The Shortest Distance

by Mark Goldwich

Image courtesy of en.wikipedia.org

There’s an old saying that is also a scientific fact – “The shortest distance between two points is a

straight line.” I was thinking about this because I wanted to present another real case scenario, where the insurance company quickly denied a valid claim based on an incomplete or otherwise flawed investigation. And I was then struck with the obvious question of “why do they do this time and again?”

First I’ll present the scenario, and then I’ll make a case for why it happens.

In this case, a couple was moving from Jacksonville to Gainesville. They found a home in Gainesville, and got it under contract before selling the home in Jacksonville. And besides, the home in Gainesville still needed some work, so the husband was going to go back and forth, doing the needed work, until the Gainesville home was ready, and the wife would remain in Jacksonville until that time, or until the Jacksonville home was sold.

So they took out insurance on the Gainesville home, and then something happened to delay the closing, and the insurance policy was canceled. The policy was then reinstated prior to the second scheduled closing, which went off without a hitch. After the closing, the husband spent a week in the Gainesville home they just closed on, doing repairs and getting it ready. At the end of the week, he drove the 2 hours back to Jacksonville, and about 2 weeks later they got a notice in the mail from the utility company in Gainesville, saying there was a spike in the water usage, indicating a water leak somewhere.

Mold image courtesy of en.wikipedia.org

Luckily (that doesn’t seem like an appropriate word here, but it fits), they knew a neighbor in Gainesville that they quickly called to check things out. The neighbor could not see any problems, there was no water leaking out the doors, so he shut off all water going to the house just to be sure. When the husband returned to the Gainesville home a few days after that, and went inside, there was water everywhere, and mold was already starting to grow.

So they called their insurance company, and told them about the loss. The insurance company sent someone out to the property a few days later, and took a recorded statement of the homeowners. And within just a few more days after that, they received a letter from the insurance company…drum roll…denying the claim in its entirety. The letter explained in detail that the policy had an exclusionary clause which prohibited payment in the event of a water leak, but only if the home was vacant or unoccupied for 30 days, unless the property owner shut off the water and drained all plumbing lines of water (this is typical in the North where plumbing lines left unattended in the winter tend to freeze and rupture). In this case, the water was not turned off, as no sudden freezes were expected in the middle of summer in Florida.

When I spoke with the property owners, they explained the facts to me, just as they did to the ^st, which was just a few days prior to when the insured called the claim in, after going to the property and seeing all the damage. And since August 1^st is more than 30 days after the property was purchased on June 13^th, they quickly concluded that the property was vacant or unoccupied for more than 30 days. Case closed.

insurance company and their representatives. So, why the denial? The main reason is the insurance company set the date of loss as August 1

Image courtesy of dreamstime.com

But why August 1^st, and if that is not the correct date of loss, what is? The insured told me they called the insurance company on or about August 4^th to report the claim. I have no doubt they were asked at that time “when did the loss occur?”, as is standard practice. Naturally, the insured did not know when the loss occurred, since they were not living in the property at that time, so they would have answered with, “I don’t know when it happened.” Everyone could agree it did not happen on August 4^th, and that it must have been prior, so I can only imagine the insurance representative input August 1^st as the date of the loss, simply for convenience. (If they did it because they knew the policy well enough to know this date would likely result in a denial, that would make them evil). This practice of approximating the date of loss is not at all uncommon, but it often makes for confusion down the road. As it did here.

The fact is, the property owners received the letter from the utility company on about July 23, meaning it was mailed a few days earlier, and the letter stated the meter was read on July 19. This proves the loss must have occurred prior to July 19. And since the homeowner left the property on June 24, and there was no problem with the water at that time, the date of loss must be between June 24 and July 19. No matter how you slice it, the property could not be empty for more than 25 days. And even in Common Core math, 25 is less than 30. Will the carrier agree with my position? We’ll find out soon enough, but for now, the insurance company and their hired adjusting firm are both playing dumb.

Now to answer the original question, “why does this happen?” Initially, I believe it happens by a combination of coincidence and convenience. They are not sure of the date, so they simply guess. Or, they are not sure of the cause of the loss, so they simply guess. Sometimes they base it on the opinion of the insured, or a witness. The problem is, the date might be wrong, or the insured or witness might not understand the difference between “flood”, “back-up”, or “fill-up” – heck, some seasoned adjusters don’t know the difference. But once they are shown the difference, you would think they would make the correction in their record, and re-adjust the claim accordingly. Alas, I don’t find that happens in most cases, and if it does, it only happens much later. Instead, the carrier insists their initial decision (or “instinct”) was correct, and they will fight any other position fiercely.

