Homeowner insurance rant
Background: I own a rental property in Arkansas. The deck and back of the house sustained damage from the recent storms when a large tree fell on the deck. The top of the tree damaged the metal roof, pulled off siding and the deck was destroyed on the northwest side.
I contacted Shelter and reported the damage. I explained I live in Missouri and my renters would be there to allow access to the property. The property is listed as a rental on the policy. I get a call from the adjuster who gave me the date and approximate time he would be there. He asked if someone would be able to meet him. I explained I was in Missouri, but would let the renters know so that someone would be there. I gave him their phone numbers in case there was a change of plan.
That was the last I heard from the adjuster. The next thing I know, the renter contacts me by text. The adjuster came and left the claim settlement information with them. I know that with a double whammy of storms (tornado and high wind damage) the adjusters are spread thin and are busy. I have been waiting for the adjuster to contact me. NOTHING. The renters asked me if I wanted them to do the repairs. They are a couple that does small construction/repair jobs, self employed. They have in their hands the written estimate to include the depreciation and my deductible. Now, mind you. the renters' names are different than mine, I informed him renters would meet him and my policy explicitly indicates it is a renter occupied home.
This morning I get a text from the renter that the settlement check has been sent to me at their address. I was never contacted to see if I accepted the settlement. Not insuring that my mailing address was correct in their file is my mistake. I should have double checked when I reported the damage. In the back of my mind I thought I had received my newest policy here at the Missouri address. I haven't lived at the rental property since 2006.
I contacted Shelter today. Their response; sorry. I also called the adjuster, and left him a message. He hasn't returned my call. HQ said, well we can cancel the check, and send you the written estimate and at that point you can let us know if you want to settle, pay out of your pocket or get another estimate. I explained at this point I don't want to wait even longer to have this resolved. HQ said they can cancel the check that has been issued, and overnight a new check with a copy of the adjuster's estimate. I ensured my address was now up to date. They are sending a new check.
HQ said sorry multiple times. They tried to excuse the screw up by saying the adjuster was busy. I explained that the policy indicates the property is a rental, I spoke with him indicating the renters would meet him there, and my name which is on the policy is definitely not the same as the people with whom he spoke. Again, nothing but "sorry". To put it mildly, I am not happy. I sit here with a renter who wants to do the repair and knows the exact dollar amount of quoted estimate. Arrrggghhhhhh!!!!!
This would have been a win-win for both of us as they would have a means of earning money during this pandemic which would ensure they had the funds to pay me the monthly rent. Btw, full damage quote was for $4590.00.
I contacted Shelter and reported the damage. I explained I live in Missouri and my renters would be there to allow access to the property. The property is listed as a rental on the policy. I get a call from the adjuster who gave me the date and approximate time he would be there. He asked if someone would be able to meet him. I explained I was in Missouri, but would let the renters know so that someone would be there. I gave him their phone numbers in case there was a change of plan.
That was the last I heard from the adjuster. The next thing I know, the renter contacts me by text. The adjuster came and left the claim settlement information with them. I know that with a double whammy of storms (tornado and high wind damage) the adjusters are spread thin and are busy. I have been waiting for the adjuster to contact me. NOTHING. The renters asked me if I wanted them to do the repairs. They are a couple that does small construction/repair jobs, self employed. They have in their hands the written estimate to include the depreciation and my deductible. Now, mind you. the renters' names are different than mine, I informed him renters would meet him and my policy explicitly indicates it is a renter occupied home.
This morning I get a text from the renter that the settlement check has been sent to me at their address. I was never contacted to see if I accepted the settlement. Not insuring that my mailing address was correct in their file is my mistake. I should have double checked when I reported the damage. In the back of my mind I thought I had received my newest policy here at the Missouri address. I haven't lived at the rental property since 2006.
I contacted Shelter today. Their response; sorry. I also called the adjuster, and left him a message. He hasn't returned my call. HQ said, well we can cancel the check, and send you the written estimate and at that point you can let us know if you want to settle, pay out of your pocket or get another estimate. I explained at this point I don't want to wait even longer to have this resolved. HQ said they can cancel the check that has been issued, and overnight a new check with a copy of the adjuster's estimate. I ensured my address was now up to date. They are sending a new check.
HQ said sorry multiple times. They tried to excuse the screw up by saying the adjuster was busy. I explained that the policy indicates the property is a rental, I spoke with him indicating the renters would meet him there, and my name which is on the policy is definitely not the same as the people with whom he spoke. Again, nothing but "sorry". To put it mildly, I am not happy. I sit here with a renter who wants to do the repair and knows the exact dollar amount of quoted estimate. Arrrggghhhhhh!!!!!
This would have been a win-win for both of us as they would have a means of earning money during this pandemic which would ensure they had the funds to pay me the monthly rent. Btw, full damage quote was for $4590.00.
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Only problem I see, is having the renters doing the work. If they were to get hurt repairing the damage, you would be responsible for their medical bills, if they said that they were working for you. Unless you have them employed and cover them with workman’s compensation, you could even be held responsible for wages lost.
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That is the adjuster's quote. The renters have it in their hands so they know exactly how much to bid. They know what I will get in the settlement. My rant is why in the world would an adjuster ever think it was okay to leave any paperwork with the renter regardless of whether or not they had their own small construction company. On top of that, just send the check without consulting me on whether or not I wanted to settle for that amount. Depending on the settlement, in some cases to keep insurance costs down, its better to pay out of pocket.Flying Clay Disk said:I guess I'm missing the problem here. Or, perhaps you left something out.What was the adjusters estimate vs. the actual estimate to repair (or do you not have one of these figures?) You quoted the $4595, but is this the insurance company's estimate, or a contractor's?
