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Understanding What Your Insurance Policy Says

Most people have some type of insurance coverage – homeowners, health, auto, life, etc.  However, most people are not able to fully interpret the language in an insurance policy and therefore don’t always have a full understanding of whether they are adequately covered or not.  This is especially true when it comes to homeowners policies or commercial property coverage.  As a result, lots of folks may find themselves thinking they had coverage that they don’t or may even find themselves to be underinsured and didn’t realize this until it’s too late.  Do you understand what your insurance policy actually says?

The purpose of insurance is to reduce your exposure to the effects of particular risks.  Insurance serves as a means to indemnify you after a loss and put your property back together to it’s pre-occurrence condition without costing you anything out-of-pocket other than any applicable deductible.  Not having insurance at all is taking a huge gamble and hoping that things work out for the best.

Having a full understanding of your policy language and how that relates to your coverage is of the utmost importance.  Some insurance companies have gotten sneaky with their policy language and have begun to include language that protects them instead of you the policyholder.  This is particularly eye opening when a policy includes language specifically concerning the discontinuation of products or materials such as shingles, siding, brick, and tiles and flooring.  This becomes an important policy exclusion to coverage when you find that you have damage to one room of your home and the same materials (flooring and paint) continue into the next room.  Now there is no match of the materials and the insurance company won’t pay for the undamaged room so now you’re in a bind.

Standard policy language allows for a full replacement rather than repair when the product can no longer be purchased and has been discontinued or is otherwise out of date.  Some policies now include language specifically excluding this issue and stating that they “are not required nor do they guarantee a match of materials” [policy language taken from a Homesite Insurance homeowner’s policy].  They state further that “the repair is intended to return the damaged property to a pre-loss condition without regard to cosmetic appearance,” meaning that materials used to make the repair “may vary in color, shading, dimensions, pattern, and composition” [emphasis added].  This goes directly against the purpose of insurance at a very basic level which is to return your property to the pre-loss condition which should absolutely include the matching of materials.

Another concern that people don’t fully understand is being underinsured.  This occurs when someone either doesn’t realize the full value of the property being insured or possibly are mortgage free and not required to have a certain level of coverage. Shortcuts are made to save money by lowering coverage thereby saving on premiums, hoping it won’t be needed (taking on the risk). If or when damage occurs and devastation hits, it’s too late.

Make sure that you understand what your policy says and that you have the coverage you need to be made whole again.  There are professionals who can help you with this.

The Danger and Disruption a Fire Insurance Claim Causes

The danger and disruption cause by a fire is enormous.  Losses from fire can range from a total loss to a simple clean up of a few walls and everything in between. Each fire claim is very different so hopefully we can help you understand how to speak the lingo and how to set your expectations when dealing with the insurance company.

First, is it safe to enter the home? Not usually.

Assuming that the fire is minimal (in regards to safety), the fire department typically soaks the area when putting out the fire. This creates a potential hazard of wet sheet rock falling from the ceiling. There is also likely broken glass on the floor in addition to other tripping hazards due to the firefighters moving things around in order to put the fire out. In addition, the air is now toxic.

What should I take out of house immediately after the fire?

The insurance company may ask you to leave things alone until they send someone for an inspection. Use common sense and remove only what you cannot live without. This means birth certificates and important documents, family heirlooms and memorabilia, etc. It’s okay to remove these items because otherwise you run the risk of things being destroyed by mold in just a few days. There is also the risk of smoke or the possibility of your property being broken into while unoccupied. These items are covered by your insurance, but money won’t replace a family heirloom or memory.

Be sure to take photos of every room, panoramic and up close, before you remove or move anything. Those precious items then should be cleaned and dried by a professional because any moisture could lead to mold. Also, smoke is acidic and can slowly eat away at things. Do not procrastinate when having items cleaned. Call a contents restoration company right away for those items.

Solicitors have arrived. What do I do?

Chances are, especially if you live in a major city, you will be solicited by restoration contractors, cleaning companies, and public adjusters. All of these professionals add value to a claim. However, each of these groups will likely give you different advice because of their financial interests in the job. A contractor wants the insurance company to account for as much replacement of the structure as possible and doesn’t benefit from the contents portion of the claim at all. On the other hand, a cleaning/restoration company will want to clean and salvage as much as possible on contents and structure. A public adjuster will be interested in pursuing and obtaining the maximum settlement for the entire claim – structure and contents. Therefore, because of these different financial interests, you can see how each group will be jockeying for the ball.

