Ask The Public Adjuster About Insurance Claims: Claims adjuster. denied insurance claims

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This Time It’s Personal

By Mark Goldwich

As a licensed adjuster for 30 years, I am more familiar with insurance claims than most people will ever be. I have personally handled thousands of insurance claim
s of all kinds in many states around the country, and I have managed or overseen the handling of hundreds of thousands of claims by others. I have stood with people whose homes or businesses were ruined, and those who suffered no damage at all, but just wanted to be sure. I have spoken to many, many others by phone. I’ve heard their stories of loss, and of the trials of the claim process, as well as the repair and recovery processes. And I have witnessed both the despair when claims go poorly, and the joyous relief when claims go well. It is safe to say I’ve seen and heard just about everything when it comes to claims.

But it’s different when the claim is MINE, right? Well, yes and no. You see, my own home was damaged recently when on Friday, October 7, 2016, Hurricane Matthew skirted the eastern seaboard of the United States. It was not an extreme amount of damage, but more than enough to file a claim. My roof was badly damaged, as was my fence, and a few other smaller items. No big deal, I thought, at least the roof wasn’t leaking, and no large trees had fallen on the house. So, as far as storm damage, we were luckier than many. But just to be sure, I followed the advice I have given to others – I got out a pad of paper, noting all of the damages, and began logging all claim related activities. I also took photos and videos of the damages. Then on Monday morning, I called my claim in, once I was certain my covered damages would exceed my hurricane deductible.

After that, we waited to hear something from our insurance company. About a week later, my agent called, and said he was just checking to see how the claim was going. I’m not sure, I replied, because aside from his call, we had not heard anything from the insurance company at all. Not a big deal, I told him, there are plenty of people with much more severe damage, I’m sure they’ll get to me soon enough. A week later, my in-laws’ claim for similar damage was being finalized by the very same insurance company, even though we had submitted their claim for them several days after calling in our own claim. I was beginning to think this insurance company was giving me extra slow treatment, but the next day an adjuster called my wife to schedule his inspection of our damages.

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In the meantime, we began gathering estimates from different contractors just as anyone would, while waiting for the adjuster to get back to us with his estimate of the damages. When the estimate came back about a week later, I guess I should not have been too surprised that it came without a check, because I’m accustomed to this particular insurance company depreciating heavily, and making small up-front payments until the work is done, and then the recoverable depreciation is claimed and paid.

Still, I couldn’t help but compare my estimate (with no payment) to that of my in-laws. My estimate was nearly twice that of my in-laws, yet they received an up-front payment (albeit a small one), and I received no up-front payment at all. Again, same insurance company, same geographic area. It just seemed there was some disparity in our treatment. Could it be because my father-in-law retired from that insurance company after decades of service, whereas I resigned from that insurance company to represent policyholders with claims against that insurance company? Or was it all just coincidental? Either way, I was starting to feel slighted. I talked to an attorney – not because of what I perceived as delays in handling my claim, or even the disparity in the handling of my claim versus the claim of my in-laws, but because I was anticipating what might come next, and I wanted to be ready.

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From repeated experiences with this insurance company, I knew that when an insured asks for more money than the adjuster estimates, this company goes on the offensive and demands what is called an “Appraisal”. This is a process in many homeowners policies which was initially intended to reduce the number of claims being litigated. The Appraisal process basically states that if either party (the insured or the insurance company) feels there is a dispute as to the amount of the loss being claimed, either party may demand an Appraisal to resolve the perceived dispute. In doing so, each party would have to hire (and pay for) an appraiser, and the two appraisers would select an umpire, whose job would be to help resolve the dispute if the two appraisers were unable to agree on their own. The cost of the umpire is split between the parties. In other words, if you don’t agree with their estimate (and we find very few of their estimates to be agreeable), you have to pay – generally over $1,000 – in order to get the insurance company to pay the full claim. Nice, huh?

So when we were done collecting estimates from the various contractors, I starting looking for a Proof of Loss form in order to submit the estimates. Because I am an adjuster, and because I used to work for this particular insurance company, I knew the policy contained a “Condition” which required I submit a Proof of Loss (POL) within 60 days of the date of loss. I was surprised when I could not find this form online. Then I checked the insurance company website. Not there. Then I remembered this insurance company allows clients to create an online profile and track claim progress online. I did this, and I must say, it was pretty slick. I could check the status, upload documents, correspond with the claims department and my agent, even look at all my policies. Cool!

But, no POL, not even in the sections marked “Resources” or “Documents”.

So I called the claim representative designated right there on my claim status page. She answered the very first time I called. Sweet. I gave her my information, and she asked how she could help me. Not needing to discuss the claim, I simply asked for a Proof of Loss form. She said she did not complete one. I told her I know that, but I needed to complete one now that I have all my estimates together.

