Not Ready for Prime Time (viewer discretion advised)

by Marc Goldwich

I was reviewing the headlines this morning which were chock full of mayhem.  Everything from the aftermath of catastrophic flooding which resulted in numerous drowning deaths in the South Carolina, to more school shootings, along with a smattering of auto-related fatalities vied for my attention. This combined with Halloween being just around the corner was enough to cause my mind to entertain the dark side of life. So I began thinking about the job of cleaning up after a catastrophe.

Image from commons.wikimedia.org

In case you're not aware, there is an entire industry set up for handling these kinds of events. Typically called “Biohazard Clean-up” or “Crime Scene Clean-up”, these companies are e an offshoot of emergency restoration companies. Whether the hazard you need gone consists of  toxic waste, deadly mold, body fluids or most any other kind of nasty stuff that crop up after an emergency, there are trained professionals who are only too happy to roll up their sleeves and dive right in. 

The hit Discovery TV show “Dirty Jobs” is a favorite of mine, but I doubt you will ever see Mike Rowe tackling this type of job. While certainly “dirty” enough, my guess is it would simply be too disrespectful to find any humor in this line of work, and for his show, humor plays a major role.

There are other shows which depict and deal with death, usually CSI or homicide, but I have never seen one address the clean-up aspect that invariably needs to take place after the police finish their investigation. Since you can now watch shows on just about any occupation imaginable, I would not be surprised to find a show following biohazard clean-up teams around.

So what would that entail? First let’s think about the types of situations these companies and their crews might deal with. Things like:

-          Sewage backups

From commons.wikimedia.org

-          Crime scene residue

-          Suicide

-          Homicide cleanup

-          Blood cleanup

-          Accidental death cleanup

-          MRSA and H1N1 decontamination

-          Hoarding scenes

-          Animal waste/remains

-          Chemical spills

-          Tear gas cleanup

-          Meth lab cleanup

-       Radiological hazards

    

None of these events should be taken lightly, or undertaken by anyone except certified biohazard professionals. Not that most people would want to deal with any of these problems

.

These companies need to be well versed in applicable state and federal regulations, they need to be licensed and certified (where required), they need to use appropriate transportation and/or disposal protocols, and they may need to be registered with the states’ Department of Health. These companies can also expect to be regulated by governing and advisory bodies such as OSHA (Occupational Safety and Health Administration), NIOSH (National Institute for Occupational Safety and Health), DOT (Department of Transportation), and EPA (Environmental Protection Agency).

Image courtesy of townhall.com

The dirty work of these professionals usually begins when the coroner’s office, or other governmental entity officially releases the scene to the property owner or other responsible party. Depending on the type and severity of the “event”, the clean-up teams are required to wear protective clothing, may seal off rooms to prevent or minimize the spread of airborne or physical elements of the bio-hazard scene, and follow specified methods and practices to decontaminate such scenes.

The scenes must be meticulously cleaned of all harmful material, which typically includes the removal of any porous materials (whether personal belongings like clothing and sheets, or building materials such as carpeting, wood subfloor, or drywall) – which must all be properly disposed of, and then sanitized. You can only imagine the mess that will be left, even after the mess that was the biohazard is removed.

And many people are so distraught after dealing with such a loss, that they overlook the fact that insurance may cover the expense of the clean-up efforts. Just remember this rule of thumb, if property is damaged as a result, it is probably covered by insurance (either yours, or someone else’s).

ServPro.com provided the following bio-hazard and sewage emergency tips:

After any biohazard or sewage contamination in your home or business, your primary focus should be safety:

-          Is it safe to stay in the house?

-          Exposure to biological and chemical contaminants can pose serious health consequences.

-          Flood water can contain sewage, pesticides, and other contaminants.

-          Only do activities that are safe for you to perform.

Image courtesy of aftermath.com

What to Do After a Contamination

-          Stay out of affected areas.

-          Call emergency service personnel if the situation is life-threatening.

-          Treat all bodily fluids as if they are contaminated.

