When choosing a homeowner’s policy, most of the time you don’t read the entire lengthy document. You generally meet with an agent who explains the various types of coverage and you choose the one that fits best for you at the moment. But how do you know your choice at that time is the best one for you in the future? Knowing the different types of policies will help you maximize your benefits in the long run.

Having a great insurance policy helps to protect your house. And you want to protect your most valuable asset, but how do you know which policy will be right for you? While you can’t use a crystal ball to look into the future, you can learn about all of the different types of policies that are currently available to maximize your own benefits. Then you can make the best educated decision for you and your family.

There are several common types of homeowner’s insurance policies.

1. HO-1 Coverage

This insurance is the most basic on the market. It protects you from fire, hail, vandalism, theft, or damage from other common threats. While you might never need it, most HO-1 policies will also protect you from civil unrest, volcanic eruptions, and windstorms. If you are on a budget, an HO-1 may be the way to go, as it is the most affordable. However, keep in mind that with an HO-1 policy, you are still liable if someone is injured on your property.

2. HO-2 Coverage

HO-2 coverage includes everything from HO-1 coverage, but the policy is upgraded to cover damage from frozen pipes, water heaters, steam from various appliances, and power surges. While this policy covers more than the basic one, know that the insurance coverage only applies if the damage specifically occurs from one of the events listed in the policy.

3. HO-3 Coverage

Most people choose HO-3 coverage as their homeowner’s insurance policy because it covers you for every type of damage, except for things like floods and earthquakes. The best part of the HO-3 policy is that it covers the main structure of your house and any other buildings or structures on the property. That means if you have a shed or storage unit, it will cover that too. Unlike the HO-1, the HO-3 provides liability protection. The policy covers any injuries that might happen on the property and if you accidentally damage something on your neighbor’s property, it covers the repairs.

4. HO-5 Coverage

If you are looking for the most comprehensive homeowner’s policy on the market, the HO-5 is the way to go. While it usually costs more, the higher premium means more security in knowing that you have extensive coverage. An HO-5 covers all of the possible perils the same as the HO-3, but it also protects your personal belongings from any damage that is not specifically excluded, such as a flood. Be careful, because this policy does not cover every possible event that could occur, so make sure you know what events are specifically excluded.

5. HO-6 Coverage

If you own a condo, an HO-6 policy is most often the one to choose. Condo policies operate the same way as homeowner’s insurance policies, but they have a few minor differences. For example, instead of covering the entire condo building, the HO-6 will only protect your unit. That means your belongings and the structure of the unit will be covered, but any part that is technically owned by the HOA is their responsibility. Most of the time the HOA will have their own policy to cover the exterior of the building, so you can rest easy knowing those larger problems are not yours to tackle.

6. HO-7 Coverage

HO-7 coverage is designed for people who live in mobile or manufactured homes. An HO-7 policy will cover the same items as an HO-3. Some policies will also include liability protection which does not come with an HO-3 policy.

7. HO-8 Coverage

If your home is over 40 years old, then it might have different repair needs and costs than more modern homes. Because of this, your home might not qualify for an HO-3 policy. For older homes, HO-8 policies were created to deal with the price discrepancies for replacement items. Claims are generally based on actual cash value of the damage minus depreciation.

Each homeowner’s policy offers different coverage for a variety of budgets. There is also different coverage for different types of property. It’s alright if you don’t know the ins and outs of your policy because a Public Adjuster can help maximize your benefits during a claim. But it is good to know the basics of your policy because understanding what your homeowner’s policy covers, allows you to maximize your benefits if you ever have to file a claim.

The coverage grant of your insurance policy governs whether you can claim a “direct physical loss” or not. Physical loss is an essential threshold requisite for insurance under most of the insurance policies. However, the company’s interpretation of a physical loss to your asset solely depends on the kind of coverage you opt for. 

A skilled public adjuster can work through all the technicalities of your insurance policy to the maximum claim that you own! Essentially, any visible and physical damage that occurs to your home can include a claim for physical damage to property.

The insurance companies put up conditions

Insurance companies state preconditions for the loss to be ‘physical.’ This requirement is widely exploited to rule out alleged losses since they might be intangible or incorporeal. In such a case, getting an insurance policy would be rendered useless as it won’t hedge you against physical losses. 

It is the State Law that exercises authority over insurance coverage issues. Many companies have not definitely fixed on what the phrase “direct physical loss or damage” means in property policies. Thus, leaving room for many open-ended possibilities that might or might not be in your favor.

This is where experienced Public Adjusters at United Claims Specialists can help you by representing your insurance claims. Each claim is different, but hiring Public Adjusters can potentially increase your claim payments.

