NOTE: For what should be obvious reasons, this preview of the 3RSystems, LLC Insured Property Owners Storm Damage Recovery Guide has excluded certain portions of the guide. The full and complete version however, is included with 3RS Profit MAX / The Playbook© to be given to your insured customers at the proper point in time during the claims process. Several of the underlined links on this site are intentionally deactivated but are "live" on the actual pages given to your customers.
Become an informed insurance consumer
by knowing and understanding how the insurance claim process really works.
Terms and Titles you need to know
ACTUAL CASH VALUE (ACV) POLICY - This type of policy coverage pays the cost to repair
DESK (OR, IN HOUSE) CLAIMS ADJUSTER - A person employed by an insurance company who takes over insurance claims estimates after they have been received from a staff or independent insurance adjuster. In some cases, representatives of independent adjusting companies will falsely prese
FORENSIC ENGINEER - A licensed engineer who is employed by an independent engineering company that is contracted with an insurance company to inspect and give an opinion as to whether or not a property has sustained insurance covered damage usually after an insurance adjuster has conducted an inspe
GENERAL CONTRACTOR OVERHEAD & PROFIT (GC O&P) - General Contractor Overhead & Profit is a part of the total claim payment owed to the insured property owner by their insurance company to pay to their contractor as part of the total repair price when it has been determined that the insured is reasonably likely to hire a g
INSURANCE ADJUSTER - A person who is either employed by a insurance company as a “staff” adjuster or a person who is employed as an
INSURANCE AGENT - A person directly employed by an insurance company who sells and services insurance policies off
INSURANCE APPRAISER - A person who appraises the value of an insurance claim for a fee. If and when an insurance claim goes to appraisal, the i
INSURANCE BROKER - A person not directly employed by an insurance company who sells and services insurance
INSURANCE DECUCTIBLE - The percentage dollar amount of the claim that you have agreed to pay per your insurance policy contract when you file a claim. Some insured property owners who file property damage insurance claims will ask their contractors to “bury” their deductible, in other words
LADDER ASSIST - An unlicensed person who either assists a licensed insurance adjuster with property damage inspec
MANAGED REPAIR PROGRAM (MRP) - A property damage repair program controlled by an insurance company using contractors who agree to complete repairs at pricing, guidelines, and processes dictated by the insurance company rather than For what should be obvious reasons...buyer beware.
ORDINANCE & LAW COVERAGE (O&L) - This type of policy coverage (mandatory in some states and optional in others) provid
PLAINTIFF'S INSURANCE ATTORNEY - A person who is licensed to practice law and represents and defends the interests of an ins
POLICY EXCLUSIONS - A policy exclusion excludes c
PROOF OF LOSS - A Proof of Loss is a formal statement made by the insured to the insurer regarding a claim,
PUBLIC INSURANCE ADJUSTER (PIA or PA) - A person who is licensed to adjust property damage insurance claims on behalf
REPLACEMENT COST VALUE (RCV) POLICY - This type of policy coverage pays to repair your home with materials of like kind and you $10,000 minus your deductible.
TORTIOUS INTERFERENCE - Causing harm by intentionally disrupting a contractual relationship or harming a business relationship or activity,
UNAUTHORIZED PRACTICE OF PUBLIC ADJUSTING (UPPA) - Unauthorized Practice of Public Adjusting laws – UPPA laws are laws
"The truth never changes...but it does change that which is not"
In economics, a free market is an idealized system in which the prices for goods and services are determined by the open market and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other (self-proclaimed) "authority" - such as a Property & Casualty (P&C) insurance company. When an insurance company says they will pay you no more than their initial low price offer, they have, in effect, "set" the price of your claim while knowing full well that doing so clearly violates fundamental free market principles. Their out when that is the case, is to slightly increase your claim offer in an attempt to appease you and hope you will accept their next "final" but still less than fair and full settlement offer.
Contrary to the popular belief of far too many property owners who haven't suffered damage to their properties as a result of a severe weather or other disastrous event and therefore have never had to file a claim with their property & casualty insurance company, as supported by "The Insurance Hoax" and "What Your Insurance Company Doesn't Want You To Know Regarding Your Insurance Claim", the likelihood of any of them initially being offered a full, proper and fair settlement payment on their insurance claim is less than 5%. More often than not, they (you) will be offered a percentage settlement that is far below the real, true and accurate (RTA) cost of repairing the damage.
