There Goes the Neighborhood

by Mark Goldwich

I can’t remember the last time I heard about an extreme weather event in West Virgina, but I sure did today. And if you were on any major news network, you probably saw it too. Video footage of an entire home, floating down a swollen river while ON FIRE! It was absolutely remarkable to watch - the power of the water, and the contrast of water and fire. It was just spectacular, but in the worst possible way.

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Now imagine you are the owner of that home. When you can finally return to your former neighborhood, which could be in just a few days, or it might not be for several weeks, it will be almost impossible to recognize. Street signs could be gone, major landmarks might be missing, and if you can find where your home used to be, we already know the home will not be there. Just a clean slab, next to several other clean slabs. It must be absolutely devastating to the mental state of the family.

For younger children, it might have been the only home they have ever known. For older kids, it might represent their childhood and friends. For the parents, it was where they started their family, and built their lives. And for older folks, it may literally be their entire world. But for all of them, it is time to start over, ready or not, but definitely not by choice.

So where do you start when that is not just something happening on the news, but it is your reality? My suggestion would be to start by reaching out to loved ones. Get help, if at all possible, because you are going to need it. And then, in no particular order, take pictures or video. Grab a pad of paper and start taking notes. List your activities and your expenses. Call your insurance agent and report the claim. Go online and learn what you can about what just happened to you, and what you can expect to go through in the coming months and years (note – I did not bother to include “days” or “weeks”, because that is simply not how you are going to be measuring this journey – sorry, trust me). Figure out what assistance is available to you (Red Cross, FEMA, etc.).

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And I would always recommend professional insurance claim assistance, but especially in this case, where you have damage caused by flood AND fire. Maybe you have insurance that protects against both flood and fire – it would be great if you did, but you could still use help to determine which policy you would  want to use to cover which of the items damaged. Just knowing that could make a significant difference as to what damages you attributed to which policy. This alone could more than pay for the fee charged by the insurance adjuster.

But what if you only had insurance that would protect you against one of the two events (flood and fire)? Then you really are going to need help, because imagine this scenario: you have fire insurance, but your insurance company tells you ALL the damage to your property is caused by flood – even though there is plenty of news footage showing your home floating down the river, fully engulfed in flames. While I don’t think there would be an argument for the slab, or maybe even the flooring, or even the baseboards, I would certainly argue a lot of other items were damaged by fire alone. They could still argue if not for the flooding, there would have been no fire. They could also argue that even if the home never caught fire at all, the home and everything in it, would have eventually been destroyed by the flood. As you might guess, I would take on that fight every day of the week.

Conversely, if you only had a flood policy, but no insurance to cover your home for fire, they could argue the majority of the damage to your home, and the belongings inside, were damaged by fire and not flood. If so, I would simply argue the opposite. Is it wrong that I changed my position just like that? I would say no. My job is to fight for the insurance coverage you paid for, not to accept the exclusions they raise. You paid good money for that insurance coverage, and you certainly did not intend any of your premium to be spent on policy exclusions – those just seem to come free with the policy. So yes, quite plainly and openly, I will fight to find any applicable coverage I can, based on the facts of the loss. In other words, if two homes were floating down the river on fire, and one of them only had flood insurance while the other only had fire insurance, I would argue both should be covered, for opposite reasons. And if that sounds like I “want my cake and eat it too”, I’d counter that cliché with “what’s good for the goose is good for the gander!” Anyone who has ever had to wrestle with an insurance company over a claim knows exactly from where I speak.

Once coverage is secured, it is time to start proving your loss. This is going to be difficult as well, since there would be little left to identify, making it difficult to assign a value to it. But it has all been done before. It’s a step by step process, and it does take time, but with the right assistance, you can get back on your feet again. And one day (too long for most people to imagine), you are relocated to a new neighborhood, or your old neighborhood starts to slowly return. Here comes the neighborhood!

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.

Winning by Losing

by Mark Goldwich

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People who are pessimists may say, “I can’t win for losing,” This translates to, "If it weren’t for all the bad things happening to me, I would be fine." There are plenty of people in Texas and other areas of the country who can probably relate very well to this phrase, even if they are not normally pessimistic. 