Experts can tackle it better

There are cases where the insurance companies have stated that unless there is variation in the physical structure of a property, there is no direct physical loss. Whereas, the usability of the property is an important factor, sufficient to claim recovery.

Consequently, as the policyholder, you would have to testify with concrete proof that your loss is incorporated under the policy’s clause. In simpler terms, it means that as a policyholder, the burden to prove the loss of your property lies on you. If this sounds overly taxing, let the United Claims Specialists tackle the matter of contention with your insurance company!

If your loss is not physically credible – What’s next? 

Several all-risk property policies do not lay out the definition of physical loss or damage. The Port Authority v. Affiliated FM Ins Co., allude to the widely accepted definition of physical loss as a “distinct, demonstrable, and physical alteration” of its configuration. For instance, significantly viewable damage to your property due to water or fire. 

There can be chances when a physical loss persists, but it is not detectable to the naked eye. However, your property has degraded in terms of usage. The question is, how can you make it evident? The physical imperilments that come out of fire are visible. But, it is difficult to possibly prove the plausible damage to its interior structure. 

Instances where the issues were severe

In 2012, in Universal Image Prods. V. Fed. Ins. Co, the US Court of Appeals, received a plea by a business head for the recovery of business interruption coverage. But according to the Court, there was no structural deterioration whatsoever. It was further opined that water seeping resulting in mold and bacteria contamination of a premise did not incorporate “direct physical damage.” 

Whereas in Farmers Ins. Co. v. Trutanich 1993, a homeowner suffered a “direct physical loss” due to a persisting odor. This emanated from the basement, where the tenant was operating a methamphetamine lab. Here, the Court derived that the odor was physical and damaged the house. 

Having said that, many jurisdictions no longer limit a “direct” physical loss to the literal sense of the term. The Third Circuit claimed that “sources unnoticeable to the naked eye,” can come under an insurance claim. This applies in cases where the physical loss makes your property “uninhabitable and unusable.” 

How can a public adjuster help you?

There is no denying the fact that property insurance policies for homes and businesses are obscure. This is because there are multitudes of factors to consider. As mentioned before, your policy might not clearly explain the direct physical loss. Yet, you would have to demonstrate that there was an alteration to your asset, and this can be extremely challenging. This task is imperative if you want to indemnify the condition for your coverage. 

With a humongous premium scheme, you would want to get tremendous value out of your policy. As an inexperienced individual with limited knowledge about insurance policies, the most viable option is to hire a public adjuster. Hiring a knowledgeable public adjuster can potentially multi-fold your claim payments. 

If you are looking to make the most of your insurance claim, contact the team at United Claims Specialists. We’ll ensure you get the maximum recovery you deserve.

Over the course of the past several weeks, the coronavirus has quickly earned the title of Public Enemy No.1 across the globe. Thousands of people across the nation are fighting this virus, and millions more are putting themselves at risk every single day on the medical frontlines. And all the while, those who can remain in their homes are patiently awaiting the day that their lives can resume to business as usual.

However, the existence of the coronavirus will not prevent natural disasters, like floods and fires, from causing physical damage to your property. Although it may seem as though things could not get any worse, a natural disaster can unfortunately still rear its ugly head at any given moment. Whether the damage is small or large, understanding how COVID-19 has temporarily affected homeowners’ insurance claims is crucial to getting the compensation that you deserve.

“Homeowners insurance is a type of financial protection that covers your home, personal belongings, and additional living expenses in the event the house is damaged or burglarized.” Many claims companies have adjusted their claims vetting processes of homeowners in response to the coronavirus. Prior to on-site visits, policyholders are being contacted and “are asked a series of questions to evaluate the risk” of in-person inspection.

Moreover, the virus has forced some claims companies to speed up their adoption and integration of certain consumer-facing technologies. A number have gone as far as providing policyholders deemed high-risk with self-service apps so that personal contact may be avoided. The digital process is not drastically different from having an adjuster visit your home to assess the damage: you report what happened and what was damaged, submit photos, videos, and/or police reports, file a claim, and eventually, get reimbursed. But homeowners should be prepared for delays, as insurance companies may still await an adjuster’s inspection prior to paying out a loss.

Guidelines vary by both carrier and location. Several carriers have halted all in-home visits, delaying inspections until further notice. Conversely, many carriers are still performing inspections, but have instructed their adjusters to wear gloves and masks during all in-home visits.

