I have been seeing a great deal of post-Ike flap between the three catagories of adjusters, GCs and Attorneys as to who is the most capable of delivering services that produce the most accurate and complete form of claim settlement from the Insurance Carriers. Thought it was time that I spoke up for the true professionals that walk amongst us yet are all too often thrown into the same catagory as those who are licenced with little or no experience.
The biggest problem with the general public’s perception of any claims adjuster (as well as with most other profession other than their own) is the all too human tendency to oversimplify and stereotype career roles into a nice and neat square package of information. The average brain (mine included) has a finite amount of storage space with little tolerance for the jagged truth which we all know is neither easily digested or stored amongst the tight stacks of information kept within our collective understanding of how the world works.
AN INSIDERS DEFINITION OF THE THREE TYPES OF CLAIMS ADJUSTERS
Staff Adjuster: Hired as a full time “in house” claims representative by individual insurance carriers to settle claims in a fair and efficient manner.
Independent adjuster: Hired as a temporary claims representative by individual insurance carriers to settle the claims that their own staff adjusters cannot complete / do not have the time for. The emphasis here is the fair settlement of the overflow of incoming claims that usually results from catastrophic events. Efficiency is not as important as correctness of claim settlement primarily because income is based on volume of work completed and additional independents can always be acquired as needed to meet Dept. of Insurance timelines for claim settlement.
Public Adjuster: Free lance claims adjuster for hire by the general public to provide fair claim settlement representation. Has a distinct advantage of both time and information (Several years to conclude all claim settlement activity) as well as the insurance carriers written estimate as a general guide to either expand upon or pick apart.
Truth be told, there are fewer differences between these three categories of adjusters than there are within and amongst the individual categories themselves.
All of these types of adjusters compete within the same venue: Inside the theatre of accidental direct physical damage as it applies to the insuring contract that was written for the property in question. i.e no one, adjuster or otherwise, has the power to (with few exceptions) deviate from the insuring contract that was written by the insuring company within the governing framework set forth by the DOI and then agreed to by the policyholder.
All adjusters want basically the same thing: The accurate settlement of claims that close, go away and never re-open( i.e. we all want closure so we can get paid and move onto the next assignment).
The “law of the jungle” (claims industry) is really quite simple: Those who provide the most complete collection of fact as it applies to the conditions of the insuring agreement and then carried through to completed repairs will always be the most accurate (with respect to the DOI’s criteria for fair claims settlement).
There is no true equality amongst adjusters with respect to their abilities just as there is no true equality amongst people who call themselves athletes. Anyone w/ a pair of tennis shoes can call themselves an athlete just as anyone with a forty hour class can call themselves an adjuster. The true test of professionalism will always be defined by ability as well as the understanding of how the game is played.
EXAMPLE:
If you were forced to bet thousands, may be even tens of thousands of dollars, (you know, kind of like the same stakes as you would most likely have in your own insurance claim) who would you choose for representation in the following challenges:
THE CHALLENGE YOUR CHOICES FOR REPRESENTATION
A Game of Monopoly A Mail Clerk, A Kindergarten Teacher, A South
American Indian, OR A Real Estate Investor.
A Game of Golf O. J. Simson OR Tiger Woods
An Auto Race Rodney King OR Jimmy Johnson
Hopefully this example illustrates my point by listing three different types of events that (unlike the claims process) most people within this country would be fairly familiar with. The public in general is not aware of this “no true equality” fact because insurance claim settlement (though still is and always will be very much a game with its own set rules) is not a televised sport. Please understand that even the insurance industry (be it staff, independent or public) has a wide spectrum of talents from the Koby Bryants, all the way down to the kid that nobody wanted on their kickball team back in third grade.
There are without exceptions tricks to every trade:
Let’s use Michael Jordan (the now retired basketball player) for our next example. I believe that everyone would agree that Michael was a very gifted athlete with an extremely deep understanding of how the game of basketball is played. He did not simply know the rules of the game as they were printed in black in white. He knew the origin of the rules, he knew the spirit of the rules, he knew how the rules would be applied, he knew how far he could push before the rules would be applied and knew how to take full advantage of what was not in the rules. I could elaborate on the depth of his game for days however, will sum up this point by stating that his bag of tricks / understanding and abilities, was simply larger than that of his opponents. Don’t for a second believe that the same does not hold true for a good claims adjuster!
Choosing An Adjuster:
Requesting a seasoned and talented staff or independent adjuster to handle your claim is always a wise move yet for the most part will produce little more than a “luck of the draw” effort by any insurance carrier. Staff turnover and industry growth alone keeps carriers in a perpetual state of hiring new adjusters to complete the claims that their seasoned workforce simply cannot get to (i.e . fifteen to twenty-five percent of their workforce cannot keep up with one hundred percent of all incoming claims.) Some insurance carriers will allow for a second inspection with a different adjuster however, such action does not guarantee that the second adjuster will be any more seasoned than the first.
Requesting a seasoned and talented public adjuster to represent your claim settlement interest should ultimately produce more favorable results. After all, experience is essentially the product that their industry markets and if they cannot deliver that then what would be the point of hiring them. This is not to say that the public adjusting industry does not have their share of complete amateurs within their ranks. If the public adjusting company possesses some depth and diversity amongst their personnel, then they may (and in all honesty should) incorporate a workflow that funnels past the more experienced members of their team before any requests are made to the insurance carrier for payment.