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When I was in my early days of training as a company adjuster, I was showed a diagram that looked like a baseball field. I was told that for every single claim, regardless of type or size, you had to go around the 4 bases of the “claim diamond”. First base was Policy – there had to be a valid policy in force. Second base was Coverage – there had to be coverage for this type of claim. Third base was Exclusions – if there was an exclusion for this event, you could not proceed to Home Plate, which of course was Payment – paying the claim (paying the appropriate amount is a whole other story).

It just seems now adjusters are not taught this same diagram, where you run from point to point, 

around what looks like a square, never running in the same straight line. Instead, they appear to go straight to third base, looking for that exclusion, so they can stop all that running around. Maybe it’s laziness on the part of the carrier in conducting their training, or maybe it’s laziness in the newer adjusters, or maybe they all just want to save a few million dollars each year. Whatever it is, it is working pretty well for them, and all insurance consumers need to be aware.

In this article I presented a real-life case scenario, where a valid claim was erroneously – if not intentionally – declined despite facts which refute the denial. I also offered reasons why this happened in this particular case, as well as why it happens regularly throughout the industry. And the moral of the story is…Having a professional guide you through the claim minefield will help you make it to home!

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.   

Too Much of a Good thing?

by Mark Goldwich

Image courtesy of piff.net

If you have not heard about the “Assignment of Benefits” crisis currently going on in Florida and elsewhere, you are not alone. But just because you haven’t heard about it, or experienced it, doesn’t mean it’s not out there. Assignment of Benefits has been around a long time. Historically, these forms were used by doctors and other medical professionals so they could provide treatment and then seek reimbursement directly from the health insurance companies. Only recently have emergency restoration companies and other contractors begun to use these forms in a similar fashion. Most people have not heard about it, and will not hear about it, until “it” happens to them. Unfortunately, then it may be too late (for them). Fortunately, you are about to take a short course in “it”.

What is “it”? Well, that depends on which “it” you are talking about. The first “it” is the damage that happens when your property suffers a loss from fire, water, storm, or other insured event. When that happens, you usually have a restoration contractor come out to help clean up, dry out, or otherwise assist in getting your property back to normal.

The next “it” is the “standard” Assignment of Benefits form that the restoration contractor asks you to sign “before work can begin”. Now think about it, you just came home to find 3 inches of water throughout your home, all kinds of property was ruined, you scrambled to find an emergency restoration contractor who could come out right away, and they are handing you a form to sign before they begin to suck gallon after gallon of stinky water out of your carpet, walls, cabinets, and so on. Of course you are going to sign it, right? And yes, most people do. Especially when the contractor quickly explains how it is in your best interest, it is done all the time, it is nothing to worry about, and it allows them to go directly to the insurance company for payment instead of you, Darn right it sounds good!

Courtesy of flickr.com

So people sign it. And just to be clear, in many cases, that is last they will ever hear about it. I am not writing this for all those situations that happen to other people. I am writing this for you, so you know enough about the form, the process, and the pros and cons, so if you are ever faced with this situation, at least you will know enough to make an informed decision.

The fact is, for the most part (as far as I can tell), the Assignment of Benefits form is a good thing. It allows your contractor to deal with your insurance company for you, and to bill them directly, and to even sue the insurance company if they don’t pay the whole claim. Otherwise, they would have to bill you, or even take out a lien your property if you couldn’t pay, and then you would have to sue your own insurance company to get the money to pay your contractor. That’s a good thing, right?

Well, you know the old saying, “If something seems too good to be true, it probably is.” This old adage still applies today for a reason. As with many things in life, once word gets out about a “good thing”, it tends to attract a lot of attention, including the attention of profiteers .