For those with carriers who have put a pause on in-home visits, it is imperative to refrain from disposing of “damaged items until after the adjuster signs off on them,” if possible. Additionally, if a carrier will not allow their adjuster to make in-home visits at this time, “it’s more important than ever that homeowners take pictures and videos with their cellphones” of the damage sustained to their property. Depending upon the nature of the damage, the pictures and videos sent to your insurance company may make it unnecessary for a the adjuster to enter your home. However, if damages in the interior of the home require inspection, it is advised to ensure that your adjuster is properly covered with a mask and gloves prior to his or her entry into your home.

Even though each carrier will respond differently to COVID-19, doing all that you can to collect and retain evidence of your property’s damages and losses, while keeping yourselves and your families safe, will help you to receive fair compensation. The longer the implications of the virus persist, the more insurance carriers and their policy adjusters will have to make changes to their claims vetting processes in order to properly serve their policyholders.

References

Howard, Pat. “Homeowners Insurance and Coronavirus (COVID-19).” Policygenius, 30 Mar. 2020, www.policygenius.com/homeowners-insurance/homeowners-insurance-and-coronavirus-covid-19/.

Samler, Harry. “How Homeowners Insurance Claims Have Changed during the Pandemic.” CBS46 News Atlanta, 13 Apr. 2020, www.cbs46.com/investigations/how-homeowners-insurance-claims-have-changed-during-the-pandemic/article_13150c9c-7dde-11ea-8a8c-4b26c8d63531.html.

Sams, Jim. “How Insurance Claims Pros Are Adjusting to Pandemic Complications.” Insurance Journal, 13 Apr. 2020 www.insurancejournal.com/news/national/2020/04/15/564363.htm.

No one wants to be stuck in the chaos of a hurricane. Let alone deal with all the damage and devastation afterward.

But… it happens. And it’s out of our control.

The least you can do is be prepared with insurance that’ll be sure to cover your losses.

Make sure you’re covered with your insurance policies and know how to file an insurance claim by following these 5 simple steps:

1. Find your insurance policy

You won’t know what you’re covered for and what you’re not covered for until you find your insurance policy. So make sure you find it and read it over carefully. 

Damage from a hurricane might be from water, high winds, or other causes, so make sure you know which of these causes your insurance plan covers. Most insurance policies don’t cover flood damage and you may have to get separate insurance for flood damage.

You won’t know exactly how to file an insurance claim until you read your insurance company’s specific policy. Review your insurance policy so you know what your deductibles are and what steps you’ll need to take next to make a claim. 

Also, make sure you take note of your policy number since you’ll need this when you contact your representative.

 2. Contact your insurer

Most likely, local weather forecasters have already notified your insurance companies about the possible damages. So they may already have a system in place to make it easier to make your insurance claim.

Many insurance companies will have a process to take you through the initial steps on their website or even on an app. And that may be much more pleasant than making a call right away.

But whether you call or go through a process online, make sure you notify them that you are making an insurance claim, give them your policy number, and let them know if you need emergency service or repairs.

3. Document the damage

Make sure to take photos and videos of the damage, so that you’ll be able to prove your insurance claim. 

Also, take notes of what’s damaged. Make of list of everything that’s been damaged and try to write down the values of each item if you can (and even better if you have receipts of damaged items or receipts of the cost to repair the damage).

This will help both you and your adjuster. It’ll help you remember all the details of when it first happened and it’ll help your adjuster see the damage in the state it was in right after the storm.

After you’ve documented everything, mitigate damages as much as you can, like holes in the ceiling, but don’t get rid of anything that’s been damaged until an adjuster can document them.

4. Meet with your insurance adjuster

Your insurance company will send an adjuster to come to document the damages and collect any records or receipts from you.

Your insurer’s adjuster may tell you that the damage is not covered in your policy. But be cautious of their word, and make sure you get what you deserve out of your policy. 

And that’s where a public adjuster can come in and work miracles for you and your insurance claim.

5. Consider hiring a public adjuster 

Dealing with the insurance company and their adjuster can feel completely overwhelming and confusing. Especially when you feel like your adjuster is not giving you answers and payments that you’re entitled to.

Hiring a public adjuster is a great alternative because they don’t work for an insurance company. 

They work for you.

You can be sure when you hire a public adjuster that they will do their absolute best to make sure you get the settlement you deserve. Especially since they don’t get paid until you do. Public adjusters normally receive a percentage of the total claim settlement, which means they work diligently for you since that’s how they’ll get paid as well!

Interested in hiring a public adjuster?

Check out our services at United Claims Specialists and learn how we can help.

Click here to learn more!

