This article is the first of a two-part series of articles on insurance issues for condominium associations by our friend Daniel B. Odess, the president of Globalpro Recovery, Inc. (www.getglobalpro.com).
Have you or your association ever relied on the insurance company, your rep, agent or broker to tell you how to file your insurance claim? Or, how much your claim is worth? Or, whether or not it’s even worth filing a claim? If you answered yes to any of these questions, then you’re not alone. To take it one step further, as shocking as it might sound, it’s probably not the best move either. When it comes to insurance, the reality is when they have a loss, most people focus on how much they pay for insurance rather than on how they get paid by their insurance company. If you’ve ever reviewed your policy to find out what it covers, within a few sentences you’ve probably read a statement similar to this one: “We do not insure, however, for loss…” So, does that mean what is included is not specifically excluded? For most policyholders, it would’ve been hard enough to find this section, let alone understand it. If you haven’t experienced it, grab your policy to see for yourself.
Here are some points to keep in mind when you start thinking about “how am I going to get paid for my damages?” Thankfully, there are people who exist that do, in fact, represent your interest.
Such a difficult topic, but it’s important to know that just because the policy says you have a deductible, doesn’t mean it always should be applied to your loss. Too often, the deductible is not specifically stated in the policy or can’t be interpreted by the average policy holder. It’s important to review the policy and make sure the exact dollar amount of your deductible is included in your policy. If you can’t figure out the deductible, then how can your insurance carrier expect to deduct it from your recovery?
To continue, it’s not a good idea to assume that just because the insurance company’s rep, agent, or broker tells you that your damages are below your deductible, that it is true.
1. Did the insurance company actually visit and inspect the property?
2. Did the insurance company’s adjuster inspect the entire property or only what perceived to be your damages?
3. Did the insurance company rely on your opinion to formulate the total amount of your damages? If the answer to question #3 is yes, then what expertise do you have in construction, engineering, and most of all, insurance in order to assist the insurance company in determining the total amount of your damages?
It’s mandatory to allow the insurance company to inspect your visible damages for however long and often as they deem reasonable. However, you’re not responsible for the adjustment of your loss. Also, if the insurance company rep sees extensive damage, you want them to utilize the expertise of licensed and/or qualified consultants, such as engineers and contractors.
Lastly, and just as important, if the insurance company elects to repair the damages for you with one of their “preferred vendors,” you are not obligated to pay any part of the deductible to the insurance company’s preferred vendor.
Who’s on your side? It’s not who you think
Understanding the role of each individual involved in an insurance claim is vital to recovering the full amount of monies owed to your association. When it comes to property insurance claims, there are three kinds of adjusters who are licensed to handle the claim matters in the field:
1. Independent Adjuster 2. Company Employee Adjuster 3. Public Adjusters
When your association experiences a loss, your insurance company hires either an Independent Adjuster or a Company Employee Adjuster (more commonly referred to as a “Company Adjuster”). The common misconception is that the adjuster sent out by the insurance company has the policyholder’s best interest in mind and represents the interest of the policyholder. Ironically, Florida law specifically states otherwise.
For an Independent Adjuster, Florida law states:
626.855 ”Independent adjuster” defined.–An “independent adjuster” is any person who is self-employed or is associated with or employed by an independent adjusting firm or other independent adjuster, and who undertakes on behalf of an insurer to ascertain and determine the amount of any claim, loss, or damage payable under an insurance contract or undertakes to effect settlement of such claim, loss, or damage.
For a Company Adjuster, the Florida law states:
626.856 ”Company employee adjuster” defined.–A “company employee adjuster” is a person employed on an insurer’s staff of adjusters or a wholly owned subsidiary of the insurer, and who undertakes on behalf of such insurer or other insurers under common control or ownership to ascertain and determine the amount of any claim, loss, or damage payable under a contract of insurance, or undertakes to effect settlement of such claim, loss, or damage.
Therefore, both the Independent Adjuster and Company Adjuster “[undertake] on behalf” of your insurance company, “to ascertain and determine the amount of any claim, loss or damage payable under your policy.”
However, Florida law states for a Public Adjuster, the following:
626.854 ”Public adjuster” defined. — (1) A “public adjuster” is any person, except a duly licensed attorney at law as exempted under s. 626.860, who, for money, commission, or any other thing of value, prepares, completes, or files an insurance claim form for an insured or third-party claimant or who, for money, commission, or any other thing of value, acts on behalf of, or aids an insured or third-party claimant in negotiating for or effecting the settlement of a claim or claims for loss or damage covered by an insurance contract or who advertises for employment as an adjuster of such claims. The term also includes any person who, for money, commission, or any other thing of value, solicits, investigates, or adjusts such claims on behalf of a public adjuster.
According to the OPPAGA study published by the Florida Insurance Council, ” ‘The typical payment to a policyholder represented by a public adjuster was $22,266 for claims filed in 2008 and 2009 related to the 2004 hurricanes. In contrast, policyholders who did not use a public adjuster received typical payments of $18,659.’ The report also notes that the difference in payments was even larger for claims related to the 2005 hurricanes, ‘with public adjuster claims resulting in payments that were 747% higher.’ ”
To summarize, the Public Adjuster “acts on behalf of… an insured…” unlike the Independent Adjusters and Company Adjusters sent out by your insurance company when you experience a loss.