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.

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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.

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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.

When Things Go Wrong and Then Right

by Mark Goldwich

Last week I wrote about an insurance claim that actually went right from start to finish (a fairly rare occurrence in my experience). This past week I was reminded of the awful reality of how rare that is, and how terrible it can be when things go wrong (at least until they go right).

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Imagine you are the grandmother of 5 children, and you are their sole caretaker and guardian. That sounds pretty tough enough, doesn’t it? Now imagine that the home the 6 of you live in is completely destroyed in a fire…2 days before Thanksgiving! Are you crying, yet? If not, just wait.

Now imagine you contact your insurance company of many years, and they assure you (on the phone) that everything will be alright, and they will send an adjuster out right away. An adjuster does come, but instead of paying you for the loss, or even advancing you some money for a place to live, or for clothes to wear (other than those on your backs), or for your next meal, you are told they will be sending an expert to investigate and determine the cause of the fire, and that you will have to make yourself available for a recorded statement.

During that recorded interview, you are asked about your finances, your medical history, your relationships, if you have a criminal history, whether you are taking prescription medications, where you were and what you were doing when the fire broke out, whether you or anyone you know had anything to do with the fire starting, and just enough other questions to make you feel like a suspect in the arson of your own home (when it wasn’t even caused by arson to begin with).

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Weeks pass as adjusters and investigators inspect the home and consider whether or not to pay any part of your claim. All the while you are forced to live with a relative who has 3 children of their own (that’s now a household of 8 kids for those of you with rusty math skills!). Weeks turn into months, and you don’t hear anything from your insurance company well into January (certainly you have a tear at this point, right?).

It is easy to understand how anyone could begin to lose hope at this point, but fortunately one of the fire restoration companies that came around looking to bid on the job told you about a public insurance adjuster that might be able to help get the claim processed. You contact them, agree to hire them, and finally things start to go right. Within days you get a $5,000 advance so you can move into your own place while your home is being repaired. The mere sight of the check causes you to completely break down. And not long after that, your public adjuster calls to say another $235,000 is on the way.

This is what countless numbers of people go through every year in dealing with their insurance companies. And it is what gives me great pride and satisfaction in my chosen career.  I was at a networking event with the adjuster that handled this claim recently, and we told the story of this claim.  When we were done, the woman sitting next to me (vice president of a local credit union) was staring at me, with a mixed look of shock and disgust, and said, “I don’t get it, why wouldn’t they just pay her?” to which I replied, “Why would they want to do that?”  “Isn’t that the whole reason for insurance?” she asked. “Yes” I said, “but if they paid her, their profits would be less, wouldn’t they?”

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 Obviously, I was toying with her a bit, but she soon realized what I have been saying for years – the smiling faces you see on TV and the catchy jingles you hear on the radio for insurance companies are not what you will likely be faced with when you actually file a claim. You will go from loyal customer to financial adversary. Every penny they pay out in claims is money taken from their bottom line. And they don’t like that.

This story illustrates that things can go very wrong in the course of an insurance claim. But as we have seen, things can also go right, either straight from the beginning or after they started going wrong. Unfortunately, most people will never be told they have the option of hiring a professional adjuster to assist them on their claim. For them, the ending to the story could be just as heart-wrenching as the beginning.

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And this is why I network, promote, talk to people, and use social media blogs. I want everyone to know they don’t have to settle for less than everything they are entitled to. I want them to know they have options, and they don’t have to simply accept poor treatment from an insurance company. They don’t have to hire me. They don’t have to hire anyone. I just want them to know they have the right. I really just want them to know, because people who know make better decisions that lead to happier endings.

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.

Has your Homeowner's Policy Sprung a Leak?

by Mark Goldwich

At our weekly team meeting this morning, we talked about claims we are currently handling, and how various insurance companies are using everything at their disposal to minimize claim payments, or avoid paying altogether – and what we can do about it. It’s one of the main reasons we meet each week. This week, it just so happened that a few of the claims involved water damage, and we talked about a few of the technicalities involved in these types of losses. 

