Latest / The Art of Adjusting® Podcast / Episode #66 - Start Repairs or Sit Tight? The Catch-22 of Property Damage Claims

Transcript

Episode #66 - Start Repairs or Sit Tight? The Catch-22 of Property Damage Claims · The Art of Adjusting® Podcast

• 0:06
  Speaker 1: Hello, I'm Bill Auten of Auten Claims Management.
• 0:09
  Speaker 2: I'm Chantel Roberts of CMR Consulting and welcome to the Art of Adjusting podcast.
• 0:14
  Speaker 1: 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
  Speaker 1: 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
  Speaker 2: Hello, it's Chantel, by myself again.
• 0:36
  Speaker 2: Welcome back to the Art of Adjusting podcast, the show where we're going to talk claims.
• 0:40
  Speaker 2: Common sense podcast the show where we're going to talk claims.
• 0:43
  Speaker 2: You know common sense.
• 0:44
  Speaker 2: My opinion I'm going to get up on a soapbox.
• 0:48
  Speaker 2: We never know what's really gonna go on.
• 0:51
  Speaker 2: I am flying again solo and Bill is out again this week.
• 0:57
  Speaker 2: I think Mrs Bill is having him finish up his honey do list.
• 1:03
  Speaker 2: Either way, you are stuck with me, so I mean lucky you right.
• 1:10
  Speaker 2: So I decided that today I would handle a pretty difficult topic and I probably shouldn't, because you know Bill will always keep me reined in.
• 1:21
  Speaker 2: But I thought you know what are we going to talk about today, and I've come across this a few times in my expert witness cases.
• 1:32
  Speaker 2: It's one of those damned if you do, damned if you don't kind of situations that adjusters often find themselves in.
• 1:41
  Speaker 2: It is a tough and difficult situation and this is the situation when you have written the estimate, you've cut the check, you expect the insured to begin repairs.
• 2:00
  Speaker 2: They have a contractor and nothing is happening.
• 2:04
  Speaker 2: Months go by and damages continue to accrue because the insured is not doing the repairs.
• 2:16
  Speaker 2: It is kind of a fine line, like I said, because you, as the adjuster and as the insurance company, you can't tell the insured to begin repairs, and so you know what do you do in this particular instance?
• 2:35
  Speaker 2: Um, but on on the flip side, we have to understand the reason why the insured is not beginning repairs.
• 2:45
  Speaker 2: It could be several different reasons.
• 2:49
  Speaker 2: So I thought that I would touch on some of those things so that we could get them addressed and see if we can't get our claims moving and resolved.
• 3:00
  Speaker 2: Of course, we're going to be talking about the kind of claim where we don't have, maybe, a preferred vendor working, because I think preferred vendors, that's something different where we have the preferred vendor coming in and they do the work, as you know, as soon as they get the estimate written or whatever written or whatever.
• 3:24
  Speaker 2: So I think that's something completely different.
• 3:25
  Speaker 2: And y'all are just going to have to deal with me having like a little bit of long pauses, cause usually I let Bill fill in these long pauses while I'm taking a sip of tea because I'm I'm thirsty.
• 3:34
  Speaker 2: But yeah, today you're just going to have to deal with some long pauses, as I, you know, drink my tea and off, drink my tea, and it might even give me a chance to like rethink what I'm going to say.
• 3:51
  Speaker 2: Who knows, we never know what's going on in my mind, do we?
• 3:52
  Speaker 2: It's always a kind of a surprise.
• 3:54
  Speaker 2: So how do we as adjusters, you know, walk this line of we can't tell you what to do, but your policy does tell you, as the insured, that you have to protect the property from further damage.
• 4:11
  Speaker 2: And how do we get the insured unstuck?
• 4:16
  Speaker 2: Because they may be waiting on this mythical final estimate idea?
• 4:24
  Speaker 2: Or maybe their contractor?
