Do I Need a Lawyer?

Maybe.  But probably not if you suffer a property or casualty loss.  Let’s first discuss a property loss such as a house fire.  Do you need a lawyer in such as case?  If you’re super wealthy and just don’t have time to work with your insurance company than a lawyer could represent you in working up your property settlement.  But even then, lawyers charge more than Public Adjusters and do the same thing, so unless you feel you’ve been wronged and are looking to file a lawsuit against your insurance carrier (when you should seek representation) there just aren’t very many reasons to hire a lawyer for a property loss.   When dealing with property claims, assuming that you have a standard policy from one of the large carriers who all have similar coverages, just ask yourself, are they paying me enough for me to rebuild so that you’ll be back to a pre-loss condition except for the deductible?  Property losses shouldn’t usually require a release so if hidden damage is discovered such as during demolition, you can still re-open your claim.  Plus, often times and especially large property losses, it’s not uncommon for the policyholder to already have a contractor and often your insurance company is going to work with that person to get an agreed repair cost.  Property claims are more black and white… how many square feet of carpet?  Are the walls painted or have wallpaper? Is your roof concrete tile or asphalt shingle?  Lawyers don’t like black and white property claims because they are only worth a finite amount and insurance companies are good at calculating structural damage.

On the flip side, what about an injury claim?  Maybe you were in an accident and it wasn’t your fault, or you tripped and fell at a business and for whatever reason they are negligent (maybe they had sub-standard maintenance issues).  Here it’s a much finer line between should you or should not not seek legal representation.  Here are some things to consider when making the decision.  Are you an honest person?  Like really… are you out to simply get reimbursed a reasonable amount for your medical costs and something for your pain?  Or are you looking at this incident as a pay-day?

If you’re injured, it’s not serious though, you don’t “over-treat” just to rack up excessive medical bills in effort to inflate your claim, and in the end you’re realistic in your expectations, there is a good chance that your adjuster will appreciate this, calculate what they think your claim is “worth” and make you an offer to settle.  This is your chance to negotiate.  But think of it like this.  If you went to the doctor once after the accident because you had general soreness for a couple days, didn’t miss any work, and that’s it, you can expect the adjuster to offer you money to reimburse your medical costs and maybe a hundred or two for your pain and suffering.  That sounds kind of reasonable to me.  If you counter and ask for $500 for pain and suffering, you likely won’t get it but maybe you can get another $50 or $100.  The adjuster will appreciate you being in the range of reasonableness.  However if they offer you $250 for pain and suffering and you ask for $10,000, you’re probably not being realistic.  Keep in mind, your average injury adjuster has been doing this for many years and knows generally what claims are worth.  No two claims are the same, but claims worth a few hundred dollars for pain and suffering look much different than claims worth $5,000.  So do you need an attorney on these small injury claims?  In the end you probably don’t because you’d have to get at least 33% more with an attorney than you would have otherwise to cover the cost of the attorney not to mention you’re now adding an unknown amount of time to the wait before you get your money.  **Side note, if you have a small claim, maybe only worth a couple thousand or less, you may actually have trouble finding an attorney to take this type of case since there obviously isn’t a lot of money in it for them.

What about a an injury claim with a few thousand in medical bills related to the loss?  This is kind of on the fence because it depends on how well you can negotiate direct with the insurance company and again, will hiring an attorney and losing 33%-40% of the settlement be made up with the larger settlement?  Also consider, if you know your medial costs and you’re already starting to negotiate a settlement with the insurance company you might be looking a money in hand within days.  Hire an attorney and you may not see money for six months or a year or longer.  There is some value in getting paid less today vs. more in a year.

How about if you have significant, legitimate and obvious injuries?  In this case you may be better off getting an attorney who can compile everything for your case and negotiate a higher settlement.  Large claims is where the threat of filing a lawsuit carries some value for the attorney.  Personal injury attorneys don’t want to file suit as it takes time and money and rarely, and only in truly extreme situations do they actually end up in court, but just the filing of a suit forces the insurance company to hire their own attorney to defend the suit and even if the insurance company “wins” they may end up “losing” due to legal costs.  That’s why nearly all injury claims are settled before trial.  Plaintiff attorneys would much rather negotiate a settlement so they get paid quicker (well… as fast as quicker can be when a claim is traveling at the speed of attorneys which isn’t very fast).  I’m pretty claim savvy myself being an adjuster for nearly 20 years, but if I had a significant injury claim with lost wages, significant pain and suffering, possible long term medical issues, etc. I’d likely hire an attorney myself.  But on the flip side if working with the other adjuster they acknowledge that they only have low policy limits such as $15,000 or $25,000 total, maybe I don’t hire an attorney since the realistic amount of the recovery is likely going to be capped as getting a judgement in excess of policy limits can be tough and take time.  What good is a judgement in your favor if you can’t collect?

So at the end of the day, when you suffer a loss, should you get an attorney?  It depends.  Property claims… probably not.  Injury claims… maybe.  If you reach out to attorneys and they won’t take your claim because it’s too small or you’re obviously inflating your injuries to the point that it’s obviously fraud, that’s a good sign that you probably don’t need an attorney and should just do your best to negotiate with the insurance company direct.  Middle range injuries, it may come down to how well you can present your damages and negotiate with the adjuster yourself.  Serious injury claims where policy limits are high, it often will make sense.

A few other points, if you search in Google the question if you should hire an attorney following an injury, nearly all of the hits at the top will be from law offices who always say yes.  They make money when people get hurt and happen to call them vs. the next guy.  Personal injury attorney web-sites are filled with horror stories about the big bad insurance companies, telling you how evil insurance adjusters are and overall how insurance companies are out to screw everyone.  The reality is that these are broad and somewhat dishonest claims lacking in true context.  Another thing that attorneys always will tell a potential client is that they will make sure to get the insurance company to increase their settlement to account for possible future injury costs that may not be known at this time.  The reality is that this is often a myth.  It’s extremely rare for injuries to suddenly pop up years later that weren’t known prior yet are related to a specific loss long ago.  Good adjusters won’t put any value into these type of claims.  ATTORNEY:  My client may discover in two years that their back didn’t fully heal so we want an extra $15,000 to account for this possibility.  ME:  I may get hit by a bus tomorrow.  Should I just stay home on the off chance it happens?  

And one last point, if you do need an attorney (or Public Adjuster on a property claim), there is nothing wrong with trying to negotiate their rates, especially if you have a larger value case.  If an attorney says he charges 40%, it’s not unreasonable to simply ask if this rate is negotiable.  If he or she says no… shop around as there are endless attorney’s who want to get a slam dunk case with a high pay-day.  If they do negotiate, will they take 20%?  Probably not.  Are there some who will take 25%?  Yea there are some who maybe would but also keep in mind that good work isn’t cheap and cheap work isn’t good.  Competent and experienced attorneys probably can pass on a case if the party insists that they take significantly less than what they usually get paid.  In the end, if you’re looking to hire an attorney 30%-35% isn’t unreasonable for a competent attorney to represent you, especially if you have a high value claim.  If your claim is obviously going to be worth hundreds of thousands of dollars, it’s reasonable that the attorney would be willing to take a less than their normal rate if they know that they are looking at a huge pay-day.  Just keep in mind, very often the attorney isn’t looking out for your best interest, they are looking to get the highest settlement possible in a reasonable period of time so they can bank their cut.

