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organized folder

If you missed it, look back at  mistake #4.

Mistake #5.  It’s understandable that, initially, a property owner is going to be “back on their heels” and a little disorganized after a major loss.   A major fire or tornado is not something you really plan for.  However, a disorganized policyholder will always get less than they are due because it breeds confusion.  A homeowner who has suffered significant damage to their home would be wise to get a 5 or 7 pocket file folder to keep and organize all paper and documents that are related to their claim.   You can get these at any Office Depot, OfficeMax or Staples for $5-$7.   Being organized helps to put you back in control of your claim and your life.   On the other hand, disorganization puts you at distinct disadvantage to the experienced and well-organized adjuster and will cost you a lot of money in the final settlement if you don’t have a method for keeping track of everything.

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If you missed it, look back at  mistake #3.

Mistake #4.  One of the biggest errors I see policyholders make is that they never document the conversations they have with the adjuster.  There is nothing wrong with meeting with the adjuster or talking to him/her on the phone but those conversations ought to always be followed up with an email that briefly summarizes your understanding of the conversation.  Any follow-up email you send ought to ask them to please respond immediately if your understanding is inaccurate.  Attorneys call this a “paper trail”.  The adjuster keeps a log of all activity (phone calls, visits, etc…) related to your claim.  If it’s important for them to properly document your loss from their side of the claim it ought to be doubly important for you, the novice, on your side of the claim.  Documenting your communication with the insurance company’s representative will also send a subtle message to them that you are paying attention to the details. Continue to mistake #5.

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If you missed it, look back at  mistake #2.

Mistake #3.   The formidable task of listing all of the personal property lost in a fire or tornado takes a lot of time and focus to do it right.  My observation over the years as a Tennessee and Kentucky Public Adjuster is that people get worn down (emotionally and physically) during the process of inventorying; and because of that they end up listing just the big stuff and then they “throw in the towel” on the rest.  That’s a very costly mistake.  If you can’t do a comprehensive and detailed list of EVERYTHING lost in the fire (including bobby pins, spatulas, shower curtain rings, etc…) then get some professional help, otherwise you will leave tens of thousands of dollars of your money in the insurance company’s pockets. Continue to mistake #4.

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If you missed it, look back at  mistake #1.

Mistake #2. It’s the insurer’s responsibility to put together an estimate that reflects what it will cost to repair or rebuild your home.  Let them give you their estimate before you show them any bids you have received from other general contractors who are offering to do the work (by the way, NEVER use one of the carrier’s preferred contractors).  It’s a little like playing poker in that you want them to show their cards first.  Once you get their estimate it’s always a prudent idea to get a public adjuster who is very familiar with Xactimate (the primary estimating software used in our industry) to review the insurance company’s numbers before agreeing to anything.  A “second opinion” is very valuable and shouldn’t cost you anything.  We do them all of the time for people who want to know if they are getting everything to which they are entitled. We find that about two-thirds of the estimates we review are incredibly under-valued.  With those kind of odds it’s clear the deck is clearly stacked against you, the policyholder.  A review of their estimate will clearly show the intentions of the carrier with respect to your claim.  The “proof is in the pudding” as we say. Continue to mistake #3.

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After a fire or tornado has damaged your home there seems like an endless list of things that need your time and attention. The sheer number of items that need to be addressed (along with the unfamiliarity of a large insurance claim) often lead the insured to making some avoidable errors.

As a very experienced Kentucky, Mississippi and Tennessee Public Adjuster I would like to share some of the things that in my opinion are the most common mistakes people make in handling their insurance claim. Over the next series of blogs I will reveal the five most common mistakes made by policyholders after a loss so you can make sure not to repeat them yourself.

Did you suffer a loss?  Before reading, check out this post about the 5 things you should do IMMEDIATELY after your loss. Once you’ve been through that, read this and make sure to avoid these common mistakes.

