Latest / The Art of Adjusting® Podcast / Episode 92: Spring Storm Claim Playbook

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Episode 92: Spring Storm Claim Playbook · The Art of Adjusting® Podcast

• 0:06
  William Auten: Hello, I'm Bill Aughton of Autin Claims Management.
• 0:09
  Chantal Roberts: I'm Chantel Roberts of CMR Consulting, and welcome to the Art of Adjusting podcast.
• 0:14
  William Auten: Today we're going to talk about life as an insurance adjuster from the perspective of property, auto, liability, or workers' compensation adjusters.
• 0:22
  William Auten: Our goal is to bring interesting topics in the world of claims adjusting to people who are working as an adjuster now and to people who are considering a career as a claims adjuster.
• 0:32
  William Auten: Good morning.
• 0:32
  William Auten: Hey Chantel, how are you?
• 0:34
  William Auten: I'm doing well.
• 0:35
  William Auten: How are you?
• 0:36
  William Auten: Doing really good.
• 0:37
  William Auten: It's springtime.
• 0:38
  William Auten: Today's supposed to be in the 70s.
• 0:40
  William Auten: First time in a but a little while that it's been that kind of that kind of weather for us.
• 0:45
  William Auten: So we're looking forward to that.
• 0:46
  Chantal Roberts: Yes.
• 0:47
  William Auten: Um, and spring is always volatile when it comes to weather.
• 0:51
  Chantal Roberts: Let's talk about that.
• 0:52
  William Auten: A lot of ups and downs and ins and outs and all kinds of fun stuff.
• 0:56
  Chantal Roberts: Let's talk about that because I have a little evergreen tree that's that's been growing for like five years now, and I swear it looks like it's dying, but chat GPT tells me that it is not, that it is just that it is just winter stressed, quote unquote, and uh win stressed.
• 1:17
  Chantal Roberts: And I'm like, dude, I don't know what to do with you.
• 1:20
  Chantal Roberts: It's brown because it's been today will be 78, tomorrow will be 50 something.
• 1:27
  Chantal Roberts: Then we go up to the 60s.
• 1:29
  Chantal Roberts: I it's it's killing me.
• 1:32
  Chantal Roberts: It's absolutely killing me.
• 1:33
  William Auten: Well, April, well, March and April tend to um tease everybody and uh give you some nice days and then hit you with snow and wet weather when you least expect it or want it.
• 1:47
  William Auten: Mostly want it.
• 1:48
  Chantal Roberts: Yeah, yeah.
• 1:49
  Chantal Roberts: And then of course, that leads to the whole wind, uh tornado alley kind of deal.
• 1:58
  Chantal Roberts: And and and then we will because we have wind claims, it may lead to interior water damage.
• 2:05
  Chantal Roberts: And so we're gonna be talking about wind, water, and property claims.
• 2:11
  William Auten: Yeah.
• 2:12
  William Auten: Probably a little hail too.
• 2:14
  Chantal Roberts: Oh, yeah.
• 2:14
  Chantal Roberts: Well, you can't have spring weather without the hail.
• 2:18
  Chantal Roberts: Yeah, you can't, absolutely not.
• 2:21
  Chantal Roberts: And so be sure to like, subscribe, follow, comment, all of that kind of stuff because it really pushes pushes us to other people who are insurance professionals, adjusters, and industry partners.
• 2:36
  Chantal Roberts: So that's my little spiel for today.
• 2:39
  William Auten: Yes, nice spiel.
• 2:41
  Chantal Roberts: All right, thank you.
• 2:42
  Chantal Roberts: I practiced it in the mirror beforehand.
• 2:47
  William Auten: Right on.
• 2:48
  William Auten: I can tell.
• 2:49
  William Auten: Anyway, uh, we are uh we're talking about a spring storm loss profile.
• 2:55
  William Auten: Yes.
• 2:55
  William Auten: So what does that mean?
• 2:56
  William Auten: Uh so we're talking about wind-driven elements like rain and hail and falling trees and and limbs and freeze freeze thaw cycles uh and damage coming from that.
• 3:11
  Chantal Roberts: Um yeah, and a lot of times these things overlap, and it's really hard to figure out well, when did this thing happen?
• 3:22
  Chantal Roberts: And and and one of the things too is we may have damage creep, which I'd like to talk about in just a minute.
• 3:28
  William Auten: Interesting.
• 3:29
  William Auten: Yeah, so uh yeah, overlap can happen all the time.
• 3:32
  William Auten: You know, the uh insured will call, hey, my uh my roof is leaking in my living room over the window, and it's leaking in the bedroom over the window.
• 3:42
  William Auten: And um, I'm pretty sure it has something to do with the tree that fell, but that fell in the back of the house.
• 3:47
  William Auten: So I'm not sure what's going on there.
• 3:48
  William Auten: Yeah, can you send somebody out?
• 3:50
  William Auten: So uh that sounds like they probably have an ice dam situation, which is more of a winter claim, but we see them up here in the north in March.
• 3:58
  Chantal Roberts: Um that's because y'all are crazy for living up there.
• 4:01
  Chantal Roberts: It's cold.
• 4:01
  Chantal Roberts: Yeah, we've talked about that before.
• 4:04
  Chantal Roberts: See all of the episodes, see all of the previous episodes.
• 4:06
  William Auten: Uh it's not that cold though.
• 4:08
  William Auten: I just recently drove through a part of New York State that's very flat, and um, and I did some research on that area.
• 4:16
  William Auten: There used to be a uh a large lake there to 10,000 years ago.
• 4:20
  Chantal Roberts: Uh uh.
• 4:22
  William Auten: And um uh that was when the ice age happened.
• 4:26
  William Auten: Now, what I didn't realize is where the area where I was driving through the ice is said to have been over a mile thick.
• 4:35
  Chantal Roberts: Wow, you know that's what Greenland is.
• 4:39
  Chantal Roberts: Like they say that 90% of the island has never, or continent, whichever one you want to call it, but I guess island, uh, since we only have seven continents.
• 4:50
  Chantal Roberts: Anyway, that 90% of the island has has not been looked at, you know, explored because a lot of under the ice.
• 5:01
  Chantal Roberts: Yeah, it's like a mile thick.
• 5:02
  William Auten: Yeah, it's crazy to even imagine uh imagine that.
• 5:08
  William Auten: So I don't want to hear any complaints about snow and ice.
• 5:11
  William Auten: Um we got it pretty easy to since the ice age, but um yes, we do.
• 5:19
  William Auten: Nonetheless, um, overlap.
• 5:21
  William Auten: We have uh so you know those two incidents I just talked about, they're actually two separate incidents, and they would be subject to two separate deductibles.
• 5:29
  SPEAKER_02: Yes.
• 5:30
  William Auten: And uh the adjuster should um, you know, note that in the file.
• 5:35
  William Auten: If it's an independent, you're gonna have to tell the carrier they probably need to open two separate claims.
• 5:40
  William Auten: If you're a staff adjuster, you should be doing that and explaining to the insured how the coverage works and all that, because they're gonna not be happy if they have to pay two deductibles.
• 5:50
  Chantal Roberts: No, but you should absolutely open two files.
• 5:55
  Chantal Roberts: And so often I don't see where carriers are opening two files.
