Don't Let the Grinch Spoil Your Christmas!

by Mark Goldwich

People know this time of year for buying gifts, gifts, and more gifts. No matter the economy, or the weather, or the state of the Nation, gifts are purchased this time of year by the hundreds of millions. That’s a lot of gifts. And a lot of money. And a lot of LOOT!

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Yes, sorry to burst your gifts-galore daydream, but many a gift will be stolen again this year, some

right out from under the Christmas tree, just like in our favorite Dr. Seuss show. And more will be stolen from trunks, and backseats, from vans and from planes, from stores and from…well, you get the idea. This time of year is not only prime-time for retailers, it is prime-time for thieves as well.

Think about it. Brand new items, still in boxes. No wear, no tear, no scratches or scuffs, no personalization of any kind. Ready to sell, or pawn, or re-gift to a friend. It’s not difficult to see the allure of stealing Christmas presents – if you’re in the stealing state of mind.

Now that we have painted a rather nasty picture, let’s put an insurance claim bow on it, and see what we can DO about it. The way I see it, we have two main choices. We can try to avoid the theft, or we can transfer the risk (or the cost) of the theft, should it occur despite our best efforts to avoid it.

To avoid being a victim of holiday theft, there are countless websites that will give you endless tips, from email and credit card security, ATM safety, keeping gifts hidden, staying with your gifts, using alarms, carrying concealed weapons, etc.

Simply Google “Holiday Crime Prevention Tips” and you will quickly find a wealth of information that will greatly reduce your chances of falling victim to modern day Grinches.

But, should a holiday mishap happen to happen despite all your best laid plans to avoid it, there is always the transfer concept noted earlier. And by transfer, of course, I mean insurance. After all, that is what insurance is – transferring the risk of something bad (and expensive) happening, from someone (part of a large group of people) who can’t afford to have that something happen, to a group or company that can afford to pay for the loss, thanks to all the people in the group that did not have anything happen, but paid a premium just in case. Insurance companies call it “peace of mind”. Then, at the end of the year, they call it “profit” – with compounding interest.

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So, whether you use credit card insurance, or some type of property insurance, make sure you understand how your purchases will be covered until you give them, and how your gifts will be covered once you get them. Talk to your insurance agent, or review your homeowners or renters insurance policy. Typically, gifts you buy are covered under your policy until you give them to someone else, while they are “anywhere in the world” (even on Santa’s sleigh), but always subject to the “limitations and exclusions” of your particular policy.

Some policies say if you have an alarm, but don’t turn it on, and your property is stolen, you are not covered. And many policies place a maximum limit on certain types of property that is stolen, like money, jewelry, furs, business property, photography equipment, artwork, and other more “unique” items. Know your policy, and consider purchasing extra insurance for such property, typically called an “inland marine” or “floater” or “personal articles” policy, and which is often relatively inexpensive.

With over 27 years of experience as an insurance adjuster, I understand a simple truth: “People know enough to carry insurance, but don't know enough about the insurance they carry.” That’s why I always recommend people get to know their agents, or get reacquainted. They can be a great help in understanding the insurance you have, or getting a different policy that suits you better. If you don’t have an agent, then it is your responsibility to understand your insurance policy thoroughly – not an easy task.

Whether or not they have an agent, people all too often leave the claim handling to the insurance company, in hopes they will be treated fairly and be paid what they are entitled to under the policy. Many times, though, policyholders are paid only a fraction of what they are owed.
As I remind people over and over, the insurance company adjuster (or the independent adjuster they hire) represents the insurance company. They do not represent you. Only a public adjuster works exclusively for you, the policyholder, to ensure your best interests are served. If you are leaving the insurance claim handling up to the insurance company, you are basically allowing them to decide their own profits. This is rarely a good idea.        

What most people don’t know is that insurance is not an exact science and settlements are subject to interpretation and negotiation. How your claim is interpreted and negotiated can greatly affect the amount of money you receive, or how your property will be restored or replaced. Another little-known fact is that insurance claims can be submitted, or reopened, years after the event, or even after the claim was closed or denied.

To prevent delays, denials and deflections by insurance companies in handling your claim, my first and best advice is simple: consult a professional. But, if you decide to handle a claim yourself or reopen one you think deserves a second look, please consider the following ten “commandments”:

1)            Don’t try to pull one over on your insurance company – be thorough, but honest.

2)            Take note of everything that’s stolen or damaged, and keep a detailed log of all conversations with your insurance company.

