The Dynamics of Denial

By Mark Goldwich

We previously talked about the different phases of denials, but now we’re going to learn about the dynamics of denial itself, and how the insurance industry has turned it into a force to be reckoned with, a force that no individual policyholder without significant training can realistically expect to overcome.

The sad truth is, in far too many cases, the Powers That Be can categorize your loss in any way they see fit, and then deny all or part of your claim. And the Powers That Be are, in all likelihood, far better at this categorizing-and-denying dynamic than you are at challenging it. And they are better at categorizing-and-denying than you are at challenging them. .

A dynamic is, literally, something in motion - and that is exactly what you’re going to feel like you’re dealing with when you deal with this strategy: a moving target. You will have been under the impression that you were talking about one thing, and suddenly you’ll get word from on high that, all along, you were really talking about something else - something that the insurance company, by a remarkable coincidence, has no responsibility for.

One word for this process is “dynamic” – but another word, I think, might be “game.” And just like in Las Vegas, it’s a game that the House (in this case, your insurance company) will usually win.

• Does this categorize-and-deny game affect all socioeconomic groups equally?

No. In my opinion, lower-income policyholders are much more likely to be adversely affected by what insurance companies do in terms of denial. After just about any kind of disaster, there is a percentage of people in virtually any community whose claim will be denied by their insurers on the pretext that their home maintenance was poor. This group is almost always disproportionately poor, and disproportionately belonging to a minority group.

Image courtesy of wikimedia

In other words, there are certain neighborhoods in a community where a home may not have been painted for a while, and a door may not have been fixed that should have been fixed. In these homeowners’ policies, there are, almost always, innocent-sounding “maintenance” and “wear and tear” exclusions. It seems fair enough: the insurance company isn’t responsible for compensating for normal wear and tear; the homeowner has an obligation to maintain the property. Watch what happens, though. After a disaster or other claim, and after a nightmare of delay and bureaucratic runarounds, the homeowner finally meets with an adjuster.

Can you guess what happens next? The adjuster simply decides that he or she can’t (or won’t) separate the damage of the disaster from the normal wear and tear of a home that happens to be occupied by people who can’t afford a fulltime housekeeping and repair staff. Without a public adjuster, these people may have their claims denied in part or in full, on the grounds that they have failed to maintain their homes properly. Look at it again: “You didn’t paint for a while. That means you must not be covered for a hurricane, because your poor maintenance makes it impossible for me to say for sure that a hurricane caused this damage.”

With a public insurance adjuster working on their side, these policyholders are, in my experience, far more likely to receive a fair settlement from the insurance company … even if there is physical evidence that they could, in a perfect world, have maintained their homes a little better.

• Why do adjusters do this kind of thing? Are they really “out to get” homeowners and deny as many claims as possible?

It’s more complicated than that. There are a lot of reasons adjusters may end up denying some or all of your claim. Part of it, perhaps, is simple laziness. (In the example I just mentioned, the wear-and-tear and maintenance issue, an adjuster may spot a few home-repair problems and decide that it’s simply easier to deny the whole claim than to do the work necessary to distinguish water damage from overlooked carpentry projects.)

Other issues might be inexperience, a ridiculously overstacked schedule, or a subtle series of messages from the insurance company to whom they are reporting. Let me be clear: I believe that at the outset of their work with the insurance company, adjusters are told to pay every valid claim.

But that’s a message that might only get sent once or twice during the adjuster’s relationship with the insurer. Far more potent, over time, are the daily messages an adjuster receives.

Even assuming that adjusters are never told (directly) to deny valid claims, they are given little “raps on the knuckles,” little messages from upstairs: “You did this wrong, you did that wrong, you paid too much here, you overlapped there.” It only takes a few weeks for these messages to have the desired effect.

Adjusters, of course, do not want to continue to go through the process of getting their knuckles rapped. They start figuring out for themselves what the insurance company

really wants. And so, by the way, do the engineers, repair and restoration firms and other “experts” sent out by the insurance company to “help” you deal with your situation.

I’ll have more to say about these people in a later blog, but for now, let me just leave you with this hint: If the insurance company sent them, don’t expect them to have your best interests in mind, even if you are the one paying them.

• What else can I expect as an excuse for denial of all or part of my claim?

Plenty. The insurance company may “misread” a critical definition of a word within your policy.

Result: Denial. Or: The insurance company may declare that your going on vacation (or having some other reason for leaving the property for a period) invalidated your policy.