• 6:02
  Chantal Roberts: But if you think about this logically, unless the insured has a flat roof or something to that effect, and most of the time they don't, uh except maybe out in you know the western states or something to that effect, but you've got a gabled or a sloping roof, so you will have a an apex on it.
• 6:22
  Chantal Roberts: And if the tree fell in the back of the house, rainwater is not going to go up the interior of the roof over the little point, you know, the apex, and then down the other side of the roof to leak on the front part of the house.
• 6:39
  Chantal Roberts: I mean, that's just physics, not to mention logic.
• 6:44
  Chantal Roberts: Yeah.
• 6:44
  William Auten: And is it possible for it to leak on the front of the house when the tree uh damaged the back of the house?
• 6:50
  William Auten: It is possible because the way the roof slopes, you never know.
• 6:53
  William Auten: So due diligence uh comes into play.
• 6:56
  William Auten: Um, just because there's two different looking types of damage at the property doesn't necessarily mean that they're not related.
• 7:06
  Chantal Roberts: So um you would need to.
• 7:09
  Chantal Roberts: I want to make sure that the adjusters understand you either you or your field adjusters have to physically be in that attic.
• 7:18
  Chantal Roberts: Yes, taking photographs.
• 7:20
  Chantal Roberts: And if there and and what you have to show is not only if it did happen, like the front leak was caused by the tree falling in the back, and you would know this because you would see water running, I don't know, along the trusses or something.
• 7:39
  Chantal Roberts: It could happen, like you said, it could happen.
• 7:43
  William Auten: It's your job to verify, exactly.
• 7:46
  Chantal Roberts: Or I don't know, maybe the insulation got sop and wet, but you would think that that would be more interior water from the back before you get to the front.
• 7:55
  William Auten: Anyway, I'm saying a beautiful adjuster will always verify with photographs and uh yes, and and if you don't know, um find somebody who does find uh somebody either at your office who who's been you know around the horn a uh a few times or um maybe a trusted contractor.
• 8:17
  William Auten: Uh if or even an engineer, if you're you know, if the claim is large and uh warrants the expense of an engineer, that might be an option also.
• 8:27
  Chantal Roberts: Yeah, and I want to talk a little bit about damage creep because I feel like we're going we're going to talk about this just a little bit, and I'm seeing it a little bit in my expert witness cases.
• 8:42
  Chantal Roberts: So I thought it might be good to address, and it was something that I learned painfully, very painfully learned over Hurricane Katrina.
• 8:50
  Chantal Roberts: And this is when our field adjusters would go out, take pictures of the roof, for example, but wouldn't go inside because at the time the insured would say, Yeah, there's nothing damaged on the inside or whatever.
• 9:03
  Chantal Roberts: And two years later, a year later, or whatever, they're now claiming interior water damage.
• 9:09
  Chantal Roberts: Well, the insured never mitigated their losses because they feared that cashing the check or beginning repairs or whatever would somehow hamper or hinder a future claim.
• 9:26
  Chantal Roberts: And of course, that's the discussion that you have to have with the insured as well.
• 9:30
  Chantal Roberts: However, let me stay on this topic.
• 9:33
  Chantal Roberts: The the deal is that we would actually get a lot of complaints and lawsuits saying that the field adjuster had never been up on the roof.
• 9:41
  Chantal Roberts: And so we started requiring the adjuster to take a picture of their shoe on the roof.
• 9:48
  William Auten: Oh, interesting.
• 9:49
  Chantal Roberts: To prove that they have been there.
• 9:52
  William Auten: And I've actually heard that before.
• 9:54
  Chantal Roberts: So and then we would have the adjuster ask, is there any interior water damage?
• 10:02
  Chantal Roberts: No, great.
• 10:03
  Chantal Roberts: Okay, so we're gonna come in and take pictures showing that there's no interior water damage.
• 10:08
  Chantal Roberts: So that if interior water damage occurs or is claimed at a later date, it either is one, the insured hasn't uh mitigated their own losses, which is contrary to their duties in the policy, or it's a new loss.
• 10:30
  Chantal Roberts: It it if you don't take these pictures inside or in the attic space or whatever, then you may be taking that damage as part of the original loss, and it's and it's damage creep because either we've got a new loss or the insured didn't do what they were supposed to.
• 10:51
  William Auten: Right.
• 10:52
  William Auten: It can happen um in a way that there is coverage also.
• 10:57
  William Auten: Yes, absolutely.
• 10:58
  William Auten: Ice dams are probably the the biggest um um culprit here because you can't really if there if there is damage to the roof, you can't really get up there.
• 11:08
  William Auten: Once it starts leaking, you kind of have to hold on and wait until it's done because the ice is so thick up there.
• 11:15
  William Auten: You the I've seen um I've seen adjusters, I'm sorry, I've seen contractors utilize uh heating elements up there to try and mitigate it.
• 11:26
  William Auten: Uh, but by the time they're up there and doing that, the water's already moving through the attic and everything.
• 11:34
  William Auten: And um and you can put buckets down and towels and wait it out, and usually it doesn't take long, you know, a few hours it leaks through, and then it's just a matter of cleanup and repair.
• 11:45
  Chantal Roberts: And that's not to say that again, too, like you said, it there may not be covered loss, because also the the one thing that I'm seeing adjusters not explain to their insureds, and again, at least it comes from this fear that the insured doesn't want to mitigate any of their losses or do any of their losses for fear that they'll mess something up.
• 12:11
  Chantal Roberts: And and this is when you have to have that conversation of saying, okay, so not only is it your duty, but but also there's the there could be a supplement, and and we would pay for covered causes of loss or damage that result from this accident.
• 12:29
  Chantal Roberts: So, you know, start tearing it down.
• 12:32
  Chantal Roberts: Contractors know what to do.
• 12:34
  Chantal Roberts: You you gotta do something with it.
• 12:37
  Chantal Roberts: We've given you at least what we think is gonna repair it.
• 12:40
  Chantal Roberts: And if you find more damage, give us a call.
• 12:42
  Chantal Roberts: I'm not seeing that a lot in some of the claims that I'm getting as an expert witness.
• 12:49
  Chantal Roberts: So that also leads to damage creep because the insureds are paralyzed with fear about doing things.
• 12:59
  William Auten: The um the concept of a supplement.
• 13:02
  William Auten: Well, okay, let me talk about a few different things.
• 13:05
  William Auten: I've heard insureds saying they didn't want to cash the check because they thought it would terminate the claim.
• 13:09
  William Auten: You brought that up.
• 13:11
  William Auten: Um, it an adjuster should be explaining that that does not terminate the claim.
• 13:18
  William Auten: Sometimes uh there's a lot of carriers that will take a proof of loss on really relatively small claims.
• 13:24
  William Auten: Uh so$2,500 they'll or and above, they'll take a proof of loss and they'll have the insured sign it.
• 13:31
  William Auten: And if they require it's notarized, then the insured thinks it's this super official document, which it is, but it does not close the claim and it does not finalize the claim.
• 13:42
  William Auten: I've even had this discussion with adjusters who say, well, they can't make a supplement, they've signed a proof of loss.
• 13:48
  William Auten: Well, that's not the truth at all.
• 13:50
  William Auten: Right.
• 13:50
  Chantal Roberts: And if you read, by the way, adjusters, if you read, literally read the proof of loss down on the bottom, small print, it says this is this doesn't close the claim or something legally that fashion.
