Miracle March Means Madness For Many

by Mark Goldwich

Forecasters predicted El Nino storms could drench the Western US in general, and California in particular, calling for a “Miracle March” that could ease the current drought conditions there. And halfway through March, it looks like they might be – predictably – partially correct.

"This is going to put a dent into some of the drought, but it's not going to take it away by any stretch," San Diego-based meteorologist Mark Moede told NBC News earlier this month. But according to Erik Ortiz of www.nbcnews.com, “the return of the storms this month in parts of California has drawn parallels to 1991, when a "miracle March" that brought record rains staved off a water shortage. It was also credited with saving the ski season.”

Image courtesy of en.wikipedia.org

In the first week of March, heavy rainstorms struck California and flooded some low-lying areas, but much more rain would be needed throughout the state to counter years of dry weather. In the second week of March, another round of rains helped replenish water reservoirs, and above-average snowfall has extended California’s expected ski season beyond any of the last several years, but it is still too soon to tell if this will be enough.

And while rain and snow is certainly good for California as a whole with regards to drought relief and snow-related industries, each storm brings disaster to many individuals. During any significant rainstorm event, low-lying areas tend to flood rather quickly. It may be that only 100 homes and businesses are affected, and this may not even make local news, let alone the national news (especially in the midst of a wild presidential election cycle), but for those 100 families, their entire world has turned to mud.

Keep in mind, also, that during most severe rainstorms, there are high winds, hail, and even tornados that come with the many inches of rainfall. Throw in a few mudslides on California hillsides, and you have the makings of a disastrous “Miracle March” for many unsuspecting property owners. The storms so far have not been devastating, but streets have been washed out by floods, highways closed by mudslides – one such slide toppled a dump truck in the process – and homes have also been flooded or damaged by mudslides. The uncomfortable paradox is that much more rain is needed to make an appreciable impact on the drought conditions, but such rains would also bring misery to ever-increasing numbers of people.

Image courtesy of en.wikipedia.org

Having dealt with so many individuals and families suffering through property insurance claims from rainstorms and flooding, I know how difficult it is to recover. Homes are damaged or destroyed, personal belongings are ruined, people are separated and displaced from their homes, and dealing with all the insurance hoops, exclusions, loopholes, and delays can bring a whole new meaning to the phrase “March Madness”.

As always, it’s important to know they can recover, and they will recover. The question is, at what cost? How much aggravation will they have to endure? How much money will they recover – or how much debt will they have to take on? Typically, the answers to those questions depend on what they know, and how well prepared are they are to take on this challenge. I always say, the better prepared you are before disaster strikes, the better you will emerge from the disaster. This goes from having a disaster plan (before it happens), to having a recovery plan (after it happens).

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One thing is for sure, the insurance companies all have plans. And systems. And strategies. And resources. For you to compete, you need to have these plans in place as well, even if it just means knowing who has the plans, systems, strategies and resources to help 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.

Who'll Stop the Rain?

by Mark Goldwich

Hurricane Joaquin image courtesy of Flickr.com

The latest news has the fairly sizable hurricane Joaquin threatening the East Coast of the United still recovering from 2012’s “Superstorm” Sandy. You may recall New Jersey experienced especially devastating flooding when Sandy drenched that region.

States, even though the most current predictions are it will never make U.S. landfall.  However, a storm as big as this doesn't have to hit to produce coastal flooding by the time Joaquin exits the area. In fact, the Carolinas are already experiencing flooding completely unrelated to this hurricane, so any additional rains as a result of Joaquin will make things dramatically worse. I also noted that emergency preparations are already underway in New Jersey, which is

I will first start with this – if you don’t already have flood insurance, you should seriously consider getting it as soon as possible. It may be too late for you to be covered in the event Hurricane Joaquin does strike, but there will always be another event that causes flooding, which very few of us are immune. I have been saying for years that “we are all in a flood zone, it just may not have happened yet.” Even if the place you live is not recognized as a flood zone by FEMA or a mortgage company that doesn't mean that flooding can't occur. If you are in a “low-risk” flood zone (as determined by FEMA), your mortgage company may not require you purchase flood insurance, yet your property may still be at risk. Countless people make that mistake each and every year, with dire financial consequences. And that may never change, at least not for everyone, but if you are reading this, I hope you will act now, and not become a statistic. Another of my flood-related sayings is, “if you place too much trust in FEMA flood maps today, you may be waiting in FEMA assistance lines tomorrow!”

