Overlooking the Obvious

By Mark Goldwich

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There’s an old saying about “not seeing the forest for the trees.” This basically means even though something is right in front of you, you may not be able to see it. I think it is more about not recognizing what is in front of you, because you either aren't focused on it, or you're more focused on something else. And when you don’t recognize something that's right in front of you, it's easy to overlook. It happens to us all from time to time.

When it comes to insurance, here’s what people typically overlook: Insurance companies are businesses. You may say, “That is so obvious, everybody knows that.” And on the surface, this is true. But do you know what it really means – how that fact is actually going to affect your life when you have to file a claim?

If you’ve ever tried to collect on a claim after a major disaster such as a fire, flood, or hurricane, you probably do know what it really means when I say that the insurance company is a business, first and foremost. On the other hand, if you have not yet had this experience, or are just beginning the process of filing a clain, then this blog should definitely be considered “required reading” for you. 
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For instance: You may think, because you pay insurance companies to protect you against risks, that you are the “customer” or “client” of the insurance company. While this may be technically true, this attitude can be a big mistake. Even if know your insurance agent well, consider your agent a friend, and even socialize with him or her, when it comes down to it, your friendly agent and your insurance company are two different entities entirely, and as such, they may view you completely differently.

If you think of yourself as the “customer” or “client,” you will expect certain principles of “customer service” to guide the relationship after an unexpected event affects your property. You will also expect the insurance company to be accountable to you in a way that’s roughly similar to the way a furniture store is responsible for delivering furniture in a timely fashion. I hate to be the bearer of bad news, but if you think that way, as most people do, you will almost certainly be disappointed.

As someone with nearly 30 years of experience as an insurance adjuster, working on both
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the insurance company side and the insurance consumer side, I’m here to tell you a hard truth.  
You may want to be treated as a “customer”, and you may want the insurance company to be accountable – to fulfill its obligations to you without you having to do much beyond routine paperwork. It doesn’t necessarily work out like that.

Often, you are simply regarded as the next in a very long line of people who are trying to take more from the insurance company than you deserve. The working assumption is likely to be that your claim is not fully justified, even when it is. Rather than viewing yourself as a customer, I want to suggest that you may be better served by thinking of the insurance company as your legal adversary.

Why do I say that? It’s really not simply because I represent people who have claims against insurance companies. It’s because that's how insurance companies tend to treat the people they cover: as one would treat a legal adversary. And if you ever had to face one of your insurance company’s attorneys, you certainly know this to be true.

Consider the case of a Superstorm Sandy victim that aired on “60 Minutes” recently. In this case, a homeowner discovered that his insurance company altered the report of an
engineering firm the insurance company sent out. Instead of saying “structural damaged” as the engineer wrote, the report was altered to say “no structural damage” in the final version. As you can imagine, this simple word change meant the insurance company would be spared from having to pay many tens of thousands of dollars more for each claim like this (if you multiply that by thousands of claims, you begin to see what the motivation is). When the homeowner saw the original draft report he took a photo of it with his phone. There it was, proof the insurance company was trying to defraud him. Well, in court, the insurance company’s attorney actually suggested it was the homeowner that was trying to commit fraud; and that by taking a photo of the report, he was “stealing” it. You see, insurance companies view reports like this to be “work product” – in other words, they own the report.

I myself handled a claim for a woman whose car was stolen and then dumped into a canal. The car was fairly new, and not causing her any problems. Still, the insurance company suspected she may have had the car taken and dumped in order to collect the insurance money so she could get a newer car.  As a result, they refused to pay her anything. Why? They came up with 2 reasons. 

  1. They said cellphone records showed a “ping” on a cell tower “near” the area where the car was located on the night the car went missing.   (This statement alluded that she got a call from her boyfriend to pick her up and drive him back home after “the deed was done."), 
  2. They said her taking out “Gap Insurance” was suspicious. That’s right, buying insurance to cover the depreciation gap – the stated purpose of the insurance – is suspicious to the insurance company. Not when it is being sold and the premium is collected, mind you, but just when you try to collect on it. Happy ending though, we got her paid (without having to involve attorneys).
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There are dozens, if not hundreds, of equally shameful examples on-line of insurance company lawyers going after customers by using inexcusable tactics to get the desired results. Feel free to take a few minutes (or hours) to search this for yourself online, but be prepared to be overwhelmed.

Don’t overlook the obvious, insurance companies are businesses. They are here to make money – correction – they are here to make a profit. You see, they make money when you pay your premium, and then they make more money by investing the premium money you pay. That’s their profit. When they pay your claim, however; odds are they are paying you more than the premiums you have paid, which means they are paying you with money that was supposed to be their profit. You might imagine they don’t like that much. And in that case, you’d be displaying a remarkable clarity for the obvious.

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.

Is it Time to Come Out of Your Cave Yet?