References

Jacobs, Deborah L. “How To File An Insurance Claim For Hurricane Damage.” Forbes, Forbes Magazine, 13 Sept. 2011, www.forbes.com/sites/deborahljacobs/2011/08/28/hurricane-damage-how-to-file-an-insurance-claim/#2ffd33993627.

Glenn, Alex. “How to Make an Insurance Claim After a Hurricane.” NerdWallet, 1 Nov. 2016, www.nerdwallet.com/blog/insurance/how-to-make-insurance-claims-after-a-hurricane/.

“Facing the Aftermath of a Hurricane – Filing Insurance Claims.” Findlaw, 20 June 2016, practice.findlaw.com/practice-guide/facing-the-aftermath-of-a-hurricane-filing-insurance-claims.html.

Businesses all over the country remained closed or operating under limited hours, and more and more businesses have discovered that their business disruption insurance claims are being denied. Their response is to sue their insurance companies. Lawmakers have also been drafting bills to force insurance companies to pay up, and the insurance companies are not happy about it. Even President Donald Trump has spoken about the issue, saying that if pandemics are not listed as an exclusion specifically, the insurance companies need to pay up.

“You have people that have never asked for business-interruption insurance and they have been paying a lot of money for a lot of years for the privilege of having it and then when they finally need it, the insurance company says ‘We’re not going to give it,’” Trump said during his briefing last Friday. “We can’t let that happen.”

If the insurance companies do not pay, many businesses will not survive the pandemic and may not be able to reopen when this is all over. Business disruption insurance is part of property insurance policies and is supposed to be triggered if something unexpected happens (usually a fire or natural disaster) and help cover the losses you will suffer while you remain closed. After a 2003 insurance case following the SARS outbreak where an insurance company had to pay a hotel chain $16 million from the losses they suffered during the outbreak, insurance companies began to exclude viruses from their policies.

“Pandemics… Are Uninsurable”

The insurance industry claims that if they are forced to pay out for all of the claims following this pandemic, they will buckle under the pressure. According to the American Property Casualty Insurance Association, the collective total for monthly insurance premiums for commercial properties totals $6 billion, but the amount of monthly income small businesses are losing is between $255 billion and $431 billion.

“Pandemic outbreaks are uninsured because they are uninsurable,” David Sampson, the CEO of the association says. He also said that the $800 billion surplus the insurance industry maintains needs to be kept stable at a time of “increased natural disasters,” instead of being used to keep thousands of businesses from going under.

Physical Damage

The insurance companies that are denying these claims are saying that the disruption insurance only applies to losses that are from physical damage to a business, like a fire. Many of the lawsuits against insurance companies are fighting back against the claim that the coronavirus does not cause property damage.

New Orleans-based lawyer John Houghtaling II is representing a restaurant in one of the first cases against insurance companies. He has said on several occasions that “The argument that the coronavirus doesn’t create a dangerous property condition is a lie. The insurance industry has a PR campaign that misrepresents the policies and what they owe, and they gaslight everyone,” Houghtaling said.

Whether or not this argument will work remains to be seen, but many business owners are hoping that this will work to get them paid what their insurance companies owe them so they survive the pandemic.

Forcing Payment is “Plainly Unconstitutional”

Part of what some states are attempting to do is to compel insurance companies to retroactively include pandemics in their business disruption insurance policies, which led to the CEO of Chubb, Evan Greenberg, to speak out against these attempts.

“You can’t just retroactively change a contract. That is plainly unconstitutional,” he said. “The industry would prevail on that and so I understand the frustration of legislators, I understand they’re looking for a remedy, but this would be a self-inflicted injury and create great uncertainty at a time when we have enough uncertainty and we’re trying to heal the economy.”

References

Clifford, Tyler. “Chubb CEO: Forcing Insurers to Pay Pandemic Loss Claims Is ‘Plainly Unconstitutional’.” CNBC, CNBC, 17 Apr. 2020, www.cnbc.com/2020/04/16/chubb-ceo-making-insurers-cover-pandemic-losses-is-unconstitutional.html.

Elejalde-Ruiz, Alexia. “Business Owners Bleeding Money during the Coronavirus Shutdown May Expect Insurance to Cover Their Losses. But Often They’re in for a Shock.” Chicagotribune.com, 16 Apr. 2020, www.chicagotribune.com/coronavirus/ct-coronavirus-business-interruption-insurance-lawsuits-20200416-b5kl3xaweja7refbqfr4cpkp3u-story.html.

Pershan, Caleb. “The Ugly Legal Battle Over Restaurant Insurance Has Begun.” Eater, Eater, 9 Apr. 2020, www.eater.com/2020/4/9/21214136/restaurant-business-interruption-insurance-lawsuits-coronavirus-coverage.

