After The Storm, Insurance Claims 101

Submitted to our local newspaper after a recent hailstorm and a flurry of questions.

After The Storm, Insurance Claims 101

Big storm.

What do I do? File a claim? Find a contractor? Hire a public adjuster?

I’ve been on more roofs than Santa, handled more claims than that, and wish I had a dollar for every time I’ve heard those questions.

Insurance is peculiar. The only thing we have to buy, and hope we never use.

The best way to answer the multitude of questions swirling after a storm, is to simply explain the system; and then, you’ll be able to make an educated decision.

Let’s start at the beginning. Before the storm.

The Agreement.

Assuming you have insurance. You didn’t simply buy insurance. You entered into an agreement.

You agreed to pay a premium, in return the carrier (insurance company) agreed to pay you, in the event of a covered accident.  

The agreement is, by definition, a good faith contract. This contract, is long-term. Like a marriage.

The insurance industry is highly regulated by government guidelines and timelines. They must follow the policy to the letter, any ambiguity, falls in favor of the insured.

Is It Covered?

Stuff happens. Big storm. New driver, gas instead of brake, now you can drive out the back wall of the garage. Burst water line. Flaming Thanksgiving turkey. Covered perils?

If I owned an insurance company, the Covered Perils section would be three words. Sudden. Accidental. Loss. There’d be some exclusions, like surface water. But, for the most part, sudden, accidental, loss, summarizes a covered peril.  We could write a book about it, but for now, that’s enough.

The Claim.   

Here’s what happens when we file a claim.

You call your agent. Or, you may call a claim center; or even file online. 

That triggers action. Usually, two adjusters are assigned; a desk adjuster, and a field adjuster. You should hear from them within 24-48 hours. Doesn’t always happen, but, it’s the goal.

The Adjusters.

The field adjuster’s job is to take pictures, and draw pictures, document the damage and write an estimate.

IMPORTANT NOTE: Independent field adjusters are paid on a sliding scale. The bigger the estimate, the more they make. On the other hand, if the field adjuster finds little or no damage, they actually need to work more; to document they didn’t miss anything, weren’t in a hurry, or lazy. More work, less pay.  The best way for the carrier to function in good faith. It encourages the field adjuster to do a thorough job. If the adjuster was paid more, to find less; it would be a disservice to the insured.

The system is set up in favor of you, the insured.

But what if the field adjuster misses something? What if the estimate is lower than the contractor? Or, what if additional damage is found, later?

This happens. Adjusters are human. Somethings can’t be seen on the initial inspection. Built into the process is something called a, Supplement.

A Supplement is simply additional payment(s). As long as it can be justified and verified, payment is issued. Sometimes all that’s needed is a picture and an itemized estimate. Other times, a reinspection may be needed. 

This is where your desk adjuster takes the baton from the field adjuster. Your desk adjuster is the one to review the field estimate, apply coverage according to the policy, and issue payment.

The desk adjuster will be the one you talk to the most. They will answer coverage questions, explain the final decision and settlement. They provide a copy of the adjuster’s itemized estimate.

The job of both adjusters is to hear your story, and answer three questions.

1. How’d it happen? (Cause of Loss).

2. What’s broke? (Scope of Loss).

3. Coverage? (Cost of Loss).

Those three answers are applied to your policy and coverage is determined.

If covered, payment is issued.

If not covered, a letter is issued explaining why, using your exact policy language to justify the decision.

The Contractor.

A good honest contractor, is worth their weight in gold. There is no sugarcoating the situation. After a storm, salesmen come out of the woodwork, claiming to be contractors. I just heard people on skateboards are knocking doors, giving “free hail inspections.” Maybe that’s a sign of a great contractor these days, I mean, with the price of fuel and all. I don’t know, but I’ve heard more horror stories than glory stories.

If they ask for a check, up front, be wary. Maybe in a normal situation, when you’re doing a remodeling project, perhaps it’d be okay, with references. However, after a storm, I wouldn’t.

Adjusters can usually work with legitimate contractors to reach a settlement.

 

The Public Adjuster.

The adjuster, contractor and public adjuster, all write estimates.

The adjuster pays off an estimate.

The contractor works off an estimate.

The public adjuster charges for an estimate.

The public adjuster charges a fee of 10-20%. They do not do, or hire anyone to do, the work.

The Relationship.

Remember, the insurance commitment is long-term, like a marriage. Whereas, the relationship, after a storm, with contractor or public adjuster, may be more like, a one-night stand.