Result: Denial. Or: The insurance company may choose to fixate on a clause in your policy that’s designed to remove responsibility for coverage in situation X – and they may try to apply that clause to situation Y, which has only the remotest connection to situation X. Result: Denial. Unless you are working with a professional.

For instance, an insurance company once tried to deny coverage to one of my clients on the

Image courtesy of a1homeinsp.com

basis of a leak in the roof of the property. They had fixated on the word “leak” in the homeowner’s policy exclusion. As it happened, though, that kind of “leak” wasn’t what justified the exclusion used. The relevant section of the policy talked about a repeated leak in a shower area. The leak had to be located specifically in the area of the shower for the denial to stick - and that was not what had happened at all. But that didn’t stop the insurance company from selecting a very tiny portion of that exclusion to quote in support of their denial of coverage. Result: Denial if you’re not working with a professional; no denial if you are working with a professional.

These are the kinds of problems that can be overcome if you use a qualified public adjuster. All are very difficult to spot – and thus difficult to challenge – if you’re unfamiliar with the language of insurance policies or the dynamics of denial.

At the risk of being blunt, let me put this another way: The company knows what it’s doing. You don’t. .

You get the picture by now. It’s in your best interests to work with someone who knows as much about the dynamics of denial as the insurance company does! In the blog, we’ll look at the third major weapon in the insurance company’s arsenal – their remarkable skill at deflecting responsibility for actually paying you what you are owed.

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.

Drowning in denial

By Mark Goldwich

Swim in denial long enough and you will soon feel like you are drowning!

Just like on TV cop shows, when it comes to an insurance claim, what you say can and will be used against you. Very often, in a hurricane, a home suffers significant wind damage, but the evidence of that damage is masked or obstructed by a later flood.

This leads to a very dangerous situation. I am not talking about the physical dangers now present within the property itself. I am talking, instead, about danger that’s built into the system, financial danger for policyholders who are unfamiliar with the way the claims systems operate. I am talking about the dangers that confront those who are unwise enough to describe damage to an adjuster.

Image courtesy of http://ed.ted.com/

I can’t count the number of times that insurance consumers made their position worse by describing to an adjuster, over the phone, the damage that was most vivid in their own minds. “The place is completely flooded!” “We’re up to our ankles in water!” “There’s extensive water damage!” It all seems relevant. It all seems accurate. It all seems important. The damage from water is what has taken over the policyholder’s world. All too often, though, talking about it means you lose!

Think about this hypothetical situation for a moment: A hurricane has ripped the roof off your house. You’re covered for that. You’re now talking to an adjuster on your cell phone. Your home’s primary coverage is for wind damage. But what have you just told the adjuster? That you’ve got flood damage! Game over!

• Yeah, but that’s a stressful situation. How can you expect policyholders to remember how important it is to watch what they say to an adjuster?

Let me answer that question by posing another: If you’re in a perilous legal situation, which is equally stressful, would you talk to the prosecuting attorney on your own, or would you demand that your attorney be present? Step one, which should be obvious to you by now, is simply not to talk to the adjuster, but to delegate the job of talking to the adjuster to someone like me. Remember, the adjuster works for the insurance company. It’s obviously easier for an adjuster to deny a claim than to do the work necessary to actually estimate one.

If you say the words, “We’re up to our ankles in water!” all the adjuster has to do is jot down the words “flood damage,” and – if you’re not covered for flood damage – voila! There’s one less item on the to-do list!

Here’s another example. Let’s say that, five years ago, when you bought your home, you were advised by someone you trusted that you “didn’t need” flood  insurance. And

let’s say that, last week, your plumbing was damaged during a natural disaster of some kind: the pipes burst, and water leaked into your basement. When you finally get the adjuster on the phone, it would be quite natural for you to describe your home as “flooded.” After all, there’s standing water in the basement. But when that overworked adjuster hears that “F” word, his ears perk up, and two words start running through his mind, over and over and over again: “Not covered … not covered … not covered …” No matter what else you think is happening in the conversation, that’s all the adjuster is going to be thinking: “Not covered.” And you know what else? Those two ominous words are likely be followed by two more silent words you wouldn’t like if you heard them: “Easy close … easy close … easy close …” That means the adjuster is going to get credit, and quite possibly payment, for “closing” a file – yours – without having to do any real work. This is just one example of dozens I could give you that would show how a single thoughtless word – like “flooded” – can make your life absolutely miserable when you say it out loud to an adjuster.

• What’s the bottom line here?