In one case, the insurance company sent out an engineer to inspect the claim. That in and of itself was not so unusual, but my adjuster knew an engineer was not typically sent out for this particular type of water loss. So, when my adjuster met with the engineer (as we usually meet with anyone an insurance company sends out), he asked enough questions to learn exactly why the insurance company picked him (a certified mold specialist) to inspect this claim. The engineer explained there are known types of molds that only grow after a certain number of days. Right away, this told my adjuster more than it would ever tell even the most savvy property owner. The insurance company was hoping the engineer could identify a species of mold that could only grow after an extended period of time. Why? We are convinced it is so they could try to deny the claim under a technical policy exclusion that precludes coverage (theoretically) for “repeated leakage or seepage of water from a plumbing system” – most property policies have an exclusion that reads something along those lines.

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Some policies go on to say there is no coverage if the leak goes on for at least 14 days, some exclude good neighbors on your street, odds are at least 1 of them are insured by this huge national company with a catchy jingle and endless ads on TV) doesn’t always take full advantage of this exclusion. After all, if they did, they could deny every single plumbing leak claim that is ever presented, since all leaks and seepages, by definition, occur over “a period of time”. You have a sudden and accidental pipe burst, and water goes everywhere, causing a lot of damage to your home and belongings. That should be covered, right? Not so fast according to the wording of this particular insurance company policy. Even if you were home, and awake, and standing right where the pipe burst, how long would it take you to get to the main water shut-off valve and turn the water off? I guarantee the answer is “a period of time”. Now, I will say this particular insurance company (I won’t say who it is, but if you have at least 5 good neighbors on your street, odds are at least 1 of them are insured by this huge national company with a catchy jingle and endless ads on TV) doesn’t always take full advantage of this exclusion – after all, if they did, they could deny every single plumbing leak claim that is ever presented, since all leaks and seepages, by definition, occur over “a period of time”.

Instead, they simply pick and choose which they want to cover, and which they don’t. To be honest, I don’t know how they have been able to get away with this for so long. A good public relations team, and good lobbyists, are probably a good start. These leaks, if they result in rot or mold, and one just says the loss is not covered if the leak “occurs over a period of time”. Think about that for a minute (or any period of time). You have a sudden and accidental pipe burst, and water goes everywhere, causing a lot of damage to your home and belongings. That should be covered, right? Not so fast according to the wording of this particular insurance policy. Even if you were home, and awake, and standing right where the pipe burst, how long would it take you to get to the main water shut-off valve and turn the water off? I guarantee the answer is “a period of time”. Now, I will say this particular insurance company (I won’t say who it is, but if you have at least 5

I will say this though – regardless of the language they use, and the resources they employ to have the scenario appear to fit the exclusionary policy language, we are usually able to get these claims paid. How? Because we use technicalities too. When the carrier says the leak went on for more than 14 days, we simply address the damages that occurred during the first 13 days (and we usually find it is not much different than the damages that took place from day 14 on. If they find mold that only grows after an extended period of time, we can find other mold present that only takes 72 hours to grow. If they claim this leak resulted in rot, we may be able to establish that the rot they are referring to resulted from a completely different leak several years ago, and is therefore unrelated.

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Not all leaks come from pipes. Another common leak source we deal with frequently comes from roofs. Roofs can leak for a number of reasons, some are covered, and some are not. Generally, if the leak occurred due to storm damage, falling object, vandalism, or some other sudden and accidental cause, the roof repair is usually covered; but if the leak was due to a lack of maintenance, faulty construction or design, the roof repair is usually excluded. What about the damage done inside the home as a result of the roof leak? This again may depend on the specific policy language. Some policies cover this interior “resulting damage” regardless of whether or not the roof itself is covered, and some policies specifically say a covered event must create an opening in the roof (or wall) before they will pay for the interior water damages. When pressed on what constitutes an “opening” that the water enters through, adjusters vary. Some will pay if roof shingles are damaged in any way, and others insist the word “opening” means, “if you are standing inside the home and can look up and see the sky.” We eat those guys for lunch!