Sams, Jim. “Trump Tells Insurers to Pay Virus Claims If Pandemics Not Excluded.” Insurance Journal, 14 Apr. 2020, www.insurancejournal.com/news/national/2020/04/14/564744.htm.“Will Business Disruption Insurance Cover Losses from the Coronavirus?” 

United Claims Specialists, 20 Mar. 2020, ucsfl.com/will-business-disruption-insurance-cover-losses-from-the-coronavirus/.

When something happens where you need to file a claim with your insurance company, there are some mistakes that can cause your claim to be denied. The following are some of the more common mistakes you can make when filing an insurance claim.

Not Hiring a Public Adjuster

A public adjuster is your best advocate in an insurance claim. They are experts in their field and they know how to handle your insurance company to get you the maximum payout you are owed. A public adjuster will help you with all of the paperwork and make sure everything is put together properly for your insurance company. They are trained to navigate an insurance policy and on how to negotiate with an insurance company. Without a public adjuster, you may end up getting lowballed by your insurance company and not getting anywhere near that amount you are owed.

Making Repairs Before Documenting Damages

When something has happened to your home, you might want to move quickly to get those repairs underway, which is understandable. However, starting repairs before you have your damages fully documented can cost you a lot of money. If you cannot prove to your insurance company what was damaged because you got a head start on your repairs, your claim could be denied or delayed.

Before you make any repairs, you must take the time to photograph and/or take videos of the damages. Without proper documentation, you may not be able to prove the damages properly, and your insurance company may deny your claim for prejudicing their opportunity to investigate.

Procrastinating Filing Your Claim

No one wants to deal with their insurance company, and the claims process is known to be a headache, so you may be tempted to put it off for a little while. The problem here is that it is easier to get your claim going when the damages are fresh. Even if you document the damage thoroughly, the insurance company might make things difficult if you wait, since they cannot see the damages shortly after they occurred.

Not Retaining Damaged Property

You probably want to throw away something that has been damaged after you file your insurance claim, but your insurance company may want to inspect it again later on. If you throw it away, they cannot do that. This is harder to do if it is your entire house that has been damaged and you need to clear away the debris before you can begin to rebuild. However, it is easier to hold on to things if your home is vandalized or a window breaks during a storm resulting in damaged furniture or other household items. If you are unsure if you can throw something away, speak with your public adjuster before doing so; they will be able to tell you if you should hang onto something or if it is likely safe to get rid of.

Paying Out of Pocket on a Third-Party Claim

Let’s say you’re a business owner and a customer gets injured on the premises, and the injuries do not seem too severe. You may think it is okay to just pay out of pocket for their expenses instead of filing a claim with your insurance company and waiting around for them to process it. You absolutely should not do this.

Injuries that seem minor in the beginning might end up being something more serious that is noticed later on down the line. If you did not file with your insurance when the injury first happened and the injured person is suddenly needing more expensive medical bills covered, you may run into some trouble with your insurance company. Not filing as soon as possible can result in delayed or non-payment.

The deadlines for insurance claims are rapidly approaching, especially for people still waiting on their Hurricane Irma claims and the California 2018 wildfires, along with other claims. The coronavirus has led to stay home orders all over the country, making it difficult in some areas for someone to continue fighting an insurance company over a claim. This is especially true if the claim is now in legal proceedings since non-essential court cases have been suspended for the time being.

With this in mind, the National Association of Public Insurance Adjusters (NAPIA) called on state insurance commissioners across the country to extend the deadlines on insurance claims, “including deadlines dealing with sworn statements required for a proof of loss, replacement costs, construction restrictions, examinations taken under oath, claims reporting and miscellaneous arbitrary deadlines.”

President of NAPIA, Jeff O’Connor said in a statement: “Due to the catastrophic impacts of COVID-19 to the entire population and specifically insureds, insurance companies, adjusters, investigators and every vendor associated with representing the insured or insurance companies, NAPIA urgently requests your response be broadened to further protect property owners.

“While a few states have included the property claims process in their COVID-19 responses, many have not. Today, we ask you to consider extending insurance claim deadlines for property insurance claims and to clarify with more specificity in bulletins that lack clarity as to their scope. The reason for the request stems largely from the combined logistical challenges presented in the claims process requiring physical examination of loss, possible illness of stakeholders and convalescence period all nearing the season for increased property claims due to weather-related events.”

