Hurricane Irma Insurance Claim Mistakes Florida Property Owners Should Avoid
Hurricane Irma has caused widespread wind, water, roof and flood damage throughout Florida. As clean-up begins, attention will turn to insurance property claims and many residential and commercial policyholders will submit an insurance claim for storm damage to their property. The public adjusters at Tutwiler & Associates urge policyholders to take the proper steps to protect their property insurance claim and avoid settlement problems with the following 11 tips.
1. Notify your insurance carrier of your damage as soon as possible to expedite your claim. Do not go back into your home or mitigate damage until you know it’s safe to do so. If returning to your home after a power outage, do not turn on the power right away, especially if your home has been flooded. Have an electrician check the dwelling first to ensure it is safe.
2. Don’t make permanent or emergency repairs until you or an adjuster have documented the damage. Then mitigate your loss to prevent any further damage from occurring. Your insurance policy requires this and this is your responsibility. And don’t throw away any damaged materials until the insurance adjuster has seen them and inspected your property. You do not want to prejudice the investigation of your insurance claim. While you are expected to take reasonable steps to prevent further damage from occurring, we often see policyholders rush to “repair” the property only to bring the actual damages into question. In some cases you are harming your claim by simply eliminating the evidence. So take pictures!
3. DO ask the adjuster for their credentials, including how long they have been adjusting claims. With big storms and in order to meet demand for claims adjusting, the adjusters the insurance company uses may be flown in from out of town and not up to speed on Florida law or they may be newly recruited, trained for a few days and sent out to adjust claims. This leads to adjusting mistakes folks! In Florida, a new public adjuster has had to apprentice for 1 year before being allowed to adjust a claim independently. I guess those same standards don’t apply to insurance company adjusters.
4. DO NOT sign over your claim to a contractor or restoration company. This is sometimes called Assignment of Benefits. While it’s OK to use a restoration company, carefully review the restoration contractor’s Work Authorization Form and do not authorize any repair work until you get approval from your insurance carrier or adjuster. If no approval is agreed upon, your insurer may refuse to pay and you may find yourself saddled with a VERY BIG BILL. You can have a restoration company clean-up the immediate mess, but you are not required to have them also do all the repair work. This is very important as you want to make sure you are in control of your insurance proceeds and they are not being paid directly to your contractor. Any contract you sign should be for Emergency Services ONLY and your adjuster should agree to pay for them IN WRITING. Otherwise, you could be signing your claim directly to the contractor and you will never see a dime of your claim settlement.
5. Don’t feel forced to use the contractors your insurance company recommends. If you have signed up for a managed repair program with your insurance company you may not have a choice and should ask an attorney. These firms are referred by the insurance company for a reason, which is to keep the costs at a minimum. When insurers hire contractors based on cost only, you may not get the quality restoration work you require. If they get continual work from the insurer, their priority will be to keep them (not you) happy. Get independent estimates for the repair work. It’s your property and you should control both who does the work and the quality of the work.
6. Don’t forget that ALL damage repair estimates should include an additional 10% for Overhead and 10% for Contractor profit. That extra 20% should be added as a standard on all estimates. Check for the “10 & 10” on the totals page of your insurance estimate.
7. Don’t believe it when a contractor says they can handle your entire claim. By law, Florida contractors are not allowed to negotiate an insurance claim for you, only present an estimate to the insurance company. Public Adjusters and attorneys are licensed to negotiate claims. Contractors are also not licensed or trained to interpret insurance policies and adjust a claim. If they do have a public adjuster on staff they are not allowed to both adjust and repair the claim as this is considered a conflict of interest.
8. Don’t allow the insurance adjuster to unfairly depreciate the amount of your claim. Remember, these amounts are negotiable. For example: If it costs $5K to replace your sofa and it is five years old, don’t let your insurance company pay you $2,500 (50% depreciation) if your belongings are in good condition. The most they should take is 15% and reimburse you $4,250.
9. Don’t allow restoration companies to cart out your belongings without a detailed itemized list of belongings. Take pictures of the process. Expect to be charged storage fees and remember that some items can be restored while others that could harbor mold are cheaper to replace than cleaning. Most importantly remember that storage and cleaning costs reduce your policy limit and coverage amounts. Wouldn’t it be cheaper to go out and buy new items with the insurance claim proceeds rather than cleaning damaged clothes and personal property which may never be fully restored to their pre-loss condition?
10. Don’t be afraid to ask your insurance company for an advanced payment for any undisputed amounts until an agreement can be reached on the rest of your claim. This will help you get repairs started and avoid heavy out-of-pocket expenses. Take extensive photographs of all the damage, and keep all your receipts and documents, as well as records of conversations with the insurance company.
11. Don’t wait too long to file your claim or respond to insurer inquiries. If you have a flood loss or your insurance company sends you a Proof of Loss Form you have 60 days to submit your entire claim. If not, and you do not get an extension, your claim could be void.
Beware of those who prey on people in a desperate situation. In past storms we have seen out-of-state vendors coming into Florida claiming they are public adjusters. Our check with Tallahassee revealed many are not licensed in Florida. Sure hope the folks in Tallahassee are up to the challenge of enforcing this. People who claim they are licensed professionals and are not, in my opinion are predators who steal from folks that deserve to get all the help they can get from honest, hard working and experienced licensed insurance company adjusters, licensed independent adjusters and most importantly licensed and bonded experienced public adjusters. Please! If you hire an adjuster, make sure they are licensed in the State of Florida.
Be proactive but patient and remember that filing an insurance claim is a process. Things may not happen as fast as you’d like. Hire the right professionals to help document your loss and damages. If you feel overwhelmed or intimidated by the process or feel your insurance company is not offering a fair settlement, consider hiring a public insurance adjuster to help with your claim. Public adjusters are typically compensated for their time with a small percentage of your recovery. When a state of emergency has been declared as has with Hurricane Irma, adjusters can only charge no more than 10% by law. Often times a public adjuster is able to recover their fees by identifying legitimate claim amounts the insurance company failed to document or offer and negotiate an increase in the settlement amount for you.
Be smart and stay safe!!
If you have questions regarding any property insurance storm damage related issues caused by Hurricane Irma please submit a question to one of our insurance claim experts or feel free to call us. As always, the professional public insurance adjusters at Tutwiler and Associates are here to help with any questions you may have.