Hurricane Warning

By Mark Goldwich

From his vantage point high above the earth in the International Space Station, Astronaut Ed Lu captured this broad view of Hurricane Isabel. The image, ISS007-E-14750, was taken with a 50 mm lens on a digital camera. (Photo credit: Wikipedia)

Since we are about two-thirds of the way through Hurricane Season, and it has been very quiet, I thought this might be a good time to remind people we are not out of the woods yet. When it comes to hurricanes, there is so much to know and so much to prepare, so I am going to try to consolidate things the best I can. While there are plenty of blogs that will show you how to prepare you and your family for a hurricane, what is harder to find is advice on what to do once the storm has passed.Many insurance adjustment errors, especially on catastrophe claims (like hurricanes), stem from the adjuster overlooking or misquoting damages. Usually, this happens for one of three reasons: adjusters don’t spend enough time to identify all the damages; they are unfamiliar with the damaged item; or their estimating software incorporates a bad price.

Other mistakes happen when adjusters either misinterpret the policy or misinterpret the facts on the ground. Either circumstance can result in the denial of a claim that should actually be covered -- or in a payment that is lower than it should be. As to whether the “misinterpretations” are accidental or intentional is for another day.

If you do decide to handle a claim yourself, or reopen one that you think deserves a second look, please consider yourself bound by the following ten “commandments” -- all of which a qualified public adjuster should certainly observe.

Commandment #1: Do not try to pull one over on your insurance company!

Be thorough, but be honest. Few things turn insurance adjusters on like the prospect of catching policyholders who are engaged in fraud. Most companies have entire departments devoted to rooting out fraud, and you can be sure that the insurance company’s fraud representatives will be among the best-trained people in the company. (Too bad the adjuster who comes out to inspect your home probably isn’t trained this well.). The fraud representatives have seen and heard it all, and they eat would-be cheats alive. Remember that insurance fraud is a crime. Don't even try it. And don’t ask me to try it for you, because I won’t!

English: Buras, LA, February 4, 2006 - Spray painted communications on the side of damaged homes identify insurance companies, the address of the home and items that are outside buy not considered debris. The writing provides color in a mostly monochromatic landscape. Robert Kaufmann/FEMA (Photo credit: Wikipedia)

And now: A side note. It seems a little unfair, doesn’t it? The insurance company can make one “mistake” after another that costs you money, and you can be subjected to any number of mysterious coincidences that fall to the insurance company’s benefit – coincidences that, taken together, can result in your claim being underpaid by thousands, tens of thousands, or even hundreds of thousands of dollars. And nothing bad ever seems to happen to the insurance companies (outside of record profits, I mean). But if an unscrupulous policyholder can be shown to be bumping his claim up by a few hundred bucks, that’s not a coincidence. In that situation, you may rest assured that the insurance company will seek criminal charges if at all possible, even for what might seem by comparison to be fairly trivial amounts of money. What’s more, it is very likely that the company will secure a conviction -- through the state, of course. A cynical person might wonder how even the playing field really is. I’ll only point out that the insurance companies have the lobbyists, who, in turn, have the ear of lawmakers and other powerful folks.

Commandment #2: Take notes.

Buy a notebook. Buy a pen. Put them to use. Take your time and go around the property, noting everything you see to be damaged. Everything. Besides the obvious stuff like missing roofs and two-foot flood lines, you are looking for scratches, scuffs, scrapes, cracks, bangs, dents, tears, stains, discolorations, swelling, unevenness – I mean everything. Look high and low, inside and out. Write it all down.

You should also keep a detailed log of all conversations that take place with your insurance company, adjusters, contractors, and other players in this drama. Keep track of everything: Your own time cleaning up, time you spend making emergency and temporary repairs, and every penny you spend that has anything at all to do with the claim. I can’t stress enough the importance of being thorough and detailed.

Commandment #3: Get pictures.

Photograph it all. Video it all. When I say “all,” I mean everything. You may need these images somewhere down the line. Warning: Your adjuster may want a copy of these records. Be sure to keep copies for yourself in case the adjuster happens to lose the images you provide.

Commandment #4: Show the adjuster all the damage.