MISTAKE #1. Many policyholders believe that the adjuster assigned to their claim can fairly and equally represent their interests and also that of the adjuster’s employer, the insurance company. That is a near impossibility. Our own judicial system recognizes that one attorney cannot fairly represent both sides in a legal matter. To do so is a violation of the Rules of Professional Responsibility and they could expect to lose their license. It’s called a “conflict of interest”. The same can be said of the adjuster assigned to your claim. That adjuster works for your insurance company, not for you. Remember that, and consider finding someone who has a lot of experience in handling claims for just the policyholder. This will level the playing field. Continue to mistake #2.

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After a major loss, most people experience many of the same emotions they would expect were it a death in the family instead. They feel a sense of disbelief, denial, fear, anger, resignation and depression. Yet in all their emotions, they never count on one thing that frequently happens; “psychological warfare” waged upon them by their insurance company.

The first thing I remind my clients of is that insurance companies are business entities. They are in business to make money. And they are most profitable when they collect premiums from people like you and me and are able to keep that money invested. They are least profitable when catastrophic claims occur and they are forced to pay the policy limits on those claims. So, quite naturally, they have become very good at avoiding the financial pain caused by paying more than they absolutely have to pay.

As a Tennessee public adjuster I advise my clients that their insurance company studies statistics on everything. Statistics on how long it takes someone to call after an auto accident to how likely a person is to die based on their personal habits. In other words, they study people’s behavior and then they use that knowledge to psychologically manage their response to each type of claim.

Did you know that your insurance company knows with statistical certainty, how likely you are to accept their first offer without question? A significant majority of insured’s accept what their insurance company initially offers them without argument. If only 20 percent of those who incur a loss are going to question or argue the size of their settlement, why would the insurance companies pay everything in the first check? They save a tremendous amount of money by paying 60 or 70 percent of what they should, knowing that only a minority of families are going to ask for more money.

One way that insurance companies are able to do this is by understanding human nature. Let’s assume you had a beautiful home and while you were out shopping your ten year old son, playing with fireworks in his bedroom, accidentally burns your house down. It’s unfortunate and it’s clearly accidental but know this: the objective of the adjuster assigned to your claim is to settle the claim to your satisfaction as cheaply as he/she can. It is not their job to volunteer any more than they have to in order to get your claim settled.

So, how does this adjuster save the insurance company money? He will interview you, your son and anyone else relevant to the loss. He will question you about possible motives you might have had to want a fire like that to happen. He will make sure you had no possible motive to want a fire like that to happen. It will feel a lot like you are being investigated for arson or insurance fraud. (Remember, his job is to first make sure that a claim is legitimate and I have no argument with that but there is a limit to that kind of approach). You also need to realize that even though your son didn’t do it on purpose you will, naturally, have a sense of remorse about the negligence that caused the accident. If the insurance adjuster can cause you to feel any insecurity or additional guilt about the claim, he has taken you one step closer to getting you to accept something less than a full settlement. Why? Because you are in a weakened state of mind and less able to resist this kind of tactic.

If I can offer you any advice in how to keep your insurance company from manipulating your emotions it would be this:
1. Insist that your insurance adjuster put everything in writing. Verbal offers are not binding and when it comes to claims, there is often a great deal of difference between what they will say and what they will put into writing.
2. Get the full benefits of what your premiums paid for. You’ve lived up to your end of the deal now it’s time for them to live up to theirs. So don’t allow any insurance adjuster to make you feel guilty about your loss. Get everything you’re entitled to and don’t allow them to psychologically intimidate or pressure you to accept anything less.

Scripture admonishes us in the book of Matthew “to not worry about tomorrow, for tomorrow will worry for itself. Each day has enough trouble of its own” (NIV). But try as we might to not concern ourselves with tomorrow (or next week, or next month etc…) we all seem to possess an innate desire to know what tomorrow holds for us. So, inevitably, whenever I meet an owner who’s suffered significant damage to their property they almost always get around to asking me, “What’s going to happen next?” (This is a reasonable and logical question in light of the fact that they most likely have never been down this road before). While I can’t tell them with certainty how their insurance company is going to treat them or how much of a settlement they will receive I believe that has an experienced Tennessee Public Adjuster I can give most people a general idea of what process their claim will go through in the next couple of weeks…a “lay of the land” if you will.