She said no, I didn’t need to complete one, I could just send in the estimates. When I said I would

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rather submit the POL as required by the policy, she proceeded to argue with me about whether or not the policy in fact required me to send a POL, unless she requested one from me. Even when we both pulled up the policy on our respective computers, she continued to argue the policy language, because she was reading from a section above the section in question. Even after pointing this out to her, she would not agree. Finally, I simply insisted she send me the form, even if she didn’t think I needed it. She said she would, and we hung up. Hours later she called me back and left a message saying she would NOT send me the form, stating, “That is not something we routinely send out to customers.” Again, having worked there for 17 years, I know that form is sent to customers on a very regular basis.

So, was I being intentionally lied to? If so, why? Or, was this adjuster so poorly trained that in addition to being unable to read and interpret the policy, she did not understand what this form was, or that is was required as a condition of payment? Either way, now it became personal for me. I promptly filed off complaints with the company, my agent, and the Department of Insurance in my State. All I wanted was a form – one that was required by my policy, and the company not only made it impossible for me to find this form online, but was actively refusing to provide it to me upon request. I couldn’t help but think, how many millions of people are they doing this to every year? And how often do they deny claims for failing to submit a form they don’t tell people about, don’t provide access to, and even tell people it is not required?

I may never know the answers to those questions, but just today I received a call from some supervisor in Atlanta. They received my complaint. He apologized, agreed the policy says exactly what I already know it to say, and he said they would send me a blank form. We’ll see. It just goes to show, no matter how experienced you are, things are different when they happen to you. Luckily, as upset as I may be that it happened to me, I am much more upset that this (and worse) is currently happening to untold numbers of other people far less equipped than myself at dealing with insurance company bureaucracy. Good luck to us all!

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.

Surprises You Can Do Without

by Mark Goldwich

Image courtesy of commons.wikimedia.org

Being a fan of Weather.com, I was noticing that even though it is not making national news – whatwith the first presidential debate and Charlotte riots and all – there continues to be bad weather wreaking havoc in parts of the country you might not normally think about. Deadly flooding in Iowa, Minnesota and Wisconsin, and tornados in Indiana and Utah, seem to happen with little warning, leaving death and destruction in their path which will be remembered for years to come.

This is happening almost a month after Florida saw damage from the first hurricane to hit the state in eleven years. Hurricane Hermine did not come out of nowhere, but as hurricanes go, it developed rather quickly, going from a depression to a category 1 hurricane within 24 hours of making landfall. Typically, these depressions are tracked for weeks, with courses predicted and severity estimated in plenty of time to allow for preparation or evacuation. That didn’t happen this time, but fortunately, Hermine wasn’t a very powerful storm, and it moved through the state and was on its way relatively quickly, so damage was not nearly severe as it could have been.

As is typical of many lower level hurricanes, most of the damage resulted from flooding, not from the powerful winds hurricanes are known for. And much of the wind damage occurred when trees, planted too close to structures, and allowed to grow untrimmed, were toppled onto homes, cars, and other property. Sometimes, people are in those homes, making for a dangerous and frightening experience. The same holds true for people trapped in homes by fast-rising waters or flash floods, given no time to escape. Regardless of the nature of the damage, once the wind has stopped blowing or water recedes, there is another frightening experience awaiting those trying to put their lives back together. We hear about it every time an event like this happens.

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Just last week I heard from someone who had a very large oak tree land on their home after Hurricane Hermine coasted through the state capitol of Tallahassee. It wasn’t even their tree – it was their neighbor’s – but it was big enough to crush a number of roof trusses on their home which allowed water to run into their attic. It also smashed a skylight, and a kitchen vent, allowing more water into their home. They placed buckets about to catch the water streaming into the house, and spent most of the night emptyin
g the buckets as they filled up with water. Before too long, insulation in the attic got so heavy from all the water, that the ceiling collapsed onto the floor. Luckily, no one was hurt, but their home was a mess.

They promptly called their insurance company first thing in the morning to report the loss. Their carrier put them at ease, telling them a “preferred vendor” would be out to take the tree off the house and begin to clean up the mess. And sure enough, an hour later they received a call from a restoration company. This particular restoration company is nationally recognized in the insurance industry, but many people have not heard of them because they do not advertise as much as other companies. It seems they don’t need to, since insurance companies so regularly refer them to policyholders who need emergency restoration work.

This may sound innocent enough, but we have found that having this special relationship between the insurance company and the emergency restoration company can be very good for all parties, except for the policyholder – the one that is in dire need. The restoration company gets work handed to them on a very regular basis, saving potentially millions in advertising nationally every year. By getting to the job site first, this company has gotten extremely proficient at selling themselves to the policyholder to complete all the needed restoration work, especially since they already seem to have the approval and blessings of the insurance company. This nets them even more money than the emergency work they were initially called out for.

