Our dishwasher flooded. Insurance covered the water damage to the ceiling in the basement as well as the flooring in the kitchen above. We decided to update kitchen along with the repairs. Our insurance was covering cutting out damaged basement ceiling, scraping entire ceiling and re-texturing/painting ceiling, and also replacing carpet/linoleum upstairs. Day 1 of demo contractor didn't turn water main off and hit pipe which re-flooded ceiling in basement-pretty much damaged the same area in the basement, not a big deal since it was coming down anyway. Only extra thing was the amount of water - took them over 5 minutes to shut water valve off - when it leaked into the basement it leaked down the wall above a window in the basement causing a large balloon of water behind the eggshell finish paint on the wall - I pierced the paint, squeegeed the water out and then took a blow dryer to dry the wall/paint and smooth out the stretched out paint. The contractors knew this-demo guy saw it and I text contractor right away. The next thing that happened is they taped plastic up all around the basement to protect walls and furniture while scraping/painting ceilings. When the plastic was taken down it peeled the paint off the wall with it, not just the large area above the window where the water caused a balloon in the paint but the entire perimeter. It's eggshell so we can't touch up the spots. Contractor said it's not their fault because they used paint approved masking tape - it was not blue, green or bright yellow tape - I can't find any other approved for painted walls masking tape that looks like regular masking tape to me. Contractor said it's because basements tend to have more moisture in them and this can happen. (Side note-we also had our upstairs ceiling scraped and re textured and the paint didn't peel nearly as bad, which I didn't care because we were repainting those walls anyway) - but My insurance denied the supplement claim saying contractor caused additional damage, recourse is with them. Contractor is saying it's not their fault (except the one balloon) that our walls peeled and we are on the hook for having it repainted. Meanwhile I approved the repainting because in the end it had to be done anyway and I wanted the mess done and over with because we are basically living in the basement until the upstairs remodel is done. So my question is - who is responsible for the cost of painting the walls in the basement?