Most all Association Managers have experienced an insurance claim filed by their clients. No doubt in many cases this translated to additional responsibilities to these managers in an attempt to settle these claims on behalf of their clients. Which I presume resulted in varying degrees of success and stress in the process.
There are several reasons why an association manager is wise not to represent or attempt to adjust, settle or negotiate a client’s insurance claim. The following are some of the reasons an Association Manager is should never adjust a claim for their clients, and should retain the services of an experienced and Licensed Public Insurance Adjuster.
First, most states have laws requiring a person adjusting a claim to hold a Public Adjusters license or to be a licensed attorney. While it is not uncommon for an association manager to oversee and adjust a claim for their association, they are doing so at an incredible risk. Insurance policies are contracts, and like all contracts both sides have expectations and obligations to live up to, or there are consequences. Insurance claims have MANY deadlines and requirements of the policyholder. These requirements include timelines by which documents or requests must be submitted or adhered too; all of which if not properly complied with, can result in the outright denial of a claim, a denial that could be upheld if legally challenged.
There are many cases and instances out there of Association Managers, who made critical errors in complying with such deadlines and requests at great detriment to their client’s claims. Many clients in these situations to recover damages for the losses as a result of their mistakes have sued the Association Managers. As an Association manager can you imagine the ramifications if you missed a deadline, or made a mistake in the claim that resulted in a denial? Or cost your clients millions of dollars? Considering the benefit, Association Managers are wise to stay away from this liability.
The same holds true for an Associations Board of directors when adjusting claims on behalf of the owners or tenants. If a board were to have a valid claim denied as a result of their failure to comply with the terms of the policy, they are exposing themselves to risk of being sued by the homeowners. While many may have “directors and officers liability” coverage to protect against the financial impact of such action, a claim like this it’s not worth the risk.
Secondly, insurance claims are very complex and confusing, which an insurance company may use to their advantage when a nonprofessional adjusts a claim. Often times even to me a professional, coverage’s, damages and amounts owed are misrepresented and in the absence of experience will go uncorrected. This can translate in many claims to millions of dollars going unrecovered, that would not have been without a professional.
Thirdly, insurance claims when adjusted properly can require a significant amount of man-hours and expense to present properly. It is not uncommon for a public adjuster to have 100+ hours and $20,0000+ of their own money tied up in presenting a claim for an insured, sometimes that is what it takes to get my clients what they deserve. Most Association Managers I work with are extremely busy, and quite frankly don’t have the time, nor do they want to spend the time to stumble through the claims process.
Fourthly, a Public Adjuster will obtain a much higher settlement for your client. Which will result in them being able to complete the restoration of damaged property with the highest level of consideration for quality workmanship and installation, superior products, and better warranties with the utmost attention to detail and safety from a high-grade contractor. Most association managers take this for granted until an underpaid insurance claim results in a contractor having to cut corners on construction. Most associations, who have allowed their insurance companies to settle their claims uncontested, will be forced to work with a contractor who will be required to cut corners on the project in order to make a profit on the job. A Public Adjuster knows how to secure a settlement that will ensure the Association Managers are not chasing poor construction for the decades to come.
We hope this post has opened up some people to understanding why the services of a public insurance adjuster are important to them and their clients, and why an association manager should never adjust an insurance claim for their clients.