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Last Post 11/20/2010 12:03 PM by Ray Hall

"Deductible Consistancy"

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Ray Hall

Senior Member
Posts:2443

11/12/2010 4:11 PM
This post will question the auto and property claim departments with the same company to say it "just depends on each case" . Hmm... lets take the property department first. An insured has a HO-3 and has minimum roof damage from a small windstorm loss that is less than the deductible. It is inspected and the insured is advised the loss does not exceed the deductible amount for windstorm; therefore no payment will be forthcoming... this is repeated several thousand time each day as we are aware. #2. As soon as the insured gets this bad news, she gets in her new auto and drives to the shop for her pedicure to relax. On the way a rock hits her windshield and leaves a *. She knows her agent told her the comprehensive coverage has a $500.00 deductible and she wished she could just get it repaired as she could live with the repair . Two people in the shop state they know how insurance carriers operate and one owns a body shop, when she is finished bring the car by and it will be repaired with a 90 day guarantee and the cost will be paid 100% by her insurance company. She does this and is very happy. The 2nd person is a contractor and wants to look at her roof to see if he can be some help. He meets the adjuster on the roof and both agree it has wind lift; but windlift does not have a code for repair; therefore he will recommend she turn this over to the TV lawyer "who can get thousands more". This is a hypothetical question for the vice president of claims for the HO-3 policy. If you could do it over would you waive the windstorm ded. and just repair this roof as thats all this insured wanted when she turned it in. No don,t say the deductible stop,s inspections on small loss,s. Should the auto and property department swap jobs if the object is customer service and underwriting profit ?

Ray Hall

Senior Member
Posts:2443

11/15/2010 5:59 PM
I thought this would start a discussion, wrong again. It seems most posters know the carriers read the post and this will keep you from getting a call. I don,t think that is a fact, but it may be true. Is the thousands of people who want to go on storms afraid... just plain afraid to have a thought that does not come out of the same ole box. What did your supervisor say? Well ask your next supevisor how to keep from being named in a lawsuit on the next storm... if you only do what you were told to do.... and the first house on the next storm is the lady with the * in her windshield and she only wants her carrier to send a contractor out to replace about 6 ridge rows(blown of by wind) on the front hip at no cost to her, just like they did the windshield last month or so.

RandyC

Member
Posts:197

11/15/2010 8:43 PM
Ray, you are talking about waiving the deductible and paying for something below the deductible amount in order to save a greater expense later, right? Sometimes they have programs that waive the deductible if the insured will replace their old roof with a hail resistant shingle. That's something like what your were talking about, isn't it. I think they have to be careful to be consistent. If they make an exception for one insured they need to do it for all, if it is at all possible. I don't know much about actuarial accounting, but the ding in the windshield repair might be easy to crunch the numbers in order to establish a viable program that improves the whole risk pool, while repairing a few shingles on a roof might have an adverse effect on the property risk pool. It's all beans...but the way the beans fall affects the cost of the premiums. It's a bit like the old huge tree that is leaning, about to fall on the house, but not yet touching it or doing any damage. If they don't pay for taking down the tree, they'll be paying to replace the whole house later. So they put the insured on notice. If they paid for one of these....how could they ever refuse to pay for a thousand others? If they waived the deductible to repair three shingles, at what point of replacing more and more shingles would the deductible kick back in. If there was no deductible for repairing a few shingles, then how could they apply the deductible for replacing all the shingles?