Why is that? Property & casualty insurance companies want to pay out as little as possible on their insured’s property damage claims so they can keep as much of their insured’s paid in premium money as possible in house. What do they spend that money on? To begin with, they spend, and you ultimately pay for, hundred’s of millions of dollars each year on their “good hands”, “on your side”, and “good neighbor” type of feel good “trust us” advertising. They also use that money – your money, to fund banks, pay often exorbitant undeserved salaries and bonuses to their top level executives, pay their lawyers to write hard to understand policy language and defend their questionable claims practices and with stock insurance companies, to keep their shareholders happy.
In regards to stock P&C insurance companies keeping their shareholders happy, Allstate CEO Tom Wilson said the following several years back while speaking at an Allstate shareholder meeting; “Our obligation is to earn a return for our shareholders”. At the time, Allstate claims still owed one of my insured property owner customer’s well over $10,000 on their storm damage claim but was unjustly refusing to pay. A quick letter sent by me to CEO Wilson, reminding him that his primary obligation was not to earn a return for Allstate shareholders but rather, to honor Allstate’s “Good Hands” promise to their premium paying customers resulted in my customer receiving the withheld balance due within a week of my letter.
While attending a construction industry seminar a few years ago on the topic at hand, one of the presenters who was not from the construction industry made a comment, seemingly in defense of the property & casualty insurance industry’s questionable methods that were being discussed, that went like this; ”Well, after all, the insurance companies are in business to make money.” While I have no problem with the fact that property & casualty insurance companies are in business to make money, it is the methods they often use to make that money that are suspect as well as problematic and in need of drastic change.
I was once asked by another past insured property owner customer of mine who I had helped recover an additional $24,500 still owed to them on their property damage claim by their insurance company - $24,500 real dollars that their insurance company had been refusing to pay, do I, as someone who has been involved in the property damage restoration construction industry for many years, view the property & casualty insurance industry and the people employed by it to be generally corrupt and suspect, overall?
My answer? No, not at all. In fact, over the years, while always working on the side of and on behalf of insured property owners, I’ve worked with many good and honest people from the insurance industry side. The problem however, for far too many of them, is that they are often forced by the behemoth and often, seemingly heartless, multi-billion dollar insurance companies that employ them to choose between job security and doing what is right and when they put job security first, that is never a good thing for the insured policyholders who put their trust in them.
With that in mind, no insured policyholder should ever have to go through what their insurance companies far too often put them through when they file a valid and legitimate property damage insurance claim, especially these days, considering all that is going on in the world. As a policyholder, you deserve substantially better service than insurance companies typically give and with what follows, you’ll be more able to level the playing field and move your claim to fair and full payment within a reasonable time period while keeping the typical insurance company underpayment and illegitimate claims denial nonsense to a minimum.
Unauthorized Practice of Public Adjusting (UPPA) Laws
Before getting into the process, you need to first learn about UPPA - Unauthorized Practice of Public Adjusting laws, know who’s behind the UPPA laws and know how the laws work against you as an insured policyholder. UPPA laws are, IMO, based on my years of research and investigation into the who, what, where and why behind the laws, “one of the biggest financial scams ever perpetrated against the American insurance buying public” by the property & casualty insurance industry
UPPA laws, which are now in effect in nearly every USA state, prohibit restoration contractors from doing what they had previously done over the years and decades which was to negotiate property damage insurance claims on behalf of their insured policyholder customers. Up until about ten years ago, professional restoration contractors, who know better than anyone what is damaged in a storm, know how it needs to be repaired and know how much the repairs should cost, were essentially still free to negotiate
In many cases, the state legislators who presented the insurance industry written UPPA bills in their home states were, and/or are, as I have proven over time, employed in one way or another, by the property & casualty insurance industry. Wanting to keep their insurance industry employers happy, those knowing insurance industry employed state legislators deceptively promoted UPPA to their ill-informed fellow legislators as consumer protection that would, at least according to they and the insurance industry lobbyists who initially promoted the UPPA ruse to those state by state legislators, prevent contractors from “overcharging” for their repair work. Know this, restoration contractors cannot “overcharge” insurance companies on their insured customers claims since they are not the ones who sign the settlement checks paid to the insured's.
