You’ve got an insurance claim and the “adjuster” sent out by the insurance company is perfectly willing to tell you what isn’t covered but can’t tell you what is covered. Or tells you they can’t commit the insurance company to coverage or payment. What do you do?
This situation is more common than you might expect. Much of the time when we inspect losses with the insurance company adjuster, the adjuster begins the inspection with a preamble something like this: I’m here to inspect the loss and I don’t have any authority to act on behalf of the company. Now I know this statement is B.S., my guys know this statement is B.S., but the adjuster thinks this relieves them of any responsibility for their actions. Having pontificated thusly, the adjuster then begins to go through the loss, taking exception to this damage or that price. They are always willing to tell you what isn’t covered, what they believe to be over priced and what they believe to not be related to the cause of loss. They may even want to take a recorded statement or pick up receipts for repairs and expenses.
All of this is the activity of an adjuster as opposed to a damage appraiser. Their actions negate their words. I hold the adjuster to their actions. I also never trust that adjuster to be straight with me from that point forward.
Now as a policyholder, you may not appreciate this distinction until it’s to late. So what I recommend is that you watch what the adjuster does. If they go through your loss telling your “this is not covered” or that is the result of “long term leakage”, make a note of these statements in your journal. Note as closely as possible the exact wording of their remarks. On the other hand, if the adjuster tells you the roof is going to be replaced or you’re going to get a new kitchen, make a note of this as well. Then write a letter to the adjuster acknowledging the commitments made by that adjuster. Don’t acknowledge a no coverage position, only those things which the adjuster agreed to pay for. On anything that the adjuster takes exception to during the inspection, insist they write you a letter citing the appropriate policy language supporting their position.
The idea here is to document and or confirm everything that was said. If you fail to document it now, while it’s fresh in your mind, you’re at a disadvantage when trying to remember what was said later. If after confirming what was said to the adjuster in writing they try and backtrack, you can then put them on the spot by insisting that they explain their statements.
Monday, March 31, 2008
Wednesday, February 13, 2008
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?
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?
Friday, February 8, 2008
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/
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/
Wednesday, February 6, 2008
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.
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.
Monday, February 4, 2008
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.
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.
Wednesday, January 2, 2008
Cause and Effect
I was visiting a client last week. The insurance company wanted to conduct yet another inspection of the property to further evaluate the loss. This despite having already had approximately one year to conduct their investigation. One year mind you with no payment, no evaluation of coverage, no evaluation of damage. My client is frustrated. He wants to confront the insurance company adjuster:
Client: Are you here to represent me?
Adjuster: I’m here to represent the insurance company.
Client: Doesn’t my insurance company represent me?
Adjuster: Your public adjuster represents you.
Client: Yes, I know that but doesn’t my insurance company also represent me?
Adjuster: Your insurance company represents the shareholders.
Client But doesn’t the insurance company have my interests at heart?
Adjuster: You insurance company is not required to have your interests at heart. They are required to pay the claim if it’s a covered loss.
Client: Is this a covered loss?
Adjuster: We’re still investigating
Client: When will you be finished with your investigation?
Adjuster: When we’re finished.
At that point I took my client aside and told him to stop wasting his time. However what he learned was instructive to say the least. He learned that following a loss he has effectively given the insurance company an interest free loan, until the claim is paid. If you could have money for free, how much of a hurry would you be in to pay it out? Not much.
He also learned that contrary to popular belief, you’re not in good hands, no insurance company is on your side, their’s no umbrella to keep the rain off and insurance companies are anything but good neighbors. He’s had a loss, a significant loss that may run $1 million dollars or more. So far he’s been jerked around, not responded to and effectively told to shut up.
Yet, he’s had a loss and looked to his insurance company for assistance.
If this story were an isolated case, I would not be writing about it here. Unfortunately, it’s far from isolated. Many of my clients contact me after they’ve been told to shut up and go away. We’ll they don’t and you shouldn’t either. Stand up and fight for what you’re entitled to and don’t allow the insurance company to intimidate you.
This claim is going to suit and to appraisal. I’ll let you know how it turns out.
Client: Are you here to represent me?
Adjuster: I’m here to represent the insurance company.
Client: Doesn’t my insurance company represent me?
Adjuster: Your public adjuster represents you.
Client: Yes, I know that but doesn’t my insurance company also represent me?
Adjuster: Your insurance company represents the shareholders.
Client But doesn’t the insurance company have my interests at heart?
Adjuster: You insurance company is not required to have your interests at heart. They are required to pay the claim if it’s a covered loss.
Client: Is this a covered loss?
Adjuster: We’re still investigating
Client: When will you be finished with your investigation?
Adjuster: When we’re finished.
At that point I took my client aside and told him to stop wasting his time. However what he learned was instructive to say the least. He learned that following a loss he has effectively given the insurance company an interest free loan, until the claim is paid. If you could have money for free, how much of a hurry would you be in to pay it out? Not much.
He also learned that contrary to popular belief, you’re not in good hands, no insurance company is on your side, their’s no umbrella to keep the rain off and insurance companies are anything but good neighbors. He’s had a loss, a significant loss that may run $1 million dollars or more. So far he’s been jerked around, not responded to and effectively told to shut up.
Yet, he’s had a loss and looked to his insurance company for assistance.
If this story were an isolated case, I would not be writing about it here. Unfortunately, it’s far from isolated. Many of my clients contact me after they’ve been told to shut up and go away. We’ll they don’t and you shouldn’t either. Stand up and fight for what you’re entitled to and don’t allow the insurance company to intimidate you.
This claim is going to suit and to appraisal. I’ll let you know how it turns out.
Monday, December 17, 2007
The Looming Adjuster Crisis
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.
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.
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