-          Turn off the HVAC system if there is sewage damage.

What Not to Do After a Contamination

-          Don’t leave wet fabrics in place. Hang furs and leather goods.

-          Don’t leave books, magazines, or other colored items on wet carpet or floors.

-          Don’t use your household vacuum to remove water.

-          Don’t use television or other household appliances.

-          Don’t turn on ceiling fixtures if ceiling is wet, and keep out of rooms where ceilings are sagging.

Let’s all hope we never need these tips, but as we can plainly see from watching the news, the fact is, biohazard clean-up is a grim reality for many families. As with anything else, the more you know in advance of an emergency, the better equipped you will be in handling that situation.

In this article I discussed the subject of biohazard clean-up, and the professionals that are trained to perform what just might be the dirtiest job of all. I mentioned some of the types of events this might involve, and included tips for dealing with such an event.

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.   

Who'll Stop the Rain?

by Mark Goldwich

Hurricane Joaquin image courtesy of Flickr.com

The latest news has the fairly sizable hurricane Joaquin threatening the East Coast of the United still recovering from 2012’s “Superstorm” Sandy. You may recall New Jersey experienced especially devastating flooding when Sandy drenched that region.

States, even though the most current predictions are it will never make U.S. landfall.  However, a storm as big as this doesn't have to hit to produce coastal flooding by the time Joaquin exits the area. In fact, the Carolinas are already experiencing flooding completely unrelated to this hurricane, so any additional rains as a result of Joaquin will make things dramatically worse. I also noted that emergency preparations are already underway in New Jersey, which is

I will first start with this – if you don’t already have flood insurance, you should seriously consider getting it as soon as possible. It may be too late for you to be covered in the event Hurricane Joaquin does strike, but there will always be another event that causes flooding, which very few of us are immune. I have been saying for years that “we are all in a flood zone, it just may not have happened yet.” Even if the place you live is not recognized as a flood zone by FEMA or a mortgage company that doesn't mean that flooding can't occur. If you are in a “low-risk” flood zone (as determined by FEMA), your mortgage company may not require you purchase flood insurance, yet your property may still be at risk. Countless people make that mistake each and every year, with dire financial consequences. And that may never change, at least not for everyone, but if you are reading this, I hope you will act now, and not become a statistic. Another of my flood-related sayings is, “if you place too much trust in FEMA flood maps today, you may be waiting in FEMA assistance lines tomorrow!”

Here are some interesting flood facts from www.FloodSmart.gov:

• In the past 5 years, all 50 states have experienced floods or flash floods.
• Homeowners' insurance does not cover flood damage.
• Just a few inches of water from a flood can cause tens of thousands of dollars in damage.
• A car can easily be carried away by just two feet of rushing water.
• New land development can increase flood risk, especially if the construction changes natural runoff paths.
• Federal disaster assistance is usually a loan that must be paid back with interest. For a $50,000 loan at 4% interest, your monthly payment would be around $240 a month ($2,880 a year) for 30 years. Compare that to a $100,000 flood insurance premium, which is about $400 a year ($33 a month).
• A Preferred Risk Policy provides both building and contents coverage for properties in moderate- to low-risk areas for one low-price.
• You are eligible to purchase flood insurance as long as your community participates in the National Flood Insurance Program. Check the Community Status Book to see if your community is already an NFIP partner.
• In most cases, it takes 30 days after purchase for a policy to take effect, so it's important to buy insurance before the storm approaches and the floodwaters start to rise.
• In a high-risk area, your home is more likely to be damaged by flood than by fire.
• Even though flood insurance isn't federally required, anyone can be financially vulnerable to floods. In fact, people outside of mapped high-risk flood areas file over 20-percent of all National Flood Insurance Program flood insurance claims and receive one-third of Federal Disaster Assistance for flooding.
• From 2005 to 2014, total flood insurance claims averaged more than $3.5 billion per year.
• Since 1978, The NFIP has paid nearly $50 billion for flood insurance claims and related costs.
• There are currently more than 5.3 million flood policies in force across more than 22,000 communities in the U.S.