And what does the insurance company get? They get a nationally branded contractor that will respond to their requests for assistance at a moment’s notice, and local managers with whom they develop long-term relationships. They also get preferential treatment, even compared to the homeowner for whom the work is being done. After all, it is the insurance company that pays the restoration company, not the homeowner. It is only natural then, that the relationship between the insurance company and the restoration company can result in blurring the loyalty lines. Remember, they want that flow of claims to keep streaming into their pipeline, so if they have to jump through a few extra hoops, or make less money on a job here or there to keep their “partner” happy, that’s what they are going to do, even if it comes at the expense of the policyholder.

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So in this case, the insurance company’s preferred restoration company was on the site within a few hours of the homeowner’s call. As discussed with the insurance company, the tree was cut up, the mess dealt with, and a tarp was placed on the roof to prevent more water from entering until the reconstruction could begin. Then they began to work their magic, explaining to the homeowner that they were the insurance companies preferred contractor, and that they would write up a complete estimate for all of the damages and reconstruction estimates. They said they would help take care of everything, including helping the family relocate while the work was being done, not to mention meeting with the insurance adjuster to agree on the estimate. Within days, the insurance adjuster and the preferred vendor met, just as planned, and the adjuster told the contractor, “send me your estimate”. It all seemed to be going according to plan.

But the next day, the contractor came out again with an engineer to confirm the damages and begin the permitting process. And while they were there, the contractor first asked the homeowner to sign what is called a “work authorization”. This allows the contractor to access the property and work on the repairs – basically, hiring the contractor even though no estimate was done. While many people might not be familiar with this form, this particular homeowner was (since he himself is a contractor), and he knew this was not necessary in order for the contractor to provide the insurance company with an estimate. It was clear the contractor was not happy, and the request became more firm, with the contractor saying the form was needed for the contractor to send the estimate. The homeowner refused, and the contractor left in a huff. That was a few weeks ago, and as far as he can tell, no estimate from the preferred contractor was ever sent to the insurance company.

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A week later the insurance company then sent their own adjuster’s estimate, but it was woefully lacking. This comes as no surprise to me, and in my opinion, it is simply a strategy to coerce the homeowner into hiring the preferred contractor, in hopes of getting the process back on track. By this, I mean the track desired by the insurance company and their contractor. Now it is our turn get this claim back on track for the policyholder, and that is exactly what I intend to do.

In the wake of such catastrophes, it is easy to see how people would be vulnerable in a time of calamity. They are desperate to have the damage repaired so they can get on with their lives. The thought of an insurance company working in concert with a contractor to take advantage of a policyholder that has paid a lot of hard-earned dollars for the promise of being treated fairly, is hard to believe. Still, based on my decades of experience, I’m afraid it might be the rule rather than the exception, and this example certainly seems to support my suspicions. After weathering the storm you need to be strong, and especially vigilant before signing anything. For those who know, help is just a phone call or keystroke away. And since being forewarned is forearmed, now you know.

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.

The Delay is in the Details

by Mark Goldwich

Image courtesy of flickr.com

To begin to understand how and why insurance claims can sometimes drag on way too long, it is important to start by understanding the key players. Insurance companies employ representatives who answer policyholder phone calls (but lack the experience or authority to do anything about it), various claim representatives/adjusters (field, office, staff, independent, examiners) of differing experience levels, as well as experts (contractors, consultants, engineers, attorneys) to help determine how a particular claim is to be handled.

The call representatives are in an office full of cubicles, all of them are connected to a computer by a headset, which reports to supervisors the number of calls taken, the average call time, the average wait time, the number of breaks taken, and other factors that determine compensation or even continued employment. The supervisors can also "listen in" on random or selected calls to grade the call rep. You know, for "quality control purposes". I'll agree with the "control" part of that.

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The field adjusters go to the property and take photos, diagrams, measurements, and collect other information about the claim to report back to a claim examiner or manager with their estimate of the damages. Sometimes they set their own schedule, and sometimes they have their appointments scheduled for them by other representatives in the office. Either way, they are usually kept very busy.

As you might imagine, insurance companies do not like paying for idle time. They get to the property, where the owner wants to describe everything, go into detail about how the loss occurred, what they did, the origins of the property damaged - and the adjusters just want the basic facts so they can get to their next appointment. Many of these field adjusters, being independent adjusters, are paid based on the amount of the claim, or the number of claims handled, not on the time they spend listening to the policyholder.

The examiner is typically the one that decides (often with the help of a manager) how much is going to be paid, if anything. Many times, the examiner has less field experience than the field adjuster that was actually at the property. Regardless, it is the examiner that usually makes the final call on coverage and payment. And keep in mind, unlike many of the field adjusters, the office examiners generally do not get paid based on the number or size of the claims, but on a salary, no matter how many claims, or what size claims, they review. In many cases, the examiner believes a more expert opinion is needed before they will "sign off" on the claim, so they assign this task to whomever they believe can help (contractor, consultant, engineer, attorney, etc.).