So what could be bad about the Assignment of Benefits form? Naturally, that usually depends on the nature and character of the contractor asking you to sign it. The potential downside is if the contractor does a whole bunch of work that is not covered by your insurance (every insurance policy has more exclusions than you can shake a stick at), guess who will not be paying that bill? Hint: The insurance company. Guess who will wind up paying that bill? You (unless the contractor eats it, and the odds of that are slim). And while the Assignment of Benefits form allows the contractor to negotiate the claim (since the claim now belongs to the contractor, not the homeowner), not all contractors have the experience and expertise to effectively settle all these insurance claims. And insurance companies will suggest that contractors are getting the Assignment of Benefits, greatly inflating the claims, and if the insurance company balks at paying right away, the contractor simply hands the file over to an attorney who promptly sues the insurance company.  This creates legal fees that are eventually passed on to consumers in the form of higher premiums.

Image courtesy of pixabay.com

How do insurance companies feel about Assignment of Benefits forms? Here is a quote directly from
www.securityfirstflorida.com): “If your home is damaged, your first thought may be to call a contractor before contacting your insurance company. This can be a costly mistake. There have been an increasing number of homeowners who have unknowingly signed contracts or forms that include Assignment of Benefits agreements. These forms are sometimes provided by contractors, often from damages that are caused during a storm, and must be read carefully. By signing documents with an Assignment of Benefits agreement, you may be allowing the contractor to collect your claim settlement funds directly from your insurance company. This has resulted in homeowners losing control of the claim process and it could mean having to pay amounts beyond what is covered in their policy. The contractor could place a lien on the home, and contractor liens in Florida can be enforced by foreclosure.”

the website of Security First Insurance (

Was that scary enough? Clearly, insurance companies do not like Assignment of Benefits at all. This alone might lead one to think these forms benefit the homeowner (despite the insurance company warning), but it may not be that simple, for the reasons stated above. Combine this with the fact that there are law firms traveling the state (possibly the country), presenting seminars to crowds of contractors, specifically on the use of Assignment of Benefits forms. Naturally, these are the same law firms that would sue the insurance companies on behalf of the contractors who use the Assignment of Benefits forms but fail to settle the insurance claims (whether inflated or not). These attorneys guide the contractors on the use of the forms, caution them on how to act within the law, and ultimately create a stream of lawsuits for the firm.

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What’s the answer? Know what the form is really about, so when you read it, you can have a basic understanding of what you are being asked to sign. Also try to get a feel for the contractor who is asking you to sign the form. They should be able to explain it to you. If they can’t, that is a bad sign. If they try to suggest it says something other than what is says (we have heard some say the form simply allows the contractor on the property, or allows them to communicate with the insurance company), that could be a worse sign. If they stress they know how claims work, and they will cover your deductible for you, or even get you some extra money…while it might sound good, it suggests they are willing to cut corners, or operate outside the law, and I would suggest you find someone else. But if they are open and honest, and you find them to be credible and ethical, and the form does not say anything that makes the hair on the back of your neck stand up, I would sign the form. But still watch what they do and make sure they are not overdoing things. 

One thing is for sure. The insurance companies are very hard at work figuring out ways to beat the Assignment of Benefits dilemma. Stay tuned for further developments, as this is not going away anytime soon. There is simply too much money at stake for all parties involved.

In this article I explained the basics of the Assignment of Benefits form as it is used in property insurance claims, gave some pros and cons, discussed the reasons it has gained attention and usage, as well as explored the potential for abuse. 

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.   

Unimaginative Denial, Creative Solution

by Mark Goldwich

This week I wanted to write about a claim my firm agreed to take on in the past few days. To me, this claim exemplifies why it is so important to have access to professional claim representation when it comes to property insurance claims, and why you can’t trust your insurance company to answer the question “is it covered?”

In this case, the homeowners live in a planned development, in what’s called a “zero-lot-line” home. This basically means that at least on one side of their property, the exterior wall of their home marks the boundary line of their property, so they have no yard at all on that side. The property is also unusual in that they have an atrium on one side of their home, with no roof above it. This atrium is literally a room inside their home’s footprint – it just has no roof covering it. Inside they have smooth pea-rock, and a few larger decorative rocks, statues and crystals, making it a tranquil space to relax.

What happens when it rains, you might ask. The floor of this atrium room (under the pea-rock) is poured concrete, and the concrete slopes towards the exterior wall of the home. Water then passes through a pair of “scupper” holes, about 4 inches squared (leading to a drain on the other side of the wall), and there is also a drain in the outside corner of the room that connects to an underground pipe leading to the side of the front driveway, where it is supposed to flow harmlessly into the street, towards a larger drain. It sounds like a mess, but for years, this system of holes and drains worked fine.

