Costco Water Damage Blog

Had a first this weekend. One of the visitors to my site provided me with their phone number and I got to speak to them via phone instead of just email. It appears they had similar things happen to them and are dealing with some of the same players as I am in regards to the claim. She told me that Costco lowballed her and suggested she file a homeowners claim instead of making her whole. This seems to fit other stories I have been hearing from visitors.

I am currently tuning the infrastructure of this site so that if you have had an issue with Costco or RXO, your story can be posted here for all to see. We can enumerate the issues and discover patterns of treatment in these claims.

I consulted with the attorney who will be filing my suit against Costco and RXO last week. Lawsuit being drafted. Will publish a copy here the day it is filed with the courts. You'll get to see it before Costco and RXO are served with a copy.

After reflection post mediation I have decided the following:  RXO has so many people involved that no one person clearly understands the claim. Comically, the absolute only feedback I received during our mediation today were about items we weren't even asking to be reimbursed for.

While a lawsuit is in the works, I've decided to wholeheartedly up my public embarrassment of both Costco and RXO. It is very clear that these behemoths of companies have absolutely no problem taking my family's money and misery to boost their profits. The only way you can fight that kind of greed is with the light of day.

Over the next few weeks I will be hiring someone to rewrite this website in a way that is easily digestible to casual consumers. I will update this with the names of the people from RXO, Sedgwick, Costco, etc.. and copy their emails here for all to see. I will hide nothing.

I will use my web developer skills to automate social media comments about Costco and RXO on any public post made by anyone that uses mentions for either company to maximize the audience that sees this website. For the low low price of about $10 per month, an API review,  and three hours of my time I can put this website in front of millions via social media commenting.

I just created a sister website - RXOWaterDamage.com - and will be revitalizing both websites to include RXO into this.

I don't know why it took me so long to do so, but I looked up RXO HQ - and it's in Ballantyne. I used to live in Ballantyne and still have people there. You will see my "RXO Hires uninsured contractors: RXOWaterDamage.com" signs there.

You will see "Costco uses uninsured contractors: Buyer Beware: CostcoWaterDamage.com" signs locally here in Jax and in NC.

3 months of ClearChannel Billboards of both signs. Out of spite.

And finally, for now, I intend on paying someone to to fully write an article and link to this website, and have it published on the newswire.

Based upon the laughable offer they made me months ago, it's clear they want me to remain silent about this as they want me to sign a confidentiality agreement and a non disparagement agreement. Tough luck. Unless I am made 100% whole, not a dollar more or less, I wouldn't even entertain the idea.. They ran into a customer this time that cannot be pushed around or bullied into a lowball settlement and I relish the fact that I get to put them on blast for years to come. I'm not in any hurry to make them do what they should have done months ago.

Mediation has concluded for the day. Details confidential, but no agreements were made. Lawsuit will be filed next.

During the lawsuit they will depose every single contractor that has come to my house and attempt to discredit them. They will attempt to discredit all of the hardworking small business owners in our town that provided independent third party analysis and guidance in a time when I most needed them - at a time when Costco/RXO provided no guidance at all - and at a time when I was footing 100% of the bill. I can't wait. Will update this blog continuously with lawsuit filings, deposition transcripts, and outcomes as they come. They will spend hundreds of thousands of dollars (or more) to attempt to discredit these people and to avoid making me whole for their mistakes. This is who you do business with if you buy from Costco.  

I had been talked out of doing it before the mediation, but expect to find sign holders at the three local area Costco's holding a CostcoWaterDamage.com sign from the public sidewalks later this month.

Not once during mediation did anybody say "here is why we think what we think" and not once were we asked "why do you think what you think". The mediator was nice and gracious, but this entire thing could have been a quick email.

We have a scheduled pre-suit mediation on 5-5-2025 with Costco and RXO. I will update after that as to whether we settled, the terms of the settlement, and if they do not agree to cover all of my valid expenses I will detail how much these corporations were comfortable with me paying to cover their screwup and profits.

If we don't settle I'll begin filing the lawsuit documents as they are filed with the courts.

Either way expect some update on 5-6-2025.

140,000 visitors so far. I get emails weekly from others who are going through the same thing with RXO and Costco. Contact me to add your situation to our website so we can put them all on blast publicly.

Giving an update. I received an email from someone else last night who purchased a refrigerator from Costco, had RXO install it, and had water damage, so it inspired me to give an update. I have received numerous emails from the form below from people who have experienced something similar.

Update - there is nothing new to update. RXO low balled me as described above. They have no given me one more red cent although they clearly know they are liable and that the damages will exceed what they've paid. They're forcing me to weather the brunt of this financially hoping that I'll cave into a lowball offer. 0% chance of that happening.

Costco claims that my dispute is not with them, but with their vendor, RXO. I do not have a contract with RXO, Costco does. My installation agreement is with Costco and it is Costco that I will sue.

I have given Costco a deadline of 4/11/2025 to resolve this claim or a lawsuit will be filed. Their attorney suggested pre-suit mediation so I may extend that deadline by 2-3 weeks to avoid having to pay attorneys fees.

RXO disputes the amounts despite being given a fully adjusted claim. They have been doing absolutely nothing to progress on their side - this is an issue that could have been taken care of in a week.

For now I'm being patient. For dining we have camping chairs and a plastic table. We order in most of the time since we have no means of cooking. If it weren't so personal it would be funny.

