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Posts by Clay Morrison:
- The first problem I noticed is that every property I examined appeared to be underinsured. Underinsured means that the amount of insurance coverage selected by either the agent or the insured is not enough to cover the real cost of replacement. At first I thought this was an anomaly, but not only did it appear consistently, it appeared consistently with two companies in particular.
- The next issue that I noticed was that all the estimates I examined from one company had made no allowance for overhead and profit. Overhead and profit is a markup allowance added to the bottom line of an insurance damage estimate to allow for the overhead and profit of a general contractor. Again, this phenomenon appeared on every estimate I examined that was written by the same insurance company.
- Next, I noticed that sales tax was missing from Joplin tornado claims estimates by the same company who had omitted overhead and profit. Almost every city in America requires that business collect sales tax for their goods and services.
- Finally, the unit pricing allowed in the estimates by several insurance companies appeared to extremely dated and much lower than I would have expected. I need to mention that the problems I noticed are prevalent with two insurers who are probably two of the largest insurers in Missouri.
Joplin Tornado Claims Examination – Tornado Insurance Claims
December 7th, 2011Misguided Trust with Property Insurance Companies for Joplin tornado claims?
Two weeks ago I was in Joplin, Missouri working on Joplin tornado claims. Joplin reminds me of a town copied directly from a Norman Rockwell painting. The people are genuine, the youth are respectful and I can tell that a handshake is a readily accepted form of transacting business. While the people of Joplin seem ready and willing to trust that their property insurance company has done the right thing for them following the devastating tornado that ripped their town apart in May, I found a much darker picture as I began to examine claims.
As my work on claims progressed, I began to notice some very disturbing trends on the Joplin tornado claims that no consumer seemed to be aware of.
I cannot tell you that every company has handled Joplin tornado claims in this fashion, but every estimate I examined was handled this way. Joplin seems to be recovering slowly, but I can imagine how many properties are underinsured, how many claims are missing overhead and profit, how many claim payments omitted sales tax, and how many folks are only now learning of these facts as they try to rebuild.
Time Running Out for Joplin tornado claims
Unfortunately Missouri has limited time frames to take formal action for any wrong doing, and at the same time most policies issued in Missouri specify that you must claim recoverable depreciation within 6 months or less in some circumstances. These two factors, combined with a truly catastrophic situation make for the perfect storm when it comes to the consumer losing in the end.
I suspect that a huge percentage of Joplin claims were handled as I have described above. If you have a loss from the Joplin tornado, I would strongly urge you to have a professional public insurance adjuster to examine your claim. Even if you were paid policy limits for your Joplin Tornado Claim, I suspect that you were not paid fully to replace your property even though your adjuster may have said that they have done everything they can.
Texas Wildfires Total Loss Insurance Claim – Update to our 2nd posting
September 28th, 2011It seems that just when you think you have addressed things properly, something else comes up that causes you to take notice. We recently posted advice on dealing with a home that was burned to the ground and what to expect from a fire loss regarding proving your damages. Following our post, a very vigilant blog follower who experienced what he considers to be a total loss from fire to his home, sent me a note reminding us of Texas
Statute 862.053 that reads as follows:
Sec.A862.053.AAFIRE INSURANCE: TOTAL LOSS OF REAL PROPERTY.
(a) A fire insurance policy, in case of a total loss by fire of property insured, shall be held and considered to be a liquidated demand against the company for the full amount of such policy. This subsection does not apply to personal property.
(b) AAAn insurance company shall incorporate verbatim the provisions of Subsection (a) in each fire insurance policy issued as coverage on real property in this state.
(c) AAThe commissioner shall require compliance with this section.
Our last post was probably not very clear when we described a house that was burned to the ground. What we need to clarify is “what” is considered a “total loss” and who determines what a total loss is. We have had reports from the field of some people being paid in full for their policy limits and some being told that while the house is burned, the slab is still usable. The questions remain for us as to whether a usable slab causes the home to be considered a total loss and the statute does not seem to define it either.
We wanted to collect various opinions from some of the attorneys we work with and Sergio Leal with Merlin Law Group reviewed this statute and took the initiative to follow up by posting a blog dealing with how the courts have defined a total loss. Please view the following link to make your own assessments as to what might qualify you for a total loss.
If you have not been paid full policy limits for your burned down home, you may want to consider asking your insurance company about the above provision. We would like to hear from you on this topic as to whether you have been paid your policy limits. I want to give our blog follower all the credit for being vigilant enough to bring this to our attention.
Bastrop, Texas Wildfire & Fire Insurance Claim Story?
September 27th, 2011Bastrop, Texas Wildfire Insurance Claim
Your home is gone, the insurer will have to pay the policy limits… Right?