Questions or comments, don’t be shy.

-Damon

 

Found mold eh? Relax, you won’t die.

Any property adjuster who has been doing claims for about, a week, I’m sure has already had a claim involving mold.  I’ve probably had hundreds in my nearly 20 years.  And in about… oh… 100% of them, someone involved, either the homeowner, a tenant, plumber, contractor or emergency services vendor will overreact to the situation.   Mold is naturally occurring and it’s everywhere.  On the keyboard that I’m typing on and the phone or computer you’re reading this.  There are many myths about mold and when it’s found but most times adjusters come across it is when there is a water loss such as a pipe break or toilet overflow.

The truth is that there is no “standard” as to how to treat mold and what levels of exposure will even cause harm.  Adjusters hear all the time about how a policyholder’s child has asthma or is allergic to mold but from a claims perspective, this is all just noise.  The fact is that the mold removal industry is basically designed to strike fear into people who then feel the need to spend (or have their insurance company spend) thousands of dollars to professionally re-mediate mold when in the end all that was likely warranted was putting on a dust mask, cutting out the drywall with mold on it and making sure that the area is dry so further damage (or mold) doesn’t result.

I’ve heard countless times from mold remediation companies about the “correct” way to handle mold but in the end, mold is NOT like asbestos or lead.  Asbestos and lead are known and proven to be dangerous.  As such, the government has strict regulations and guidelines about their proper removal and disposal.  However, when it comes to mold, there is no official government guidelines on remediation.   The vast vast vast (yes.. three vast’s) majority of claims where mold is found, most of the work directly attributed to the discovery of mold is simply window dressing to both make the policy holder feel good and/or line the pockets of the mold remediation company doing the work.  Also let’s not forget about the nice environmental hygienists who are getting paid for testing for mold either before to determine the type (NEVER EVER NEVER covered by insurance) or mold clearance test after removed (sometimes covered by insurance).

Here’s the bottom line, when you open your fridge and you see mold on some cheese, do you suddenly feel the need to drop everything, put on a space suit, set up a negative air chamber to remove the mold from your home then using a HEPA vacuum fully clean the fridge?  I’m guessing no.  So next time you happen to find mold, just relax, it’s not a big deal so don’t make it one.

Here in an OUTSTANDING piece by Kelly Richardson with the San Diego Union Tribune titled The truth about toxic mold: 13 myths debunked that outlines myths about mold better than I’ve ever seen.  CLICK HERE

As always, if you have any questions or comments, please do not hesitate to contact me.

-Damon

The best fire claim…

… is the one that doesn’t happen in the first place.  As noted in my prior post, there are many things you can do to prevent water losses.  And for the most part there are lots of things you can do to prevent a fire too but it’s much easy to prevent a water loss than a fire loss as many water losses are inevitable.   Fire… not so much.  For example if your water heater is 15 years old, there is a good chance it’s going to fail and cause water damage.  On the flip side, it’s pretty rare that a water heater is going to start a fire (however it does happen).

Fires are actually pretty rare but that doesn’t mean some simple steps shouldn’t be taken to try to prevent them, or more importantly, try to minimize the chance of injury or risk should one happen.  Here are some tips to consider before, during and after a fire:

Smoke Detectors – This seems obvious but you’d be surprised how many homes I’ve been in that didn’t have working smoke detectors.  Maybe the batteries were dead, maybe they just didn’t even have them.  These things aren’t expensive and code requires them in various places throughout a home.  Are you a landlord but don’t have required smoke detectors?  Well, the chance that someone could get hurt or killed aside, you’re also looking at potential lawsuits and maybe even criminal negligence.

Fire Extinguishers – This is also a “common sense” item to have but often homeowners don’t have even one.  One under kitchen sink or someplace easily accessible in case of a kitchen fire is a must.  I’ve also got one in my bathroom as fires from hair dryers and such can and do happen.  I’ve also got one in my garage, a place where a lot of fires can start.  And make sure you have the correct fire extinguisher too.  Not all are designed for the same type of fires (cooking vs. electrical for example).

Grease Fire – I can’t explain it any better than this screen shot so read this and take mental notes:

Valuables and Key Documents – They can be costly but getting a nice safe for your home isn’t a bad idea.  And I’m not talking about a $59 Wal-Mart special.  I’m talking about one that’s rated for at least 30 minutes.  Most house fires will be out long before this unless you live in the woods and it takes the fire dept. long to get to your place.  If that’s the case, consider a larger and heavier grade safe.  Obviously this is where you should keep your firearms and the crown jewels so they don’t get stolen either.

Fireworks – Leave them to the professionals or find “Fireworks Guy” down the block (every street seems to have one) and let them do everything and run the risk of lighting their hair on fire while you watch from a safe distance.

Turkey Fryer – These are basically death traps.  Obviously these should NEVER be used inside.  And realistically is the turkey even that good?  After all, no matter what you do to cook it, turkey is still a foul dish.

Other Outside Stuff – Similar to the turkey fryer, you should NEVER use other outside designed stuff inside such as a BBQ or an outdoor cooking stove.

Car Stolen and Burned? – Cars get stolen.  And sometimes cars are destroyed in fires.  But when a car is reported as stolen and then is later found burned… that’s a huge indicator for possible insurance fraud.  Car thieves usually want the car either to resell or for parts and rarely torch them.  There are rare examples though such as my great aunt who didn’t drive often and had her car stolen but didn’t know for a few days until the police showed up to let her know it had been used in a bank robbery and then torched since it was evidence.  This is a rarity though as fires usually attract people and attention is not something that bad guys usually want to avoid.  So, if you’re planning to commit insurance fraud, you’ll need to think of another way to make a buck.

Wild Fire Home Protection – If you live in an area with a wild fire threat, make sure that you clear all burnable brush a safe distance from your home.  Don’t have anything against the home’s foundation or walls that is burnable.  Most homes that burn in wild fires don’t actually catch on fire from the roof from falling embers (many roofs are actually fireproof such as asphalt shingles) but instead they catch fire from something under the roof that catches fire first such as patio furniture against the side of the home.

Evacuations – If there is a wild fire and authorities are even recommending evacuating, I’d recommend going.  Ideally you would have already considered what to take with and it’s ready to be loaded into your car.  Wild fires are extremely unpredictable.  You might be under a voluntary or even recommended evacuation notice on minute and before you know it you could be in serious trouble and nobody was able to come around to warn you again.  Don’t take risks with wild fires.