Here are some interesting flood facts from www.FloodSmart.gov:

• In the past 5 years, all 50 states have experienced floods or flash floods.
• Homeowners' insurance does not cover flood damage.
• Just a few inches of water from a flood can cause tens of thousands of dollars in damage.
• A car can easily be carried away by just two feet of rushing water.
• New land development can increase flood risk, especially if the construction changes natural runoff paths.
• Federal disaster assistance is usually a loan that must be paid back with interest. For a $50,000 loan at 4% interest, your monthly payment would be around $240 a month ($2,880 a year) for 30 years. Compare that to a $100,000 flood insurance premium, which is about $400 a year ($33 a month).
• A Preferred Risk Policy provides both building and contents coverage for properties in moderate- to low-risk areas for one low-price.
• You are eligible to purchase flood insurance as long as your community participates in the National Flood Insurance Program. Check the Community Status Book to see if your community is already an NFIP partner.
• In most cases, it takes 30 days after purchase for a policy to take effect, so it's important to buy insurance before the storm approaches and the floodwaters start to rise.
• In a high-risk area, your home is more likely to be damaged by flood than by fire.
• Even though flood insurance isn't federally required, anyone can be financially vulnerable to floods. In fact, people outside of mapped high-risk flood areas file over 20-percent of all National Flood Insurance Program flood insurance claims and receive one-third of Federal Disaster Assistance for flooding.
• From 2005 to 2014, total flood insurance claims averaged more than $3.5 billion per year.
• Since 1978, The NFIP has paid nearly $50 billion for flood insurance claims and related costs.
• There are currently more than 5.3 million flood policies in force across more than 22,000 communities in the U.S.

Image courtesy of commons.wikimedia.org

These are sobering statistics, which should make all non-insured homeowners pause to consider. It would be great if more people did know more about how flood insurance works, and who it can protect. Too many individuals and families are impacted each year simply because they got bad information about flood insurance, didn’t understand the information they were given, or didn’t have the resources to obtain the correct information. My goal would be to reach at least one person, and make a difference.

Along these lines, there was another section at FloodSmart which detailed common misconceptions about flood insurance. It was there I learned that floods are the #1 natural disaster in the country, and that many people (wrongfully) believe they are somehow not eligible for flood insurance, either because of where they live, or their mortgage status. I can’t tell you how many people have told me after the fact that they didn’t think they needed flood insurance because “the mortgage company said it wasn’t necessary.” The mortgage company probably said it wasn’t “required”, or maybe that is what they meant to say, but either way, the message was lost in translation.

The fact is, according to NFIP (National Flood Insurance Program):

• You CAN get flood insurance nationwide.
• You CAN get flood insurance if you live in a floodplain or high-flood-risk area.
• You CAN get flood insurance if you live outside a floodplain, or a low-to-moderate flood-risk area, and at lower cost.
• You CAN get flood insurance if your property has been flooded before.
• You CAN get flood insurance from insurance agents in your area.
• You CAN buy flood insurance even if your mortgage broker doesn't require it.

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Were you already aware of all this? If so, wonderful – you are a flood maven! If not, it might be time to do a little more research. People with accurate information about flood risks and protection options can make better decisions and plan for disasters. Sometimes the key is knowing who to ask, or where to look before the storm clouds gather and you begin to wonder, "Who'll stop the rain?"

In this article I used current weather conditions to again remind people of the need to prepare for potential disasters like flooding, and the cost of failing to do so. I also provided information from a valuable resource on the subject of flooding, www.FloodSmart.gov, and presented statistics and misconceptions to help people gauge their own levels of understanding on this topic. I hope you scored 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.   