Imagine you just bought a new home, or just moved into a better rental, or finally opened up your business, when historic flooding beyond anyone’s expectations suddenly washes everything away.Or maybe an early morning tornado flattens your home, leaving you homeless, with nothing but the clothes on your back, and the gratitude to have survived. Such calamity could lead almost anyone to wonder if the powers that be have it in for them, and that they can’t win for losing.

Then again, there are some people that might utter this phrase whenever less tragic events take place, be it a relationship break-up, a minor fender-bender, the passing of a pet, or the stubbing of a toe.
Whether you can only relate to the more extreme cases of this saying, or any of them at all, as you might have guessed, especially if you are familiar with my writing, I can take this otherwise pedestrian phrase and spin it to show how differently insurance companies view the world. Better still, I can even back it up with examples.

For insurance companies, whose profits are measured in hundreds of millions, or even billions of dollars, they see the world in a very different light indeed. Insurance companies don’t accept the notion of a phrase like “can’t win for losing”. No, for them, even when they lose, they win. In fact, I would argue part of their “winning strategy” is to knowingly (if not purposely) lose – and lose BIG – at least sometimes.

I realize it seems inconsistent to suggest that large insurance companies, with ivy-league business school minds at the helm, who are very much about winning at all costs, are at all OK with losing, ever. Hang in there for just a bit, and I'll explain how it works.

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Several years ago I handled a claim that has since stuck in my mind because of the way it turned out. It was really not unlike many other claims I have handled, but in this particular case, the insurance company took an unusually hard stand against paying the claim in full. In the end, we could not get the carrier to make a reasonable offer, and the insured had to retain an attorney. It took over a year for the attorney to reach a settlement before the case was to go to trial, but the insurance company agreed to pay over 8 times as much as we were willing to accept prior to the attorney’s involvement. Even after the insured’s attorney was paid, and my fee was paid, the insured was left with about 3 times as much as she was willing to accept before an attorney was retained. That “8 times” number has stuck with me ever since. By the way, that “8 times” number does not include the insurance companies defense costs, because we are not privy to that information, but an educated guess would mean the insurance company really paid 10 to 12 times as much as they could have settled for. That’s 1000%, to 1200% more. Good thing they are loaded!

The insurance company was willing to pay up to 12 times as much as we were previously willing to accept. “Why would they do that?”, I wondered for the longest time. As with many things, over the years I figured it out. If the insurance companies are good at one thing, it is the actuarial science. An actuary, according to, is “a business professional who deals with the measurement and management of risk and uncertainty. The name of the corresponding profession is actuarial science. These risks can affect both sides of the balance sheet, and require asset management, liability management, and valuation skills. Actuaries provide assessments of financial security systems, with a focus on their complexity, their mathematics, and their mechanisms.” Actuaries use mathematics, statistics and financial theory to study uncertain future events, especially those of concern to insurance. In laymen’s terms, they are “bean counters”, and very good at it.

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While I don’t believe they would ever come right out and say it, I am convinced the insurance companies have determined there are only so many people that would argue about a claim settlement. Of this small number of people, there is an even smaller subset that would hire an attorney to pursue their appropriate claim payment. And of this small group, there is an even still smaller subset that will pursue their litigated claim all the way into the courtroom. Consider this, in the nearly 12 years that I have been a public adjuster, handling thousands of claims, only a small fraction have required attorney representation, and less than 5 have ever made it into a courtroom. 

The insurance companies might say these claims settled because the insured’s did not want to take their changes in court, but given the settlement numbers, I would argue the exact opposite is true. In fact, I cannot think of a single claim where the insurance company did not settle for a significantly higher amount than what they had previously offered. The “8 times” number was a bit of an anomaly, but I would venture to guess 3 or 4 times would be more common.

Still, why in the world would an insurance company pay even 3 or 4 times as much as they could settle a case for, and why would they ever pay 12 times as much? Simple, it costs more to pay everyone top dollar to begin with. If they make it easy, everyone will do it. So, they are willing to pay a whole lot more than needed on a select few claims (lose big), than to pay even a tiny bit more on every claim (lose bigger).
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It’s all a matter of how much, and how often they must lose, in order to maximize the winnings overall. If you are good with math, you quickly see how this makes perfect sense, and how the insurance industry has figured out how to win by losing. Just don’t give up on your claim, and you can win as well!

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.