Adjuster or Damage Appraiser

We have a new adjuster onboard. Mitchell recently got his public adjusters license and was looking for a place to learn the craft. He’s sharp, has good street smarts and had one minor flaw: be believed that an adjuster sent out by an insurance company was a professional. He’s been disabused of that notion.

A client, I’ll call him Hy, had a hurricane loss. Hy called his insurance company, like he’s supposed to do and reported the loss. The company sent out an adjuster who evaluated the loss as below the deductible. Understand, Hy has a rather large deductible, so maybe it’s understandable that the company representative would evaluate the loss as not breeching the deductible. Maybe. A year passes and Hy learns that Mitchell has recently been issued his license, so he calls him.

Mitchell and I inspected the loss and wrote an estimate. The value was well in excess of the deductible. Now if you’re an insurance adjuster reading this you are probably thinking to yourself ‘no surprise here’. Mitchell requests a re-inspection and I tag along. The new and improved adjuster is given a copy of our estimate and begins the process of reviewing it in context of the loss. He agrees that the roof is in need of replacement. He agrees with the estimates’ interior damages. He doesn’t say one word about changes. Mitchell’s thinking ‘all right, I’ve got my first settlement’. I’m watching and waiting. We go over the agreements with our client and then sit back and wait: Mitchell with anticipation, me with reservation.

The check comes. There is no resemblance to the agreements reached with the adjuster. Mitchell’s pissed, Hy’s pissed, I’m pissed. It’s time for a reality check. I know you can’t reach an agreement with the adjuster, but this is news to Mitchell and Hy. The reason for this is quite simple. While the adjuster may have an adjuster’s license issued by the State of Florida, they are not actually adjusters. They are damage appraisers. They look at you with a blank bovine stare knowing full well and aware that the insurance company is going to re-adjust the estimate, unless of course is comes to an embarrassingly small amount. You see the adjuster does not have the authority needed to do their job. Mitchell understands this now. Hy understands this. You should understand this too. Today’s insurance adjuster has no authority, so don’t put much stock into what they say.

We are going to resolve this via appraisal. Appraisal it seems is the only way to reach agreement these days. The tragedy is that most policyholders still believe their adjuster. That’s changing though, one claim at a time. Then what?

Super Tuesday Tornadoes

To everyone whose home or business was damaged by the tornadoes on super Tuesday, you have my heartfelt condolences. These types of events cannot be emotionally prepared for and when they happen you are often times left to the whims of the insurance company for recovery. I have some advice: first don’t be victimized by the storm. While you have been a victim, you do not have to internalize the event and become a victim. Becoming a victim takes away all your power.

You job now is to take the necessary steps to begin to recover. You will have to prove your damages to the insurance adjuster assigned to your claim. You do this with photographs, the opinions of experts, contractor’s estimates and personal property inventories. Begin by taking photographs. I utilize the 4-corner method of photographing losses. This method enables you to visually show a 360 degree view of your property on a room by room basis. After taking overview shots take closer view shots where you can just begin to see the damage while still placing it in the context of the overview shots. Finally take close up shots. Take photographs even if you believe the insurance company will fully pay you for your loss. You won’t know for weeks whether you’re going to be in a dispute and photographs preserve our evidence.

Begin making an inventory of your property now. Buy a few spiral notebooks and give one to each family member with instructions to write down everything they remember and which was blown away. Take photographs of everything you throw away. If possible don’t discard property until after the adjuster has seen it. Take you photographs and notebooks and compile them into a single spreadsheet on a room by room basis. Price every item being claimed and give the spreadsheet to the adjuster.

Solicit bids from contractors to get your home repaired and give a copy of those bids to the adjuster.

If your home is not livable and you’re staying in a hotel, be sure to get a receipt for everything you spend. Organize those receipts on a daily basis. Submit those receipt to the adjuster for reimbursement. Do this at least once a week.

Lastly, ask for an advance. If your company is interested in working with you they’ll provide you with advance money. If not, you’ll know soon enough how difficult a time you’re in for.

For more information on making a claim go to http://www.benefitbill.com/

A Pie Divided Looses Money

Insurer testimony before Senate Select Committee on Property Insurance Accountability in Tallahassee, Florida on Monday revealed an industry crying poor while laughing all the way to the bank. It revealed the inherent vulnerability with the legislature’s ability to regulate an industry that is allowed to divide itself into smaller and smaller pieces. Allstate is the case in point. Allstate is earning more money than ever before, but Allstate Floridian, according to its Chief Executive Officer, Joseph Richardson, Jr. is on the brink of insolvency. (This from an article in Insurance Journal)

Over the years insurance companies have gotten increasingly smaller while the parent operations have gotten increasingly larger. This paradox allows the industry to claim losses as a basis for rate increases without exposing the parent company to scrutiny or litigation. This business model effectively divides the pie and places the risk upon the residents of the state to “bail out” the smaller company in times of disaster when those residents are most in need of protection. What happens to the parent company: they get to declare themselves the victims of the same catastrophe while not being exposed to excess loss.

The solution is simple. Pierce the veil of the subsidiary and look at the entire company rather than being content with a small slice. Doing this with Allstate would reveal a company that is far healthier that testimony would lead you to believe.

The Collins Center

Florida is embarking upon a new journey: The Collins Center as a means for resolving disputes via the appraisal mechanism in the insurance policy. Advertisement aside, I have elected to participate in this project. After two days of training, I can say it’s promising.

Appraisal in Florida is symptomatic of a system broken. More claims are resolved today via litigation and appraisal than ever before save in the aftermath of Hurricane Andrew. The question that must be asked is why? Why does the public (insured’s, adjusters and attorneys) see appraisal as a necessary evil to resolve disputes with their insurers? Quite simply there is no one on the insurance company side to negotiate with. No one who has authority to agree on loss and value. No one who is authorized to commit to coverage. No one who is able to share information at that vital early stage in the adjustment process. That lack of field adjuster authority creates an attitude of mistrust amongst all involved.

The truth is that the insurance company does not trust the decision making capacity of those it hires for the adjustment of the claim to make the right decision. That lack of trust is then veiled behind secrecy and obfuscation with the intended result: delay of payment and frustration on the part of those who are in dire need of the bargain of the contract.

From the ashes of destruction rises the Phoenix. The Collins Center is a non partisan organization with its hands in many projects. It has undertaken to provide a bit of sanity in the appraisal process by taking out of the loop a key component: selection of the umpire. Parties agreeing to utilize the Collins Center will have an umpire appointed by the center on a rotational basis. This rotational appointment hopefully will result in a perceived absence of bias with the umpire. Time will tell how well this system will work. In the interim, I am willing to give the process a chance.

Not all public adjusters support this program, but lets face it the system is broken and anyone bringing sanity into the process is welcome in my opinion.