It's only a small area...

[Mike Kleisch]

How much water could there be? No flashing was installed on the upside of the chimney chase. Looks like the roofer tried to make instant flashing by installing felt up the side, staples and felt remnants on the chase.

They're debating how much to tear off inside the home.

[Nick Ostrowski]

I had a similar situation like that a few years back. No flashing at the roof intersection with a faux chimney chase and rot and moisture damage the entire length of the chase from 1st floor up to attic. The entire chase had to be rebuilt to the tune of $8,000.00.......after the crap repairs made by the seller's contractor were brought to light and my client was already living in the house.

[Mark Reinmiller]

Especially bad with stucco.

30825

[Raymond Wand]

They'd be foolish not to open the interior sections of the wall. Do it right or don't do it at all.

[kenny martin]

Was there ever any Tyvek or was it torn off with the siding?

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Was there ever any Tyvek or was it torn off with the siding?

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Was there ever any Tyvek or was it torn off with the siding?

[Dirk Jeanis]

How much water could there be? No flashing was installed on the upside

.
AN AWEFUL LOT OF WATER. 1 drop per second is over 7 gallons per day. Remember that any misting, raining, condensation melting ice or snow, etc will cause water movement down to the chimney. If there is NOT a flashing the water WILL penetrate. Water has time on its side. one can't see a drop…even a drop a second probably wont show visibly, but 7 gallons a day takes a SEVERE toll, even if only in wet season and condensation season.

A few cups regularly introduced inside an aread that can not readily vent and dry mositure…forget it!

I would never bid this repair job at all. It would be esitmated then bid T&M only. I would tear off until all structure was sound..then replace it all. If they want a hard bid, I would limit the work and charge for work stoppage at all change orders. Too expensive not to.
I dont care what any insurance inspector might esitmate or guess. This is a keep going until good condition. Damage could extend into the house, plates, studs, subfloor if wood etc. No way to tell except to follow the damage as you tear out and hope a structural engineer isnt needed!