Insurance Claims - Don't Be in a Hurry!
Tornadoes, Floods, Wildfires...and we just began Hurricane Season!
After the March tornadoes, I posted a Top Ten List of extremely important things to do after your property is damaged in a disaster. In the next ten postings, I'm going to expand on each of the strategies in the Top Ten List.
Back in March, we here in the metro Atlanta area had an F4 tornado strike the downtown area of Atlanta. That tornado did about $300 million in damages. About a month later, another group of twisters hit between Atlanta and Macon, doing about the same amount of damage.
Now, we're seeing tornadoes all over the middle of the USA, and massive flooding has struck four or five states, affecting hundreds of thousands of people. And don't forget the wildfires charring Southern California.
But...cheer up! We have a long Hurricane Season that began June 1, and goes until the end of November!!
The first strategy in the Top Ten List is....SLOW DOWN.
How many times have you heard an insurance company's radio or television commercial say how fast they settle claims? That really sounds good, doesn't it? Who wouldn't want their claim settled quickly?
But my experience has been that hastily settled claims are settled far below what they are worth. It's almost as if the policyholder or claimant becomes willing to give the insurance companies a big discount in return for the speed of getting a settlement check.
Don't be one of those people who are motivated by a quick settlement check.
I'm not suggesting that you should drag your feet and be uncooperative in the process. You should be very cooperative...but on your own terms, not the insurance company's terms. I'm saying that if you are in control of the claims process like you should be, it will not usually be speedy.
The process will move along in a businesslike manner, but you must not allow yourself to be rushed into a settlement. Even if the insurance company sends you a check before you're ready to settle, you're not required to cash it.
Let's look at the first 24-48 hours after you have a loss. It really does not matter if your loss is small or large or a jumbo catastrophic disaster. It does not matter if your loss is a property loss...like a hurricane or tornado or fire, or a casualty loss...like an automobile accident. There are some things that you must do to protect yourself, your family and your property.
FIRE, CATASTROPHIC WINDSTORM (HURRICANE/TORNADO) OR FLOOD CLAIMS
FIRST THING TO DO IS TO CONTROL THE SITUATION
1. Make sure everyone is safe and accounted for...including the pets.
2. Get medical attention for anyone in the family that needs it...including the pets.
3. Contact your public utility companies. Have them send out a technician to shut off the water, power and gas immediately. That itself will increase the safety factor in your damaged dwelling.
Speak with the Fire Marshall and the local Building Inspector regarding the safety of the dwelling. You want to be sure it's safe for you to enter the dwelling after the loss. If it is not safe, don't go in there...no matter what. You can replace STUFF, but you cannot replace YOURSELF.
AFTER THE UTILITIES ARE SHUT OFF, AND BEFORE THE RESTORATION COMPANY BOARDS UP THE DWELLING...SAFELY do the next step.
4. Camera work
Get hold of a video camera and a couple of video tapes. You might need a floodlight or other very powerful battery-powered light. If your dwelling is safe to walk through, take video footage of every room in the house where there is damage. Take footage from every angle in every room. Make sure you take footage of your damaged contents. Shoot footage inside closets...in open drawers, inside boxes, on bookshelves, inside cabinets, in the garage where lots of junk is stored. Take shots of all four sides of your home from the outside. Take footage of the debris in the yard, especially if it has contents items that the fire department threw out in the yard.
If you can't get a video camera, then use a digital camera and take still photos. If you can't get a digital camera, use a 35mm camera. Use the camera in your cell phone. Heck, use disposable cameras. JUST TAKE THE PHOTOS AND GET YOUR DAMAGES ON FILM!!
NEVER give your film negatives or original videotape to the adjuster. Give copies of the photos and videos, if they ask for them. Keep track of your expenses for photos and videos...you can recover that cost.
Want to know why camera work is so important?
-A photo is worth a thousand words.
-Photos trigger memories, and remind you of building and contents items that were destroyed or damaged.
-Time is of the essence. If you're adjuster can't get to your property for a couple days (or weeks in hurricane losses), and you need to protect your property, you can carefully photograph the areas that you are protecting before you cover them or alter them. That way, you've preserved evidence of the damages.
5. Notify your relatives or closest friends of the loss. Friends and relatives can be extremely helpful to you...but only if YOU control what they do.
A. Do NOT take advice from your friends and relatives, unless they have experienced a loss EXACTLY like yours, and were successful in getting every dollar they were owed. If that actually happened, they probably have a copy of this book and followed my advice to the letter.
B. Friends and relatives can be great witnesses of the damage. They can help take photos and videos. They can be witnesses when you meet with the adjuster or your contractor. They can babysit for you. They can store things temporarily for you. They can take care of your pets. They can make beer runs to the store for you while you're taking care of your claim.
6. Notify the insurance company. It is certainly acceptable to phone the agent or company claim department first, but be aware that many policies require you to report a claim in writing. Make sure you know what your policy language says regarding submitting a Notice of Loss. THIS IS CRUCIAL!!! If you do not notify your insurance company of your loss in the way the policy says to do it, your claim could be denied.
