Your property or business suffered damage during Hurricane Michael. You promptly filed a claim or had a public insurance adjuster document and file the claim for you. A check from the insurance company appears in the mail. Great! How easy could it be? But wait, there’s a catch…..on the back of your check there is language that states you are releasing the insurance company from any further costs related to the claim.

That means if more damage is found during the repair process or even further down the line you have no recourse to go back and revisit additional claim issues which can often happen with a wind claim. A Hurricane Irma related article in the Sun Sentinel, Insurance companies send settlement checks to Hurricane Irma victims with string attached explains the issue in depth. The conclusion? Some insurance companies may use this tactic to minimize their claims, intimidating policyholders into not seeking payment for additional costs that come up during repairs and is likely unenforceable according to State Insurance law.

Has any of this changed since Irma? I’ll let the lawyers and Department of Insurance fight this one out but policyholders should beware of signing anything that waives their ability to collect a fair settlement for damaged property that is covered under their policy.

Now let’s talk about verbal offers you may receive.  Many property owners who were impacted by Hurricane Michael and immediately filed a property insurance claim are starting to receive settlement offers from their insurance company.  Based on the calls to our office many are shocked at the settlement offer they are receiving. Sometimes our firm will be retained by a homeowner only to receive a call several weeks later to say the insurance company adjuster had called them with a verbal settlement offer they might be able to live with. Even though it’s outside of our contract cancellation date and work may have begun on the loss, we typically wish them well and thank them for their consideration in selecting our firm to assist them. That got me thinking about all the property insurance claim offers we’ve gotten over the many years assisting clients. 

As a public adjuster, I remembered a lesson I learned many years ago about verbal settlement offers.  Insurance company adjusters are trained to measure and price a loss. While this process can be highly subjective and subject to negotiations on a lot of different factors, the offer MAY NOT be what you will get in the form of a check. What has to be factored into any property insurance claim is the policy terms and conditions. While a good reputable insurance company adjuster will disclose these policy provisions to you with the offer, we have seen instances where others will not, just so they can get you to agree and perhaps sign a proof of loss or even worse a full release as discussed above.

So before accepting an offer amount, ask if it is “NET” of all policy terms and conditions. Ask about depreciation, co-insurance issues that may be applied to penalize you for being underinsured and if deductibles were applied properly.  

Even if these policy terms and conditions are applicable, they may be subject to different interpretations and negotiations. As an example, does the deductible come off the loss or the covered loss?  If a co-insurance penalty is being applied, can accepting an actual cash value settlement (and thus having the co-insurance figured on the actual cash value of the property) reduce its effect? And remember that depreciation amounts are very subjective and negotiable.

Please, before you accept a final claim settlement offer, understand the details of how the insurance company adjuster arrived at his/her figures. Ask that any offer made to you verbally be put in writing, so you can read and understand how the numbers were calculated. Once you cash that insurance check, some of your options may be gone.  

Settlement check related issues are one of the common mistakes we see policyholders making after every storm. If you have Hurricane Michael damage let us know of your experience when settling a claim. 

If you have questions regarding any property insurance related issue caused by Hurricane Michael,  call our public adjuster office in Panama City, 850-888-8052 or contact a public adjuster to submit a question to one of our insurance claim experts.