And I recently wrote about two other water claims that were vehemently denied. In one case a covered source of rainwater was improperly denied as being “flood” or “surface water”, when in fact it was neither. And in another case, an extensive water loss was strongly denied because the carrier erroneously believed the loss occurred after the property was left vacant for more than 30 days, when it was not. In both cases, a more technical investigation of facts and policies led to payments exceeding $50,000.

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As you can imagine, in a voluminous insurance policy, rife with legalese containing coverages, conditions, exclusions, exceptions, and exceptions to exclusions, there is plenty of room for technicalities, and for debate over said technicalities. This is all the more reason to have an insurance claim expert on your side, just as the insurance companies have experts on their side.

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.  

Is it Time for a Little Fall Cleaning?

by Mark Goldwich

Image courtesy of commons.wikimedia.org

As the Fall season is upon us, with more and more proof descending from the trees each day, I began to wonder why no one ever says, “Time for a good Fall cleaning” like they do each Spring. According to Wikipedia.com, “Spring cleaning is the practice of thoroughly cleaning a house in the springtime. The practice of spring cleaning is especially prevalent in climates with a cold winter.”

I read on to learn “It has been suggested that the origins of spring cleaning date back to the Iranian Norouz, the Persian new year, which falls on the first day of spring. Iranians continue the practice of "khooneh tekouni" which literally means "shaking the house" just before the new year. Everything in the house is thoroughly cleaned, from the drapes to the furniture. A similar tradition is the Scottish "New Year's cleaning" on Hogmanay (December 31), a practice now also widespread in Ireland, New Zealand, and to North America.

“Another possibility of the origin of spring cleaning can be traced to the ancient Jewish practice of thoroughly cleansing the home in anticipation of the spring-time memorial feast of Passover. In remembrance of the folktale of the Jews' hasty flight from Egypt following their captivity there, during the seven-day observance of the Passover memorial or remembrance, there are strict prohibitions against eating or drinking anything which may have been leavened or fermented with yeast. Jews are not only supposed to refrain from leavened foodstuffs, they are expressly commanded to rid their homes of even small remnants of chametz for the length of the holiday. Therefore, observant Jews conducted a thorough "spring cleaning" of the house, followed by a traditional hunt for chametz crumbs by candlelight (called bedikat chametz) on the evening before the holiday begins.

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“In North America and northern Europe, the custom found an especially practical value due to those regions' continental and wet climates. During the 19th century in America, prior to the advent of the vacuum cleaner, March was often the best time for dusting because it was getting warm enough to open windows and doors (but not warm enough for insects to be a problem), and the high winds could carry the dust out of the house. For the same reason, modern rural households often use the month of March for cleaning projects involving the use of chemical products which generate fumes. The most common usage of spring cleaning refers to the yearly act of cleaning a house from top to bottom which would take place in the first warm days of the year typically in spring, hence the name.”

Now, I will admit that “Spring cleaning” typically refers to cleaning done inside the home, so perhaps “Fall cleaning” should refer to cleaning done outside the home. After all, the weather has cooled down (some, but not much yet), and there is plenty to clean up outside the home, the most obvious of which is the leaves. While Fall leaves make for great photographs, and great fun (if you like diving into a huge pile of them), for most property owners, the falling leaves represent a lot of work…work that has either got to be done yourself, or that you have to pay others to do.

image courtesy of pixabay.com

But now that we are thinking about cleaning up around the home, let’s go beyond raking leaves in the yard. Keep in mind, not all leaves that fall end up in the yard. Many land on the roof, and collect in valleys, or low spots, or gutters. I have seen roofs that have had so many leaves fall for such a long time without being cleaned up, that the leaves had decomposed into dirt, and small trees were sprouting up!

Leaves left on roofs can create a number of problems. They tend to gather, so the pile of leaves grows bigger and bigger (without any raking). When leaves gather on a roof, they invite pests of all kinds to nest and reproduce. Water flow is restricted by the leaves, which may allow water to make its way into your home, without ever “creating” an opening. The reason most roofs are sloped is so water (as well as snow) can flow quickly off the roof, fast enough so it does not find a way into the building. 