A lot of people prefer not to be bothered by solicitors, especially after sustaining such a catastrophic event. There is a silver lining though. These professionals all have a good perspective and valuable opinion when it comes to the extent of damages sustained. Unlike some fly-by-night roofer that chases hail storms, you should recognize the value in these claim professionals after a simple walk-through listening to their recommendations. Whether you choose to hire or not, definitely consider the source of the information received prior to signing anything. Before hiring anyone, do your homework, call references, and make sure they are easy to contact.

Should I use the insurance company’s preferred contractor?

Chances are the insurance company will send out a “preferred” contractor or cleaning company immediately after the claim is reported. Even though these companies are “preferred,” don’t be fooled and don’t assume that they are the best choice just because your insurance company trusts them. Choosing to use a preferred cleaning company or contractor recommended by the insurance carrier has its pros and cons.

The advantage of using a preferred contractor or cleaning company is they don’t want you to complain to the insurance company about the work.  Therefore, you should expect to receive good work based on the scope that the insurance company approved. This is best case scenario.

On the other hand, you must consider where the financial interest lies, which most likely is with the insurance company. Chances are they will figure out how to work inside the adjuster’s scope of loss in hopes of cruising under the radar, which solidifies their relationship with the insurance company and leads to future jobs. When you allow a contractor or cleaning company chosen by the insurance company to perform the repairs, your negotiating power is all but taken from you. The adjuster will then be able to use that contractor or cleaning company as their “consultant” to determine the scope of repairs and pricing, and that is likely what you will be stuck with.

Furthermore, if you allow the insurance company’s cleaning company to get to work right away, its likely, depending on the severity of the loss, the money will be spent attempting to clean items that are not cleanable and really need to be replaced. If your claim, structure or contents, reaches your policy limit, those wasted funds spent on attempted cleaning will significantly affect the amount you are left with to rebuild your home and replace your lifetime of belongings.

In summary, if the insurance adjuster is giving away the farm, the preferred contractor might be a good match for you. But, if there are things the contractor and the adjuster are not wanting to pay for, or if you don’t think you are being treated fairly, a preferred contractor is not a good match. Whatever you decide, don’t make any hasty decisions. Take your time, do your homework, and get a feel for the people and/or companies you are dealing with, and make the decision that you are most comfortable with.

When can I start disposing of the contents?

You really should wait until the insurance adjuster arrives to inspect so that you have a better feeling for what items may be in dispute. Many times the adjuster will attempt to salvage as much of the contents as possible and bring in a cleaning company to pack them out and clean them. When you walk through the house with the insurance adjuster and their recommended cleaning company, stay with them. Make certain that they are not attempting to salvage and clean items that are just not cleanable. This includes sofas, beds, clothing, inexpensive items like stuffed animals, etc. It is important to remember that the cleaning company gets paid to clean which is less expensive than the alternative – replacement. If you don’t have a claim professional on your side, be firm with what you believe is not salvageable. After you and the insurance adjuster have determined what is non-salvageable, the adjuster will either have someone price the non-salvageable items or request that you document the items and price them. As with all insurance claims, do not remove anything from the home until you have first taken pictures. This is the single most important task when it comes to your contents coverage. It is important to take both a photo of the entire room as it stands and individual photos of each and every item in the room. Be sure to open cabinets and photograph items damaged. Once the picture taking is complete, use common sense when disposing of any non-salvageable items. If you hire a contents inventory company or a public adjuster, it is their job to document each of these items.

What can I expect from my insurance adjuster meeting?

Assuming you get an experienced insurance adjuster, you should consider them an artist who is painting the picture of what should be approved on your claim. If they are good at painting that picture, the claim should be approved based on those findings. A seasoned insurance adjuster will typically have a certain way they conduct an inspection. Usually, this includes going from room to room through the home explaining what their recommendation will be and why. You most likely will not be in agreement with everything, so take notes. Also, it is a possibility that the adjuster may get some friction from his file examiner concerning some of the items that he agrees need to be replaced during his inspection, so be sure and note the items that the adjuster has agreed to account for as well. If you hire a public adjuster, he or she can handle all of this for you.

