My Antenna Is Up

I was speaking to a client the other day when something hit me. She was telling me that since the insurer she had in 2005 had cancelled her; the “new and improved” insurer has inspected her home with each renewal. Several other people have expressed the same observation. It seems that insurance companies are inspecting houses on a regular basis here in South Florida.

Now my curiosity is piqued. I am inherently suspicious of insurance company motives. Rarely if ever, to they operate in an altruistic manner, so the question arises, why inspect the risk yearly?

Here is one possible explanation. Many times in the claims environment insurance companies will inspect a loss and assert a position that this damage or that damage is caused by wear and tear or long term water leakage or some other gradual cause of loss. In effect the insurance adjuster examines the damage and pronounces a pre-loss condition to a post-loss inspection. A counter argument to these pronouncements can be made: that the company is engaged in post loss underwriting in order to limit claims otherwise payable. Proving this argument may involve obtaining a copy of the underwriting file, prior claims files and the hiring of expensive experts to establish the condition of the property pre-loss. It certainly adds a level of complexity not contemplated by an insured who simply wants to get their house repaired.

The question that arises is this: Are pre-loss inspections an attempt by the insurance company to limit claim payments in the next hurricane or catastrophe? Consider this: by conducting pre-loss inspections and uncovering loose or missing tiles, an insurance company may try to assert that wind damage to a roof is wear and tear or demand that an insured affirmatively state which tiles were missing or loose before the storm. A failure to correctly answer might then result in a denial based upon insurance fraud.

Only time will tell.

The Crux of Adjusting

Disputes in insurance claims fall broadly into several categories: coverage disputes, damage disputes and causation disputes. This message addresses damage disputes.

The insurance adjuster’s job is to ascertain what the insurance company’s minimum contract responsibility is under the terms and conditions of the insurance policy. In so doing they look for the open and obvious damage and damages that can be documented using a camera and a tape measure. Sometimes these open and obvious damages actually reflect the full extent of the loss, however many times they do not. The crux of adjusting then becomes how you resolve that difference.

You’ve heard the old adage “The Right Tool For The Right Job”. This applies to insurance adjusting as well. Sometimes the right tool might be an ice pick to show charring in wood framing and at other times a golf ball to demonstrate hollow spots in tile flooring. When choosing a tool, ask yourself two simple questions: what am I trying to demonstrate? And how is this best demonstrated?

Let me give you an example. I had a client whose sliding glass door was damaged in a hurricane. Following the hurricane the wind whistled through the door whereas prior to the storm it did not. Taking a picture of the door was ineffective. The loss was proven two ways. First, I set up audio equipment to capture the whistle as it was actually occurring. Second, I videoed the door capturing the rattle of the door as it was shaken back and forth using only my pinky finger and thumb as leverage. The insurance company agreed to replace the door. Had they not agreed to pay for the door, additional more expensive proof would have been required: proof the insurance company would have been on the hook for.

Tools of The Insurrance Company Adjuster

The next time your home or business is damaged by catastrophe give this your consideration: watch what the insurance company adjuster brings with them to the scene. I’ll bet you will be able to put the tools into a couple of buckets, camera and tape measure. The camera is used to document the open and obvious damage and the tape measure is used to quantify the areas damaged. Ok, I forgot something, a flashlight. They need to be able to see what they are looking at.

My question to you is this: What happens if your damage is not open and obvious? Take a look at the photo below. This is a photo of a wall taken to a hurricane damaged house. What’s wrong with the wall?





You can’t tell. The damage is not open and obvious. A camera and tape measure is not going to help you recover money from the insurance company. You can have all the opinions you want as to whether the wall is damaged, but unless you can prove it, you’re SOL. “Sorry about that the adjuster says. I just don’t see what your talking about.” Remember they can always tell you what isn’t covered by the policy and damage which can not be proven is not covered.

Having the right tool on the other hand can mean the difference between a recovery and no recovery. Here is that very same photograph where I am taking a moisture reading. The moisture meter is pegged. It doesn’t take a genius to figure out the wall is wet. The result? The insurance company paid for the water damaged wall.







There is no substitute for having the right tool for the right job. If the insurance company adjuster doesn't have the right tools at their disposal what makes you think they are equipped to adjust your loss?

A Difference of Opinion

The Miami Herald reported today that Florida is suiting Poe Financial to recover more than $100 million. The Insurance Journal yesterday reported the same story. What’s interesting is the difference between those two stories. The title of The Herald article: Suit alleges huge fraud in Poe Financial case. The Journal title: Officials File Civil Lawsuit against 3 Former Florida Insurance Companies. With the exception of a quote from the CFO you'd never know you were reading two articles about the same story. The word fraud never appeared in the entire Journal article. In fact to read this version, you’d never know that the suit alleged that an “elaborate scheme of potential mismanagement and fraud among the officers and directors of the Poe Financial Group insurance companies that drained millions of dollars that could have been used to pay claims after the insurers failed.”

You'd never know but for The Herald that William S. Poe, Sr. collected nearly $20 million between 2004 and 2005. That two of Poe’s sons who were company executives collected $11.9 million. The family investment company was paid close to $10 million and the family foundation received nearly $1 million.

The contrast between these two reports is startling: one for its reservation the other for its point blank recitation of the allegations. Now compare that response to an issue the insurance company adamantly dislikes and watch the shrill machine come to life. Don’t believe me? Check out Anderson Cooper 360 on you tube and listen to the message put out by insurance companies in Washington State. Go to
www.youtube.com/watch?v=IvPW087RiJ8

The educated consumer is the insurance company’s worst nightmare.