As we continue to help our clients who experienced winter storm damage, settle their insurance claims, we are learning more and more about insurance company claim practices and procedures, some which is quite troubling. This winter in the northeast, we endured some grueling battles with insurance companies which I will detail below. No doubt, insurance is a for-profit business and no business likes to lose money.  We also understand that one can’t generalize one company’s behavior to all insurance companies as they all have their own standards of practice. And like other public adjusters in our industry, there are good apples and there are a few bad that can taint the entire profession.

Filing property claims seemed to take a predictable route. First, we had to get the carrier to accept liability and afford coverage. Second, working with their catastrophe adjusters who were shipped in from other states could be a challenge as they are loaded up with claims and aren’t always familiar with these types of claims or local conditions. Finally, we had to deal with their hired building consultants who knew full well they would likely not get the job. So what better way than to throw a wrench into the claims process by low-balling repair estimates and tailor their damage reports to their client, the insurance carrier who pays them.  Further, the adjusters shipped in from the south had no knowledge of building construction in the north, the associated repair costs which were higher, or the high cost of labor in a union State under a declared State of Emergency catastrophe.  As we reviewed their repairs estimates, we found adjusters would include dry-wall when walls were plaster, had no knowledge of radiant or base heating systems or how to recharge the system once disconnected. They also fell short on how to properly deal with ice dam issues and wet insulation behind the wall or address a partial or total collapse of a roof system.  I think the motto was “let it dry and see if it will fly!”  A little basic training would have gone a long way to help alleviate these issues.   

In one case involving a nationally known insurance company with severe damage to a very high-end residential home in Cambridge, Massachusetts, we are now on our 5^th adjuster.  That’s five (5) adjusters for a residential loss!  In another high-end residential claim involving the same company (I wish I could hash tag their spokesman who happens to be one of my favorite NBA basketball players) the adjusters said all the damage was “pre-existing.”  You can read the owner’s letter to the President & CEO which has been redacted and modified to preserve anonymity and you will see why we can get so frustrated trying to assist policyholders.

The average amount of adjusters assigned and reassigned to residential claims was three (3).  Multiply that by the number claims we handled and that equals the amount of time we had to essentially start the adjusting process all over, which ultimately delays the policyholder getting back into their properties.  Given what these people had to endure, I suspect many will be looking for other insurance or choose to self-insure, but clearly this is not good customer service.

To add insult to injury, the claim delays are now creating mold issues in some homes. Here’s an excerpt from a note we just received from a client: “Our contractor just removed the cabinets and microwave. They found mold all along the wall and the back cabinets are covered with mold which are now, not useable.” I mean really, how do you respond to something like that!

Our team also handles many large industrial warehouses and apartment complexes which were significantly damaged by ice dams, roof collapse and fire.  These claims often involved a surplus lines carrier and while they are now in the final stages of settlement, the recurring theme always arises – you better have adequate cash on hand or an emergency fund ready for a disaster because if one hits, you will essentially be on your own for at least 6 months give or take a few.  Some are just now receiving advance payments while the claim goes through the approval process with the carrier. 

A great article was just published in the Claims Journal on June 25, 2015 relating to Replacement Costs that are on the Rise.   I believe every property insurance adjuster should read this article and take note of all the changes, especially when adjusting hundreds of claims for the people who are depending on you to “get it right.”

If you have questions regarding any property insurance claim related issues please call 800.321.4488 or contact us to submit a question to one of our public adjuster insurance claim experts.