In my two plus decades as an insurance adjuster, I’ve adjusted losses for a Fortune 500 insurance company, as an independent adjuster, as a catastrophe or storm adjuster, and am now a public adjuster. Depending upon which side of the fence you sit on this has been either a downward spiral or a successful climb to the pinnacle of guru-hood. Personally, I’m not sure, but I do like working for the policyholder’s recovery more than the shareholder’s profit maximization. Over the years, I’ve noticed a disturbing trend within the claims adjusting profession. The first trend is the polarization of the industry into a mentality of us versus them and the second has to do with the experiential level of adjusters in general.
In an Insurance Journal article entitled Small Florida Insurer, Sunshine State Brings Storm Clouds, Susan Straker, President of the company is quoted as referring to public adjusters as vultures. These types of comments by an insurance executive underscore just how deep the animosity and the rhetoric have become amongst insurance companies. While is may play to her constituency to refer to public adjusters as vultures, it is unprofessional at the very least and ignores the benefits that we bring to the table. Let me give you an example: a client of mine called me a year ago to assist them with their insurance claim. It seems their adjuster had adjusted the loss and after applying the policy deductible offered them $21,892.00. (This was not a Sunshine State loss) I asked for a new adjuster to re-inspect the loss and we agreed the loss was substantially in excess of the $21,892.00 previously offered. We also agreed to use a contractor provided by the insurance adjuster. After several months of inspections and negotiations the insurance company acknowledged additional monies were due. How much? $861,700. If those kinds of results to my client generate the “vulture” moniker then I’m satisfied. So is my client! However, this does raise a question: why didn’t the insurance adjuster recognize a claim value of $400,000 or $500,000? The answer should be disturbing for homeowners and business owners alike.
The National Underwriter in an article entitled Human Factors Drive Demand For Tech To Bolster Claims-Function Weaknesses cite a growing shortage of qualified adjusters as an alarming trend in the industry.
"Badri Narasimhan, vice president at Insurity, a Hartford-based business process management firm, said that after his company’s annual customer focus session with executives, adjusters and supervisors, the firm determined one of the claim sector’s biggest problems is a shrinking talent pool of experienced adjusters.
He said adjuster training typically involves giving new recruits an 8,000-page manual to memorize and having them look over an experienced adjuster’s shoulder as they process claims.
His firm said Mr. Narasimhan is “betting the house” they have the answer for the loss of experienced adjusters by creating anautomated system that looks at a claim and automatically tells an adjuster the best methods for handling it and what steps to take. "
The problem with betting the house is that your house and my house are the ones on the loosing side of that bet. If poorly trained or unqualified adjusters show up at the door how is the poor unsuspecting policyholder supposed to even the scales?
Public adjusters offer a valuable service to the insuring public. They ensure claims are paid at a fair price, the insurance company’s protestations notwithstanding. If you need a public adjuster and don’t live in Florida send me an email and I’ll help you find one.
Monday, December 17, 2007
Wednesday, December 12, 2007
Who Protects The Citizens?
Perhaps one of the more colorful descriptions of insurance companies was espoused by Helen Hunt in the movie As Good As It Gets with her characterization of HMO insurance companies as being devoid of a certain parental heritage. While I don’t think she meant to imply that insurance companies are the offspring of illegitimate liaisons I certainly understand why her character felt that way. It was just this sort of thought that crossed my mind the other day following an inspection of a property.
My client had a homeowner’s policy that in the industry is called a Special Homeowners Policy. The word “Special” was coined in the aftermath of litigation over the words “all risk”. Now we both know that “all risk” in insurance policies is anything but ALL risk. There are exclusions for just about anything. However, they are still quite a bit more encompassing than a named peril policy. Or at least they used to be.
I went to the Insurance Information Institute website to get some information about homeowners losses. Here’s what I found. In 2005 out of $100 in premium collected, $16 went to pay for fire damage, $30 went towards wind damage (2005 was the year of Katrina) and $11 went towards water damage and freezing. Out of $100 in premium $57 dollars went towards just three types of loss: wind, fire and water (excluding flood) and in that order. Which gets me back to my story.
I’m inspecting this loss. It’s a simple straight forward pipe break: water damage to the kitchen and adjoining bathroom. This is just the type of claim you’d expect to have if you owned a house. There was only one problem: the policy did not cover this type of loss. Or rather it did not cover water damage from a pipe break if that break happened in a kitchen, bathroom or laundry room. Uh duh… where do you expect a pipe break to happen … in the kitchen, bathroom or laundry room. Now it seems insurance companies are sneaking exclusionary language into their insurance policies that exclude just these types of losses.