• 4:27
  Speaker 2: Their estimate is much, much higher than our estimate and it's not unheard of.
• 4:33
  Speaker 2: I think we can all agree that even if we go out and write the scope of damages with the contractor of choice, our estimate will be different.
• 4:47
  Speaker 2: And it's not beyond the realm of disbelief that the contractor has already given the insured an estimate or a price, a quote, and they didn't share that with us.
• 5:01
  Speaker 2: They, either the contractor or the insured, didn't share that with us.
• 5:06
  Speaker 2: So when the insured gets this estimate from us and it's vastly different, even though we walked the premises together and did an agreed scope, you know it creates this fear.
• 5:24
  Speaker 2: Hope, you know it creates this fear, I guess, is the best way to to look at it.
• 5:31
  Speaker 2: So let's, you know, get into all of these things.
• 5:33
  Speaker 2: I think the first thing is is, talking about this fear is what is it?
• 5:38
  Speaker 2: Why do?
• 5:38
  Speaker 2: Why do policyholders delay repair?
• 5:41
  Speaker 2: We've, we've given them in the estimate Right.
• 5:44
  Speaker 2: Dealers delay repair.
• 5:46
  Speaker 2: We've given them in the estimate right.
• 5:48
  Speaker 2: And let's just say it's, I don't know, a pipe burst in the wall or something like that.
• 5:56
  Speaker 2: You know, maybe it's an HVAC system that's in the attic and it's been leaking.
• 5:58
  Speaker 2: So now we've got it coming down from the ceiling and maybe in the walls or something like that, and so basically we've got some I don't know.
• 6:08
  Speaker 2: Let's just say $50,000 worth of damage.
• 6:10
  Speaker 2: Okay, we'll just go with that.
• 6:12
  Speaker 2: And why do the insureds have this fear?
• 6:18
  Speaker 2: Okay, well, I think first we can address the elephant in the room that everybody has told the insured that the carrier is going to screw them over, period.
• 6:32
  Speaker 2: Everybody has told them this, everybody knows it, we know it.
• 6:36
  Speaker 2: We know that the carrier is not going to screw them over, because that's not what we're about, but we know that that's what the thinking is.
• 6:45
  Speaker 2: Why?
• 6:46
  Speaker 2: Well, it's because we see these car advertisements or these home advertisements that say, oh, you've got a ghost in your house.
• 6:58
  Speaker 2: Well, you know they didn't do it back in like they did in our days and just bundle and save with us and we'll write you a check.
• 7:06
  Speaker 2: That's what people think they don't recognize, as we've talked about many, many times before that there are exclusions or conditions that they have to do.
• 7:16
  Speaker 2: Or maybe we pay actual cash value first, or maybe there's a sublimit, or maybe mold isn't covered.
• 7:25
  Speaker 2: I don't know who knows what their policy is, but each and every policy is different, even if you're living right next to one another, right With the same insurance company.
• 7:36
  Speaker 2: Okay, so we've got that.
• 7:39
  Speaker 2: Thinking that they're going to screw us over.
• 7:41
  Speaker 2: The insured is thinking the carrier is going to screw us over.
• 7:44
  Speaker 2: They're going to screw us over.
• 7:45
  Speaker 2: The insured is thinking the carrier is going to screw us over.
• 7:47
  Speaker 2: So I don't want to begin repairs until I have the carrier sign off on all of the damages, because the minute I begin repairs is when any additional damages that I find will not be covered because they weren't initially seen.
• 8:14
  Speaker 2: And I've seen this before, you know where the insured won't want to do something, because they are basically frozen, because they're afraid that if they start repairs and more damage is found, that damage won't be found or won't be covered.
• 8:31
  Speaker 2: And here's the thing that we need to address.
• 8:35
  Speaker 2: We understand that they are scared, even if they themselves wouldn't even categorize that as being scared.
• 8:45
  Speaker 2: You know, I mean, no one sits around going like, oh my gosh, I'm so scared of the insurance company, am I right?