If you get nothing else from this book, get this: Just as you wouldn’t be well advised to talk directly to the IRS if you were being audited, and just as you wouldn’t be well advised to talk directly to the D.A. if you were falsely charged with a crime, you wouldn’t be well advised to talk directly to the adjuster or the insurance company when a disaster damages or destroys your home. Don’t risk it. Get help!

In the first case, I would suggest retaining a CPA or other qualified tax professional. In the second, I would suggest retaining a lawyer. In the third, I would suggest retaining a

public adjuster, and letting me, or someone like me, talk to the insurance company and their adjuster on your behalf.

Or think of it this way: Let’s say you know very little about cars, and let’s say that, after a routine tune-up, the mechanic down the street informs you that your auto “needs a lot of work.” Which of the following options would you rather choose?

Courtesy of http://www.norcalminis.com/

A) Tell the mechanic to go ahead and get started, do whatever is necessary, and mail you the bill, whatever it turns out to be?

Or B), arrange for a car expert to meet with the mechanic, evaluate the situation on your behalf, and make absolutely sure you don’t pay any more than you really need to?

Of course, you’d choose option B. We all would. It’s the same with insurance claims, especially those related to wind and water. You want an expert on your side.

• Where can I find out more about flood insurance?

Visit this web site right now: www.floodsmart.gov

• What else should I know about this?

Let me share one more true story with you before we move on. A woman I’ll call Mary had a condominium that was destroyed in a hurricane. Luckily for her -- she thought -- she had both flood insurance (via Company X, but ultimately from the federal government) and wind insurance (via Company Y). I know what you’re thinking, “With both policies in place, she must certainly have gotten paid something– at least by one of the carriers.”

Wrong! By “co-adjusting” the two separate losses, the adjusters (and their respective insurance companies) determined that her situation just happened to fall into the tiniest of cracks between the two policies.

By yet another remarkable coincidence (are you keeping track of all these coincidences?) that crevice where her unique situation landed prevented both carriers from making payment on either claim!

Again: Don’t risk it. Get the help you need to deal with complex insurance challenges!

Keep reading!

Next time we’ll learn about the dynamics of denial itself … and how the insurance industry has turned it into a force to be reckoned with, a force that no individual policyholder without significant training can realistically expect to overcome.

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.

Swimming in Denial

By Mark Goldwich

Nile Crocodile courtesy of  simpsonstreetfreepress.org

There’s an old joke: “Denial is more than just the name of a river in Egypt.” For consumers of property insurance the joke has a cruel, updated variation: Denial is the name of a strategy insurance companies seem to use to avoid paying for the damage caused by rivers (among many other things).

In this blog, we’ll see how surprisingly indifferent the insurance industry is to a big problem – namely, that so many consumers believe, wrongly, either a) that their policies protect them against damage from floods, or b) that their property is not at a significant risk for flood damage. Before we go any further, please understand one very important  thing: Insurance companies don’t pay flood claims..

In case you just fell down from shock, and are now returning to consciousness with limited capacity, let me say it once again. Insurance companies do not pay for flood claims. Flood claims are ultimately paid by the Federal Government.

If you have flood insurance, that’s who you really bought it from: the government. The insurance companies simply adjust the losses. The handling standards are strict, and if the insurance companies mess up (i.e., overpay), they have to pay the money they overpaid policyholders back to Uncle Sam. (This leads us to an interesting side question: If the insurance company is going to err on a flood claim, can you guess which way they are going to lean?)

This situation is something that should concern you, since the reality of damage from flooding is looking like something more of us are going to have to prepare for in the coming

years. According to the web site World View of Global Warming, “Meteorologists already see an increase in severity of storms, rainfall, and floods …” They go on to observe that “These anomalies from what we think is ‘normal’ are expected to continue around the world.”

Regardless of your stance on global warming (and its potential causes), regardless of what you believe, or don’t believe, about natural weather cycles, the moral of the story is the same: Think. If you think you’re not likely to be affected by a flood … think again. If you think your homeowner’s policy covers you against flood damage … think again. I

have personally witnessed the tragedy of property owners being without flood insurance. You don’t want any part of it.

Q&A:

If I was told by someone I trust that I didn’t need flood insurance, doesn’t that pretty much end the discussion?

No. People are told all the time -- by insurance companies, attorneys, or occasionally by representatives of mortgage companies or other “experts” -- that they have no need for flood insurance. All too often, this advice is simply incorrect. Sometimes what they say (or mean to say) is, “You are not required to carry flood insurance.” That is not the same as you not needing it.

• How would that bad advice affect me?

