Recently a former insured sheepishly contact me looking for help in moving her insurance back to my agency. She “saved” about $150 by taking advantage of quote from a 1-800-INSURANCE company or one of the comparable carriers. On the surface, if you offer to save me $150, I’ll take notice too!

Her problem was that during a fall storm, wind driven rain managed to get under her roof shingles and seep into her home damaging ceilings in her home. When I handled her insurance, she knew to call me after a loss. Before me, she knew to call her prior agent if she had a loss. Now she was dealing with an 800 number. She called to try to report her claim.  She began to describe what was wrong to a person with such a strong accent she could not understand and didn’t feel that person understood her either.

So after her claim was filed, the insured nervously sat back and waited. On the fourth day she got a call from someone in Texas following up on the claim; they were the “adjuster” assigned to the case. That person asked some questions, typed some notes into her computer, then advised she would be contacted by a claims “appraiser”, in a day or two, who would arrange to come out to view the property, and evaluate the damages. That “day or two” turned into 4 more days before he made contact (because it included a weekend). The appraiser then “coordinated his schedule” to get out to view the damage after another 3 days had passed.

After 11 days the whole house smelled pretty musty. Walls had begun to absorb moisture, carpets had moisture trapped into the padding and the subflooring was now affected. When the appraiser finally arrived, he began to chastise the insured for not having arranged to get someone in to clean up the mess. He told her the policy clearly requires you to take whatever reasonable steps are necessary to remediate damages and to protect against further damage. This insured didn’t know that. Would you? Who would you call?

The appraiser did his evaluation and left having given the insured no direction as to what she should be doing. She had three contacts with people representing the insurance company with no one giving her a sense that the company was going to take care of the claim. She took it upon herself to contact a restoration contractor.

The restoration contractor came in with a crew vacuuming the carpets to extract any remaining water; they set up special dehumidifiers to dry out the air in the house; and they removed the plastered ceiling in the areas that showed the worst signs of water damage; and they examined the roof. Their inspection indicated that the roof tabs that bond the over lapping shingles together were defective. The lack of bonding adhesive allowed the shingles to lift during the storm which then allowed water access to seep into the house; a defect well known in the industry. Their recommendation was that the whole roof needed replacement.

Fast forward this case from 11 to 21 days when the “adjuster” finally called the insured to share with her the “appraiser’s” report and proposed settlement offer. It basically covered repainting the affected ceilings. There was nothing included for the cleanup activities, removal and replacement of damaged ceilings, cleaning and treatment of rugs against mold growth, and nothing for the replacement of the roof. The insured described for the adjuster the scope of the cleanup work already undertaken. Because the extent of the work was more than indicated in the “appraiser’s” report, she now needed to reach out to the appraiser to further evaluate the situation. Without the roof there was close to a $20,000 discrepancy between her settlement offer and what the restoration company indicated the costs would likely be.

After 21 days, no one for this insurance company seemed to be taking proper ownership of this claim. So when a “Public Adjuster” called the insured with an offer to handle the claim on her behalf, with a fee of 10% of the total amount collected from the insurance company, she saw it as a necessary evil. IF she calculated $30,000 less her $500 deductible and the $3,000 fee due the public adjuster, meant collecting $26,500 toward her damages compared to the $5,000 initially mentioned as the likely amount to be paid by her insurance company.

Over the last 4 months, the Public Adjuster has promised to get his fee covered with increased repair costs and to get the insurance company to pay to replace the roof. BUT, no payment has been received yet. They went through the holidays with ceilings needing repair. The insurance company remains steadfast in their assessment that the proximate cause of the loss was the defective roofing shingles. They have been willing to pay all reasonable repair costs except the cost to replace the roof. Now the real insult arising from this claim, the carrier has sent notice that they will not be renewing their policy when the expiration date comes up.

So now she has a blue tarp on her roof, an open claim for water damage, only one year with this insurance company (and 2 years with her prior carrier). Here’s my challenge now:

  1. No conventional insurance company is going to take on a risk with clear evidence of roof problems nor will the RI Fair Plan.
  2. She has a claim for water damage which has not been settled so carriers will take that to indicate that the original damage was not repaired and a mold issue likely exists.
  3. By changing so often carriers do see that as a lack of customer loyalty.
  4. I have to diplomatically educate this customer that while the insurance company’s claims service is terrible, they are correct in denying to pay for the replacement of her roof (which is contrary to the opinion of the Public Adjuster). Her policy excludes paying for property that is worn, torn, deteriorated or “defective”. The defective roof adhesive tabs allowed the shingles to lift during the storm and settle back into place as originally installed; they were not damaged which is the basis for denying to pay for a new roof. BUT, the policy does provide coverage for wind driven rain damages, which the insurance company seems to be ready to paying for.

When you experience a homeowner claim it is an undesired event that is going to adversely affect you. That’s why they call it a “loss”. But whether you have an agent to assist with the claims process or not, the quality of claims service is the public’s measure of the quality of the company. Before doing business with an on-line insurance company understand how their claims process works and decide if the savings is worth the hassle you may encounter.