Chip Merlin wrote about water losses earlier this week in his post, A Reasonable Investigation of a Water Loss Requires Using Tools to Find the Damage. One tool that adjusters should be using on all claims is the wonderful gift of vision. Adjusters can’t ignore damage by turning a blind eye but all too often this is exactly what we find in litigated claims. Larry Bache also wrote about this topic in his post, Are You Aware of Your Insurance Company’s Obligations When You Report a Loss? You May Be Surprised.
If you are a policyholder with damage to your property, you have obligations and duties under the policy when reporting the loss, but your insurance company also has obligations to you. Consider the scenario of a tree falling on your home or a hurricane damaging the roof of your business (the type of peril really doesn’t matter). Once you realize that you have a problem with the property, you do your part by calling your insurance company right away, and mitigating the loss. The insurance company pays very close attention to what you say when you report the issue them (be accurate, details matter, don’t assume and be sure to tell them you need help to understand the extent of damages you are claiming). During the initial call you should be given a claim number. The next thing that the insurance company usually does is send out a person to meet you at the property. Stress to the insurance company that you want a prompt response, and to send someone experienced without delay.
Once the representative arrives on site, ask for identification; a business card with a license number is preferred. You want to see if this person is a licensed insurance adjuster – and keep this contact information at your finger tips.
In Florida, we know that certain insurance companies do not send licensed adjusters out on the claim, and one company sends out a representative who is not an adjuster, but if pressed offers to have an adjuster available via Skype. This is outrageous and an improper way for an insurance company to investigate a claim. A licensed adjuster should be inspecting all losses.
Often times the adjuster coming to your property works for a third party; this means that the adjuster holds an independent adjuster’s license. Don’t assume that someone who introduces themselves as an independent adjuster is unbiased. I have discussed the different kinds of adjusters in my post, North Carolina Coverage: Understanding the Different Types of Adjusters.
Having an independent license number means that the adjuster can work for many different insurance companies at the same time and is not tied to just one particular company.
Remember only a public adjuster represents and advocates for you the policyholder.
Next, it is important to let the insurance company onto the property to investigate. The insurance company will ask you for the areas that concern you, and you should show them your concerns but then the insurance adjuster should do his own investigation and scope the property and the damage. You should not have to insist the insurance representative perform a thorough inspection, but it will behoove you to tell the adjuster that you are not sure of the extent of the damage and explain that is why you contacted them to evaluate the claim. Allow access and encourage the insurance company representative to inspect every part of the property, whether you see obvious damage or not.
Unfortunately, it is becoming prevalent for adjusters to only assess the areas specifically pointed out to them by the insured and to deny that they saw other damage to the building. This is often the point in the claim when policyholders becomes so frustrated that they inquire about hiring their own public insurance adjusters, someone who does know about building damage, construction build back techniques, and can fully scope a claim to return the property back to its pre-loss condition, or they look into hiring an attorney who will help.
Just this week, in a deposition, I had an adjuster holding a CPCU insurance designation testify that he only looked at the areas of damage the policyholder showed him because that was all the insured was claiming, and essentially that was all he needed to do during his inspection. This type of inadequate adjustment is a power-hold by the insurance company. Even a sophisticated or savvy business person is not a damage investigator but that’s okay because insurance companies are supposed to know damage. The policyholders, the everyday people our firm represents, are not trained in the business of adjusting and investigating claims. Yes, they should know their properties, but the extent of damage caused by a hurricane, hail storm, fire, or even a failed garbage disposal, is often complicated and requires evaluations by trained professionals. Unfortunately, the supposed trained professionals are now admitting that they do not LOOK for DAMAGE!
What is an insured to do in response? Hire help. Consider hiring a trained, professional adjuster – who works exclusively for policyholders – to meet the insurance company at the loss, show them the damage, and explain the way the damage needs to be addressed in order to return the property to its pre-loss condition.
Defense counsel in North Carolina even acknowledges this is wrong. Check out William E. Anderson’s article, Tips to Adjusters for Avoiding Bad Faith Claims:
TIP # 7: DON’T DENY A CLAIM WITHOUT INVESTIGATING IT
Prior to denying the insured’s claim, the insurer generally has a duty to investigate
the claim. Pursuant to Chapter 58, the insurer may not “Failto adopt and implement
reasonable standards for the prompt investigation of claims arising under insurance
policies” and “Refus[e] to pay claims without conducting a reasonable investigation
based upon all available information.” See G.S. § 58-63-15(11)(c), (d). Thus, the insurer may not simply place the entire burden of establishing the claim on the insured.
The adjuster’s investigation may include interviewing the insured, interviewing
witnesses, visiting the site of the loss, examining photographs and other reports, and
using experts and attorneys for guidance and input.
Where the adjuster denies a claim, he or she should always invite the insured to
submit any additional documentation or evidence relevant to the claim. This tends to
make a favorable “paper trail.” If the insured does provide additional information, then
of course you should review that additional information; the adjuster’s promise to review
additional information should not be hollow.
Apparently, not all adjusters are listening to their counsel.
I had a call from policyholder yesterday who found our blog and called looking for more information about hiring a public adjuster in another state. Together, we reviewed the NAPIA website for her particular area. She is now going to call several of those adjusters to interview them and ask about their credentials and how they can assist her and her family.
If you feel that your insurance company is not properly handing your loss, the worst thing you can do is wait, hope, and wish. You need to call to get help, ask questions, and take notes – including the names and license numbers of every person you encounter on the phone and in person.