Let’s say that your home is covered for wind damage, but not covered sufficiently for flood damage – because some “expert” told you that it wasn’t ‘required’, because you didn’t buy the right level of coverage, or because you thought, incorrectly, that flood damage was included in your homeowners’ policy.  And let’s say a hurricane tears through your neighborhood. Let’s say that the wind from the hurricane rips the roof off your house – followed, of course, by torrential rain, and then by a flood. (That’s the sequence of events we all remember from Hurricane Katrina in 2005.)

When your insurance company reviews the claim, it’s quite possible that it could deny all payment, on the argument that the damage to your house was caused, not by wind, but by flood.

• What if I’ve got an eyewitness who will swear that he saw the wind rip the roof off my house. Is it still possible that the insurance company could deny my claim

for wind damage?

Yes.

• Is that a hypothetical example, or is this something you actually know for sure that someone has experienced?

It’s not hypothetical. It actually happened to a neighbor of one of my clients. The existence of the eyewitness made no difference whatsoever to the insurance company’s decision. Again the best policy is to consider the insurance company your adversary.

Ponder that example for a minute. What are the odds against someone actually seeing your roof get torn off, before the floods come? Yet for some companies, that’s still not enough!

• What exactly do insurance companies expect to get as proof of wind damage? Well, my personal view is that they don’t really want to see evidence in this situation. It’s not like they launch a huge investigation to find out exactly what took place in your neighborhood: “Hmm … you appear to have a point here, Mr. Policyholder. Let’s get to the bottom of this. Was it wind, or was it water? XYZ Insurance has an obligation to set the record straight once and for all!” That’s not the kind of discussion you’re going to hear.

For the purposes of establishing their own responsibility (or lack of responsibility) for wind

 damages, the insurance companies appear to expect homeowners to have video cameras trained on their homes twenty-four hours a day, seven days a week, so as to record actual damage from windstorms as that damage occurs. As a practical matter, that’s about what you would have to be prepared to provide them. If you don’t have tangible proof of this kind – proof demonstrating beyond a shadow of a doubt the precise nature of the damage your property sustained – then it’s entirely possible that the insurance company could choose to deny your claim. In the aftermath of a hurricane, they’re likely to insist that water caused the damage in question, not wind … when they’re talking to people who don’t have flood insurance.

• Is that kind of nitpicking out of line?

The attorney general of the state of Mississippi seemed to think so. In the afterma

th of Hurricane Katrina, he took insurance companies to court. In Mississippi (and indeed in many other corners of our nation), it seems that a huge number of homeowners don’t have, or can’t get, adequate flood insurance on their homes, and are thus ill-equipped to respond to the denial games that insurance companies play after major natural disasters.

More denial next time…

Mark Goldwich is president of Gold Star Adjusters, a group of public insurance adjusters dedicated to helping citizens get the maximum settlement for any insurance claim.

The Haze of Late-Phase Delays (Part 2)

By Mark Goldwich

Last time we started talking about late-phase delays, and we ended with the field adjuster finally getting the claim file and estimate to the often overworked and all too often inexperienced examiner (office-based file reviewer). Remember, these examiners are usually reviewing the files of multiple field adjusters who are all trying to crank out files for payment (mainly for their own fee payment) as fast as possible. This can result in a new stack of files being delivered to the examiner daily.

If they’re so overworked, why don’t they just approve my claim?

Suppose you had this person’s job. What kind of impression would you make on your employer if you “rubber-stamped” everything that came across your desk?

It’s a little-known fact that most independents get paid more for higher claim estimates. But insurance company examiners know all about this state of affairs, and they are inclined to compensate for it. In fact, they are trained and dedicated to “correcting” adjusters who are “padding” estimates for a higher fee. There’s not only a built-in mechanism for delay; there’s a built in incentive for skepticism about the dollar figures associated with claim estimates.

How deep does that skepticism run? Consider this: I recently spoke with an independent adjuster who complained that when his estimate is adjusted down  he only gets compensated based on the amount actually paid on the claim. If the claim is later re-adjusted, and the policyholder is eventually paid exactly what the independent initially requested, the independent adjuster still does not get paid what he would have been paid if his initial estimate had been accepted!

By the way, after this happens a few times, how long do you think it’s going to take the independent adjuster to realize that he or she might as well just write the claim estimate for the (low) amount the insurance company is going to accept, and save the time and aggravation of writing the estimate for the (higher) amount that it should be written for?

What happens if the adjuster gets my claim kicked back to him or her?

