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replacement rather than repair when the product can no longer be purchased and has been discontinued or is otherwise out of date.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.

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.

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/

Protecting Your Most Valuable Assets (Disputing a Property Damage Insurance Claim)

On average, we spend thousands of dollars each year on insurance premiums – property and casualty insurance, automobile insurance, life insurance, health insurance, etc.  Usually, the lion’s portion of this is spent on coverage to insure our most valuable assets – our home and other properties.  Whether it’s a residence, vacation or rental home, or business property, most folks have insurance in the event of a catastrophe or significant damage to their property.  But, what happens when an event occurs and damage is sustained but the insurance company either denies your claim or the estimate falls way short?  It’s never too late to explore your options and that’s exactly where a licensed public adjuster or qualified first party claims attorney comes into play.

Fortunately, most people go years and years without ever having a need for using their property insurance coverage.  Likewise, because of this, most people also don’t have much, if any, experience in handling a property damage insurance claim.  Between flat denial and gross underestimating by the insurance adjuster, confusion and shock may follow closely behind the filing of the claim.  Insurance companies are like any other business, they are in the market of tracking profits, even if this means shortchanging the customer – you, the policyholder.

Let’s just start by saying that initial offers are generally lower than what is owed.  The first estimate is likely to be basic and cut every corner possible.  Just a very small example of this is some insurance companies going so far as to pay for the number of shingles needed when everyone knows that shingles may only sold in bundles.  This is just one of many examples of how one might get shorted simply because of not knowing the difference or not knowing how to read the insurance adjuster’s estimate.  Considering the number of claims filed each year, these small cuts from each estimate add up to a small fortune kept in the insurance companies’ pockets.

The best thing to do is consult with and hire an expert in this area – a licensed public adjuster.  They work for you, not the insurance company, and are trained to read the policy and apply the coverage to make sure that you are getting exactly what you have paid a premium for.  They work on a contingency fee and don’t get paid until you get paid.  They relieve you of the stress and headache of trying to navigate through and negotiate something that is most likely out of your wheelhouse.  It’s what they do!

It’s kind of funny – the insurance company writes the policy, they interpret the policy coverage, then they estimate the claim and are in control of the money.  That doesn’t have to be the case.  You have options, you just need to be aware of what those options are and how to act on them.  It’s time to level the playing field and get what you are owed.

Enjoy the summer and let someone else do the work for you – a licensed claim professional who knows the ins and outs of the insurance industry and will do their best to make sure that you are not taken advantage of by someone just because they are bigger.

How Does the Insurance Company Justify Adding O&P (Overhead and Profit) to Everything Except the Roof?

How does the insurance company justify adding O&P to everything except the roof? To understand this question, you must first know what O&P means. In the insurance industry, Overhead (10%) and Profit (10%), commonly referred to as O&P, is owed when it becomes necessary to have multiple subcontractors perform work to repair damages to your property cause by a covered peril in the policy.

Your policy provides coverage for the cost to repair or replace the property damaged by a covered loss. Although not generally stated, this includes the cost of O&P. So, while your coverage includes this additional expense, many insurance companies use the benchmark that it is only owed if more than three trades are involved in the repair process. However, there is no binding authority on the 3-trade rule and the truth is that almost every property loss involves multiple trades. When you have a hail claim, it isn’t just the roof that is damaged.

How Your Insurance Company Just Kept 20% of Your Claim

Once you have a clear understanding of what O&P is, then it is easy to see where the question comes into play. How does the insurance company justify adding O&P to everything in their estimate except for the roof itself? The roof is the single most expensive item on the estimate most likely. By excluding O&P on this one item, it just saved the insurance company a bundle of money at the expense of the insured. Now multiply this by the number of claims just in your area and you get the picture.

Another excuse the insurance companies use is that they will pay the O&P if you can prove that the charge was actually incurred. However, there is absolutely nothing in the policy that states that O&P is only paid when incurred. In fact, it discredits the insurance adjuster’s estimate when they attempt to allow for O&P on everything except for the roof. It gives the appearance of an obvious money-saving technique when included on everything except the big-ticket item. The purpose of O&P is so that the policyholder can hire one general contractor to coordinate all repairs. That includes the roof.

It takes a licensed professional to sort through these types of issues and make sure that the policyholder isn’t being given less than they deserve.