Where can I expect to get resistance from my insurance adjuster?

When an object actually sustains a burn, there is rarely a dispute over paying for it. However, when you experience smoke damage instead of an obvious burn, it becomes an area where a professional is crucial. This is a “hot topic ” and a grey area that requires an expert. For example, if the fire was contained to one room, but smoked out the entire house, you may need to replace the windows because seals may have melted causing them to fog in the future. Smoke can also penetrate the moving parts of the window.

Insurance adjusters usually will do their best on the obvious things – like replacement of sheet rock, insulation, and painted surfaces. But smoke also discolors things in your home that they may suggest salvaging. It can attach to duct work, etch metal and granite, and even cause electrical issues. Be sure to have a professional on your side evaluate these areas so that they can be properly addressed with the adjuster.

How do I resolve these issues?

It is important to consult a claim professional right away who specializes in smoke damage. If your desire a settlement based on a quality, professional report, you should can hire your own public adjuster to handle these issues and perfect the claim. It is best to consult with a claim professional as quickly as possible following the loss so that they can be one step ahead and set the tone for the entire claim.

How much work is involved in handling the claim myself?

If you are set on completing your own contents inventory, you should consider that it will take approximately five (5) minutes per item to complete. This time calculation is based upon completing a full description and pricing of ALL items, and including a web link for all of the more expensive items and/or specialty items. The average home can expect to inventory 1,000-3,000 items. With respect to the structure, the most difficult task is contacting a qualified person to assess the smoke damage and submit a report and supporting estimate to the insurance adjuster. If there are multiple areas of the claim in dispute, there most likely will also be multiple people to coordinate with to evaluate the damages. It can be a full time job.

What is covered under my policy?

If you are adequately insured, there should be enough coverage for everything you own (with a few exclusions) and living expenses while displaced from your home during repairs. Fire claims are a nightmare, but if properly insured and if you are able to reach a reasonable settlement with the insurance adjuster, you should only be out-of-pocket the deductible.

How long will it be before I get my check?

You can request an advance payment immediately. Insurance claims can sometimes feel like you’re shooting at a moving target, especially if you’re trying to handle everything yourself. However, best case scenario, by hiring a claim professional to represent your interest, you could get a thorough initial adjustment and possibly receive a structure payment in as little as a month and possibly receive the contents payment in two months. However, when there are areas of dispute, it will be necessary to budget additional time to get these issues resolved. “It’s best to lead than follow.” So, for time sake, be proactive immediately after a loss and map out a plan.

I fixed my house, but what if I file a claim again?

If you have had a prior claim, you should still be covered on everything that you replaced. It is highly recommended that you keep really good records (i.e. receipts, pictures while the construction is underway, etc.), especially if you choose to replace items that were damaged with new items that are exactly the same or very similar.

Keep your head up!

Handling an insurance claim can be very stressful and the financial impact may be crippling if not managed correctly. Stay organized and surround yourself with good people who can guide you through this tragic event.

Cleaning Up Your Contents After a Hurricane

‘Tis the season to be jolly and deck the halls with Christmas joy. Some may find that difficult this year as they are still in the middle of cleanup and restoration as a result of the 2017 Hurricane Season. This season was exceptionally tough on folks in Texas, Florida, Puerto Rico and the Virgin Islands.

Some of the issues in Texas involve the damage and contamination caused by the “black” water that destroyed their contents. CAT adjusters flooded the area immediately with the logic and advice that these items might be cleaned, particularly the pots, pans, dishes and glassware. We came across an article actually written by a cleaning company that stated the only thing that could be cleaned to a safe usable level after this contamination is the glassware. This coming from a company who earns its’ living cleaning items. They are referring to contents that were sitting in flood waters, waters contaminated by sewage and chemicals.