When you reduce the speed at which the water is attempting to exit the roof, you increase the opportunity for the water to find a way in. Also, decomposing piles of leaves stay wet longer, and can damage roof shingles.  The same goes for leaves that gather too long in gutters. The leaves eventually decompose, making room for more and more leaves, which also decompose, and after a while the gutters are full of a mushy organic material that supports insect life, plant growth, and weighs heavy on the gutters, as well as the pins that attach them to the roof structure.

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In other words, if you see a bunch of leaves on your roof, or in your gutters, it is best to clear them out as soon as possible. Your home will not only look better, but it will function better, and last longer. And you shouldn’t wait for “Fall cleaning” to do this, but do it anytime you see a “gathering” of leaves, twigs, or branches. This might also be a good time to trim back tree branches and shrubs from your roof or the walls of your home. There should never be tree branches close enough to scrape against your home in a breeze, and there should be a clear space of at least a foot between your home and any shrubs.

I was recently on a roof that had a flat portion in the back, under several huge trees of differing species, and it was literally covered in a 4 inch blanket of leaves in various states of decomposition, with some twigs and dead branches thrown in for good measure. I asked the owner (who was older than I am, and I am no Spring chicken) for a broom, and spent at least 30 minutes clearing off the leaves (a shovel would have done the job a lot faster, and with a lot less effort, but that could easily damage the roof, so don’t try this at home!). I was drenched with sweat, but did a good deed, and got in an extra workout for the day! Oh, Karma, where art thou!

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.   

Tale of the Tape

by Mark Goldwich

The phrase, “Tale of the Tape” is an old boxing saying, and refers to the physical characteristics of each fighter (age, height, weight, reach). The idea is, these numbers may predict which fighter has an advantage (assuming the numbers are not the same) over the other. This also assumes the person reading the tape measure is impartial.

Sometimes the tale you are being told depends on who is holding the tape measure. I was reminded of that this morning when a newly acquired professional acquaintance of mine said he recently went through an experience with his insurance company regarding his roof, and he was curious to hear what I thought about it.

He started, as many people in my hometown of Jacksonville, Florida do, by telling me

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a ”roofing company” was canvassing his neighbor with fliers, doorhangers, mailings and door-to-door salesman. I asked if I could guess the name of the *”roofing company”, and out of the 50+ roofers in town, I named just two. Sure enough, it was one of those two I had just named without any additional information.

I say “roofing company” because, in my opinion, these are really more like roof marketing firms than roofing companies. They employ large sales forces, use high pressure tactics, focus on generating signed contracts to have the roof work done, and then subcontract out the vast majority (if not all of) the roof work to roofing crews who actually put on the roofs. Their main focus is to get the home’s owner to sign a contract to replace the roof, usually with the hope that their insurance company will pay for the replacement. Some even call themselves “insurance specialists”.

Oddly enough, though, some of these firms never even get on the roof to see if there is any damage an insurance company might pay for. And if they do get on the roof, they may still recommend submitting a claim to the insurance company, regardless of whether or not it is likely that the claim will be paid. Again, the focus seems to be on getting the deal signed, and a claim submitted. It’s as if they just hope the insurance company will pay the claim, and if they don’t, there’s always another neighbor whose insurance company might.

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In any event, for this new acquaintance of mine, the claim was submitted, and the insurance company denied the claim. “Wear and tear” he and I both said together, almost as if I already knew what the insurance company would say. “How did you know?” he asked. The answer is simple - that is the most common reason for a roof denial. That is the insurance company’s “Tale of the Tape.”

He then asked if the denial was appropriate. I explained that I did not know, but there was an easy way to find out. We would look at the roof, and give our own opinion as to how that claim should have been handled. In other words, we would give him our own “Tale of the Tape.” The insurance company was either right, or they were wrong, but the bottom line is, it should not be left up to the insurance company to decide, and I think you can guess why.

As I always do, I told him we wouldn’t charge him anything to inspect the property, nor would we charge to provide our opinion as to whether or not the claim should be paid as valid. If we did not think there was covered damage that should be paid for by insurance, we would tell him, because unlike the roof marketing firms, we don’t employ salesmen to throw lots of spaghetti at walls all over town just to see what sticks. We invest serious time into our efforts, and we can’t afford to waste that time (or risk our licenses) on claims that aren’t covered and won’t be paid. And unlike the insurance companies, our profits do not suffer when claims are paid – in fact, that’s how we earn our living.