Image courtesy of commons.wikimedia.org

These are sobering statistics, which should make all non-insured homeowners pause to consider. It would be great if more people did know more about how flood insurance works, and who it can protect. Too many individuals and families are impacted each year simply because they got bad information about flood insurance, didn’t understand the information they were given, or didn’t have the resources to obtain the correct information. My goal would be to reach at least one person, and make a difference.

Along these lines, there was another section at FloodSmart which detailed common misconceptions about flood insurance. It was there I learned that floods are the #1 natural disaster in the country, and that many people (wrongfully) believe they are somehow not eligible for flood insurance, either because of where they live, or their mortgage status. I can’t tell you how many people have told me after the fact that they didn’t think they needed flood insurance because “the mortgage company said it wasn’t necessary.” The mortgage company probably said it wasn’t “required”, or maybe that is what they meant to say, but either way, the message was lost in translation.

The fact is, according to NFIP (National Flood Insurance Program):

• You CAN get flood insurance nationwide.
• You CAN get flood insurance if you live in a floodplain or high-flood-risk area.
• You CAN get flood insurance if you live outside a floodplain, or a low-to-moderate flood-risk area, and at lower cost.
• You CAN get flood insurance if your property has been flooded before.
• You CAN get flood insurance from insurance agents in your area.
• You CAN buy flood insurance even if your mortgage broker doesn't require it.

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Were you already aware of all this? If so, wonderful – you are a flood maven! If not, it might be time to do a little more research. People with accurate information about flood risks and protection options can make better decisions and plan for disasters. Sometimes the key is knowing who to ask, or where to look before the storm clouds gather and you begin to wonder, "Who'll stop the rain?"

In this article I used current weather conditions to again remind people of the need to prepare for potential disasters like flooding, and the cost of failing to do so. I also provided information from a valuable resource on the subject of flooding, www.FloodSmart.gov, and presented statistics and misconceptions to help people gauge their own levels of understanding on this topic. I hope you scored 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.   

Hurricane Season is Here

by Mark Goldwich

With so many other topics consuming the 24-hour news cycle lately, and so much time since a hurricane hit their usual targets, a pair of storms whipping up winds today are an important reminder we are in the midst of the height of hurricane season, and we must not be lulled into a false sense of security.

Courtesy en.wikipedia.org

Danny became the first named storm of the Atlantic Ocean Hurricane Season on Tuesday, and quickly became the first hurricane of the Atlantic season on Thursday, according to the National Hurricane Center. By Friday, just 1 day later, it strengthened from a Category 1 hurricane to a Category 3 hurricane, with winds reaching 115 MPH. And as I write this on Saturday morning, Danny has already begun to weaken. It is still a Category 2 hurricane, but is expected to be further downgraded to a tropical storm by tomorrow, and is not expected to have any impact on the United States.

This is not only a good reminder of the need to be prepared for such events, especially for those of us living in hurricane-prone regions, but of how quickly things can change. When Danny was first mentioned earlier in the week, it was simply a tropical storm to be watched, and weeks away from any possibility of affecting the U.S. Even when it reached Category 2 strength, some said it was expected to weaken, and not reach the Category 3 level. And keep in mind, a Category 3 hurricane is considered a “major” hurricane, and capable of catastrophic damage.

And while Danny has already begun to weaken, and meteorologists can opine about high pressure fronts and wind shear and all sorts of other reasons storms act the way they do,  in the end the storm is a living, breathing, and relatively unpredictable phenomenon. As a result, even professionals never know for sure what the storm will do.

Image courtesy of en.wikipedia.org

Eric Holthaus, a meteorologist writing for Slate.com on Thursday wrote, “Danny is currently struggling to strengthen and has a tough road ahead of it: Dry air blown in from the Sahara and a pocket of cyclone-killing wind shear over the Caribbean will probably offset the potential boost from increasingly warm water. It’s not possible to confidently predict Danny will even be a storm at all beyond five days from now. On the other hand, it’s perhaps equally as likely that Danny will be a formidable hurricane in 10 days. There are model runs to support both possibilities.”