When you take into account percentage deductibles, exclusions for exterior paint, pool enclosures and now a wholesale exemption of pipe breaks the only people not catching a break are policyholders. So my question is this: Who is protecting the citizen from the “#%*@%% HMO Bastards”?
My client had a homeowner’s policy that in the industry is called a Special Homeowners Policy. The word “Special” was coined in the aftermath of litigation over the words “all risk”. Now we both know that “all risk” in insurance policies is anything but ALL risk. There are exclusions for just about anything. However, they are still quite a bit more encompassing than a named peril policy. Or at least they used to be.
I went to the Insurance Information Institute website to get some information about homeowners losses. Here’s what I found. In 2005 out of $100 in premium collected, $16 went to pay for fire damage, $30 went towards wind damage (2005 was the year of Katrina) and $11 went towards water damage and freezing. Out of $100 in premium $57 dollars went towards just three types of loss: wind, fire and water (excluding flood) and in that order. Which gets me back to my story.
I’m inspecting this loss. It’s a simple straight forward pipe break: water damage to the kitchen and adjoining bathroom. This is just the type of claim you’d expect to have if you owned a house. There was only one problem: the policy did not cover this type of loss. Or rather it did not cover water damage from a pipe break if that break happened in a kitchen, bathroom or laundry room. Uh duh… where do you expect a pipe break to happen … in the kitchen, bathroom or laundry room. Now it seems insurance companies are sneaking exclusionary language into their insurance policies that exclude just these types of losses.
When you take into account percentage deductibles, exclusions for exterior paint, pool enclosures and now a wholesale exemption of pipe breaks the only people not catching a break are policyholders. So my question is this: Who is protecting the citizen from the “#%*@%% HMO Bastards”?
Monday, December 10, 2007
California Fires - The Fun Begins
The fun begins in California. Now that the fires are out, the TV crews have moved on to more news worthy events and the national eye is focused somewhere else, San Diegans are experiencing the first real impact of the October 2007 fires: insurance adjusters are beginning to say no! Well not exactly no, but some rendition of no. They want to bring in their own people to do the repairs their way. And of course their way is cheaper… go figure. So what’s the poor homeowner to do?
First things first, stop being victimized. Determine the value of your loss using repair persons of your choice and not those of the insurance company’s choice. If the two are the same that’s fine, but if not find out what it will cost to repair your home the right way not the cheapest way. You’ll arrive at a figure that is going to be different from that of the insurance company.
Next, don’t listen to all the hype about public adjusters, insurance company contractors, and plaintiff attorneys put out by those who have a vested interest in influencing your decision. Rather analyze your situation with the cold eye of reason. Decide for yourself if you need assistance or whether you are up to negotiating on your own behalf, then act based on your decision. If you elect to engage the services of an expert, seek out those who are licensed and experienced as opposed to those you solicit your business. They may be the same, but then again they may not be.
If you are doing this yourself, tell the insurance company what you are expecting in dollar terms. They will disagree with your position and insist they prove to you where you are wrong. Remember an opinion does not constitute proof. Be prepared to right for what you deserve and remember: to the insurance company your claim is just another loss. They are not involved emotionally or otherwise, except where profit is concerned.
Got questions? Let me know, I’ll see if I can answer them.
First things first, stop being victimized. Determine the value of your loss using repair persons of your choice and not those of the insurance company’s choice. If the two are the same that’s fine, but if not find out what it will cost to repair your home the right way not the cheapest way. You’ll arrive at a figure that is going to be different from that of the insurance company.
Next, don’t listen to all the hype about public adjusters, insurance company contractors, and plaintiff attorneys put out by those who have a vested interest in influencing your decision. Rather analyze your situation with the cold eye of reason. Decide for yourself if you need assistance or whether you are up to negotiating on your own behalf, then act based on your decision. If you elect to engage the services of an expert, seek out those who are licensed and experienced as opposed to those you solicit your business. They may be the same, but then again they may not be.
If you are doing this yourself, tell the insurance company what you are expecting in dollar terms. They will disagree with your position and insist they prove to you where you are wrong. Remember an opinion does not constitute proof. Be prepared to right for what you deserve and remember: to the insurance company your claim is just another loss. They are not involved emotionally or otherwise, except where profit is concerned.
Got questions? Let me know, I’ll see if I can answer them.
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