There is additional delay. The adjuster now gets it back in his or her system. The adjuster has to find time to look at the file again to see what the examiner had a problem with; and then the adjuster has to try to resolve the problem, which might require another inspection. That means another trip through the adjuster’s to-do list, probably a lengthy trip. And then, of course, your claim may require additional photographs, additional documentation, and additional phone calls. It is definitely going to require additional time.

Cut to the chase. How long is it going to take for me to get a check I can actually cash a check that comes close to covering the valid claims I have?

That’s the big question, of isn’t it. Assuming that the case does not end up in litigation, you can count on six months to a year before you get your money if you’re trying to do this on your own. To be sure, some people complete the process in just a few months. There are three possible reasons for this. One: They’re not getting all they’re entitled to. Two: They’re very, very lucky. Three: They’re working with someone who knows the system quite well.

What if my claim is still disputed after a year or so?

It happens. In that case, you are probably headed to court (or should be), and can count on another two to three years before the claim is resolved by litigation. The insurance companies also know this, and they are not particularly worried about the time factor. It seems there is simply not any meaningful incentive for them to wrap the process up more quickly. In fact, just the opposite seems to be the case. The longer the delay, the more likely it is that policyholders will either walk away from their claims altogether or at least walk away with less than they have coming. It’s my experience that most people simply don’t realize how badly they’ve been underpaid, or have no idea how to dispute the claim, or are too mentally exhausted to bother anymore.

Would working with a public adjuster be likely to reduce the delays?

The answer is almost certainly “yes.” A qualified public adjuster knows how the bureaucracy works (or rather, doesn’t work). A qualified public adjuster knows what, if anything, can be done to expedite any part of the “holding pattern.” An additional benefit, of course, is that the public adjuster isn’t emotionally involved to the same degree that you are, which means he or she may simply be less shocked, burnt out, and/or furious about the delays than you are.

Again, a cynical man might wonder whether the insurance companies count on the policyholder’s losing sleep – and initiative – over the extraordinary delays associated with getting the money they are owed.

Does pursuing a claim without outside help really burn policyholders out?

 Definitely. I’ve seen it time and time again. After a certain amount of time, people have spent so much time and psychological energy on this problem they just cannot face it any more. The months go by, and people simply give up on believing that they can affect the outcome. So they take what they’re offered -- or, to be more accurate, accept that they haven’t been given what they deserve – and try to move on with their lives. That costs them money that they have coming to them. Here’s the moral of the story: You’d work with an attorney to handle serious legal problems. You should work with a public adjuster to handle serious insurance problems.

Unfortunately, delay is not the only problem you are likely to encounter when dealing with an insurance company after a hurricane, fire, flood, or other insured loss. You’ll also have to deal with denial – quite possibly the most powerful weapon in the insurance industry’s arsenal (next to time, and money – they have plenty of weapons!).

Mark Goldwich is president of Gold Star Adjusters, a group of public insurance adjusters dedicated to helping citizens get the maximum settlement for any insurance claim.

The Haze of Late-Phase Delays (Part 1)

By Mark Goldwich

Congratulations on making it through the early and mid-phase delays of your insurance claim. The problem is there is yet another round to go in the “delay game.” This is the one that takes place after the insurance company’s estimator has completed the initial estimate.

The good news is that, unless your claim is denied (a prospect we’ll cover in a future blog) you are probably going to be talking about specifics that are actually related to your claim from this point forward. There’s a relief.  The bad news is that you’re probably going to be talking about the specifics for much longer than you had in mind. And you may not like what you hear.

Once there’s an actual estimate, what’s likely to slow the process down?

It’s possible (and even likely) that essential items have been left out of the estimate the adjuster comes up with. Sometimes the estimate is so low that, if you accepted it, you would not even be able to afford to start the work necessary to complete repairs. This may be the result of an honest oversight on the part of an overworked estimator; it may be because the estimator is not quite diligent enough when it comes to identifying valid claims. In either case, you may well end up looking at an estimate that is inadequate to your needs. And that will definitely slow things down.

In all likelihood, the insurance adjuster will say that there is a logical explanation for the difference between what you expected to get and what the insurance company is offering. The adjuster may say, for instance, that the shortfall is there because the cost of the repair work is within your deductible, or because the adjuster took depreciation into account on items that call for replacement cost, or because the insurance company has decided not to pay your contractor’s overhead until it is incurred, or even because they believe a contractor would be charging too much to do the work. All of those sound like good excuses. And they all may be distractions from the real problem. Personally, I’d be looking closely at the estimate for items that the adjuster “accidentally” left off.