Holthaus went on to say, “Though it’s borderline meteorological sacrilege to even discuss the possibility of a tropical cyclone landfall so far in advance, a Danny landfall in the mainland United States has the tenuous support of two of the leading weather forecast models, the Euro and the Global Forecast System, the flagship model of the U.S. National Oceanic and Atmospheric Administration. The Euro, widely regarded as the world’s most accurate weather model, has been relatively consistent over the last several model runs that a weak version of Danny could approach Florida in about 10 days. The GFS has been much more variable, showing a potentially stronger landfall anywhere on the East Coast—as well as the possibility of a much safer curve out to sea. But you should take this information with an Everest-sized grain of salt.”

Predictions are made, analyzed, evaluated, revised, and then reanalyzed in hindsight after events actually occurred. If the person making the prediction turns out to be correct, they are congratulated for “knowing” what would happen. If they are wrong, they simply explain what happened to cause the prediction (not “them”) to miss the mark.

Meanwhile, a depression in the Pacific Ocean strengthened into what is now called Tropical Storm Kilo on Friday, churning about 500 miles southeast of Hilo, Hawaii. Forecasters believe Kilo could grow in strength into a hurricane by Monday, the Central Pacific Hurricane Center said. One forecast track indicates it could move under Hawaii before changing course back toward Hawaii, and may threaten the state as a hurricane by Wednesday.

Image courtesy flickr.com

In the end, all we can do each time a depression, or storm, or hurricane is taking shape, is to pay attention and prepare for the worst based on information gathered from multiple sources. Of course, it is always better to be prepared (even if nothing happens) than to be unprepared, because when the rare instance of a major storm does happen, being unprepared can lead to disastrous consequences. 

There are so many resources to take advantage of today, and I do not want to bore anyone with disaster plans and safety kits (I’ve probably done this enough already), but I do want to remind you to take some time to at least contemplate what you would do if you had 24 hours to prepare for a large-scale natural disaster. Get on the computer, and find a disaster plan you like, complete with emergency supply kit, and at least print it out and review it with your family. This 30-60 minute exercise would not only create some “family time”, but would hopefully become a habit, and over time increase in everyone the confidence that comes from such repeated planning. The last thing you want to wind up doing is standing in a big box store as a hurricane bears down trying to grab the last couple of pieces of plywood, or the last few cans of food on the supermarket shelves.

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This type of exercise is good for much more than hurricane planning, I believe it helps shape the way people react and act in all kinds of stressful situations, allowing them to remain calm, prioritize needs, and take measured actions in coordination with others (or alone).

So thank Danny and Kilo, for the wake-up call to remind us that Hillary’s email scandal and pre-season football is not the most important news of the day. Remember that while the hurricane season has been quiet so far, it's far from over. Stay vigilant, my friends.

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.   

Put Noah on Standby

by Mark Goldwich

First thing this morning I got a call from a contractor who was drying out someone’s home. He had an unusual situation he was dealing with, so he called to see if I could answer some question he and the homeowner were wondering about.

As is true for much of the Southeast, and other parts of the country as well, we have been experiencing afternoon thunderstorms just about every day this week. Yesterday’s deluge was especially heavy, as evidenced by the semi-pro baseball game I took my son to but got rained out before even starting, and the news reports of localized flooding. The lightning show was also quite spectacular.

Image courtesy of commons.wikimedia.org

In any event, the contractor explained he had been inundated lately with cases he described as

“floods”, and today he was dealing with a homeowner who had water in at least 4 rooms, ruining carpet, baseboards, drywall, and any contents that happened to be on the floor. The water came in under a door when their atrium took on more rainwater than could be drained off (as it typically does during heavy rain). So the question was, “is this water damage covered by the homeowner’s insurance policy, or by a flood insurance policy?”