• 14:01
  Chantal Roberts: All it is is a proof that a loss occurred in that amount for this policy on this date.
• 14:09
  William Auten: That is your warned statement that a certain type of damage or loss occurred on a certain date, and it's it's um it's your statement to the insurance company that something happened.
• 14:22
  William Auten: That's all it is.
• 14:23
  William Auten: That's pretty much all it is.
• 14:24
  William Auten: All it is it's very formalized, yes, and it's not the easiest thing to read.
• 14:31
  William Auten: Um I did a uh I did a video for agents back in I don't remember 2014 or 2013.
• 14:41
  William Auten: It's still on YouTube, I think, for my old company, uh explaining what a proof of loss is is uh the most boring video you ever want to watch.
• 14:50
  William Auten: But so if you need something to fall asleep with, guys, but if you ever have a question about what a proof of loss is and its function and what all that stuff on the form means, uh you can watch that video and it explains it pretty well.
• 15:06
  William Auten: Um, but the one document that will terminate a claim is a policy holder's release, which is sometimes used, but um not very often in totally different things, totally different things.
• 15:17
  Chantal Roberts: So anyway, anyway, so I wanted to just discuss damage creep because the insureds are often nervous because they get a contractor's estimate that is very different than what ours is.
• 15:31
  Chantal Roberts: So, anyway, um we will probably talk about that more.
• 15:36
  Chantal Roberts: So, early cause of lost determination requires a lot of discipline.
• 15:42
  Chantal Roberts: It requires you, like we said, to be sure you get up in the attic, take pictures of the entire roof or ceiling or whatever.
• 15:53
  Chantal Roberts: Uh again, I always like to have the contractor with my field appraiser or adjuster so that we don't get into this battling estimate kind of deal.
• 16:08
  Chantal Roberts: We can try to get all of this done.
• 16:12
  Chantal Roberts: And and not necessarily one fell swoop, but there you go.
• 16:19
  William Auten: Yeah.
• 16:20
  William Auten: Um we're gonna move on here to wind versus wear and tear versus water damage.
• 16:28
  SPEAKER_02: Yes, that's a big, big issue.
• 16:30
  William Auten: When did when would we see most of that kind of um those kinds of issues?
• 16:37
  William Auten: And I'm gonna say uh claims that involve roofs.
• 16:41
  Chantal Roberts: Yes, yeah, yeah.
• 16:43
  Chantal Roberts: And this is this is becoming more and more of an issue.
• 16:47
  Chantal Roberts: Another thing that I am seeing is of course, everything is uber expensive, and so people are not taking care of their roofs, are not doing preventative maintenance.
• 17:03
  Chantal Roberts: We've had a hail storm come through recently in Kansas, maybe a month and a half ago, and the amount of contractors that I have calling me wanting to put a new roof on my house, and the amount of sales, roofing salespeople who are stopping by our house, I I am literally considering putting a note on the door saying, we are adjusters, we don't need a new roof.
• 17:34
  Chantal Roberts: Go away.
• 17:35
  Chantal Roberts: Because as soon as I say, and it's kind of it's really kind of funny to watch them do the backpedaling, because as soon as I say, Yeah, we're adjusters, I don't like I don't even need to say anything else.
• 17:45
  Chantal Roberts: They just start backpedaling, but think about what we've got.
• 17:51
  Chantal Roberts: Does my does my roof have hail impacts?
• 17:54
  Chantal Roberts: Yes, absolutely.
• 17:55
  Chantal Roberts: Does it have some wear and tear?
• 17:57
  Chantal Roberts: Yeah, sure it does.
• 17:59
  Chantal Roberts: Uh, do I need a new roof?
• 18:01
  Chantal Roberts: Not right now.
• 18:03
  Chantal Roberts: However, I do want to talk to you, and I know that that you're probably answering to get in here.
• 18:10
  Chantal Roberts: I want to talk about this new idea that has come out, and Chip Merlin has even mentioned it, where even one hail storm could cause our roof to act as if it's 10 years older or whatever.
• 18:27
  William Auten: Well, um I guess the the question comes down to direct physical loss, yes, um repairability.
• 18:38
  William Auten: And uh you know, if those two conditions are met there where you if you have actual loss to the the item damage per se, then um and you can't repair it, what are what is one to do?
• 18:57
  William Auten: So I've been on I don't know how many roofs in my life every time I go on a roof.
• 19:04
  William Auten: It doesn't matter whether there's been a storm recently or not, there are uh granules from the shingles in the gutter.
• 19:12
  William Auten: Yes, it doesn't matter how old the roof is.
• 19:15
  William Auten: Uh it happens on brand new roofs after the first rainstorm.
• 19:19
  William Auten: Um yet that is often pointed to as evidence that oh, your roof is now compromised because of a storm.
• 19:26
  William Auten: Well, that's wear and tear.
• 19:28
  William Auten: That's normal wear and tear.
• 19:30
  William Auten: Unfortunately, what people I guess don't realize is asphalt shingles they work really well.
• 19:39
  William Auten: They're they're everywhere we use them, but they wear out.
• 19:43
  William Auten: They're not the best possible option for a roof covering because they wear out.
• 19:50
  William Auten: And there's kind of a reason for that.
• 19:52
  William Auten: Uh, there's a whole industry that depends on them wearing out and and making new products.
• 19:58
  William Auten: Steel, uh steel roof is gonna last a really long time.
• 20:02
  William Auten: Uh clay tile roofs last pretty well.
• 20:06
  William Auten: They are um a little more fragile, maybe, than a steel roof.
• 20:13
  William Auten: None of these are um completely impervious to damage.
• 20:19
  William Auten: Right.
• 20:19
  William Auten: Steel roofs, you know, if a major hailstorm can act can cause denting and cosmetic damage to a steel roof.
• 20:27
  William Auten: Yes.
• 20:27
  Chantal Roberts: So let's talk about that one too, because I've sat in with engineers who have who have shown me that uh because you hear this about steel roofs, and this is more commercial than it is homeowners, but the the public adjusters plaintiff attorneys will say that the steel roof, once it's impacted, it's like clear coating or UV rating or something to that effect, some invisible kind of shield that we can't see with our naked eye, but can be seen with a microscope, has been busted.
• 21:02
  Chantal Roberts: And while that may or may not be true, what we're looking at is the functionality of the roof.
• 21:09
  Chantal Roberts: If the roof still discards water and doesn't let water inside, keeps the inside dry, then the then the roof is still functioning.
• 21:22
  Chantal Roberts: And so, like you said, it might be a cosmetic issue more so than something that needs to get repaired or replaced.
• 21:32
  William Auten: There's um I've seen endorsements that uh take away loss for cosmetic only damage.
• 21:39
  William Auten: And um, I've not read them in detail, uh, so I'm not really sure how they work or what they say.
• 21:46
  Chantal Roberts: Basically, it it says exactly what what that is, is if this loss is is deemed to be cosmetic in nature and that the roof still serves its functionality.
• 22:01
  Chantal Roberts: And that's the big word right there that the roof is still functioning as a roof should function, which is to take water away, keep the interior dry.
• 22:11
  Chantal Roberts: Then we, as the insurance company, are not going to pay.
• 22:16
  Chantal Roberts: I have also started to see a lot of, and this is especially out in the West, where they may have the concrete tiles.