Let’s start with your structure and assume that the peril that inflicted the damage was a fire. Most insurance companies have a rule that the adjuster assigned the claim has to call you within two days of notification of the loss. In that phone conversation he or she will set up a time to meet you at the property so that they can assess the scope and severity of the damage. There is a good probability that part of that meeting will include you giving a recorded statement to the adjuster of the events leading up to, and just after, the fire. This is standard operating procedure and shouldn’t be a cause of worry (plus it’s a condition of the policy for you to have coverage). This meeting normally takes place within five days of the loss depending on the adjuster’s workload.

Once on site you can expect that the adjuster will take numerous pictures of the property both inside and out. If they are trained in estimating they may even decide to start taking measurements of the damaged areas. The adjuster will take the information he gathers at the site and go back to his office and begin inputting the data into the software program (they are probably using a program called Xactimate). The larger the fire the longer it will take for them to input the data. The last question you should ask the adjuster before he leaves is: “When can I expect to receive my estimate”. Write that date down and let them see you do it. (If they aren’t going to begin formally detailing and estimating the damage at that first meeting then they will normally return in a day or two do it OR they will schedule one of their estimators to come out on site to start the estimating process. Just get an idea as to when this will happen and make note of it).

Seldom do they get the estimate to you on the date they say they will. Some of the reasons are legitimate and some are very questionable but let’s first talk about the valid things that could delay them getting back to you with your estimate. I am not an apologist for insurance adjusters but in all fairness there are things that will cause the adjuster to take longer than expected and, as I am also a Kentucky Public Adjuster, I find this holds just as true for Kentucky residents as well as Tennessee property owners. Some of those things are:
1. Their manager unexpectedly added more claims files to their caseload.
2. A catastrophe, such as a tornado or hurricane, has hit the area and hundreds if not thousands of pieces of property have been damaged. Their claim files have now just increased by five or ten fold. Two thirds of the tornados in the south occur in March, April and May. If you have a fire loss during this period and a tornado occurs around the time of your loss you can expect it to take longer for them to come up with an estimate than in August, for example.
3. The adjuster is taking a vacation the week following their initial visit (which will put them even further behind because new claims will have been added to their workload while they were taking some time off). Adjusters have families too and they want to take their spouse and children on spring break and on summer vacations like many other families.
4. Thanksgiving, Christmas and New Years. From Thanksgiving through the beginning of the start of the New Year I always see the speed upon which a claim is processed drop by about 50%. The adjusters have vacation time that they have earned that if they don’t take by the end of the calendar year they lose. This 5-6 week stretch is a popular time for staff adjusters, estimators and claim reps (the people who work in the office and you talk to on the phone) to take time off that they are entitled to. This means your claim is not getting much attention. You will need to be patient during this stretch of time.
5. Winter. There are twice as many fires per month in December, January and February as there are in July, August and September (thus a greater workload for the adjuster). So if you have a fire or burst water lines in these months you can expect to wait longer for them to resolve your claim than most other months.

The fact that there are some legitimate reasons for why your claim is not being handled as expeditiously as it should doesn’t mean that you shouldn’t be actively engaged in regular communication and follow-up with your adjuster. The old adage, “the squeaky wheel gets the oil”, still holds true.

In my continuance of this blog (Part II) we’ll discuss what’s going on at the home office and if there are things there that could be holding things up.

Have you lost your home to a fire? Or, a tornado? Both are tragic events that can leave any homeowner reeling and wondering what to do. After calling in your loss to the claims department of your insurance company you can normally expect to hear from the adjuster assigned to your claim within 48 hrs, so let’s talk a little about that initial phone conversation.

The adjuster will be your key contact throughout the life of your claim. As a Tennessee Public Adjuster here are some questions I would recommend you consider asking in that first call with your adjuster:

1) “Mr. Adjuster, would you mind repeating your name for me and spelling it. I would also appreciate getting the following information from you such as your email address and the following numbers (office, fax and cell phone)”.

