Based on damage reports from our public adjuster staff who have set up an office in Panama City, there is no doubt this event will create insurance claim disputes unlike we’ve seen before. But first we want to commend the continued brave activities of the first responders and quick activities of the city officials. 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 mitigation and replacement costs.

As the clean-up moves ahead, we are seeing 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, many 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.  We see this played out in every storm. The repair frenzy and desire to quickly put things back the way they were can overtake common sense when home and business owners just want everything normalized.

At this stage of the game, property owners need to stay focused. Make sure you understand what specific coverages you have and don’t assume anything. Review your policy with your agent or a professional adjuster. 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 make sure you are communicating with them and getting approvals (in writing) for any repairs.

So what to do? Simply put, try to apply common sense to your factual surroundings. Obviously, you 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. Be careful of rummaging through debris.

The same thing applies when it comes to mitigation requirements for your insured property.  Listen closely to what the contractors that are making the promises are saying. Does it make sense to plug in truckloads of dryers and dehumidifiers and poke holes in your ceilings and walls 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 tell you they will take care of everything. Please READ a restoration company’s contract BEFORE you sign it. If you do not understand the terms and conditions, seek professional help, either from a Public Adjuster or Attorney.

Labor will be short but don’t take short-cuts. Secure multiple bids.  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 is from flood, how did the mitigation work turn out? You also need to make sure the property was actually dried out and even tested for mold infestation. How much structural material was removed to allow for a proper dry out?  And finally, are costs being 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 please pay attention to the details. With lien rights, some aggressive contractors will be smelling the money.

In addition; don’t be afraid to modify the contractor’s contract. This is and example of the type of language we’ve seen used successfully: ANY WORK PERFORMED AND BILLED TO ME MUST 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 not legal advice and just an observation of what we have seen people do to protect themselves. It’s a good idea to have the contract reviewed by an attorney before signing. 

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 your property experienced wind driven rain damage or water coming in from the roof, “do not” report it to your insurance company as a flood.  A flood is not covered unless you have flood insurance. A flood, for the purpose of triggering flood insurance coverage is defined as rising water and has to originate from outside of the property and meet the definition of a flood as outlined in a NFIP policy.  But a “water loss” inside of your property, which may seem like a flood at the time, is most likely covered as long as the cause is from an event inside the property and is not excluded in the exclusions sections of your property policy. In insurance speak, a comma in a sentence or a word articulated in the wrong manner can make all the difference in the world when your notice of loss is typed up and assigned to a claim handler for an initial review.

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.