• 22:29
  Chantal Roberts: And those are very interesting because you have to walk on them a certain way, because even just walking on them, unlike mostly our asphalt roofs, where we could walk on it without really damaging it, although some granulars will come off.
• 22:46
  Chantal Roberts: If you just walk on a concrete roof, even me, I would break a tile, unless I walk on it very, very specifically because of the way that they are positioned.
• 22:58
  Chantal Roberts: Okay, besides that point.
• 23:00
  Chantal Roberts: So a lot of people feel that once the concrete is broken, then it's not doing what it's supposed to be doing.
• 23:08
  Chantal Roberts: A lot of insurers now are having entire roofing schedules that say if you have an asphalt roof and it's 12 years old, we're going to deduct this much depreciation until you replace it.
• 23:26
  Chantal Roberts: If you have a clay tile roof or a concrete roof or steel roof, blah, blah, blah, blah, blah.
• 23:33
  Chantal Roberts: And these are things that must be explained to the insured at the very beginning of the claim.
• 23:43
  Chantal Roberts: Because if you don't adjusters, you're going to end up in a world of hurt.
• 23:48
  Chantal Roberts: So you're going to end up in an argument.
• 23:50
  William Auten: Talk a little bit about why these endorsements even exist because 10 or 20 years ago, maybe maybe 20 years ago, you really didn't see them.
• 24:09
  Chantal Roberts: I don't want to cast dispersions on on whole entire industries.
• 24:16
  Chantal Roberts: However, it is the popular opinion that this is from the contractors and public adjusters and plaintiff bar who come into an area.
• 24:29
  Chantal Roberts: Florida is an excellent example where they may have hurricane damage or a lot of windstorm damage, something to that effect.
• 24:38
  Chantal Roberts: And then these roofers and these contractors, public adjusters, demand that the entire roof be replaced when maybe only one slope would need to be replaced or something to that effect.
• 24:58
  Chantal Roberts: This has led to, of course, our loss indemnity cost just skyrocketing.
• 25:06
  Chantal Roberts: And so our premiums aren't able to, of course, keep up.
• 25:09
  Chantal Roberts: And it's kind of like a perfect storm because then the Department of Insurance is not approving the insurer to increase the premiums as I teach in my RMI class.
• 25:21
  Chantal Roberts: And so now we've got insurers who are going bankrupt, you know, like they did in Florida a couple of years ago.
• 25:29
  Chantal Roberts: I think there were eight of them that went under, all because of a lot of claims with a particular topic that many people don't understand, and then a few bad apples spoiling the bunch.
• 25:46
  William Auten: So that's the that's a shorter.
• 25:49
  William Auten: I agree on you've identified the cast of characters properly, and and uh everything you said is absolutely spot on.
• 25:56
  William Auten: I would just add that uh the um the effort that has the effort that has been undertaken by those folks to blur the lines between the wear and tear exclusion and the direct physical loss exclusion is where the problem lies.
• 26:17
  William Auten: Insurance companies set out to say, look, you know, maintenance and wear and tear and stuff, that's not really insurable.
• 26:25
  William Auten: What we insure is uh fortuitous loss, something that happens suddenly, uh something unexpected, like a tree falling on a house or a fire.
• 26:35
  William Auten: And what has happened is they've they've taken that um they've taken the quote unquote damage and described that in a way that makes it sound as if it's fortuitous, and that now you've got a situation where it's direct physical loss.
• 26:52
  William Auten: And um that complicates things.
• 26:56
  William Auten: So the insurance companies, the only way they can respond is to put more details into their policies to create a further separation between what wear and tear really is versus what a fortuitous loss really is, and um that battle of words is never going to end, I guess.
• 27:18
  Chantal Roberts: Um, and I'm telling you what is also what I am afraid that our end, and this really doesn't have anything to do with adjusters per se, except that adjusters experience it when the claim comes down, is a lot of our municipalities or our states or our cities or even some of the counties may be believing this, or if you have an hoa, for example, or county, wherever I'm thinking of a particular place in Colorado where I have seen this, that the code is now you can't reuse any slopes.
• 28:01
  Chantal Roberts: You know, if you're only replacing one or two tiles on one slope and the insurance company goes, okay, fine, if I got to replace like an entire slope or whatever, I'm going to harvest those tiles and use them somewhere else on the insured's house.
• 28:18
  Chantal Roberts: There's code now saying you can't do that.
• 28:23
  Chantal Roberts: You have to buy an the actual product.
• 28:28
  Chantal Roberts: And I swear the code says something to the effect of it has to be shrinked wrapped with the name attached and the product bin number and blah, blah, blah.
• 28:36
  Chantal Roberts: And of course, nine times out of 10, these companies have gone out of business or that particular tile or shingle is no longer made.
• 28:47
  Chantal Roberts: So you have to get a whole new different shingle, which means we go into the matching issues.
• 28:52
  Chantal Roberts: And I'm afraid that our underwriters and agents don't know this when they're pricing the product, which means again, we're all gonna go back into this spiral of getting into a disagreement over what's wear and tear, what can we replace, what can we repair.
• 29:10
  Chantal Roberts: The adjuster gets caught up in this later on.
• 29:12
  Chantal Roberts: But if you are an adjuster, you need to be sending, you know, underwriting notes, letting the underwriters know, hey, this is a code for the entire county or whatever.
• 29:21
  Chantal Roberts: Uh just FYI.
• 29:23
  Chantal Roberts: That's what you can do as an adjuster.
• 29:26
  William Auten: Well, I think um the industry as a whole has a target on its back um because they're they're large businesses that make billions of dollars every year in in revenue and in profits.
• 29:41
  William Auten: They're always going to have a target on their back.
• 29:44
  William Auten: And in some states, you just have louder voices making the case against these um the the the standard exclusions that apply in most cases.
• 29:58
  William Auten: You've you've just got um uh kind of this groundswell of people arguing against those and for coverage where it normally didn't exist, and then you've got legislators that are kind of on board with it for whatever reason.
• 30:15
  William Auten: So you wind up you you wind up with these big cultural shifts or or pockets, I guess.
• 30:23
  William Auten: Yes.
• 30:23
  William Auten: Um where you've got these weird, these weird rules and laws and regulations around uh the handling of insurance claims.
• 30:32
  William Auten: Yes.
• 30:32
  William Auten: Um, you know, I mean you you and I have talked a lot about the depreciation of labor.
• 30:38
  William Auten: There's still a very bright line between the states that allow it and don't allow it.
• 30:42
  William Auten: Or you know, uh where I should say states that will not allow depreciation of labor and states where it really doesn't matter to the to the insurance regulators.
• 30:55
  William Auten: Right.
• 30:56
  William Auten: So um but this I'm sorry, go ahead.
• 31:01
  William Auten: Well, that's just the nature of of state regulated, you know, insurance coverage.
• 31:06
  Chantal Roberts: So there is, uh don't get me wrong, there is coverage for law and ordinance and increased costs due to code and and that sort of thing.
• 31:16
  Chantal Roberts: But I I we need to be taking that into consideration if you're an agent listening to this, look at your building codes because they're all going by building codes, is what they're going by.
• 31:27
  Chantal Roberts: And let's price it right, but also it it gets into our aging roofs and and maybe our prior repairs and that sort of thing, because we can see in these kind of mixed apparels or whatever, like, oh, now there's a roof leak in the living room, blah, blah, blah.