Image courtesy of wikimedia.org

You can almost guess what’s coming next, can’t you? We had some particularly heavy rains recently, and the drain system did not work fast enough. Rain water falling into the atrium could not escape faster than it was falling, and the atrium room soon filled with enough water that it entered the adjoining rooms of the home on all three sides. Water went everywhere.

The owners quickly called their insurance company, who told them to call a water extraction company and get the home dried out. Shortly after that, an “independent” adjuster working for a firm owned by the insurance company itself, came out to the property, spent 20 minutes taking a recorded “interview” of the homeowner, and another 10 minutes looking around and taking photos.

Now you may really be able to guess what happened next. The homeowner got a letter from the insurance company saying the loss was being denied. The letter noted that according to their “investigation” (if it can be called that), “the atrium was inundated with rising flood water, which entered your home causing water damage to your dwelling and personal property.” The letter kindly suggested they report the “Flood” claim directly to their flood insurance carrier. If they would have asked whether there was flood insurance (and they probably did), they would have known there was no flood policy in effect. They then included the section of the policy titled, “EXCLUSIONS” which says they don’t cover for “water damage, meaning: flood, surface water, waves,…” and also included exclusionary language which was actually removed from the policy by an endorsement the owners purchased (this would lead most people to believe certain events were not covered, when they actually are covered).  So the insurance company adjuster spent 30 minutes “investigating”, and just as quickly sent a letter denying the claim.

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On the other hand, I spent 2 hours at the property, in the home, the atrium, the neighbor’s property, in the front yard, the street in front of the home, and down the street looking at the drainage situation, and I determined this is not a “flood” loss, nor is it “surface water”. You see, real flooding occurs when rain accumulates as a result of “overflow of inland or tidal waters; unusual and rapid accumulation or runoff of surface waters from any source; or mudflow. I think we can safely eliminate mudflow and overflow of inland or tidal waters, which leaves us with the surface water exclusion attempt.

I would (and I will) argue that the water that fell in the atrium in this case is not surface water, it is simply rain water. Surface water is most simply defined as ”water on the surface of the ground”. For the purposes of insurance claims, courts have ruled differently, but generally define surface water as “water which is derived from falling rain, and is diffused over the surface of the ground, while it remains in such a diffused state, and which follows no defined course or channel, which does not gather into or form a natural body of water, and which is lost by evaporation, percolation, or natural drainage.” A bit more complex, but the way I see it, the rain never touched the “ground”, it was not allowed to “diffuse”, and it was forced to follow a course defined by the walls of the atrium.

Image courtesy of commons.wikipedia.org

If this occurred on the enclosed balcony of a 10^th floor condo (and I have handled similar claims in ^th floor condo balcony. The water from the neighbor’s yard did not enter this atrium. Instead, at some point, the water in the atrium simply could not escape to the neighbor’s yard fast enough. Also, the drains were so full of water they were not allowing water to escape fast enough either, and this policy contained an endorsement that could provide limited coverage for such a loss (but the insurance company never mentioned this).
the past), it would not be considered surface water by most adjusters (although I would not put it past a few to try). To me, there is not much difference between this situation and the 10

According to the insurance company, this loss was caused by flooding, or perhaps surface water, and is not covered. In my opinion, the loss was not caused by flooding or surface water, and should be fully covered (the damages could ultimately exceed $20,000). They spent 30 minutes “investigating” the claim, found what they say are 2 reasons why it should not be paid, and apparently could not find, or did not look for, any way to make a payment. On the other hand, I spent 2 hours on just my first inspection, and found their conclusions to be inaccurate and reached in haste. Time will tell, as they say, but I’m betting we’ll be successful in recovering an appropriate payment for our insureds.

In this article I used a real case to highlight the difference between an adjuster that simply goes through the motions of handling a claim with minimal effort or thought (and possibly with an objective of not finding coverage), versus an adjuster who aggressively seeks a way to find the maximum coverage, even when initial evidence suggests no coverage exists.

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.   

