In the recent case of Prepared Insurance Company v. Gal, the plaintiff appealed a lower court’s decision regarding a real estate contract and the liabilities associated with it. The insured was a homeowner who discovered that his kitchen sink leaked water, which caused damage to his custom-made cabinets. The insured filed a claim with the insurance company, which sent an adjuster to assess the damage. The report concluded that the cost to fix the cabinets would be $8,653.47, but this estimate did not include the general contractor’s overhead and profit.
A cabinetry expert also assessed the damage at the request of the insurer. He concluded that it would cost roughly $2,500 to fix the damage or almost $20,000 to replace the cabinets. This cost estimate did not include the price of an electrician or plumber, who would both be necessary to finish the job. It also omitted the estimated cost for hiring a general contractor.
The insurance company tendered payment for $6,153.47 to the insured, reflecting an $8,653.27 cost less the insured’s deductible. The insured sued, claiming the insurer undervalued the damage because it did not pay for the replacement of the cabinets or the cost of a general contractor. In the meantime, the insured filed another claim for damage to the cabinets caused by a leaking air conditioner unit. The insured had a general contractor inspect the loss. This expert testified that the replacement of the cabinets would cost $107,902.50, due to their unique nature. This estimate failed to apportion the damage between the first leak and the second leak.