All is Right With the World of Claims

by Mark Goldwich

Recently I wrote posts about two claims I was handling. They were similar in that both cases

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involved strict denials, meaning that the insurance companies were saying the claims were not covered at all, in any way, for any amount, and they had very specific reasons, using verbiage selected from the insurance policies, detailing why the claims weren’t covered. They were also similar in that from my very first consultation with the insured, I could understand exactly why the insurance company would reach the conclusion they did, yet I did not agree with the insurance company in either case. Additionally, they were different in that the two claims were the result of completely different causes of loss, and the two claims were denied for completely different reasons.

In one case, the insureds suffered damage from a pipe breaking inside a home they recently purchased, but before they actually moved into the home. The insurance company could not see a way to otherwise deny the claim, until the insured mentioned they had not moved into the home, and it had been over a month between the date the home was insured, and the date the claim was reported. You see, there was some obscure (to most people, but not to the insurance company) language in the policy that said there would be no coverage for water damage if the home was vacant or unoccupied for over 30 days (heads up for anyone that has any home, rental property, business, or other property).

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To most people, hearing the bit about there being a month between buying the home and reporting the claim would have been meaningless. After all, what is a month in the scheme of home ownership? And besides, it’s not really that uncommon to purchase a home, but not move in right away because you haven’t sold your prior home yet, and sometimes the new home is not “move-in ready”. That’s how most people think, anyway. But to most insurance adjusters, the mere mention of that month is like waving a red cape in front of a bull. It triggers some pleasure receptor in their brain, instantly bringing them back to a day in claim training when an instructor said something about a policy exclusion for losses to properties vacant or unoccupied for at least 30 days. They are suddenly curious, but only inasmuch as the answers continue to trigger those pleasure receptors.

So once the adjuster’s “investigation” confirmed the sale date of the new property, the fact that they did not move into the new property right away, and the approximate date of loss being beyond 30 days from the sale date, they had all they needed to keep those receptors firing in their brain, and their sense of curiosity quickly fades away. Their work is done. They can close that file with a form denial letter, and move to the next claim in a tall stack of claims.

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Until, that is, until they get my letter, explaining that they overlooked a key piece of information in

their “investigation.” What they missed was the fact that the insureds did not just purchase the home and not move in, the husband stayed in the home after the purchase for a few weeks to work on it and prepare to move in, while the wife returned to the prior home to prepare it to move out. With just those few weeks taken into account, the time the home was unoccupied was reduced to about 3 weeks. Initially, the carrier simply replied that they were standing by their decision to deny the claim.

After another letter explaining their error, they re-opened their investigation, and requested proof of when the loss actually occurred. Fortunately, this loss was discovered by the local utility company at the new home when they went out to read the meter, so we knew the leak occurred on or before the date the meter was read. Once we got that information in writing from the utility company to the carrier, they agreed to pay the claim, which totaled over $35,000.

In the other case, extremely heavy rains caused water to enter the insureds’ home as they slept, by filling up a unique atrium room within the home. The water could not escape the holes built into the exterior wall of the atrium fast enough, and the water rose until it was able to pass under the French doors leading from the family room to the atrium.

In this case, multiple triggers starting firing on those receptors. Words and phrases like, “flood”, “surface water”, “subsurface water”, “rising water”, “design defect” and “no opening created” overwhelmed their pleasure receptors and once again, true curiosity failed to take root. This one was easy, they no doubt thought, it’s simply not covered. The form letter went out, and the claim was closed.

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Again, that is, until the insurance company got my letter explaining they had misinterpreted their own insurance policy, whether as an innocent mistake, or something more nefarious. As the coverage question in this case was more complicated, it took more letters, and phone calls, and a demand the matter be mediated via a State mediation program, and frank discussions about attorneys getting involved and how other similar cases were ultimately ruled on by various courts – but we eventually settled this case as well. While the dollar amount on this claim was less than the other, I was happier about this resolution because the coverage issue was more contested. It took more research, and more negotiation efforts, but I felt strongly that we were right, and they were wrong. Now, the settlement agreement will say the insurance company does not admit they were wrong… but I know.

Being passionate about what I do for a living makes it worthwhile, even when things don’t always go my way. Fortunately, that doesn’t happen often. But when the stars align and multiple cases go our way, as they usually do, it feels even better! For now, all is right with the world (of claims).

 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.