With the next election cycle always in mind, those ill-informed fellow legislators who did not understand and therefore did not consider the damage that UPPA would cause to their insured and voting property owner constituents by shutting down their contractors ability to negotiate on their behalf, voted in favor of the suspect UPPA bills and ill-informed state Governors then signed the UPPA bills into law. Those same UPPA laws also prohibit contractors from helping their insured customers to understand what
In addition to the previous, in order to strike fear in the hearts of restoration contractors who might consider attempting to negotiate a fair and full claim settlement on behalf of their insured customers, many states have added new insurance industry promoted laws that treat an UPPA violation by a contractor as a crime punisha
Another quite transparent and feigned excuse the P&C insurance industry uses to support UPPA laws that prevent contractors from negotiating their customers claims is that doing so results in a conflict of interest. That excuse is easily defeated with the following; since your interest is in getting paid for all of the damage, at pricing relative to the premiums paid and your 3RSystems, LLC trained contractor best serves his/her own financial interests by putting your financial interests as described,
How Your Insurance Premiums Are Calculated
Premiums for property and casualty insurance policies are logically, actuarially based on what it would cost a property owner whose property was damaged to have the damage repaired using the real, true and accurate (RTA) cost that an experienced professional fully licensed and insured contractor using quality materials and experienced installers would charge in the near future. However, the initial insurance settlements that most insured's are offered are typically based on the "survey" costs of lower qualit
For example: Assuming the real, true and accurate (RTA) value/cost of your repair is $40,000, more often than not, through their staff and/or independent claims adjusters and in house claims managers who always have job security in mind, the insurance company you send your premiums to will usually attempt to dramatically underpay your claim. If the real, true and accurate (RTA) cost of your repairs is $40,000 and your insurance company only offers you $25,000 and you accept that offer, you will forever forfeit the additional $15,000 owed to you by them that you will need to properly complete the repairs.
Property & Casualty Insurance Agents - Can they help you with your claim?
A question often asked regarding property & casualty insurance agents – can they help you when your legitimate claim is unfairly underpaid or denied? Know this, the job of property & casualty insurance agents is to sell and service insurance policies, not adjust insurance claims. Although you may be great friends with your property & casualty insurance agent, as I am with mine, when you run into problems with your insurance company that is attempting to underpay or deny your legitimate property damage claim, ther
Understanding Your Insurance Policy
Insurance policies are generally required to be written in such a manner so that a person of average intelligence, in other words, the average insured property owner, can interpret them. In reality however, and I believe, by design, most insurance policies are actually written by insurance company lawyers so as to be nearly unintelligible by the average insured policyholder without the help of a well versed insurance attorney. Although insured policyholders are free to make the attempt to interpret what is
Keep in mind that, because of the UPPA restrictions placed on your contractor as mentioned earlier, besides being prohibited from negotiating the price of your claim with your insurance company on your behalf, he or she also cannot assist you in interpreting your insurance policy language that says what is covered and what is not. Your agent however, has a duty and an obligation to explain the policy terms, and any exclusions, to you. If you are confident – before or after discussing your policy terms with your agent, that you understand
Do you have a mortgage on your property?
If so and your claim exceeds $10,000, you and your contractor will probably be required to submit paperwork to what is usually a third party "mortgage loss draft processor" who will oversee your claim and make sure that all of the repair work is completed before the final claim payment is released to you. Nothing wrong with that, but,
Although Countrywide Mortgage (Balboa) handles most of their own loss draft processing and Sterling National Corporation (previously known as Z C Sterling) handles a fair percentage, most of the loss draft processing done throughout the USA is handled by a Atlanta, GA based niche financial services subsidiary whose parent company - Assurant Financial, was once fined millions of dollars for selling "forced-placed" home owners insurance policies that were often priced as much as ten times higher than typical voluntary
You will need to start this process right away in order to procure an initial payment on your claim with which to pay your contractor as a down payment. Your 3RSystems, LLC trained contractor will be able to assist you in making the process as painless as possible.