So, a representative sets an appointment, a field adjuster gets the claim filed and then passes the estimate to the often overworked and all too often inexperienced examinerAfter this, the examiner may hand the file off to yet someone else. Remember, these examiners are usually reviewing the files of multiple field adjusters who are all trying to crank out files for payment as fast as possible. This can result in a new stack of files being delivered to the examiner daily. All of these tasks take time, and the insurance company has plenty of time, and plenty of claims. You, on the other hand, have only one claim, and only one life to live (more about that later).

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And that is where they sometimes get you. They know, after decades of practice, and millions of claims, that if they can delay policyholders long enough, a great many will just give up. There’s an old saying, “Don’t go away mad, just go away.” I am 100% convinced that insurance companies thrive on this approach to claims processing. They don’t want you to be mad enough to file a complaint or hire an attorney, but they want you to give up without getting paid in full, if at all. It can be something of a balancing act, but one they have gotten very good at with lots of practice, trial and error, not to mention input from consulting companies.

And if you still refuse to give up (probably because you have hired a public adjuster, attorney, or both) – and only a small percentage of people do this – the insurance companies are sometimes able to drag the claim out so long, the policyholder actually dies before the claim can be paid. No kidding. I have seen multiple policyholders pass away before getting their claims paid. But I want to emphasize, our policyholder’s claims do get paid. When I think about all the other people who died before their claims are paid each year, I picture a motivational sign on the wall in the insurance office that reads, “Dead people rarely hire attorneys.” A bit cynical, perhaps, but if you have seen what I have seen, you would understand completely.

Keep in mind, professionals like myself are always available to answer any questions you have at any stage of the claim process. We're happy to speak to other groups you belong to, at no charge. I constantly find people are quite surprised when I tell them there is no charge to come to their property, review their claim, go over documentation, and consult with them on the available options. This can also include an offer to visit their office to educate their staff on insurance issues. “Sounds too good to be true” they say. That’s OK, it makes them that much happier when we follow through on what we say, and deliver results.

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.

Public Adjusting Takes a Vacation

by Mark Goldwich

Image courtesy of flickr.com

Like many other Americans, this week the family and I are on our last vacation of the summer. Vacation is a bit different for me as a business owner versus my decades as an employee for a large national insurance company. Back when I worked as an employee of the insurance company, I could just go. My job and the office would be there when I returned, but I didn’t have to worry about work while I was away on vacation. Now when I go on vacation, I have to be sure to take my phone and laptop (and chargers) with me, both of which allow me to communicate in various ways with coworkers, insureds, and others. With the systems we use, I can work virtually from anywhere, as long as I can connect to a network, or get Wi-Fi, without missing a beat.

In fact, just yesterday, as I was completing the last driving leg of our trip to Williamsburg, Virginia, I got a call from an adjuster I was expecting to hear from the day before, and in just less than 10 minutes at highway speeds, we were able to settle the claim. My insured, Ms. “P”, will be very happy. Ms. “P” suffered a water leak in April when the shower valve in her daughter’s bathroom sprang a leak in the wall cavity between the bathroom and the laundry room. They immediately shut off the water and called a plumber, who located and repaired the source of the leak. She then called a contractor who extracted the water and dried the structure. In the meantime, Ms. “P” got a closet-full of shoes out of her daughter’s room, and began drying and cleaning them. A few days later, the insurance adjuster showed up, and Ms. “P” said she could tell it was not going to go well from the start. The adjuster began by saying he needed photos of odd things, like the mailbox, and the exterior of the home (none of which had any damage or were related to the claim in any way). The adjuster suggested the water was leaking for “quite some time” and questioned the insured’s truthfulness regarding certain aspects of the claim.

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Sure enough, about a week later, the insured was officially told her claim would be denied because the insurance company felt the water leak was an ongoing maintenance issue that occurred for weeks or months, and not just hours or days as the insured had claimed. Fortunately for Ms. “P”, her water restoration contractor told her about me, and one month after the leak was discovered, she hired me to help recover on the claim. As soon as I saw the damages, exactly as the insurance company adjuster saw them, I knew with certainty the loss should have been covered. I took my photos, made some notes, and had an estimate prepared. The estimate was sent in to the insurance company with a request to meet with an adjuster (either the same one, or a new one). They sent a new one, about a month later. When we met back at the house, the adjuster acknowledged he was not familiar with the claim, or why it was not covered, but assured us he would consider it with “fresh eyes”. I remained sure the claim would be paid. Ms. “P” was encouraged, but not yet convinced. Until today, when I communicated (via email from 3 states away), the general terms of the agreement the adjuster and I came to in the car yesterday. He confirmed they agreed to fully cover the claim, and even agreed to the vast majority of my estimate, plus something to compensate the insured for saving and cleaning her daughter’s shoes.

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While on vacation, the TVs where we are staying are programmed to have the weather channel appear when the TVs are turned on. For most guests, I imagine this is so the visiting tourists can check the weather and plan their days. Of course, for me, I get to see where the storms are, and remain in “work-mode”. Today, for example, I see Tropical Storm Earl is heading for Mexico’s Yucatan Peninsula, and that Maryland is recovering from recent heavy flooding. So, while my family is at a local theme park, I am taking the day off from vacationing to catch up on some emails and write this blog. Tomorrow, though, it is back to family vacation fun, I promise – but I may need to take a work call or two, and check email and text every few hours. And I wouldn’t have it any other way. I love that I can help people any day of the week, no matter where I am!