I advise you to check your local state court records or get a PACER account for federal court and look at lawsuits against RXO and Costco before you decide to do business with them. I am learning this is not a one off event and the way they handle this is immoral, in bad faith, and at the expense of the customer.

I actually look forward to filing a lawsuit so that my claims will become forever etched in web searches forever.

Will update when there is an update. For now, Costco is content with my wife, kids, and I living in poor conditions and paying for their mistakes ourselves.

I received an offer today from RXO for $213,960.11. It is attached here. This is for about half of the out of pocket I've already spent and about 30% of the adjusted claim. It's laughable. Lawsuit against Costco, Costco Logistics (COSTCO-INNOVEL SOLUTIONS), RXO, and the installer (Deliver it Right LLC)  coming next week. Their cheapest out was last week.  Now expenses go up more. Stay tuned.

Oddly enough, Jesus Cardenas, the EFI Global employee who tested my house as mentioned above, is not longer listed as active after my complaints above. He was being held out as an CIH when in fact he did not hold those credentials. I'm glad I took screenshots.

Today is another day of frustration.

Let's start with the fact my public adjuster was told not to expect anymore money until this is resolved. That's not what the Costco VP told me last week.

Also it appears that Sedgwick is playing the games that Sedgwick is known for (use google and research for yourself). Despite having 10 weeks to inspect personal property and review the mitigation plans, they are just now asking questions about it and wanting to dispute everything. Why couldn't that have been done 5 weeks ago?  Why wait until everybody is ready to get this thing settled? It only hurts me, the injured party, and not their client, RXO - that's why.

They also want to depreciate everything I had - meaning they would like to pay me less than what it takes me to rebuild and replace to the conditions I had pre-loss. They will want me to come out of pocket $50k - $100k out of pocket and they're playing a game about it. The legal advice I get says that what they claim does not apply in a third party case. They play this game anyway.

This is purely speculation, but it appears that Costco trusts RXO to handle this and RXO pays Sedgwick to handle this, and the right hand doesn't know what the left hand is doing. I don't think that Costco and RXO understand that the tactics Sedgwick is using is driving this towards a lawsuit rather quickly, and I also do not think that Costco would be ok with one of it's members having to come out of pocket $30k, $50k, or $100k to be made whole due to the negligence of one of their contractors. Again, just speculation, but let's see what happens. Perhaps I am wrong.

I would also like to point something out for anyone else experiencing anything similar. Sedgwick is an adjusting company always hired by the party that pays - insurance companies mostly and in this situation, RXO who is self insuring. They never represent the injured party. The only reason Sedgwick exists is to minimize the payout of their client by using several different tactics - and delaying is one of those. The fact that this is the company that RXO hired to adjust this instead of an organization that takes care of both parties fairly speaks volumes as to the results RXO hopes to achieve at my expense, and.yours if you're in a similar situation.

Furthermore, I would like to point something out that should be criminal. In an earlier blog post I mentioned how I hired an independent Industrial Hygienist to assess our damage, develop a remediation protocol, and give guidance on what must be done on our loss. I had a remediation company come in and clean. Only after the cleaning was done, Sedgwick sent EFI Global to come do their own report. Not only did they send an underqualified person out, they sent him out after cleaning was done to test. EFI Global is owned by Sedgwick and is not independent. They're using the tests taken under the circumstances that I've listed above as justification to deny major parts of my claim.

They have a week to get this settled before this moves into the legal realm.   I will add on the costs for missed days of work for my wife and I, attorney fees past and future, mileage, consultation fees, and any other fees I am entitled to by law that I am not currently seeking. The games need to stop, everyone needs to act like adults and get this over with.

Last Friday we submitted our final totals including bids, estimates, and receipts. The ball is in their court to make action now. They've had 2 months to look into this case and prepare for it to be finalized. I'm curious to see how many roadblocks they deploy now to slow finalizing this down now instead of being proactive and doing their full due diligence over the past 2+ months.

We're ready for this to be over with and they have the power to settle it this week. Let's see how long it takes. I have been advised to file a lawsuit to force the issue and everything on record but I am going to hold off until at least next week to see if they handle this responsibly.

Edit: Spoke to Costco VP today who said that he spoke to RXO and I should be getting a secondary payment  

Last Friday I received a call from Tony Datillo from Costco to check in. I received a check from RXO for a little over $38k. While it was a welcome gesture I am still $178k out of pocket to keep this project moving along so really it's a drop in the bucket.

Phase 2 of mitigation ended today and was $70k, in addition to the $10k for phase 1. Tomorrow morning we test to make sure the air quality is habitable. I have workers scheduled to begin work on Monday and hopefully will be able to move back into the house in 1 month. We will be without a kitchen, sinks, etc... for about 2 months so we'll have to order takeout or eat out most of the time. While that sounds nice, I am not looking forward to it.

I've had to spend large sums of money over the past week and expect to spend another $120k in the next two weeks to keep the project moving along and get back into my house. Hopefully Costco changes their policies to make sure that their members don't have to come out of pocket when accidents like this happen, as they should. I am fortunate enough to have the funds to do it at this period in time. Imagine if I didn't or imagine if it happened to you and you didn't. I have no idea what I would do except settle for much less just to get it over with and get some cash flow.

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.

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. 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.  

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.  

🚩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.
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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.
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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.

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.

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.

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.

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.

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.

Received a call from a local adjuster who scheduled to come out 12-12.

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.

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.

Crickets.

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.  

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 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 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.