An Einstein Kind of Day

I ran across this post today in Google and it made me laugh, because sometimes I have an Einsteinian day where I too don’t know where I am going.

Albert Einstein was once traveling from Princeton on a train when the conductor came down the aisle,
punching the tickets of every passenger.
When he came to Einstein,
Einstein reached in his vest pocket.
He couldn’t find his ticket,
so he reached in his trouser pockets.
It wasn’t there, so he looked in his briefcase but couldn’t find it.
Then he looked in the seat beside him.
He still couldn’t find it.
The conductor said,
‘Dr. Einstein, I know who you are.
We all know who you are.
I’m sure you bought a ticket.
Don’t worry about it.’
Einstein nodded appreciatively.
The conductor continued down the aisle punching tickets.
As he was ready to move to the next car,
he turned around and saw the great physicist
down on his hands and knees
looking under his seat for his ticket.
The conductor rushed back and said,
‘Dr. Einstein, Dr. Einstein, don’t worry,
I know who you are. No problem.
You don’t need a ticket.
I’m sure you bought one.’
Einstein looked at him and said,
‘Young man, I too, know who I am.
What I don’t know is where I’m going. That’s why I am searching for my ticket”

Since this is a blog about insurance, I suppose I should tie this into claims because for most people having an insurance claim is like being Einstein on that train. They don’t know where they are going, nor how to get there. They are just along for the ride and at the end find themselves vaguely dis-satisfied  with the result.

Starting out with the end in mind is way to increasing your recovery. Don’t know where to start? BenefitBill can help.

Have a great day!

Bill

What Is A Claim To Insurance Companies?

       

I am working with Mitchell on a claim, and his claim and my post yesterday got me thinking about claims from the insurance company’s perspective. By way of some background, in the claim that Mitchell is working on the supervising adjuster is being very aggressive and demanding to the point of being insulting and demeaning to both him and the insured. Needless to say it’s gotten off to a bad start and letters have been flying back and forth. But still it got me to thinking about what a claim is to an insurance company.

Now a lot of you may be thinking that a claim is an expense and you’d be right, but I think it’s much more than the money that’s going to be paid out. It gets back to understanding why people buy insurance in the first place. Yes, I know you have to buy insurance if you own a car or mortgage a house, but why purchase from one company as opposed to another? Why do folks say I’ve got State Farm Insurance or Allstate Insurance as opposed to just saying I’ve got homeowner’s insurance or auto insurance? I think it’s because there is a perceived value in the company who sold them the policy and a hope that value will be expressed at the time the claim is made. So when I think of claims, I am thinking of opportunity.

A claim is an opportunity from the company’s vantage point to deliver upon that perceived value. To deliver value in the adjustment, to deliver value in the evaluation of damages, to deliver value in the payment of the claim, to deliver value in the relationship that is established between the parties. However, Mitchell’s experience seems to indicate that the insurance company doesn’t look at a claim as a way to deliver value. They are just pissed off at having to pay. In reality what occurred is that the insured is being perceived by the company as trying to get something they don’t deserve.

And that mindset is a wasted opportunity to deliver on that perceived value.

Imagine how different the relationship between insurance company and insured would be if the insurance company fostered and nurtured the concept that a claim is an opportunity to deliver value in the adjustment process. Imagine if the adjuster were more concerned with building a relationship instead of letting the policyholder know what wasn’t covered and what the insurance company couldn’t do. Imagine if they brought to the table solutions rather than objections. I think the bottom line would actually improve. Sure indemnity might increase slightly, but legal and experts expense would certainly drop.

“Would you like a latte with that drywall?”

Bill

Insurance Claims: No Insured Is An Island

I was speaking with a friend of mine today regarding a potential referral for business. A friend of his has an insurance claim and was apparently having difficulty with their insurer. In short they were out matched and out gunned at every angle. It didn’t help that the insurance company was one of those who hate paying out claims. Now you might say that all insurance companies hate to pay claims, but I am not sure that is correct. I think the vast majority of companies, while not liking to pay claims, see claims as a way to fulfill the promise made when they took the premium. Getting back to my potential referral story: this insurance company hates to pay claims. They are at war with their policyholder and the only one who doesn’t know it is the policyholder. 

This got me to thinking about Benefit Bill™. One of the points that I advocate on that site is team building. You would never consider playing football team without 10 other people on your side (we’re not talking about pickup games here), why do you consider going up against the insurance company without your team in place? Think about it a minute. Your insurance company has a readymade team at their disposal: claims managers, supervisors, adjusters, contractors, engineers, accountants, contents experts, attorneys and the list goes on and on. You do you have?

If you said me, myself and I, and you are going up against the insurance team, my monies on the insurance team. Maybe that’s why so many insured’s wind up settling for pennies on the dollar. If you’re not sure how to build your team, keep checking back with Benefit Bill™ from time to time. We are putting together lessons on team building, one team member at a time. When you begin putting your team together, the odds swing dramatically in your favor. Happy team building… and

Have a Great Day!