I have been a public adjuster for many years and have seen just about every loss situation you can imagine. After seeing the wildfire damage in Bastrop, I could not help but envision the following story wildfire insurance claim unfolding….
These videos is a possible senario of Bastrop, Texas Wildfire Insurance Claim.
Wildfire Insurance Claim – Part 1
Bastrop Wildfire Insurance Claim - Part 2
Texas & Bastrop Wildfires Claims Part 3 – Cost of Clean Up & Additional Living Expenses
September 23rd, 2011Bastrop Wildfire Claims: Cost of Clean Up & Additional Living Expenses
I spent last week meeting with property owners in the Bastrop area who are dealing with the aftermath of the horrible fires that dealt a blow to not only their personal financial condition, but also to the hearts of those who live there. In several meetings I noticed how emotions would seem to overtake those who spoke about the ordeal. However, Bastrop citizens are like a lot like other small town Texans in that they choose to pick up a shovel and start rebuilding their lives. This blog post will help provide insurance policy claim information related to the Texas and Bastrop Wildfire insurance claims.
Although FEMA employees seem to outnumber the entire population of Bastrop right now, being self-sufficient Texans the Bastrop citizens seem to be taking the bull by the horns, cleaning up, and taking care of themselves. I wonder if FEMA has lacked in applicants for assistance in Bastrop, because I noticed the following link on my email–(http://www.fema.gov/news/newsrelease.fema?id=57985). The link seems to be encouraging people to sign up even if they are concerned that they may not qualify. Sorry FEMA, but being a native Texan I can tell you that we are not like other places, and you will find few of us sitting on the curb waiting for the federal government to rescue us. Witnessing the “pull yourself up by the bootstraps” mentality has been an inspiration to me over the last week.
With all the discussion of clean up and living assistance for those with damaged homes, two insurance policy conditions come to mind for me. The first policy condition I am referring to is called “debris removal”. Whether you know it or not, your insurance policy likely has a provision to cover removal of debris that is a result of this fire. This will typically cover the demolition and removal of the burned structures on your property and may cover some of the trees involved if they have fallen on, or affected the structure. The amount you are entitled to is typically 10% of your main dwelling coverage limit. So for example if you carried $200K on your home’s main structure, then you likely have access to $20,000 in order to clean up. While many well intentioned folks have gathered fellow church members and friends to get to work with shovels in hand, I have some good news and bad news.
The good news is that if you hire someone to perform debris removal and you have the coverage, the cost is likely covered and you are free to spend your time in other pursuits. The bad news is that if you do the work yourself, most policies have a clause that allows you only minimum wage or some other grossly minimal pay for your time. By doing the work yourself you are giving your insurer a break from what they justifiably owe you. My advice is to look at your policy carefully to see if you have debris removal coverage before doing any work. If you do, find a reputable local demolition contractor who can do the cleanup and let them get to work as soon as your insurer has inspected the property.
The second policy condition I am referring to is ALE or additional living expenses. This coverage is for the additional expenses you incur over and above your normal living expenses while out of your home. To be paid, these must be incurred and you are entitled to assume equal living conditions to what you had prior to the fire.
Additional items that are covered under this coverage can be the cost differential to eat out now that you cannot prepare food at home, any additional travel expenses you incur to travel longer distances to school and work, dry cleaning now that you cannot launder your own clothes and any other costs you incur as a result of being displaced from your home. Like other coverage, ALE usually has limited coverage amounts that are specified as a percentage of your dwelling policy limit or as an incurred time line to make repairs or rebuild. ALE limits are often 10% to 25% of your dwelling limit amount or up to 1 year incurred to rebuild or repair. Read your policy carefully and make sure that you understand this coverage before you end up blindsided and out of money to live.
Wildfires in Texas part 2 – Will Insurer pay policy limits?
September 14th, 2011Wildfire Insurance Claim
Your home is gone, the insurer will have to pay the policy limits… Right?
I have been a public adjuster for many years and have seen just about every loss situation you can imagine. After seeing the wildfire damage in Bastrop, I could not help but envision the following story wildfire insurance claim unfolding.
Your home was totally destroyed by the recent wildfires and even though your world is turned upside down, you do have some sense of confidence because at least you know you are insured well and have no doubt that a check for the full amount of your policy will be forthcoming quickly.
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Help with your Wildfire Insurance Claim
If you are in a tough insurance claim situation, concerned about where your claim is heading, or something just does not feel right call me and I will be happy to discuss your situation.
My name is Clay Morrison, I am a licensed public insurance adjuster and my toll free number is 866-723-5787. Call me and I will be the expert who looks out for your best interests!