Hurricane Season is Here

by Mark Goldwich

With so many other topics consuming the 24-hour news cycle lately, and so much time since a hurricane hit their usual targets, a pair of storms whipping up winds today are an important reminder we are in the midst of the height of hurricane season, and we must not be lulled into a false sense of security.

Courtesy en.wikipedia.org

Danny became the first named storm of the Atlantic Ocean Hurricane Season on Tuesday, and quickly became the first hurricane of the Atlantic season on Thursday, according to the National Hurricane Center. By Friday, just 1 day later, it strengthened from a Category 1 hurricane to a Category 3 hurricane, with winds reaching 115 MPH. And as I write this on Saturday morning, Danny has already begun to weaken. It is still a Category 2 hurricane, but is expected to be further downgraded to a tropical storm by tomorrow, and is not expected to have any impact on the United States.

This is not only a good reminder of the need to be prepared for such events, especially for those of us living in hurricane-prone regions, but of how quickly things can change. When Danny was first mentioned earlier in the week, it was simply a tropical storm to be watched, and weeks away from any possibility of affecting the U.S. Even when it reached Category 2 strength, some said it was expected to weaken, and not reach the Category 3 level. And keep in mind, a Category 3 hurricane is considered a “major” hurricane, and capable of catastrophic damage.

And while Danny has already begun to weaken, and meteorologists can opine about high pressure fronts and wind shear and all sorts of other reasons storms act the way they do,  in the end the storm is a living, breathing, and relatively unpredictable phenomenon. As a result, even professionals never know for sure what the storm will do.

Image courtesy of en.wikipedia.org

Eric Holthaus, a meteorologist writing for Slate.com on Thursday wrote, “Danny is currently struggling to strengthen and has a tough road ahead of it: Dry air blown in from the Sahara and a pocket of cyclone-killing wind shear over the Caribbean will probably offset the potential boost from increasingly warm water. It’s not possible to confidently predict Danny will even be a storm at all beyond five days from now. On the other hand, it’s perhaps equally as likely that Danny will be a formidable hurricane in 10 days. There are model runs to support both possibilities.”

Holthaus went on to say, “Though it’s borderline meteorological sacrilege to even discuss the possibility of a tropical cyclone landfall so far in advance, a Danny landfall in the mainland United States has the tenuous support of two of the leading weather forecast models, the Euro and the Global Forecast System, the flagship model of the U.S. National Oceanic and Atmospheric Administration. The Euro, widely regarded as the world’s most accurate weather model, has been relatively consistent over the last several model runs that a weak version of Danny could approach Florida in about 10 days. The GFS has been much more variable, showing a potentially stronger landfall anywhere on the East Coast—as well as the possibility of a much safer curve out to sea. But you should take this information with an Everest-sized grain of salt.”

Predictions are made, analyzed, evaluated, revised, and then reanalyzed in hindsight after events actually occurred. If the person making the prediction turns out to be correct, they are congratulated for “knowing” what would happen. If they are wrong, they simply explain what happened to cause the prediction (not “them”) to miss the mark.

Meanwhile, a depression in the Pacific Ocean strengthened into what is now called Tropical Storm Kilo on Friday, churning about 500 miles southeast of Hilo, Hawaii. Forecasters believe Kilo could grow in strength into a hurricane by Monday, the Central Pacific Hurricane Center said. One forecast track indicates it could move under Hawaii before changing course back toward Hawaii, and may threaten the state as a hurricane by Wednesday.

Image courtesy flickr.com

In the end, all we can do each time a depression, or storm, or hurricane is taking shape, is to pay attention and prepare for the worst based on information gathered from multiple sources. Of course, it is always better to be prepared (even if nothing happens) than to be unprepared, because when the rare instance of a major storm does happen, being unprepared can lead to disastrous consequences. 