• 8:50
  Speaker 2: I mean, nobody sits there and thinks that, and most policyholders are not being difficult.
• 8:56
  Speaker 2: They are scared.
• 8:58
  Speaker 2: They are worried that you're not going to give them the full amount of money to repair these damages Because, again, based on the popular culture of what everybody has told them, they're scared to make a mistake.
• 9:13
  Speaker 2: They're scared to be left holding the bag.
• 9:15
  Speaker 2: They're scared that their premiums will go up if they act without permission or if they repair damage.
• 9:25
  Speaker 2: Hey, they're scared that they're going to lose coverage because they've been hearing about what's going on in California and everything, like how people are being dropped because their houses burned down and they've submitted a claim.
• 9:38
  Speaker 2: Right, this is where this fear comes from, even if it is not actualized as fear.
• 9:47
  Speaker 2: Maybe it's actualized as just generalized anxiety.
• 9:51
  Speaker 2: And who knew that insurance adjusters also have to be psychologists, in addition to everything else, that we have to be right, physicists, doctors, lawyers?
• 10:03
  Speaker 2: I mean, we've got to know so many things.
• 10:06
  Speaker 2: We've also got to know a little bit of psychology, so knowing where this fear comes from can help us address this.
• 10:18
  Speaker 2: You know, it could be like a contractor or public adjuster also who's saying, hey, don't touch anything until you get a final estimate.
• 10:27
  Speaker 2: Well, let's, let's just touch real briefly on that.
• 10:30
  Speaker 2: I don't think there is anything as a final estimate.
• 10:35
  Speaker 2: I don't think there's anything like that, because we won't know what the final damages are until, obviously, the repairs are done.
• 10:44
  Speaker 2: I mean, that's going to be the final estimate and we can't, you can't just sit there and let it go because we're never going to get there kind of deal.
• 10:53
  Speaker 2: It's kind of like a circle, right.
• 10:55
  Speaker 2: So the problem is, of course, this is not how our policies work and insurance isn't like a permission based sort of thing, it's a responsibility based, like this is your property, you got this policy to protect it.
• 11:14
  Speaker 2: That's your responsibility.
• 11:16
  Speaker 2: We can help you with it.
• 11:18
  Speaker 2: You know, and a lot of times before carriers have started going over to the preferred vendors a lot for property damage.
• 11:28
  Speaker 2: You know, like with our water damage, pipe burst kind of deal, where we would get our remediation, our water remediation, people to like dry out the carpets or put dehumidifiers out there or at least do a flood cut on the drywall or whatever, and then wait for the insured to find another contractor to finish out the repairs.
• 12:03
  Speaker 2: This isn't this, isn't that.
• 12:06
  Speaker 2: But in some instances and I guess still some today, I don't know y'all, drop me a line and let me know if this is still what's going on.
• 12:16
  Speaker 2: You have these people who they're frozen because they don't know what contractors to use.
• 12:26
  Speaker 2: And also, again going back to our job as a carrier and as adjusters, we can't recommend anybody.
• 12:35
  Speaker 2: Because what happens when we recommend someone?
• 12:38
  Speaker 2: Well, we're kind of recommending, we're kind of saying like, yeah, their work is good, right.
• 12:44
  Speaker 2: Recommending, we're kind of saying like, yeah, their work is good, right, and we can't really do that, which is a whole thing about preferred vendors will not even go there right now.
• 12:53
  Speaker 2: So I'm going to drink my tea and go somewhere else with this.
• 12:58
  Speaker 2: So let again, let's talk about, let's address this fear, let's talk about what the policy actually says OK, I think we are all aware of the policy conditions which says, hey, you got to cooperate with us.
• 13:19
  Speaker 2: You know, in our investigation, you have to let us look at everything as often as we want.
• 13:26
  Speaker 2: You have to report the loss to the police if you know you've had a break in or something like that.
