Documentation Cubed

by Mark Goldwich

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Everyone knows when it comes to real estate there are only 3 things that matter – location, location, location.  Similarly, when it comes to insurance claims, the key is documentation, documentation, and you guessed it, documentation.

I can do several blog posts on subjects like, “The 5 most common mistakes made by policyholders". But when you boil it all down, many of those mistakes can be avoided if you start with documentation. Now, I can tell you the word “documentation” can mean different things to different people. We all know the person that takes their shoe box overflowing with random receipts and bills to their accountant on April 14th and proudly says, “There’s my documentation, all organized for you!”

Sure, the accountant can fix it, after filing an extension for that person, and a little cursing, but he or she will probably charge more for all the extra time it takes sorting out that mess. So, when we talk about documentation, we are really talking about documentation that is organized and meaningful, not just random, illegible bits of information.

At the start of every claim, I recommend people get out a legal pad, so they can keep track of every conversation and activity that relates to the claim, and keep it in chronological order. Start by noting the time and date of the loss, what happened, what was damaged, and other relevant details (maybe other parties were involved, where it happened, how, etc.). Make detailed notes of every phone conversation (especially those with the insurance company adjusters), appointments with adjusters, contractors, etc., other activities related to the loss, and of course you want to record what has been damaged or destroyed.

For property claims, this can usually be broken down into 2 main areas: structural damage, and
damage to personal property. Most people have a tough time detailing structural damage. Simply do your best to take photos or video. And when it comes to personal property, especially after a large loss like a fire, tornado or hurricane, this can seem especially overwhelming. My suggestion is that you tackle the task the same way you would eat an elephant – one bite at a time. Start in one room, and move to one corner of the room. If needed, zero in on one piece of furniture, like a dresser, and focus on the top left drawer, and continue methodically from there. I recommend you do this for no more than 60 minutes at a time, taking a 15-30 minute break. You may wish to hire a company to help you with this task.

Depending on the size of the loss and your abilities, hiring someone to help document a large personal property loss could well be worth it. I have personally seen clients so stressed out by the event that damaged the property, that the thought of documenting the loss was more than they could bear. They would rather walk away from tens of thousands of dollars than risk their very sanity.

Needless to say, if you are really up on your documentation, you already have a complete inventory of everything in your home, complete with description, date and place of purchase, photo, receipt, owner’s manual, etc., before the loss ever even happens. Just be warned, your insurance company may believe such attention to detail and foresight suggests the loss was planned. Sometimes you just can’t win!

In addition to the legal pad, you might want to use a folder or binder to keep related bills, estimates,
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receipts, letters, and other documents you obtain or produce during the claim aftermath. If these items are not dated when you receive them, place the date you received the document on them* and try to maintain them in chronological order.

*Note: some attorneys might advise against writing directly on a document you did not personally create. I am not an attorney, and I am not giving legal advice here, but in my experience, if you can explain what you wrote, when you wrote it, and why you wrote it, you should be fine. And by all means, when in doubt, ask an attorney.

The point is, in addition to maintaining your documentation, and categorizing your documentation, sometimes you need to document your documentation.  You also need to understand your documentation. This can be difficult, especially if the documentation is handwritten with poor penmanship and grammar, or is of a technical nature.  Whoever is providing the documentation needs to understand what it is they are giving you, and they should be willing to explain it to you. This is where that legal pad comes in handy again. If you don’t understand what the documentation says, how are you going to explain it to someone else?  If no one understands it, what good is it?

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So, there you are, taking notes of every conversation you have with every person related to the claim in any way.  You are keeping every related document in order, and you understand what they mean. You have a list of everything that is missing or damaged. Now, when your adjuster asks you to prove your claim to them, you can make it all but impossible for them to do anything but pay your claim promptly and fully. And if they don’t, you have everything you need to take matters to the next level, whatever that may be.

It may sound like a good deal of work to document your claim, but just think about what happens if
you don’t – that is the stuff “5 most common mistakes” lists are made of. The stress, heartache and financial repercussions from failing to document your loss can be tremendous, and trying to document and organize everything after the claim starts to go south can be more work than doing it to begin with.