• 31:49
  Chantal Roberts: Well, yes, there is, but right over the living room is that cracked concrete tile that you've attempted to fix because and we can see it because it has epoxy.
• 32:02
  Chantal Roberts: You know, you've like glued it back together and put this old tile on instead of what you were supposed to do, which is fix the entire roof, which we know is expensive.
• 32:12
  Chantal Roberts: That's why you're trying to go around and and say, Hey, I've got a hail storm, I need my roof replaced, like all of the roofers are doing right now in Kansas.
• 32:25
  William Auten: Yeah, it uh certainly does complicate things.
• 32:29
  William Auten: Um and you know, insurance companies are routinely blamed for um you know just wanting to deny delay and defend, right?
• 32:40
  William Auten: And um it's not always the case.
• 32:44
  William Auten: And I would say that when it comes to the like wear and tear issues, uh, they're just trying to get the language right so that they don't go out of business.
• 32:54
  William Auten: Because you know, if they your premiums are going to continue to go up if if every roof claim on the face of the earth has to be paid because of some laws, even though there's a question as to how the damage actually occurred.
• 33:10
  Chantal Roberts: Um which is why the adjusters must document the sequence of failure.
• 33:17
  Chantal Roberts: You know, that's they have to tie it to the the loss and the damage.
• 33:23
  Chantal Roberts: Yes, absolutely.
• 33:24
  Chantal Roberts: Like, yes, there was a hail storm on this date, or there was a you know, Derecho winds, you know, on this date, and that's what lifted the shingle up and bent it, and now we see a water leak in this particular area.
• 33:46
  William Auten: Yeah, let's talk a little bit about concurrent causation.
• 33:51
  Chantal Roberts: Mm-hmm.
• 33:52
  William Auten: So uh that's basically when you've got two intervening causes that that um that cause damage.
• 34:00
  Chantal Roberts: Yes.
• 34:00
  Chantal Roberts: And okay, so most of the way that the policy is written, uh nine times out of ten, it's it's kind of like multiplying by zero.
• 34:10
  Chantal Roberts: And and then there's an exception to the exclusion on that.
• 34:14
  Chantal Roberts: So just stick with me on it.
• 34:16
  Chantal Roberts: So concurrent causations, nine times out of ten, the way that the policy is written, and of course every policy is kind of different, is that if you have two causes of loss, one is covered and one is not covered, like wind and flood, for example, then we don't cover either one, period.
• 34:36
  Chantal Roberts: Now the state said, well, that's not fair.
• 34:40
  Chantal Roberts: You should at least cover the wind part of it.
• 34:43
  Chantal Roberts: I mean, that's what you're doing, right?
• 34:45
  Chantal Roberts: You should at least cover the wind since you're saying wind is covered.
• 34:49
  Chantal Roberts: All right.
• 34:50
  Chantal Roberts: So then there are some states that have become anti-concurrent causation, which means you pay as the insurer, you pay for the loss that you would pay for.
• 35:03
  Chantal Roberts: So in the event of flood and wind, instead of saying, you know, wind is number one and then flood is zero, and so you take one times zero and you would get zero with no coverage.
• 35:16
  Chantal Roberts: Now you're saying, no, no, no, no.
• 35:18
  Chantal Roberts: Anti-concurrent, you just take out that flood claim and you would pay the wind claim.
• 35:29
  William Auten: Right.
• 35:30
  William Auten: So and that makes logical sense, really, because you're you're just focusing on the damage that is covered and you're eliminating the stuff that isn't covered.
• 35:40
  Chantal Roberts: Absolutely.
• 35:41
  Chantal Roberts: And again, I would encourage our adjusters when we have these two kinds of claims like wind and flood, which we'll start seeing a lot of come hurricane season, which starts June 1st.
• 35:55
  Chantal Roberts: Yay, hurricane season.
• 35:58
  Chantal Roberts: I haven't I haven't heard how bad it's gonna be.
• 36:00
  Chantal Roberts: Yeah, I well, I was gonna say I haven't heard how bad it was gonna be.
• 36:03
  Chantal Roberts: So maybe I shouldn't say yay, hurricane season.
• 36:05
  Chantal Roberts: But when you have these two kinds of policies, like a flood policy and a wind policy, adjusters work with the other adjuster, the other insurer, especially when the the house, let's say, is is just destroyed.
• 36:26
  Chantal Roberts: We don't know which came first unless the flood claim came later.
• 36:31
  Chantal Roberts: For example, when Katrina hit, we knew that we had wind.
• 36:35
  Chantal Roberts: And then in some instances, the houses weren't inundated with flood water until 48 hours later.
• 36:44
  Chantal Roberts: So, you know, even though we weren't able to see that house until months later because of the amount of claims, we would call the the flood adjuster, and your insured would be able to get you that information and say, dude, what do you want to do here?
• 37:05
  Chantal Roberts: You know, um, that kind of a deal.
• 37:08
  William Auten: So uh so I was down for Harvey in Houston, and um there was very little wind damage.
• 37:17
  William Auten: I looked at hundreds of roofs down there, uh commercial and and residential.
• 37:23
  William Auten: And um boy, I just we didn't see hardly any wind related damage at all.
• 37:31
  William Auten: It was all flood, and it was you know, Houston is known for for that.
• 37:37
  William Auten: Um because they just had that that that hurricane just came in and parked over it and just rained and rained for like two weeks.
• 37:46
  William Auten: So um there were really wasn't a whole lot of arguments about wind versus flood, right?
• 37:53
  William Auten: It was fairly obvious.
• 37:54
  William Auten: You got three feet of water in your house, that's flood.
• 37:58
  Chantal Roberts: That's flood.
• 37:59
  William Auten: No damage to the roof.
• 38:00
  Chantal Roberts: Well, you know, or the second story or whatever, yeah, absolutely.
• 38:05
  William Auten: Right, yeah, right.
• 38:06
  William Auten: But in places like Florida or Louisiana where you do get a lot of wind, or or even on the east coast where you get a lot of wind, um uh it complicates things a little more.
• 38:18
  William Auten: But you have to use your best judgment.
• 38:21
  William Auten: Um, and you had mentioned you know, the flood adjuster will be there along with the homeowners adjuster or commercial adjuster.
• 38:29
  Chantal Roberts: Well, hopefully, yeah, hopefully.
• 38:31
  William Auten: Um, and you know, I've been on those visits and they're looking at different things than I am, and and right uh, you know, we we shake hands and exchange business cards, and pretty much, you know, unless there's a dispute, we never really talk again.
• 38:43
  Chantal Roberts: Uh right, but the thing, the thing I I am trying to, I guess emphasize is let's not have an estimate where the insured is left with something uninsured, uh, you know, because oh, the wind people are supposed to cover it.
• 39:04
  Chantal Roberts: Oh no, that's the flood people are supposed to cover it, you know.
• 39:06
  Chantal Roberts: Right, right.
• 39:07
  Chantal Roberts: It let's come to an understanding.
• 39:10
  Chantal Roberts: It doesn't mean that we're our estimates are going to be the same, but there may be one or two parts that could go either way.
• 39:19
  Chantal Roberts: Well, then adjust the claim because both of you are adjusters.
• 39:24
  Chantal Roberts: That's literally your job title.