• 13:33
  Speaker 2: Ok, there's also, which we know, the duty to cooperate and the duty to protect the property from further damage.
• 13:48
  Speaker 2: Now, the issue is that this is not a suggestion.
• 13:53
  Speaker 2: It's a condition for coverage.
• 13:55
  Speaker 2: It says look, if you don't protect your property from further damage ensuing loss, you're not going to be covered.
• 14:06
  Speaker 2: And again, think about what this policy is saying and think about how people could mistranslate this.
• 14:15
  Speaker 2: We're saying and the policy says if you don't protect the property and we find additional damage, we're not going to cover it.
• 14:24
  Speaker 2: Well, what does the insured immediately think?
• 14:27
  Speaker 2: Oh my gosh, I have additional damage.
• 14:30
  Speaker 2: They're not going to cover it.
• 14:31
  Speaker 2: This is why they are sitting on things right.
• 14:35
  Speaker 2: So we need to address again the elephant in the room and and translate insurance ease into plain English.
• 14:46
  Speaker 2: And it also is horrible that adjusters are having to be translators in addition to being psychologists and auto mechanics and construction workers and doctors and lawyers and all of the other things that we have to be.
• 15:04
  Speaker 2: But here we go, we have to be linguists and translate insurancees over into English, and so it means that you know what if you've got a burst pipe and water is streaming down your wall, you've got to turn off the water to the entire house.
• 15:23
  Speaker 2: Sorry, I mean, unless you can turn off the water to that one particular pipe, and maybe you can I have no idea, I don't know how your house is set up.
• 15:34
  Speaker 2: Maybe you can then that's what you need to do.
• 15:37
  Speaker 2: If you have a leaky roof, of course you would put a tarp over it.
• 15:41
  Speaker 2: If there's water intrusion, you got to dry it out.
• 15:44
  Speaker 2: If there's broken glass because someone hurled a brick through it or whatever, you need to put some plywood over it and protect your house.
• 15:53
  Speaker 2: You board it up, right?
• 15:55
  Speaker 2: I mean, these are common sense things that the insured would need to do to protect their property.
• 16:02
  Speaker 2: If the insured waits, for example, let's say, with the window, well, that just allows all sorts of kids and vagrants or whomever to come in start spray painting everything and blah, blah, blah.
• 16:15
  Speaker 2: I mean that makes sense and I think if we start talking to the insured and explaining these things to them, then they understand that.
• 16:36
  Speaker 2: Because here's the catch Again they don't know right.
• 16:39
  Speaker 2: So how do we explain this, their duties and the conditions and everything, without it sounding like you know they're on their own or that we're oh, I don't know we're punishing them or something to that effect, something to to that effect.
• 17:02
  Speaker 2: Well, I think the first part that we need to do is actually talk to them, sit down a time and say you know what this is probably going to be, I don't know a good 15 minute conversation, maybe 30 minutes, I don't know.
• 17:23
  Speaker 2: Overestimate if anything, and say I need your undivided attention.
• 17:27
  Speaker 2: Go somewhere where you can, you can listen, and I'm going to explain this to you.
• 17:33
  Speaker 2: I usually do this with when I get them, when I get the estimate, and I go over it.
• 17:42
  Speaker 2: Okay, so the total damages are $1,000.
• 17:46
  Speaker 2: You have an RCV policy, so you know we would.
• 17:51
  Speaker 2: The damages are a thousand.
• 17:53
  Speaker 2: You have a $5 deductible, so it's $9,995.
• 17:57
  Speaker 2: You would pay the $5 deductible.
• 17:59
  Speaker 2: We would pay ACV, actual cash value, first.
• 18:04
  Speaker 2: You know, boom, this is what this is.
• 18:08
  Speaker 2: When you finish repairs, you would get, let's just say, the recoverable depreciation was, I don't know, $5,000.
• 18:16
  Speaker 2: So that means that I'm paying you.