By Mark Goldwich

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Unless you’ve been living in a cave, you know emails are very much in the news lately. Private
emails, business or government emails, mixing the two on multiple devices via multiple servers have been a hot topic lately.  Not to mention whether or not these emails (and text messages) can, should or must be saved, and for how long, and by whom, have been discussed and dissected nearly non-stop for the past week or so. And it doesn’t look like there is an end in sight to neither the topic nor the controversy generated by it. My goodness, if it weren’t for Ferguson, MO flaring up again, and Iran going nuclear, you can imagine how we would all be hearing about Emailgate 24/7?

“How does this have anything to do with insurance claims?” you might ask. Because, like so many aspects of our daily lives these days, more and more correspondence is done by a keyboard and transmitted electronically these days than by the U.S. Mail. Insurance companies and their adjusters often have email addresses, and most allow these representatives to communicate with their customers electronically. Personally, I think this is a very bad idea for insurance companies or adjusting firms, and few are limiting this activity.

Why is it bad for insurance company representatives to email or text a claimant?  I would respond by noting the obvious, that electronic communications are fast, but permanent (unless you have a private server and limit access to it). It is too easy to quickly respond to an email or text, sometimes without thinking it through, or doing any serious fact-checking. And once someone hits “send”, they can’t get it back.

Besides, if you are the insurance company, you don't want anything happening quickly. As I often
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say, time is the insurance company's best friend. Time is always on their side. Time is what gets claimants to grow so frustrated with the process that they are willing to accept a lower settlement, or to prefer to walk away with no money at all, rather than to continue to fight for what must seem like an eternity. I’ve seen it myself all too many times. Time is also what causes some claimants to die (literally) before their claims get settled. Do you really think family members, with plates already full of obligations, want to add an ongoing claim dispute they know nothing about to their to-do list? Not likely.

Keep in mind though, if you are the claimant, while you want to take advantage of the speed of electronic communications, you also need to be careful not to send a hastily written communication that can be made part of a permanent record, because you too will be unable toretrieve it after clicking “send”. Naturally, this is another reason you should entrust the claim to a licensed professional who should not be sending emails or texts without giving them proper consideration, and who should not be caught up in the emotion of the moment.

So, my advice to claimants would be, hire a professional to help you with your claim. And if you insist on trying to handle a claim yourself, use electronic media for communications as much as possible, but be sure to put due thought into whatever you put in writing.  Understand that once sent it can’t be undone, and that if you ever say the wrong thing, the insurance company can, and will, use it against you later. Another piece of advice would be to keep copies of all these communications in case you need them at a later date as well.

Case in point: We currently have a client who suffered a significant flood loss. She called her agent,
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who she had multiple policies with for several years. She had a good, one might even say friendly, relationship with her agent. After suffering the loss she contacted her agent who said he would take care of it. Time passed and she kept in touch with her agent, mainly by texting. From her texts with the agent it seemed like there was nothing unusual about the claim. It was just taking a while to get it processed. And then she got the settlement paperwork, which was prepared by the agent, that showed most of the claim was not being paid. In fact, the payment came out to about 5% of the entire claim, or about $4,000 on an $80,000+ claim.

That was enough to prompt her to hire us, and once she did, we quickly learned what was happening behind the scenes. Things that came as a complete shock to her. But the good news was, she had saved all the emails and texts between her and the agent, and while this claim has not yet been resolved, we strongly believe those saved communications will go a long way towards getting this claim turned around for her. All those short conversations tell a story (different from the one the agent was telling).  They show a pattern of behavior, for both her and her agent, that could make all the difference in the world in this “he said, she said” situation.

In this blog we have gone from coming out of our caves to observe current headlines, to advice for insurance claimants on using electronic communications. This included a real-life example of how that advice could be applied to your advantage. I hope you will be able to benefit from this information well into the future. You never know when you’ll need it. And now, back to the news…

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.

Whatever Happened To Integrity?

by Mark Goldwich

It’s everywhere in the news and online lately. Integrity is in decline. Political scandals involving everything from campaign financing, to disappearing emails, to marital infidelity, to deflated footballs, influence peddling and cronyism…you name it. Maybe it’s the 24/7 news cycle, or maybe it’s just happening more frequently, but there does not seem to be any shortage lately of stories where a person’s or company’s integrity has been compromised.

Image courtesy of CBS News
And if you’ve been at all in touch with insurance related news lately, you may have seen something about the story that was also featured on “60 Minutes” recently. An engineering firm was raided by government officials who suspected the firm of altering reports related to Super-Storm Sandy. If you saw this, then you got the main idea. Government officials carrying box after box of files from this now-disgraced engineering firm, accused of changing reports to the detriment of insurance consumers.