When California Dreaming Becomes a Nightmare

by Mark Goldwich

“All the leaves are brown” as the song goes, only now they’re on fire. This is when “California dreaming” can turn into a real nightmare. If you haven’t been watching a lot of news, you may not know California has been experiencing a severe drought for several years, and is currently battling huge fires covering thousands of acres.  While wildfires like this occur yearly, and take place all over the country, whether caused naturally (usually by lightning), by arson, or by human error, these current fires are particularly noteworthy due to their size and the length of time they have been raging, most likely due at least in part to the drought.

Image courtesy of commons.wikipedia.org

According to the California Department of Forestry and Fire Protection (http://calfire.ca.gov/), there are currently about 15 wildfires in California being fought by about 12,000 firefighters. They note that typically, less than 10% of all fires within their jurisdiction are caused by lightning. Cal Fire estimates that fire suppression expenditures will exceed $200 million dollars this year (well short of the $524 million spent in 2008). And so far this year, Cal Fire estimates nearly 4,400 fires have burned about 118,000 acres within their area of control.  

Regardless of how the fires began, stoked by the combination of high levels of fuel (dry vegetation caused by drought) and high winds, the results have been devastating. Wildlife has been killed and their habitats burned, homes have been threatened or burned, and valuable resources are being expended expended to fight the fires.

A few weeks ago I watched as news teams broke into regular programming to show live footage of cars and trucks burning on a California freeway, abandoned by drivers who could see the flames approaching, but who were unable to drive to safety due to the amount of traffic. It was the first time I had seen this many vehicles caught up in a wildfire like this. Luckily, all of the drivers escaped with their lives. Many of their vehicles did not fare as well, burning in HD for the entire country to see. Homes and other structures are also being destroyed, but fortunately, not in relatively dramatic numbers compared to past years. At least 43 homes were reportedly destroyed in just one of the fires near Sacramento recently.

While touring one of the areas affected by fire recently, California Governor Jerry Brown took the opportunity to blame Republican presidential candidates, suggesting the fires were a product of climate change, and asking “What the hell are you going to do about it?” Perhaps it was a rhetorical question, or maybe it was because Republican candidates don’t take Governor Brown seriously, but I don’t recall any of the candidates responding.

Image courtesy of en.wikimedia.org

As we see reports of firefighters heroically battling these blazing fires, it was interesting to learn that the California Department of Corrections & Rehabilitation employs nearly 4,000 volunteer inmate firemen (and women) to help combat wildfires, more than any other state in the country. This not only allows a larger force to wrest control of the fires, it provides a significant cost savings to the state’s taxpayers, as inmate fire crews are paid only a fraction of the minimum wage that non-inmate civilian firefighters and smoke jumpers get paid. But not all inmates qualify for the program, including those convicted of arson (good thinking, California!).

No sooner do these crews get a fire under control, when we hear of evacuees being allowed back into their neighborhoods to assess the damage.  Some find total devastation, while others find their homes miraculously spared. For those whose homes were reduced to rubble, they have to start from scratch. Usually all that remains of a home after such a fire is the concrete slab and the chimney (both of which - while clearly recognizable - are typically damaged beyond repair).

Image courtesy of en.wikimedia.org

If they happen to have insurance that covers fire, they still have a long, tough road ahead. Many insurance policies now place a cap on Additional Living Expenses (the amount of money you must spend due to the loss, over and above what you normally spend – typically, these include things like a rental home in addition to your mortgage, additional fuel or travel expenses if your temporary lodging is further away from work or school, and other increased costs as a result of the loss). Many policies now have higher deductibles, or even percentage deductibles, for all losses, not just hurricanes. And then you have to hope your insurance company will be prompt and fair when adjusting your claim.

In any event, if you have to suffer through a loss by wildfire, you will be spending many long hours over the following weeks, months or years to present your claim.  This will include proving what you owned, what was damaged, and what it was worth. Think about it, if everything you ever owned was reduced to ashes, could you remember it all? And even if you could remember it all, would you be able to prove to a stranger that it existed to begin with, and that you owned it, and what condition it was in? Now try all this while under extreme stress, or even depression. How many hoops do you suppose it takes for the average person to jump through before they give up on part (or all) of their claim under these conditions? And how many hoops do insurance companies have at their disposal? In my experience, I can tell you insurance companies have an average of one more hoop than the average claim victim is willing to endure.

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This is why I not only recommend you hire a professional public adjuster to handle your claim.  We are not subject to the same emotions and stresses as you, and we have the experience and tools to better follow through on your claim.  You also need to fully document your home and all your possessions in advance of any disaster. You will be going through more than enough stress when disaster strikes, so you might as well take measures in advance that will make your recovery easier.