What are - General Contractor Overhead & Profit (GC O&P) Payments?
General Contractor Overhead & Profit or GC O&P payments are payments added to the total of your claim to cover your contractor's time and expenses and are calculated based on your contractor's costs of doing business and profit needs. In the past, insurance companies "required" that a contractor supervise three or more sub-contractors (for example; roofers, siders, electricians) on any given restoration project in order to qualify for GC O&P. This rule (AKA the "3 trade rule") has fallen by the wayside in recent years and has been replaced with the "complexity rule". The "complexity rule" implies that in order for your contractor to be paid GC O&P on any given restoration project,
Common sense: Even a simple re-roofing job on your property will "require supervision and coordination of all aspects of the project" and, therefore, GC O&P should be added to the total settlement offer. Insurance companies will often attempt to unfairly deny GC O&P payments on "roof only" restoration projects or deny the roofing portion of a restoration project that includes more than just roofing.
Both "rules" were/are rules made up by the insurance industry and are never mentioned in and are not a part of your insurance policy. Insurance companies hope is that contractors are not aware of the fact that GC O&P payments are a proper cost to be included as part of most if not all insurance claim settlements. In most cases, GC O&P payments will not be listed as part of an insured's settlement offer. Since however, GC O&P payments are calculated as part of your insurance premiums, they should logically be added to the total settlement offer made to you by your insurance company. Not doing do results in what is known as "unjust enrichment" to the insurance company.
If GC O&P payments are added to the total of your claim, they will typically be listed on the front cover sheet of the loss report or scope of loss report sent to you by your insurance company as 10% Overhead and 10% profit (20% total). That is another insurance industry made up rule that may or may not result in a proper GC O&P payment to your contractor. Your contractor's GC O&P requirement may be substantially higher than the basic 10% & 10% typically offered if it is offered at all.
The current general rule regarding when GC O&P should be paid on any restoration claim - if it is reasonably likely that you will be hiring (or need) a General Contractor to complete the repairs, GC O&P is owed on the entire amount of the claim - even if you do not hire a general contractor to complete the repairs. Some insurance adjusters and some in house claims managers try to confuse insured's by telling them that GC O&P payments are already factored into the insurance company's settlement offer. If however, you see nothing on the insurance company loss report sent to you by your insurance company pertaining to GC O&P or simply Overhead and Profit, ask your agent, the insurance adjuster and the insurance company in house claims manager to explain why it is not included as part of the insurance claim settlement offer from the insurance company. Then, ask/demand that GC O&P be included as part of the final settlement offer to you on your claim. You paid for it as part of your premiums, therefore, they should pay it as part of your claim
Tortious Interference - "The contractor is charging too much?"
Often, after an insurance company adjuster or in house claims manager has reviewed an insured's repair quote prepared by the insured's chosen contractor, they will call the insured and tell them their contractor is charging too much - even going so far on some occasions to imply that a contractor "is trying to rip them off" and suggest to or tell the insured to get other estimates. Another common ruse is to tell insured's they know of other contractors who will do the job for much less. In saying that, they are not trying to save you money, they are trying to save themselves money.
The above is nothing more than a bad faith attempt on the part of the insurance company adjuster or in house claims manager to cause the insured (you) to question the integrity of the contractor, cause strife between the contractor and the insured (you) and cause the insured (you) to consider illegally breaching their (your) contract with the contractor. Besides being bad faith, it is also Tortious Interference (i.e., causing harm by intentionally disrupting a contractual relationship or harming a business relationship or activity,
The fact that a contractor estimates property damage higher than an insurance company initially offers rarely means the contractor is pricing the repair costs too high. Usually, it means that the insurance company is offering the insured substantially less than they should be paying relative to the premiums paid by the insured. The insurance company does not care if the insured gets into legal trouble by breaching their contract based on the errant advice of a wayward insurance adjuster or in house claims manager. Typically, all they care about is paying out as little as possible on each claim - and staying employed.