• 39:26
  William Auten: Yeah, in my Harvey example, there wasn't a lot of of exchange of in of claim information because it was a really bright line between flood versus anything else.
• 39:37
  William Auten: But when you've got other areas where uh the line is blurred, and you know, did that um you know, did that section of the the house come down because of flood water or because uh the wind blew it apart?
• 39:51
  William Auten: Um, those are things that you you do have to work with the flood adjuster to come up with uh an agreement as to who who covers what.
• 40:00
  William Auten: And um exactly now the problem, the real problem occurs when you've got flood and wind and no flood coverage.
• 40:09
  William Auten: And that that happens quite often.
• 40:11
  William Auten: Unfortunately, we just had a rain event here where there was a lot of areas that flooded that normally are never exposed to flood hazards.
• 40:21
  William Auten: And the reason that happens is if you know it's a very hilly and mountainous terrain up here in upstate New York, and um the water, the creeks and stuff that flow down from these hills and mountains get clogged up sometimes with ice or trees or whatever, and you wind up with flooding in areas where you never really expected flooding.
• 40:43
  William Auten: When that happens, you've got people who suffer flood damage with no flood coverage, and that that can be a tough spot to be in.
• 40:51
  Chantal Roberts: And be sure you look at your policy language because there is backup and overflow a lot of times of policy when we were looking at that.
• 41:02
  Chantal Roberts: You know, backup means uh something has has stopped and uh is something that causing the barrier, and it's usually through a sewer system or plumbing system or something to that effect.
• 41:13
  Chantal Roberts: But regardless, something has stopped the water and now it is backing up into the house versus overflow, which is something that is like, oh, there's so much water, it's going over the banks or whatever, and the sewer system can't handle it or whatever, and it now overflows two different things.
• 41:35
  Chantal Roberts: It might look the same, but two different things with uh coverages, and you got to look at that.
• 41:41
  William Auten: Yeah, the overflow uh is generally like the the analogy is if you poured coffee into your coffee cup until it overflowed and leaked onto whatever and caused damage.
• 41:54
  William Auten: So um, but overflow of a river or a creek doesn't fall into that category.
• 42:02
  William Auten: That's um that becomes then that's flood, that's groundwater.
• 42:06
  Chantal Roberts: Yeah, uh and there's normally dry land, yada yada, yada.
• 42:10
  William Auten: Yeah, there's actually land uh language about creeks and streams and rivers, I think.
• 42:17
  Chantal Roberts: Um anyway, the point being, read your policy, but I did want to like point put that in there, uh, you know, just boom.
• 42:25
  Chantal Roberts: So I think we've kind of talked about the functional cosmetic repair versus full replacement based on scope and contractor pressure versus evidence-based scoping.
• 42:37
  Chantal Roberts: That I think we should touch on just real quick uh before moving on, which is again, I had mentioned a lot of times our insured is a little confused, which is normal because who knows anything about insurance?
• 42:52
  Chantal Roberts: Who wants to learn insurance?
• 42:53
  Chantal Roberts: Nobody.
• 42:54
  Chantal Roberts: And and so the insured would have an estimate from the contractor of, let's say,$100,000, whereas the adjuster, the the insurance adjuster's estimate is, I don't know,$50,000, let's say.
• 43:12
  Chantal Roberts: And then once RCV or depreciation is applied, all we're paying is, I don't know,$30,000.
• 43:19
  Chantal Roberts: And the insured is going, that's$70,000 difference.
• 43:22
  Chantal Roberts: What is what what what is it?
• 43:25
  Chantal Roberts: What's wrong?
• 43:25
  Chantal Roberts: And one of the things I think we should start talking about with our insureds is the fact that the contractor will write all of the damages.
• 43:38
  Chantal Roberts: We may only write the covered damages, which means there could be damage out there that you definitely, Mr.
• 43:48
  Chantal Roberts: and Mrs.
• 43:48
  Chantal Roberts: Insured, have to fix.
• 43:50
  Chantal Roberts: It just ain't covered, so I'm not gonna write it.
• 43:52
  Chantal Roberts: Or there would be costs involved with.
• 44:00
  Chantal Roberts: The loss that are reimbursable, which I would really love our adjusters to start putting in even the reimbursable things on the estimate so it shows that we've considered it.
• 44:13
  Chantal Roberts: For example, permits to get construction going.
• 44:19
  Chantal Roberts: Most of these places will require the contractor to file a permit cost and they will pass that on to the insurance company or code upgrades or debris removal.
• 44:33
  Chantal Roberts: All of that is like reimbursable.
• 44:35
  Chantal Roberts: You know, that has to be incurred, quote unquote.
• 44:38
  Chantal Roberts: But I wish we would put a little line saying debris removal TBD, so it shows that we've considered it because when the insured is comparing the things trying to be apples to apples, they see that we're not having a lot of things that the contractor is having on their estimate, and they think we're lowballing.
• 44:59
  William Auten: Sure.
• 44:59
  William Auten: And trying to so some claims you go to and you can write a complete global estimate from start to finish.
• 45:08
  William Auten: And um that estimate can represent the actual cost of the claim where you can write a check to the contractor less a deductible, and um the story's over.
• 45:19
  William Auten: That's not all of them, and I would argue that probably that's a minority of them, because most claims uh uh involving damage to a building are complex.
• 45:30
  William Auten: And you may have hidden damage that nobody can see until they start um doing the repairs apart.
• 45:38
  Chantal Roberts: Also have damage create right there.
• 45:41
  William Auten: The building inspector may go out there and say, Well, I see what you did here, but what we actually have to do to meet code is this and this and this.
• 45:48
  William Auten: And if you've got code upgrade coverage, uh that's another thing that could be added on.
• 45:52
  William Auten: So um there's a lot of reasons why the original estimate is going to differ from the um um the contractor estimate or the final estimate.
• 46:03
  Chantal Roberts: Yeah, the final cost.
• 46:04
  Chantal Roberts: Right.
• 46:05
  William Auten: And um, I mean, I I've finalized a claim where the uh two months later the heating system failed, and it turns out that the that uh some damage from a uh small fire in the place, uh smoke damage actually caused premature corrosion in the heating system components, the electrical system, the and and that had to be replaced months after the claim was closed.
• 46:32
  William Auten: It happens, you know.
• 46:34
  Chantal Roberts: Yeah, absolutely.
• 46:35
  Chantal Roberts: But think about again coming from the insured's point of view, where the insurance company is the big bad wolf trying to lowball and delay, deny, defend.
• 46:47
  Chantal Roberts: And here is the person that the insured has researched and trusted to repair their property, that being the contractor or the public adjuster to write the estimate.
• 47:00
  Chantal Roberts: And that differs so much from your estimate.
• 47:12
  Chantal Roberts: And and I really do wish that we would put these little things on there so that they see, yeah, we are gonna pay for them.
• 47:19
  Chantal Roberts: We're not forgetting it, but it's not due now.
• 47:26
  Chantal Roberts: Like we know there's gonna be code upgrades that we're gonna have.
• 47:28
  Chantal Roberts: We know that there's gonna be debris removal, we just don't know what the price is, right?
• 47:33
  Chantal Roberts: We can't put it on there, but we're considering it.
• 47:36
  Chantal Roberts: Yeah, I don't I don't know if that really makes sense, but it it I I think it would reassure the insured to say, oh, they are looking at it.