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Filing for the Wildfire Insurance Claim
You have maintained “full” coverage in the amount of $200,000 for over 20 years now with your agent who is also your neighbor, and have never made a claim for a single item. You make a trip to your agent’s office who directs you to the claim tent set up at the nearby Grocery store parking lot. When you arrive at the claims tent, you are greeted by a very friendly soul who says they are the field supervisor, and immediately begins pulling up your information on the computer to assist you on your wildfire insurance claim.
They verify that you are in a known fire zone, possibly on the confirmed total loss list and that you are definitely covered for fire. With great enthusiasm you are presented with a check for $1,500.00. You are a little dumbfounded and tell the supervisor that your house is gone- what about the rest of my insurance coverage?
The supervisor states that an independent field adjuster will be contacting you to make an appointment to view the property and as soon as that is completed you will be receiving payment for your claim with no explanation what “payment” means. You question further, but you are assured that “we will take good care of you”.
Feeling somewhat upset but still holding onto the belief that you will be paid in full for your policy limit amount you wait in anticipation for the call from the independent field adjuster for your wildfire insurance claim. The field adjuster calls, makes the appointment and subsequently meets you at the site.
After a brief inspection and a few questions, you ask the adjuster for a card so that you can contact him with further questions and as it turns out, he is out of business cards. He tells you that he will turn in his report to the insurer and they will be in touch. There is no confirmation of payment or how much.
By this point you are not feeling as much confidence as you did a couple days ago when you contacted your agent on your wildfire insurance claim. However you are still certain that a check for $200,000 will be arriving as soon as the independent adjuster turns in his report. Numerous days pass and no check arrives.
Finally three weeks after the independent field adjuster inspected your home an envelope arrives, and with great excitement you tear it open to find a check for $105,500 enclosed with instructions that explain that your total loss amount was $145,500 and that they have withheld $40,500.00 in recoverable depreciation that you may be able to recover someday depending on certain circumstances.
At this moment, you immediately realize that there must be a mistake and head off to the claims tent where all this started only to discover there is no mistake and you will have to call an 800 number in order to enquire as to why the claim was so underpaid.
At this point you are in denial, this cannot be happening- certainly this is a mistake in the system and they will rectify it. After all isn’t that how insurance works? The insurer will have to pay the policy limits….Right?
The answer is a resounding NO!
Much to the dismay of policy holders in the Bastrop area, a burned to the ground home does not mean payment in full of your policy limits. When a disaster occurs and your property is completely destroyed it is up to you, the insured to demonstrate why the property insured was worth every dollar that you were insured for.
In Texas and many other places the insurer will only pay what you can prove the value of the home to be, regardless of how much insurance you carried. It is critical that you document your home properly in order to receive the full amount you may be owed under your policy. It is also critical that you perform this in a timely manner.
The longer it takes for your wildfire insurance claim, the more likely you are to end up shorted on the back end. Your insurer will utilize their adjuster to reconstruct your property on paper and if the total number that comes out of their software is lower than your policy limit that is what you will be paid. The moral of the story is to be prepared to reconstruct your property on paper to demonstrate the true value or find a professional to do it for you. What you receive for your wildfire insurance claim is up to you.
Texas Wildfires & Your Insurance Claim Part 1
September 6th, 2011Texas Wildfires Insurance Claim
Much of central Texas is dealing with wild fires that are consuming thousands of acres and is destroying hundreds of homes. There is no escaping a wildfire in the hill country because the landscape is filled with combustible growth everywhere due to the drought that has haunted Texas for months now. The first priority of everyone in this area should be preservation of life, things can be replaced. However, when the smoke clears and you return to your property you need to be prepared for the following situations when dealing with your insurance claim.
Scenario 1: If your home or business is completely destroyed, you will need to file a Texas wildfire insurance claim. By filing a total loos fire insurance claim, this does not mean that your insurer will “total” your home and pay you the policy limits contained within your policy. Texas is not a “valued policy” state. Valued policy means that if your property is destroyed by a covered cause of loss, the face value of the policy is due to the insured. In Texas you will only be paid for what the replacement cost of the property is regardless of how much insurance you carried. You must be prepared to reconstruct the cost of replacing your property on paper and demonstrate what the true replacement value is to your insurer. The insurance adjuster will be there to assess what his employer should pay you. It’s not the insurance adjuster’s job to assert your claim to the insurer- it’s yours.
Scenario 2: Should you return to find a partially burned home you will have to be prepared to demonstrate to the insurer why those partially damaged portions of your home should be rebuilt correctly and not just patched. I have seen numerous occasions where lines are drawn in the sand by the insurer when it comes to properly repairing partially burned homes. If you have significant partial damage and you feel that your home might be a total loss, you should push the issue with the insurer and be prepared to show why it’s not practical to repair your home.
