The purpose of this website is to document my water damage claim stemming from a refrigerator installation performed by Costco on 12-2-2024 so that others in the future will understand what a claim process is like, what to expect, and to be better prepared to navigate claims.
This particular claim involves displacing my wife, kids, and myself during the holidays as our home has been declared unlivable by mitigation specialists. While I'm sure this magnitude of loss is atypical, the goal is to give you a generalized idea as I previously went though a water loss and had no blueprint for how to deal with it. This is my blueprint for you.
On 12-2-2024 we had a KitchenAid refrigerator delivered and installed by Costco. I purchased a refrigerator from Costco.com that included delivery. Costco sent out an uninsured contractor to my house to install that caused major damage. The rest is being written.
Environmental Company Reports and Remediation Protocol - $875
Cleaners
Moving Company to remove and store belongings - $10,090.06
Mitigation Company - $10,477.53 (phase 1 only)
Alternative Living Expense - $51,589.78 (12/2 - 2/28)
Packing Supplies - $123.82
Piano Transportation - $426.25
Piano Storage (December) - $75
Piano Storage (January) - $75
Estimate fees from contractors - $246.40
Flooring and deposit to install $17,440
(Updated 1/21/2025)
Today I had a fridge delivered and installed by Costco. I purchased it online two weeks ago and scheduled delivery for today. After the installers were finished I followed them out the door and went to work. Later that day my daughter calls me as she gets home from school and says the house is flooding.
My wife and I rushed home from work and sure enough, my house was covered in 1.5" - 2" of water. My wife was in tears and I was in disbelief.
We called pros and began removing water from the house. It was quite a job. The pros arrived two hours later and started doing their thing and letting me know initially what the damage looked like.
I filed a claim with Costco. As a shot in the dark I sent an email to the CEO of Costco, and to my surprise he replied back within an hour and copied several executives. Here's to hoping this gets handled correctly.
Today was an active day. We had mitigation teams back out. Surprisingly my email to the CEO of Costco did in fact cause an early phone call from someone from Costco who wanted to come out first thing this morning and take a look at the damage. He did come out and took a look around and agreed that they would have to take responsibility. He expressed skepticism at my estimate of a $200,000 loss but after seeing the damage he concluded I am in the ballpark. I later learned that he in fact worked for RXO - I'm assuming a company Costco hires to handle logistics and installs. I am unsure of their working relationship with each other so I was a little more disheartened that Costco didn't send someone out from Costco even as a goodwill gesture considering the magnitude of my loss.
An environmental group came out to determine if there was mold growth and the extent of water damage. I learned that they did find mold, the water was now classified as contaminated, and we were going to have to move out of the hosue. They formed a remediation protocol that must be followed by contractors to deem the house livable again.
The rest of the day was filled with confusion as contractors buzzed around salvaging what they could. I had a call from Aaron with Gallagher-Bassett, a company that Costco contracts with on loss claims. He explained to me that he was an adjuster, but not the adjuster that makes any decisions, and that he was there to advocate for me if someone from RXO isn't giving me the answers I want. Something to that jist - I really didn't understand what his role was when it's said and done. He sent a followup email that said he is a Resolution Manager and his email stated that Costco is self-insured. Great - them being self insured means that with Costco's legendary customer service that I should not have to come out of pocket much during the process and reasonable and timely payout schedules will follow.
I later get an email from someone from my local RXO office that really put a sour taste in my mouth and ruined the hopes I had received from Aaron. Paul emailed me and copied the installation company that they hired asking for documentation. While Paul with RXO said that his job was to ensure prompt handling of the claim and satisfactory resolution for all parties involved, he did tell me that I would have to work with the third party installer and their insurance to handle the claim. That's when I knew this was going to be an unpleasant process - it appears Costco is removing themselves from the insurance process and I am going to have to deal with whatever insurance the sub-subcontractor purchased that installed my fridge - probably the cheapest that has no interesting in providing a prompt resolution in the matter.
I'm not feeling optimistic at bedtime.
Today we really started to see the house fall apart. Parts of the house were being quarantined and our belongings were packed up to be hauled off to a warehouse tomorrow. Further destruction of the house took place to discover the extent of damages. However it was a cooling off day as we had a day to process everything.
I expected to hear something from someone at Costco today, and I really didn't. The CEO, Ron Vachris, did reach out to me to let me know his team was keeping a close eye on the situation. While appreciated I get the feeling they just want to make sure that third party insurance doesn't screw me over.
After consideration of the amount of my personal time it's going to take to resolve this claim, I am considering hiring a Public Adjuster. I thought I wouldn't need one because it's Costco that I hired to do the install and surely Costco would take care of the claim swtifly and without headache, but after research into it I believe that it will be a long drawn out process that I have to fund until the claim is resolved. Hiring a public adjuster takes that burden off of me, but at a great cost in fees. It's unlikely Costco would pay their fees, but then again they're not really entitled to my time for free either, right? We shall see.