• 47:46
  Chantal Roberts: This is this is one of the reasons why, in addition to you verbally explaining it to the insured.
• 47:53
  William Auten: Yep.
• 47:53
  Chantal Roberts: Okay.
• 47:54
  William Auten: Anything can be considered.
• 47:56
  William Auten: Uh doesn't mean everything will be paid.
• 47:58
  William Auten: Exactly.
• 47:59
  William Auten: Uh there may be real solid reasons why it can't be.
• 48:03
  William Auten: But um yeah.
• 48:06
  Chantal Roberts: Yeah, okay.
• 48:08
  Chantal Roberts: So storm openings created or openings created by uh, you know, the the covered peril or what have you.
• 48:18
  Chantal Roberts: Sometimes I was thinking again of wind versus flood, but you know, sometimes you've got the flood taking up the whole first story or whatever, but you still have busted out windows up on the second story.
• 48:32
  Chantal Roberts: Well, obviously that's wind.
• 48:34
  William Auten: Right.
• 48:35
  Chantal Roberts: So um and that might be interior water damage too.
• 48:39
  William Auten: Yeah, so homeowners policy uh will pay for interior water damage if the roof leaks.
• 48:45
  William Auten: Um doesn't really say what has to happen to that roof for it to leak.
• 48:50
  William Auten: That's why we pay for ice dams.
• 48:53
  William Auten: On a commercial policy, it's a little different.
• 48:56
  William Auten: You do need uh an opening created by wind or some other uh direct cause of loss.
• 49:03
  William Auten: Um ice damming on a commercial policy is generally not covered unless there's an opening created by wind.
• 49:12
  Chantal Roberts: So so I hear a lot, and I never know how to respond to this.
• 49:17
  Chantal Roberts: I hear a lot of public adjusters or contractors talking about oh, well, there is openings created, or I guess there are openings in a roof.
• 49:29
  Chantal Roberts: And I think you and I have talked about this before.
• 49:31
  Chantal Roberts: I there are openings in a roof because when we attach the uh, I don't know, the furlings or the asphalt shingles or whatever, we're nailing them in so the nails go through the roof and the membrane and all that, and you can go up into the ceiling and see where the roofs are or the nails are coming through the the plywood on.
• 49:54
  Chantal Roberts: And I'm like, that's not really that's not damaged though.
• 49:58
  Chantal Roberts: Yeah, that's not an opening though, guys.
• 50:01
  Chantal Roberts: You're really stretching the language and torturing the language, but how do you respond to that?
• 50:06
  Chantal Roberts: Because it makes sense to an to an insured, and remember, an insured is not as savvy as we are in the insurance profession about insurance, by the way, guys.
• 50:16
  Chantal Roberts: I'm not saying they're not savvy, they are savvy, but you know what I mean.
• 50:20
  William Auten: I I think the language of the policy requires that it's a storm-related opening or a wind-related opening.
• 50:29
  Chantal Roberts: But didn't you just say that in homeowners it doesn't really say that?
• 50:32
  William Auten: It it doesn't.
• 50:34
  Chantal Roberts: So then it could be any kind of opening, and wouldn't wouldn't a nail going through the roof be an opening?
• 50:41
  William Auten: Yeah.
• 50:41
  unknown: Okay.
• 50:42
  William Auten: It's totally covered.
• 50:44
  William Auten: Water that comes in through those those little holes or creeps up behind the shingles or whatever in a homeowner's policy, or even if you have an old worn-out roof and it's shedding water every day, and then one day it the the the wear and tear is such that it starts to leak now, and you've got interior damage.
• 51:08
  William Auten: I don't think you you could make an argument that wear and tear is the underlying cause.
• 51:14
  Chantal Roberts: And then I think there would be denied.
• 51:16
  William Auten: But the direct well, the direct damage though is water damage.
• 51:20
  William Auten: So I think I'd pay to repaint the ceiling or repair the ceiling, but you know, I would tell the insured you gotta get a new roof, it's wore out, and uh and leave it at that.
• 51:29
  Chantal Roberts: Yeah, because that's wear and tear.
• 51:32
  William Auten: Right.
• 51:32
  Chantal Roberts: Right, okay.
• 51:34
  Chantal Roberts: Matching.
• 51:36
  William Auten: Matching, yeah.
• 51:37
  William Auten: Okay, so there are states that have matching statutes.
• 51:41
  William Auten: Yes.
• 51:42
  Chantal Roberts: Um, Florida and Texas are some.
• 51:44
  William Auten: Yeah, Connecticut is one up here.
• 51:48
  William Auten: Um so in those cases, from a practical standpoint, if you've got uh generally speaking, for most roofs, if you've got a few shingles missing, you're probably gonna replace the slope.
• 52:02
  William Auten: Um are you gonna replace the whole roof?
• 52:06
  William Auten: Sight lines come into play then, and um, you know, unless you can find an exact match, you're probably gonna be closer to airing on the side of caution to replace the entire roof than than just a slope.
• 52:20
  Chantal Roberts: Um I want to interject something real quick because I learned something, you know.
• 52:27
  Chantal Roberts: I I talk with some public adjusters, and we've had some public adjusters on our podcast before.
• 52:34
  Chantal Roberts: Uh, I particularly love David Princeton.
• 52:37
  Chantal Roberts: I I feel that he is very down to earth, and I don't think he abuses the system the way some people do, but and and I hope I didn't offend him.
• 52:53
  William Auten: Of course.
• 52:53
  Chantal Roberts: I and I hope I didn't offend David by saying that.
• 52:57
  William Auten: David's not the only one out there.
• 52:59
  Chantal Roberts: I mean, yeah, I know, I know.
• 53:00
  Chantal Roberts: I love Nathan too, by the way.
• 53:02
  Chantal Roberts: Love you, Nathan.
• 53:03
  Chantal Roberts: Okay, so anyway, um, so so what I was what I was saying is uh I and I think it was David or it might have been Nathan, I I don't remember which, but I was reading one of their LinkedIn posts, and they were talking about how all of these adjusters, all of the insurance companies like ITEL, for when you have uh carpet that's not in stock anymore and you send this.
• 53:29
  William Auten: To be clear though, itel is not an insurance company.
• 53:31
  Chantal Roberts: Yes.
• 53:32
  Chantal Roberts: Let's talk about it real quick, not an endorsement.
• 53:34
  Chantal Roberts: Although if you want to offer us money, itel, feel free.
• 53:37
  Chantal Roberts: We would take it.
• 53:38
  Chantal Roberts: Uh and what ITEL is, is a company that you could send a sample to.
• 53:44
  Chantal Roberts: And ITEL will tell you as the adjuster where the or what kind of carpet, what kind of tile, what kind of asphalt shingle it is, if there are any in anywhere in the United States, who the manufacturer is, yada, yada, yada, blah, blah, blah.
• 54:06
  Chantal Roberts: And nine times out of 10, this is what insurance companies are using to say, okay, so you've got a roof that needs to be replaced, or maybe just a slope that needs to be replaced.
• 54:22
  Chantal Roberts: And you are saying, Mr.
• 54:24
  Chantal Roberts: Contractor, Mr.
• 54:25
  Chantal Roberts: Public Adjuster, or Ms.
• 54:26
  Chantal Roberts: Public Adjuster, or Ms.
