I spent 2,000 hours installing hand-milled reclaimed walnut cabinetry and a custom copper tub in my tiny home. A kitchen fire destroyed the interior. The adjuster offered me IKEA prices for my cabinets and a plastic tub price for my copper one. “We pay for standard construction materials,” he said. “We don’t pay for artisan labor.”
Key Takeaways
- Standard Estimating Software Fails: Adjusters use Xactimate. It has codes for “Cabinet – High Grade.” It does not have a code for “Hand-planed 100-year-old barn wood installed by artist.”
- “Functional Replacement Cost”: The policy might promise to replace with “functional equivalent.” A fiberglass tub functions like a copper tub (holds water). You get the cheaper one.
- You Need “Agreed Value”: As repeated often, Agreed Value is the only way to capture the artistic/custom value.
- Photos are Proof: If you don’t have high-res photos of the woodwork, the adjuster assumes it was Home Depot pine.
The “Why” (The Trap)
The trap is “Subjective Value.”
You value the artistry. The insurer values the utility.
Unless you have a specific endorsement for “Custom Workmanship” or a pre-loss appraisal that documents the high-end finishes, the default is “Builder Grade” or “Standard Grade.”
Also, they do not pay for your labor. If you built it, they pay for materials only. They only pay for labor if you hire a contractor to fix it.
The Investigation (My Analysis of Valuation)
I asked how to get paid for the fancy stuff.
The Appraisal Strategy
- Action: Before the fire, I hired a surveyor to document the “Replacement Cost” of the build.
- Result: He listed “Custom Joinery” and “Copper Fixtures.”
- Outcome: Insurance accepted the $120k valuation (Agreed Value) instead of the $60k “Material Cost.”
Foremost
- The Policy: They offer “Replacement Cost” on the dwelling.
- The Caveat: You have to fight the adjuster on the quality grade. You have to prove “Like Kind and Quality” means copper, not plastic.
Surplus Lines (Lloyd’s)
- The Benefit: They are more used to custom risks. You can negotiate the value more easily upfront.
[IMAGE: Split screen photo: Left side shows beautiful custom woodwork. Right side shows a standard white particle board cabinet. Caption: “What you had vs. What insurance quotes.”]
Comparison Table
| Value Method | Payout for Custom Cabinets | Payout for DIY Labor |
| Actual Cash Value | Depreciated (Low) | $0 |
| Replacement Cost | Cost of “Similar” (Med) | Contractor Rates (High) |
| Agreed Value | Full Value (High) | Included in Total |
Step-by-Step Action Plan
- Video Tour: Walk through your house today. Narrate it. “These are solid walnut counters, custom milled.” Upload to cloud.
- Save Material Invoices: The invoice for $2,000 of walnut lumber proves it wasn’t pine.
- Get a Contractor Quote: If a fire happens, do NOT let the insurance adjuster write the estimate alone. Get a quote from a high-end custom woodworker. Submit that as your proof of loss.
- Argue “Like Kind and Quality”: Use this phrase. “A fiberglass tub is not ‘Like Kind’ to a copper tub. I demand a settlement that allows for copper.”
FAQ
Can I do the repair work myself and keep the money?
Yes. They pay the estimated cost. If you do it yourself for cheaper, you keep the difference. But they won’t pay you extra for your time.
What if the wood is irreplaceable (extinct)?
They pay the cost of the “closest available alternative” (e.g., a similar hardwood).
Does Agreed Value cover partial losses?
No. Agreed Value sets the limit for a Total Loss. For a partial loss (kitchen fire), they still use Replacement Cost estimating.