Today I'm relearning that finding accommodations is going to again be difficult with very few choices. To keep our kids in the same school district and to get a house that will accept our pets we will cost me $487 per night with fees. This is what we had to do during the last flood. We don't live in an area with rentals, there are no hotels, and our choices are extremely limited. I'm grateful that there is this option. Unfortunately guess who comes out of pocket for this until somebody's insurance reimburses me? Me. The last claim with my own insurance policy I had to come out of pocket $36,000 for Alternative Living Expenses before I saw a penny reimbursed for that. This claim will be for a much longer stay so my fingers are crossed.
Realizing today that we will have to forego our prepaid vacation this weekend because we have to navigate this at such an early stage. Bummer.
Aaron from Gallagher-Basset called and told me that RXO was getting claim information together for him. Didn't hear back. Mitigation continues.
Crickets.
Stopped by the house to check out the progress. Drywall is gone. Carpets are gone. Hardwood flooring is gone. Mitigation will be divided into two stages and we're ending the end of stage one. Once we hear from an adjuster we'll proceed with step two which will be removing cabinetry in the kitchen, laundry room, living room, bathrooms, and tile flooring. We're more at peace with it today.
This blog now has 2440 visits. Way more than I would expect for such a short period of time.
Got a call from a claims examiner today with Sedgwick representing RXO. Turns out that Costco hires RXO to do installs, and RXO hires local subcontractors. Apparently my local subcontractor was uninsured so RXO and Costco are on the hook for the claim. It's a bit comical yet appalling that if you schedule an installation from Costco.com for an appliance you may get an uninsured contractor in your home.
Claims Examiner said they'd be sending out an independent adjuster (IA) to inspect the home. I look forward to that.
Received a call from a local adjuster who scheduled to come out 12-12.
Received a call from Brandon with RXO checking in on status. Later received an email from Paul with RXO stating they are working on covering ALE (Alternative Living Expenses). This was nice since I haven't asked for it yet.
Jake - an adjuster for Sedgwick came out today. Very nice guy. Will learn more over the next month.
Naturally some of my items are going to be depreciated. My cabinets and tile flooring, which are both less than 10 years old and both in excellent shape, and currently still in style, will be depreciated. This means that they are going to be valued less than what it costs to replace with new. For instance, if it costs me $100,000 to buy new they may say that my cabinets have depreciated $15,000, then they'll give me $85,000 and I have to come out of pocket for $15,000 just to get my cabinets built back to exactly the way they were 20 days ago. This is because this is a third party claim.
I do have the option of filing this with my homeowners insurance where I pay extra to get replacement cost value (RCV) so that I am fully reimbursed for how much it costs to replace my cabinets. Depending on how this claim plays out I may still use my own Homeowners Insurance and allow them to subrogate to RXO and Costco for their costs. Time will tell.
So far I am out of pocket $27,694.25 for cleaning, mitigation, moving and storage, and alternative living expenses. These are monies that I have already paid. Phase 2 of mitigation will likely be over $50k.
Still to come is removing the rest of the furniture, relocating and assessing piano for storage and damage, kitchen destruction, flooring removal, then build back. After getting estimates for rebuilding and getting a glimpse of mitigation costs and relocation costs, on top of spending $471 a day on AirBNB, I believe this will exceed my original estimates.
So far we've had 12,492 visitors to this site. I've had 5 people reach out via the form below - 4 going through something similar with a Costco appliance and one gentlemen who is negative towards this documentation. I'm am still surprised at the traffic of an 11 day old blog.
I conversed with Sedgwick's people today about any opposition to expenses on 6 items. I got no answer on 4, and was told that they would be sending out their own industrial hygienist for a second opinion for 2 of the other items. I was also told to stop work on everything until this hygienist comes out and we can all agree on a scope of work. Was told they would give the hygienist my number so that we could arrange for him to come out asap.
They are doing their due diligence and I will be patient for that.
I did not hear from the hygeniest so I reached out to him directly. He stated he was not given my info and therefore could not reach out to me. We scheduled him to come out tomorrow 12-18-24 at 9am.
🚩Today was the first whiff of bad faith that I received on this claim.
Hygienist came out and did his assessment. He arrived 16 days after the loss, after remediation has partially taken place and everything wiped and cleaned. He took samples of the areas that had already been cleaned to determine if there was mold spores (?). I can't quite figure out using common sense or info from other industry professionals what he was hoping to find by testing a cleaned area.
I received an email from Jake the adjuster stating that the hygienist stated that the loss was category 1 at this time pending testing, and stated that "your home is inhabitable at this point". I asked for further clarification and he said that he'd leave that up to the experts. Well, the experts that I hired stated it was not inhabitable during remediation and that it was a category 3 water loss and I have not received any other report stating otherwise. This was red flag #1.
