Here’s an enlightening insurance claim success story from our valued Pittsburgh Adjuster, Mr. Zach Flora. Statistics show that 5% of structural fires or one in twenty are caused by cigarettes. On the late morning of May 21, 2020, an apartment landlord in the Pittsburgh area found out what it was like to become part of that statistic. Once the smoke cleared, he turned to his insurance company for help, where he quickly realized they weren’t the “good neighbor” they made themselves out to be. Then he turned to a trusted insurance claim adjuster also known as a public adjuster.

It was a bright sunny day in late May in the Pittsburgh area where a tenant of a 24-unit apartment building was on his balcony taking in the sun while having a smoke. Once he was finished, the tenant flicked the cigarette over the balcony, thinking it was no longer lit. Unfortunately, for him, the 23 other tenants and apartment building owner, it was not. The cigarette landed at the base of a pine tree. Due to the hot dry weather at that time, debris from the tree acted as an igniter that slowly smoldered, sending embers into the air. Multiple fire investigations determined that the embers somehow went into the roof soffit, caught fire to the blown in insulation, and quickly spread throughout the roof of the building.  More than 8 brave men and women of local fire departments responded to help fight the fire, but upon arrival, it was apparent the damage had mostly been done.

As the fire continued into the early evening, the owner of the apartment building rushed to the scene to find that his tenants were safe and assess the damage. His building had been destroyed. Being the owner of other rental properties, this was not the first time this Pittsburgh native has been through the insurance claims process. That evening he reported the claim to his insurance broker, began to look after his tenants and get his claim related affairs in order. He assembled a team of family members and friends to help tenants with their needs. Some were fortunate to be relocated to other properties he owned. Being onsite for the next day he was swamped with restoration vendors and contractors making all sorts of promises in order to gain his business on the repairs. Fortunately, all he needed to do was make one call to licensed public adjuster, Zach Flora of Tutwiler & Associates Public Adjusters for help. Zach had handled other damage claims for the owner and was a trusted resource that knew the necessary steps needed to both process and protect this large loss claim.

Mr. Flora immediately met with his client and visited the damage scene where he began to secure the site and assemble the necessary documentation. It is also very important for the policyholder to comply with all post loss obligations and cooperate with the insurance company’s right to investigate. Seventeen tenants also had renter’s insurance which had to be included as well. Zach assembled a list of all insurance companies involved to arrange the Origins and Cause (O/C) investigation. Once the investigation was complete, the scene was cleared, and all companies involved had the documentation they needed.

Of course, the owner was anxious to begin the repair process. But there was one problem Zach identified before demolition could begin. Believe it or not, after nearly 2 months since the fire, the insurance company had not sent an adjuster to inspect the property and document the fire, water, and smoke damages. Understanding the insureds eagerness to begin repairs, Mr. Flora reached out to the insurance carrier and stressed the importance of setting a joint inspection of the loss so he could be on hand to walk the adjuster through the loss and make sure nothing was missed. He also knew that the insurance company sometimes makes the decision to hire their own restoration vendor to write an estimate. In these situations, if not careful, a property owner may unknowingly sign away their insurance proceeds by signing a managed repair company’s Assignment of Benefits (AOB) work authorization. Simply put, insurance companies will send their vendors to write estimates and the vendor will be obligated to do the repairs in accordance with what the insurance company specifies, not necessarily what is actually required to put the building back to pre-loss condition. Bottom line, it’s a cost savings measure taken by the insurance company to minimize their claim payouts. With an AOB contract, the vendor is paid directly by the insurance company and the owner has no control of their insurance proceeds because they have assigned all insurance benefits to the vendor. That’s why, we caution policyholders to never sign such a contract and believe you (the policyholder) should stay in control of your insurance claim and be able to control and inspect the quality of the work before the vendor is paid.  

Zach made sure the owner was aware of this process and when the insurance company tried to send their vendor, he recommended allowing the company to write an estimate of repair for the insurance company but not sign anything in their process of doing so. Mr. Flora was ahead of the game and had already begun preparing an estimate, identified areas of concern and made arrangements with the correct tradesmen for competing quotes on this commercial job.

Fast forward to two weeks and still no joint inspection. When the insurance company vendor realized they were not getting the job since the owner hired his own vendors to begin work on restoring the building. He was also funding the initial work with his own money as he had yet to receive any insurance payments. The insurance vendor submitted a rushed repair estimate to issue payment to them by the insurance company. Seeing that any attention to detail was lacking and the final estimate was either undocumented or for work not completed, the insurance company finally decided to send their representative to inspect the loss. Again, Zach insisted on a joint inspection to avoid any further miscommunication or disagreement on the scope of the losses.

With the joint inspection scheduled, Mr. Flora had all his documentation for the insurance company adjusters to review. The insurance company decided to send two of their large loss adjusters to scope and take measurements of the building which took an entire day to complete and ensure all the key details of the loss were pointed out. Mr. Flora also informed the representatives that his client was self-funding repairs and requested that a substantial advanced payment be paid towards the loss. Within two days a six-figure advanced payment was issued to the insured.

Due to the size of the loss the insurance company requested a few weeks to produce their repair estimate. With respect and a clear verbal agreement to the scope, Mr. Flora agreed so that no corners would be cut. After an additional 3 ½ half weeks the insurance company estimate was submitted. Upon a thorough review of the report, it became quite evident the repair estimate was patched together by the insurance company and missing details agreed to at the joint inspection. Had the inside claims department made arbitrary changes as sometimes happens? Mr. Flora discovered many other areas of concern that needed to be corrected. Fortunately, the Tutwiler firm utilizes Matterport Technologies equipment, a 3D virtual camera that capture’s a live walk through of a property, documenting the scene from the time it was filmed for as long as it’s kept active in your system. Mr. Flora deployed the equipment early in the process and was able to correct the inaccuracies in scope based on the data.

Regrettably, there was still a major gap between the insurance company estimates and those of the client’s vendors. Insurance companies are always up to new tricks when it comes to writing estimates and or applying the company way of assessing a loss. In this case, the insurer decided to use a price list for what’s called “New Construction”. Although this can be looked at from a layman’s eyes as just that, this price list in the Xactimate estimating software specifically states that it is to be applied to a job of “ground up” construction only. By using this category, the insurance estimator took away the labor figures to complete a job with a preexisting structure. There was no doubt, this was not a ground up rebuild with existing framing and the 4 walls continued to stand, and not the right pricing for the job. Furthermore, it was decreasing the insureds insurance proceeds by 13 - 20% in most areas.

Once again, being familiar with the insurance process and with the assistance of the advanced technological systems used, Mr. Flora was able to present documentation as to why the New Construction pricing was incorrect. However, even with direct quotes from the creators of the software, the insurance company would not change its pricing estimate due to the significant increase in payout it would bring.

After multiple attempts to settle the dispute amicably and with confidence in his work product, Mr. Flora informed his client of the Appraisal provision in his policy. In property insurance policies, Appraisal is an alternative dispute process that allows each side to hire a disinterested objective and qualified individual to assess the loss and make a fair estimate of repair. If the two sides can agree on an estimate, that becomes the final payment. If not, an umpire is brought in to render a final decision. With a few more inspections, the pricing discrepancies were resolved and without hesitation the two appraisers confirmed that the insurance company position was incorrect, resulting in a near 7 figure increase in the insurance proceeds.

With the help of new technology and a thorough understanding of the insurance claim process, Mr. Flora was able to achieve a fair insurance settlement for his client. This allowed the client to properly repair of the building his tenants were eager to move back to.