Document in Advance – Today with digital photos and the easy of taking video, it’s not a bad idea once or twice a year to simply walk around your home and take pictures.  Sure, it would look a little shady to have these if you really do have a fire and your home burns down as it could be an indicator of possible fraud, but in the end if you can truly document what you had, you won’t forget as much when the time comes to try to remember EVERYTHING inside your home that was destroyed.   Photos and video and other important documentation can be kept in a safe deposit box or your heavy duty fire safe or saved to the cloud for access if needed.  You’d be surprised how many sub $10 items don’t get paid for in a house fire claim because they simply get forgotten.  Photos can help to avoid this.  And if you do find yourself in an evacuation situation… I know time is limited but it will only take a couple minutes (if you have time) to walk around and snap off 50 photos on your way out.

Safety First – In the end, if you find yourself in a fire keep in mind that nothing that’s going to burn is as valuable as you.  You and your family’s safety is all that matters in the end.  If you have good insurance and everyone gets out safe, yea you’ll have a headache to deal with but everything will be OK in the end.

As always, if you have any questions or comments, please do not hesitate to contact me.

-Damon

Cheapest Insurance Claim Ever

If you ever have a property loss, specifically caused by water, even if you have insurance, you know that it could still be quite costly.  If you have a $500 or $1,000 deductible at a minimum you’re going to be out this much.  But there can be other costs such as lost of time, hassle factor, non-covered damage for whatever reason, etc.  So how do you keep the costs down from a water loss?  Simple… don’t have one in the first place.

Although I don’t handle homeowners claims much any more, I did for many years.  And despite not having any firm numbers, I can confidently say that a large percent of the water damage claims that I handled were easily avoidable in the first place.  Here are some things one can do to prevent a claim from ever happening:

  1. Washing Machine Hoses – Most new machines come with cheaper black rubber hoses.  Pay the extra few bucks and get the steel braided ones.  And also NEVER re-use hoses if you move.  They can easy become compromised if you’re undoing them and then re-installing.  Spending $20 for new, higher quality, hoses is money well spent.  Another good tip is that if you’re going out of town, consider turning the valves off before you leave just in case these things break while you’re gone.  Trust me, water losses when people aren’t home are common because if often if people are home, they catch them fast enough before they cause a lot of damage.
  2. Refrigerator & Toilet Supply Lines – Similar to the washing machine hoses, it’s best to get a metal (often copper) refrigerator hose rather than the cheap tubing that came with the unit.  Especially if you have mice as they LOVE to chew on these things.  Same with toilet supply lines.  Pay a couple extra bucks and get steel braided rather than the cheaper white tubing style.
  3. Avoid Frozen Pipes – If you live in a cold weather part of the country, always remember to keep your heater on during the winter, even if you aren’t home.  Or, turn off the water to the home and drain the lines.  Homeowners insurance policies don’t cover damage caused by frozen pipes breaking unless you do one of these two things.
  4. A/C Unit – Once every blue moon, these things should be serviced to make sure they are running efficiently.  This is also a great time to make sure that the condensation lines aren’t clogged with dirt and debris.  You’d be surprised how much damage can be caused from A/C condensation line failures.  And often this is slow damage that goes unnoticed and that could be a coverage issue as most policies won’t cover long term “repeated leakage and seepage.”
  5. Water Valves – Just like noted above, if you’re going out of town, yea it’s kind of a hassle, but consider turning the water off to your home (if you don’t need the sprinklers to run or anything).  Then if something should break while you’re gone, you won’t have a lot of damage if any.  Downside is that constantly turning your water on and off may cause pressure changes which could be bad for older pipes.
  6. Replace Older Pipes – How old is your home?  If your home is 40 or 50 years old or more, your plumbing system could be falling apart in the walls and you may not even know.  It’s expensive but pipes don’t last forever and if you sell your home, having “new” pipes could be a strong selling point if you have an older home.  It could also save you money on your annual insurance premiums or on the flip side, cost you money if you have old pipes as your home is a greater risk for suffering a loss.
  7. Tubs & Showers – If you have tile, make sure that the grout isn’t all cracking.  Cracks and little holes can form and over time water can get where it’s not supposed to.  Often these types of water damage claims aren’t covered because the damage (usually rot and deterioration) has been going on for quite some time.  Same with fiberglass tub/shower surrounds, over time they can become brittle and crack.  Hairline cracks may not look like much but they could be allowing water to seep out and you don’t even know it.
  8. Kitchen Sink – Notorious for issues that go undetected.  After all who looks in the far back of the kitchen sink cabinet often?  Well… start to.  Lots of plumbing under there for sink, faucet, garbage disposal, dishwasher, etc.   A small occasional drip, can go undetected for a long time and once you notice it, all your cabinets could be damaged beyond repair and your insurance company may not be able to help (again… they don’t cover long term “repeated leakage and seepage”).
  9. Sewer Lines – If your home is older, lets say 30, 40 or 50 years or more, and the sewer line has never been replaced, you may want to bite the bullet and do it before you have a loss.  Tree roots can damage them over time but often they just simply wear in the ground.  If you have an older clay pipe from the early 20th century, you probably don’t have anything actually as it’s probably already deteriorated and mostly gone.  Cast iron from the mid 20th century isn’t much better these days.  Replacing a sewer line isn’t cheap, could be $5,000 to $10,000 depending on what you need but having a back-up and raw sewage flood your house makes that cost seem a lot more worth it.
  10. Water Heaters – They aren’t designed to last forever.  Warranties on these often are only 6 years and sometimes 10 for higher end ones.  Anything over 10 years insurance companies pretty much consider beyond their useful lifespan and we don’t even go after manufactures at that point.  Even units in the garage can cause a lot of damage if they start spraying the common wall to the interior of the home.   The most common issue is the tank simply rusting out at the bottom.  If your water heater is over 12 or 15 years old… it’s not a matter of if it will blow, it’s a matter of when.

That’s it for today.  As always if you have questions or comments, don’t be shy.

-Damon

The Exciting World of Insurance Claims… No Really.

OK, I get that insurance claims on the surface can seem pretty boring, and at times I don’t disagree.  I did auto injury claims for a year and this was basically the dark time of my career.  Let’s be realistic, what happens to cars?  They get into accidents, they get stolen or they get broken into.  Sure a few other things happen from time to time but for the most part one of these three causes of loss will be the vast majority of the claims an auto adjuster handles.

But property claims?  That’s where the fun is.  There are countless ways to destroy a house.  Fire, lighting, hail, pipe break, theft, vandalism, animals, a tree can fall on it, flood, a bear can break in and destroy the house, sewer back-up, earthquake and on and on.  Sure we see a lot of the same causes of loss over and over again such as hail or a dishwasher supply line breaking, but every once in a while we get something truly awesome.  Here’s a few REAL claims that I’ve handled over the years:

Lost and NOT found.  While at State Farm had a claim for a woman who had lost her diamond tennis bracelet.  This is a pretty “normal” claim until she mentioned that they looked all around the house but didn’t find it.  Then they saw the cat was dead.  So what did she do?  She had her husband take the dead cat into the back yard, cut him open and check to make sure he didn’t swallow it.  Well… he didn’t.  So now they still didn’t have her bracelet and they had to clean up the mess of their mutilated cat.  And seriously, what husband would do this?  Not me, that’s for sure.

