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John Durham (Johnd)
Posted on Monday, May 28, 2001 - 1:24 pm:   

After reading all the post on this subject, I must say I agree in part with each of the adjusters posting. I do believe that the insurance policy, as written and as accepted, (a policy of adhesion) should dictate the settlement rules. While I most certainly agree with Mr. Ebner on the principal of multiple layers, I also am aware that every policy has a renewal date. This would make it incumbent on the insurance company to field underwrite out the multiple layers. If an insurance company accepts a risk in an as-is condition, then the policy should protect the risk without exception. Inasmuch as tear-off of a roof is considered a labor function how can one depreciate labor. I, as others have indicated, cannot find language in standard policies that refer to deferment or hold back. Have we not already deviated from the language of the policy. There must be a reason most adjusting software programs do not allow standard depreciation on labor items without overriding this feature.

I will not attempt to address the damage to the roof here, as there are just too many different philosophies regarding what is and is not damage. Suffice to say if you stay within the generally accepted guidelines of damage you should not run into any trouble.

I hear a lot about the Bad Faith Rules and Regulations and as adjusters we are required by some states to maintain knowledge regarding bad faith dealing. If this was the carrier’s problem then we would be allowed to pass this buck to the carrier, not having to accept any responsibility for adhering to these regulations. As we all know, as Independent Adjusters, this is simply not the case. I believe that it is incumbent on each and every adjuster to not only adhere to these rules but to make sure that our fellow adjusters also do so.

If I ever have to have my property adjusted, I sure hope the carrier sends John Johnson to handle the adjustment.
Steven W. Ebner (Medulus)
Posted on Monday, May 28, 2001 - 4:08 am:   

While I always try to satisfy my customer, the insurance carrier, there is a reason why we have chosen to be independent and should we believe the practices we are asked to follow are unethical the best thing to do is walk. Whether or not we owe for roof tear off before it is performed would depend on several factors, not least of which is whether two or more layers are allowed by building code in the area. Increasingly the codes do not allow multiple layers. If the code allows for multiple layers, there seems to be nothing unethical about holding back roof tear off until and if it is incurred. We have simply become accustomed to insurance companies giving the insured every benefit of the doubt (while the frequent conception is that the carriers are the ones acting spuriously). Sometimes it takes a good and thorough search of the policy to determine what is actually owed as an upfront payment. But, of course, a 35% depreciation on all roofs is unethical and silly. I can't imagine that any policy justifies that action. If that were clearly the demand, it was time to walk. There are other assignments that do not ask you to sell your soul.
Tom Toll (Tom)
Posted on Sunday, May 27, 2001 - 8:45 am:   

The insured is entitled to be indemnified for an acutal loss of damage. If the roof had light hail damage, (slight loss of granular particulate) they have not sustained a structural loss requiring replacement. This particular situation is not cut and dried. The good insured's have brought some of this on themselves. You submit to have the roof replaced by a tear off and re-application of new shingles. In order to save their deductible or for other reasons, they nail over the existing one layer. They have just pocketed the tear off which was allowed. If they sustain another loss in later years, are they owed for a tear off of two layers. I think not. Problem is, houses sell, and how are we to know if the present homeowner is the culprit or did the insurance company pay for a nail over. In my opinion, the company has a right to do what they are doing. When the roof is replaced, per the estimate and upon re-inspection it is authenticated, then the insured will be totally indemnified when he is paid the hold back. I question the 35% depreciation on all roofs, however. If an insured has a one year old roof and is charged 35% depreciation, the company is in violation of the contractural agreement they have with the insured. This could and probably would lead to a bad faith situation. You could, of course, have a disclaimer at the bottom of your estimate that would let you, the adjuster, off the hook. Hail claims are inherently difficult at best to work, particularily marginal hail claims. In Omaha, I have seen adjusters paying for roofs that, in my opinion, are not damaged severely enough to justifiy replacement. A slight loss of granulation does not degredate the shingle. This is a normal wear and tear item. If you have 15 big hits that are noticeable, then you pay, in my opinion, for replacing 15 shingles, not the entire roof. This is what the roof shingles are designed for, to protect the decking and interior cavity of the structure. We should not summarily replace shingles if they sustained loss of granulation only. Needless to say, it is sometimes very difficult to evaluate hail damage in marginal areas. We just have to do the best we can, but we need to be educated as to what is and is not damage. Be careful ladies and gentlemen, roofs are dangerous. Gravity always prevails if you get sloppy with your feet and position on the roof. I do not climb on anything over 8/12 pitched. We have progressed to walking on two limbs, unlike our friends, the monkey family.
john johnson
Posted on Saturday, May 26, 2001 - 6:39 pm:   