What happens if I can’t get the adjuster to raise the amount?

You have two options. Option one: You can walk away from the process and take what the insurance company gives you (Important note: If you simply authorize the work you think is needed done and then submit your bills to the insurance company, the odds are very good that the insurance company will consider your action to be tantamount to walking away from the process, which means that you are very unlikely to get your repairs paid for). Option two: You can continue to pursue the claim.

Hiring an attorney, or a public adjuster like me, would fall under continuing to pursue the claim. Unless you are positive the insurance company made a mistake and overpaid the claim in error, I always strongly recommend pursing the claim aggressively. You might, for instance, work with someone like me, who might advise you to demand a re-inspection.

If I demand a re-inspection does that mean the whole process starts all over again?

Not quite, but it can certainly create additional delays. However, at this stage of the game, your choices are pretty simple:

1. Accept what they are offering to pay you;
2. or accept additional delays in order to pursue the additional monies you are entitled to.

What if no re-inspection is needed – won’t the adjuster just write me a check?

Not unless the amount of additional money you are asking for is very small. (And if the insurance company does that, the odds are not good that you’ll be getting a check big enough to actually repair the damage you have suffered.)

Consider the fact that many insurance companies have entire teams set up to handle “supplemental” claims. These are claims that are made because the initial payment was disputed as being too low. There’s a reason so many adjusters are working on supplemental teams. Insurance companies dispute a lot of stuff. The adjusters on these teams are trained to resolve these claims over the phone if possible. Would it surprise you to learn that a phone-handled claim costs less than a field-handled claim?

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What will the adjuster do?

The adjuster will give the claim file material to a supervisor or file examiner (someone who sits in an office and reviews files), and the file examiner will then have to review the claim. Of course, it could be weeks before the file examiner even sees your claim.

The examiner will either approve it or kick it back down to the field adjuster (probably not the original adjuster, of course.) Which of these two is more likely? It’s hard to say, because every case is different. But keep in mind that these offices are flagrantly understaffed. Some of the people who work there are often shockingly inexperienced. I personally know of cases where the claim examiner had literally never inspected a claim in the field before. And yet this is the person who is directing, and rejecting, estimates written by seasoned adjusters!

By the way, the examiner might be handling the estimates for five adjusters, or might be responsible for as many as twenty. You have no way of knowing. One thing’s for certain: The claim examiner inevitably has a huge stack of estimates to review, a stack that gets bigger and bigger with each passing day. So that’s yet another built-in mechanism for delay.

I wish I could say the late-phase delays are over once the examiner gets an estimate from the field adjuster, but stay tuned and we’ll finish with the late-phase delays next time.

Mark Goldwich is president of Gold Star Adjusters, a group of public insurance adjusters dedicated to helping citizens get the maximum settlement for any insurance claim.

The Malaise of Mid-Phase Delays - Part 2

By Mark Goldwich

Last time we started talking about mid-phase delays – let’s pick up the conversation from where the adjuster is finally assigned and is ready to see you…

English: (Photo credit: Wikipedia)

• Once the adjuster actually arrives in a given area, things do start to move forward briskly in that geographical area, don’t they?

Sometimes. Other times, things go mysteriously wrong in ways that cause substantial delays. The insurance companies – buffered as they are by the companies they are outsourcing an ever-increasing amount of their work to – benefit financially from delays that they (technically) have nothing to do with. Call it another in a long list of extraordinary coincidences that benefit their bottom line.

• It all sounds very fishy – but are there events that can “legitimately” delay an adjuster?

Sure. As we’ve seen, a claim can be reassigned. It’s also quite possible that the adjuster will have to deal with an honest-to-goodness family emergency; we all have those from time to time. Very often, this emergency is disaster-related; some of these people are picked because they’re local, and local people have local ties of their own to think of after a hurricane, tornado, earthquake, fire, or flood. 

Other adjusters come from out of state, which means that they may need to go home when things go wrong there. And, as we’ve already noted, the adjuster could get into an accident, get sick, get reassigned to another region, or “burn out” and quit the profession – not an uncommon outcome.

• When an adjuster is reassigned, what happens to all the claims that adjuster was responsible for, but now leaves behind?

All the files have to go to someone entirely new, and…The whole process starts again.

Damage in Pensacola after the 1906 hurricane. Retrieved from the Monthly Weather Review for September 1906. (Photo credit: Wikipedia)

• Is that a big deal?