There are so many resources to take advantage of today, and I do not want to bore anyone with disaster plans and safety kits (I’ve probably done this enough already), but I do want to remind you to take some time to at least contemplate what you would do if you had 24 hours to prepare for a large-scale natural disaster. Get on the computer, and find a disaster plan you like, complete with emergency supply kit, and at least print it out and review it with your family. This 30-60 minute exercise would not only create some “family time”, but would hopefully become a habit, and over time increase in everyone the confidence that comes from such repeated planning. The last thing you want to wind up doing is standing in a big box store as a hurricane bears down trying to grab the last couple of pieces of plywood, or the last few cans of food on the supermarket shelves.

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This type of exercise is good for much more than hurricane planning, I believe it helps shape the way people react and act in all kinds of stressful situations, allowing them to remain calm, prioritize needs, and take measured actions in coordination with others (or alone).

So thank Danny and Kilo, for the wake-up call to remind us that Hillary’s email scandal and pre-season football is not the most important news of the day. Remember that while the hurricane season has been quiet so far, it's far from over. Stay vigilant, my friends.

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.   

Accidents Never Take a Vacation

by Mark Goldwich

Summer is kicking into high gear. The kids are out of school, the fourth of July is upon us, the heat index is high (dangerously so, for some), and people are taking vacations, myself included.  In fact, as I write this, we are just taking off from DFW Airport in Texas, on our way back from a fantastic family vacation in San Francisco, California.

Image courtesy of commons.wikimedia.org

This is probably not the best time to think deeply about vacation-related accidents, but I have a few hours without walking to the next trolley, taking pictures of the local sights, or eating yet another high-calorie meal. So here I am, on the way to a cruising altitude of 33,000 plus feet, wondering how a properly designed wing system and a pair of well-maintained engines help this very heavy people mover defy gravity, while trying to focus on risk management. 

I'll start by going back over a month ago, when we were planning the trip. My mom, whose idea it was to take the trip to begin with, said she wanted to get trip insurance, and suggested we look into it as 

well. She had actually bought - and even used similar 

trip insurance in the past - and so now she usually 

gets it on her more expensive trips. 

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Trip insurance works similar to other types of insurance where you can pick and choose the coverage and amounts you are interested in obtaining. You can choose from medical coverage in the event you become sick or are injured while outside of your normal health coverage plan (obvious factors to consider here are what your health insurance or medicare plan does not cover). You may also elect to purchase travel protection that can reimburse you for prepaid reservations if your trip is delayed or canceled. There are even policies that include baggage protection should you have items lost or damaged while being transported. You may also add accidental death or dismemberment coverage just in case you are killed or dismembered while flying in a jumbo jet or riding a cable-car on the way to Fisherman’s Wharf (if you have life insurance, you probably don’t need this).

My wife and I talked about coverage based on the cost of the insurance, and what we felt were fairly low odds of needing the insurance'  As a result we decided to pass. After all, that is what voluntary insurance is about - factoring in the cost of the insurance, the odds of mishap, the cost of not having the insurance, and the peace of mind that supplemental insurance is supposed to impart. 

Image courtesy of en.wikimedia.org

Let's face it, any number of unfortunate accidents could have occurred before or during our trip that would have prevented us from going at all, or that could have cut our trip short.  This occurence would have cost us thousands in unrecoverable expenses, as a result setting us back financially. Then again, nothing did happen, and in hindsight, we made the right decision and saved almost $500. For me and my family of four, the cost of the plan was just too much for what we perceived as the odds of anything happening that would prevent us from taking our vacation. 

For my mom, the cost of her plan was outweighed by the cost of her trip, should something unexpected come up as had happened before. Nothing happened to her either, but her plan was much less, and it was worth it to her for the peace of mind she enjoyed.

While we were away, we rented a car for two days to go sightseeing beyond the San Francisco area. When I got to the counter, it was suggested that I might want to opt for up to three different types of insurance; collision coverage for the rented vehicle, liability coverage for damage I might cause to others, and medical coverage for me and my family should we be injured while using the rental. 

I'm not going to say it was a particularly hard sell, but even after I mentioned that I have full auto coverage and health insurance, the rental agent briefed me on some of the potential advantages of purchasing their plan, like not having to file a claim with my own insurance company. Let's just say that I wasn't swayed. For me, the value of convenience and peace of mind is fairly low, especially when combined with my experience at not needing such supplemental insurance in the past. If just one factor was different (for example, if I didn't have good auto insurance), I may very well have opted for the relatively inexpensive rental car policy. 