Options For Resolving Dispute With Your Insurance Carrier:
1. Ask your insurance carrier to revisit and revise your claim settlement. The chances that your estimate contains an error is one hundred percent because there is no such thing as a flawless settlement. Claim settlement is a very complicated mixture of observation, interpretation and opinion that all takes place amongst the unpredictably fluid market of the repair industry AND all of this is calculated by live and very human entity that is without question capable of making mistakes. This in a nutshell is why your claim payment was based on a document referred to as an “estimate”. Just remember that you too are prone to error and will be expected to live by “the law of the jungle” ( i.e. those who are the most accurate are the most correct) if the mistake / oversight you are attempting to resolve is not seen as such by your insurance carrier.
2. Turn your claim estimate over to a general contractor or tradesperson and ask them to help you resolve your differences with your insurance carrier. Many people within the repair industry are quite skilled at getting all the monetary reimbursement that they need for the work that they complete however, be cautious. Never sign a contract that specifies dollar amounts that exceeds your insurance carriers estimated amounts for the work in question. Remember, first things first so make sure your repair company has come to an agreed amount with your carrier to restore the damaged property prior to committing to those figures. Some repair companies will ask you to sign a “subject to” contract stating that if they can come to agreement with your carrier on repair amounts, then you will agree to allow them to complete the repairs based on those amounts. Keep in mind that while repair companies are fairly good at looking after their own interests (i.e. the ones that they have in common with you), they are quite capable of falling way short (sometimes for legal reasons) of help with all of your claim related interests. Some companies may tout that they employ licensed adjusters to assist with your claim however, let me remind you once again that both Rodney King and Jimmy Johnson have (or at least had) a drivers license yet only one of them can be considered a professional driver.
3. Hire a public adjuster to assist you with finding all of your claim interests. A good public adjuster will almost certainly be able to find additional settlement dollars, even for items that you never believed that you had coverage for. Public adjusters are typically reimbursed for their assistance based on ten percent of the final estimate amounts on a contingency basis (i.e. no payment will be required if claim supplement does not exceed ten percent of original settlement amount). The ten percent payment may seem like a lot to share however, keep in mind that it is not uncommon for a good PA to get an insurance carrier to double or triple their original settlement offer. The decision should be easy for those who were denied any claim settlement or provided an estimate amount that was less than that of their deductible, this group of people have nothing to lose by hiring a PA.
4. Hire an attorney to address your disputed claim settlement issues. It is a well known fact that attorneys are quite clever when it comes to getting money from insurance carriers. HOWEVER, here are a few things that you should consider prior to traveling this road:
· Legal action can be very costly (almost certainly more than ten percent of your settlement outcome) and should never be your first line of recourse for resolving any dispute. Financial gain for your attorney does not necessarily translate into your own financial gain. Even if you are successful by receiving a larger claim payment, your bottom line may be adversely affected by time away from work and a damaged relationship with your insurance carrier.
· Attorneys do not hold a monopoly of understanding on the subject of insurance policies. They are however a rather intelligent breed who combat this information deficit by employing those (i.e. public adjusters) who are versed in the etiquette of fair claims play to complete most of the leg and brainwork for them. Attorneys who employ talented adjusters produce case files supported by a factual breakdown of the scope of the damage occurrence. Attorneys who employ those with little more than an adjusters license produce trumped up dollar figures that are unsubstantiated by market conditions and ignore the overall scope of the loss.
· Attorneys are quite intimidating. As a former staff adjuster I have seen many a circumstance where the mere threat of legal action has prompted claims management to authorize payment for items that are well outside the realm of coverage provided for under the insuring agreement. Such behavior falls into the category of damage control because it averts costly legal expenditures and possibly even prevents their customer from moving to another carrier. Threats aside, attorneys are still held accountable for the “laws of the jungle” in order to justify the additional claim settlement they are asking for.
Suggestions on How To Locate Talent Amidst the Sea of Those Who Are Offering Their Assistance
I’m sure there are several ways to go about locating suitable representation for your claims interest. My suggestion falls along the lines of a “voir dire” of sorts to determine the credibility of those who are competing for your attention. Please understand that very few (if any) adjusters have taken the time to commit all forms of the homeowner’s policy to memory. However, the questions that I have listed here should fall into the category of common knowledge for anyone who has adjusted a hundred plus claims.
As per the standard (and by far the most common form of) Homeowners Policy:
1. Explain how a policy deductible can be absorbed by the insurance carrier. Answer: Homeowners policy deductibles can be absorbed (in whole or part) when loss exceeds any limit of liability.
2. List three perils that trees, shrubs, plants and lawns are covered for and two perils that they are not covered for. Answer: Covered perils only include fire, lightning, explosion, aircraft, vehicles not owned or operated by resident of the residence premises, vandalism, riot and theft. Both windstorm and hail are examples of non-covered perils.
3. Arbitration and appraisal are two different processes employed by the insurance industry to improve the practice of fair claim settlement. Provide a brief description of each and explain which of the two is specifically provided for under the standard homeowners policy. Answer: Arbitration is employed primarily to establish whether or not damage has actually occurred while appraisal is used to establish the cost of repairing / replacing damaged property. Only Appraisal is guaranteed / provided for within the standard homeowners policy.
4. Dwelling extensions (i.e. fences, decks and outbuildings) w/o endorsement are covered up to what percentage of the primary dwellings limit of liability. Answer: Ten percent.