Association management professionals are frequently called upon by their clients to assist in a variety of different projects and matters. These matters range from basic maintenance too complicated construction projects. While it has always been our Firms warning and positions that Association Managers should not expose themselves to the liability that comes with adjusting insurance claims on behalf of their clients, see our blog post, “Why an Association Manager Should Never Adjust a Client’s Insurance Claim” we know that sometimes you feel you have no other options. Due to the complicated nature of insurance policies, insurance claims and the risks associated with adjusting these losses, we wanted to provide a list of the top things an association manager should be aware of, and look out for, when supporting their clients in the adjustment of an insurance claim.
#1: Get assistance in evaluating and understanding the policy, it’s coverages and its specific terms and conditions. While you as an association management professional may not understand the complicated language of a policy, it is wise to consult the qualified resources at your disposal to assist in gaining the proper understanding of the policy. These resources include the Association’s insurance agent, their general Association Council, and even other consultants such as Public Adjusters. These resources should be able to help you understand the basic framework of the policy, its coverages and how they may impact the valuation of the loss.
#2: Evaluate and ensure you understand how the Associations governing documents, and state laws governing common ownership communities, affect the coverages afforded in the policy, and the amount of repairs that will need to be accounted for. All too often we encounter association management professionals, that are under impressions of the application of these documents and their provisions on a loss, that are incorrect. It is very important that you understand how these documents apply in each situation, as they can dramatically affect the amount of loss. Tap into the resources available to you to ensure you have an understanding the role these documents play in your clients claim.
#3: Thoroughly evaluate and understand the duties your client has in the event of loss, per the policy. Every insurance policy has a section that outlined the duties the insured must comply with in the event of loss. These duties range from prompt notification, providing a detailed inventory of damaged property, providing an amount of claim damages, cooperating with the insurer and providing important legal documents within a certain time period. Sometimes these documents do not have to be requested by the insurer, and the failure to provide them in the timeline outlined within the policy can result in a denial of coverage, which could be binding. Association managers should take great care in making sure that all duties are understood and that appropriate professional assistance in complying with those duties is sought out. The failure to comply with these duties is one of the biggest risks to an association manager, when adjusting claims for their clients, as the failure to comply and perform the duties in the event of loss, can jeopardize coverage for your clients.
#4: Investigate and understand all other timelines that apply in the event of a loss. These deadlines can vary from how much time you have to notify the carrier of your clients intended settlement method, how long you have to notify them of the existence of contaminants, pollutants, fungus, mold, etc. as well as how long you have to perform repairs after the settlement of the claim, and still make a claim for the recoverable depreciation that may be associated with the loss. Understand your obligations, and the obligations of your client in cooperating and assisting the insurer in their investigation. We have seen numerous association management professionals that have compromised their client’s claims, by failing to comply and cooperate (both intentionally and unintentionally) with an insurer’s requests when investigating a claim. While there is a requirement to cooperate under the policy, there are also limits to when an insurer’s requests and demands are considered reasonable. In some of these cases an insurers requests may be outside the scope of cooperation requirements within the policy, or be unreasonable. This is a fine line to walk and it is wise for an association management professional to seek the proper counsel and assistance in evaluating these types of issues, as they can be detrimental to the claim.
#5: Follow up ALL conversations you have with the insurer in writing. Never let it come down to your word against theirs. Any statements, promises, requests or conversations you have with the insurer, stop what you are doing and follow up in writing (email is fine). This will save you from having disagreements on what was, and was not, said down the road.
#6: Be professional! Don’t get hostile, short or aggressive with the carrier, their consultants or representatives. Ask them what they need from you in order to expedite and conclude this claim. Obtain your own estimates, expert opinions and supporting information and make sure they have received it, evaluated it, and if they disagree with it, ask them to outline in writing, with specificity, why. If they assert something from the policy, ask them to send the specific policy section and reference for the language.
#7: Do not be forced into obtaining multiple bids. Your client should interview multiple contractors, make their choice and stick by it. See our blog post, “How Obtaining Multiple Bids Helps Insurance Companies Underpay Claims”, for more information on this topic.
We hope these tips will assist you in any claims assistance you provide in the future. Know that as Colorado Public Adjusters we are always here to provide information and advice to Colorado Community Associations if you run into questions.