• 18:18
  Speaker 2: I'm writing you a check.
• 18:18
  Speaker 2: I'm going to cut you a check right now, to you and your lien holder, because it's a house.
• 18:22
  Speaker 2: In the amount of what?
• 18:26
  Speaker 2: Was that?
• 18:26
  Speaker 2: $4,995,?
• 18:30
  Speaker 2: Right, if I can do my math in my head.
• 18:32
  Speaker 2: And then, when you complete your repairs, I'll either go back out there or I'll send someone back out there, or I want you to send me the receipts showing me that you've completed the repairs.
• 18:44
  Speaker 2: Whatever however, your company does it, and then you can earn up to $5,000.
• 18:51
  Speaker 2: It's not an automatic thing.
• 18:53
  Speaker 2: Not an automatic thing.
• 18:54
  Speaker 2: Now you may be wondering what to do.
• 18:57
  Speaker 2: You know.
• 18:57
  Speaker 2: Here's what the issue is.
• 19:00
  Speaker 2: You now have the estimate, you will have the check.
• 19:04
  Speaker 2: We can't tell them to start repairs, because it's not our house, right, and if something goes wrong during repairs, we don't necessarily want that liability.
• 19:19
  Speaker 2: But what we can say is I can't tell you what to do with your property, but I can tell you what your policy requires.
• 19:31
  Speaker 2: Ok, I can't tell you what to do with your property, but I can tell you what your policy requires and then say I'm giving you your estimate, I'm giving you your money.
• 19:41
  Speaker 2: You can have.
• 19:43
  Speaker 2: You can have your contractor begin repairs.
• 19:47
  Speaker 2: If additional damages are found, stop, have him, stop, have her, stop the work and contact me.
• 19:57
  Speaker 2: Boom, that's what we're doing.
• 19:59
  Speaker 2: We're telling them that we recognize that there are going to be supplements, and in fact I have even gone so far, depending on the insured, the savviness of the insured to tell them If you find additional damages and more often than not we are going to find some this is called a supplement.
• 20:23
  Speaker 2: We are all used to this in the insurance business and if your contractor is worth his or her salt, they know about it as well.
• 20:32
  Speaker 2: So when your contractor says, oh hey, this is actually not on the estimate that the insurance company gave me, there's going to be a difference in prices.
• 20:45
  Speaker 2: It's not.
• 20:46
  Speaker 2: We're not ripping you off, we're not low balling you, we just didn't know about it.
• 20:51
  Speaker 2: It's called a supplement.
• 20:53
  Speaker 2: We would send someone back out there and and take a look.
• 20:57
  Speaker 2: If it's covered, if it's a covered part of this loss, then we add it to the original estimate and we cut you another check.
• 21:06
  Speaker 2: That's the supplemental process.
• 21:08
  Speaker 2: If it is not part of this loss, let's say that it's pre-existing.
• 21:14
  Speaker 2: I don't know, maybe it's pre-existing, we can open up another claim.
• 21:18
  Speaker 2: You would owe another deductible, but it's not going to be covered under like this loss.
• 21:24
  Speaker 2: So this could be one of the reasons why my estimate differs from your contractor's estimate.
• 21:33
  Speaker 2: He has written an estimate for all of the damages, but let's just say I don't know, we've got a leaky HVAC system in our attic or I burst and it happens on the left side of the room and the contractor has written damage for the right side of the room.
• 21:55
  Speaker 2: Well, obviously the water hasn't gone over there and we can tell that this water damage is much older, because of the rings or I don't know whatever mold maybe.
• 22:04
  Speaker 2: I have no idea, but we can tell that it's different.
• 22:07
  Speaker 2: We would have said, okay, so the right side of the room is a different claim.
• 22:11
  Speaker 2: Yeah, I mean, if you put everybody's estimates together, then yes, our estimates would equal his estimates, but he, your contractor, or or she your contractor, is writing out one estimate for the entire room.