Documenting and organizing from the start, and consistently throughout, will take much of the stress out of the process, leaving you more confident and comfortable with everything that is happening. It can be the difference between feeling like a victim, or feeling like you are in control. 

Mark Goldwich is president of Gold Star Adjusters, a group of public insurance adjusters dedicated to helping citizens get the maximum settlement for any insurance claim.

Time for a Little Tornado Tech

by Mark Goldwich

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You can’t watch the news without noticing its tornado season again. Just recently a sizeable tornado hit Illinois, and if you watch the national weather like I tend to, more wicked weather is always on the horizon.  There’s something special about tornadoes. Their size, their appearance, the ferocity, the sound, and the unmistakable path of destruction left in their wake.

Personally, I’ve never experienced a tornado up close and personal, but I’ve seen their aftermath many times. Just seeing the twisted metal hanging from trees, stripped of leaves, and oddities like a 2x4 impaled through a brick wall so cleanly you’d think it was built that way.  It’s images like these that let you almost imagine the sheer power of the event itself. Maybe that’s what is so captivating about tornadoes, the destructive power.

So I thought I’d share a some other facts concerning tornadoes. Did you know a tornado can reach wind speeds of over 300 miles per hour – much stronger than the most powerful hurricanes.  EF5s, the storms that produce these incredible winds,  can even be over a mile wide.  Ir a twister this size were to hit Jacksonville, Florida, it would consume all of downtown in one gulp. And while we usually hear about tornadoes hitting largely unpopulated areas, skipping along for short periods of time before dissipating, that’s not always the case. In one storm, a single tornado hit parts of Missouri, Illinois and Indiana, killing 695 people.   That was in 1925, and while there wasn’t much in the way of early tornado detection, or strict building codes, the population was also a lot less dense then it is today. It makes me wonder how that same tornado would compare today. Hopefully, there would be a lot fewer fatalities.

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Even with Doppler radar and eyes in the sly, the average amount of warning time before a twister hits is only 13 minutes.  Add to that the fact that Tornado Alley comprises an area of 500,000 square miles with a population density of 17 million and you can understand how many people tornadoes can affect.  ". Texas, Oklahoma, Kansas, Nebraska, South Dakota, North Dakota, Iowa, Missouri, Arkansas and Louisiana make up Tornado Alley We usually see at least 500 tornadoes occur in this area every year, which is why it is how it got its name since 30% of the tornadoes in the US occur here. And the most likely time of year to have tornadoes form is from March through May, and usually in late afternoon or early to mid-evening hours.  Sad to say that tornados aren’t relegated only to the mid-west. They can occur in any state in the Union. 

In a quote from Yahoo Finance:
According to the Storm Prediction Center, seven of the 10 costliest tornadoes since 1950 have occurred in Tornado Alley. Topping the list is the deadly Joplin, Missouri, tornado of 2011, an EF5 tornado which caused an estimated $2.8 billion in damages to the town. The Insurance Information Institute reports the average insured loss per year was $7.78 billion between 1993 and 2012 for severe thunderstorm events, including tornadoes.The costliest of those years? An estimated $27 billion in insurance claims in 2011 from severe thunderstorms.
We also know tornados don’t just appear out of the blue.  They form within large thunderstorm clouds, where updrafts are particularly strong. Did you know the average thunderstorm releases around 10,000,000 kilowatt-hours of energy -- the equivalent of a 20-kiloton nuclear bomb?  [source: Britannica]  That’s also the reason many survivors of a twister report they sound like an approaching freight train.  There’s a tremendous amount of power inside a tornado.  And not even just typical thunderstorms, but supercell thunderstorms are needed for tornado formation. Even then, there’s only about a 50% chance an actual tornado will form.