Absolutely. Let’s say you’ve been called by Adjuster A, and Adjuster A has set up an inspection time for two weeks from today. The appointment comes and goes. No one shows up. You call the insurance company, get transferred to the call center, spend a whole lot of time on hold, and then, if you’re lucky, get the news that that adjuster is no longer handling that file. At that point, you may be given the name and phone number of Adjuster B … or you may simply be told that you will need to wait for the new adjuster to contact you.

• Okay, but that’s only likely to happen to me once, right?

In my experience, it’s not unheard-of for a claim to be reassigned in this way two, three, or more times in succession. Some people end up with a dozen or more adjusters by the time the claim is paid.

• Once the adjuster actually inspects my property, what happens then?

After the adjuster inspects the claim, he or she must write up an estimate, a process that sometimes takes quite a while to complete.

• Why?

First, understand that you are likely to be dealing with an (outsourced) independent adjuster. The independent adjusters are typically hoping to physically inspect a whole bunch of claims first … and then, having done that inspection write up all the estimates later. Why? Because they are afraid that if they don’t get out and at least inspect the claims, the claims will be taken away from them and given to somebody else, which means they will lose out on billing for that claim. The independent adjusting industry can be a bit cutthroat. After all, qualifications are minimal, prior experience is not required, and the financial potential is tremendous.

Some are paid $1,000 per day just to make themselves “available” (i.e., sit and wait) from the time the storm strikes to the day they begin working on the storm claims. Some independents can make over $200,000 per year. Just about everybody would like to be at that level. Out of fear of losing money and access to future claims, they want to keep as many claims as possible. So they may put off writing up your estimate so they can go out and inspect more claims.

Westend11NovUpyachtsK (Photo credit: Wikipedia)

This is unfortunate for two reasons: first, it delays your payment (there’s a surprise), and second, the quality of the estimate drops with the passage of time, because the estimator’s memory of your property fades. Even with inspection notes and photos, the passage of time means that there is a greater likelihood of ambiguity, error, and a resulting challenge from the insurance company.

• Who is ultimately accountable for customer complaints during this process?

Excellent question. If such a person exists, you have my heartiest wishes in locating him or her. As a practical matter, all you can do is call the message center. When you do, the person who answers the phone will tell you repeatedly that he or she can do nothing more than take a message for you. As I pointed out earlier: There are really two disasters to deal with: one that everybody knows about because they see it on the news, and one that you only know about if you yourself actually experience it. That second disaster has to do with actually getting money from your insurance policy.

• Do policyholders ever go crazy as a result of dealing with this stuff?

Not being a qualified mental health professional, I am in no position to say. But the question has certainly crossed my mind. Imagine the level of frustration that somebody will feel after having suffered damage from a hurricane, fire, flood or other calamity – then waiting for weeks to hear from an adjuster -- and then having new adjuster after new adjuster delay, then leave a message, and another, then set up a time to meet, and fail to materialize. I wouldn’t be surprised to learn that some people do in fact need counseling, therapy, and/or medication as a result of dealing with the claims process. I do know that, as a public adjuster, I deal with these kinds of problems constantly, and they are extremely frustrating -- even for me. And I’m already familiar with this process of ongoing, systemic delay. Dealing with it is what I choose to do for a living!

• Is that all I have to worry about when it comes to delays?

I wish it were. Stay tuned for next week’s blog where I’ll tell you all about late-phase delays.

Mark Goldwich is president of Gold Star Adjusters, a group of public insurance adjusters dedicated to helping citizens get the maximum settlement for any insurance claim.

The Malaise of Mid-Phase Delays - Part 1

By Mark Goldwich

In my last blog, I talked about early phase delays, which one would hope would end once the insurance company provides you with an adjuster – just as one spending eternity in a very hot place would hope for a glass of ice water.

Once you hear back from the adjuster, you might imagine that the process would finally start to speed up. Unfortunately, you’d probably be wrong.  It’s during this middle phase that people usually conclude that something other than the immediate aftermath of the disaster is holding up the processing of their claim. That “something” could well be the greed of insurance companies.

Then again, it could be some systemic problem having to do with the institutional nature of any insurance-related bureaucracy. Maybe greed is not the best explanation for the strange “holding pattern” affecting mainly independent adjusters and insurance companies. This pattern that seems to kick in around about the time the other institutions in the affected community – the post office, the hospital, the businesses that weren’t physically damaged -- have all started to bounce back from tragedy. But a debilitating malaise seems, predictably, to grip the insurance sector at exactly this point.

It’s certainly possible that greed has nothing to do with this malaise. Mid-phase delays in processing your claim might not have anything to do with insurance company greed. Then again, they just might.