This is not to say you should always reject trip insurance or supplemental rental car coverage. Especially when driving an unfamiliar vehicle, in a strange place, the odds of accidents increase exponentially. Also you need to factor in the driving habits and conditions at your destination.  Needless to say, everyone has their own tolerance for risk, and everyone values intangibles like convenience and peace of mind differently. 

Knowing how to deal with risk avoidance and risk management is all about  being tuned into your own thresholds for dealing with risk, as well as knowing what risk management plans you already have in place. This and common sense  will go a long way towards helping you make financial decisions in this area.

Until next time, whether you are lighting off fireworks left over from the Fourth of July, or traveling near or far away, have a safe, happy, and healthy summer!

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.  

It’s Like Pulling Teeth

by Mark Goldwich

Today, my 13-year old son is getting 4 teeth extracted to make room for wisdom teeth and braces, and to be perfectly honest, I don’t really know all the reasons why, that is just what both the dentist and the oral surgeon say needs to be done, so I am trusting their advanced degrees.  I have no doubt it will be an extremely unpleasant experience for all involved, especially for my son. We have known about it for some time, it has even been postponed at least once, yet everyone is still nervous, anxious, and dreading this day, and the next few days to follow.

So it got me to thinking about the origin of this phrase. My research suggests the earliest found uses in the 1830s, and generally means “extremely difficult” or “stubborn”, and referred to the difficulty found in people giving up information or money. An example from 1831 published in the Foreign Missionary Register of The American Baptist Missionary Magazine (Vol. 12, October 1832, No. 10), in the 23rd October 1831 entry of Mr. Judson's Journal: “When any person is known to be considering the new religion, all his relations and acquaintance — rise en masse; so that to get a new convert is like pulling out the eye-tooth of a live tiger.” Or in 1836 Knickerbocker: “And for this service to the sons, what did I get from the sires? The pittance of a few dollars, which came like pulling so many teeth.” 

Image courtesy of intelligentdental.com

For as long as dentistry has been around, pulling teeth has been a painful and distasteful experience.

And so the same is true for many people when it comes to rendering money or information. At least nowadays, there is nitrous oxide and other forms of anesthesia to ease the pain (at least during the teeth-pulling process). Unfortunately, as my son can attest now that the teeth are pulled, there is little that can be done to make the whole teeth-pulling ordeal completely free of discomfort. On the way home from the dentist, while still feeling the effects of the nitrous, he asked if we could come back tomorrow because “it was fun” and “only took 5 minutes” (it was an hour). Well, it has all worn off, and he has absolutely no interest in going back tomorrow for more “fun”. Or ever.

But what in the world does this have to do with insurance? You see, it has long been my theory that insurance companies deliberately want to make the claim process as difficult and distasteful as possible, mainly because it often ends with the insurance company making a payment. Even if they don’t make a payment, they certainly don’t want you to leave with the notion that, “Hey, that was great, I can’t wait to do that again!” This only makes sense, especially when you consider that every dollar they pay out on a claim, is one less dollar for the bottom line. And again, even if no money is paid, simply considering a claim comes at a cost for the insurance company, which also negatively affects the bottom line.

When you think about it, they have to walk a pretty fine line. They want their claim service to be highly regarded, for claim personnel to be friendly, knowledgeable and accurate, and to have (relatively) few complaints. Yet they don’t want people beating a path to their doors (premium paying doors yes, but not the one where claims submitted ).

So what do they do? They have trained people to practice smiling while they answer phones, because they have been told by consultants that “smiles can be heard over the phone”. Their people are trained in customer service to have numerous word-tracks at their fingertips to keep customers calm, patient, and understanding as they are being “handled”. They set up numerous layers (agents, desk examiners, field adjusters, independent adjusters, supervisors) such that each person can say they are doing what they can for the customer, even when the end result is negative. It’s like a bullet-proof vest that is made up of very thin layers of material, each of which on its own could not stop a bullet, but when combined together are able to diffuse the energy of the bullet, and stop it cold.