What’s for dinner?  I think this was a claim I handled at Allied (then a part of Nationwide).  A woman lived in an old kind of rundown home.  She had an old oven.  She went to turn it on to preheat it to cook dinner and a minute or so later her kitchen was on fire.  The cause?  A rat had gotten inside her oven and when she turned it on it caught on fire.   This brings new meaning to the saying that it “tastes like chicken.”

Insurance fraud is a crime.  Tripping and falling or slipping and falling does legitimately happen.  Sometimes it’s not a simple miss-step though.  A couple years ago with my current employer, CUNA Mutual Group, I got a claim for a woman who claimed that she tripped and fell after using our insured’s ATM at a credit union.  Something didn’t seem right and after some investigation on my part, come to find out that she had made about a half dozen fraudulent claims over the past couple years to many insurance carriers and unfortunately for her, some I worked for and had friends at who could help me with my investigation.  Long story short, a few months ago her and her husband were both convicted of a couple dozen counts of insurance fraud each and have been ordered to pay nearly $100,000 back to the various insurance carriers or face prison time.  We unfortunately deal with fraud a lot, and often for various reasons we still end up having to pay.  But actually busting someone and they actually get convicted?  It’s rarer than you think as she was the first in my career.

A high end dump.  I was handling a claim for a real small run down home that had burned down during the San Diego wildfires in 2003.  For the most part it was a “normal” claim.  I was meeting with him one day to to capture information on everything in the home that had been destroyed.  Pretty normal stuff and all is going well until we get to his clothes dresser.  In the top drawer was t-shirts, 2nd drawer was shorts and jeans, 3rd drawer was socks and boxers.  I asked what was in the fourth and he said a violin.  I asked him to tell me more about and he said it was a Stradivarius.  Without missing a beat, I asked where he kept his Gutenberg Bible.  I found it hard to believe that in this run down house in Alpine, CA, below this guy’s sock drawer was an authentic Stradivarius violin probably worth millions.  Pretty sure it wasn’t the real deal since I did some research and all known pieces had been accounted for and documented and none were known to be kept in this guys dresser below his socks.  Didn’t matter anyways as he got policy limits.

Just another claim.  I’ve handled many claims for celebrities over the years but two stand out because they were well known professional athletes.  Had a claim once for a star NBA player as some drunk guy ran into the brick column next to his security gate at the street.  Didn’t actually speak to the NBA player as it was in-season so worked with his agent in Chapel Hill, NC (he’s one of the Tar Heel’s greatest players).  Another claim that I remember was a theft claim an Oakland Raider who had his gym bag stolen from his car.  Inside was the usual stuff, his nice watch, iPod, clothes… oh and his team issued playbook.  He got a hefty fine for losing his playbook but we paid the amount to him since it somewhat represented the “replacement cost.”  How did we verify this?  An assistant coach (also a well known former NFL player) sent me a letter on Raiders letterhead confirming the amount.  At the end of the day, they were regular claims for people with extraordinary day jobs.

Happy cows come from California, not Idaho.  This is still my favorite all-time claim from when I was an inside commercial adjuster with Travelers.  We insure a cattle ranch in some remote part of Idaho.  Got a claim with facts that says a cow died.  Under a farm policy if they have cattle coverage we pay $500 for accidental death.  Talking to the farmer, I ask what happened.  He says cow was shot (yes, this actually happens  and more than you think… sometimes people will randomly shoot livestock).  I noted that this covered but before I finish my sentence he goes on telling me that it wasn’t shot with a normal gun, it had to have been some sort of ray-gun and that it was aliens who shot his cow.  Being a smart-a$$ I kind of started to chuckle thinking he was kidding only to realize he’s serious.  For about 5 minutes he goes on about how he’s seen aliens a few times and every once in a while they do something like this to his cattle.  In the end I assured him that if the cow was shot, with a regular gun or an alien’s ray-gun, it’s still covered as accidental shooting is a covered peril.  He got paid $500 and I got some good blog material.

As always, if you have any questions about insurance or claims, don’t hesitate to reach out to me.

-Damon

 

 

 

Who’s Screwing Who?

When you have an insurance claim, whether it’s an auto claim or property loss, there is a good chance you may end up having to deal with a few different people.  Complex claims such as a house fire could easily involve half a dozen people or more and it’s easy for an insured (you) to get confused as to whose doing what and who’s working for who.  So here’s a handy dandy little list to help sort out some of the people you may end up working with on a claim.  **Keep in mind that many of these people are looking out for you, some not so much, others are basically only looking to screw anyone they can to make a buck.  That being the case, in reality there are truly good people in each category but on the flip side there are also truly bad apples in each category.  So don’t take these descriptions as universal fact, but know that the vast majority of the time these descriptions are going to be accurate.

Your assigned insurance company adjuster.  This person is NOT out to screw you.  Let’s say you are insured with State Farm, Travelers, etc. and you have a claim.  They assign it to an adjuster (like me).  This person is probably paid a salary (sometimes hourly such as in California but that’s a different blog for another day) but really doesn’t have any interest in the true outcome of your claim other than paying you the right amount at the right time.  Adjusting is an art, and calculating the “right amount” at the “right time” is the key here, but for the most part, your friendly company adjuster isn’t out to screw you, they actually want to close your claim as quickly as possible as we are never actually caught up.

Company employed auto damage appraiser.  This person is NOT out to screw you.  This is someone who loves cars and basically looks at vehicle damage all day and every day and writes repair estimates.  Like the company adjuster, they just want to close your claim quickly to move on to the next one.  Auto damage appraisers can be looking at a dozen cars a day sometimes so they have little reason to screw you with a low estimate… it just means they have to do more work down the road.

Independent Auto Appraiser.  This person is NOT out to screw you.  Not every company is State Farm and has people everywhere so some companies hire independent auto appraisers to inspect damage and write estimates.  This person really doesn’t care one way or another, they just want to inspect your damage, write the repair estimate and then send the invoice for their time/expense to the carrier so they can get paid.

The average Enterprise Rent-A-Car representative.  This person is NOT out to screw you.  More than likely this person just recently graduated college (they have a long history of hiring recent college grads) and really just wants to do a good job so they don’t get complaints and find a better job.

The average bodily injury attorney.  This person IS trying to screw you, the insurance company, and anyone else with deep pockets.  The higher the settlement, the more this person makes.  Sure there are some great injury attorneys and there are times when you absolutely should have legal representation if you have been injured.  But if your case is only worth $4,000, and you’re not satisfied with this so you hire the Law Offices of Dewey, Cheetham & Howe and they settle for $5,000… after six months… yea that sounds better since it’s more than $4,000.  But it’s not so great when you get a check for $3,300 because they charged you 33% of the settlement.  These folks aren’t called “Ambulance Chasers” because they like seeing the flashing lights.

