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.

Image courtesy of commons.wikimedia.org

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.        

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.

What Are They Up to Now?

by Mark Goldwich

With a title like, “What are they up to now?”, you might think I’m writing about my kids, the presidential candidates, politicians in general, or some other high-profile group. What I’m talking about in today's blog are Insurance Companies. You see, earlier this week I attended a two-day conference presented by the Florida Association of Public Insurance Adjusters. The conference is billed as an educational and networking event designed to improve our skill sets, become better at what we do, and network with other industry professionals.

Image courtesy of Pixabay.com

One of the main takeaways from the conference was learning about significant trends in insurance industry tactics and strategies. These strategies are usually marketed as “consumer protections”, which also just happen to help insurance companies stuff billions more into their collective coffers. A happy coincidence, I’m sure (that’s sarcasm, for those of you who are unfamiliar with my writing style). Those of us whose job it is to protect the insured from their own insurance companies, see these tactics and strategies for what they really are, profit boosters.

Rather than bore everyone with all of the topics discussed, I’m going to focus on one key strategy, “Repair Cost Control”, which I will separate into two popular methods, “Managed Repair” and “Our Option”.

The idea behind “Repair Cost Control” is fairly straightforward – if the insurance companies can exert greater control over the repair process, repair costs will decrease, and profits will increase. They will naturally argue that reduced costs and increased profits translate into lower premiums, but just ask yourself when was the last time your insurance premiums were significantly reduced, despite the fact that your coverages were significantly reduced? Answer: You’re kidding me, right?

To gain even greater control over repair costs, as if having professional adjusters, estimating programs created with insurance industry input, and a host of repair professionals and attorneys at their disposal was not enough, the insurance companies have come up with “Managed Repair” (sometimes referred to as “Managed Care” to make it sound more benevolent), and “Our Option” (which could more accurately be renamed as, “Butt out, this claim is none of your business!”).

Under the “Managed Repair” process, the insurance company “guides” insurance victims to hire contractors who are “preferred vendors” that have special relationships with the insurance company,

Image courtesy of commons.wikimedia.org

rather than contractors of the property owner’s choosing. You can imagine how lucrative it could be for a contractor to enjoy such favored status. A large insurance company could provide so much work that the contractor could all but eliminate their marketing budget, which previously could have been tens of thousands of dollars each and every month. Gone! That doesn’t sound so bad, especially for the contractor and the insurance company. But think about it – the contractor gets the claim job “gifted” to them from the insurance company, and gets direction from the insurance company's adjuster.  This includes coverages, limits, and exclusions, which are all outside the scope of the contractor’s job, both realistically and legally, and the contractor gets included on claim payments, rather than getting paid by the insured property owner. Is it any wonder these contractors tend to forget they are working for the property owner, and tend to feel they are really working for the insurance company?

And what happens when the work done by a “Managed Repair” contractor is good enough for the insurance company, but not satisfactory to the property owner? “No problem,” the insurance company says, “you signed a contract with the contractor, so it is your responsibility to deal with them.” Nice!

And what of this “Our Option” mentioned as an alternative to “Managed Repair”. In my opinion, it’s even worse. Most property insurance policies have an “Our Option” clause that basically says, “we may elect to repair or replace the damaged property with a contractor of our choice.” Most insurance companies interpret that to mean that they can buy contractors, or enter agreements with contractors, so that if the insurance company agrees a loss is covered, they pay the contractor directly for the repairs, and the insured has no voice in the repair of their own property (usually, their home).

Think about that. The insurance company can literally own the construction company, or employ the contractors, and if the insurance company agrees to pay the claim, they pay themselves, instead of paying you. Talk about keeping it in the family! If someone can explain how that is not a clear conflict of interest, well, you’d be the first person to explain that. But, so far as we can tell, no state agency has even thought to ask that question, let alone demand an answer to it.

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So, what’s a property owner to do in light of these trending strategies that remove you from the process while growing insurance company profits? First, you need to know that these strategies exist, and how they work. Done! Next, you need to decide whether you want to believe the insurance company is doing this in your best interests and go along with the plan, or if you want to maintain control over who repairs your property, how they repair it, and with what workers and materials. If the latter, you need to know your rights, and be willing to fight for your rights (otherwise, you will probably lose those rights).

I hope I was able to bring to light, in an easily understandable way, a couple strategies trending with insurance companies that we as insurance consumer advocates recognize are detrimental to property owners, and primarily serve to benefit insurance companies. Feel free to research the topics on your own, and learn how to protect yourself.

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.