Justin, in my opinion you did the right thing. Arbitrary depreciation percentages and holdbacks do not for the most part let the Insured obtain the benefit of his bargin, i.e. to be indemnified for the loss. I am not so sure whether the company was an insurer or a CAT company has anything to do with the issue; either way, the Insureds were not being treated fairly. As adjusters, it seems to me that our job is to adjust the loss fairly and equitably on both sides of the insurance contract. The fact that the Insurer pays our service bills should absolutely not have anything to do with the adjuster's evaluation of the loss. Many times we side with the Insurer simply because it is the correct thing to do. Many times we side with the Insured because it is the correct thing to do. I guess this philosophy will rain gloom and doom upon me.
Anyway, you did right in standing up to what you believe. Too many adjusters look the other way.
Linda Asberry (Linda)
Posted on Saturday, May 26, 2001 - 8:43 pm:   

Well, I suppose I would have had to turn in the files, also. While it may be true that theoretically you are employed by the carrier, it is your license, your integrity, and last but not least, may be your name as a defendant on a "Bad Faith" law suit! Keep in mind that we, as adjusters are NOT immune to the consequences of the actions of the carriers. Fortunately, we as independents, do have the option of picking up our marbles and going home--not much the less for wear! A refresher in consumer protection may well be in order.
Kile Anderson (Kileanderson)
Posted on Saturday, May 26, 2001 - 8:33 pm:   

You work for the carrier. If they tell you to do every claim while hopping on one foot and singing Yankee Doodle Dandy, that's the way you do it. They have ultimate responsibility, it is their customers you are servicing and the carrier is your customer. He who signs the paychecks makes the rules. I do, however, admire your integrity for bowing out when you couldn't agree. That's about all you could do.
Bill Richard
Posted on Saturday, May 26, 2001 - 3:03 pm:   

Justin, was this a carrier or the Cat Company that requested this? What is the statute of the state in question (ins to value)? At the first glance, my opinion would be follow their rules using the disclaiming verbiage in the settlement report advising of who/whom instructed you as long as no laws or statute was being broken for all except the depreciation. It would be my first opinion without knowing the statute or governing precedence, an arbitrary blanket 35% depreciation may be deemed unfair especially where the broad evidence rule is in use. In any case, we all must be able to live with ourselves.
Justin Duckworth (Justducky)
Posted on Saturday, May 26, 2001 - 1:56 pm:   

Recently, I took an assignment from a new carrier in the midwest. When I arrived, they gave me 100 claims & no instructions. After completing 12 claims, I was informed I MUST do the following:
1. Initiate 100% holdback on roof tear-off.
2. Initiate 100% holdback on dump-fees.
3. Depreciate 35% on all roofs.
4. NOT pay for roofs with minor hail bruises, as (this does not hurt the roof any.)
5. NOT pay for multiple layers on tear-off, only the first layer.
When I asked the carrier to show me the policy language that described the DEFERRED PAYMENT they said it was not my business to question this practice and just do what I was told.

I noticed that all the other adjusters were very young and seemed to just go along to get along. I did not, I returned the 88 +- claims and departed the storm. I would appreciate an honest opinion from others about this practice.

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