3)            Take pictures – photograph and/or video it all, and be sure to keep copies separate from the item itself (credit card statements or cancelled checks can help).

4)            Show the adjuster all the receipts and damage, and be as thorough as possible.

5)            If your home was damaged in the process, remind the adjuster that not all homes are built with the same materials.

6)            Review the adjuster’s estimate in detail, until you understand it completely.

7)            Request a licensed contractor review the insurance company estimate and provide an independent quote.

8)            If the insurance company refuses to pay for anything, demand they explain why – in writing.

9)            Be persistent and don’t give up. Appeal up the chain of command.

10)        Seek professional assistance when needed.                        

When thinking about holiday Grinches, and how you can protect yourself, don’t restrict your material concerns. Be sure you are also mentally prepared. As I always say, the best time to prepare is…now! For everyone at Gold Star Adjusters, Happy Holidays!

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.

Don’t Keep The Home Fires Burning

By Mark Goldwich

Image courtesy of www.fire.ca.gov

Although we’re thankfully past hurricane season, those of us in Florida and other hurricane prone

regions of the U.S. have again fared better than predicted, we can not afford to let our guard down. As temperatures drop, a new disaster season begins – that of home fires.  Whether from space heaters, fireplaces, candles, Christmas tree lights, cooking accidents, or a variety of other sources, the end of hurricane season on November 30^th seems to mark the beginning of home fire season.

Just as with hurricane season, you need to have an action plan for fire season.  This involves detecting fires, putting out fires, escape routes, alternative meeting locations, calling assignments, disaster kits (for people and animals), temporary living arrangements, disaster cash, and of course, plans for documenting your claim to your insurance company.

Did you know that it’s your responsibility to prove to the insurance company what you own if your home should burn to the ground?  You may pay for $100,000 (or much more) in personal property coverage, but you may only receive payment for what you can both remember and prove that you owned. 

I once had a client that lost well over $100,000 worth of belongings when her 2-story home of over 40 years burned to the ground. Tragically, her husband perished in the fire. Would you believe her “top-notch” (but not so “neighborly”) insurance company would only pay her for about $40,000 in property because that is all she could remember in her traumatized state of mind?

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This is why I highly recommend you consider photographing, filming and listing all your https://www.facebook.com/ProofOfAssets .  Or contact United Policyholders at: http://www.uphelp.org/ .

possessions, or at least your most valuable ones, and keep copies (with receipts, owners manuals, and appraisals) in more than one location.  A safe deposit box or a fire and waterproof safe works well for this task.  Another way to accomplish this is to retain a company that will do this for you. This service is quite affordable, especially when you consider how much time, money, effort and heartache it can save you to be able to document your claim.  If you are local to the Jacksonville, Florida area, contact Renee English at:

The same holds true for your home itself.  Building materials come in a wide range of styles and levels of quality, and the size or age of the home can have little to do with the cost or quality of the building materials used.  Maybe you have high end cabinets, or wallpaper, or tile.  Or maybe you upgraded when you remodeled recently.  After a fire, many of these things look the same (black).  The tendancy of the insurance company is to “guess” at what you had by considering the age, size, neighborhood, etc.  But if you keep good records, and photos or video, you’ll stand a much better chance of recovering everything you are entitled to.

coolrain44.wordpress.com

While I tend to focus on the insurance side of things, always keep in mind the very best way to avoid being victimized by your insurance company is to not have the claim in the first place.  There are numerous websites that can give you tips galore for minimizing the risk of a home fire (and for safely escaping), especially around the holidays, when it is not only cold outside, but people have extra lights, candles, cooking, and so on.  Use good judgement and care. 

Even worse judgment is to try to capitalize on a home fire by overinflating the damages caused.  Some people think that just because their home is a mess and everything is burned beyond recognition (or seems to be), that this is a good time to try and pull a fast one on the insurance company.  By all means, don’t do it.  Insurance companies relish the thought of catching would-be cheats, and their fraud investigators tend to be their best trained assets.  Don’t give them this gift.

Remember, that when it comes to disasters not all come with names and media hype - or warning.  The best time to prepare for a home fire that will probably never happen is always…now!  To avoid getting burned twice, once by the fire and once by your insurance carrier, remember that you don’t have to go it alone.  Hire a licensed public adjuster who can help you through the process and in so doing get you everything all you deserve.

Please enjoy a happy, safe and healthy holiday season!

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.

Diving Into Deflection - Part 2

by Mark Goldwich

Last time we ended by talking about the fact that despite all the frustrating tactics used by insurance companies, including unnecessary delays, confusing denials, and mysterious deflections, most claims – even those with both high values and merit – never seem to make it into court.