Bill

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Roof Damage To Be or Not To Be

I’ve been in the chat rooms today where the conversation remains active regarding State Farm Insurance being investigated in Texas. What has amazed me is the number of adjuster who adamantly state that roof shingles that have been lifted by wind but are otherwise physically fit are not considered to be wind damaged … in their humble opinion. As you might imagine, I adamantly disagree. The crux of their argument, if I understand it correctly is that because the shingles have no other blemishes or observable defects aside from being lifted by wind, that they are not considered as damaged.  

Of course if you are a homeowner, this means you’re not going to get paid.

I believe this type of analysis is flawed and here’s the reason why.  As I’ve stated on many occasions property insurance policies do not insure property: they insure people. They insure people against risk of direct physical loss, but nowhere in the policy does it define what is meant by direct physical loss. So in my not so humble opinion you (the insured) are entitled to the broadest possible interpretation of what constitutes direct physical loss. To restrict the investigation and subsequent observation to the shingles in these situations is myopic at best and wholly disingenuous. Roofs are a system. They are put together in a systematic fashion and each part of that system is dependent upon the other parts to ensure it fully functions as it is supposed to.  When one part of the system fails, as is the case of wind lifted shingles the entire system is impaired. That impairment is direct physical damage.

I used the analogy of a piece of tape being pulled up. When put back into place it never seems to have the strength of bond equivalent to the original bond. Shingles are no different.  The system is broken when the shingle are lifted and no amount of pressing them back into place will restore the system to its’ pre-loss condition. In my not so humble opinion.

Bill

Mortgage Upside Down Prepare For Insurance Problems When You Make A Claim

I was talking to my friend Steven today. He was up in arms because a potential client of his had their house foreclosed and it knocked him out of a deal. Seems this person had an insurance claim and was paid by their insurer. The mortgagee’s name was included on the insurance check, which by the way is standard procedure. The homeowner then forwarded the check to their mortgage company for endorsement: more standard procedure. The homeowner was behind on their payments and when the mortgage company got the check, they cashed it, used the proceeds to pay down the overdue payments and then promptly foreclosed: unfortunately more standard procedure still.

 

Let this be a warning to everyone who is behind on their mortgage and is unfortunate enough to have an insurance claim. The chances are you will not get your mortgage company to release the insurance monies to you. They will instead use the funds to pay down the what you owe them leaving you with an impaired property. You may very well find yourself in a double bind because your insurance company can demand proof of repairs as a precondition to renewing your property insurance. OMG!

You might be asking yourself: “what’s the point in paying insurance if I can’t use the proceeds to repair my home?” Steven would be asking that question right along with you and it’s a good question, particularly in South Florida where premiums are sky high. What’s the unfortunate homeowner to do? I’m not an attorney, so my first bit of advice is to talk to one. Find out what your rights are.

Also, find out if you hire a contractor whether the bank is required to release funds to the contractor in lieu of applying funds to the balance of the mortgage.Or any other method of getting access to your money. And yes it is your money and your house...at least until the bank takes it over.

Let me know what you find out.

Bill

Roof Damage

ABC News reported on September 7, 2012 that State Farm Insurance was under investigation in Texas for the way it handled thousands of hurricane Ike claims. Apparently winds from Ike cause shingles to become unsealed. State Farm Insurance’ opinion in this matter was that an unsealed shingle does not constitute damage.  The opinion is not isolated to State Farm Insurance however. Other carriers take the same position. That position however is unfair to policyholders making claims for damages to their roof.

I stated in a workbook I prepared several weeks ago that because the insurance company does not define what it considers damage, that the policyholder is entitled to the broadest interpretation of that phrase. I also indicated that something is damaged when there is a change in the condition of the property between that time immediately before the event and anytime following the event.

So let’s look at the unsealed shingle position as not constituting damages. The insurance companies (and presumably their engineers) opine that roofing shingles unsealed by wind will re-seal themselves after a period of time. What they fail to mention is how well the re-sealing occurs. If I pull a piece of tape off a plastic package and re-stick it back on that package the tape will re-seal, but it’s not the same. Once the seal on the tape is broken, it never seals back to the same degree and I believe the same holds true for shingles. As a former company insurance adjuster I’ve been up on roofs where the wind has broken the seal, the shingles easily lift up. I’ve also been on roofs weeks after wind has come through an area and lifted shingles. I’ve found the shingles on these roofs to have re-sealed, but the seals were weak and easily re-broken. I’ve paid for those roofs: why? Because the roofs were damaged by wind, that’s why.

A policyholder pays good money for insurance and should not be faced with a re-interpretation of policy language after the loss. A policy whose language is broad should afford coverage….period. Otherwise the policyholder should be informed beforehand that the company arbitrarily denies coverage for covered damages. That way they can make an informed decision whether to buy that insurance or go to a company that pays for damage when damage occurs. Of course the insurance industry can’t tell them that: they’d sell no insurance if they did.

Bill

p.s. I don’t know how long the link will stay active but here it is if you want to read the article for yourself http://abcnews.go.com/US/state-farm-faces-criminal-investigation-hurricane-claims/story?id=17167218#.UEytMVFSTW5