After 10 years of a hurricane drought, Florida has experienced two named Hurricanes, Hermine and Matthew.  Our hearts go out to all the folks affected by Hurricane Matthew. Based on damage reports and our own public adjuster staff who are out helping policyholders, it looks like the worst of the damage goes from Melbourne up through Daytona Beach, St. Augustine and Jacksonville.  Anything on the coast felt the wrath from Matthew. From the media reports, flooding was as bad or worse than the wind in many locations but in combination they likely did a number on property owners.  And if property damage wasn’t enough, the loss of power added misery to the mix.  To deal with these perils it behooves property owners to keep their eye on the ball or in this case the money. High percentage hurricane deductibles are being applied and many folks may be surprised that despite their wind or hurricane coverage, they may be out of pocket for the mitigation and replacement costs due to lack of flood coverage or exclusions for water - sewer back-up. 

So while the clean-up begins, it appears there is a feeding frenzy going on in some areas with the usual crowd of disaster mitigators, loss consultants and others that claim knowledge about making it all better in short order by just signing a piece of paper. In other words, home and business owners need to be on guard. Don’t get me wrong, some of these folks are on the up and up. But like any big Cat (catastrophic) event, the bad ones often show up intermingled with the good guys.  Based on field reports, the repair frenzy may have overtaken common sense that often is not too uncommon when home and business owners just want everything to be put back the way it was.  

At this stage of the game, property owners need to stay focused. If you have insurance regardless if it is flood, wind or both, remember you have a duty to mitigate your loss. In simple terms, this means you have a duty to preserve the property and prevent further damage to your property. But this process has a great deal of subjectivity associated with it.  To put it another way, there will be second guessing by the folks with the money better known to many of us as big insurance. 
So what to do? Simply put, try to apply common sense to your factual surroundings. Certainly you would want to take care of any life, health or safety issues such as making sure the power is off in flooded areas (best leave this up to the professionals) before you go walking through wet or standing water. If confronted with trees or other objects hanging in a dangerous or precarious manner that may cause you, your family or co-workers bodily injury, think before you act!  Think things through--can you reasonably do this without injuring yourself? Remember, most accidents and injuries happen at home. You may already have a really dangerous situation on your property that may compound the possibility of an accident. 

The same thing applies when it comes to mitigation requirements when it comes to your insured property.  Listen closely to what people that are making the promises are saying. Does it make sense to plug in truckloads of dryers and dehumidifiers without understanding the scope and price of the work being done? Does it make sense to run up a big bill for dryers and blowers when wet and damaged drywall will likely have to be thrown out anyway? And those policyholders who don’t have the right insurance coverage may end up paying all costs.

Wet-building materials should be removed from inside the property. However, if insurance is in place, do not throw anything away. Wait until your insurance adjuster gives the OK. When you do dispose of property, set it outside before the looters or others come by to go through your stuff.  Take photos, lots of photos and make sure they are preserved for future reference. If you do not have insurance, talk with a qualified financial professional. You may have a tax deduction for an uninsured casualty loss for property that was not covered by insurance.   Please remember to document and confirm everything you are told or promised in writing. Emails are a great way to confirm what someone told you to do or not to do and to ask questions or for instructions on issues about your loss. Create a claims binder for yourself and save all these communications for future reference. 

Some mitigation - restoration companies who are either sent out by your insurance company or solicit you directly may ask you to sign an authorization form before commencing work. READ CAREFULY! There is some small print they may claim is standard procedure for losses like yours. If you see anything on the authorization form that says ASSIGNMENT OF BENFITS I would back off, in my opinion. Look for someone who can dry-out your home without having you assign all your policy benefits over to them. In other words the time to READ a restoration company’s contract is BEFORE you sign it. If you do not understand the terms and conditions, seek professional help, either from a Public Adjuster or Attorney.

In addition; don’t be afraid to modify the contractor’s form. This is the type of language we’ve seen: ANY WORK PERFORMED AND BILLED TO ME HAS TO BE APPROVED BY MY PROPERTY INSURANCE COMPANY. MY INSURANCE COMPANY HAS THE FINAL SAY ON SCOPE AND PRICING OF THIS CLEAN UP AND THE CONTRACTOR AGREES TO ADJUST ANY SCOPE OR PRICING DISPUTES WITH MY INSURANCE COMPANY. THE CONTRACTOR AGREES THAT OTHER THAN MY DEDUCTIBLE, ANY SUMS BILLED OR OWED BY ME TO THE CONTRACTOR ARE TO BE PAID TO THE CONTRACTOR BY MY INSURANCE COMPANY, PROVIDED THE WORK MEETS MY SATISFACTION AND IS APPROVED BY THE OFFICIAL BUILDING DEPARTMENT HAVING JURISDICTION OVER THIS MATTER. EVERY EFFORT MUST BE MADE BY THE CONTRACTOR TO MEET WITH ME, MY REPRESENTATIVES AND MY INSURANCE COMPANY ADJUSTER TO FIRST AGREE ON THE SCOPE AND PRICE OF THE RESTORATION PROPOSED BY THE CONTRACTOR.
The above is just a suggestion of how you may want to protect yourself and you may want to have the contract reviewed by an attorney before signing.  

As to the ASSIGNMENT OF BENEFITS issue, Hurricane Matthew home and business owners have now been thrown right into this mess due to the Florida Legislature not taking any action to curtail this controversial practice. The following is a little background that may help you understand the AOB problem and how it could impact you. AOB means the contractor has the right to pursue a claim directly against your insurance company should their bill not be paid in full, regardless of its merits.  As this term says, you have assigned ALL POLICY BENEFITS TO A CONTRACTOR! An AOB in Florida with licensed insurers gives your contractor (with your permission by signing their form) the right to argue, file suit and do any other thing detailed in your policy (not you) to collect their money regardless of your satisfaction about the work that was performed and regardless of the fees charged! Some property owners may say, “what’s wrong with that? I don’t care as long as I get my property fixed.” Please consider problems of workmanship. Will they do the job correctly and did the building officials issue a final permit to allow you to occupy your home? Since a lot of damage from this storm was from flood, how did the mitigation work turn out? You also need to make sure the property was actually dried out. How much structural material was removed to allow for a proper dry out?  And finally, were costs inflated to the point where the insurance company won’t pay? If your insurance company does not approve the mitigation work and refuses to pay it’s likely a lawsuit will arise. So pay attention to the details. With lien rights and in some cases an AOB provision, some aggressive contractors are smelling the money.

Do you have flood coverage? This storm caused a lot of flooding which is a peril not covered in a standard homeowner’s insurance policy or for that matter a commercial policy. If there is no insurance coverage for the flood peril, what happens to the AOB issue? This is important since a lot of AOB contractors are banking on suing your insurance company if they do not get paid. To my knowledge an assignment of benefits is a moot point with the National Flood Insurance Program. Being a federal program, they will not honor an AOB contract provision. So if you or your contractors are banking on collecting from NFIP, be careful. Any shortfalls in payment from the NFIP or work performed on uninsured items may result in a lien being filed on your property by the contractor if you get into a dispute on the scope or price of your loss. 

Let us know what you are seeing in your community. As always, the professional public insurance adjusters at Tutwiler and Associates are here to help with any property insurance related questions you may have. Please call 800.321.4488 or contact a public adjuster to submit a question to one of our insurance claim experts.