It’s not really that surprising that most of these situations don’t land in a courtroom. By the time most people start thinking about lawsuits, they’ve already been battling the insurance company for a year or more. Then they are told the lawsuit will probably take another two to three years! Be honest. What would you do? Sometimes, when people find themselves caught in the “deflection game,” they’ll give just about anything to be done with the process.

Are these “deflection” situations isolated cases? If you ask representatives of the insurance industry, the answer will be an immediate “Yes.” If you ask Elliot Spitzer, former New York Attorney General, and former Governor of the State of New York, he’d offer a somewhat different assessment of the situation.

What did Spitzer have to say about this? In a lawsuit, Mr. Spitzer accused major insurance companies of "fraud, bid-rigging, and antitrust violations," and charged some of the biggest players in the game with fleecing their customers. Spitzer warned that the American insurance industry “needs to take a long, hard look at itself," and suggested that "if the practices identified in our suit are as widespread as they appear to be, then the industry's fundamental business model needs major corrective action and reform."

He went on to note that "there is simply no responsible argument for a system that rigs bids, stifles competition and cheats customers." Mr. Spitzer’s investigation and lawsuit

focused first on corporate customers, but specifically included individual consumers as being among those victimized by industry practices. His press release was entitled,

"Investigation Reveals Widespread Corruption In Insurance Industry."

Image by dcemp.com

Isn’t the legal system supposed to correct problems like this? In theory, yes. And there are some encouraging signs. A 2007 DecisionQuest poll of practicing attorneys found 75% of respondents would now expect jurors to agree with the sentiment that insurance companies “would do anything to avoid paying even legitimate claims.” That’s refreshing evidence of reality-based thinking within the halls of justice.

But most of these cases, as we have seen, never reach a jury. For your own protection and economic well-being, it may be wisest to stop thinking of insurance companies in terms of your friendly neighborhood insurance agent, and start thinking of insurance companies as resembling the people who ran their firms into the ground by setting up a nearly incomprehensible maze of wholly-owned, partially-owned, and “affiliated” companies … companies whose relationship with one another seemed to require an advanced degree. I realize that sounds like a harsh assessment. But the irresponsible use of deflection warrants it, in my opinion. Let me give you a brief example that may help you understand why I feel as I do about this.

Think of a big insurance company. Let’s call it Baseball, Mom, and Apple Pie Insurance – BMAPI for short. BMAPI’s motto is, “Faithful and friendly, during good times and bad.” It has an expensive ad campaign that features gorgeous sunsets, adorable puppy dogs, and happy policyholders who dearly love and respect their local BMAPI agent.

Now, if BMAPI handles, say, 1.5 million claims in a year, and then deflects – sorry, “saves” – just $300 on each claim, that adds up to nearly five hundred million dollars more for BMAPI to keep for itself and invest as it sees fit (1.5 million times $300 = $450,000). That’s right, nearly half a billion dollars.

Follow me on this next part, because it’s extremely important. The number I just used to get to roughly half a billion dollars of extra income for BMAPI was, you will recall, three hundred dollars of, shall we say, “savings.” Now, you might well ask: How realistic is that figure I just used? Is three hundred dollars a valid number -- or a dubious number?

Hear me, please, when I tell you that my typical additional recoveries – that is, the money I get the insurance company to agree to pay in valid claims over and above what it had already agreed to pay out – is not in the hundreds of dollars. It’s in the thousands of dollars. That’s in my average case. 

Image courtesy of the lostogle.com

 .

Ponder that, if you will. Not three hundred dollars per case. Thousands of dollars per case. And that’s not the exception to the rule. That’s what usually happens.  Deflection is real! Taking this fact into consideration, let's do that math in our heads … 1.5 million times $3,000 = $4.5 BILLION! That’s per year, for just one company. Not too shabby! Are you starting to see why a cynical person might start to think all the coincidences that seem to favor insurance companies might not be so coincidental after all?

But now I really must be exaggerating about the $3,000 figure, right? I would say that is conservative, and base that on thousands of claims we have helped our clients settle for $5,000, $20,000, $100,000 and more (we even helped a client recover over $396,000 on a claim the insurance company insisted for 4 months was not covered at all). And keep in mind, we are just 1 firm, in 1 city, in 1 state, in a great big country.

For more information on bad faith insurance issues, please take the time to visit this web site: www.badfaithinsurance.org -- or just do a Google search with the words “bad faith” along with the name of your own “friendly and faithful” insurance company, and see what kind of ugliness pops up. You may be surprised.