The immediate answer, as is often the case, was, “that depends”. I realize people are not fond of that response, and it sounds like I am trying to avoid giving a definitive answer, but especially when it comes to insurance, there are often more questions that need to be asked before an answer can be given with any degree of certainty.

One of my questions was “what did the insurance company say?” I’ll admit this question was more a question of curiosity, since my answer is never based on what an insurance company says, and just as I would expect, the answer from the insurance company was, “you’ll need to wait for the adjuster to come out and make a determination.” And while that doesn’t sound like a good answer, as we’ll see later, it really is the proper response.

Odds are even when the adjuster comes out, an answer will still not be available, as adjusters today are rarely able to make such coverage decisions in the field, as they did in previous decades. I would think as technology improves the speed of communication and research, such decisions would be easier to make on the scene, but the reality is that adjusters today are usually relegated to asking questions, taking photos and measurements, and then relying on a claim examiner in an office somewhere (who often has little to no field experience handling claims) to make the final decision.

After asking the contractor a few more questions, I learned the atrium was an exterior atrium, created by 3 walls that were at ground level. I also learned the area of water that rose high  enough to enter the home was not very large, consisting mainly of the area of the atrium itself. In other words, the “puddle” did not extend to any fence or neighbor’s property line, and was much less than 2 acres in size (we’ll see why this was important shortly).

Image courtesy of sociimedia.com

Armed with this information, I was able to answer with a high degree of certainty, which of the homeowner’s policies (home, or flood) would cover this event, even without having to read either policy, and here’s why: homeowner’s insurance policies generally do not cover for rain water which collects on the ground and enters the home (they call this “surface water” or “flood”); and flood insurance only covers for events specifically defined as “flood.”

According to FloodSmart.gov, a “flood”, in simple terms, is “an excess of water on land that is normally dry.” The official definition used by the National Flood Insurance Program (NFIP) is “A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is your property) from:

• overflow of inland or tidal waters;

• unusual and rapid accumulation or runoff of surface waters from any source;

• mudflow*; or

• collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined above.”

*Mudflow is defined as “A river of liquid flowing mud on the surfaces of normally dry land areas, as when earth is carried by a current of water. Other earth movements such as landslide, slope failure, or a saturated soil mass moving by liquidity down a slope, are not mudflows.”

So basically, if it rains a whole bunch, but the water that accumulates into an ever-increasing puddle does not reach the neighboring property, and does not exceed 2 acres, it is not covered under the flood policy, as in the case of my friend the contractor’s new customer.

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Therefore, the answer to the question “is the water damage covered by homeowners or flood insurance?”, in this case is, “probably neither.” Why? Because surface water is excluded by the homeowners policy, and the event did not meet the definition of “flood” in the flood policy. The insurance company should have known that in the few minutes it took for me to make that determination, but before they can deny a claim officially, they are obligated to fully investigate the facts of the claim, and document for their own records whether or not it should be covered, in the event the homeowner does not accept their conclusion and hires an attorney to fight them on it. And as explained to the contractor, my answer was based on the information given to me at the time, and if the homeowner wanted, I would be happy to fully investigate the facts and compare my findings to those of the insurance company.

One more thing about this particular example is that this homeowner did not have flood insurance. Like most people who do not live in a designated flood zone, if their mortgage company does not require them to carry flood insurance, or if they don’t have a mortgage, they simply don’t get a flood policy. In this case, it probably would not have mattered anyway,  I don’t believe it would be covered by the flood insurance policy based on the facts provided, but it highlights a problem we see on a regular basis – people often don’t consider flood insurance until after it’s too late. Even though most insurance companies provide bold warnings that flood is not covered under the homeowners policy, and even with all the commercials FEMA puts on TV advising people to get flood insurance, if it is not required, many people simply don’t get it. Perhaps they think if they really needed it, someone would make them buy it.