Once formed, a tornado will move with its “parent-cloud”, sometimes hopping, sometimes changing
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directions, sometimes dissipating and reforming again. Scientists still debate the precise reasons tornadoes dissipate without notice, just as they sometimes seem to form without warning, but most agree it has to do with the “parent-cloud”, or rotating mesocyclone, that brings with it disruptive airflow, moisture, and balance of hot and cold air.

 Is there really a “calm before the storm”? The answer is yes and no. That is to say, sometimes there is a period of dead calm just before a twister hits, and sometimes there is not. Every storm is different. Some survivors also report a strange greenish tinge to the clouds preceding a tornado.  The thing that most often separates tornado survivors from victims is preparedness or lack thereof.

Tornadoes strike with little warning. So being prepared is half the battle. So, have a plan – know your plan – and practice your plan. Especially when you have only minutes to act, it’s critical to know exactly what to do, with whom, where and when.  Your plan should be in writing (otherwise, it is just an “idea”). Everyone in your family/household/office should be familiar with the plan. Review, update, and practice the plan each and every year.  

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And don’t forget to include Gold Star on the “recovery” phase of your plan, so when the dust settles, you can give us a call and we’ll take care of the rest!'

Mark Goldwich is president of Gold Star Adjusters, a group of public insurance adjusters dedicated to helping citizens get the maximum settlement for any insurance claim.

Loose Lips Shrink Chips - What NOT to tell your insurance adjuster

by Mark Goldwich

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There are so many great quotes that support this subject – “Silence is golden”, “It’s better to be thought a fool than to open your mouth and remove all doubt”, “Play your cards close to your vest”, and so on.

The point is, as with many things in life, when it comes to insurance claims, you need to watch your Ps and Qs (I couldn’t help throwing in one more). Be mindful of what you say, and how it may affect you later. That could be tricky, especially when you don’t know how what you say now can affect you later as it relates to something as complex as insurance. So, stick to the rules above, and below.

My best advice for when you are talking to any insurance representative (after recommending you consult a professional for representation on your claim) is to say as little as possible, and to keep what you say as factual as possible. Most people, once they get started talking, have difficulty putting on the brakes. Most people are also uncomfortable with “dead air”, or that “awkward silence.” They’ll start off telling you about the pipe that burst, and before you know it, they’ll be rambling on about how their “dog Petey, named after a favorite uncle, doesn’t like a certain neighbor, who’s kid once stole a car and” … you know?

I tell people to just answer questions factually, in as few words as possible, and only if they personally know something to be a fact. For example, if their uncle told them the house was built in 1972, and he explains he knows that for a fact because that was the year the Miami Dolphins went undefeated…and they are asked how old the house is, and they don’t personally know, the answer is “I don’t know.” Or they could say, “I don’t know, but my uncle has said it was built in 1972.” But, “1972” is the wrong answer, even if the uncle was right, and the home happened to be built in 1972.

There is absolutely nothing wrong with saying, “I don’t know”, or “I don’t recall”, especially when that is the truth, but many people feel saying that too many times gives the impression that they are being evasive, or worse, that they are not smart (otherwise, they would know). To me, what’s not smart, is giving an answer to a question when you don’t really know the answer. And to an insurance company, giving an answer that turns out to be proven wrong – can be considered evasive, or even “a material misrepresentation”.

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I also remind people that terminology counts. I’ve heard many people describe a pipe leak, or a toilet overflow, as “a flood”. That may be what it ended up looking like, but in insurance terminology, “flood” refers to “a general and temporary condition of partial or complete inundation of … normally dry area from overflow of inland or tidal waters or unusual and rapid accumulation or runoff of surface waters from any source…”, and for the most part “flood” is not covered by your homeowners insurance. So, don’t say “flood” unless you are really sure this is what it is.

