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.

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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?

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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.