(Beware of) "Hired Gun" Insurance Company Paid Forensic Engineers
Sandy Flood Insurance Issues Said to Be Focus of Criminal Probe Evidence of fraud in Hurricane Sandy reports Supreme Court Upholds Hurricane Katrina Fraud Verdict Against State Farm How Engineers Scam Homeowners After Disasters
"State Farm has ordered an independent investigation in to one of its vendors and suspended work with Haag Engineering Co. based on an Oklahoma jury's finding that the insurance company used Haag reports to maliciously deny policy holder claims, a newspaper reports." Insurance Journal Okla. Couple Awarded $13 Million in Lawsuit Against State Farm May 30, 2006
If your insurance company disagrees with your contractor's assessment of the damage to your property, they may choose to send one of their paid for third party "forensic" engineers to conduct a "forensic investigation" of your claim.
Although the term, "forensic investigation" sounds impressive, in regards to the inspection of roof, siding and related property damage claims "investigations" by insurance company paid "forensic" engineers, it really is not. Anyone willing to pay a few hundred dollars to do so can become "certified" for wind and hail roof inspections in about a week. In the great majority of cases, these folks ("certified" insurance adjusters and "forensic" engineers) will typically report the following on completion of their insurance company paid "forensic investigation" of the typical roof wind and hail damage claim - even in areas where every other home in the area was damaged: No wind and/or hail damage but evidence of foot traffic, wear & tear, thermal expansion, improper installation, manufacturers defects, lichens, moss, anomalies, mechanical damage, intentional damage, improper maintenance, etc. - anything but actual wind and hail damage.
Based on the engineer's (ambiguous) opinion that any damage found is anything but wind, hail, flood or other property damage, the insurance company denies the (your) claim. As a side note: In regards to insurance claims as above, it is generally accepted that ambiguity should always fall in favor of the insured over the insurance company due to the insured's lack of bargaining power. The insurance companies then claim their denials are substantive because they relied on the opinions of an "expert" engineer with an important sounding title and therefore should be shielded from lawsuits. The engineering companies and their engineers then hide behind what is known as the "Doctrine of Privity" which says that since the insured(s) and their contractor are not parties to the contract between the insurance company and the engineering company, the insured(s) and their contractor have no standing. When the insured's are injured however, when a legitimate damage claim is falsely (implying knowingly) or fraudulently denied by an engineer, the engineer and the insurance company have both harmed society which falls outside the protection of the Doctrine of Privity.
Average per claim engineer fee for their roof inspection service? Around $800 for a basic residential roof inspection. Low average per (residential) claim savings to the insurance company who relied on the engineers opinion that damage was not weather related? $8,000 to $10,000 dollars. Fortunately, more and more juries are seeing the light these days
Simple common sense combined with experience tells us that there are those who will put money and job security ahead of reality and truth. "Forensic" engineers aren’t hired by insurance companies to find roofing, siding and related wind and hail storm damage, they are hired to disprove the existence of it. There is simply no other reason a P&C insurance company would hire them. If they don’t, per their opinion, deny legitimate damage, the inspection assignments (millions of dollars worth) will eventually dry up.
If your insurance company informs you that they will be sending an engineer to inspect your roof and/or other property for damage, go online and Google the following - "(name) engineering company complaints". If you find that the engineering company has complaints against it and you are properly concerned - as you should be, y
The Claims Process - From "Filed to Final"
So, you've been regularly paying your insurance premiums for years and your property has sustained substantial damage from a storm or related insurance covered event - what do you do next? Rather than following "conventional wisdom" or an insurance company’s self-serving recommendation to get several free estimates as you would normally do when considering retail remodeling work, the best approach for you as a property owner with insured storm or related property damage - is to choose to work with a independent 3RSystems, LLC trained restoration contractor who is also an American Policyholder Association (APA) professional member, who can prove experience in the insurance claims repair process,
However you and a contractor met after your property was damaged, whether by a knock on your door, a flyer, a referral, or a radio or TV ad, after the contractor has conducted their offered and your approved free damage inspection of your property and the contractor has confirmed damage, he or she will ask you to sign a "contingency” agreement. A quick note about contingency agreements - if your insurance company legitimately denies your claim – legitimately being the key word, the agreement
Whether titled as a Proposal, Agreement or Contract, as long as it contains an offer which is typically an offer to ensure the accuracy of the insurance company's claim settlement offer to make sure that all damage is accounted for and to complete the repairs as listed in the insurance company's final settlement offer that all parties have agreed to in exchange for consideration - the insured's promise to pay the contractor for the repairs and the insured's acceptance of and agreement to the terms, a legal and binding contract is established
Your signed contingency agreement contract will initially include everything including cancellation clauses (additionally, often separate) that will make up your contract except a description of the damaged items and the pricing. That description and the pricing will all be shown on the loss report that your insurance company adjuster or in house claims manager sends to you after completing their initial inspection of the damage. Once your contractor properly estimates the damage and costs then agrees that the final loss report is accurate and includes all damaged items at a fair and proper real, true and accurate (RTA) price relative to the premiums you paid, you and your contractor will simply transfer that information onto the contingency
After you have approved and signed the contingency agreement which will not show the cost or what will be repaired until you, your contractor and the insurance company have agreed to the final price and scope of work, your contractor will meet with your insurance company adjuster when he or she assesses the damage to your property - on a specific date and time. The specific date and time is determined by you when you demand of your insurance company claims department that their insurance adjuster conduct their inspection - on a specific date and time chosen by you.