Ray Hall

Senior Member
Posts:2443

11/15/2010 10:19 PM
No this is not about pay now or pay more later...like your tree example. If a policy has a $500 ded. how can the deductible be waived if the total RC is $600.00, but a repair is $60.00 with a 90 day guarantee the crack will not run by the insurance company if you let us repair the crack. In Ike most of the shingles had "windlift" Many many policyholders stated they just wanted the shingles resealed, but many wanted a new roof. All the insurance carriers was on the North side of the street chanting "mininum repair" only. In the crowd of insureds on the on the South side of the street were all the roofers, public adjusters & lawyers and all the repair people said "we cant guarantee repairs". All the adjusters could not find a code for reealing shingles per square and just said minimum repair. I can read insureds about as good as many and I know if I could have told the insured your roof can be repaired and we will send a roofer out and repair your roof and "we" will guarantee the workmanship for 90 days (not to leak)..from the repairs only and not one cent will you have to pay...... thousands of roof claims would have been closed for much less than the windstorm deductible. I still think the deductible is used as co-insurance and co-insurance is not allowed in TX. on a one, two or three familydwelling. You will find the HO-3 and the Family Auto policy has almost the same language in the first party property coverage. How can the same carrier waive the ded. on glass for repairs and not give the insured the same bargin on a small roof repair ?

RandyC

Member
Posts:197

11/15/2010 11:08 PM
I think there is more than one question here. The fight is not over on the windlift question. Some places see windlift as damage; other places that alone is not damage. When the fight is over, that one question may be answered. As you know, the seal is designed to let go when thermal conditions threaten the shingle. Resealing to the exact design requirement would be difficult. It might solve the wind lift problem, but probably create a new thermal problem. The other questions I don't know. When I was younger the uncertainty would have driven me crazy. It doesn't bother me so much now. There is a lot of uncertainty in the world. It's a good question, Ray. You ask a lot of good questions. They don't all have good answers.

Ray Hall

Senior Member
Posts:2443

11/16/2010 7:56 AM
Randy you may remember when 3 tab shingles did not have a factory seal. Was the seal down strip put on shingles to kep the tab from lifting in the wind Or to keep the roof from leaking from wind driven rain? I was always thought it was just to keep the tabs from flapping in the wind. Had nothing to do with turning water.... if the shingles were installed to factory spec,s. Now lets gets to the real "adjustment problem" An adjuster meets the roofer and the only untoward objective finding by both is..... The roof appears to be about 10 years old and about 400 shingle or 1200 tabs and about 20% are not sealed and the ONLY presumption a reasonable person can reach was "it has to be wind damage" or if its not wind what is the cause.? Now the real problem is "this will get paid for as a total loss one way or the other. and this has been going on since 9/13/2008 on Ike roof claims.

OdieWyatt

Member
Posts:56

11/17/2010 11:08 AM
In Xactimate try RFG ADDCOLD for adding adhesive to shingle tabs. It defines it as a cold weather installation, but it seems like it could be applicable to loose tabs also. If the first person in the subdivision agreed to the "free" repair and was happy with it, what will happen when all her neighbors get their entire roof replaced? Will she not become upset that her company misled her and patched her obviously totaled roof? Won't a jury find her roof should have been totaled based on the adjacent roof replacements? Will this be a case of her company willfully taking advantage of her? What meetings took place pre-storm to decide to adopt this plan, all with the goal of saving money? Did she not pay the same premiums as her neighbors? Sounds like a bad faith claim waiting to happen, not that it is bad faith, but that is what the lawyers might say. Personally, I think it is a good idea and a service for the insured. I just don't want to be the one to pilot the program... On another note, why not drop all roof deductibles back to $250. The insurance company gets extra premium by not having to give credit for the 1% deductible. Next, calculate the real world installed cost of the roof and pay it in full to the homeowner (no holdback, no fake invoices). Let them further negotiate on price with the roofers, so any savings stay with the insured, not with the roofer. The inflated pricing that includes enough to waive the deductibles will collapse and roofers will once again have to compete on price to get the job from the homeowner. No more bids that say they will do the job for the insurance company amount. The insurance companies can adjust the roof pricing downward as the competition causes it to fall further.

Ray Hall

Senior Member
Posts:2443

11/20/2010 12:03 PM
We all overlook the point most insureds are very loyal to their property insuror. Many people will take the person who comes to their house "word". Less than 5% of people are just like you and I. But we have a lot of push back from contractors and lawyers.

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