len Scannapieco of Estate Homes in Washington Crossing, Pa., spinning.


Estate Homes replaced all of the old siding. The insurance company required contractor Len Scannapieco to retain undamaged roofing shingles at the back of the house, but the new shingles on the front match closely. When the standard-size, pre-hung door arrived, Scannapieco discovered it was 4 inches too high for the old, 6-foot, 6-inch front door opening, so he reframed the opening. Siding: CertainTeed. Roofing: GAF. Door: Sellmore. After photography ¬ Randl Bye

Not long before the fire, the Hendersons had added to the house, a Levittown classic built in 1954. It was the biggest on the block, with seven bedrooms and three baths. The Hendersons' Nationwide home insurance was a standard replacement value policy. When updating the policy after the addition was completed, Nationwide had evaluated the 3,500-square-foot house and contents at $185,000.

After the fire, a Nationwide adjustor came to the house. "He was very nice at the outset," Henderson says. "He said, 'We'll do everything we can to help you.'" Still, Henderson decided to hire a public adjustor, Jerry Berkowitz of Young Adjustment Co. in Blue Bell, Pa., to represent his interests during the restoration process. A public adjustor's fee is hefty - 10% of the insurance settlement - but in this case it was a good investment.

Miles apart

The insurance company adjustor offered $92,000 to cover restoration. Berkowitz commissioned a builder to estimate the restoration, and his estimate was $245,000.

The next step was reappraisal in hopes of closing the distance. While the insurance company revisited its appraisal, Henderson paid Scannapieco $500 to act as appraiser on his behalf. Scannapieco and Henderson were friends from church, and Scannapieco recently had restored another friend's fire-damaged house. "I built the estimate line by line, item by item, just as it would be built," Scannapieco says. His estimate, $238,000 for a raised-roof design (Henderson requested this modification with the understanding he would pay for it), was still distant from Nationwide's revised $130,000 figure.

By now it was May 2001. "The town inspectors were breathing down their necks," Scannapieco says. Besides, the insurance company had been paying $3,300 in monthly rent for the Hendersons' temporary home in a nearby town. The public adjustor and the insurance company did some "arm wrestling to balance items off to reduce the differences," explains Scannapieco. The process took weeks and still failed to close the dollar gap.

Finally, in September 2001, an umpire, a third appraiser chosen by both original appraisers, rendered a binding decision of $221,000. Henderson then got construction estimates from Scannapieco and two other builders. One of the other contractors had a large backlog of jobs, but the second was available and presented an estimate $10,000 less than Scannapieco's. Nevertheless, because he knew Scannapieco and had worked well with him during the appraisal phase, Henderson chose Estate Homes.

"Since Henderson was paying for raising the roof, I was told to proceed with that portion of the job," says Scannapieco. He stripped some of the roof shingles but had to stop when the insurance company objected to the raised-roof plan, insisting the house be restored with no changes. Henderson told Scannapieco, "I can't take it. Rebuild the house exactly as it was."

In October, Scannapieco hired an architect to develop construction plans. The architect was confounded, too. Faced with putting the house back "the way it was" and designing it to meet current code, he said he could not produce plans to budget.

Judgment calls

The vinyl flooring had melted onto the concrete, so the demolition contractor couldn't remove it. Scannapieco had to chip it off and then patch the concrete. A post was needed at the end of the kitchen counter to support a second floor joist between the original structure and the addition the Hendersons had built. Mrs. Henderson disliked the post, so Scannapieco replaced the joist with a glulam beam.

A second architect developed plans, delivering them Jan. 1, 2002. He drew the pre-existing house, leaving code violations up to Scannapieco to address with the inspector. Henderson signed the construction contract Feb. 5, almost 18 months after the fire.

"Shortly after work proceeded," says Scannapieco, "I received word that the insurance company would monitor and examine every item and detail, and if they found any deviations whatsoever from the intent to rebuild the house exactly as it was, they would file a claim to dismantle the arbitrated settlement."

Henderson still wanted to remove a wall between two first-floor bedrooms to make one, larger bedroom. This change would cost about the same as replacement closets, so the insurance company agreed to let Estate Homes proceed with it. The work entailed installing a supporting overhead beam where the partition had been. Henderson paid for a skylight, adding patio doors to the space and turning the powder room into a master bath.

The building inspector required an additional vent stack for the first-floor bathroom. Estate Homes had to "bust concrete, dig down and install a new vent line," Scannapieco says. The inspector wanted fire-stopping in all walls, even where it had not been before. The window in one daughter's second-floor bedroom was too small and high to meet code for egress. The building inspector "said he could live with that," says Scannapieco, because the window was above a carport roof that could support a person. But Henderson was sure his daughter would not climb out onto the carport roof, and Scannapieco also thought the window should be moved. To keep Henderson happy, he framed a larger opening in another place and picked up the tab for the enlarged window.


Because the staircase was charred but intact, the insurance company wanted Scannapieco to restore it. He refused, considering it potentially unsafe, and the inspector agreed. Code requirements on tread size and riser height meant the new stair design required reframing the floor over the staircase to provide adequate headroom.

That window wasn't the only item for which Scannapieco paid. When faced with choices that might affect customer satisfaction, he took the service-oriented approach. By job's end, he had more than $4,000 in items he did not bill to the client. They ranged from job-site protection (repapering the roof during the debate over raising the rafters) to structural modifications (adding insulation under part of the first floor, straightening the study wall, adding a header over the bow window) to aesthetic issues (trimming the rafter ends so the new gutters would lay flat against the roof overhang).

When he exposed the framing, Scannapieco saw that one roof section was resting on another; the connection was unsound. "I could not see ignoring" the problem, he says, so he reinforced the supporting ledger with a larger header. When Estate Homes removed the shallow, 1950s-style bedroom closets, Scannapieco reframed them as deeper spaces "to make them more user-friendly."

By June 2002, the job was complete, and the Hendersons moved in at last. Once started, production had moved quickly. But the starts and stops leading up to production were hard on Scannapieco. "I continued to assure the owner we'd start as soon as we could," he says, "and that kept me from pursuing other opportunities, especially long-duration jobs." This meant lost opportunities but a promise to Henderson fulfilled.

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