If you have ever personally experienced a flood such as the one caused by Hurricane Harvey, one thing you will remember for a long time is the smell. One whiff of this and there’s no way you would agree to the cleaning of the pots, pans, dishes or glassware. We have insurance to replace these items when damaged. This would certainly be considered damage and not something you can just wash off and continue to use. The insurance companies would like for you to clean and disinfect these items, they say just immerse these items in boiling water for 10 minutes to disinfect and sanitize. We say I don’t think so!

In Florida, those affected by Hurricane Irma saw much different damage from powerful winds rather than flood. Those folks are battling the storm created opening language in the policies and other issues related to wind. However, their biggest battle has been the stortage of insurance adjusters created by the back-to-back storms. Some three months after the storm and some policyholders have still not seen an adjuster and some still haven’t received a penny from their insurance company. Demolition and repairs are already underway because they must protect their property from further damage while they wait for their claim to be handled. This is a struggle since there is no definite timeline on the payment of the insurance proceeds. Fortunately, some contractors have begun work knowing that payment is going to be delayed but have still been willing to help these people out.

If you find yourself in need of help or thinking that maybe your claim has come up short, it is easy to find professional help. A simple review of your claim and/or estimate by a licensed public adjuster may shed some light on the process and where those shortfalls are and help you reach full resolution concerning your claim.

Turn Around Your Flood Claim With Professional Help

A flood is never fun to deal with. When it comes to insurance claims, the worst type of claim you can have is a flood claim. Flooding causes a devastating amount of damage, compounded by the fact that you have limited coverage and it can take months to settle a claim. The following is a breakdown based upon my experience on what to expect during a typical flood claim.

How bad is the water itself?

The flood water is typically category 3 water, also referred to as “black water.” Category 3 water can include all kinds of contaminants such as gasoline, oils, sewage, other chemicals and harmful bacteria, salt (if you are on or near the ocean), etc. It is important that you not come in contact with this water or rebuild your home without first cleaning and treating all affected areas of the property that is not being removed or disposed of.

If flood waters touch it, is it damaged? Yes and no.

Any building components that absorbs water, building materials that cannot be cleaned, and electrical components are usually not salvageable. With respect to contents, simply put, don’t even attempt to clean category 3 water from clothing or soft goods because there are oils and chemicals that may never come out.

When should I start tearing out and disposing of things?

Do not remove anything from the home until you have taken an adequate number of photographs. When you believe that enough photos have been taken, take some more. This is the single most important task relating to contents coverage. First, take photographs of each room attempting to capture as much of the room as possible as is. Next take pictures of each item in each room where it sits, as well as an up close of the water line or visible water damage. Also make sure to open cabinets and photograph inside.

After you take photographs, be conservative when disposing of what you believe to be non-salvageable items. However, it is important to remove all non-salvageable contents, drywall, carpeting, insulation, etc., from the home as soon as you can once the flood water recedes. Leaving these items increases the risk of mold developing in the house. This can cause a HUGE problem as it can spread quickly and mold is not typically covered under a flood policy.

I cannot emphasize enough the impact of taking photos after a flood. The difference here is not just a few dollars. You risk full denial of contents if you don’t have photographs, including paper towels, toiletries, and socks. On these types of items, lay the items out and take close-up photos of each item. Considering the more expensive items like furniture, electronics, and appliances, be sure to take pictures including the brand, model number, and serial number. If there isn’t a brand, make sure the photo depicts the quality and any special features. These details will be the difference between the insurance adjuster accounting for a $400 washing machine or a $2,000 washing machine. Pictures are everything in a flood claim!

What is covered under my flood policy?

There are a lot of variables when it comes to the structure coverage – base flood elevation, the year the house was built or last renovated, flood zones, primary residency, basements, coinsurance, just to name a few. Assuming your house is properly insured, is your primary residence, has a slab foundation, does not have a basement, and is above the base flood elevation, you are basically covered for any structural item inside the exterior walls of the home.

It is necessary to purchase both building and contents coverage. The contents policy will cover most items inside the home or garage or any other anchored, fully enclosed building on the property, up to the contents policy limit. These do not include a swimming pool, fence, deck, barbeque grill, or trampoline.

Detached garages are covered, but only up to 10% of your structure policy limit and also falls within the structure limit of the policy, not in addition to. There is an exclusion of coverage if the detached garage includes an apartment above the garage, a bedroom in the back of the garage, or any other area that is used as living space. Flood policies also do not cover sheds or guest houses, unless separately insured.

