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Everyone talks about the calm before the storm when what they really should be forcused on is the calm AFTER the storm. In the wake of Hurricane Hermine last week, I wanted to talk about some storm insurance basics. First, a little about myself, just so you know I’m qualified to speak on the subject. I’m a Florida native, and have seen my share of tropical storms and hurricanes over the past 50 (or so) years. I have a Bachelor of Science degree in Insurance from the University of Florida, and my diploma is hanging on the wall behind me. I’ve been a licensed insurance adjuster in Florida since 1987. I spent 17 years with one of the country’s largest insurance companies, and personally handled or managed the handling of hundreds of thousands of claims, in many states across the country. In 2004, I decided to leave my job at the insurance company, start Gold Star Adjusters, and adjust claims for policyholders, not insurance companies. A few years later, after seeing too many terrible things happening to so many insurance claim victims, I wrote and self-published my first book, “UNCOVERED: What Really Happens After The Storm, Flood, Earthquake or Fire”.
So with that out of the way, here are some little-known facts about property insurance:
First, how do you think about your relationship to your insurance company? How many of you think of yourselves as a “customer”? Do you want to know what you really are? – You are a financial and legal adversary. That’s right. Now, if you have an insurance agent, especially and independent insurance agent, you may feel like a customer to them, and to be honest, they probably feel the same way about you. But to the claims department of the insurance company, as soon as you file that insurance claim, you are asking the insurance company to share their profits with you. To get an idea of how well that goes over with them, think about asking Microsoft to share profits with you the next time you buy a computer. Good luck.
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Did you know that although insurance is generally marketed as a “product”, your insurance policy is actually a legal contract? The insurance company writes the contract, and when you buy the insurance, you are accepting the contract. Did you also know that while you can’t negotiate how the contract is written, you can negotiate the settlement of a claim? The catch is, even if you knew you could negotiate the settlement, who do you suppose knows more about insurance? - the insurance company, or you, the policyholder?
Not only can you negotiate an insurance claim, but did you know you can re-negotiate a claim after it has been paid (or denied), or that you can re-open a claim years after it has been closed, or even after it has been denied? You can. In Florida, you have 5 years to pursue your claim (except after a windstorm or hurricane like Hermine). But again, even if you know this, how well are you going to do against the insurance company’s experts? You see, while you weren’t looking, your insurance company, their lobbyists, and your state representatives changed that a few years back. Now you only have 3 years to pursue your hurricane claim. Two years, gone, just like that.
Did you know that just because your insurance company sends an official letter, complete with policy language or other legalese, stating your claim has been closed or denied, that doesn’t make it so? We get many of these denied claims paid every year.
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OK, now that you’ve learned a little more about the insurance industry than you probably wanted to know, let’s talk a little about how you can make the best of it, should you ever need to file an insurance claim (a lot of this comes from a section in my book, UNCOVERED, detailing my “10 commandments of claims”):
Know your insurance policy. Meet with your agent and have them explain it to you, and make sure you have the proper coverages, endorsements, limits, and deductibles, based on your individual needs.
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Flood is not covered by homeowner’s insurance, so consider buying a flood policy.
Just because you’re not in a designated flood zone, doesn’t mean you won’t get flooded. Flood zone maps are created and updated by the federal government. If you trust their accuracy now, you may be one of 1000s filing for government assistance later. Think about it, we (especially in Florida) are surrounded by water. I don’t care what the flood map says, if you live in Florida, you stand a real chance of flooding.
Take photos or video of your property and valuable possessions, and store important documents where they can’t be damaged (the cloud, family, safe deposit box, etc.). These photos and videos could prove to be invaluable when it comes time to documenting your loss.
Don’t try to pull one over on your insurance company – be thorough, but honest. Many of their best adjusters work in their “fraud” units. It would be nice if their best and brightest adjusters were the ones paying claims, instead of being the ones denying claims, but that’s another story, and a testament to the priorities of the insurance companies. Inflating a claim is just not worth risking a felony conviction.
Take notes of everything that’s damaged and keep a detailed log of all conversations with your insurance company, your contractor, and everyone else. Show the adjuster all the damage and be as thorough as possible. If the adjuster doesn’t want to spend to time to review it all, make a note in your log, and have them (or someone else) come back when they have more time. Review the adjuster’s estimate in detail, until you understand it completely. Request a licensed contractor or other professional review the insurance company estimate and provide an independent quote.
If the insurance company refuses to pay for anything at all, demand they explain why – in writing. Even if they explain why in writing, get a second opinion. I can’t tell you the number of times we have gotten claims fully paid after the insurance company initially denied the claims, in writing, including the exact policy language they relied upon to deny the claim to begin with. My motto is, “the claim is covered until I say it is not”.
Be persistent and don’t give up. Appeal up the chain of command. Too many policyholders give up too easily, and as a result, I am convinced they leave many tens (if not hundreds) of millions of dollars in the insurance companies’ bank accounts every year.
And, lastly, seek professional assistance when needed. Whether from a public adjuster, attorney, contractor, engineer, politician, consumer reporter, or anyone else you think can help.
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.