U.S. News and World Report is trying to spread the news about the work of public insurance adjusters. The situation you, the policyholder, are submerged into after a devastating loss is new and unfamiliar territory. Your world has been turned upside down and you have more worries and questions than anything else.
Insurance adjusters who only assist the policyholder and work for insureds directly are there to help, but so many people don’t even know that there is a professional of this kind that can offer experience and guidance in these situations.
When we have health problems we know about seeking help from those who offer medical treatment, when we have financial problems, we know where to turn. But with insurance, many people assume they will just have their agent to help them, or they rely solely on the adjuster who comes to the house from the insurance company to be in their corner.
Watch a few insurance commercials and it is no wonder that is the mindset of policyholders. But U.S. News and World Report cautions us that we need to advocate to make sure property damage claims are handled properly. Unlike the commercials, getting your claim resolved is not MAGIC, Jimmy.
Amy Bach of United policyholders and public adjuster Chris Aldric, were interviewed for the article. From the insurance side, Loretta Worters, vice president of the Insurance Information Institute, a nonprofit sponsored by the insurance industry also gave quotes.
‘We don’t want the people to be taken advantage of by the insurance companies,’ Aldrich says. ‘Your loss at your own home or business is personal. Insurance companies look at this as a business.’
While the adjuster sent by the insurance company works for the company, a public adjuster works for you, so he or she will analyze your policy, make your claim and sometimes even help you secure your home, such as covering broken windows or holes in the roof, or find temporary housing.
Chris is an adjuster with Andrew K. Knox and Company in Toms River, New Jersey. His firm is very familiar with the terrible claims handling that was done after Superstorm Sandy devastated the area.
Here are the tips from U.S. News and World Report. I like the tips and think they are worth sharing but had to add in some additional comments that come from handling other catastrophic claims—and by no means is this an “all you have to do” list.
1. Know what your policy covers. "Every insurance policy is different in regards to coverage," Aldrich says. Deductibles may not be the same for all types of claims. Does your policy pay for the actual cash value of your home and contents, or do you have replacement cost coverage, which pays the cost of buying new stuff or rebuilding your house, with some limitations? You may need to add what’s called ordinance or law coverage to pay for upgrades that are required by building codes. "It’s well worth paying for," Bach says. "Most of the time if you have substantial damage, there are going to be upgrades that you’ll need to make."
2. Document your loss. That could mean providing photos or video showing the damaged items or producing a copy of a household inventory or receipts. "What a lot of people don’t understand is that the burden of proof is on you, as the insured," Aldrich says. "You have to produce a document, produce an estimate."
Comment: **It should be noted that the insurance company has burdens too but you will be a better position if you have your own file on this claim that can illustrate what happened. You have to have some evidence because you are up against a large corporation that has no feelings.**
3. Protect your home from further damage. If your roof is blown off or your windows are broken, the insurance company expects you to secure those openings before more damage occurs, which may not be covered. "Some companies may look at it as negligence if you don’t take precautions," Worters says.
Comment: ** Remember these can be temporary and emergency repairs, board up or tarps.**
4. Negotiate if you don’t like the initial offer. Get estimates from multiple contractors and send them to the insurance company with your request for reconsideration. "Insurance companies are relying too heavily on computer programs to estimate repair costs," Bach says. "You can expect that there will be a gap between the amount the insurance company says it will cost to make repairs and the estimates you get from local contractors."
Comment: **This is very important and is almost a guarantee that you will negotiate unless you are paid for a total loss. And even if you are being paid “limits”, your policy may have endorsements that offer more funds. Never forget the insurance company is in business to make money. It are a corporation that has annual profits that might make your head spin. We are committed to pressing the insurance companies for our policyholders to make sure the policy is honored. Don’t assume the check made to you is complete or final, and use caution before you cash it!**
5. Know that the money won’t necessarily go to you. Most insurance checks are written to the company holding your mortgage, which then has to send the money to you.
Comment: **However, make sure you are named on the proceeds and note that this does not apply for all coverages.**
6. Hire licensed contractors. Get at least three estimates, and check references, licenses and insurance. Never hire a contractor who says he was simply "in the neighborhood." After a disaster, reputable contractors don’t need to solicit business, and those who go door to door are often unlicensed at best and scammers at worst.
Comment: **This is a helpful tip that may be most effective at different junctures depending on the claim. Once you are rebuilding, this is a definite. During the claim process finding three estimates may be unnecessary when one quality estimate may be more effective and time saving**
7. Vet the contractors recommended by your insurance company. In some cases, insurance companies have a list of contractors who have agreed to do the work for what the company will pay. Ask about warranties, references, licenses and insurance. "Sometimes these people that they bring in are good and sometimes they’re not," Bach says. If you don’t like those contractors, you can choose your own.
Comment: **I would go to far as to say “PROCEED WITH CAUTION” when it comes to vendors. Why does the insurance company want you to use its buddy? The reason is obviously for financial savings and this could impact the quality or scope of work.**
8. Consider hiring a public adjuster. If you’d rather let someone else handle your claim, or if you feel the amount offered is inadequate, a public adjuster may be able to help. Before you hire a public adjuster, ask for references and check the adjuster out as you would any other contractor. The National Association of Public Insurance Adjusters is a good place to start. "It’s very hard for the average consumer to self-advocate in these situations," Bach says. "It can be challenging to take on an insurance company because they’ve got armies of lawyers on their payrolls."
Comment: **We have blogged about the benefits of public insurance adjusters since Propertyinsurancecoveragelaw.com was started. Each state may also have a professional association of public adjusters that you can research. These experienced advocates will travel to you and help at no out of pocket charge to you in most situations.
9. Beware of scams. Disasters bring scam artists and charlatans out of the woodwork. Be wary of out-of-town roofing companies and contractors who are simply stopping by to solicit your business. Remember that good contractors don’t need to solicit business after a disaster.
Comment: **Trust your gut instinct on this one and follow up with due diligence.**
And finally, I have to add my own tip number 10.
10. Get Solid Legal Advice from Lawyers Dedicated to this Area of the Law. Consult with counsel early and often. Your insurance company is talking to its lawyers frequently after a storm, and you should also know your legal rights. Don’t assume that you can’t afford a lawyer. Often times you can’t afford not to have a lawyer.
Author Teresa Mears is one to follow, she writes about insurance and property regularly.