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In this way, extracting money, and sometimes information, from an insurance company is a lot like extracting teeth. It can be an emotionally charged, painful process, which even if successful, leaves a bad taste in your mouth, with no desire to repeat the procedure anytime soon. The process also tends to get people frustrated, particularly if they were not prepared for the ordeal.  This makes them much more likely to exit the process with less money, or no money at all, just as suggested in an 1855 quote from Godey's Lady's Book for October, 1855: "Some people it's like pulling teeth to collect from; they dodge and shuffle, and ask me to call again, until sometimes I am quite out of patience."

In my years of helping people with insurance claims, I have had several who were not just willing, but eager to accept less money, sometimes a lot less money, just to be through with the claim process, or “ordeal” as they would call it. In most cases, I could get the policyholders to stick it out with me, letting them know I would not give up on them, if they would not give up on themselves. A few times, nothing I could say would change their minds – their will was broken.

One such case in particular was a woman who lost not only her home of over 40 years to a fire, but she lost her husband of over 45 years to that same fire. With the home a total loss, the insurance company had no choice but to pay her policy limit on the structure. But when it came to her (and her husband’s) personal belongings, they required she detail each and every item the two of them purchased, collected, and possessed during the past 40+ years. It was a painstaking and emotionally painful process, and they offered no assistance, even considering her state of mind. When all she could do was recall about $50,000 dollars worth, they depreciated it all and paid her about $35,000, or about half of her $75,000 limit for contents.

They were nice enough about it, even telling her that if she could think of more items, all she would have to do is submit that as well, but now they would require proof of ownership of any additional items. I assured her she would not have to prove everything as they were saying, and that I would be willing to sit with her and help her remember and document additional items, even those over her policy limits so she could claim those amounts on her taxes as an uninsured loss, but to no avail. Basically, they presented her with the idea of having more teeth pulled, and my offer of anesthesia was not enough to dull the pain.

Image courtesy of pixshark.com

Sometimes in life you have to go through things that are not pleasant. Whether it is having teeth pulled, or dealing with an insurance claim, try to keep in mind you’ll survive both. And in either case, I recommend the laughing gas.

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'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.

Image courtesy of beausrsj.wordpress.com

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.  

Honesty and Your Policy

by Mark Glodwich

In my last blog I talked about the importance of documenting your insurance claim in order to maximize your chances of success in recovering everything you are entitled to.  In that blog, I mentioned how documenting your claim properly could save your claim even if you made other mistakes along the way.

Image courtesy of commentsmeme.com

So today I wanted to talk about just 1 common mistake people make when filing an insurance claim. And just as the documentation tips in the prior blog can be used for situations other than insurance, this mistake should also be avoided in non-insurance situations. As is often the case, really good tips, advice, and suggestions can be used in all kinds of situations, by anyone, and with consistent success.

The one common mistake I’m going to focus on today is not being honest, bending the truth, telling a little white lie, fudging, or just plain committing fraud. Needless to say, don’t do it. I’m not going to say insurance companies aren’t stupid on a global scale, but I have found that individuals who work at insurance companies can be fairly intelligent. And keep in mind; some of their best trained adjusters are those working for their “fraud” units. Sure, everyone knows lots of people rip off insurance companies and get away with it.  Sometimes their right hand doesn’t know what their left hand is doing, and they can be too overworked to notice your minor fudging on a relatively small claim. But when it comes to risk versus reward, it’s just not worth it.

We usually only hear of big fraud cases where the fraudster is greedy and dumb, which is a terrible combination. But the reality is, regular people get caught all the time, even on small claims – it just doesn’t make the evening news. And often, that’s because there is no arrest for the news media to become aware. In my experience, most would-be insurance cheats are not arrested, their claims are simply denied (sometimes just the items being inflated are denied, or sometimes the entire claim is denied), and they “get off with a warning”.