Cause & Origin Fire Investigator.  This person absolutely is NOT trying to screw you, or the insurance company.  Almost always a retired fire fighter, these guys (there probably is a woman C&O out there, but I’ve never come across one) really just want to find the cause of the fire.  Then they can help with identifying an at-fault party such as an appliance manufacturer or perhaps the arsonist if intentionally set.  These guys loyalty only rests with the truth.  Sometimes the truth costs insurance companies money, sometimes it helps save us money.  Their integrity is what matters in the end with these guys.

Independent Adjuster.  This person is NOT screwing you, but may be screwing the insurance company.  These people are hired by insurance carriers if they don’t have a field adjuster in your area.  They will inspect your home’s damage, take photos, write up an estimate of repairs, and forward everything to the company adjuster (me) for review.  If anything they will often over-estimate damages because there is less chance that the file will be reopened but also because often the contracts with these adjusters is based on the loss amount.  A $49,000 fire loss may result in a $1,000 invoice to the carrier for their time, but a $50,000 estimate could be worth $1,200 if there is a tier based fee schedule in place.  However in the vast majority of cases, they just want to be accurate and fast so they get paid faster for their time.  Plus they know that lousy independent adjusters don’t get called back for future claims.

Engineer.  This person is NOT screwing you or anyone else.  Insurance companies often need to hire engineers to help determine cause of loss, extent of structural damage, repair options, etc.  We don’t hire fly by night shady engineers, we usually hire well known and established engineering firms who charge a lot because if we end up denying a claim, we need to make sure that our engineer won’t get blown up in court during cross examination so we try to only hire top-shelf firms.  Like the C&O Fire Investigator, this person is more loyal to the truth and wants to keep their integrity intact.

Public Adjuster.  This person is ABSOLUTELY screwing you, the insurance company, and anyone else they need to bulldoze to make a buck.   I’m sure there are some lovely people who are “PA’s” and in the end, I get that they are just doing their job.  But this really is the dark side of insurance claims.  Public Adjusters are kind of like attorneys in that they represent you after a loss, often on property claims vs. bodily injury claims.  Rates are negotiable but it’s not uncommon that they will take 10% or more from your settlement.  Have a $250,000 house fire?  Well, you’re only going to get paid $225,000 after Joe PA takes his cut.  At the end when you realize that you indirectly paid this guy $25,000 for his services, you’ll probably scratch your head and wonder if it was worth it.  Trust me, it likely wasn’t.

Your Plumber.  This is a toss up as to who this person is screwing.  Could be nobody, could be everyone.  Good honest plumbers are hard to find.  But whatever you do, NEVER take the plumber’s referral for the company that can clean up the water damage.

The emergency company recommended by the plumber.  This person is ALMOST ALWAYS screwing the insurance company, and often will have to screw you in the process.

The emergency company recommended by your insurance company.  These guys likely aren’t going to screw you because they know that the insurance company is paying.  They could very well be trying to screw the insurance company but that comes back to why adjusting is an art form.  The “legitimate” emergency companies and insurance companies are in a never ending game of cat and mouse.  They will steal our cheese if we don’t catch them, but if we do, they won’t put up too much of a fight because they still want future work.

The emergency company you found on your own.  Wild card.  Some are great and provide a legitimate service for a “reasonable” price.  Others… not so much.  When I say reasonable, you’ll see their bill for $5,000 and think it’s a rip off, and for the most part I’ll agree but I may still pay it.  Take into consideration that these people will show up to your home at 2:00 am on a Sunday morning to clean-up your basement which had a gross sewer back-up, you can see why they charge so much to begin with.

The General Contractor.  This is truly a wild card also.  I know some great contractors.  And on the flip side, you can’t spell contractor without C-O-N.

Contents Expert.  This person may be screwing you, but it’s probably not on purpose.   If your house burns down, often we hire someone (however some of the bigger carriers may have in-house people who do this) to calculate your contents loss.  This person literally may sit with you for a day and try to capture in a spreadsheet every single item in your home that you lost.  They may not have anything to go by with regards to quality or true replacement cost so sometimes we just have to take average values.  Don’t know how much your sofa cost new because it was 15 years old?  Could be $500, maybe $750, possibly even $1,000.  Just depends on what the contents adjuster comes up with given the limited available information.  Perfect example of garbage in leads to garbage out.

SIU Investigator.  Every insurance company is required to have a “Special Investigation Unit” to try to help identify insurance fraud.  These are often former police or other people with investigative backgrounds.  If they have to get involved, rest assured, they aren’t trying to screw you, they are trying to help us make sure you’re not screwing us.

The doctor your ambulance chasing attorney referred you to.  This person is likely out to screw the insurance company, Medicare, and anyone else footing an inflated bill.  If they are truly shady, you may get caught up in a shady insurance fraud ring and if this happens, you’re screwed.

The chiropractor referred by your ambulance chasing attorney.  Shadier than the doctor but without the medical degree.  Oh, and he can’t bill Medicare so he has to find deep pockets elsewhere.

Your Insurance Company.  These people are VIRTUALLY NEVER out to screw you.  You may think they are screwing you, don’t like it when a claim is denied, and feel that your policy is worthless, but your policy is a contract and we are heavily regulated to make sure that we’re living up to our promise.  Yes, sometimes mistakes can be made and in extremely rare cases we have our own bad apples, but the risk of a bad-faith lawsuit somewhat guarantees that you’re getting a fair shake from your carrier, even if you disagree.

So there’s a good run-down of the most people involved in auto and property claims.  Again, these are just generalizations and there are great people and bad apples in each category.  Feel free to let me know if you have any questions or comments or have had your own insurance loss and want some help getting it resolved quickly.

-Damon

 

Flood Damage vs. Flood Damage

Not all water is the same.  And should your home or apartment become damaged, it’s good to know about the type of water damage you have and then what actions need to be taken.  When dealing with insurance related maters involving water, there are basically two kinds of water, covered or non-covered.

Every claim is different but for the most part water damage that is covered is going to be things like domestic water.  This includes supply lines such as those running to the dishwasher, refrigerator, toilet, sinks, pipes in walls or even under your slab, etc.  Generally, but not always, if your home is damaged by water that came from a plumbing related source, it’s usually covered.  On the flip side, non-covered water damage is going to be water that is natural.  The most common is river flooding, rising water from heavy rains, hurricane storm surge, etc.  Thought not always true, for the most part a good way to think of covered water vs. non-covered water is did it touch the ground outside before coming inside?  Pretty much if you can say yes to this, the damage that specific drop of water causes isn’t likely going to be covered by a traditional homeowners policy.  Once a drop of rain touches the ground, if it then gets inside a building and causes damage, it’s likely not going to be covered damage.

This is why it’s crucial that if you live in a flood zone, you also carry flood insurance.  Otherwise, if something catastrophic happens and your home is flooded, you’ll likely be out thousands of dollars.  Even a couple inches of water from a flood can easily cause tens of thousands of dollars in damage not to mention the hassle factor.