Some States Respond

Some states have extended deadlines, either before or after O’Connor’s statement, including Oregon, California, Texas, Maryland, and North Carolina, but until more states get on board with this, many homeowners may face challenges getting their claims resolved by their approaching deadlines.

California asked insurance companies to relax deadlines by at least 90 days after the end of the COVID-19 state of emergency has ended. This is following the California Department of Insurance saying they have “received complaints from consumers and local and state officials that certain residential property insurance companies are insisting that insureds (who suffered losses in the November 2018 wildfires) must continue to repair and rebuild their homes during the COVID-19 crisis to obtain full replacement cost and Additional Living Expense (ALE) benefits.” With the stay home order, many homeowners cannot even get a construction crew to continue working on their homes right now.

With California calling for this extension partially because of an event that was declared a state of emergency at that time, perhaps this will help encourage Florida to extend their deadline for Hurricane Irma insurance claims.

Taking the time to send your local insurance commissioner a letter on this subject to help show them that the people want and need insurance companies to extend their deadlines may be helpful!

References

Jackson, James. “State Calls on Property Insurance Companies to Push Back Fire Claim Deadlines.” NBC Bay Area, NBC Bay Area, 3 Apr. 2020, www.nbcbayarea.com/investigations/consumer/state-calls-on-property-insurance-companies-to-push-back-fire-claim-deadlines/2267183/.

NAPIA. “NAPIA Asks State Insurance Commissioners to Extend Deadlines for Insurance Claims.” Get RSS 20, Naylor Association Management Software, 31 Mar. 2020, www.napia.com/blog_home.asp?display=30.

Do you hire a realtor to buy or sell a property? Do you hire an accountant to prepare or file your taxes? Do you hire a contractor to rebuild your home?

If the answer to any of these questions is yes, then you may understand why you should hire a public adjuster when you need to file a property insurance claim.

If an incident occurs and you need to file a claim with your insurance company, you allow their adjuster to inspect your damages, you fill out all of the paperwork, give the insurance company all of the documents you think they need, and then you cross your fingers hoping they come through for you.  Hope is wonderful, though wouldn’t it make sense to have more hope after hiring an expert that represents YOUR interests??  A skilled public adjuster can help you file your claim, show your insurance company all the true damage, and negotiate your settlement in its entirety without the emotional burden that comes along with having a devastating event ruin your property you’ve worked so hard to upkeep.

It IS about the MONEY $$

One of the most important things that you might miss out on without a public adjuster is your settlement amount. It’s no secret that insurance companies have been known to low-ball you with their first offer. Since the claims process is complicated, you may decide to just take what you can get and leave it at that.. You may choose to fight your initial offer, but you might take the next one they propose that is slightly higher even though it’s still not actually what you are entitled to based on your damages.

Public adjusters are experts in their field, and they will negotiate with your insurance company on your behalf to make sure you receive the full amount your insurance company owes you.

Insurance policies are complicated, and you may not be able to determine whether you have coverage for something. If the right language is not used in your claim, you could end up getting denied on a technicality. 

Some of these include:

“I have mold.” Claim Denied. Instead, say “I have water damage from a broken pipe that then caused mold.”

“I had a flood in my house.” Claim Denied. You might mean that you had a pipe break that caused water to damage throughout your home; this feels like a flood to you, but homeowner’s insurance policies do not cover floods, so using that language can get your claim denied instantly.

“This was leaking for sooo long.” Claim Denied. If your pipe burst on Saturday night, and you could not get the plumber to come fix it until Monday morning, that may feel like forever to you, but your insurance company may interpret that it was leaking for months, which means you were negligent and they can deny your claim.

“There is damage from the sewer overflowing.” Claim Denied. Since the damage sounds like it was not caused by something directly in your home, some insurance companies may not be willing to cover those damages. However, if there was a drain pipe that collapsed inside your own, that then caused the toilet to overflow, most policies would cover this claim. 

Your insurance company has the advantage

Insurance policies are lengthy and complicated and so is understanding what needs to be done to actually repair your damaged property. Unless you are an expert at reading and understanding legalese AND construction and restoration, it’s difficult to get the insurance company to pay out what’s actually needed.

If you are left confused by your insurance policy OR what your property damages truly consist of, you’re probably giving your insurance company the advantage with your claim.  As an average property owner, you have no way of knowing whether or not you got a fair deal from your insurance company unless you have someone with years of experience, on your side representing your interests, every step of the way during all inspections and negotiations.

Property owners do not know how to fight, who to fight, or even what they need to fight for. This leaves you at a tremendous disadvantage.

Another problem you may run into is that sometimes an insurance company will intentionally draw out the length of your claim. Their hope is that by the time they finally do give you a settlement amount, it has been so long that you will take it, simply because you are tired of fighting.