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What's UPPA With Your Insurance Claim?

by Mark Goldwich

There are always many hot topics in the insurance industry. Right now, especially in Florida, a major hot topic is the Unlicensed Practice of Public Adjusting (UPPA, for short).  In essence, this is where a contractor or other service provider performs the services of a public adjuster without being licensed to do so. This can include things like interpreting an insurance policy, discussing coverage or negotiating a claim settlement. Contractors do this on a  regular basis – and a few of them may not know they are committing a felony.  The rest of them know, but don’t appear too concerned.  Several of them recently spoke before a committee in Tallahassee, explaining, while on camera, how they're performing a needed and valuable service by “assisting” policyholders with their claims.  While the video was sent to the Florida Department of Financial Services for review, the contractors still don’t seem concerned about doing what professionals in my industry have been specifically trained and licensed to do.

Can you imagine a parade of plumbers getting up before a legislative committee, one by one, and

stating for the record that they regularly do repairs to electrical components without a license since they are “familiar” with electricity, have seen electrical work done, and have even done it before themselves?  They could argue that by the time a licensed electrician could be called out, they could have already fixed the problem, saving the consumer time and money.  Unfortunately, those of us in the field who are being hurt by this, as well as the insured consumers who are not getting the full benefit of a licensed, dedicated advocate, can’t expect much will change anytime soon, because we see little to no enforcement of this law.  But we are not giving up, and we will continue to be on the look-out for UPPA violators.

What’s the harm?  Contractors will say that after handling thousands of losses where insurance claims were presented, they know much more than the average homeowner.  And this may be true, but the fact is the vast majority of them are not trained as are licensed Public Adjusters when it comes to dealing with a variety of complex insurance policies, state statutes, and so on.  Also, there is often more involved in these insured losses than just building restoration.  There can be Loss of Use, Additional Living Expenses, Contents, and other policy provisions not related to the building.  As licensed public adjusters, we are familiar with handling all aspects of an insurance claim.

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It would be like me saying, “I have seen so many homes damaged by water, I know better than most homeowners how to extract the water, and use fans and dehumidifiers to dry the home quickly, so you don’t need to hire a water restoration company, I can do that for you.”  NO!  I'm not licensed to do that!  That is why they have a water restoration license, or a contractor’s license, or an electrical license, and I have a public adjuster’s license.

So, why do many contractors insist on handling claims they know they aren't licensed to, especially when they also know public adjusters ARE licensed to do so?  In my opinion, it comes down to time, and money.  The contractors feel sure they can settle claims quicker, and possibly make more money by handling the claim themselves, rather than having a licensed public adjuster handle the claims.  The truth is, they may be able to get the claim settled faster, but they usually have to concede on the amount of money being paid in order to do so.  Most contractors also feel they are good enough at what they do that they can get the same amount of money on a claim that a licensed public adjuster can get.  Time and again, we have found this not to be the case.  Still, many contractors view the fee paid to licensed public adjusters as money drained from their pocket, when in many cases, that money would never have been there if it weren’t for the public adjuster’s expertise.

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Consider this as another consumer alert.  Hire only professionals licensed to handle the task at hand. According to the Florida Department of Financial Services (formerly the Department of Insurance):

“The definition of a public adjuster, as explained in Section 626.854, Florida Statutes, is any person, except an attorney, who, for money or any other thing of value (which would include a contract for repairs):

• Prepares, completes or files an insurance claim form for an insured,
•  Aids in any manner on behalf of an insured in negotiating for or effecting the settlement of a claim, 
• Advertises or solicits for employment as an adjuster of such claims.

Courtesy of thecontractorcoachingpartnership.com

If a contractor is acting as a public adjuster in any manner by negotiating or effecting the settlement of an insurance claim on your behalf, without being licensed as a public adjuster (Section 626.854, Florida Statutes), they could be subject to arrest and may be charged with a third-degree felony as provided by Section 626.8738, Florida Statutes.”