Most water damage claims that insurance companies deal with aren’t those that you see on the news such as the flooding after Hurricane Katrina.  Instead, the vast majority of  water damage claims we deal with are things like supply lines to washing machines breaking and running for a half hour until discovered.  Even this “clean” water can still cause extensive damage but nothing like the damage that a river flood will cause.  Many times walls and sometimes even flooring can be saved if a proper emergency response is arranged quick enough.

So if you home is damaged by water, remember… “Flooding” isn’t covered but “Water Damage” may be.  Either way, should you have any loss, water or otherwise, make sure you take action quickly to mitigate your damages, and don’t hesitate to contact your insurance company right away as they can often help with sending out qualified emergency vendors at pre-approved costs.

As always, if you have any claims related questions or anything regarding property and casualty insurance for that matter, don’t hesitate to contact me.

-Damon

 

 

Don’t be a Cheapskate

Obviously the key to insurance and dealing with an insurance claim is having it in the first place.  And it will make your life much easier if you have good insurance too.  The problem is that most people don’t know what type of coverage they need, especially when it comes to auto insurance.  Insurance is one area where people, unfortunately, go a little more skimpy than they should.  Don’t get me wrong, I don’t want to pay any more than I have to for good coverage, but the key to good insurance is actually having… good coverage.  In this case I’m talking about having sufficient policy limits.

Do you own a car?  They you need insurance as it’s the law.  Sure, you can get some cut-rate policy for whatever your state minimums require, but is that enough?  In California for example, the state minimums are $15,000/$30,000/$5,000.  Nevada is a little higher at $15,000/$30,000/$10,000.

But what do these numbers mean?  Well, the first number ($15,000) is the most that your insurance company will pay to any one person who is injured in an accident that you are found liable for.  Think about that and you’ll quickly realize in today’s world, it doesn’t take a lot of medical care to reach $15,000.  The second number ($30,000) is the most that they will pay in any single occurrence, regardless of the number of injured parties.  Let’s say you’re really having a bad day, and hit a mini-van full of kids and they’re all injured to some extent.  Seven people in the car, but your insurance company, MBA Mutual Insurance of Reno, is only going to pay up to $30,000 TOTAL.  Again, let that set in… that’s not a lot of money when talking about medical care.  Oh, and those $15,000/$30,000 also have to cover pain and suffering too… if there is anything left after the medical costs.

The third number ($5,000 in CA and $10,000 in NV)  is what they will pay for property damage.  Property damage is basically the other person’s car that you rear ended because you were texting while driving.  Or maybe it’s the fence you drove through because you were more focused on your Starbucks than the road.  The issue is that these aren’t very big numbers to protect you when you consider how much damage you can cause in a car.  Rear end a Benz and that $5,000 doesn’t go very far.  Actually if you rear-end a 2012 Honda Accord you’re still likely going to be under-insured.  Granted your insurance company will do everything they can to protect you, and will try to get a signed release before they release their policy limits, but you’re still exposed to a lawsuit in excess of your limits depending on how much damage you caused and how little coverage you have.

“But Damon, I don’t have any assets.  I live paycheck to paycheck so they won’t get anything from me as I have nothing to protect?”  Nope, not going to fly with me.  Even though you’re paycheck to paycheck, do you have a good paying job?  Actually, do you have a job at all?  Do you own your home, have any liquid assets such as your vacation savings fund?  Or maybe you’re young but have a lifetime of earning potential ahead of you?  If any of these are true, then you NEED to bite the bullet and pay for higher limits.  I’d recommend at least $100,000/$300,000/$50,000 in this day and age.  If you can, go higher.  This way heaven forbid you hit an E Series Mercedes and the driver and passengers are hurt, you have pretty much nothing to worry about.

And what about Uninsured/Underinsured motor coverage?  You NEED this.  And for as high a limit as you can afford.  Trust me, there are way too many cr@ppy drivers out there who also don’t have insurance.  They often go hand in hand.

So what about “Comprehensive” and “Collision” coverage?  Curious if you need those?  This is much more of a grey area and more dependent on what your sled is worth.  If you’re driving your uncle’s used ’87 Monte Carlo with the bad paint and bald tires, there likely isn’t a reason to pay for these coverages if they are only going to pay you $500 anyways should it become damaged.  But let’s say your car is worth about $5,000?  If you total it, you need something to drive you to and from work and since these coverages are based on the value of your car (decreasing over time as the value decreases) you may want to seriously consider getting “Comp & Collision” if you won’t have the funds to buy yourself a replacement car should the need arrive.

Rental car coverage is an absolutely must have.  It will only cost you pennies in the long run and unless you happen to have an extra car lying around, you’re likely going to use it even for the smallest of claims where some body work is needed that can’t be fixed in a day or two.  Most plans will offer something like $30/$900 which means $30 a day up to $900 for a month.

Lastly, what about deductibles?  This is entirely up to you (keeping in mind that deductibles only matter when dealing with Comprehensive and Collision coverage, not liability claims where there is a 3rd party).  Obviously the higher the deductible the lower the premium but it’s my experience that, especially the comp deductible, it doesn’t save a ton of money by going with a higher deductibles.  The difference between $100 and $1,000 deductible for your comprehensive coverage may only be a few bucks a month.  But if you have a claim… it’s $900 at once.  Do the math and see how many months/years would it take in premium savings with the higher deductibles, if you are claim free, to see when you’d be ahead and the savings would have paid for itself.  If it will take 5 years in premium savings to cover the cost of one claim at the higher deductible, it probably isn’t worth the risk.  Collision will likely have a tighter spread with regards to money saved for higher deductible but still I’d never recommend a deductible higher than $1,000 unless you really are financially comfortable and can absorb a $1,000 hit to your available funds at a moment’s notice.

Here’s the bottom line regarding everything above.  Sure higher limits, lower deductibles, comp and collision and rental car coverage could cost you $50 or more a month.  But heaven forbid you actually get into a serious accident.  One claim can literally save you (or pay you) more in the end than you would have saved over the course of years or even decades if you were a cheapskate.  It’s just not worth the risk.  And that’s what insurance is about, lowering your risk.

That’s it for today.  For my next blog, I’ll go into more details about getting proper Homeowners/Renters insurance.  As usual, if you have any questions or comments, please do not hesitate to let me know.

-Damon

Please speak English

So, you just had a claim, and now you’re talking to some claims adjuster in some far off place whose asking you a bunch of questions.  That’s kind of the easy part if you’re the insured since YOU know what happened, you just need to make sure your insurance adjuster understands.  Sometimes the hard part is understanding the claims lingo that the adjuster will tell you to help you understand the claims process and coverage.  We do this for a living so it makes sense that sometimes we don’t even realize that we are talking in code.  And trying to read an insurance policy yourself to understand likely isn’t going to help because A) you’re probably not a lawyer and B) even if you are a lawyer, lawyers and courts often disagree about the intent of insurance policy language.  But, for the most part here’s a handy-dandy guide to some terms you may hear but may not fully understand:

Collision Coverage – Pretty straight forward… you hit something or something hits you and you’re usually covered.

