Over the past few months, we have been helping businesses and homeowners try to settle their insurance claims from the extreme Winter Storm damage that has impacted enough property owners in Massachusetts and throughout the Northeast & New England area that this storm rivals the damage done by other major storms we have worked. 

As we’ve seen with past major storms with widespread damage, it is very apparent that the insurance company’s are overwhelmed and they are desperately looking for assistance to service all their policyholders who have made claims for their property damage.  Similar to hurricanes, the carriers have enlisted the help of many independent adjusters who have made the trip from as far away as Arizona to help them make inspections, write repair estimates, and make field calls before turning their files in and heading back home.  The issue with this is that most of these independent adjusters are assigned so many claims that there are simply not enough hours in the day for these adjusters to conduct a thorough inspection of the damage and then spend adequate time behind the computer to write a detailed repair estimate.  Furthermore, many of these properties are high end and the Xactimate software sometimes does not include these custom building components nor does it take into account or reflect the accurate pricing to make repairs on these types of luxury homes.  So what we are finding is that most (not all) independent adjusters simply write what they can get away with, get paid, and go home leaving the property owner left holding the bag. 

Other activities we are seeing is that adjusters are writing to replace drywall in their repair estimates when in fact it is plaster over blue board, which is 20-30% more than drywall!  This behavior on behalf of the insurance company is an indication that the carriers are pulling out all the stops to minimize their claims payments.  Further, most of the out of state independent adjusters do not account for the higher labor costs associated with doing work in the Northeast.  According to the Bureau of Labor Statistics Occupational Employment and Wages, May 2014 relating to construction laborers, the hourly mean wage in Texas is $13.59 compared to a $23.04 mean wage in the New England area.  And this does not take into account the higher price of wages, building materials, etc. which are all at a premium due to supply and demand from the storm damage.

When we do reach an agreed upon scope and method of repair with the independent or field adjuster, we are finding those agreements are too often reversed and/or being changed once they reach the inside examiner, also known as the claims desk adjuster.  This is someone who has never seen the loss and damage in person. Yet he/she is the one who makes the final decision on what will be paid.   The other dynamic is that many of these adjusters have a certain dollar amount they can settle at without authorization. So if the level of the desk adjuster’s authority is $25K to settle claims, they know they better keep the payment under that or they have to explain to the higher ups why they should pay more.  But who would go the extra mile for one family when you are dealing with hundreds if not thousands of others? 

Finally with respect to depreciation, we are seeing insurance companies depreciate very aggressively and in many cases offering anywhere between 50% and 70% of what a claim is really worth.  If you have an older property, you better beware. 

Based on the trends we are seeing, it appears the insurance companies are setting themselves up for a tidal wave of appraisals aka “Reference” and lawsuits for those who will be persistent in their fight. As usual, most will give up and give in, which the insurance companies count on and for the most part get away with.  Our experience appears to confirm the recent study that you have a 50% chance your insurance company is going to fight you on claims if your home is damaged in a disaster.

The best advice to move your claim along is to be persistent and call the insurance company and your agent everyday.  Save the receipts and invoices from your contractor if you have the funds to pay out of pocket and write letters for your claim file (you should have one). If worst comes to worst or all this is overwhelming, hire a professional public adjuster to help you with your claim.  Unfortunately, many public adjusters are booked solid but this may change as long as some claims work their way through the claims process and get settled. 

It took over two (2) years for the people of New York to realize they were being underpaid by Superstorm Sandy damage. Let’s hope the property owners and consumer advocates in the Boston area can figure it out faster.  If you have questions regarding any property insurance claim related issues please call 866.527.0104 or contact us to submit a question to one of our public adjuster insurance claim experts.