• 22:25
  Speaker 2: We're only focusing on this date of loss, so we're only focusing on the left side of the room.
• 22:31
  Speaker 2: This would be another way to explain this fear.
• 22:33
  Speaker 2: It's not that we're lowballing you, it's not that we're ignoring some damages.
• 22:37
  Speaker 2: It's that this is a different claim.
• 22:40
  Speaker 2: Yes, your policy would cover that.
• 22:42
  Speaker 2: It would be a different data loss, a different deductible, at least with some insurance companies.
• 22:47
  Speaker 2: Now, some insurance companies will just throw the whole thing in.
• 22:50
  Speaker 2: That's not the point, but now, so that is how you would explain it, depending on, I guess, the savviness of your insured, because I think it does really depend.
• 23:07
  Speaker 2: If it's like grandma, I do tend to spend more time explaining it.
• 23:13
  Speaker 2: If it's someone who is savvy and can follow along a little bit better, I do gloss over more things.
• 23:23
  Speaker 2: Now, again, that's not saying don't use that against me.
• 23:25
  Speaker 2: That's not saying that I tell people different things.
• 23:29
  Speaker 2: I don't.
• 23:30
  Speaker 2: I'm telling them the same things, but I am breaking it down in ways that they can understand it and putting it in terms that they can understand, or using examples that they can understand.
• 23:41
  Speaker 2: Okay, so let's see where we are.
• 23:45
  Speaker 2: You know the next thing, after you've had this long conversation with them the insured that is and you know where I'm going with this.
• 23:55
  Speaker 2: All of you who my six listeners, our six listeners know why where I'm going to go is yeah, after you finish talking with them, you need to put it in writing, absolutely need to put it in writing, and I would say not only emailing these things to the insured, which is fine.
• 24:19
  Speaker 2: I love email, I love putting things in the email, but in some certain instances, I do believe that snail mail is better, and this would be one of those instances where we are explaining the damages and how we have arrived at the damages and what coverages are taking place, because that happens to be some of the good faith claims handling practices or part of the unfair claim settlement practice act, you know, is explaining which coverages were used when we're making payment.
• 24:56
  Speaker 2: So you know, there I would again put this in writing and say something like hey, you know, pursuant to your policy, you would need to take reasonable steps to protect the property from further damage, and failure to do so may result in limited coverage for additional damages or ensuing losses that occur.
• 25:23
  Speaker 2: It's not a reservation of rights letter, because nothing has happened yet, but what we are doing is we're keeping it neutral, we're keeping it factual, and you want to make sure that you're not only saying these things to the insured so that they understand it, but that you are also sending it in a letter.
• 25:49
  Speaker 2: Likewise, you don't want to just send a letter and not talk to the insured, because saying something like, pursuant to your policy, you are required to take reasonable steps to protect the property from further damage, sounds very intimidating and we get back to that fear right, and we need to make it human and we need to address their humanity and their fear.
• 26:16
  Speaker 2: And the only way that we can do that is by talking to them, by picking up the phone and listening to their voice.
• 26:21
  Speaker 2: And I get the fact that we are all overworked.
• 26:26
  Speaker 2: I get it.
• 26:27
  Speaker 2: I get the fact that there's not enough adjusters, there are not enough hours in the day.
• 26:32
  Speaker 2: All I can say is, I don't know.
• 26:35
  Speaker 2: Make an appointment and say I need to talk to you for about, you know, 10 to 15 minutes.
• 26:40
  Speaker 2: I want to explain this to you so that you can understand.
• 26:43
  Speaker 2: I'm going to send you a letter, blah, blah blah.
• 26:46
  Speaker 2: If you have any questions, take a look at it and then give me a call back.
• 26:49
  Speaker 2: I guarantee you.
• 26:51
  Speaker 2: I guarantee you your call volume will drop.
• 26:56
  Speaker 2: I know it's going to take a lot of work on the front end, but I guarantee your call volume and your emails will drop.