In the next blog, we’ll get some more clarity on exactly how the “deflection game” is likely to be played in your world.

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.

Diving Into Deflection - Part 1

By Mark Goldwich

If you are current on my blogs, you know we have been talking about the various ways insurance companies are able to create and take advantage of delays – to their financial gain, and your financial loss. It’s not easy, but these delaying efforts can be overcome.

Even if you endure all the delays, and even if you somehow work your way through the labyrinth of denials, the insurance industry may well have one more coincidence up its sleeve. This coincidence catches a lot of insurance consumers by surprise. It often contributes to the exasperated, exhausted homeowner’s conclusion that it’s better to give up, settle for what they can get, and perhaps accept dimes, nickels, or even pennies on the dollars they are actually owed.

The coincidence is known as deflection, and it’s what happens when the insurance company finds reasons to avoid paying you money that you actually have coming on your claim. Although listed last in this blog series (after delays and denials), deflections can be encountered at any time during the claim.

In this blog, I’ll give you a broad overview of the “deflection game”; in the chapters that follow, we’ll look at how the game is actually played to the detriment of you, the policyholder.

Like the coincidences mentioned in previous chapters, this one requires the help of a professional if you want to stand the barest chance of getting all you are owed. All too often, though, this is a game that non-professionals lose … simply because they don’t realize they’re playing in the first place.

Q&A: What you should know

What, exactly, does the “deflection game” involve? It involves the insurance company finding ways to avoid giving a direct, truthful answer to what would seem to be a fairly basic question: “Who has the moral and legal responsibility to make sure that my legitimate claim is paid in full, promptly and to my complete satisfaction?”

Isn’t that obvious? Doesn’t the insurance company itself have the obligation to pay the claim? That answer may perhaps seem obvious to the policyholder, but sometimes it’s not all that obvious to an insurance company with a multitude of adjusters, engineers, restoration companies, attorneys, insurers, re-insurers, and third-party administrators at its disposal. There are so many cases of insurance companies dodging this issue that I can’t really do justice to the topic in a blog of this size. I can say, though, that it seems the legal system has finally begun to catch up with a few of the worst offenders.

What kinds of cases are we talking about? In Ohio, a jury held that a life insurance and disability management services company was guilty of breach of insurance contract; the jury awarded the plaintiffs $429,400 in compensatory damages for nonpayment of claims. But that wasn’t all. The jury also found the insurance company guilty of bad faith insurance practices, and mandated an award of $1,130,000 to the plaintiffs.

They coupled this with a whopping punitive damages award of $3 million. Documents from the case give some sense of the elaborate lengths to which some companies will go to avoid paying people the money they are owed. This particular insurance company used a third party administrator, and an affiliate re-insurer (which was also a 40% owner of the third party administrator) to combine their efforts in an illegal scheme to avoid paying completely legitimate claims.

 

The scheme involved a whole host of complex accounting maneuvers, as well as false information that was submitted to an insurance commission. Now, I realize that, at this point, you may be having some difficulty getting your head around all this. That’s because a) such cases are pretty complicated and b) you’re probably still thinking of insurance companies as responsible businesses with an obligation to take care of their customers over the long term. All too often, it seems they’re simply not very responsible, and not thinking about the interests of their customers in any time frame, short or long.

Are there other cases like that Ohio case mentioned? Plenty. Many have a disturbing, and all-too-common, theme – the insurance company says that paying you is actually someone else’s responsibility.

But the “someone else” either never follows through or only partially follows through on its obligation to you. Or they say that the other party’s report or advice “prevents” them from paying you (as if they can’t override the opinion of an outside party). I’ve personally seen this happen many, many times.

Do all of these cases wind up in court? No. In my opinion, very few of the cases that could go to court ever get there, and most policyholders in these situations do not get the impartial hearing they deserve.

Why not? Because many individual policyholders simply can’t tolerate the idea of wandering into another bureaucratic maze with no clear outcome that they can see benefiting them in the near future. (As we all know, going to court can be a long, expensive process.) After all the delays, and after all the denials, many people are simply sick of the process of trying to get the insurance company to pay up. They either take whatever crumbs they’ve already been tossed, settle prior to trial, give up altogether, or even die (yes, we’ve seen claim victims pass away before seeing the claim check arrive).

As I’ve suggested elsewhere in my blogs, I suspect a fair number of people suffer one of these outcomes. We’ll dive deeper into deflection 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 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.