As I have adjusted property insurance claims over time, there is a list of statements, assertions and positions, that I repeatedly hear and see from insurance companies, their consultants and experts; that leave me flabbergasted every time I encounter them. It seems no matter how many times insurance companies and their consultants have made these statements, or taken these positions against clients of this firm, and ultimately been proven to be completely afield from reality; they do not hesitate to make the same assertions on subsequent cases we run into them on. While our firm is abundantly equipped to overcome these repeated positions, many policyholders who take on their claims self-represented most likely do not have the experience to know when the fix is in.
While we always recommend policyholders obtain professional assistance at the outset of a loss, for those policyholders who go it alone, here is a list of the top 5 of warning signs that you may want a professional and neutral second opinion when dealing with a Hail and/or Wind loss.
#1: This damage happened outside our policy period.
This one has always been my favorite. When dealing with a hailstorm or wind loss, this is generally the a “go to” for insurance companies and their consultants to redirect the liability and obligation elsewhere. This position will likely be accompanied by a fancy report from an engineer, who will have cited weather data back in time (until they find a date with hail bigger than the storm in question) upon which they will likely attribute the damages to such a historical event, usually which occurred outside their client’s policy period. Our firm presently has a case in where an insurance company’s consultant is attributing the observed hail damages to a storm back in 1991! The consultants didn’t realize when he wrote his report, that the buildings current roof system was not installed until after that time (pretty hard for a historical event to damage materials that were not present at the time). I wish this was a lone or isolated incident, but unfortunately this defense has become an all too common one in our experience. When you hear this position, call a professional to have the facts and position evaluated.
#2: This damages are “cosmetic” not “functional” or have “not reduced the lifespan of the roof”.
The second most common defense we encounter in hail and wind losses, is the misclassification and redefined definition of what constitutes damages. All too often insurance companies are relying upon 3rd party consultants and experts to determine the cause and extent of damages that may have occurred. These 3rd party consultants and experts, and subsequently insurance companies, have systematically begun taking the position that certain types of damages are considered by them to be “cosmetic” not “functional” or having “not reduced the lifespan of the roof”, and therefore should not be paid for. In nearly all of these encounters this classification of damages contradicts the definition of damages within most insurance policies, or is completely errant from a scientific or factual perspective. These type of mischaracterizations are common when evaluating damages to metal surface, asphalt shingles, wood shakes, HVAC and mechanical equipment, and other common building components. While some insurance policies are starting to redefine the definition of compensable damages, many cover these damages and are owed to a policyholder. When you hear this assertion, call a professional to have the facts and policy evaluated to determine the position is correct.
#3: You need to get multiple bids OR your contractors prices are too high OR We are going to get competitive bids.
We frequently encounter insurance companies either demanding that their insured obtain multiple bids, or taking it upon themselves to get “competitive bids” as they refer to them; to arrive at a determination of the amounts owed a policyholder. It is important for a policyholder to understand that YOU select your contractor, and most states have passed laws outlining that the right to select a contractor is assigned solely to the policyholder. This does not prevent insurance companies from utilizing the process of obtaining “competitive bids” in order to seek a favorable amount of repair costs and recommendations. Often times these bids are obtained from contractors and consultants beholden to the insurance company. And in situations where the Insured obtains multiple estimates, in our experience the insurance company frequently attempts to pay the lowest estimate, or assert that they are all “above fair market pricing.” Policyholders should interview multiple competent contractors, select the contractor of their choice and be committed to the use of that contractor, rather than letting an insurance company choose for you. Our blog has two other posts on these issues, if you would like additional information check them out. “Preferred Contractor? We would Prefer Not!” and “How Obtaining Multiple Bids Helps Insurance Companies Underpay Claims”. When you hear this, call a professional public adjuster to have your claim evaluated.
#4: The initial Actual Cash Value Payment is less than 75% of the Replacement Cost estimated by your insurance company.
Most insurance policies with a replacement cost value (RCV) settlement provision, promise the insured the replacement of old materials for new materials of like kind and quality, when a covered loss occurs. This coverage is offered in exchange for additional premium from the insured. Alternatively, the Insured may choose to settle for the Actual Cash Value (ACV) of these loss, which is the RCV less any amount withheld (Depreciation), these withheld amounts are reductions for things such as age, condition, obsolescence, etc… This settlement option allows the insured to recover depreciation withheld upon completion of the repairs, and serves to ensure that repairs are made. However, in our experience it is all too common that we experience insurance companies overly depreciating losses, which reduces the proper ACV amounts owed to a policyholder. In a situation where an insured intends to settle on an ACV only basis, the amounts withheld are unrecoverable, and these amounts are rightfully owed to the policyholder. In a situation where an insured intends to settle on an RCV basis, the under depreciation of claims puts additional burden on the insured who often times must front additional money to contractors in order to complete repairs. On large losses, like the ones our firm specializes in, this can be a significant burden upon the policyholder. While the above percentage may not be applicable in all situations, or a firm and fast rule, it is a good rule of thumb. If you are provided with a settlement proposal where the ACV amounts are less than 75% of the RCV amounts, call a public adjuster and have the calculations of damages reviewed and evaluated.
#5: When you are told you don’t need a Public Adjuster or Attorney to assist in your claim.
Often times when disputes arise, or frustration on the side of policyholder comes to a breaking point; it is common for a policyholder to ask, or sometimes threaten, to seek professional help from a Public Adjuster or a Lawyer. I have yet to hear of an insurance company or a representative encourage an insured to seek a professional opinion. In our experience, insurance companies and their representatives, whether in the situation of a dispute, or if they catch wind that an insured may be seeking professional representation; will make provide assurances, or try to convince a policyholder that seeking professional assistance is not necessary. If your insurance company is telling you that you don’t need a public adjuster, I would suggest you call us and find out what a public adjuster can do for you on your specific claim.