Important note: Although it can prove to be a bit cumbersome, documenting the entire claims process from start to finish by recording dates, times, names, etc. is an important and necessary part of the process in moving your claim from "filed to final" with the least amount of resistance.
Upon arriving at the claim site at the stated date and time but prior to conducting the initial inspection, the insurance adjuster will introduce him or her self to you and explain the adjustment process. At that point, if you did sign up for a FREE American Policyholder Association policyholder membership,
You’ll then hand to the adjuster a Adjuster/Engineer Questionnaire/Report then ask the adjuster to complete, sign and date the form then return it to you for your records. The form asks important questions regarding the adjusters training, licensing, qualifications, insurance, actual employer, etc. You have every right to know all you can about the individual who will be estimating and pricing the damage to your property. At the bottom of the form, the adjuster will see the following warning that reads as follows; "BE ADVISED THAT INSURANCE FRAUD OCCURS WHEN AN INSURANCE COMPANY, INSURANCE AGENT, INSURANCE ADJUSTER, INSURANCE CLAIMS MANAGER, INSURANCE CLAIMS EXECUTIVE, AND/OR FORENSIC ENGINEER COMMITS A DELIBERATE DECEPTION IN ORDER TO OBTAIN AN ILLEGITIMATE GAIN."
The adjuster may decide not to complete and sign the form and return it to you, which is fine. The fact that they received it and more likely than not, will have read through it at some point during the day, should serve as sufficient notice that they will be expected to properly and honestly report any covered damage and will be held accountable if they do not. Because of the fact that the insurance claims process has become so contentious over the past couple of years – meaning, the insurance companies are fighting tooth and nail to keep their claim settlements as low as possible, by whatever means, it is acceptable and proper and recommended that, where and when legal, you and/or your contractor audio or video record the adjusting session. BTW, your 3RSystems, LLC trained restoration contractor will have copies of the Adjuster/Engineer Questionnaire/Report to give to you.
After the insurance adjuster has completed their initial inspection of the damage to your property with your contractor present, your contractor will then audit the insurance adjusters estimate you will receive a few days later from the adjuster and compare it to their own damage estimate. The insurance adjuster’s estimate is called a "loss report" or "scope of loss report“ which should include payment lines listing payment for “Overhead” and “Profit” that are based on the total repair price. In most cases however, these two important line items will be intentionally omitted by insurance companies from their loss reports. If payment lines for Overhead & Profit or General Contractors Overhead & Profit are not listed on the loss report, usually on the front page, you need to demand of your insurance company that those payments be included.