And finally, in one of life’s great ironies, some of the fire-ravaged areas of California are expecting thunderstorms shortly that could drastically help douse the fires, but also tend to create lightning with the potential to spark even more fires.

Here’s hoping California’s nightmare of a fire season is soon put to 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.   

Everything's Debatable

by Mark Goldwich

With the first round of GOP Presidential debates behind us, and in the shadow of the Iran Nuclear

Image courtesy of msn.com

“deal”, I thought this would be a good time to write about debating and negotiating, and how it relates to insurance.

For me, the word “debate” is just fancy-speak for “argument”. Debaters are people who purport to be knowledgeable on a subject that present opposing viewpoints. The main difference is debates are planned, moderated, and  usually conducted with rules or conditions. Arguments are not nearly as formal, and can break out pretty much anytime. Still, it comes down to two or more people with opposing positions, trying to state their case effectively, so as to sway the other side, or the audience.

Negotiations are not much different either. Two or more sides come together with the hopes of reaching an agreement, or common ground, to establish an outcome. In the process, the parties argue (or debate) their positions to reach an agreement satisfactory to them. Early in my adjusting career I was taught the definition of a negotiated agreement was one in which “all parties are satisfied, but none are happy”. In other words, everyone gives up more than they wanted to, but they get enough to make the agreement, or take the deal. I was also taught that there were proven techniques and strategies that could be employed when negotiating. Once of my first supervisors strongly recommended I buy a book called “You Can Negotiate Anything” by Herb Cohen. This was over 25 years ago, but I still remember it, and it gave me a foundation for thinking differently about negotiating. And it didn’t just apply to insurance, as the title implies. It applied to just about anything.

As we saw in the presidential debates, even parties on the same “side” can disagree substantially, and

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occasionally an “argument” breaks out. And as we saw following the Iran negotiations, there can be significant differences of opinion on whether or not one party gave too much, and got too little.

But back to insurance. With insurance, you can’t negotiate when you enter an agreement to pay an insurance company to insure your property (or your life or health, for that matter). And remember, insurance – while often described as a “product” – is actually a legally binding contractual relationship. But with one major difference than most other contracts you enter into. When you agree to contract for insurance, you have no say in the wording of the policy. It is a unilateral contract – the insurance company writes the policy/contract, and you either accept it or you don’t. For the most part, this is not a good thing, with one main exception. Typically, if there is a dispute regarding the language of the policy, courts will generally rule in favor of the party that did not have a say in writing the contract.

Now, while you might not have a say in how the policy contract is written, you do have a say in what you get paid should you have a claim (shhhh, don’t let the insurance company know – they are under the impression that they get to tell you what they are going to pay, and you just have to accept it). 

Why do they think this way? Because in nearly all cases, insureds accept whatever the insurance company offers them. After all, who usually knows more about insurance and estimating damages, the insurance company or the insured? Who sends out a professional, licensed insurance adjuster, well versed in what they will and will not pay for? Who follows this process up with a letter on official letterhead that includes language from the actual insurance policy? Who has consultants, engineers, and attorneys at the ready, and depending on the insurance industry for their very livelihood? And who handles tens of thousands of claims each and every year, the insurance company or the insured? Of course, the insurance company has a huge advantage throughout the process.

But that does not mean you can’t negotiate an insurance claim, or renegotiate a previous insurance

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claim, and get a better “deal”. In fact, that’s exactly what we do every day for people. Even people who are educated, or business savvy, or whatever, tend to do poorly when it comes to dealing with their insurance company. It is simply because they are not skilled in negotiating with insurance adjusters.

This may be confusing because on the one hand I said negotiating is simply arguing or debating your position to reach an agreement. But remember, to do this effectively, you have to be knowledgeable on the subject, and in the case of insurance claims, the subject can be obscure, unfamiliar, technical, and if you’ve ever read an insurance policy cover to cover, quite convoluted. This is why professional public adjusters tend to fare much better at negotiating insurance claim settlements with company adjusters. We are familiar with policy language, construction, basic engineering, construction codes and standards, and while we are not lawyers, we are trained on applicable rules, laws, and legal cases. We also spend each day immersed in the process of adjusting and negotiating claim settlements. For the most part, we know what the insurance company adjusters know (sometimes more), putting us on a level playing field, which is a tremendous advantage when it comes to negotiating any agreement.