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.

Record Losses For All

by Mark Goldwich

Image by commons.wikimedia.org

The Weather Channel’s website, weather.com, recently published an article, “Eight Billion-Dollar Weather Disasters Have Hit the U.S. So Far in 2016”. The article noted this was only for the first 6 months of 2016, and that just one of the storms alone accounted for over 3.5 billion dollars of that damage. Also of note were the facts that 5 of the 8 weather disasters occurred in Texas, including 2 flooding events, and the damage totals did not even include late June flooding events in West Virginia. All told, at over 12 billion dollars, this could end up being the costliest January to June weather disaster period in recent history (it is already ranked #2, behind 2011’s tornado superoutbreak in April).

Now let’s try to break down who has to pay for all these damaging weather events, and how this could translate into insurance terms. First, remember that not all such losses are covered by insurance. Some properties are uninsurable, some properties are insurable but the owner chooses not to insure, can’t afford to insure, or decides to self-insure, and still others are insured, but not all the damages are covered by insurance. For example, if a 50-foot tall, 100 year old oak tree comes down in a storm, and does not land on covered property, there is no coverage for cutting up the tree and hauling it off of the property – and the bill for that could be thousands of dollars. Now, consider how many trees come down in all of these storms without landing on anything. As another example, flood insurance only covers certain types of buildings, and only up to certain limits (it is not like other types of property insurance where you purchase the amount of insurance you need).

So, out of the 12 billion dollars in damages, let’s say only 7 billion dollars are covered by insurance – that is still a great deal of money. Fortunately, the insurance companies have that money sitting in reserves, collecting more interest than you or I can get. And, let’s not forget that just because the damages are covered by insurance, and the policies are in place, and the premiums are paid, that doesn’t mean the insurance companies are going to willfully pay that money to their insureds, who have now crossed the line from (pre-loss) “customers”, to (post-loss) “legal and financial adversaries”.

Small change image courtesy of flickr.com

Care to guess how much I would predict insurance companies would offer premium paying customers with covered losses, if the covered damages were actually 7 billion dollars? Don’t read ahead. Just think about it for a minute before scrolling down. Don’t peek! If they owe 7 billion, how much would they pay without question? Should be 7 billion, right? OK, maybe they try to hold back a little – after all, some people probably try to inflate their claims, and mistakes happen, but they would probably pay at least 5 billion, don’t you think?

Well, I don’t. My experience tells me they would try to pay a mere 1.75 billion dollars of the 7 billion dollars owed. Good thing we’re a litigious society, with tons of lawyers at our disposal, and we won’t let anyone take advantage of us like that, huh? Don’t count on it. Accounting for the small percentage of policyholders that would fight their claims – either on their own, or with the help of a professional public adjuster or attorney – I would doubt the figure would rise above 2 billion dollars. That makes for a nice additional profit of about 5 billion dollars on covered losses owed, but not paid.

Why do I think the insurance companies would offer so little? That would be based on my own experience, supported by a governmental agency, the Florida Office of Program Policy Analysis and Government Accountability that published a report in January 2010, which showed insurance payments were up to 747% higher when policyholders were represented by public adjusters for claims related to hurricanes (catastrophes). This report supports my own experience when dealing with insurance claims, and especially when dealing with catastrophe claims.

Exhibit 6

Public Adjuster Representation Typically Resulted in Larger Payments to Policyholders

Source: OPPAGA analysis. Data refers to the median (50th percentile or typical) payment.

Consider these two examples of actual claims I handled recently:

In one case, an insured was paid just over $2,600 for damage to his roof from a storm. The insurance company acknowledged that about 50% of the insured’s roof needed to be replaced due to a covered wind event, but decided not to pay to replace the entire roof as was required by building code (and the insured had the proper endorsement to address this). I thought it would be a simple matter of letting the insurance company know of their mistake. Instead of quickly paying the correct amount, an adjuster blustered about the amount I had estimated, misrepresenting a number of facts about the size of the roof and the cost of the repairs. It took a few months to get someone else involved that agreed the prior adjuster did not respond properly, and an additional $7,750 was paid, on top of the $2,600 initially paid.

In another case, a woman had a pipe leak inside a wall between her bathroom and laundry room, damaging some drywall, a vanity, floor tiles, and some of her daughter’s shoes. The insurance company adjuster was very difficult with her, suggesting the leak must have been occurring for an extended period of time, and questioning the insured about some items that were completely unrelated to the claim. She said she could tell there was going to be a problem within just a few minutes of him entering her home. Sure enough, she soon received a letter denying the claim altogether. She then hired me, and I recently met with another adjuster, who agreed to pay for the damages, totaling over $6,000.

