It’s been 1 month since Hurricane Michael roared ashore. My fellow adjusters and I have seen some horrific damage in the Panama City area and we plan to be there for the long-haul. Many policyholders are just starting to receive their insurance checks in the mail and much to their surprise, the settlement checks received are grossly insufficient and barely cover a fraction of what the true cost of repairs will actually be. We see this same scenario play out in every storm that we have worked over the years. 

Sadly, this trend will continue and as the demand for construction services increases, the overall recovery from Michael will continue to deteriorate.  This factor is driven by increasing costs for quality labor and specialty subcontractors along with rising costs for building supplies and materials to name a few.  The insurance industry still has not recovered from the historic 2017 hurricane season, taking another hit from Hurricane Florence this year and now hurricane Michael has the claims industry turned completely upside down.  This is notwithstanding all the “daily claims” such as fire and water losses not to mention our Country’s still thriving economy and continued construction boom that is showing no signs of slowing down any time soon.

For those who have hired a professional public adjuster, those claims are on top of the pile and being expedited every way possible.  Sadly, those who chose to “wait and see” what their insurance companies were going to offer, reality has hit and they are quickly scrambling to hire a public adjuster to help dig them out of the hole.  Many see they have been caught in the log-jam and now want to get ahead of the thousands of other policyholders whose claims are still in the que. To add to the misery, the Florida State statutes places a fee cap where licensed public adjusters cannot charge more than 10% of any “new” money that has been previously offered or paid by the insurance company.  Essentially, lobbyist and advocates for the insurance companies want to make it cost prohibitive for the policyholder consumer to hire professional help given the law that restricts what a public adjuster can charge, in effect making it cost prohibitive for the consumer to hire a professional adjuster, even if the consumer wants to pay for the service from dollar one.

The silver lining is that some insurance companies are instructing their field adjusters to “keep the estimates low”, based on anecdotal evidence from vendors. I recently had a conversation with an independent adjuster who was actually a great guy who wanted to write an accurate estimate, but his managers and superiors told him to keep the repair estimate below $150K when he verbally agreed and told me his estimate exceed $350K! This is happening more than you would want to know.

Now we are seeing some companies sending settlement checks with no repair estimate attached to support the payment amount, which is bad business. Of greater concern are the checks that come with Release of rights language stating: “cashing of this check constitutes your agreement of the claim settlement” where if the check is cashed the companies will argue that you were in full agreement and therefore they will close the claim.  We continue to see this “tactic” and each day we hear many more stories just like it.

To confirm this, one only needs to look at the Florida Office of Insurance Regulation’s website who compiles claims data filed by insurance companies.  Currently, as of November 8, 2018, there have been 117,565 reported claims filed as a result of Hurricane Michael and according to these same companies, 42.7% have settled or “closed” their claims.  These are incredible statistics provided by the insurance industry as they are reporting that half of all the claims are completely resolved one month after a near Category 5 Hurricane slammed into the Florida Panhandle!  Don’t take my word for it, read for yourself: Hurricane Michael Insurance Claim Stats

To be fair and balanced, some of our firm's clients have been adequately paid by their respective insurance companies. I’d like to think the reason is because our firm properly assembled and presented a legitimate claim, which if done correctly the insurance company has nothing to legitimately dispute so they simply pay what they rightfully owe.  In these cases, we make sure that we acknowledge the company for doing the right thing and oftentimes, they respond by thanking us for helping them to present the claims to their upper management who ultimately signs off to authorize making the payment. Also, my guess is that many insured policyholders in the most ravaged areas, are being paid full policy limits where the structure is gone, the loss is over the policy limits AND there is no dispute about wind vs. flood. Let’s hope.  

Make no mistake, there are some really good field adjusters working for the insurance companies and those are the folks who should be carrying the checkbooks in their cars to write a check right on the spot. Unfortunately, those days are long gone and now the field adjusters have to submit their reports, which the inside file examiners who sit behind their computers (often in another State) tell them to modify their estimate for whatever the reason, but we all know the reason - MONEY!  If an insurance company can save $5K on a claim payment and apply the same concept to 1,000 other claims, that is a savings of $5,000,000 dollars! My claim noted above is a $200K difference and simple math tells me that if they can get away with 10 of those there is another $2,000,000 dollars in their pocket. The list goes on.

Historically, many adjusters will get tired of the grind.  Many wanted a year off from last year where they are still dealing with ongoing claims.  Now they have hundreds more. Life in the disaster zone is not easy. Working 7 days a week and long hours at night grows old quick.  Sitting in traffic, mounting expenses for fuel and hotel along with dealing with angry consumers does take a toll and eventually many of these men and women want to go home to their families, especially as the Holiday Season approaches. Many will not return leaving files open. This leaves policyholders still waiting to receive a fair settlement having to call their insurance companies to request another adjuster be reassigned in their attempts to get the insurance companies to make supplemental payments and do what is right.  

From what I am seeing, Hurricane Michael will be the nightmare that is going to last for many years to come. Business and homeowners need to educate themselves, be vigilant and not give in to a process that can hurt them in the long run. If you feel you are not being treated fairly, seek out professional advice from someone you feel comfortable with and get an advocate on your side.

Let us know what you think! As always, the 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.