Another often confused term is “back-up”. Sounds innocent enough, right? There are generally two reasons why water comes up out of a drain, instead of going down a drain. Water is either backing up through the city sewer line or a septic drain field (this is a true “back-up”), or there is a clog in a drain pipe (this is technically a “fill-up”). In both of these cases, the results appear to be exactly the same – water coming up out of a toilet or drain. Why does this matter? Well, one is typically excluded from coverage, and one is typically covered. The problem is, most people, even insurance adjusters, aren’t familiar enough with these terms, and if the wrong term is given, the claim is denied. Now, you can’t just say “fill-up” and expect the claim will be paid, either. You have to be able to demonstrate it was truly a “fill-up”, and you may have to be able to articulate the difference, to someone who is supposed to know the difference, but doesn’t, and will not readily believe they have been “doing it wrong all these years” – You can bet I have heard that response a few times.

How about “vacant” versus “unoccupied”? Historically, and generally, when it comes to insurance, the term “vacant” also triggers thoughts of denial by insurance adjusters, especially when related to certain types of losses (theft and vandalism) on certain types of policies (commercial rental or business policies). Here, another seemingly trivial technicality may be the difference between coverage (if unoccupied) and denial (if vacant). The term unoccupied means nobody is living in the property. And the term vacant means there is not only nobody inhabiting the property, but there is no personal property there as well. So if a home is vandalized, and an adjuster learns the home had been empty for 2-3 months before the vandalism occurred, they may deny the claim, despite the fact that the property still contained many personal property items (furniture, dishes, cleaning supplies, etc.). Now, I will say some insurance companies have picked up on this difference, and now take steps to more specifically define what they mean by “vacant”, or they simply exclude for theft or vandalism if the property is either “vacant” or “unoccupied.” 

And then there are words that just scream “not covered!” to most adjusters. You see, most insurance policies have certain things that are universally excluded from coverage. These are things like, “mold”, “rot”, “wear and tear”, “defect”, and just plain “old.” So when an adjuster hears these words coming from a policyholder, the little red light in their head immediately goes off, and sometimes they don’t even bother to verify it for themselves. After all, they were given the “facts” by you, the person who should know best. Case closed.

Mold as a rule is often not covered. But water damage is usually covered. And in most cases, guess what almost always precedes mold? That’s right, water. So in cases where water has damaged property, and then mold sets in, you might want to focus your attention on the water, not the mold if you want to have a better chance of getting paid. Is this being deceptive? An insurance company adjuster might suggest it is, but it absolutely is not, it is being factually correct.

The same is true for rot. Rot is generally not covered. But sometimes the rot that is seen (which may have occurred years ago from an old leak), is simply found in the same area of a new leak. If you just show the adjuster the rot in that area, he or she may assume the rot is related to the “new” leak, believing it is a long-term, on-going leak. A small difference in understanding could change the entire outcome of the claim. We have seen it happen more than once.

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This is just a sample of often confusing and misunderstood terminology related to insurance claims. There are many more, and as we have seen, policies are always evolving to minimize the potential misunderstandings or ambiguities that tend to result in litigation. This is good for the consumer in that lawsuits are reduced, which could (theoretically) keep premiums in check, but on the other hand, it usually resolves the ambiguity in favor of those who write the policies to begin with – the insurance companies.

I hope you have learned from this that when the chips are down, it is best to know your insurance policy, know your terminology, and as Kenny Rogers famously sings, “You gotta know when to hold ‘em.” By that I mean, don’t spill your guts when talking to an insurance adjuster, because words matter, and simple misstatements could mean the difference between a claim’s life and its demise.

Mark Goldwich is president of Gold Star Adjusters, a group of public insurance adjusters dedicated to helping citizens get the maximum settlement for any insurance claim.