Q&A: What will happen?

• Once I get some kind of contact from the adjuster, how high a priority is my specific claim likely to be for this person?

It’s likely to be extremely low.

• Why?

Because catastrophe adjusters tend to have unconscionably high workloads.

• How heavy a workload are we talking about, exactly?

The adjuster may well be given fifty, one hundred, or two hundred claims. In considering those numbers, bear in mind that he or she could probably only assess between three and five in any given day for a typical disaster.

• Is that because insurance companies can’t afford to hire enough adjusters?

Given the record earnings reported by the industry, this really does not seem to be a plausible explanation.

• What other explanation could there possibly be for the industry’s decision to pile so much work on a single adjuster?

It may have something to do with extraterrestrial intelligence sabotaging a critical Earthling recovery pattern so as to lay the groundwork for a future assault on our planet. On the other hand, if the insurance industry isn’t under the covert control of off-world civilizations far more advanced than ours, the impossibly high workload of adjusters may have something to do with corporate greed. By a singular coincidence, a fleet of surrealistically overloaded adjusters tends to reduce the speed at which valid claims are evaluated and processed. (Take me to your leader is not spoken here.)

• What has to happen before the adjuster can actually come out and inspect my property?

Typically, the adjuster only has to make some kind of voice-to-voice contact with you over the phone.

• That can’t take all that long, can it?

If you’re one of the very first people on the list, and you happen to be sitting by the phone waiting for it to ring, no, it won’t take long at all. But remember: the adjuster may have fifty, one hundred, or two hundred claimants to contact; he or she must sort those claims into some kind of geographic order. The overloaded adjuster can’t be expected to drive all around, based on the order the claims were filed – he or she is much more likely to make calls within a small territory before moving on to contact the next area.

And remember this: Adjusters usually prioritize by severity…In other words, they try to see the most severely damaged – usually uninhabitable – homes first. This appears to be the most compassionate thing to do, but – by another extraordinary coincidence – it is also the most frugal from the insurance company’s point of view. You see, these uninhabitable homes usually require the insurance company to pay “loss of use” expenses. These can be extremely high. But if you get to these claims right away, you can “lock in” time frames and dollar amounts owed to the policyholder, greatly reducing the overall costs.

The aftermath of Hurricane Andrew in the Miami area (Photo credit: Wikipedia)

In some settings, though, the adjuster may be required to call on each policyholder before conducting any inspection. That alone could take quite some time. Either way, it starts with a phone call from the adjuster to you. And if you’re not sitting by the phone when the call comes, you can then expect to wait. You may wait while you and the adjuster play phone tag. You may wait while the adjuster’s schedule takes him or her out of your area. You may wait because your file is reassigned to someone else. You may wait because the adjuster gets sick, gets injured, has legal troubles, or simply quits. Whatever happens, though, the odds are that...You WILL wait.

• Suppose I’m unlucky enough to land at or near the bottom of the adjuster’s territory/priority list – what does that really mean to me?

It means that you may well have to wait for every person, in every other territory identified by the adjuster, to talk with the adjuster by phone, schedule a visit, and actually have their property inspected. In other words, your own perceived “place in line,” which you probably assume will be based on the point in time that you filed your claim, could end up being pretty much meaningless, since you are now waiting for the adjuster to meet with people who filed claims much later than you did. They get to meet the adjuster before you do simply because they’re closer to the area where the adjuster is already working.

• Are there any other ways people could “jump ahead of me” in line?

Yes. They could move up higher on the adjuster’s priority list if they get their insurance agent to report the damage as being more severe than it really is. Mind you, the insurance agent would probably never admit to engaging in such a callous and self-serving practice, but, back when I was working as an adjuster for a major insurance company, I got the distinct impression this took place. In fact, it seemed to happen so frequently that I couldn’t begin to estimate the total number of times I made my way to a supposedly devastated property, only to learn that it had sustained considerably less damage than I had been led to believe.

The bitter truth....is that the system is probably going to make you wait for a period that is much longer than any rational person would consider acceptable. After a major disaster, that’s simply what happens, given the manpower, workload, and logistical hurdles that independent adjusters are forced to deal with. So let’s face it: It’s going to take a while to get to everyone. Some people will jump ahead, and some will fall to the rear, but the overwhelming majority of policyholders are going to be waiting for a whole lot longer than they’d like.

After all that, you might think we’d be done exploring mid-phase delays, but alas there’s more…which we’ll learn about next time.

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.