Will my additional living expenses be covered?

Flood policies generally do not cover the costs of temporary living during the time that the property is uninhabitable. This can be the source of the most financial stress for most flood victims.

What can I expect from my adjuster meeting?

Assuming you get an experienced flood adjuster, they should inform you that they do not actually have any paying authority, but rather will make recommendations based on findings. A flood adjuster is the artist that will be painting the picture on what should be approved on the claim. If he is good at painting that picture, the claim should be approved based on those findings. A seasoned adjuster will typically have a certain way to conduct inspections. They will typically lead you room-by-room explaining what they are recommending and why (taking measurements, pictures, and thorough notes). You more than likely will not agree with everything they want to salvage, so be sure to take good notes on the items you are in disagreement.

What things will the adjuster disagree with?

These are the “hot topic” items. Items that typically get the most resistance from insurance adjusters include countertops, tile flooring, bathtubs, toilets, faucets, brick walls, wiring, windows, A/C units, hardwood furniture, and other expensive content items. Ask your insurance adjuster specifically about each of these items during your inspection and take notes.

How do I resolve these issues?

Assuming pictures have been taken of everything, resolving any issues could be much easier. However, it is important to hire an expert to document the areas you are disputing. Hiring a public adjuster to manage the entire claim for you is usually the best option.

How do I prepare my contents inventory?

On average, you can budget roughly 5 minutes per item to write up a thorough contents inventory. For each item, the adjuster will need the following information: location (room), description, brand/make, model number, serial number, age, condition, quantity, replacement price, and price verification (link to website to purchase item, original receipt, etc.). It is also a good idea to note which picture corresponds with each item on the inventory so that the insurance adjuster can easily find items.

Take the time to account for each and every item correctly and with as much detail as possible to insure the contents portion of the claim is paid quickly and undisputed. Remember that you are disposing of many of the non-salvageable contents once you have taken your pictures, therefore it is necessary to gather as much information as possible on each item. There is no going back once it is thrown into the pile on the curb.

Do I sign the proof of loss if I disagree with the adjuster?

Most seasoned flood adjusters or public adjusters will advise you to sign the proof of loss even if you are in disagreement because you are under a strict time limit to do so. You WILL NOT get paid until the signed proof of loss is submitted. Sign the proof of loss to receive payment on what the insurance adjuster has agreed (the undisputed amount). Then proceed by reopening the claim to request supplemental payment on the issues remaining in dispute.

How long will it be before I get my check?

Request an advance payment concerning both your building and contents coverages. Assuming there are no coverage issues to be determined, the adjuster should be able to get you an advance payment quickly.

Use the advance payments wisely because you most likely will not see another payment for months. Typically budget 3-4 months for the initial claim amount to be issued. Reopening the claim for supplementing the differences could add another few months. This is a normal flood claim and unfortunately there is nothing you can do to expedite the process.

I repaired my property, but what if it floods again?

There is coverage on everything which was replaced considering proof of replacement can be provided. If you had 3 feet of flood water in your home, the adjuster will not assume that you replaced the drywall, you will be required to provide proof. Therefore, it is important to keep good records of all receipts, as well as date-stamped photographs while repair and reconstruction is underway (in case you go back with items that are very similar to what you had originally). Store these documents in a safe place (or other location) so that the next incident doesn’t destroy these records).

Keep your head up.

Handling a flood claim is very stressful and the financial impact can be crippling if the claim is not managed properly. Keep your head up! Have a plan, stay organized, and surround yourself with good people who can guide you through this tragedy.

Click here for a copy of the National Flood Insurance Program Dwelling Form Standard Insurance Policy, October 2015.

http://www.fema.gov/media-library-data/1449522308118-6752c210f65aed326a9ddf4a0ddaca1f/F-122_Dwelling_SFIP_102015.pdf

— by Roy Young, PA

Shortage of Insurance Adjusters in Wake of Hurricanes Harvey and Irma

Hurricane season is at its peak and folks are still in recovery mode following the devastation caused by Hurricanes Harvey and Irma. Now, there appears to be a shortage of insurance adjusters, especially in Florida where basically policyholders are having to wait because the insurance adjusters are all in Houston because Harvey was the first to hit.