New Orleans after Hurricane Katrina: Flood damaged West End neighborhood: On Bellaire Drive near 17th Street Canal breech, a 1966 Chevrolet Chevelle is marked not to be towed away. Note: Thousands of flood damaged autos, declared total losses by insurance companies, are being hauled away as trash. Presumably the owner of this one optimistcally intends to fix up the old car, which was completely submerged in dirty water for weeks. Photo by Infrogmation. (Photo credit: Wikipedia)

This sounds easy enough, but in order to do it, you must know exactly what to show them. Again, you’re better off working with a professional who has done this a couple of hundred times. If you choose not to do that … well, be sure to give the adjuster a copy of your own exhaustive list of damage to the property, and keep a copy for yourself. Lead the adjuster around the property and be sure he or she notes each and every item on your list.  If that means the visit takes two hours -- or ten hours -- so be it. Be more thorough than the insurance company’s adjuster wants to be. I tend to find that if an adjuster is inspecting a property for 30 minutes, I will probably be there for two hours. If the adjuster is there for two hours, I will probably be there for four to six hours. Am I just slow? I like to think not. I am thorough, though, and I am careful. I don’t want to miss any damage. The carrier adjuster just wants to move on to the next claim. I want to make sure you get everything you’re entitled to. Two different agendas!

Ask directly about the adjuster’s experience level. You wouldn’t want to be operated on by someone with little experience, and the same goes for the insurance adjustment of your largest financial asset, your home or business. Note that an ethical, experienced adjuster making any kind of effort should be able to point out a thing or two to you that wasn’t on your list.

Commandment #5: Remind the adjuster that not all homes are built with the same materials.

Insurance adjusters use computerized estimating programs that are designed to generate rough estimates (educated “guesses”) about the average amounts of damage in average homes. These software programs tend to be fairly accurate in evaluating average homes and average losses – and tend to be less accurate on very small losses, very large losses, very low quality homes, or very high quality homes. The more familiar you are with your home and the quality of its construction, the better off you will be.

Commandment #6: Review the adjuster’s completed estimate in detail, until you understand each and every line.

This is where you will find mistakes – unfortunately, though, these documents can be extremely tough to read. Room sizes may be off, damages you pointed out may have been omitted, or prices cited may be too low, either because the quality of the item being replaced is not correct, or because the prices being charged are higher than they were when the software for the estimating program was written. (This is a very common problem after a catastrophe).

Commandment #7: Have a licensed general contractor review the insurance company estimate and provide an independent estimate.

Formerly flooded residential neighborhood of St. Bernard: Auto has inscription asking where insurance company is. (Photo credit: Wikipedia)

If this is impossible, at least see if they will indicate specific concerns they may have about the ins urance estimate. This can be tough to do after a catastrophe, as contractors can be hard to come by. You may choose to get individual estimates from the roofer, carpenter, electrician, plumber, painter, A/C man, flooring specialist, or other professional. I would not suggest that you get estimates from the “cheapest guys in town.” If you get more than one estimate for a particular repair, count on the insurance company paying on the lowest figure associated with whatever you provide them.

Commandment #8: If the insurance company refuses to pay for an item, demand that they explain (in writing) why.

The company should not only do this, but also show you exactly where in the policy it says that what you are claiming damages for is not covered. This point is very important. Never simply accept that something is not covered because the insurance company says it’s not covered. The company has an obligation to make you understand why it is not covered. It is the company’s job to prove to you that something is not covered.

Commandment #9: Be persistent. Don't give up.

This may be the most difficult commandment of all for you to follow, but it is absolutely essential. I am convinced that, as a group, U.S. policyholders walk away from millions of dollars in valid claims each year simply because they are sick and tired of dealing with the claims process. Hang in there. If it is appropriate to do so, write complaint letters to the company (making sure to cover the local, regional, and home office levels), as well as your state’s regulatory agency, Attorney General, or Governor; your municipality’s Mayor, Councilman, or Selectman; or anyone else in authority who may listen. Take advantage of any measures your policy or State has for reconciling these matters. (These are sometimes called Alternative Dispute Resolution methods.) When writing, be brief and to the point (I’ve seen people scribble page after page of ramblings that are impossible to make sense of. Even if they are right, these letters will never be taken seriously.) Keep after them. Be relentless. Try to stay calm.

Commandment #10: Seek professional assistance when needed. 

English: BOWN BROOK, NJ, 9/18/99 -- Darrell Potter Jr. returns home following the flooding in Bown Brook, NJ. Mr.Potter has flood insurance, home contents insurance and vehicle insurance. Photo by Andrea Booher/FEMA News Photo (Photo credit: Wikipedia)

Depending on the loss, this could mean a contractor, an engineer, a mold specialist, an accountant, an attorney – or, of course, you might decide that you need a good public adjuster after all (one who will not charge you anything up front, but will, instead, charge a commission on what they are able to collect for you above and beyond what the insurance company is offering. It may feel strange, having to consult with someone to make sure that your insurance company pays you what you’re actually owed. But if they did what they were supposed to, public adjusters like me would be out of work.

Think of us as your insurance against problems with the insurance company.  No, it’s not “right” that you should need insurance like that, because you have probably been paying a large amount of money to the insurance company every year, and you’ve probably been doing that for many years. But this is the way it is. At least now you know about it, and you also know what you can do about it.

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.