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Keep in mind these are small losses, not resulting from major weather catastrophes, yet the amounts the insurance companies were attempting to avoid paying were relatively significant for such small claims. If you consider the hundreds of thousands of claims that would have been filed for the weather related catastrophes in the first 6 months of 2016, and have confidence as I do in the amounts that could be recovered with professional representation, you can begin to see why I believe the insurance companies could be avoiding as much as 5 billion dollars or more in covered claim payments.

Yes, the insurance industry might be making record payments on record numbers of weather disasters, but their insureds are also suffering record losses as well. The difference is, the insureds paid their full premiums with their hard-earned money, and don’t have the 5 billion dollars I believe is being shorted, and the insurance companies do have the money. The insureds who refuse to settle for less than everything they are owed are fully compensated – I hope that includes you.

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.

Collateral Damage - Can your insurance policy become a casualty of war?

by Mark Goldwich

Image courtesy of en.wikipedia.org

While just about everyone in America is talking (if not listening) about the racial problems facing the nation, and all the theoretical reasons for the discord, as well as the perceived solutions, I was also thinking about the real life property damage consequences from the Dallas attack and other demonstrations that sometimes begin peacefully, but don’t always end peacefully, as well as events such as the Orlando and San Bernardino attacks.

After giving the obvious due consideration for the loss of life, and everything that goes along with that loss of life, and the acts that led to the loss of life, I couldn’t help but think about the property damage involved in these types of events. Often, the property that is damaged does not belong to either the victims, or the perpetrators. Instead, the owners of the property that is collaterally damaged or destroyed are additional innocent victims of the various types of mayhem that seem to be more and more common. In fact, in Dallas, the explosive that ended the event, was introduced and detonated by the police, not the assailant. Should this make a difference? I thought, “If I’m wondering about this, maybe other people are as well.”

So what about it? Is property damaged like this covered? First, we’d need to break down the causes of the property damage, because determining coverage always begins with the cause of the damage. And as you might imagine, the cause might depend on who you are asking. Was the event a riot, a civil commotion, civil unrest, looting, arson, terrorism…?

Image courtesy of YouTube

Because we are talking about insurance, these terms are usually defined in either the policy, or in case

law (a legal ruling or judicial interpretation based on a past case, usually with similar facts). Still, what one person interprets as “riot”, another may consider “terrorism”. Without even getting into this very deeply, you can probably see that what should be clear cut, with just a little wordsmithing can be made to be as confusing as which bathroom should be used by someone born with male parts. Some will say, “that’s easy”, while others will promptly chime in, “not so fast.”

To illustrate how quickly and easily key terms can be interchanged, Brendan McKenna in a 2006 article found at Insure.com noted, “At 9:30 a.m. on Sept. 11, 2001, shortly after learning about the crash of a second airplane into the World Trade Center in New York City, President George W. Bush called the events an "apparent act of terrorism." Standard property/casualty insurance contract forms provided to the industry by the Insurance Services Office contain clauses excluding "war, including undeclared or civil war" and "warlike action by a military force, including action in hindering or defending against an actual or expected attack, by any government, sovereign, or other authority using military personnel or other agents." Just over a day later, Bush said that "the deliberate and deadly attacks which were carried out yesterday against our country were more than acts of terror.

They were acts of war." While the President’s words have unequivocally stated the position of the United States, they may have muddied the waters concerning the insurance issues around the attacks on the World Trade Center and the Pentagon. Many property/casualty insurance policies are written to exclude coverage for acts of war, but not for acts of terrorism. If the act-of-war exclusion clause of the insurance contracts is invoked, insurance companies can refuse to pay the benefits on the policies, including payments on businesses, homes, and cars that were damaged or destroyed.” That would have been ruinous to countless Americans who suffered tens of billions of dollars in direct and consequential damages.

Most standard Homeowner’s or Business insurance policies exclude damage caused by war, and most do cover damage caused by riot or civil commotion, but so far, I have not seen or heard of many policies having specific coverages for, or exclusions against, terrorism (especially on the Homeowner’s policies – some Business policies already exclude terrorism, but allow terrorism coverage to be purchased). So far, at least, this trend benefits policyholders, as most of the events we are referring to here would not be considered “war”, even though we generally talk about “war on terrorism”, or note that radical jihadis have declared “war” on America. As far as I know, no insurance company would consider any of the cases above to be “war”.

According to an article by Gwen Moran in HouseLogic.com, “Several states, including Florida, Massachusetts, New York, Ohio, Pennsylvania, and Texas, forbid terrorism exclusions, according to a report on terrorism’s impact on homeowners insurance from the Missouri Bar Association.”

