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Tuesday, October 30, 2012

Arizona Public Adjuster – Insurance Claim of the Week

I was referred to a repair by a dry out company from Mesa, Arizona.  When I arrived it was explained to me that a loss had occurred under the kitchen sink.  One of the angle stops had begun to leak and had soaked the sink cabinet and the cabinet next to is.  No great shakes, it happens.  The homeowner told me that she had already had the insurance company out and that they had forwarded a repair scope of work that included a replacement of the sink cabinet.  Conveniently, they had included a quote from a local cabinet shop (this shop does pretty good work and I had even used them before based on one of these quotes provided by the insurance company).  They seemed to have given a fair quote for the replacement of the sink cabinet and according to the insurance company scope of $1,340.00 the face of the old cabinet would be reused.  I struggled with that for a couple of reasons.  First, the face of the existing cabinet had been stained by the water that had run out of this cabinet onto the floor during the leak.  Second, there had been no thought to address any damage done behind the cabinet during the leak.  It was now dry and I guess since it was “out of sight” it could be “out of mind”.  Third, there was no thought given to the damage showing inside of the cabinet adjacent to the sink cabinet.  Given there was minimal visual damage and only on the inside at the bottom but it was obvious that it had been wetted most likely during the leak and was not the same as it was.  I spoke with the home owner and told her that I felt that she should be getting more out of her claim.  I told her that the insurance company wanted to replace the cabinet box and reuse the damaged face in order to avoid replacing all of her kitchen cabinets.  You see when cabinets are in a house for a long time (a few months to years) they change color for many reasons (light, chemicals, maintenance etc.) they are altered and even if they are replaced in part by cabinets from the same company they most likely will not match the cabinets that have been left in place.  I wrote a repair scope that accomplished this repair and submitted it to the insurance company.  After the insurance company received my quote the desk adjuster who had been assigned to the claim called me asked why my scope of work was $12,000 and the adjuster who had visited the site was at just over $1,300.  I explained that I did not feel the cabinets would be properly repaired the way they had proposed and why I felt that way.  He was understanding and offered to send the cabinet shop out to review the things that I had explained.  I met with the cabinet shop and the home owner a few days later and explained the issues.  In addition, I asked the cabinet shop to include an explanation of the trims and panels that they would be using to make the repairs.  It turns out that the trims that would match were not even available and that many of the other materials that they wanted to use to make the boxes were very similar (likely the same materials used in the original manufacture of the cabinets) without the custom exposure that the existing cabinets had received.  With the revelation of that information the insurance company saw that it would not be able to bring the policy holder back to “pre-loss condition” or to be like the loss never happened without a full cabinet replacement.  This work is now completed and the client is very happy.

Friday, October 12, 2012

I am a convert to using public adjusters!!! Observations of a Restoration Contractor.

When the construction industry in Arizona turned in 2008, I found myself changing from commercial ground up construction of retail buildings to mostly residential insurance repairs.  This field would not have been my first choice at the time, but since flood and fire do not really care if there is a recession, it seemed like a great place to be until things got better.  One of my first assignments was to make an estimate for a family who had suffered a fire.  The quick details of their claim are that they left an electric appliance to cook their dinner one Sunday while they went off to church and when they came home their home was burning.  They called their insurance company to report the fire and were told that “someone would contact them within 48 hours.”  There they were, on the sidewalk of their destroyed house and their insurance company was of absolutely NO immediate help.  Unfortunately, things just got worse from there.  This family was fortunate enough to have relatives in town with which they could seek shelter.

After reviewing the site, I created a scope of repairs using an industry standard estimating program which by coincidence was the same one that the insurance company used.  When my scope was complete, it was sent to the insurance company and the insurance company simultaneously forwarded their scope to my company.  Imagine my surprise when the insurance company scope of repairs came in at $82,000 and my scope was at $350,000.  I had visions of being called a scoundrel or of being fired for gross incompetence.  As I looked through the insurance scope, it began to occur to me that their scope would only cover up damage and not come close to addressing the problems associated with the fire that had occurred in this home.  During the ensuing weeks, the insurance company suggested to the policy holder, that we were “gouging” them.  In addition, they intimated that if the policy holder stuck with the notice of claim that we provided, their claim would be paid slowly and or not at all, their rates may increase proportionally, even insurance fraud was mentioned.  All the time the insurance adjusters scope left damaged electrical wiring unrepaired, smoke charged drywall painted over and ruined contents being left out and undervalued.  I watched in disillusionment, as the insurance company stuck to their position realizing that the paradigm I had held, that the insurance company would protect its policy holders, (that’s their job right?) faded into the realization that they would argue to keep the costs as low as possible, so that they will reduce the cost of the claim.  Finally, the owner hired a public adjuster.  Then everything changed.  All of a sudden the insurance company was responsive.  Where phone calls took days or weeks to be returned they were talking to the public adjuster when he called.  After months of stonewalling, payments for undisputed amounts of the claim arrived in the mail, so that repairs could begin after waiting six months.  Then a “large Loss” adjuster from the insurance company was assigned to the claim.  Turns out that the adjuster the insurance company had making the valuation and scope of repairs for the claim, didn’t really know anything about construction.  I’m not just saying that she wasn’t or hadn’t been a licensed contractor, she literally did not know anything about construction or even how the repairs were to be made to the house.  I could not help but wonder how in the world a large legitimate insurance company could have possibly allowed her to be in charge of the scope of repair of this family’s most important asset.  The large loss inspector came into town (Phoenix, AZ) from Washington State,  I am not sure why they had to send someone from so far.  When we finally went through the house with the new insurance company adjuster and the public adjuster, all of the items on my previous scope were accepted, as well as some new ones that had come to light during the process.  The grand total on the structure only was finally settled out at $362,000.  The family told me that they had come close many times to accepting the insurance company’s first offer of $82,000.  They figured that the insurance company surely couldn’t be making that big of a mistake, but they stuck to the course and all ended well for them.  The repairs of the home were finished 5 months later.  They received a fair settlement for their lost items and are now living happily in the same home with their 5 children.   They even got paid for their living expenses as their policy stated.  I have no doubt that had they not allowed a public adjuster to help them negotiate their claim that they would have been cheated by their insurance company.  Maybe you are thinking that this was a one-time occurrence, but you would be wrong if you did.  I am happy to say that in the last four years it has not happened on all of the hundreds of claims that I have handled since then, but it happens enough to where it is my opinion that there is a lot more insurance fraud (if you choose to call it that as I do) that runs from the insurance carrier to the policy holder than I ever imagine goes the other way.


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