But as noted by FloodSmart.gov, “people outside of mapped high-risk flood areas file over 20-percent of all National Flood Insurance Program flood insurance claims and receive one-third of Federal Disaster Assistance for flooding.”

The bottom line is don’t wait for Noah to sound the alarm, or for you find out first-hand what flood insurance is all about before talking to your agent about flood insurance. It may be a good idea even if you are not in a flood zone, and it should be less expensive there 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.  

Overlooking the Obvious

By Mark Goldwich

Image courtesy of businessoflosingweight.com

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. 

              

Image courtesy of brucemcintyre.com

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

Image provided by funnyjunk.com

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

ThinkProgress.org

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.

Shades of Delay

By Mark Goldwich

In this blog, I want to give you examples of what I call early-phase delays. These are delays that come in the first stage, the stage immediately following the disaster or insured loss. These examples of delay are sometimes the most shocking ones to people who file claims, because they expect to be treated as customers, rather than adversaries, by their insurance company. (By the time policyholders get to mid-phase and late-phase delays, they’re not quite as shocked by the behavior of some insurance companies and other players who are supposed to represent their interests.)

Q&A: What will happen?

English: New Orleans, La. August 30, 2005 --Aerial view of New Orleans and the surrounding area showing the flood waters and damage caused from Hurricane Katrina. New Orleans continues to be evacuated as a result of floods caused by failures of the Federal levee system. Photo by Jocelyn Augustino/FEMA (Photo credit: Wikipedia)

• Will there be enough manpower to process the claims that (predictably) follow a natural disaster?

No. A cynic might tell you that this manpower shortage is intentional. I can’t know what the intentions of large organizations like insurance companies are, so all I will be able to say for sure is that, the insurance company will not have enough people on the ground to process the deluge of claims that will follow a major fire, flood, hurricane, tornado, or other significant event. By a remarkable coincidence, this works to their financial benefit. And believe it or not, this “manpower shortage coincidence” takes place over and over again, year after year.

• Are you talking about the first few days following the disaster before the insurance company “calls in the troops”?

No, I mean a period of weeks or months immediately following the catastrophe that triggers your insurance claim. And for many insurance companies, there really are no full-time “troops” for them to call in.

• Why not?

Insurance companies generally staff on a permanent basis at a level that’s meant to handle claims that take place for more common events like kitchen fires, pipe leaks, thefts, and other routine forms of property damage or loss. In other words, they simply don’t hire enough permanent claims staff to cover disasters in addition to the more ordinary claims.

• Is that because insurance companies don’t know whether disasters will actually take place in a given twelve-month period?

Given the industry’s historic obsession with probability, and with actuarial statistics connected specifically to things like fires, floods, hurricanes, and tornadoes, this seems like an unlikely explanation. Some of the larger insurance companies do hire additional staff to handle catastrophe situations, but certainly not as many as are actually needed.

• Could they hire enough full-time staff to do the job for disasters that they know, or strongly suspect

Westend11NovUpyachtsK (Photo credit: Wikipedia)

will eventually take place?

If you mean “can they afford to,” that’s a matter best discussed with the executive management teams, boards of directors, and stockholders of insurance companies.

Although I’m a former insurance company employee myself, I was not privy to these sorts of internal decisions in any meaningful detail.

• So how do insurance companies process claims if they don’t have the manpower to handle them?

Basically, they outsource. In much the same way that Information Technology companies outsource programming and technical service jobs to other countries, insurance  companies utilize independent adjusting firms that subcontract with adjusters who can be sent to a disaster site to work for an insurance company.

• What happens if there is no disaster?

If there is nothing going on in the form of insurance work, then these people have to fend for themselves. Some are able to work year-round for insurance companies. Many others go back to whatever work they did before deciding to be Independent Adjusters. And still others just wait for the next disaster, living for extended periods off money made working the last disaster – semi-retired, I call them.

• What kinds of credentials are adjusters required to have?

Less than you might think. In many states, they don’t have to have a college degree or even need to be licensed. Even in states which require a license, the Independent Adjusters don’t need to be licensed before the storm; they simply get “temporary” or “emergency” licenses once they start working for the insurance company. They could literally be hauling manure one day, and adjusting your loss the next.