On the topic of terrorism insurance, according to the Insurance Information Institute (www.iii.org), most personal policies cover terrorism, and most commercial/business policies do not, and even if a business did have a terrorism policy or endorsement, some losses associated with terrorism could still not be covered (fire, nuclear, biological, chemical, radiological, and cyber-terrorism), so it is increasingly important to sit down with your insurance agent to consider these threats, especially if you own a business. While talking with an agent, it may be worthwhile to see how your various insurance policies (home, condo, rental, auto, business, life, health) would react to the scenarios mentioned above.

In conclusion, there are still many questions left unanswered with regard to the insurance coverage of these types of events, and changes continue to be made as additional events occur and more data is gathered by underwriters. That said, you can be pretty sure insurance executives everywhere are meeting at conferences and other industry events to consider how to address the seemingly growing costs associated with paying claims from these types of events. Whether they will adjust policy definitions, limit exposure to these types of losses, or exclude more of these events altogether, remains to be seen, but I have a hunch they will eventually determine a strategy for maximizing profits. They always do.

ps: As I write this I am reminded that terror is an international scourge. This morning's news is filled with the tragic terror attack in Nice, France that claimed at least 50 lives, 2 of whom are American.

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.

Collateral Damage - Can your insurance policy become a casualty of war?

by Mark Goldwich

Image courtesy of en.wikipedia.org

Image courtesy of YouTube

Because we are talking about insurance, these terms are usually defined in either the policy, or in case

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.

There Goes the Neighborhood

by Mark Goldwich

I can’t remember the last time I heard about an extreme weather event in West Virgina, but I sure did today. And if you were on any major news network, you probably saw it too. Video footage of an entire home, floating down a swollen river while ON FIRE! It was absolutely remarkable to watch - the power of the water, and the contrast of water and fire. It was just spectacular, but in the worst possible way.

Image courtesy of en.wikipedia.org

Now imagine you are the owner of that home. When you can finally return to your former neighborhood, which could be in just a few days, or it might not be for several weeks, it will be almost impossible to recognize. Street signs could be gone, major landmarks might be missing, and if you can find where your home used to be, we already know the home will not be there. Just a clean slab, next to several other clean slabs. It must be absolutely devastating to the mental state of the family.

For younger children, it might have been the only home they have ever known. For older kids, it might represent their childhood and friends. For the parents, it was where they started their family, and built their lives. And for older folks, it may literally be their entire world. But for all of them, it is time to start over, ready or not, but definitely not by choice.

So where do you start when that is not just something happening on the news, but it is your reality? My suggestion would be to start by reaching out to loved ones. Get help, if at all possible, because you are going to need it. And then, in no particular order, take pictures or video. Grab a pad of paper and start taking notes. List your activities and your expenses. Call your insurance agent and report the claim. Go online and learn what you can about what just happened to you, and what you can expect to go through in the coming months and years (note – I did not bother to include “days” or “weeks”, because that is simply not how you are going to be measuring this journey – sorry, trust me). Figure out what assistance is available to you (Red Cross, FEMA, etc.).

Image courtesy of flickr.com

And I would always recommend professional insurance claim assistance, but especially in this case, where you have damage caused by flood AND fire. Maybe you have insurance that protects against both flood and fire – it would be great if you did, but you could still use help to determine which policy you would want to use to cover which of the items damaged. Just knowing that could make a significant difference as to what damages you attributed to which policy. This alone could more than pay for the fee charged by the insurance adjuster.

But what if you only had insurance that would protect you against one of the two events (flood and fire)? Then you really are going to need help, because imagine this scenario: you have fire insurance, but your insurance company tells you ALL the damage to your property is caused by flood – even though there is plenty of news footage showing your home floating down the river, fully engulfed in flames. While I don’t think there would be an argument for the slab, or maybe even the flooring, or even the baseboards, I would certainly argue a lot of other items were damaged by fire alone. They could still argue if not for the flooding, there would have been no fire. They could also argue that even if the home never caught fire at all, the home and everything in it, would have eventually been destroyed by the flood. As you might guess, I would take on that fight every day of the week.

Conversely, if you only had a flood policy, but no insurance to cover your home for fire, they could argue the majority of the damage to your home, and the belongings inside, were damaged by fire and not flood. If so, I would simply argue the opposite. Is it wrong that I changed my position just like that? I would say no. My job is to fight for the insurance coverage you paid for, not to accept the exclusions they raise. You paid good money for that insurance coverage, and you certainly did not intend any of your premium to be spent on policy exclusions – those just seem to come free with the policy. So yes, quite plainly and openly, I will fight to find any applicable coverage I can, based on the facts of the loss. In other words, if two homes were floating down the river on fire, and one of them only had flood insurance while the other only had fire insurance, I would argue both should be covered, for opposite reasons. And if that sounds like I “want my cake and eat it too”, I’d counter that cliché with “what’s good for the goose is good for the gander!” Anyone who has ever had to wrestle with an insurance company over a claim knows exactly from where I speak.

Once coverage is secured, it is time to start proving your loss. This is going to be difficult as well, since there would be little left to identify, making it difficult to assign a value to it. But it has all been done before. It’s a step by step process, and it does take time, but with the right assistance, you can get back on your feet again. And one day (too long for most people to imagine), you are relocated to a new neighborhood, or your old neighborhood starts to slowly return. Here comes the neighborhood!