Keep in mind that, because the insurance company loss report that forms the basis of your claim is sent to you directly, you are never in the dark regarding what work is proposed and at what price. If your contractor’s audit of the adjuster’s loss report reveals that damaged items are missing or omitted and/or the pricing is too low relative to the true cost of repairs in your area (95 + % of the time, that will be the case), your contractor will be happy to speak with the insurance
If, after your contractor has spoken with your insurance company adjuster about their loss report discrepancies and your insurance company adjuster still refuses to pay for legitimate covered damage that was either missed or omitted by the insurance adjuster, your contractor will advise you to call your insurance company claims department and request a re-inspection where, under normal circumstances, your contractor and preferably a new insurance adjuster will meet
At the re-inspection, if agreed to by your insurance company, you will follow the same process as you did at the initial adjuster inspection. As the first adjuster did at the initial inspection, prior to conducting the re-inspection, the hopefully new adjuster will introduce him or her self to you and explain the adjustment process. If you indeed have become an American Policyholder Association policyholder member (free to you as a policyholder), also let the new adjuster know that then ask the new adjuster to complete the Adjuster/Engineer Questionnaire/Report then return it to you. The adjuster will then complete the re-inspection with your contractor then send you a revised loss report
If the re-inspection loss report still shows that damage was missed or omitted, and your contractor contests the results shown on the re-inspection loss report, the adjuster or in house desk claims manager in possession of the re-inspection loss report may call you and say your contractor is charging too much or even say your contractor is trying to “rip you off”. This common practice, one which you should pay little attention too, is known as “Tortious Interference” which is defined as
The insurance adjuster’s or “in house” desk adjusters purpose and intent in making such accusations is to cause you to doubt your contractor, become frustrated, illegally breach your agreement with your contractor, or simply give up, and accept the insurance companies unfair lowball and incomplete settlement offer. Once your claim has gotten to that point, your contractor will have hit what I call, the “UPPA wall” and can offer you no further help. You are still free to attempt to
In lieu of a re-inspection, your insurance company in house (desk) claims adjuster, who will, at some point in the process, take over the claim from the original adjuster, may instead order, not a re-inspection, but rather, a claim “investigation” by one of their independently contracted third party "forensic" engineers, or as I call them - “hired guns” as I mentioned previously. Assuming your insurance company has agreed to conduct a re-inspection with a
When that indeed is not the case, at that point, you as the insured will have basically four options; 1. Using the knowledge you have gained from studying this material, you can argue your case on your own for fair and full payment on your claim that includes 100% GC O&P payments. In doing so, you will save substantial time and money in not having to utilize and pay for the services of an appraiser or Public Adjuster or attorney. 2. Hire and pay an insurance appraiser to take your claim to appraisal. 3. Hire a licensed public adjuster who can negotiate your claim and interpret policy language but will charge you 10% percent of the final claim proceeds for doing so, or, 4. Hire and pay a licensed and well versed insurance attorney to prosecute your claim. Option 1. should be your first choice and then, only if you fail at achieving maximum claims pay out on your claim through that process, you still have Options 2. thru 4. to consider. In choosing any of the three remaining options however, although they will likely result in your claim eventually being paid near or in full, they will also likely and unfortunately cause final settlement of your claim to be delayed by weeks to months.
In regards to public insurance adjusters who work for insured's rather than insurance companies, property & casualty insurance
Property & casualty insurance companies know full well that only about 4 to 5% of insured's will ever hire an appraiser or public adjuster to take over their claims and only about 1 to 2% ever hire an attorney to sue. That then leaves the other approximate 95% of insured property owners wholly exposed and vulnerable to the bad faith and often fraudulent delay, deny and defend underpayment schemes of the property & casualty insurance industry
They also know (and hope) that if your claim is under that $30k mark and you can’t find a public adjuster to take over the claim and, you are reluctant to pay additional out of pocket monies to hire and pay an appraiser or attorney, you may just give up the fight and accept the insurance companies unfair, bad faith, and potentially fraudulent lowball settlement offer. That is their hope, anyway, and that is the whole point of the UPPA laws I mentioned previously that prevent your contractor from negotiating
If your insurance company realistically still owes you $30,000 on your claim and they refuse to pay more than $20,000 and you do not fight back for the additional $10,000 they still owe you - and that, pre-UPPA, your contractor would have been able to negotiate for on your behalf, the insurance company then keeps the additional money they should have paid you on your claim as undeserved, unearned profits. These nefarious and unjust practices save the property & casualty industry hundred’s of millions of dollars every year.