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Thank you. I didn't know that just submitting a claim in these times triggered cost increases. I'm glad to have internet friends to help out.Flying Clay Disk said:Well, a couple things.Reason for the check...that's all you're going to get from the insurance company.Regarding rates...anymore it doesn't really matter. If you make a claim your insurance will go up, regardless if you take the payout or not. Just the act of sending out the adjuster triggers it. Might as well take it.Adjusters for wind, water, storm, fire damage are generally pretty liberal with their estimates. Depending on how big your deck is, $4595 will buy a whole lotta' deck, especially I would think in Arkansas.ETA - If your renters are any good at carpentry, I'd just tell them to give you a quote and pay them yourself. Deposit the insurance check in the bank.
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Get 3 quotes. Your renter can be one of them.
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I had a claim with my Allstate home owners policy last fall for a lightning strike that took out my well. They paid me 10k which was the cost for new pump and new underground wiring to the house. The adjuster paid what the repair company was asking minus the 1k deductible.
I just got my one month advance notice on my home owners ins. yearly paid renewal. It was up 300 dollars from last years.
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Been there and done that. The insurance adjuster is only paying what damage they come up with. No more. You could send in 10 estimates it doesn't matter unless the adjuster missed something on their evaluation. If you get it repaired for less than the check that is good. Lots of times you can. However it is your responsibility to keep the damage to a minimum after the storm damage. Tarp the roof do whatever but keep it from getting more damage . 0 -
Susie,
Before my current career, I used to be a property claims adjuster for one of the major companies. The process that you have described, while inappropriate to be sure, sounds very typical of what happens with these companies during big storm events. They fly in adjusters in from all over and hire independent adjusters to supplement their staff. The name of the game is closing claims. They whip out an estimate, stroke a check, and close the claim unless you dispute it. In many, many cases, they under-pay. Most of the time, it is because the company has had to supplement with under-experienced adjusters, or because adjusters are in such a hurry that they miss important details. In any case, here is my advice:
1. Do not cash the check. Have them send you the full, itemized estimate for review and comparison.
2. Get three additional estimates from reputable contractors (i.e. ones that will be recognized by the Insurance company, and that you would be willing to have do work for you). They will need to provide a detailed estimate as well. You can talk to them about details of the adjuster's estimate (i.e. scope of work), but don't share pricing information with them. Just see what they come up to on their own.
3. If the 3 estimates all come in under your adjuster's estimate, you're done. Cash your check, get the work done, and all is well. If, however, they are higher than the adjuster's, contact the company and provide them with the estimates. Most times, the documentation will be sufficeint for them to just go ahead and agree by phone to pay you the difference. In some cases, however, they may request to meet with one of your designated contractor's to discuss it on-site.
4. Do not have your tenants do the work. This, of course, is personal preference. However, I would keep these business dealings separate for both your sake, and theirs. Too many conflicts and issues that could go wrong. If you do use them, don't feel obligated to pay them the full amount of the check. Insurance companies usually account for at least 10% overhead and 10% profit on the assumption that a general contractor will be involved and using sub-contractors. Their operation may not warrant such. In any case, getting the other 3 estimates I mentioned will help you in your negotiation with whoever you end up choosing (more competition).
5. Finally, do not pay ANYONE until the work is complete to your satisfaction. Don't sign the check over to a contractor, or pay up front. A reputable contractor will take payment upon completion. Also, big storms bring fraudsters by the truck-load. They will be most likely to ask for money up front. Then, they will disappear, or will do shoddy work with shoddy materials. Do not use a company that does not have a well-established local reputation.
6. If you reach the end of your rope with the adjuster/company regarding the amount of the claim, escalate, escalate, escalate. The higher up the management chain your claim/complaint goes, the more likely they will pay the additional amount that you are claiming. In an extreme case, you can always threaten (or actually do) contact your state's insurance department to file a formal complaint against the company.
Best of Luck!
Frog0 -
I have no problem changing insurance companies / agents - and telling them why I am leaving them. I enjoy watching them try to explain to me why my rates are going up.
I keep a spreadsheet of my insurance costs. It is like the agent doesn't think I am tracking the rates.
My current policy uses a monthly direct withdrawal from my bank account for all of my policies (vehicles and property). I don't get a bill. I don't write a check, but I do keep track of my costs. When it gets out of line, my agent and I have a little discussion - and usually it goes back down.
I understand the insurance company is in business and they have to cover their overhead. Sorry about the big storm "way over there". I don't have a claim with your problem two states away. I have your insurance to cover me. When you stop being concerned with my coverage and are more interested in covering your overhead, you will lose me as a customer. It really is just that simple.0 -
Unfortunately, claims DO affect premiums. Because of the complex formulas they use for underwriting, however, it is really hard to say exactly how. In general, one claim, especially storm or other act of god, usually has little effect at the individual level, unless there is negligence involved. That said, it likely seems like it does when the bill comes. In most cases, a big storm, etc. may up the calculated risk of the whole region. Hence, everyone's premiums go up, but, at the individual level, the guy with the claim feels that it is personal to him.
More often, what I used to see is cancellations associated with claims. In fact, that's one of the reasons I left the industry. I started seeing folks who had been customers for 50 years file their first no-fault claim, and then get cancelled as a "bad risk."
Oh, and agents........ shysters to the core. They are nothing but front men, and (with very limited exceptions) have no authority over anything. They'll tell folks they're covered for everything in the world up front (to get them to buy a policy), but later, when claims are denied, they play dumb and blame corporate. Sadly, most people never read their policies themselves (they're pretty clear). Anyhow.....I am no fan of agents.
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Am retired from 2 different insurance companies (commercial side of things, not homeowners)
Somebody should buy frodog a beer or 3. What he posted is absolutely, 100% correct. That is some of the best advice in a concise form that I have seen. Listen to him.0
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