What are some other ways to gain advantage in an insurance claim negotiation? There are many, but

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being educated on the subject is certainly a great start.  I would suggest you remain calm, and not be emotional, but be able to use emotion to bring the other party to your side. Instead of screaming at an adjuster about how you are tired of living with the damage, calmly describe how it affects your children, your spouse, or your ability to eat or sleep. Describe what you are enduring so they can picture having to go through that experience themselves.

Don’t negotiate with yourself. Typically, this means you don’t make the first offer, and you don’t make two consecutive offers in a row. But once the insurance company has presented their offer, don’t expect them to make another offer simply because you rejected the first (they know that trick).

Stay in the real world. Don’t exaggerate figures or make unreasonable demands, just because you believe their figure or offer is unreasonably low.  Take the time to really listen to the other side. Show them that you are considering their position, and not dismissing them. Reiterate their points back to them, letting them know you heard them, before replying with your counter-points. Then, see if you can find areas of common ground.

Ask to speak to someone higher up the chain of command. The further up you can go while making reasonable arguments, the better your chances they will contact their subordinates and ask them to resolve this so you won’t keep calling them. Obviously, they expect this, and will resist, but you can persist and respectfully insist. If the claim supervisor won’t talk to you, ask for the claim manager, or the vice president of claims, or the owner of the insurance company. It will not always work, but it does work.

When negotiating directly with someone, don’t feel compelled to fill moments of silence. For some

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reason, most people dislike “dead air” time. Control yourself. Quickly filling the gaps with more words is a sign of desperation.  Be willing to suspend the negotiations for another day, or walk away altogether. This again shows you are confident in your position, as opposed to being weak. As has been pointed out with regard to the recent Iran proposal, a bad deal is worse than no deal at all. Follow up verbal negotiations in writing, memorializing the discussion. Naturally, you will want to spin this correspondence in a way favorable to you, but without completely distorting it – you want to maintain your credibility throughout the negotiations.

Don’t go into the negotiation with concrete expectations of absolute victory. Imagine the worst outcome, and consider the lowest amount you would accept. Then ask yourself,” if they offer me one single penny less, would I walk away?” If the answer is “no”, you need to reconsider the lowest amount you would accept, and then ask yourself that same question again and again until you are certain you would walk away without a deal. That’s your bottom line.

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Never begin your negotiations with your bottom line, and don’t be afraid to state a higher figure is your bottom line, even if it isn’t. Using this card too often will damage your credibility.

Finally, assume the other party knows these tactics and strategies as well (and maybe more). Negotiation is like a dance – dress well, learn the steps, perform with confidence, and you should be fine. And when all else fails, hire a professional.

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.  

Watch Your Step

by Mark Goldwich

Just as every rose has its thorn, every job has its hazards. In the world of insurance adjusting, depending on the type of adjusting being done, these hazards can range greatly (probably much like many other jobs). For anyone curious about the potential hazards of my industry, or for those who might be interested in a career in adjusting, the following will give you an idea of the risks we face.

First I’ll start with those adjusters who work primarily in an office setting (and yes, many insurance adjusters, especially as technology improves, never leave an office to settle your insurance claim). Besides the obvious hazards of getting into car accidents going to and from the office, or tripping on your own shoelaces, most in-office hazards come from repeated activities – staring at a computer screen all day, sitting in a chair all day, and typing for hours on end.

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Many corporate offices have access to ergonomics specialists within their Human Resources departments, or offer training videos on workplace safety. In addition to taking advantage of these resources, certainly it is wise to always be aware of things like tripping hazards (loose carpet, uneven surfaces, electrical cords, changes in floor elevations that are minor or difficult to see, or items placed on the floor near a corner). Then there are slipping hazards (water or other fluids dripping or leaking on a hard surface), sharp edges on furniture or accessories.  Las but least we come to the falling hazards (usually from a heavy or unstable object placed too close to the edge of a shelf or other piece of furniture). I'll bet you didn't know the work place could be such a hazard zone.

Get up from your desk on a regular basis and take a brief walk around, doing simple eye, wrist, back or neck exercises based on professional advice and your personal needs. Not only can you avoid some of the repetitive motion conditions, you may take this time to take note of other potential hazards in the office, and recharge your batteries.