• 54:27
  Chantal Roberts: Contractor, Mr.
• 54:28
  Chantal Roberts: and Mrs.
• 54:29
  Chantal Roberts: Insured, that you cannot get this roof because shingles are no longer being made.
• 54:37
  Chantal Roberts: But I can tell you this is where there's a storage facility that has 300,000 shingles of that exact kind of shingle.
• 54:48
  Chantal Roberts: And so the insurance company will go, you can go there and get it and have the same matching roof.
• 54:56
  Chantal Roberts: Well, either David or Nathan, they had said the issue is that insurance companies don't necessarily understand when a contractor goes to Home Depot or the roof shingle place or whatever, they often get a contractor discount and it's local.
• 55:15
  Chantal Roberts: So there's no shipping charges.
• 55:16
  Chantal Roberts: So all they got to do is pick it up and take it, and all of that is built into the pricing.
• 55:21
  Chantal Roberts: But if we have to order shingles, let's say our insured is in Kansas and we have to order these shingles from this warehouse out in Florida, it has to be shipped here.
• 55:32
  Chantal Roberts: So we have to add that on.
• 55:34
  Chantal Roberts: So is it really a difference?
• 55:38
  Chantal Roberts: Is there really a cost savings?
• 55:40
  Chantal Roberts: Is it really the same?
• 55:41
  Chantal Roberts: And I thought, you know what?
• 55:43
  Chantal Roberts: It that is actually something I have never considered before.
• 55:47
  Chantal Roberts: So I'm just throwing it out there, it's a good argument, it's something to be considered.
• 55:53
  Chantal Roberts: There you go.
• 55:54
  William Auten: Sure.
• 55:54
  William Auten: Yeah, and but that happens, and and I've actually seen that um laid out in ITEL reports.
• 56:01
  William Auten: Um, and if it's not, it's at least commented on by an adjuster.
• 56:05
  William Auten: Um, it should be.
• 56:07
  William Auten: Yes.
• 56:07
  William Auten: Um, it's an added cost.
• 56:09
  William Auten: And it may be that the ITEL price after that shipping is more than it would be to um just replace it with something local.
• 56:20
  Chantal Roberts: Yes.
• 56:21
  Chantal Roberts: And therefore, adjusters, again, this is the one thing I'm gonna tell you to do in that particular instance.
• 56:26
  Chantal Roberts: You need to document your file that you went through all of these steps.
• 56:30
  Chantal Roberts: I know it sounds like it's a pain in the rear, but you have to for bad faith issues because if I'm not seeing it as an expert witness that you went all the way through all of these considerations, then of course I'm gonna try, you know, I'm gonna believe what the plaintiff, which is the insured, is saying that you didn't consider these sorts of things.
• 56:48
  Chantal Roberts: So you got to say, I looked at the ITEL thing, I did the pricing, it's just cheaper for to do it this way versus that way, and we're gonna go that way.
• 56:56
  Chantal Roberts: You got to explain your logic.
• 56:58
  Chantal Roberts: Okay.
• 56:58
  William Auten: Yes.
• 57:01
  William Auten: Well, why don't we move on to the practical adjuster framework and then uh close things out here.
• 57:08
  Chantal Roberts: Yeah, because we're we've just been chatting away and try to keep this thing going.
• 57:13
  Chantal Roberts: So, what what are the steps that we've got to do in our framework, Bill?
• 57:17
  William Auten: So, first establish the cause of loss.
• 57:20
  William Auten: And um by doing that, you're gonna want to set you'll then be able to separate what may be caused by a storm or some fortuitous event or some covered event versus what may have been there prior to the storm or what may be considered wear and tear, uh, rather than direct physical loss or fortuitous damage.
• 57:44
  William Auten: And um verify functional damage if you've got this, um, if you've got these endorsements that that pay won't pay for cosmetic damage, you're you're gonna have to nail down, okay, does this does this um reduce the functionality of the materials or whatever of the item and then document everything?
• 58:06
  William Auten: Uh as we just said, make sure you're documenting that you're going through all the steps to make these verifications.
• 58:13
  William Auten: Yes.
• 58:13
  William Auten: And through the process, you got to communicate that all properly to the the stakeholders, namely the the policy holder and uh any of their you know contractors or public adjusters.
• 58:25
  William Auten: You I don't know how much you owe to the contractor necessarily, but um the insured at the end of the day is the person that has to really understand it.
• 58:33
  Chantal Roberts: Yeah, yeah, absolutely.
• 58:35
  Chantal Roberts: And I mean, you know, know that these spring storms that we're discussing, they are complex.
• 58:41
  Chantal Roberts: It requires a lot of communication, which we don't necessarily have the time for, but it's going to save us time down the road, which is why we need to communicate with our insureds up front.
• 58:56
  Chantal Roberts: And time and headaches.
• 58:58
  Chantal Roberts: Yes.
• 58:58
  Chantal Roberts: And and that documentation also helps us when you're documenting your file.
• 59:05
  Chantal Roberts: It's gonna make it more watertight, unimproved in intended.
• 59:11
  Chantal Roberts: Yeah, and uh it makes the file more defensible.
• 59:17
  Chantal Roberts: So we need to, of course, stay sharp and stay aware of what we are doing when we are handling these kinds of claims.
• 59:31
  William Auten: Always imagine that you're uh you're in court on the stand being asked about your claim file.
• 59:37
  William Auten: And uh if you keep that in mind when you're working your files, you'll um potentially be a little more thorough.
• 59:44
  William Auten: Yeah.
• 59:45
  Chantal Roberts: So yeah, so our next episode will drop on Thursday, April the 23rd.
• 59:53
  Chantal Roberts: And it's we're gonna be talking construction because of course, spring is when the months are warmer, days get longer, and so buildings start getting done, roofing starts getting done, all of the fun stuff starts getting done.
• 1:00:09
  William Auten: I'll wear my hard hat.
• 1:00:10
  Chantal Roberts: Yep, absolutely.
• 1:00:12
  Chantal Roberts: Oh, I might even have my little high visibility thing going.
• 1:00:16
  Chantal Roberts: So awesome.
• 1:00:18
  Chantal Roberts: Yeah, so we will see you in two weeks.
• 1:00:21
  William Auten: Yes.
• 1:00:22
  William Auten: Thank you, and uh take care.
• 1:00:23
  Chantal Roberts: Thanks, you too.
• 1:00:24
  Chantal Roberts: Bye.
• 1:00:25
  William Auten: Bye-bye.
• 1:00:26
  William Auten: Thanks for joining us on the Art of Adjusting Podcast, where we talk about life as an insurance adjuster.
• 1:00:31
  William Auten: Hit that subscribe button real quick and tell all of your adjuster friends to check this out as well.
• 1:00:36
  William Auten: For independent adjusting services, go to www.autin.claims.
• 1:00:40
  William Auten: And for anyone interested in working as an independent liability adjuster, go to the contact us tab to join our roster.
• 1:00:48
  Chantal Roberts: So this wraps up another Art of Adjusting podcast.
• 1:00:52
  Chantal Roberts: If you enjoyed this podcast or this episode, please give us five stars and a review.
• 1:00:58
  Chantal Roberts: It does help the algorithm pick us up.
• 1:01:00
  Chantal Roberts: In the meantime, you can contact me at theartofadjusting.com for consulting and training purposes.