Over the last week or so, we've had a bunch of customers calling with water damage to their flooring. Ironically, none of them are related to Hurricane Sandy. One was due to an accident by the town causing water to flood the streets, another by a next door neighbor in an attached condo, and another due to a leaky refrigerator. Water damage can happen for a number of reasons (too many to list) and sometimes it is covered by insurance.
I'm not an expert on whether or not your insurance covers the damages...you will need to speak to the insurance agent about that. (Many in our area do not have flood insurance so if the water came inside from an outside flood, it is often not covered...unless there was a power outage and the sump pumps did not work). If it is covered by insurance, it's important to understand what you can be compensated for. Many homeowners do not realize the full scope of what they are entitled to, so below is a checklist of some not so obvious items to include, if your floors have been damaged.
You should be compensated for "like for like" which means you are basically entitled to get the same type of flooring that you had or something of equivalent value. And, you should be compensated for the full costs associated with achieving that (although for most policies, there is some sort of deductible). This is how most (but not all) insurance policies work.
What does Replacing "like for like" mean?
Most insurance companies will provide you with a report of what you are entitled to, and it is usually based on an I-tel report. They will often send a sample of what you had to I-tel for analysis, so you will be compensated for the same sort of of quality. 
For example, if you had an inexpensive berber carpet, you will be compensated for that; or if you had an expensive wool carpet, that's what you would be compensated for. You may not be able to find the exact same style or color (as carpet styles and color trends change all the time), but you would be able to get something equivalent to what you had. If you choose to change the type of carpet you do and upgrade, you can, but you will need to pay for the difference in value.
Similiarly, if you had hardwood, you would be compensated for hardwood - same species, width and treatment. If you choose to upgrade, you can (and pay the difference), or if you choose to change to a different type that costs the same or a different color, you are entitled to that. Basically, you get an allowance, and anything that comes in above that, you have to chip in for.
What if you want to spend less than what the insurance company allocates? Well this depends on your insurance company and your policy. Some policies will only compensate you IF the work is completed; some will only give you some of the money up front, and the remainder after you've paid for the work, or after you've submitted a signed contract with a flooring company. Others will give you the full money before the work is started. It depends on your policy.
What happens if the bill comes to more than the insurance company has allotted? Well again, this will depend on the insurance company/adjuster and policy. Often, in my experience, when you have a legitimate invoice or estimate from a flooring company that is in fact replacing "like for like," they will compensate you for this. Usually, the insurance company uses national rates for their estimates, and sometimes these are not appropriate for your geography (or for your particular circumstances). Also, sometimes, they do things purely on a per square foot basis, but don't take into account that estimates for small areas may come out with a higher cost per square foot. Usually, when they see a legitimate estimate from a reputable company and the price is justified, they will cover it. Likewise, if there are additional items that come up during the installation that were unforeseen, they will usually compensate for this as well (for example sometimes when the hardwood is ripped up, the plywood underneath is damaged, and this must be replaced as well).
What else should insurance pay for beyond the flooring? Items that may not be obvious:
Content manipulation - This refers to moving all the loose/breakable items and replacing them afterwards. Usually, the insurance company has a fixed rate per hour to compensate the homeowner. I believe it is usually $35-40/hr.- Moving furniture - furniture needs to be moved when flooring is installed. Some of our customers prefer that we do this work; others prefer to do themselves. Regardless, the insurance company should be compensating either the flooring company or you for your time.
- Painting base boards - often baseboards need to be repainted or touched up after flooring is done (this depends on the nature of the flooring). Some homeowners choose to hire professional painters to this work; others prefer to do themselves; either way, the insurance company should be compensating you for it.
- Hotel stay - if refinishing hardwood floors (sometimes)./strong> If you are refinishing the hardwood floors, you can not walk on these areas for several days. If this blocks your way to the bedrooms and/or bathrooms and/or the smell is over powering, you are usually entitled to a stay at a hotel.
- Temporary housing - If your home was severely damaged and you can't live in it, then insurance will usually cover temporary housing in a furnished apartment. I have had several customers with this who have been compensated for 3-12 months pending the length of time they needed before their house was livable again.
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Dustless sanding - if you or someone in your family has allergies or asthma
- Clean up/dusting - Often, after the work is done, there is some clean up afterwards, especially if it involved sanding and refinishing. Usually, this is as simple as dusting. Some people pay a cleaning person for this; some do it themselves. Either way, you should be compensated for it.
Originally posted at: Flooded Floors? Many don't realize what insurance will cover
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