New Orleans after the Hurricane Katrina levee failure disaster. (Photo credit: Wikipedia)

• Once a storm hits, are there lots of insurance adjusters swinging quickly into action? 

The insurance companies would say yes, and you can be sure there will be a news clip with at least o

ne adjuster quickly on the scene looking appropriately concerned. Even so, my personal experience is that there are not nearly enough adjusters getting to the site when they should, and I believe most storm victims would agree with me. Ultimately, the answer depends on one’s definitions of the words “lots”, “quickly”, and “action.” I can predict, confidently, that you won’t consider the adjuster’s appearance to be timely.

• What’s the holdup?

When a storm or other disaster hits, the independent adjusting firms get a call from the insurance company. Their people start calling people, who start calling other people, who start calling still other people. Then the independent adjusting firms start looking for a place to set up their offices, or perhaps they wait for the insurance company to set up

facilities. As a practical matter, independent adjusters (who are the people typically given assignments through these companies) are usually left to their own devices when it comes to traveling to the disaster site, finding a hotel to stay at and securing other support services. You can imagine how difficult it is to secure undamaged, available housing and office space right after a disaster. Needless to say this, too, slows down the processing of your claim.

• What actually happens when I call the insurance company?

If you can get through at all, you’ll probably get the number of a claims call center.

• Okay, what happens when I reach the call center?

Typically, they take your information. They can’t do much of anything else. Unlicensed call center personnel often can’t even tell you how much the deductible is on your policy. These people are temporary employees who are not well trained and (usually) not particularly motivated. They take down the information, either handwritten on a simple store bought pad or company created sheet of paper, or they may transmit an e-mail or generate a message printout. Each of these calls represents a message that an adjuster working for that company is supposed to return. That is, if the message gets to the right place.

English: (Photo credit: Wikipedia)

• How long is it going to be before I hear from that adjuster to set up a time for inspection  of my property?

This is the sixty-four-thousand dollar question. The best answer is that you should probably be prepared to wait anywhere from one week to three months to get even an initial call back. I would suggest if you haven’t heard back after a day or two, you should call back – the adjuster probably lost your message. Call, leave message, wait, repeat. Call, plead, leave message, wait, repeat. Call, plead, plead some more, leave message, wait, repeat. Does this really sound like something you’d like to do while you’re without power, without air conditioning, without hot meals, and without clean water … for, say, two months?

• You’re kidding, right?

I wish I were. I recently talked to an adjuster on behalf of one of my clients after a natural disaster. When I finally was able to speak to him after weeks and weeks of calling with no response, I asked him to explain his failure to return my messages. He said, “Look, I get 80 messages a day and I have time to return maybe ten of those messages before I get another 80 the next day. That’s the system. You do the math.”

• That’s an exceptional case, right?

No, I’m afraid that was quite typical for this insurance company – and probably not too different from most other companies. It really is all about staffing. The call center folks

are there, but they can’t help. You need to talk to the adjuster. But the adjuster is not there. He or she is out “in the field” adjusting losses. If they were available to talk to you, who would adjust all the losses?

• Is it a Catch-22, or is it just a coincidence that happens to benefit the insurance company? Whatever it is, it’s not going to work out in your favor.

• Couldn’t insurance companies afford to do this differently?

One would certainly think so. The question then is at what cost? Odds are the insurance

companies would find it too expensive to provide the level of service expected by consumers.

• So do I have to wait a couple of weeks for the insurance company and the independent adjusting company to set things up … and then another week to three months more just to hear back from the adjuster for the first time?

That’s pretty much par for the course. Sure, you might get lucky and be the first person the adjuster calls back. You might also win the lottery tonight. I wouldn’t count on either.

• Yeah, but things will get better after I hear back from the adjuster, right?

Wrong. I’ll tell you all about mid-phase delays in the next blog…

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.