• 27:02
  Speaker 2: I bet you dollars to donuts.
• 27:06
  Speaker 2: Ok, anyway, let's let's talk about why our estimates don't match.
• 27:12
  Speaker 2: We mentioned this very, very briefly.
• 27:14
  Speaker 2: We will have the difference.
• 27:21
  Speaker 2: Even if we walk the damage with the insurance contractor.
• 27:27
  Speaker 2: The contractor could be putting in, like I said, this whole right side of the room.
• 27:38
  Speaker 2: That doesn't have anything to do with the actual damages that this claim is about.
• 27:42
  Speaker 2: That could be one difference.
• 27:44
  Speaker 2: Another difference is that the contractor maybe they put that these are premium, high-grade cabinets when they are, I don't know, lowe's specials.
• 27:56
  Speaker 2: You know just something that they got from Lowe's on sale or Home Depot on sale or something to that effect.
• 28:03
  Speaker 2: It's.
• 28:06
  Speaker 2: It's not always the contractor, don't get me wrong.
• 28:08
  Speaker 2: It's not always.
• 28:08
  Speaker 2: I'm not saying that.
• 28:09
  Speaker 2: The contractor is always trying to, you know, fill out or pad the claim or his estimate, her estimate, whatever.
• 28:17
  Speaker 2: You know, contractors, they write the work to complete the job, to cover overhead and make a little profit.
• 28:28
  Speaker 2: I mean, they have the right to do that.
• 28:32
  Speaker 2: They have the right to make overhead and profit.
• 28:36
  Speaker 2: And our estimating platforms like Xactimate, they're not exactly gospel.
• 28:45
  Speaker 2: They're not always going to be right.
• 28:49
  Speaker 2: It could be a difference in scope.
• 28:53
  Speaker 2: Assumptions is the instance where the carrier has been or have been.
• 29:06
  Speaker 2: Carriers have been taking depreciation on labor, overhead profit and taxes, and Bill and I get into taking depreciation on labor all the time.
• 29:18
  Speaker 2: You can go search other things, other past podcasts for that.
• 29:24
  Speaker 2: We have a lot of fun with it.
• 29:26
  Speaker 2: We are on stark ends of it.
• 29:28
  Speaker 2: But if your policy says that we can do it, then well, there's nothing I can do about that.
• 29:35
  Speaker 2: That's going to happen.
• 29:36
  Speaker 2: And that will be a difference from what you get paid, what the insured gets paid, versus this estimate that they are seeing from their contractor or us.
• 29:47
  Speaker 2: And again, this is something that you have to address.
• 29:51
  Speaker 2: You must address it.
• 29:54
  Speaker 2: You must address the fact that they can earn up to you know X amount of dollars because it's holdback, depreciation, but they've got to do the repairs first.
• 30:06
  Speaker 2: It is a reimbursement.
• 30:08
  Speaker 2: To put it plainly, that's what it is.
• 30:10
  Speaker 2: It is a reimbursement.
• 30:11
  Speaker 2: They got to spend the money first.
• 30:13
  Speaker 2: It is a carrot hanging out there to make them, to make them do the repairs.
• 30:26
  Speaker 2: That's that's what it is.
• 30:27
  Speaker 2: That is what it is.
• 30:27
  Speaker 2: So what can we do?
• 30:28
  Speaker 2: We have to educate.
• 30:28
  Speaker 2: So now we're teachers.
• 30:29
  Speaker 2: Oh, my goodness, gracious Whoa.
• 30:32
  Speaker 2: We're psychologists, teachers, linguists, contractors, you know construction workers, auto mechanics, lawyers, doctors, everything.
• 30:45
  Speaker 2: This is why I think that this job is like fantastic.
• 30:47
  Speaker 2: I love this job and I always encourage everybody to get into this job.
• 30:51
  Speaker 2: But you know, that is just me.
• 30:54
  Speaker 2: Blue agrees.
