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Avoiding Deficient Property Loss Settlements

Avoiding Deficient Property Loss Settlements
This condominium complex's initial settlement offer was 32.7% of the actual value of the damage sustained by a major storm. Original Offer: $408,857.00 - we settled for: $1,250,325.

The Public Adjusters
LEAD FIGHT AGAINST "DEFICIENT" PROPERTY LOSS SETTLEMENTS ON CATASTROPHE CLAIMS

The Public Adjusters are taking a leading role in the never ending battle of "deficient" scope and pricing practices by many property-casualty insurance companies.

In the 2004/2005 hurricane seasons the insurance companies have been taking a beating on natural disasters that occurred one after another in Florida and Gulf Coastal areas. To meet the needs of their policy holders and to settle claims fast, these companies had to engage the services of out-of-town contract adjusters, even if they had very little, and in some cases, no experience adjusting losses.

These adjusters, for the most part, bill on a per file basis. The more losses they see, the more they get paid. So, the object is to get in and get out as fast as possible.

What happens? We have discovered that 90% of the losses are evaluated at less than their fair value. Of these, 50% come in at 22% less; 25% come in at 35% less; and 15% are in excess of 50% less than their fair value.

The company's adjuster will supply the insured with a detailed computerized breakdown of their loss. The report appears to be very detailed and complete. But this report, although comprehensive, if analyzed closely, can reveal many inconsistencies, mistakes, and missing items.

It can also reveal that the pricing is incorrect. Not only by the adjuster but by whomever supplied them with cost data for their computer system.

If you don't know how to interpret the details of the report given to you by the adjuster, you may be settling your claim for an amount somewhat less than it's true value.

So, What Do We Look for?

Room Sizes
Are they correct? You will be surprised by the amount of times an adjuster can measure a room that is off by as much as a foot or more in any one direction. Many of the quantities of materials used in the estimate are automatically calculated based on the room's size. If the size is off, those quantities are incorrect, and it filters through the entire estimate, which affects the bottom line cost figure. The impact on the settlement could be significant if several rooms are incorrectly measured.

Incomplete Scope
Many times when the insurance company adjuster's crushing caseload is overwhelming, they want to get in and out as soon as possible. The speed at which they do an estimate usually causes them to unintentionally miss many items. The miss rate could be as high as 60% of the damage.

Hidden Damage
This could cause you problems, even after you settle the loss. An adjuster usually misses this more than 75% of the time.

Incorrect Materials
The company adjuster and some times their experts make incorrect assumptions as to the type of materials and their prices used in situations where there is some unique types of construction.

Any combination of the above deficiencies could have a significant impact on your property loss settlement