How Ike Insurance Claim Help Is Supposed To Be
I wonder how hard the Hurricane Ike insurance company adjusters are working to pay benefits? I have always found that the harder and longer you work at something, the better the results are.
Similarly, one would expect that the longer an adjuster inspected a structure and looked for damage, the more benefits would be paid.
For an insurance company, ignorance can be bliss. For example, last week our law firm spent two hours in a in-house seminar regarding how winds can damage the glazing, fastening, and frames of glass windows and doors. The gentlemen teaching us spend their entire time inspecting glass windows and doors for all kinds of reasons.
I wonder how many insurance company adjusters have received any training regarding the effects of wind on glass doors and windows? I suspect that many Houston policyholders are going to be left with glass windows and doors that will deteriorate quicker, leak more often, and not work as well as a result of Hurricane Ike. Ignorant claims adjusters can wrongly save an insurer a lot of money at the policyholder's expense.
Most catastrophe adjusters receive little technical training regarding how a hurricane affects a structure. I took a deposition of a State Farm catastrophe adjuster that had no construction or adjustment experience before Hurricane Katrina. He was previously a minor league hockey player. Want to take a bet on how often his estimates for damage were accurate?
I was thinking about the ongoing Hurricane Ike insurance claims during a deposition this week. The insurance company attorney at the deposition didn't appear to get it--but his adjuster client understood exactly what I was asking. Yesterday's post, Rules of Good Faith Claims Handling, listed the rules of claims adjustment. The adjuster agreed that his good faith training recognized every one of those claims rules about which I inquired.
Many catastrophe insurance adjusting firms pay lip service to the rules of good faith claims handling. There is little training and even less emphasis placed on getting the estimate right in the sense that the policyholder is getting the service promised and owed. The emphasis of most catastrophe adjustment services is to simply get the estimate done.
As a result, claims problems are commonplace following a catastrophe.
Hurricane Ike claimants are in the same boat Floridians were in following the 2004 hurricanes and other Gulf Coast residents were in following Katrina. As a result, it should come as no surprise that people hire attorneys like us--the insurance industry has invited Hurricane Ike policyholders to do so by failing to provide the service our clients bought.
Sometimes when I talk at conferences on this topic, an insurance adjuster or insurance attorney will challenge me. He or she will say that I never see the hundreds of examples of satisfied policyholders. In response, I ask if he would be willing to let me re-inspect and reopen ten claims files to see if I can prove that nine out of ten claimants did not receive entitled benefits. They get quiet pretty darn fast.
And the sad part is that insurance companies should have programs doing exactly what I proposed. After all, shouldn't the insurance company be trying hard to pay every penny it is supposed to pay? That is how Hurricane Ike claims are supposed to be handled.
I personally believe that during a time of monumental catastrophe, an insurance company should send it's "top Adjusters" to the scene to conduct inspections and assemble Estimates.
You say that you have "...always found that the harder and longer you work at something, the better the results are." I beg to defer because no matter how LONG an inexperienced Adjuster looks at a structure, if the experience is not there to notice things that need repair, replacement, etc., the estimate will prove futile.
On the other hand, if an EXPERIENCED Adjuster visits the same structure for a SHORTER period of time and works just as hard (yet knows what he/she is doing), the subject Estimate is going to be fruitful, thus leading to a (hopefully) quick claim resolution for the policyholder who paid for such peace of mind.
SHIRLEY HEFLIN
Shirley,
You are correct. An experienced and trained adjuster with authority can speed up the resolution of the claim.
Often, the dollar authority of experienced adjusters is so slight that they are frustrated getting their jobs done. Some progressive insurers have allowed their more experienced "General" or "Executive" field adjusters liberal dollar authority levels so money can quickly be approved and into the hands of the policyholder.
Great point.
Good day Chip: Per our discussions, my personal receipt of memo below is the most "real time" authentication I secured from trusted and experienced adjuster friends who were thrown into the TWIA adjusting fray, fully validating your points and the tendency to cast exclusion style chaos into the face-to-face adjusting responsibilities. Hope this is helpful. Mark Phillips
Documentary Provided by:
(Redacted)
Dateline: October 31, 2008
Relayed To: Mark Phillips, Loss Consultant
The problem we have encountered as adjusters in relation to this storm is the wind/flood/surge problem; something we've encountered very little in the past. We had to get online and do a little research to make ourselves more aware of exactly how surge happens; as one of our claims was a total loss, possibly from surge as no one really knows what happened, and it requires a great deal of documentation to get the claim settled. We do not believe it was from surge. It's difficult to prove. We believe the wind blew it away and the surge then washed it away. Proving wind happened first would mean a huge difference in what the insured is paid in damages. There will be much controversy over this topic.