If a contractor knows they are committing a felony, even if they are confident they can get away with it by acting as a public adjuster without the proper licensing, you need to consider what else they would be willing to do, whether for money, convenience, time, or anything else.  We know a lot of contractors, and we regularly recommend they change the wording of their ads, car signage, websites, etc., as well as what they say to consumers and insurance adjusters.  We don’t want to see them get into trouble, and we remind them that in 2013, three roofers from a well-known local roofing company were arrested, booked, and faced up to 5 years in prison because they informed homeowners they were “insurance specialists” and could assist the homeowners in dealing with their insurance companies.  While those arrests certainly have not stopped this practice from occurring, we believe insurance companies and the DFS are  looking to make examples of contractors engaged in UPPA.

Whether you are a contractor or a consumer, it's better to be safe than sorry by understanding how UPPA can affect your insurance claim.

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.  

Shades of Delay

By Mark Goldwich

In this blog, I want to give you examples of what I call early-phase delays. These are delays that come in the first stage, the stage immediately following the disaster or insured loss. These examples of delay are sometimes the most shocking ones to people who file claims, because they expect to be treated as customers, rather than adversaries, by their insurance company. (By the time policyholders get to mid-phase and late-phase delays, they’re not quite as shocked by the behavior of some insurance companies and other players who are supposed to represent their interests.)

Q&A: What will happen?

English: New Orleans, La. August 30, 2005 --Aerial view of New Orleans and the surrounding area showing the flood waters and damage caused from Hurricane Katrina. New Orleans continues to be evacuated as a result of floods caused by failures of the Federal levee system. Photo by Jocelyn Augustino/FEMA (Photo credit: Wikipedia)

• Will there be enough manpower to process the claims that (predictably) follow a natural disaster?

No. A cynic might tell you that this manpower shortage is intentional. I can’t know what the intentions of large organizations like insurance companies are, so all I will be able to say for sure is that, the insurance company will not have enough people on the ground to process the deluge of claims that will follow a major fire, flood, hurricane, tornado, or other significant event. By a remarkable coincidence, this works to their financial benefit. And believe it or not, this “manpower shortage coincidence” takes place over and over again, year after year.

• Are you talking about the first few days following the disaster before the insurance company “calls in the troops”?

No, I mean a period of weeks or months immediately following the catastrophe that triggers your insurance claim. And for many insurance companies, there really are no full-time “troops” for them to call in.

• Why not?

Insurance companies generally staff on a permanent basis at a level that’s meant to handle claims that take place for more common events like kitchen fires, pipe leaks, thefts, and other routine forms of property damage or loss. In other words, they simply don’t hire enough permanent claims staff to cover disasters in addition to the more ordinary claims.

• Is that because insurance companies don’t know whether disasters will actually take place in a given twelve-month period?

Given the industry’s historic obsession with probability, and with actuarial statistics connected specifically to things like fires, floods, hurricanes, and tornadoes, this seems like an unlikely explanation. Some of the larger insurance companies do hire additional staff to handle catastrophe situations, but certainly not as many as are actually needed.

• Could they hire enough full-time staff to do the job for disasters that they know, or strongly suspect

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will eventually take place?

If you mean “can they afford to,” that’s a matter best discussed with the executive management teams, boards of directors, and stockholders of insurance companies.

Although I’m a former insurance company employee myself, I was not privy to these sorts of internal decisions in any meaningful detail.

• So how do insurance companies process claims if they don’t have the manpower to handle them?

Basically, they outsource. In much the same way that Information Technology companies outsource programming and technical service jobs to other countries, insurance  companies utilize independent adjusting firms that subcontract with adjusters who can be sent to a disaster site to work for an insurance company.

• What happens if there is no disaster?

If there is nothing going on in the form of insurance work, then these people have to fend for themselves. Some are able to work year-round for insurance companies. Many others go back to whatever work they did before deciding to be Independent Adjusters. And still others just wait for the next disaster, living for extended periods off money made working the last disaster – semi-retired, I call them.

• What kinds of credentials are adjusters required to have?