This “policy of honesty” starts from the time you fill out your application for insurance. Did you know, if you make what is called “a material misrepresentation” on an insurance application, years before a valid claim takes place, your insurance company can not only deny your claim, but they can rescind your policy entirely? When your policy is rescinded, it is as if you never had it, meaning you cannot collect on it. And just what is a “material misrepresentation?” In short, to an insurance company, it’s when you answer in such a way that they consider the answer to not only be untruthful, but that if you had told the truth, they would have never insured you to begin with.

Courtesy of rootinc.com

Now think about this…You’re sitting with an agent, and he or she is asking question after question on the insurance application, when out of the blue they ask if you had a DUI in the past 5 years. You’re embarrassed that it happened in the first place, and you can’t remember if it happened 4 years ago, or 6 years ago, but it was right around 5 years ago. So you think to yourself, that it has nothing to do with the homeowners insurance you are applying for. So you answer, “No.”

Years later, your home burns to the ground, with everything in it, and you submit a claim. To your surprise, instead of paying the claim, your adjuster tells you they need you to submit to an Examination Under Oath. “It’s no big deal,” the adjuster says, “it is very common to require this on large losses.” And besides, you know you had nothing to do with starting the fire. As you proceed with the EUO, an attorney for the insurance company introduces you to the court reporter who will be transcribing everything said. You are still not thinking about that day in the agent’s office until the attorney asks, “Have you ever been convicted or plead no contest to a DUI?” Still not putting 2 and 2 together, you answer, “Yes.” The attorney promptly follows up with, “In what year was that?” to which you reply, “I have no idea; that was nearly 10 years ago.” “Actually,” the attorney says, “our records show it was in such and such year, isn’t that correct?” Again you respond that you don’t remember, but that sounds about right. He then asks you if you remember the agent asking you the question about the DUI within the past 5 years, and he asks you to confirm your signature on the application, and the date, which you do. Now you start doing the math in your head, and your stomach starts to churn a bit, but you’re able to keep your lunch down because the attorney quickly goes on the next question, and the next…

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With all the questions over all the hours, it still hasn’t sunk in. That is, until you get a letter about a week later, explaining that your policy has been rescinded, with no payment on your claim, and only your premium is being refunded, because your DUI was only 4 ½ years prior to your insurance application.

This happens a lot more often than you would ever imagine. I call this, “denial by rescission”. If the

Image by leisuremartini.com

insurance company can’t find another reason to deny the claim, they may look to the application for items they consider “material misrepresentations”. Sometimes this happens when the agent didn’t even ask the question, but completed the application for the client, thinking they were helping speed up the process, and maybe also being embarrassed about some of the questions, or thinking they know the answers.

This is why it’s critically important to review the policy application questions and answers before signing it. And don’t assume any answer is not relevant, or that it wouldn’t count if that’s what the agent wrote as the answer. In a situation like that, you should assume that if you sign it, they will hold you to it.

And certainly once a claim is made; stick with the policy of honesty. Even if the answer to a question is embarrassing, or if the fact that you don’t know the answer is embarrassing, be truthful anyway. If “I don’t know” is the answer, state it every bit as proudly as you would if you did know the answer. Offer to find the answer. Or, suggest they speak with the right person to get the answer.  It will be a lot better than trying to make up an answer, just to hide the fact that you didn’t know something. Remember, the penalty for not knowing something is never as harsh as the penalty for giving a bad, untruthful, or dishonest answer.

What we learned in kindergarten is still true today – honesty is the best policy.

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.

Time for a Little Tornado Tech

by Mark Goldwich

Image courtesy of dreamatico.com

You can’t watch the news without noticing its tornado season again. Just recently a sizeable tornado hit Illinois, and if you watch the national weather like I tend to, more wicked weather is always on the horizon.  There’s something special about tornadoes. Their size, their appearance, the ferocity, the sound, and the unmistakable path of destruction left in their wake.

Personally, I’ve never experienced a tornado up close and personal, but I’ve seen their aftermath many times. Just seeing the twisted metal hanging from trees, stripped of leaves, and oddities like a 2x4 impaled through a brick wall so cleanly you’d think it was built that way.  It’s images like these that let you almost imagine the sheer power of the event itself. Maybe that’s what is so captivating about tornadoes, the destructive power.