Scenario 3: You return to find your home standing and looking pretty good from the outside, but enter to find an intense smell of smoke and some water damage from the fire departments wetting down the structure to save it. This will be prove to be a very tough claim for you as fires of this magnitude create smoke that is so intense it permeates every opening in the structure. You may discover that the insurer wishes to send out one of their vendors to “clean” the smoke from your home. While this can be effective in a limited number of cases with an isolated fire, it will likely not be effective in wildfire situation. Paper and fabric based products absorb the smoke smell and the odor will penetrate into your walls, insulation and attic. The only real cure is to remove these building products and replace them. You will have to be prepared to convince your insurer that this is necessary and that won’t be an easy task.
Finally, you have to consider your contents. If the contents are burned beyond recognition, your job will be to compile a list of contents that includes quantities, ages, and the cost to replace those items today. You will also have to prove ownership by providing pictures or other documents that actually demonstrate that you owned the items. Unfortunately it’s the insured’s job to prove what they owned and what those items are worth. If you return to find some contents only partially damaged then you will have to demonstrate why it’s proper to replace those items and not clean them.
Fire and smoke claims are challenging to say the least, and that is why it’s imperative for the policyholder to take the initiative on asserting and supporting their claim from the outset.
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TWIA- The new process if you have a claim
September 1st, 2011If you are a TWIA policy holder, you need to understand the new process that you will be facing when you make a claim. This new process brings back bad memories for me of a flow chart project back in college with a lot of “if then” statements included. In this flowchart I see numerous issues that the policyholder needs to pay close attention to. First, buyer beware if you should end up in front of an “expert panel” who will make a determination of whether your damage was from wind or flooding. Next, it appears that appraisals will become much more frequent. While I am a proponent of appraisals, it should not be used as a tool for parties to attempt to avoid legal liability. Third, I would never recommend that a policyholder take a premium discount of 10% in exchange for agreeing up front to be bound by binding arbitration. Circumstances vary in every claim, and limiting your remedies up front is not prudent. Lastly, the consumer now has only 60 days to dispute the amount of loss paid by TWIA if TWIA accept’s responsibility. In the midst of a catastrophe this is simply not enough time for an insured to truly assess the costs of damage. The link to the flowchart is below—let me know if it brings back bad college memories for you as well. #TWIA
http://www.texastribune.org/library/data/texas-windstorm-insurance-claims-process/
Hurricane Irene Damage Claims
August 29th, 2011Hurricane Irene property damage insurance claims:
While Hurricane Irene’s winds didn’t live up to concerns, it appears that the flooding far surpassed all expectations. When dealing with a flood claim you are facing an entirely different set of circumstances. I would like to offer the followinng tips for dealing with your flood claim:
1. Take pictures and make a video of the structure in flooded conditon as soon as you return and prior to removing anything. Allow the flood adjuster to see the home as is following the flood if possible.
2. Remove all wet and damaged contents and place it in a pile for inspection by the insurer. DO NOT throw things out until you have photographed all items and have allowed the adjuster to inspect them.
3. If you flooded to 4′ or less in side the structure, remove all water damaged building materials that are under the 4′ level. If you have paneling you will probably have to remove the paneling to 8′ high because that’s how its produced and you can’t splice it.
4. If you flooded to above 4′ in depth you will likely have to remove all items touched by the water up to 8′.
5. Ensure that the adjuster views all removed items in person and if not take lots of pictures.
6. *** You will be approached by numerous contractors offering to “demolish and dry out” your structure. Be very careful because the flood policy will not normally cover large amounts of drying and when your claim is paid, they will only pay for removal and replacement of water damaged items. Often times, drying contractors will attempt to charge exhorbitant fees to demolish and dry your facility and those per square foot fees often exceed what the insurer will allow for removal, drying and replacemetn combined. Be very careful as to what you sign.
7. Never sign a sworn proof of loss for the flood adjuster unless you wholely agree with the estimate as presented. A common request you may hear from a flood adjuster is to sign the proof of loss for what he has written up regardless of the amount because “you can always file a supplement later”. If you sign a sworn proof of loss for an amount you don’t agree with this may come back to haunt you later. Press the adjuster to get the estimate correct up front!
8. Be proactive regarding the removal of damaged items. If you fail to take action and your home eventually dries out you may be stuck with decaying building materials simply because the adjuster deems them “now dry”.
9. Never give the adjuster original docuements of any type. Keep copies of everything and when you provide documents to the adjuster, ask the adjuster to sign for receipt of such items. Request an address, phone, fax and email for the flood adjuster. Remember they are likely from somewhere other than where your loss is and you want to be able to locate them later if needed.
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