Less than you might think. In many states, they don’t have to have a college degree or even need to be licensed. Even in states which require a license, the Independent Adjusters don’t need to be licensed before the storm; they simply get “temporary” or “emergency” licenses once they start working for the insurance company. They could literally be hauling manure one day, and adjusting your loss the next.

New Orleans after the Hurricane Katrina levee failure disaster. (Photo credit: Wikipedia)

• Once a storm hits, are there lots of insurance adjusters swinging quickly into action? 

The insurance companies would say yes, and you can be sure there will be a news clip with at least o

ne adjuster quickly on the scene looking appropriately concerned. Even so, my personal experience is that there are not nearly enough adjusters getting to the site when they should, and I believe most storm victims would agree with me. Ultimately, the answer depends on one’s definitions of the words “lots”, “quickly”, and “action.” I can predict, confidently, that you won’t consider the adjuster’s appearance to be timely.

• What’s the holdup?

When a storm or other disaster hits, the independent adjusting firms get a call from the insurance company. Their people start calling people, who start calling other people, who start calling still other people. Then the independent adjusting firms start looking for a place to set up their offices, or perhaps they wait for the insurance company to set up

facilities. As a practical matter, independent adjusters (who are the people typically given assignments through these companies) are usually left to their own devices when it comes to traveling to the disaster site, finding a hotel to stay at and securing other support services. You can imagine how difficult it is to secure undamaged, available housing and office space right after a disaster. Needless to say this, too, slows down the processing of your claim.

• What actually happens when I call the insurance company?

If you can get through at all, you’ll probably get the number of a claims call center.

• Okay, what happens when I reach the call center?

Typically, they take your information. They can’t do much of anything else. Unlicensed call center personnel often can’t even tell you how much the deductible is on your policy. These people are temporary employees who are not well trained and (usually) not particularly motivated. They take down the information, either handwritten on a simple store bought pad or company created sheet of paper, or they may transmit an e-mail or generate a message printout. Each of these calls represents a message that an adjuster working for that company is supposed to return. That is, if the message gets to the right place.

English: (Photo credit: Wikipedia)

• How long is it going to be before I hear from that adjuster to set up a time for inspection  of my property?

This is the sixty-four-thousand dollar question. The best answer is that you should probably be prepared to wait anywhere from one week to three months to get even an initial call back. I would suggest if you haven’t heard back after a day or two, you should call back – the adjuster probably lost your message. Call, leave message, wait, repeat. Call, plead, leave message, wait, repeat. Call, plead, plead some more, leave message, wait, repeat. Does this really sound like something you’d like to do while you’re without power, without air conditioning, without hot meals, and without clean water … for, say, two months?

• You’re kidding, right?

I wish I were. I recently talked to an adjuster on behalf of one of my clients after a natural disaster. When I finally was able to speak to him after weeks and weeks of calling with no response, I asked him to explain his failure to return my messages. He said, “Look, I get 80 messages a day and I have time to return maybe ten of those messages before I get another 80 the next day. That’s the system. You do the math.”

• That’s an exceptional case, right?

No, I’m afraid that was quite typical for this insurance company – and probably not too different from most other companies. It really is all about staffing. The call center folks

are there, but they can’t help. You need to talk to the adjuster. But the adjuster is not there. He or she is out “in the field” adjusting losses. If they were available to talk to you, who would adjust all the losses?

• Is it a Catch-22, or is it just a coincidence that happens to benefit the insurance company? Whatever it is, it’s not going to work out in your favor.

• Couldn’t insurance companies afford to do this differently?

One would certainly think so. The question then is at what cost? Odds are the insurance

companies would find it too expensive to provide the level of service expected by consumers.

• So do I have to wait a couple of weeks for the insurance company and the independent adjusting company to set things up … and then another week to three months more just to hear back from the adjuster for the first time?

That’s pretty much par for the course. Sure, you might get lucky and be the first person the adjuster calls back. You might also win the lottery tonight. I wouldn’t count on either.

• Yeah, but things will get better after I hear back from the adjuster, right?

Wrong. I’ll tell you all about mid-phase delays in the next blog…

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.