So I thought I’d share a some other facts concerning tornadoes. Did you know a tornado can reach wind speeds of over 300 miles per hour – much stronger than the most powerful hurricanes.  EF5s, the storms that produce these incredible winds,  can even be over a mile wide.  Ir a twister this size were to hit Jacksonville, Florida, it would consume all of downtown in one gulp. And while we usually hear about tornadoes hitting largely unpopulated areas, skipping along for short periods of time before dissipating, that’s not always the case. In one storm, a single tornado hit parts of Missouri, Illinois and Indiana, killing 695 people.   That was in 1925, and while there wasn’t much in the way of early tornado detection, or strict building codes, the population was also a lot less dense then it is today. It makes me wonder how that same tornado would compare today. Hopefully, there would be a lot fewer fatalities.

courtesy of noaa.gov

Even with Doppler radar and eyes in the sly, the average amount of warning time before a twister hits is only 13 minutes.  Add to that the fact that Tornado Alley comprises an area of 500,000 square miles with a population density of 17 million and you can understand how many people tornadoes can affect.  ". Texas, Oklahoma, Kansas, Nebraska, South Dakota, North Dakota, Iowa, Missouri, Arkansas and Louisiana make up Tornado Alley We usually see at least 500 tornadoes occur in this area every year, which is why it is how it got its name since 30% of the tornadoes in the US occur here. And the most likely time of year to have tornadoes form is from March through May, and usually in late afternoon or early to mid-evening hours.  Sad to say that tornados aren’t relegated only to the mid-west. They can occur in any state in the Union. 

In a quote from Yahoo Finance:

According to the Storm Prediction Center, seven of the 10 costliest tornadoes since 1950 have occurred in Tornado Alley. Topping the list is the deadly Joplin, Missouri, tornado of 2011, an EF5 tornado which caused an estimated $2.8 billion in damages to the town. The Insurance Information Institute reports the average insured loss per year was $7.78 billion between 1993 and 2012 for severe thunderstorm events, including tornadoes.The costliest of those years? An estimated $27 billion in insurance claims in 2011 from severe thunderstorms.

  

We also know tornados don’t just appear out of the blue.  They form within large thunderstorm clouds, where updrafts are particularly strong. Did you know the average thunderstorm releases around 10,000,000 kilowatt-hours of energy -- the equivalent of a 20-kiloton nuclear bomb?  [source: Britannica]  That’s also the reason many survivors of a twister report they sound like an approaching freight train.  There’s a tremendous amount of power inside a tornado.  And not even just typical thunderstorms, but supercell thunderstorms are needed for tornado formation. Even then, there’s only about a 50% chance an actual tornado will form.

Once formed, a tornado will move with its “parent-cloud”, sometimes hopping, sometimes changing

Before and after image from livescience.com

directions, sometimes dissipating and reforming again. Scientists still debate the precise reasons tornadoes dissipate without notice, just as they sometimes seem to form without warning, but most agree it has to do with the “parent-cloud”, or rotating mesocyclone, that brings with it disruptive airflow, moisture, and balance of hot and cold air.

 Is there really a “calm before the storm”? The answer is yes and no. That is to say, sometimes there is a period of dead calm just before a twister hits, and sometimes there is not. Every storm is different. Some survivors also report a strange greenish tinge to the clouds preceding a tornado.  The thing that most often separates tornado survivors from victims is preparedness or lack thereof.

Tornadoes strike with little warning. So being prepared is half the battle. So, have a plan – know your plan – and practice your plan. Especially when you have only minutes to act, it’s critical to know exactly what to do, with whom, where and when.  Your plan should be in writing (otherwise, it is just an “idea”). Everyone in your family/household/office should be familiar with the plan. Review, update, and practice the plan each and every year.  

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And don’t forget to include Gold Star on the “recovery” phase of your plan, so when the dust settles, you can give us a call and we’ll take care of the rest!'

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.