If the inquiries coming into our offices are any guide, policyholders are receiving settlement offers for their insurance claims and many are not happy and in some cases shocked at the offer they are receiving. Most often we are told the offer does not remotely cover the cost of repairs based on estimates local contractors are providing.

These low ball offers are very common in this type of storm situation and may not always be the fault of the insurance company. At the root of the problem is the fact that adjusters are NOT “adjusting” these losses. Because of the size of this storm and the number of claims, “adjusters” may pulled in from all over the United States to write “estimates”. Even more worrisome are the recent recruiting practices we’ve seen from claims adjusting firms offering to train novices in a few days with promises to make a bunch of quick cash. Most are contracted by independent adjusters who are paid on a per loss basis by the insurance carrier. They are writing estimates instead of adjusting the claims, many without any knowledge about local pricing (demand surge) and without any agreement with a licensed building contractor who has to pull and be responsible for the building permit.  As we have written in other blogs, the adjusters want to write an estimate and close the file so they can get paid. Its quantity over quality! You need to demand quality. You paid for it!

Then what happens is that the estimates are given to an inside claims manager who never saw your claim. They use the estimate (sometimes poorly documented) to determine your settlement offer. What should be done in cases like yours is for the adjuster to actually adjust the file in the presence of you or your contractor so that an agreed price and scope of loss is reached between all parties. If you are not getting satisfaction or the answers you need, you need to go to a more senior claims manager and demand a re-inspection with “your” contractor present so that they can have input in the pricing and scope of the loss. As we have advised many times, keep a record of who said what and when. If you meet with someone, make notes. If given instructions or promised some action from an insurance representative on your claim, document it or ask for a confirmation in writing.  And remember, your policy requires you and the adjuster’s cooperation in the adjusting process. 

If you have made an effort but failed to get anyone’s attention TELL YOUR STORY in a written letter. Send it certified mail to your elected officials (all of them and as many times as necessary) as well as the president and CEO of the insurance company. If you get no response, send your letter again with a note that you have not been given the courtesy of a reply to the first letter. Just the fact that you documented that no one will return your calls should be enough to get someone’s attention.

Typically, there is an appeals process, but what you need now is to request a re-inspection by an adjuster who will actually adjust your loss now rather than wait in the long line.

Another factor that can have a significant impact on your settlement is the depreciation adjustment that is used to determine your claim settlement. We always get questions about how depreciation works from confused policyholders. As public adjusters, we deal with this type of situation all the time when we are managing a policyholder’s claim. Deprecation is figured in a number of ways depending on who is making the calculations. And remember that, Florida policies apply a separate hurricane deductible which is separate from your standard deduction. As an example; in the insurance adjusting field, the text book example is to come up with a percentage based on the age of an item and its full life expectancy. So if an item is one year old and the average life is 20 years the percent to be applied for deprecation is 5%.  If the cost of the item new is $5,000 then $250.00 in deprecation should be taken for each year of life. If an item is 5 years old and the life expectancy is 15 years then 33% would be reasonable.

But remember, there are a number of depreciation tables in use. The IRS may have one and the insurance company may have its own. There is no set-in-stone rule on depreciation and it is as much an art form as science. And this is where having a professional on your side that is used to dealing with these issues can be of benefit. Generally, depreciation should be based on usage. As an example; a family with five children will more likely have more wear and tear on their household items that a couple with no children.

Many states have adopted what is called the “broad evidence rule” which basically says that all things need to be considered to determine the fair amount of depreciation to be applied. Depreciation is very negotiable. So if you believe the depreciation is unreasonable and you can make a case that the damaged item(s) are worth more, talk with the claims adjuster or turn to a professional to make your case. If they will not agree, see if you have an appraisal clause in your policy. You can use this clause to appraise the actual cash value of an item covered by insurance.

If you have questions regarding any property insurance related issue caused by Hurricane Irma please call 800-321-4488 or contact a licensed Florida Public Adjuster to submit a question to one of our insurance claim experts.