Many insurance adjusters who work in an office, also work in the field, whether at private residences, commercial properties, or car repair shops. These adjusters not only spend more time in their cars trying to avoid getting hit by other drivers, but typically find themselves in unfamiliar surroundings, without the benefit of management and/or HR sanitizing every surface year-round. 

Once you venture outside, the number of hazards increase exponentially, and there are far too many to name here. I’ll just give an idea of a few I have encountered over the years.

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As field adjusters, and especially as catastrophe adjusters, a major component of the job is climbing onto roofs. Most people can appreciate the obvious hazard of falling off the roof, but that is only half the battle. The method for getting on and off the roof – the ladder – is the other half. You have to be careful to set up the ladder properly, facing the right direction (yes, most ladders have instructions printed right on them with illustrations to show how to set up the ladder safely), and on the right surfaces. I once set up my ladder in the trunk of my car because I just needed 2 more feet to get up on a roof. The smart thing would have been to leave and return with a ladder that would reach this particular roof, but when in a hurry, and having a appointments to keep, people tend to improvise. It looked like it would work fine, and in fact it looked like I was in the clear until I made it to the eaves. At that point, there was enough of a shift in the weight being placed on the ladder that the felt-like material in the trunk suddenly gave way, quickly taking the legs of the ladder out from under me. All I could do was react, placing one hand on the roof, and another on the gutter, expecting the ladder to drop away completely and leave me hanging until I could drop myself down as safely as possible. Fortunately, the ladder didn’t drop completely away, and I was able to climb down without any injury to myself – and I only had to pay the homeowner for a minor gutter repair.

One of my adjusters was not as lucky when the ladder he set up on the side of a home slipped out from under him. He was just getting back on the ladder to climb down from the roof when this happened, and his first instinct was to push himself away from the ladder so he could land a safe distance away on his feet. Except for the possibility of twisting an ankle upon landing, I think he would have been fine, but he didn’t see there was a clothesline behind him, and as he came down, the clothesline hit the back of his legs, causing his body to rotate backwards, and he landed hard on his upper back and head, nearly losing consciousness.

Over the years I’ve heard many stories of people who were so focused on reading their tape measures, or were too engrossed in trying to identify damage on a roof, that they simply stepped off the edge of the roof, sometimes resulting in serious injury or death.

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Then there was the time I was on a wood shake roof in Oklahoma when I came upon a section of the roof that was home to a swarm of wasps, and they did not appreciate my trespassing in their space. This might have been just the right time to be scared stiff, because it gave me time to think about my next (slow) steps, and not get the wasps any more excited than they already were. Disaster averted!

In addition to the above, there are a host of dangers on roofs alone – high voltage electrical lines, slippery spots of mold or mildew, and rotten wood that can give way beneath you and land you in the attic, to name a few. And don’t forget the sun, lightning, and other weather conditions – I once got hailed on while inspecting a hail claim!

Then you have other critters you come across while doing property inspections, from bats to bees, to spiders and snakes, to overly protective and aggressive dogs. I even once found myself surrounded by a tribe (or trip) of goats on a farm in Texas. At first it was cool as a few gathered around to see what I was doing there. But before long they were all around me, nibbling and crowding and a few butting. Good thing I had my trusty ladder with me to help fend enough of them off so I could make my escape.

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Finally, you have all the hazards that are difficult to see when the destruction is especially heavy. After a severe disaster from fire, hurricane, flood, or tornado, there are many sharps pieces of debris that are literally everywhere. I have stepped on nails, been cut by glass, and poked by sharp or pointy spikes of wood or metal. Getting a tetanus shot every 10 years was not a problem for me. And most recently, I stepped into a quicksand-like mixture of sand and sewage, going from walking on solid ground to sinking to my knees in just 1 step. You hear about quicksand, or see it depicted on TV or in movies, but until you are in it, you can’t really imagine the holding power it has on you – I was stuck! And I stunk!

Overall, I have been very lucky throughout the years to escape any serious injury. Then again, except for a few times when lapses in judgement almost cost me dearly, I’d like to think I was pretty careful more often than not, considering my surroundings, taking  care to minimize the risks I was taking. Whatever your job, be careful, be observant, and listen to that little voice in your head (that grows louder as you grow older). 

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.