Comprehensive (Comp) Coverage – This covers your car for physical damage by causes OTHER than collision.  The most common are theft, vandalism, hail, a tree falls on the car, etc.

Deductible – The fancy way is to say that this is your self insured portion of the loss.  Wait… what?  Translation… the part of the loss your insurance company won’t pay and you’re out of pocket.  Most people usually don’t know what their deductibles are until they have a loss… then get upset it’s so high despite the fact that they picked them.

Replacement Cost Value (RCV) – This is the current cost to replace something NEW.  More common to come across when dealing with homeowners or business insurance.  Your sofa gets damaged in a fire, you buy a new sofa to replace it and MBA Mutual Insurance Company of Reno pays you the full cost of replacement.

Actual Cash Value (ACV) –  A little more complicated but this is the RCV less applicable depreciation to account for age and condition before consideration of the deductible.  Say what?  OK, think of it like this:  You have a 2012 Honda Accord.  It’s stolen and you were’t a cheap-skate so you did pay for “Comp” coverage when you got your policy.  A NEW 2017 Honda Accord is $25,000 but you didn’t have a 2017 and you agree your 2012 isn’t worth as much as a new one.  So they offer to pay you $12,000 as they have determined this is the “ACTUAL CASH VALUE” of your stolen sled.  This is usually when Volvo owner will argue about the value offered as every Volvo owner is convinced that their Volvo was worth more than all others.   ¯\_(ツ)_/¯

Claimant – There are always two involved parties in every insurance claim, and sometimes three.  The first party is YOU.  The second involved party is your insurance company.  Sometimes claims involve a “3rd party” or what we call a “claimant” which is someone who has been damaged in some way and is making a claim against you.  Cause an accident and the other driver is a “3rd party claimant.”  Or have a dinner party at your house and someone slips and falls and is injured.  They would be a 3rd party claimant on your homeowners liability claim.  Some claims can have many claimants.   Think about a dry cleaners that goes up in flames and the poor adjuster assigned to the file then has to deal with literally hundreds of claimants who lost clothing.  Yes, this has happened.  Yes this is an adjusters worst nightmare.

Insured – Our fancy (and lazy) way of noting you, our policyholder, in our log notes.  It’s nothing more than a generic term that insurance companies and adjusters use in their log notes instead of having to always type out Mr. Wolfeschlegelsteinhausenbergerdorff (yes, that’s a real name, I looked it up just for this post).  There are variations of “insured” as well such as Mr. Insured, Mrs. Insured and when handling a business claim the person you deal with you might list in your notes as the “Insured Contact.”

Policy – This is a lengthy document always printed out and mailed to you when you first purchase insurance.  It’s never read by the purchasing party and usually put in a bottomless drawer never to be seen again until you’re cleaning your desk out 7 years later during a move.  It’s also a legal CONTRACT that is the road-map that determines what we will and won’t pay for should a loss arise.

Catastrophe – For you, this is EVERY claim in your eyes.  For us, this is usually a large event that generates hundreds and usually thousands or even hundreds of thousands of claims.  Yes, your Prius getting broken into and your gym bag getting stolen is a catastrophe in your eyes.  But when we use the term, we’re referring to a hurricane, tornado, earthquake, flood, zombie apocalypse, etc.

Peril – These are the causes of loss that we cover and are clearly listed in the policy you didn’t read.  Homeowners policies often will cover 15 or 16 specific perils for personal possessions such as your TV or sofa.  Things like fire, lighting, theft, etc.  If it wasn’t damaged by one of these specified perils… no coverage.  Some policies though have “all peril” coverage however the specified exclusions still apply.

Exclusion – These are things we don’t cover.  Every policy has them.  Some I’ll admit are kind of odd, but most when you think about them and understand why they are included actually make sense.  Obviously your home or auto policies don’t cover maintenance so things like wear and tear, deterioration, mechanical breakdown are specifically excluded.  Imagine how much insurance would cost if we didn’t exclude wear and tear and had to pay for every old roof on every home in America.

Coverage Limit – This is the most we will pay for a loss and is always stated on the declarations page you didn’t bother to read when you got your policy.

Underwriter – This is someone you’ll never see or have any direct contact with deep in the bowels of a large office building.  This person decides how much you pay for your policy and if we’ll even agree to insure your run down ice shanty of a house.  I am NOT this person.  I don’t know why your rates went up.  I don’t know why your deductible is higher than you thought it was.  I don’t know how this claim will effect your policy and if you’ll pay higher premiums or even get dropped next year.

Well, that’s it for today.  Should you have any insurance claims related questions, maybe had a loss and just want to get a straight answer, make sure you’re getting a fair shake from your insurance carrier, etc. don’t hesitate to contact me.

–Damon

Insurance Claims, Myths vs. Reality

Just like many large industries that don’t get a lot of positive press (Big Oil, Politics or Big Pharma for example) much of what is said or thought about the insurance industry by average Americans is rooted in misunderstandings and/or a lack of basic knowledge.  The unfortunate truth is that most people don’t think highly of the insurance industry.  Insurance companies provide a valuable service but too often only negative issues are those that make headlines or spread via word of mouth.  Just like people who work for those big mean oil companies or a pharmaceutical company with the nerve to try to make a profit from a breakthrough cancer drug to fund future R&D, those of us who work in the insurance industry are just regular people doing our jobs just like anyone else.  There isn’t some secret insurance cabal out to bilk Americans out of their hard earned dollars to line the pockets of the very rich and powerful.  One point I’d like to note, I’m going to be specifically discussing the property and casualty insurance industry, not health insurance which has it’s own wide-spread myths and misconceptions.

So what is “property and casualty” insurance anyways?  Simply, it’s insurance that covers physical stuff (home and auto) and also general liability such as if you cause an auto accident and are then liable to the other party.  Generally within property and casualty (P&C) insurance there are two sub-categories, personal lines and commercial lines.  Personal lines refers to individual people and what they need to insure such as their homes, cars, boats, or a Rolex watch whereas commercial lines refers to businesses which can be as small as a mom and pop corner store on Main Street, USA to a company as large as Apple or even other insurance companies.  There are also some hybrid types of insurance such as “agribusiness” which is designed for farming.  It’s kind of a blend of both as farms can get policies that cover both the personal possessions of the farmer and his family but also his business interests such as farm equipment, barns and other out buildings, livestock, etc.

Regardless of what line of P&C insurance we’re dealing with, personal or commercial, there are some common myths and beliefs that unfortunately are widespread throughout the general population.  So let’s look at some of the common myths about the insurance industry and find out if any are based in fact.