The people all must carry flood insurance, wind insurance (we've been working for Texas Windstorm) and then they have their home owner policies; three kinds of insurance to pay for.
We're finding that even though they knew they needed flood insurance and wind insurance the agents, in many cases, didn't do a very good job of explaining how they work in relation to surge, which plainly is not covered in the policies. We're finding many of the agents do not even understand the concept of surge. The agents believe their customers' properties are well insured no matter what the flooding issue. It's fairly simple for us to refer them to their flood insurer but we try to explain a little of the concept of flood as compared to surge.
We're hearing that the flood guys are not doing a good job of taking the time needed to do their part of explaining – and they may not be doing a good job in some instances (we are told this from our insureds) in working the claims. It is fairly simple to tell the customer it is surge and walk away! Research takes time and sometimes is a wasted effort. No doubt the information and documentation required is very hard to come by. The insureds in many cases are left very upset.
We've been grateful we are working for wind and not for flood!
Agents realize the policies exclude surge (there is no surge insurance available); but they don't really understands the mechanics of surge and they haven't explained it well. We expect many to be using their E&O insurance because their lack of explanation has caused great grief to many.
The claimants find that after paying all that money flood doesn't cover it. Wind doesn't cover it and home owner policy doesn't cover it so who does? That nasty little word "surge" ruins everything! In cases where mortgages will allow, many plan to drop their insurance saying it's worthless. We're so grateful most of our claims affect the 2nd floor up! The flooding for Texas Wind has to come from the top down rather than from the bottom up. Seldom do we (as wind adjusters) have to worry about the bottom floor of the multi-floor break-away bottom floor homes because that is usually a flood problem. Most every home on Tiki Island Village is missing the bottom floor after the storm. We understand that the city fathers will be taking a new look at the regulations to build the break-away walls. That perhaps those walls breaking away with the force they did is what caused much of the damage.
We hear stories that if they were OUR PERSONAL story, it would be a heartbreaker!
We hear from many of the insureds that the adjusters take one look, say sorry, its surge..and walk away. Hearts are broken, they feel they didn't even get a chance to show the damage or even talk to the adjuster. That has not been popular. We've inherited a few of those claims.
It's greatly appreciated when we listen intently to them, do our best to feel their pain and even though our ultimate findings may turn out the same, at least we didn't brush them off with the "surge" word before hardly even shaking their hand. We have emails to prove how much they appreciate the special attention and sympathy! It shows someone at least cares for their pain!
Speaking of Tiki, there are stories we heard during our investigation that are very interesting. When there is a claim where the insured loses everything, where the house is completely gone & there has to be much investigation and documentation to be done. You have to talk to the city officials to see what exactly was documented. You have to talk to neighbors and make lots of watermark pictures and compile all kinds of documentation. In checking on one of our "completely missing" claims, we heard some interesting stories. This particular property was in Galveston but it was on Tiki that we got some of our most interesting information; information that will probably be of prime importance in upcoming investigations.
Supposedly only a few people, possibly only one person, stayed on Tiki during the storm considering the mandatory evacuation. We heard that person tells that the water rose up gently -- pretty quickly but gently. But the water did not go down gently. It didn't recede as you would expect water to do. It went out immediately as if someone pulled the plug on a bathtub and that is when much of the damage was done. It will be a large point of evidence when the litigations start. Surge takes it all away instantly but this bathtub effect is different. That's when the walls on the 1st floors went out; when the boats and appliances that had floated up began to bang up against things and did the damage, etc. Supposedly the few people who saw this will be important witnesses to how things happened. That's supposedly why cars and other large objects were buried.
I feel the "Surge" phenomenon will be an always present cause of damage in upcoming storms. But we're told that this was a particularly unusual storm and that surge is not always present.
Mark,
Your comment deserves a full Post in reply which I will have up first thing on Monday morning. Thank you for the memo from those adjusters.
However, for everybody else reading, storm surge is covered under a National Flood Policy.