Insurance companies are advertising for adjusters and trying to build up their rosters to cover the areas hit the hardest. Simply put, they are using anyone with a pulse to help out because of the high volume of claims being reported right now. Property owners are the ones who will be left on the short end of the stick as inspections are being performed by people who just don’t have the experience or expertise to properly inspect and estimate the claim. This leaves huge holes in the estimate, huge discrepancies in the claim value, and makes it even more important for the property owners to hire their own claim professional and have an expert on their side.

There are lots of numbers and terms to get through when trying to figure out how much your insurance company is going to pay for your storm damage. Many times, the age, whether it can be repaired, and/or possibly discontinued materials will lead to complete coverage of the damages. In the claim estimates, most discrepancies arise because there are covered components missing in the initial insurance estimate. While is it nice to get your insurance check and begin the repairs, don’t rush to the finish line!

Your insurance carrier has a claim professional representing them – do you? Even if the insurance adjuster is an independent third party, they were still contracted by and work for the insurance company. Insurance companies would further lead you to believe that you, the policyholder, must get your own estimates to help in the negotiation of the claim. You are not an expert. You should hire someone to represent your side in the claim negotiation process.

Don’t be a victim twice, seek professional help with your claim.

https://www.marketplace.org/2017/09/14/business/hurricanes-irma-and-harvey-are-causing-insurance-adjuster-shortage

 

Hurricane Harvey Damages South Texas Crops

Hurricane Harvey made landfall at a really bad time for South Texas farmers. What was looking to be one of the best years ever may now turn into big losses in cotton and rice crops and others. Much of the area is still waiting for the water to go down so they can truly assess the damages. Some say it will take months and possibly a year for the loss totals to come in.

Read more http://at http://www.npr.org/sections/thesalt/2017/09/06/548985185/texas-farmers-suffer-extensive-crop-losses-in-wake-of-harvey

 

Blue Tarp Law Taking Effect in Texas September 1, 2017

With the pounding South Texas has taken for days now thanks to Hurricane Harvey, people are asking how the Blue Tarp Bill (HB 1774), which goes into effect September 1, 2017, is going to impact these claims.

Consumers and business property owners need to be aware that written “notice” of a claim must be sent to the insurer prior to September 1, 2017 to take advantage of the existing 18% interest rate for unlawfully delayed claims. However, this applies to wind claims, not flood claims.

For a better explanation of the changes and how it may affect you or those impacted by Hurricane Harvey, see more at the following.

Hurricane Harvey Insurance Claims Misinformation

 

Storm Created Opening or Wind Driven Rain

Lots of folks don’t quite understand the difference between wind driven rain and a storm created opening. It’s complicated. The difference is usually only learned when someone is affected by either term as the result of a property damage insurance claim.

In 2016, the day after Christmas, the residents of Rowlett, Texas learned exactly what it means to have a storm created opening when their homes and lives were ripped apart by tornadoes and severe storms. The next day it rained, and the day after that it snowed, all the while their homes were still open and exposed to additional damage from the bad weather. Clearly the storm created the openings into their properties, so the insurance companies would be paying for any subsequent damage as well, right?

This question gets more difficult when there is not an obvious storm created opening and the insurance company claims the damages were instead a result of wind driven rain. Some might argue that high winds can also cause a storm created opening causing damage to your roof in less obvious ways, such as lifting a shingle which then causes a leak. While many insurers may attempt to deny those types of insurance claims, one should hire a claim expert (public adjuster) and argue for that coverage.

Wind damaged roof in New Orleans, Louisiana.

A public adjuster handling the claim works closely with the insured to provide the most equitable and prompt settlement possible. They inspect the loss immediately, analyze the damages, assemble claim support, review coverage, and serve the insured, not the insurance company. Just because an insurance company says a claim is closed or has made payment on a claim does not mean that it is finally settled. The insured must be satisfied with the settlement.

Often times insurance adjusters will determine causality based on what is in the best interest of the insurance company they work for. On the other hand, a public adjuster is a representative for the insured. They look for the real cause of damage to your property so that you get what is fair and equitable according to the coverage afforded in your policy. Not that all insurance adjusters are out to get you, but it does make good sense to get a second opinion, especially when it comes to one of your greatest assets – your home.