  • Insurance fraud is a victim-less crime as insurance companies have plenty of money.  This is unfortunately a common belief but it’s far from the truth.  A staged auto accident or simply someone whose home was broken into and pads their claim by a few hundred dollars are both crimes and both forms of insurance fraud.  Staging accidents most people would agree with is wrong but simply “padding” a claim for a couple hundred dollars isn’t seen in the same light yet it still costs the insurance industry billions of dollars each year.  The FBI estimates that non-health insurance related fraud totals approximately $40 billion in loses a year.  That means that insurance fraud costs the average family between $400 and $700 per year in the form of increased premiums.  Wouldn’t it be nice to have $50 a month auto insurance rates with high limits instead of $150?  We’re all the victims of insurance fraud, not just the insurance companies having to pay the bogus claims.
  • Insurance adjusters get paid to deny claims.  This claim when really considered deeply collapses into itself.  Insurance companies, whether deserving or not, get sued often.  Many times for what’s called “bad faith.”  If an insurance company handles a claim with the intention of NOT paying a claim, even if covered, this is a low hanging fruit type of case for an attorney who will gladly sue the carrier for millions of dollars.  If an insurance company actually did pay their adjusters to deny claims, this would absolutely come out in discovery during a lawsuit and that company would be essentially put out of business from all of the bad faith lawsuits piling up.  I’ve worked for three of the largest insurance companies in the world, State Farm, Nationwide and Travelers as well as currently working for CUNA Mutual Group which is still a huge company and I can assure you, I’ve never been paid extra for denying a claim nor have I ever had a manager direct me to deny a covered claim.  I’ve never even been directed to pay a penny less than what was rightfully owed to our policy holder.  If anything, we often will overpay some claims if there is reasonable dispute as to what a proper settlement value is.  Trust me, your $2,500 property loss isn’t worth the cost of us being sued and having to pay tens of thousands of dollars in legal fees… even if we win.
  • Insurance companies always want to pay as little as possible.  This is somewhat true.  But think, what business doesn’t want to cut costs where possible and help their bottom line?  If Joe Ice Cream Man can buy his ice cream from Ralph the Dairy Guy for 5% less than he can from Larry, that’s a smart business decision.  Likewise, if an insurance company knows that your hail damaged roof can be replaced for $8,000, why should they pay $10,000 simply because you found a roofer who’s charging significantly more than the market average?  The key to the sentence is the word “possible.”  If we can cut costs and still keep our promise to our policy holders which is clearly spelled out in our policy given to each insured at the time the policy is purchased, that will ultimately help everyone in the form of lower premiums.  Lower premiums helps us to be competitive with our competition and competition is what drives a free market and capitalism.
  • People are  forced to buy insurance that doesn’t cover anything.  There are two parts to this statement, first that people are forced to buy insurance and then, that it doesn’t cover anything.  The first part is both true and a myth.  Nobody is forced to buy homeowners insurance… unless they own a home.  If you choose to purchase a home, and have a mortgage, yes you are then required to have insurance to protect the bank’s interest in their investment.  Don’t want to pay for homeowners insurance?  Don’t own a home.  Or own your home but don’t carry a mortgage on it.  Sure that’s a lousy choice but you aren’t actually forced to buy homeowners insurance… you’re choosing a lifestyle that requires it… home ownership.  Don’t want to pay for auto insurance?  No problem, don’t own a car.  Again, lousy choice, but a choice it is.  Now, to the second point that insurance doesn’t cover anything.  Obviously this is a myth and just an exaggerated talking point.  When you buy insurance you get a full copy of your policy and all coverages and endorsements.  Nobody actually reads this stuff though until they have a loss (and usually not even then) and sometimes, unfortunately, things just aren’t covered for various reasons.  It’s not uncommon for someone whose claim was rightfully denied to think that their policy is worthless and doesn’t cover anything.  But ask someone whose home just burned down and got a check for $250,000 within 48 hours (I’ve handed these out myself during the San Diego wildfires in 2003) and you’ll find that the myth that insurance doesn’t cover anything doesn’t hold water.

There are plenty more myths and misconceptions about insurance but I’ll need to end this somewhere.  But I’ll leave you with some common things an insurance adjuster will hear countless times in his/her career.

  1. “I’ve never had a claim before so you should pay this one to keep me as a customer.”  Usually something said by someone whose claim is being denied or they aren’t happy with the settlement amount.  This statement almost always leads to the adjuster looking at their claim history and more times than not, they actually have had prior claims.  It really doesn’t matter anyways, whether you have no prior claims or 25 prior claims, it still doesn’t change coverage on this current claim.
  2. “He was going so fast that I didn’t see him until he hit me.”  If you didn’t see him how do you know he was driving too fast?
  3. “It’s your job to deny claims.”  No ma’am, I get paid the same whether I pay your claim or not.  And I’d rather pay your claim actually as I could close it today since I won’t have to wait a few days for my manager to approve the lengthy denial letter that will take me some time to draft.
  4. “There is mold present and my child has asthma so we need extensive testing done to determine the type of mold before we do anything.”  Do you put on a space suit and set up a negative air chamber when you find mold on cheese in your refrigerator?  Is your child licking the wall?  Does it matter the type of mold if I can assure you that we’ll have proper remediation done?  The bottom line is that it seems a near lock that at the first speck of mold we’ll hear about the child with asthma or how you’re allergic to mold.  Magically though when people hear there isn’t coverage in a homeowners policy for them getting sick, these mold related illnesses disappear.
  5. “I didn’t want to call the plumber until we spoke to you first to make sure we can fix the leaking pipe.”  So you were pretty much going to let the water to continue to flood your home until you had our permission to call a plumber?  This wouldn’t happen, but what if you didn’t hear from us for three days?
  6. “My Volvo is worth more than others.”  No offense to Volvo owners but your’s likely isn’t anything special.
  7. “We were going full speed across the lake and caught a plastic bag in the water and it ended up wrapping up in the prop and the motor seized up from overheating.”  No, this didn’t happen.  Trust me, I have science on my side.
  8. “If you don’t pay this claim you’ll be hearing from my lawyer!”  Probably the most common and meaningless threat an insurance adjuster will hear throughout their career.  First, 99% sure I won’t be hearing from your lawyer.  And even if I do, that means I won’t have to listen to you yelling at me any longer.
  9. “You already charged me the deductible and now you’re charging me again?”  I’ve done this literally thousands of times.  Total loss, less deductible, less prior payment (even if deductible was deducted from the initial payment) doesn’t result in the deductible being taken twice.
  10. “I’ve paid insurance all my life and it’s about time I get something back.”  That’s just not how insurance works.  You haven’t been making deposits into a bank account all these years and now expect to make a withdrawal at your leisure.
  11. “There has to be some sort of mistake, I shouldn’t have a deductible so high.”  Let me see… looks like eight years ago when you first got this policy you picked the $1,000 deductible option and it’s renewed with the same deductible, and a paper copy of your declarations mailed to you, each of the last seven years.
  12. “How did you get into insurance?”  Well, I wanted to play center field for the Dodgers when I was a kid.  That didn’t work out so this was my second choice.