After a few calls and a little research I found that the "Industrial Hygienist" sent by Sedgwick was in fact not a licensed Industrial Hygienist at all. Red flag # 2. I found this link to Florida Statutes. By Sedgwick and this particular "IH" representing himself as an Industrial Hygienist without actually holding that license violates statute and by statute "constitutes a deceptive and unfair trade practice.". Here is a link to his CV.
Let that sink in - A FL licensed insurance adjuster hired someone illegally posing as an Industrial Hygienist to inspect my home and contradict an actually licensed Certified Industrial Hygienist, and participated in deceptive and unfair trade practice. Now, let me clarify that I'm not saying that they did this on purpose and that they also could have been duped by their hire's claims, but being as they are licensed professionals in this state one would assume they would vet their hire's credentials before misleading me as to their credibility. They did not send an IH to my house as they stated they would, they sent someone with significantly lesser credentials to contradict the report of someone with higher credentials and qualifications. If this was intentional, shame on them. If it was accidental, it's an unacceptable oversight.
I am appalled that something like this happened, by pure oversight or by design. I filed a complaint with the DBPR (Department of Business and Professional Regulation) regarding the issue as there should be accountability. Will be following up with the Department of Financial Services tomorrow as well.
I am also appalled that the adjuster suggested that my home was habitable based off of this imposters phone conversation, without having a report, and directly contradicting the report of someone more qualified. They are willing to risk my family's safety to reduce the claim amount and it's all based upon deception.
I expected better.
It has been two weeks since I have heard anything at all from anyone about this claim. Not a word. I did not receive the report from their contractor that they sent out although they said it would be completed over 10 days ago.
I have spent the past two weeks paying for consultations and attempting to get the rebuild lined up to reduce the amount of time we are displaced.
After the fiasco two weeks ago mentioned above I have hired a public adjuster to handle this for me so I can concentrate on getting the repairs done in a timely manner. Judging by the fact I haven't heard from anyone at RXO, Costco, Sedwick, etc... it is clear to me that they have no issue stalling this project and leaving my family displaced. There is no urgency on their behalf.
To date I am out $36.234 of my own money to deal with this. I expect to spend an additional $120,000 of my own money in the next 3 weeks to finish remediation, move the rest of my items, and purchase flooring and cabinetry. Then I have to hire people to install everything. It's all on me and I think that if this is happening to you as well that you should expect it to be on all on you as well.
I wish I never bought that fridge from Costco.
Nothing new to report. I have not heard anything from Costco, RXO, or Sedgwick since 12-18-24. My PA has been in touch and we're gather info to send them a demand letter.
Phase 2 of demolition started this week. Most of my cabinets are gone and next week they remove the flooring. The cabinets had a lot of mold on them and when they remove the drywall behind the cabinets next week they expect there to be a lot of mold as well.
I spent about 25 hours this week getting quotes to repair the walls, trim, paint, tile, cabinets, etc... My wife and I spent about 15 hours going through personal property in the videos and photos that we took of the incident (most of the items were taken away for storage by a remediation company) to develop a list of personal property that was damaged. It was a lot.
So far to date I am out of pocket over $41k. The movers came and took more large items this week and I expect the bill to be another $5k. The remediation company has about 7 guys doing work 5 days a week for the next month and I expect that bill to be over $50k. We also have to reorder flooring and pay the deposit for the tile installer to come ($9k for flooring and another $12k for the 50% deposit on the work).
Scheduling drywall and tile installation for the first half of February. Kitchen cabinets will take 8-12 weeks to come. While talking about kitchen cabinets - I'm at a bit of a conundrum. I've purchased cabinets from Costco twice before and they were great. This time the total cost to order cabinets is going to be probably over $75k (Still working that out with a designer) and I have to pay through Costco. All of this would be fine under normal circumstances, but considering their people damaged my home it seems a bit absurd to be sending Costco a $75k check for cabinets and replacing another $20k worth of personal property through them when I haven't seen a single red penny. There is real irony there.
Anyhow, I expect to be out of pocket about $160k within the next 3 weeks.
Pics updated.
Demo is almost done - I think today is the last day. Remediation will take 2 weeks and then I believe I can start rebuilding.
I spoke to the VP of Costco Logistics the other day who said they will be working to prevent similar things in the future and that he would see to it that money starts coming my way. Today I learned that they offered to send me some money for my expenses already.
Today I spent another $17.5k on flooring and a deposit for the installer.
Kitchen quotes are coming in. Quotes to reinstall are coming in. It's a lot. More updates soon.
Nothing new to report. No tangible movements anywhere. I spent almost 10 hours this weekend meeting contractors for estimates and working on a final number for cabinetry. It is exhausting and not fun.
I sent out a $17,440 payment to a flooring contractor to get the flooring and down payment for the install. The flooring and backsplashes are going to be over $40k. Pricing for goods and services are over the top now.
I expect to write a ~$50k check this week to get cabinets on order. My hope is to have the flooring, cabinets, and countertops installed by the middle of April.