Make sure you get all this information on your first call. They might be hesitant but, trust me, you need all of this. Don’t let them talk you out of it. Why? Because communication is paramount and you do not want your adjuster finding any way to avoid talking to you. Claims always take longer than you hope for…and this is most certainly true if you cannot locate your adjuster.

2) “Mr. Adjuster…can you bring me a copy of my policy when we first meet over at the property? Oh, you can’t? Then please order me a complete copy right away. When can I expect it?”

Believe me when I say you need the whole policy. Within the policy is where you find out all of the information on the types of coverages and benefits you are entitled too. Many times after reading the policy I am able to reveal to homeowners that there are additional benefits within their policy that have for some reason not been mentioned by the adjuster to the property owner.

3) “Mr. Adjuster…can you please bring me a copy of my “declarations page” (or “dec” page as we in the industry call it)?”

The “dec” page is a one page summary of your basic coverages and it tells you the policy limits and types of coverage that are specific to your home, business and personal property. The limits on your policy increase a little bit every year so make sure you get a current “dec” page.

4) “What benefits are available to me and my family under the Additional Living Expense coverage of my policy?”

This coverage (which is frequently referred to as ALE) is designed to help you pay for any “new” expenses that you are, or will be, incurring due to the damage to your home. Some of these ALE expenses are for things like renting another house, staying at a motel, higher cell phone bills, longer distances to drive, etc). Ninety-nine percent of homeowners have this coverage. (I will make a list, in another blog, of many of the other items that fit into this category and should be paid for out of your policy).

5) “I understand that insurance companies frequently will give their policyholders an “advance” on their settlement. We are in need of clothes and other necessities so I would appreciate you bringing a check to help us through the first couple of weeks. How much do you normally advance people?”

This check is usually handed over to the policyholder on the first visit from the adjuster and is normally between $1,000 and $10,000. It goes to help you purchase some clothes, replace some lost medicines, pay for a hotel or purchase whatever else is now necessary. Keep in mind, this check can be spent on anything you choose but spend it wisely. This check is taken out of the coverage your policy has allotted for contents and will be deducted from the final settlement check on your personal property (except for those purchases directly related to Additional Living Expenses). So make sure you hold unto all receipts and keep good records and differentiate between the money you spend on new contents and the money you spend for Additional Living Expenses.

Well, there you have it. Not an exhaustive list of questions to ask your adjuster when you first visit over the phone but a good start. Here’s the secret: the more you can project to the adjuster that you have a working knowledge of the claims process the greater the probability that you will be treated fairly. Knowledge is power!

You may or may not like your adjuster but you should be ready to be the squeaky wheel with them. And it’s not grease you’re wanting but attention, assistance, good communication and, finally, a fair settlement.

Alabama Public Adjusters

June 1st, 2011

With forty-four states providing for the licensing and regulation of public adjusters why has “The Cotton State” not allowed people in our profession to work as an Alabama Public Adjuster… and doesn’t this increase the potential for a bad insurance settlement for the citizens of Alabama? It’s a good question and a fair one at that.

While it may be unfortunate that a “public adjuster” cannot help someone with their claim it really does not matter. Why? Because every policy that I’ve read in Alabama includes a provision (written into the policy by the insurance company I might add) that provides a clearly defined process for resolving issues concerning “how much” the insurance company should pay for the repairs or reconstruction of a property they are insuring.

This process is called appraisal and is similar to mediation and arbitration in that it is an alternative dispute resolution format put in place to prevent expensive and time consuming lawsuits. The appraisal clause was inserted into policies years ago because no one thought it wise to leave filing a lawsuit as the only option for a policyholder who has received a low settlement offer.

Brian Goodman, Esq. and counsel for The National Association of Public Insurance Adjusters has been working with the powers-that-be in Alabama to come up with some legislation that would model the law that the National Association of Insurance Commissioners recommends for the licensing and regulation of public adjusting. This could all happen sooner rather than later but there is no definite timetable as of now.

But, again, whether public adjusting is allowed in Alabama or not the people of that fine state still have a very effective tool already built-in to their policies that can remedy the issues surrounding a low settlement offer… and it’s called appraisal.

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