The Use of Drones and Other Technology for Insurance Claim Handling

There has been lots of recent talk about the testing and progress surrounding the use of drones and other technology by the insurance industry to streamline the claim filing process for the policyholder.  Here are just a few questions and opinions concerning the use of these tools.

  • Does the insurance company’s use of technology (drone and photo app) make the claim filing process easier for the consumer?

The use of technology doesn’t have any effect on making the claim filing process easier for the consumer (policyholder).  The use of certain technology, including drones and photo apps, is a great tool for both the insurance adjuster and public adjuster.  However, it in no way replaces the human aspect of claim inspection and estimating.

  • Should the use of this technology for claims processing be considered by the consumer as a factor when choosing which insurance company to use?

Absolutely not.  The use of drones and other technology by the insurance company could possibly help with the initial inspection and getting the claim started.  It in no way should affect the ultimate outcome or payment of the claim.  Therefore, it should not have any bearing on what insurance company the consumer chooses to go with to insure their property.

  • Will the use of technology streamline the claim filing process? Is that beneficial to the consumer?

To streamline the process would mean cutting valuable corners and missing valuable aspects of the claim.  While this may be a savings to the insurance company, it could be detrimental to the consumer (policyholder) and their claim.  The fact is that the insurance companies are a for profit business.  Therefore, any savings to the company will be pocketed and pad that quarterly financial report.

Summary:

The use of drones and other technology are great tools for both the insurance adjuster and the public adjuster.  However, its use cannot replace the human aspect of the claim.

First, let’s talk about a commercial flat roof and how difficult it can be to see the damage when you are actually on the roof.  Lots of times the adjuster needs to take a core sample to show that water has penetrated the membrane of the commercial roof as a result of the hail damage.  This type of damage is very difficult to pick up with an eye on the roof and therefore certainly would not be exposed from photos taken from a drone.

Next, let’s consider a widespread swath of large hail and whether or not the insurance company could fly a drone over to take pictures of the roofs of an entire neighborhood.  That would be a great start, but it doesn’t take into consideration the additional collateral damages – gutters, AC units, windows and window frames, patio furniture, fencing, etc.  There may also be interior damage from leaks caused as a result of the hail damage.  A drone certainly couldn’t take photos of any interior damage.

Some insurance companies are also utilizing the use of new photo apps to assist the policyholder with contents that are damages.  Most large content losses usually occur as a result of a fire or flood claim.  In those situations, the use of a photo app would be great for an initial documentation of the loss.  However, the insured is not trained in how best to take these photos and has no idea usually the amount of time it takes.  It also doesn’t consider that the insurance company will also request the insured to price and date the items, which a photo app doesn’t do for you.

You cannot replace the human element of adjusting claims, you just can’t.  ALL OF THESE THINGS ARE GREAT TOOLS FOR THE CLAIM INDUSTRY, BUT CANNOT BE A SUBSTITUTE OR REPLACEMENT FOR BOOTS ON THE GROUND AND EYES ON THE ROOF.

  • Message to the consumer should be that whatever means the insurance company employs for an inspection and estimate – human or drone/technology – the scope and estimate produced is still a result of someone who works on behalf of the insurance company, NOT the consumer.
  • In our opinion, the consumer needs to always consult and hire their own expert – public adjuster.

More information can be found at http://realestate.usnews.com/real-estate/articles/why-isnt-filing-a-homeowners-insurance-claim-as-easy-as-auto-insurance

June 2017 Hail Storm in Minnesota Most Costly

For a State like Minnesota, known to suffer severe hail storms, 2017 has been a record setter. On June 11, large hail “devastated” the neighborhoods of Brooklyn Park, Coon Rapids and Blaine. As CBS local new there reports, the estimates are that this hail storm is the most costly in the last 20 years.

The Insurance Federation representative is already marking it as the third most costly storm in the State’s history. A local contractor to the area says that most homes will average between $30,000 and $40,000 to fully repair the damages.

http://minnesota.cbslocal.com/2017/06/28/hail-damage-costs-north-metro/