Public adjusters can help make sure your forms are submitted properly the first time and that no “stone remains unturned” when it comes to the damages. They also know how to handle insurance companies who intentionally draw out claims so they can get away with paying less.

Bottom line

At the end of the day (and the beginning of it) there is an inherent conflict of interest between an insurer and their insured. Whereas many insurance adjusters aim to be fair, are they equipped, educated, or authorized to a degree that enables them to provide payment to the maximum benefits for every policyholder’s claim? Is it in your insurance company’s best interest to pay every claim to the MAXIMUM of its merits?

Even if your insurance company grants coverage for your property claim, the average property owner has zero idea how to read the repair estimates carriers must legally provide along with settlement payment. Did the insurance company pay for everything they were supposed to? Are you to trust them when they say “everything was paid for”? Who determines that??

Public adjusters can level the playing field for you. PUBLIC ADJUSTERS and attorneys are the only individuals licensed by the state to represent policyholders during their crucial times of need. Attorneys can be great, but representing “in the field” isn’t their forte’. They do best, once there has been wrongdoing by the insurance company, perhaps months, or years after the incident or loss occurs. Public adjusters, on the other hand,  are there from the start,  guiding policyholders during the stressful and grueling claims process. As a result, PUBLIC ADJUSTERS are typically able to minimize or even eliminate, simple mistakes, underpayments, and insurance company wrongdoing altogether, while ultimately maximizing settlement recovery.  

Most insurance companies have excluded pandemics from their policies, so you cannot get your business disruption insurance to cover your losses from the Coronavirus. Since that is the case, when the first Coronavirus lawsuit was filed recently in Louisiana, they took the stance that the virus caused physical damage to the property. This case is likely going to set the precedence on how other Coronavirus lawsuits will be handled.

This virus is so dangerous that the government has ordered businesses that are not considered “essential” to shut down, and everyone is supposed to be cooped up in their house if they do not have to do something that is considered necessary. The Coronavirus lingers on surfaces for about 48 hours, and anyone else who contacts it in that time is exposed; this had led to the thoughts that this is damaging the property. “If the non-dangerous teenage pranks of ‘egging’ or ‘TPing’ a house are acts of vandalism and property damage, the dangerous virus on my business property certainly is property damage.”

Problems with Claims

One difficult part of calling this property damage is that you need evidence that it has damaged your property. This means you have to have regular testing on your site to prove the presence of the virus. Without some sort of evidence that the virus has indeed damaged your property, your insurance claim may get denied instantly.

There is some speculation that since COVID-19 is a pandemic, not merely a communicable disease that is specifically listed in policy language, there may be some leeway in getting insurance to cover it that way.

There has also been speculation that the Coronavirus counts under the “Act of God” defense for insurance coverage, which “usually covers unforeseeable natural phenomena like floods, fires, earthquakes, and other natural disasters, as well as businesses that were affected in the aftermath of 9/11.” This clause is complicated and can be difficult to use.

Political Pressure

Politicians have been putting pressure on insurance companies to cover this, leaving them scrambling, not wanting to have to pay out what could end up being a crippling sum of money by the end of this. There is a growing outcry in Washington of people who have paid hundreds of thousands of dollars to their insurance companies over the years who are now being told their business disruption insurance will not cover their losses.

“Business owners everywhere — not just restaurants — are flabbergasted that they’ve been paying on a timely basis thinking they’re covered if something bad happens only to find out it’s not the case,” said Jason Berry, co-founder of Washington-based KNEAD Hospitality + Design. Berry himself has been paying $100,000 per year to his insurance company for his restaurants, and his insurance denied his claim in four days.

Conclusion

Currently, we are looking at a lot of unknown factors where insurance and the Coronavirus are concerned. There are certain angles to attempt in an insurance claim for business losses, and with political pressure mounting, insurance companies may be forced to pay out for business losses and disruptions as a result of the virus.

References

Fantozzi, Joanna. “Here’s What Your Restaurant Business Insurance May (or May Not) Cover during the Coronavirus Pandemic.” Nation’s Restaurant News, 26 Mar. 2020, www.nrn.com/finance/here-s-what-your-restaurant-business-insurance-may-or-may-not-cover-during-coronavirus.

Merlin, Chip. “Corona Virus and Physical Damage-The Louisiana Case Law That Will Be Relied Upon in the First Coronavirus Case Filed: Property Insurance Coverage Law Blog: Merlin Law Group.” Property Insurance Coverage Law Blog, 22 Mar. 2020, www.propertyinsurancecoveragelaw.com/2020/03/articles/insurance/corona-virus-and-physical-damage-the-louisiana-case-law-that-will-be-relied-upon-in-the-first-coronavirus-case-filed/.