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.

Winning by Losing

by Mark Goldwich

Image courtesy of flickr.com

People who are pessimists may say, “I can’t win for losing,” This translates to, "If it weren’t for all the bad things happening to me, I would be fine." There are plenty of people in Texas and other areas of the country who can probably relate very well to this phrase, even if they are not normally pessimistic.

Imagine you just bought a new home, or just moved into a better rental, or finally opened up your business, when historic flooding beyond anyone’s expectations suddenly washes everything away.Or maybe an early morning tornado flattens your home, leaving you homeless, with nothing but the clothes on your back, and the gratitude to have survived. Such calamity could lead almost anyone to wonder if the powers that be have it in for them, and that they can’t win for losing.

Then again, there are some people that might utter this phrase whenever less tragic events take place, be it a relationship break-up, a minor fender-bender, the passing of a pet, or the stubbing of a toe.

Whether you can only relate to the more extreme cases of this saying, or any of them at all, as you might have guessed, especially if you are familiar with my writing, I can take this otherwise pedestrian phrase and spin it to show how differently insurance companies view the world. Better still, I can even back it up with examples.

For insurance companies, whose profits are measured in hundreds of millions, or even billions of dollars, they see the world in a very different light indeed. Insurance companies don’t accept the notion of a phrase like “can’t win for losing”. No, for them, even when they lose, they win. In fact, I would argue part of their “winning strategy” is to knowingly (if not purposely) lose – and lose BIG – at least sometimes.

I realize it seems inconsistent to suggest that large insurance companies, with ivy-league business school minds at the helm, who are very much about winning at all costs, are at all OK with losing, ever. Hang in there for just a bit, and I'll explain how it works.

Image courtesy of Pixabay.com

Several years ago I handled a claim that has since stuck in my mind because of the way it turned out. It was really not unlike many other claims I have handled, but in this particular case, the insurance company took an unusually hard stand against paying the claim in full. In the end, we could not get the carrier to make a reasonable offer, and the insured had to retain an attorney. It took over a year for the attorney to reach a settlement before the case was to go to trial, but the insurance company agreed to pay over 8 times as much as we were willing to accept prior to the attorney’s involvement. Even after the insured’s attorney was paid, and my fee was paid, the insured was left with about 3 times as much as she was willing to accept before an attorney was retained. That “8 times” number has stuck with me ever since. By the way, that “8 times” number does not include the insurance companies defense costs, because we are not privy to that information, but an educated guess would mean the insurance company really paid 10 to 12 times as much as they could have settled for. That’s 1000%, to 1200% more. Good thing they are loaded!

The insurance company was willing to pay up to 12 times as much as we were previously willing to accept. “Why would they do that?”, I wondered for the longest time. As with many things, over the years I figured it out. If the insurance companies are good at one thing, it is the actuarial science. An actuary, according to Wikipedia.org, is “a business professional who deals with the measurement and management of risk and uncertainty. The name of the corresponding profession is actuarial science. These risks can affect both sides of the balance sheet, and require asset management, liability management, and valuation skills. Actuaries provide assessments of financial security systems, with a focus on their complexity, their mathematics, and their mechanisms.” Actuaries use mathematics, statistics and financial theory to study uncertain future events, especially those of concern to insurance. In laymen’s terms, they are “bean counters”, and very good at it.

Image courtesy of commons.wikimedia.org

While I don’t believe they would ever come right out and say it, I am convinced the insurance companies have determined there are only so many people that would argue about a claim settlement. Of this small number of people, there is an even smaller subset that would hire an attorney to pursue their appropriate claim payment. And of this small group, there is an even still smaller subset that will pursue their litigated claim all the way into the courtroom. Consider this, in the nearly 12 years that I have been a public adjuster, handling thousands of claims, only a small fraction have required attorney representation, and less than 5 have ever made it into a courtroom.

The insurance companies might say these claims settled because the insured’s did not want to take their changes in court, but given the settlement numbers, I would argue the exact opposite is true. In fact, I cannot think of a single claim where the insurance company did not settle for a significantly higher amount than what they had previously offered. The “8 times” number was a bit of an anomaly, but I would venture to guess 3 or 4 times would be more common.

Still, why in the world would an insurance company pay even 3 or 4 times as much as they could settle a case for, and why would they ever pay 12 times as much? Simple, it costs more to pay everyone top dollar to begin with. If they make it easy, everyone will do it. So, they are willing to pay a whole lot more than needed on a select few claims (lose big), than to pay even a tiny bit more on every claim (lose bigger).

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It’s all a matter of how much, and how often they must lose, in order to maximize the winnings overall. If you are good with math, you quickly see how this makes perfect sense, and how the insurance industry has figured out how to win by losing. Just don’t give up on your claim, and you can win as well!

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.