If you didn’t see this, then like most people in the country, you were completely unaware that an engineering firm could even be thought of doing something as sinister as writing or altering a report that would prevent an insurance customer from receiving a fair settlement. But that is the charge, and more than likely, in my opinion, that is exactly what happened.  Of course LL denied any wrong-doing, as are the insurance companies. And that is probably the last most people will hear of it, until eventually there is another story about the fines handed down (I suppose I should say IF these companies are found guilty). And then it will be back to business as usual.

While the press will in all probability downplay the end game, I will look forward to it, because it is something that has been stuck in my craw for a long time now. You see, I have known about this practice for decades. That’s right, it is not something new, nor is it something specific or isolated to Super-Storm Sandy claims.

Writing engineering reports for insurance companies is a HUGE business. Insurance companies pay billions of dollars every year for these reports, and many engineering firms specialize in this field.  They target insurance companies, knowing they can make big money year after year.
Personally, I have known about this from my days working for an insurance company. Engineers would sometimes ask what we wanted the report to say. I was trained to respond, “just tell me what you find, just give me the truth”. Whether we were worried about the litigation that would result if we ever got caught fixing reports, or whether we simply wanted to maintain integrity, I’m not sure. But either way, our (my) integrity stayed intact.  Of course that was years ago.

I just don’t know that insurance companies have the same mindset anymore. In fact, I am convinced many do not. Also, I think most have gotten smarter about how they approach this. They may not outright tell an engineering firm what they want, but the engineering firm knows, or thinks they know, that they tend to consistently deliver exactly what the carriers need to reduce claim payments, or avoid paying claims altogether. Is it coincidence? I just don’t see it that way.

You see, for years my adjusters and I have been meeting with engineers, junior engineers, or the engineers-in-training that these firms send out. While at the property, we make small-talk with them, and try to gauge what they will say in their reports. We know that what they say, and the way they
say it, could determine the outcome of the claim. That is, whether or not the claim will be covered.
Image from hurri-clean.com
For example, I recently met with an engineer to determine why mold was suddenly developing in a client’s home. The engineer walked around the home, asked a number of questions, poked his head up in the attic, took pictures, and admitted he was not sure what was elevating the moisture levels in the home enough to cause mold to grow. When pressed a bit, he said he would report that there must be a leak in the roof that was allowing water in, and that was the cause. He further said that in his opinion, that would give us the greatest chance for the insurance company approving the claim. The insured and I were satisfied, but I cautioned the insured to wait for the report before proceeding with repairs.

And as happens too often, when the official report came back (not within 2 weeks as we were told by the engineer on the scene, but 2 months later), we were shocked to see the report looked nothing like what the engineer on the scene said it would. Instead, the report claimed the mold was due to general conditions of high humidity, probably caused by water seeping into the building walls and windows (despite little if any evidence of this), combined with an air handler that was too large for the home (although he took no calculations at all that would be required to make this determination). And there was no mention at all of the roof leak he was sure would get the claim paid. Of course, the claim was denied.

We all “know” what happened. The engineer first wrote it up as he saw it, or initially discussed it with his senior engineers at the firm.  But after some back and forth between his bosses and the folks at the insurance company, the report was changed (they’d call it “revised”). That’s why it took so long, and why it looked so different. It happens like this all too often.

But I will admit they don’t always change, or revise, their reports. Usually, they know up front how to write their reports so the insurance companies will keep them busy writing more reports, and earning more money. We see those guys too. We meet them at the home, and they spend 90% of their time looking at, photographing, and making notes on every defect, deficiency, workmanship issue, and other issues we all know aren’t covered, whether we are claiming those things or not. They spend very little time looking at what we are telling them is being claimed, and when they must see it – because we insist on them looking at it, they usually dismiss what we are claiming. They say things like, “those shingles should not have blown off in that storm. If the roof was newer, and kept in better maintenance, and if the shingles were properly installed, they probably would have been fine.”

Image courtesy of weather.com
Somewhere up north, maybe in Boston, where we all know the snow has been falling for weeks, there is an engineer earning his stripes by looking at a roof that has collapsed under heavy snow loads,while trying to figure out how that loss could be attributed to poor design, materials, or workmanship – anything but record snow loads. Besides, anyone could look at the situation and say, “heavy snow did it”. The challenge is using your degree, training, and intuition, to uncover a critical flaw, no matter how minute, that few others would have detected.

This engineer no doubt went to school for a long time. He has student loans to pay. He has a long career ahead of him. He has mouths to feed. He certainly doesn’t want to disappoint his boss. And he knows if he is good at his craft, he can make a good living writing reports for insurance companies. He also  knows that engineers who routinely write reports leaning in favor of insureds, get passed over when it is time to assign the task or writing these reports.

And so it goes. Little by little, integrity takes a back seat to progress. Besides, they must think, it’s everywhere. Everyone does it, even our leaders. 

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.