Sams, Jim. “Restaurant Suit Tests Business Interruption Insurance for Coronavirus Shutdowns.” Insurance Journal, 19 Mar. 2020, www.insurancejournal.com/news/national/2020/03/19/561638.htm.

Warmbrodt, Zachary. “Insurers Scramble to Avoid 9/11-Style Coronavirus Backlash.” POLITICO, 26 Mar. 2020, www.politico.com/news/2020/03/26/insurers-avoid-9-11-style-coronavirus-backlash-149462.

“Will Business Disruption Insurance Cover Losses from the Coronavirus?” United Claims Specialists, 20 Mar. 2020, www.ucsfl.com/will-business-disruption-insurance-cover-losses-from-the-coronavirus/.

The National Flood Insurance Program’s Write Your Own (WYO) Program is a collaborative program between FEMA and the private insurance industry. It allows insurance companies to write and service flood insurance in their names. Through the WYO Program, “The [insurance] companies receive an expense allowance for policies written and claims processed while the federal government retains responsibility for underwriting losses.”

There have been a number of flood insurance adjusters over the years who have been accused of underpaying claims after a flood disaster. In 2015, Congress conducted an investigation into why there were so many underpayments after Superstorm Sandy in 2012, in which they acknowledged the habit of underpaying, also known as “running and gunning,” but they did not call out the practice as the exact cause of the lowballed insurance claims.

Instead, the report said it was “theoretically possible” for adjusters to make more by running and gunning, but they found “no evidence to support the hypothesis that engineers working in the NFIP reflexively downplay flood damage because that is what they are accustomed to doing in other insurance lines.”

Senate Democrats rejected this assessment, saying that the investigation “relied on questionable data, concluded too quickly and ignored evidence of widespread underpayments from the more than 2,000 lawsuits filed after Sandy in federal court.” The investigation was four months long and relied on FEMA’s data, which is known for having problems with record keeping.

An independent adjuster for a WYO is given incentives to adjust as many claims as they can without overpaying on any of them, for fear that an overpayment will be covered out of their own pockets. “rather than accurately estimating one or two losses in a day which may total $200,000, a FEMA percentage paid field adjuster will estimate 8 claims a day for a total of $1,000,000. So long as none of the individual estimates are overestimated, which results in a back payment to FEMA, the field adjuster has the financial incentive to estimate as much possible in total rather than as accurately as possible. If any of the estimates are found later by FEMA to result in an overpayment, the field adjuster may contractually pay out a lot more money from his own pocket than what he may have made in an entire catastrophe.”

This practice is along the same lines as “churn and burn,” which occurs after a major storm when independent adjusters are sent out to assess the property damages. They are paid based on the number of estimates they write, so they will try to hurry through each one, aiming to 10 every single day, to earn as much as possible in the wake of the disaster.

Keep in mind that ethical independent adjusters do exist, and will properly assess the damages and give the insurance company a reasonable estimate, they are just not talked about on the same level as the unethical adjusters who only care about how to make a quick buck off your disaster.

References

U.S. Senate Committee on Banking, Housing, and Urban Affairs. “Assessing and Improving Flood Insurance Management and Accountability in the Wake of Superstorm Sandy.” 22 Jun. 2015,  https://www.banking.senate.gov/imo/media/doc/Majority%20Staff%20Flood%20Insurance%20Report_2015.pdf

“Churn and Burn Insurance Adjusting.” United Claims Specialists, 10 Mar. 2020, www.ucsfl.com/churn-and-burn-insurance-adjusting/.

Merlin, Chip. “National Flood Claims Do Not Get Paid Properly Because the Only Incentive Is to Underpay: Property Insurance Coverage Law Blog: Merlin Law Group.” Property Insurance Coverage Law Blog, 7 Jan. 2017, www.propertyinsurancecoveragelaw.com/2014/07/articles/insurance/national-flood-claims-do-not-get-paid-properly-because-the-only-incentive-is-to-underpay/.

Ryan, Joe. “Schumer Rejects Insurance Program Findings.” Newsday, Newsday, 24 June 2015, www.newsday.com/business/schumer-rejects-findings-of-senate-committee-on-flood-insurance-1.10572850.

“The Write Your Own (WYO) Program.” The Write Your Own (WYO) Program | FEMA.gov, 19 Dec. 2019, www.fema.gov/write-your-own-wyo-program.