Immediate Actions: Demo & Mitigation
Most people who find themselves in the unfortunate situation of having a property loss find themselves experiencing the claims process for the very first time as well. This lack of a reference point for the claims process can lead to misconceptions and mistakes, especially in the hours, days, or weeks following the loss. One of the most common misconceptions that people have is that the faster demo and rebuilding occur, the better for their recovery. Here’s how it often plays out:
- Step one: The loss occurs.
- Step two: The insurance company sends mitigation, pack-out and demolition crews to begin the process of rebuilding.
- Step three: Within days the board-up has happened, the damaged material is removed and all personal property items are out of the home or business and either stored or thrown away.
Who can guess what important step was missed? To the untrained eye, it looks like the insurance company and their representatives are really doing a great job. The process is moving along at breakneck speed. People that wanted to help appeared out of nowhere and things are really looking like you will be back in business before you know it. It’s just like the insurance company’s commercials lead you to believe. The only problem is it is not the insurance company’s job to build anything back, to do any mitigation, or to remove your contents. Their job is to indemnify your loss. This is their only job. All policies state that it is the responsibility of the Insured to:
- Mitigate the damage to protect the property against further loss.
- Remove and store personal property and provide an inventory of damaged and lost items.
- Prove their loss to the insurance company.
The reason that an insurance company does these things for an insured and provides the manpower to get these things done is summed up in one simple phrase… IT SAVES THEM MONEY.
When the control of any area of the loss is turned over to the insurance company’s representatives, that representative will always do his/her best to protect the company that employs them. Either they will or they are not doing their job. Let me ask you a question… When was the last time you called up the IRS and asked them to send one of their agents to do your taxes for you? They work for our government. Your tax dollars pay their salary. In a very real sense they work for you. Shouldn’t you be able to trust that their calculations would be fair and in your best interest? The reason that you don’t send your tax information into the IRS to do your taxes, is because they have a significant conflict of interest, a conflict of interest that could cost you a lot of money and so does your insurance adjuster when it comes to calculating your loss. There are several reasons that the adjuster will jump on a loss quickly.
- A quick response sometimes causes a loss of information.
When companies rush to demolition, most of the time the insured has left the calculation of their loss to the insurance company’s representative or their preferred vendors. Until a settlement offer is made to the insured, that has been independently evaluated by a representative of the insured and found to be accurate, the removal of items, of any kind, from the loss site will damage the evidence of loss that is vital to prove that loss. If it is gone it is hard to prove that it was there to begin with.Remember, fast and accurate are not the same.
- Who is benefiting from the work that is being done?
I have personally seen a preferred vendor, who will go unnamed, send a crew to pack out a house and store items that can be cleaned. The vendor threw away items in a dumpster supposedly keeping a good record of these items. The vendor went through their process of cleaning the items that were stored down to the Tupperware that was found unused in the attic of the home.The client who had around $130,000 in personal property coverage was thrilled with the progress until he was presented a bill for $80,000 for pack-out and PP cleaning, and a far less than accurate list of items that were damaged. I am certain that you wouldn’t build a new house, or hire an attorney, or hire an accountant without having an estimate of the cost of services. I have had clients tell me that the insurance company was paying these vendors, only to find out that they were being paid out of their policy proceeds.Remember, your policy provides coverage to indemnify your loss. When you have a loss it is your money to spend how you decide to spend it. Don’t let anyone else spend it for you.
- No evidence no proof
When an adjuster sends a demolition company to start on the removal of damaged items before the loss has been evaluated and calculated, he/she is taking control of the loss. Remember that most policies state that it is the responsibility of the insured to prove their loss. Doing the demolition before the loss is proven would be like a CSI agent asking a team to come in and clean the place up before they do any of their investigation.
This conflict of interest is the very reason that many insureds hire a public adjuster like FirstCall to help them. While this might be your first loss, you can bet your bottom dollar that the insurance company has dealt with these situations again and again, and they know the best and most economical way to get through the process. Insurance companies are happy to lead your claim if only you will let them.