You pay premiums to your insurance company for coverage based on future real, true and accurate (RTA) rates, therefore, it makes sense that your P&C insurance company should settle your claim at least at current real, true and accurate (RTA) rates rather than attempt to leave you less than whole. You deserve no less. If however, your insurance company disagrees with you, your contractor and even the evaluation of other professional contractors as well as public adjusters,
When the engineer introduces him or herself to you, you will hand the Adjuster/Engineer Questionnaire/Report to them and ask them to complete the form then return it to you. The engineer may or may not do so and if they do not, make note of that in your claims process records. The engineer may also refuse to conduct their "investigation" of the damage with your contractor present - which is fine. Engineers may also refuse to conduct their "investigation" if they know that they a
After completing their "forensic" investigation of the property, the engineer will write a report on their findings and deliver it to the insurance company. As is the case with insurance companies, many engineers are reluctant to give a copy of their engineering report to the insured property owner. If your insurance company denies your claim based on the engineers report however, you need to know what the engineers report said. Don't hesitate to demand a copy of that report for your records -
If, after all has been said and done, your insurance company and you finally come to a fair and full settlement agreement, your insurance company will send you a check in the amount of the depreciated value of your claim. From that, you will be able to issue a down payment to your contractor that you will give to him or
Once those inspections have been completed and approved, your contractor will send a final invoice to your insurance company requesting the final payment due which will consist of the agreed to final amount on the claim minus your deductible. On receipt by you, you and your contractor will meet to go over and pay
Additional advice and warnings
In regards to contracting for insurance covered storm property damage repairs, doing the actual repair work is only 25% of the job - the easy part. Dealing with and going up against multi-billion dollar P&C insurance companies, their independent and staff adjusters, in house claims managers and their lawyers who are typically reluctant to fully pay their insured's claims is 75% of the job - the hard part. If you want to make sure you are paid all of the money owed to you by your property & casualty insurance company on your damage claim you need an experienced and professional 3RSystems, LLC trained restoration contractor who understands the process from both the construction and the insurance side.
Never accept a claim settlement offer from any insurance adjuster or insurance company claims manger before you have had a trained professional restoration contractor inspect your property for damage. If your insurance company claims department has refused your legitimate demands for full and proper settlement payment and
Regarding contractor offers to "bury" property owner insurance deductibles and property owners acceptance of such offers, many states have already passed and other states are considering passing laws that prohibit the practice. Whether or not passed as law in any particular state, the actions of
A very small minority of property owners with damage mistakenly believe that they can, after a contractor has done all the work in making sure that all damaged items are accounted for and properly paid for - in other words, fulfilled their obligation, cancel their signed contract then hire a different, often less experienced contractor to do the repair work for less money while pocketing some of the insurance proceeds for their own personal use. This could be construed by the insurance company and others as insurance fraud. Many insurance adjusters who know the insurance company's they represent want to keep payouts low will often attempt to cause the insured property owner to cancel/breach their contracts
With that and with a reminder that you pay the premiums and that makes you the boss, and to never be intimidated by the process or by independent or in house insurance adjusters or "forensic" engineers, I wish you the best of luck on your property damage claim.
Larry M. Burtis, President - 3RSystems, LLC / ICCOA
USA Restoration Construction Contractors
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3RSystems, LLC supports the American Policyholder Association (APA) in its mission. Insured property owners can join the American Policyholder Association (APA) for free. To learn more and to learn how to become a member, visit the American Policyholder Association (APA) website through the link below. NOTICE: The American Policyholder Association (APA) does not take a position on Unauthorized Practice of Public Adjusting (UPPA) laws.
Disclaimer - Other than offering my experienced opinions as a matter of reference, I do not give accounting, tax, insurance, investment or legal advice. If you need accounting, tax, insurance, investment or legal advice, I recommend that you consult with a licensed accounting, tax, insurance, investment or legal professional practicing in the area of your concern. 3RSystems, LLC / ICCOA does not guaranty or warranty the workmanship of any 3RSystems, LLC trained restoration contractor. 3RSystems, LLC also does not offer any other guaranties or warranties pertaining to the licensing or insurance status of any 3RSystems trained restoration contractor. NOTICE: The American Policyholder Association (APA) does not take a position on Unauthorized Practice of Public Adjusting (UPPA) laws.
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