As you have probably already guessed the claims process is very complicated and difficult to navigate successfully. When you have had opportunity to work with a number of adjusters from a number of different companies you realize why—the insurance company adjusters are just people. People who deal with situations differently based upon their training and experience. All of them do their work a little bit differently and all of the results of their work can vary drastically. One adjuster might be hard to deal with on a certain part of the coverage and easy to work with on another part of the coverage. They have good and bad days, just like the rest of the world and their job isn’t easy. They are caught between a rock and a hard place on a regular basis. Now, I’m not saying that we need to pity them and give in to their tendencies, oh no. We have to treat them with respect and expect them to do their work fairly and accurately. One thing that can aid in smoothing out the bumps in the process, is having a clear understanding and accurate expectation for how the process is supposed to work. Knowledge of the process can help you in many ways, both with the adjuster and in keeping your own sanity.Here’s a breakdown of how an average claim should work:
- You have a covered loss.
- A. (You call FirstCall and we handle the rest of the steps with your occasional input.) B. You notify the insurance company that you have had a loss (in writing) or you call your agent and have him notify your insurance company.
- You make sure you have a full copy of your policy and you read the Declarations page and the “duties after a loss” section.
- You hire someone to secure the property and get an estimate from them for the cost of their work (before they do the work).
- You take detailed pictures of the damage to the property and put together an estimate (or have someone put together an estimate in Xactimate) for the structural damage.
- You determine the personal property items that can be cleaned and separate those from the ones that must be replaced and you put together an inventory of the items that must be replaced.
- You gather the current pricing, age and amount of depreciation for each item that must be replaced and calculate the ACV payment that must be made for your personal property.
- You determine how much it will cost to clean and store the balance of the items and clean and store the items (or hire someone to do this work as well, making sure that you have an estimated price for their work before they do it).
- You get your books together and your tax records and put together your “loss of use/loss of income/business interruption” portion of the claim. (or you hire someone who can do this work for you as well, making sure that you have an estimated price for their work before they do it).
- You fill out a “sworn statement in proof of loss” form and present all of you documentation to the insurance company’s adjuster.
- You meet with the insurance company’s adjuster, on site as many times as he/she needs to meet in order to understand your documentation. (This part is always a negotiation.)
- You work with the adjuster to settle differences of opinion on all coverages, and settle on an ACV amount on all coverages.
- You receive the in initial payments on all coverages separately, and you send the structure portion to the Lender to be put into escrow.
- You choose a contractor who will do the work that you want to have done to repair the property. (This may or may not be the same work as what you have in your estimate of damage and loss in the estimate.)
The policy of insurance or insurance contract is designed to indemnify loss and damage. It is not designed to force you to build anything back (necessarily). What you build back is your decision (and potentially your lender’s decision) alone. This is why Public Adjusters like FirstCall and contractors estimates are so drastically different. Contractors are giving you an estimate in hopes that you will hire them based upon their estimated cost to repair and hopefully the quality of their past work. The difference is in the fact that your estimate needs to indemnify the loss, or as we like to say… “put everything back, just like it was, five minutes before the fire happened, in like new condition and at today’s current prices.” That is what you are paying for in this policy or contract of insurance, and that is what you should get.
As you can plainly see the steps require some skill or at least help in order to recover properly from a loss. Most of my clients are grateful for the help we provide in our service, and have said that what they paid us for our fee was not only worth every penny they paid but actually gave them a net gain of 30%-40% after our fees were taken out. It is difficult but, if you let us, we can help.