Hold the Mold

by Mark Goldwich

If you are like me and many other people I know, you have been suffering from allergies due to especially high pollen levels. It is amazing how much aggravation those tiny little spores can inflict on people, especially if they are sensitive to it, as I am. While I usually like to be outdoors and enjoying the sunshine and fresh air, lately I just want to be in my home or office, windows shut tight, breathing nice stale air with minimal pollen.
Knowing there had to be a way to relate this to insurance claims, I quickly realized mold is a lot like pollen – itty bitty spores floating around when the environmental conditions are just right, wreaking havoc on those people who are most sensitive, and those items that are most difficult to get mold out of.
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Mold damage to domestic and commercial properties can be both extremely dangerous from a personal health perspective and quite expensive to repair - far more expensive to repair than a lot of property owners realize. Especially if it’s that black mold we keep hearing about with the scary name - Stachybotrys chartarum. This variety of mold has been known to cause illnesses including brain damage, and has also been said to be linked to “sick building syndrome”.
Not surprisingly, perhaps, the insurance companies have not only figured out how much this kind of damage can cost ... they have also figured out how to avoid paying for the majority of the damage in the most severe cases.
Like most things, it used to be a lot simpler. In the situation where you have a sudden major loss that is covered by your policy and mold quickly ensues as a result of that loss, then historically, what has happened is that the policy simply kicked in to cover the damages. Whatever the insurance company had to pay to repair your property was simply what it would pay, whether it was a little, or a whole lot.
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I actually had a claim just a couple of years ago where a couple had what was deemed a covered mold loss, and the insurance company ended up paying something close to a quarter of a million dollars – a huge amount – especially when compared to the $8,200 the insurance company offered before I got involved. Of course, that was what the couple had been paying healthy premiums for years to be protected from: that huge repair bill.  
Nowadays, that simple outcome is much less likely to happen, at least in my state. In almost every policy in the state of Florida, you will find something called a "mold endorsement." This is a very tricky piece of policy wording. Why do I say "tricky?" That’s because normally, an endorsement is something that gives you additional coverage within your policy above and beyond the boilerplate language. This passage is tricky because it leads you to expect you are getting coverage that you're not.
The policy seems to give you extra coverage for mold, but actually, under this endorsement, that coverage is severely limited, typically to a maximum of ten thousand dollars. That may sound like a lot of money if you've never been through the process, but as the experience of those homeowners I worked with a few years back suggests, it really isn't.
Notice once again what has happened here. The industry is not cutting your premium by 90% because you're suddenly getting a tenth of the coverage on mold damage that you might have imagined you were getting when you first became a customer. It's simply reducing your coverage by 90% and calling it a day.
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If we went to the supermarket, and found we had to pay the same amount for a gallon of milk that we had to pay last week … but then realized, as we put our groceries away, that the gallon container only contained a cup of milk … we might have cause to complain to the state consumer protection authorities. And we certainly would have cause for complaint if we noticed that every single provider of milk in the state had executed the same “adjustment” at roughly the same time! In such a situation, it would be very hard to believe that the local and national news outlets wouldn't devote heavy coverage to such an “adjustment,” and it would be hard to imagine, too, that politicians and regulators would sit still for such abuse of the consumer.
But this isn't milk we're talking about. It's insurance. It's not something you pour on your cereal. It's your ability to restore your life, your home, and your family after a disaster. So no one pays much attention. Except the individual consumers who find out the hard way that they have a problem.
The problem is that most homeowners a) don't know that ten thousand dollars may not be close to  solving a mold remediation problem, and b) would probably never bother to check the language anyway. So what has the industry done here? It has simply decided that it was paying too much on completely legitimate mold claims ... and found a way to pass the vast majority of the costs to repair the most serious cases on to consumers who don't know any better. The insurance companies needed no legal authorization to do this. They simply put it into their agreement, called it an "endorsement," and made your life significantly more difficult and expensive when the time comes to deal with the mold problem. Here again, we have a situation where you need a professional review of your policy before you sign on the dotted line, especially before you accept a claim settlement.

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I certainly hope this has enlightened you a little bit about mold endorsements. But, there is actually a whole lot more on the topic of endorsements that you should know about – maybe next time! Just remember, when it comes to mold, or endorsements, or anything insurance claim related, don’t assume the insurance company is on your side, and don’t accept what they tell you as the absolute truth. Seek professional help … just as you would for severe allergies.
Mark Goldwich is president of Gold Star Adjusters, a group of public insurance adjusters dedicated to helping citizens get the maximum settlement for any insurance claim.