7. Determine what it's going to take to secure your property and protect it from further loss. This is part of your responsibility in your insurance contract. If necessary, contact a disaster restoration company to board up the building, or tarp the roof, or extract the water, etc. IF YOU DO THE WORK YOURSELF, OR ALLOW OTHERS TO DO FREE WORK FOR YOU, THE INSURANCE COMPANY MAY NOT PAY YOU FOR YOUR TIME.
8. SERIOUSLY CONSIDER HIRING A PUBLIC ADJUSTER (PA) IN THE FIRST 24-48 HOURS (see Chapter Nine about Public Adjusters in my book).
9. If you need to contact an emergency service provider or disaster restoration contractor, go to the websites listed below to find one.
SUPER IMPORTANT TIP!!!
A restoration contractor is very different than a general contractor. Most general contractors who do remodeling or new construction do not have the skills and knowledge that a restoration contractor has.
For one thing, the restoration contractor is very familiar with the insurance claims process, and how insurance companies pay for repairs. The restoration contractors use similar estimating software to that used by the adjusters and insurance companies. A general contractor who submits an estimate in an unacceptable form to the insurance company or adjuster just annoys them, and slows down your claim.
Another reason to find restoration contractor is that they are usually full service contractors. They will be able to do temporary or emergency cleanup and board up. They will own the equipment for drying and water damage remediation. They are familiar with the kinds of damage that fires, wind and water do to homes. Finally, they are experts at writing accurate estimates for these specific kinds of damages.
General contractors who do not make their living in insurance restoration do not have this kind of equipment and experience. Period.
You can also look in your local Yellow Pages under "Disaster Restoration," or "Fire Restoration," or "Water Damage Restoration." Look for logos that say "DKI," or "ASCR," or "AAORC."
DKI - Disaster Kleen-up International. Headquartered in Chicago, IL, is a network of the leading independent property damage restoration contractors across North America. You can ask for a referral at 888-735-0800, and also find them at: http://www.disasterkleenup.com
ASCR - The Association of Specialists in Cleaning and Restoration, Inc. is the leading trade association for cleaning and restoration professionals worldwide, and the foremost authority, trainer and educator in the industry. You can ask for a referral in your area at 800-272-7012, or the website: http://www.ascr.org
AAORC - American Association Of Restoration Contractors, is a national network of reputable and reliable restoration contractors who provide top-notch restoration services. You can call them toll free at 866-771-1525, or look them up on the Web.
Call at least two restoration contractors, if possible. Ask them to meet you at your home to inspect the damage within 24 hours of the loss.
Remember this important point...there is NOTHING in your policy that requires you to get two or three estimates. Meeting two contractors is just a smart way to find one that you like best and want to work with. Check out their references, and ask them for a list of satisfied customer that you can call by phone. ONLY AFTER THE CONTRACTOR CHECKS OUT should you hire him.
10. TIME TO GET ORGANIZED
Start A Document File
I'll expand on this point in a later article because it's super important and there's a lot to say about it. Just go get a box with a lid to start with. Don't wait...do it right away!!
11. Meet the adjuster. (First, read Chapter Seven, Claims Adjusters.)
The following procedure is what a professional claims adjuster SHOULD DO at your first meeting:
Introduce himself and give you his business card.
Sit down with you FIRST and explain what he is about to do.
Find out from you if you've ever had a loss before.
READ YOUR POLICY WITH YOU, and answer all of your questions.
Explain in detail the claims process, and the steps he will be taking.
Explain to you, the insured, what your responsibilities are in the claims process.
Then, after all of that.....he should inspect your damage.
If your adjuster does NOT do all of the above, in basically that order...you must realize that you may have a problem right away.
Here's another tip about adjusters. Most adjusters are likeable people, and try their best to get along and be pleasant. Occasionally, you'll find an adjuster who is disagreeable, rude and sharp tongued. If you find that you don't get along with the independent adjuster that has been assigned to your claim, call his supervisor and request that another adjuster be assigned to this claim. Make your request politely but firmly. You do not have to take abuse and poor treatment from an adjuster. If the claims supervisor won't change the adjuster, call the insurance company and ask them to assign the claim to another adjusting company.
If you're dealing with the insurance company's staff adjuster, and getting treated badly, call his supervisor and firmly request another adjuster. If the supervisor doesn't cooperate, go to his supervisor. Keep going up the ladder until you get what you want. If none of this works, call your State Department of Insurance and file a complaint.
Many times you can meet the adjuster at your location on the same day as the loss occurred. That's the ideal situation. Some damages can be mitigated (made less severe) by the speed that cleanup begins. For example, you have an icemaker supply line that bursts while you are out, and the red oak wood floor in your dining room gets very wet. If you can get the water up off the floor, and drying equipment in the room quickly, the floor will likely not swell and buckle...and the floor can be saved. If you had to wait 1-2 days for the adjuster to arrive, the floor would likely have to be replaced at much higher cost.
At this first meeting with the adjuster, make requests for advance payments, if necessary. (See Chapter Nineteen, Advance Payments.) If you've had a major Contents loss, like fire, smoke or water damage, you'll need to replace some of these items quickly. If you have had a loss which leaves you unable to live in your home temporarily, you'll need money to pay for hotel rooms, or temporary housing, or a short term lease for a house or apartment (Additional Living Expense coverage). Insurance companies will make these types of advance payments to the insured when the advance is requested. They seldom offer an advance.