• 30:56
  Speaker 2: I don't know if you can hear him barking, but he is in the background barking now.
• 30:59
  Speaker 2: So, again, another phrase that you can tell the insured is that, okay, we're going to start off.
• 31:11
  Speaker 2: So one of the things, one of the ways that you could educate the insured, is by saying you know what Estimates are, just that they are our best guess as to what the damages are.
• 31:28
  Speaker 2: They are a starting point Supplements part of the process.
• 31:33
  Speaker 2: We are used to this.
• 31:35
  Speaker 2: If your contractor finds related damages, stop what you're doing.
• 31:40
  Speaker 2: We will review.
• 31:41
  Speaker 2: Finds related damages.
• 31:45
  Speaker 2: Stop what you're doing.
• 31:46
  Speaker 2: We will review, encourage documentation.
• 31:47
  Speaker 2: If your contractor finds more damage tied to the loss, you know we'll reopen the claim.
• 31:52
  Speaker 2: A lot of people I can't tell you how many lawsuits I see because the insurance company has closed the file.
• 32:01
  Speaker 2: Like you know, we've paid you the ACV and they closed the file.
• 32:06
  Speaker 2: The insured thinks again.
• 32:09
  Speaker 2: Let's think about this from the insured's point of view when something is closed, it means it's finished.
• 32:16
  Speaker 2: I'm going to say that again when something is closed, it means that it's finished, and think about this from the insurance point of view.
• 32:23
  Speaker 2: Now, do we need to have like a billion claims open because you know we're waiting for recoverable depreciation?
• 32:30
  Speaker 2: I don't know.
• 32:30
  Speaker 2: It depends on your company's rules.
• 32:35
  Speaker 2: A lot of companies close those claims, but what you need to tell them, the insured is here it is.
• 32:44
  Speaker 2: This is your ACV payment.
• 32:46
  Speaker 2: Do not say ACV payment.
• 32:48
  Speaker 2: Explain what ACV is, of course.
• 32:50
  Speaker 2: Here's your actual cash payment.
• 32:52
  Speaker 2: You will earn up to you know X amount of dollars for your recoverable depreciation once repairs have been completed.
• 33:00
  Speaker 2: My file is now closed.
• 33:02
  Speaker 2: Let me know when you've completed payment and I will reopen it.
• 33:08
  Speaker 2: The insureds don't know that we can reopen our file.
• 33:11
  Speaker 2: I mean, it seems so common to us, it seems so every day to us.
• 33:20
  Speaker 2: But I want you to think about I don't know neurosurgery.
• 33:25
  Speaker 2: We don't know the first thing about it.
• 33:27
  Speaker 2: I know I say we're doctors, but we're not that kind of doctor.
• 33:30
  Speaker 2: And so if they say, hey, we're going to have to close your brain up after doing some work or whatever, and they find out that they left some scissors in there or something, what are you thinking Like oh my God, besides, you're going to sue, you know.
• 33:48
  Speaker 2: Oh my gosh, I'm going to have to live with these scissors in my brain the whole time.
• 33:53
  Speaker 2: No, no, we can reopen it and, and you know, handle it and all of this kind of stuff.
• 34:00
  Speaker 2: So these are the things that we need to tell the insured, such as hey, you know what?
• 34:08
  Speaker 2: If you find more damage.
• 34:09
  Speaker 2: Take pictures, stop what you're doing.
• 34:12
  Speaker 2: Take pictures.
• 34:13
  Speaker 2: You're going to need pictures.
• 34:14
  Speaker 2: You're going to need photos, scope invoices, I don't know proof, but not just like the opinion that I didn't pay you enough.
• 34:24
  Speaker 2: There's gotta be something there.
• 34:28
  Speaker 2: Okay, um, so you know there's.
• 34:31
  Speaker 2: There's um, a tightrope, like I said, that we have to walk Right, um and and again.
• 34:42
  Speaker 2: This is where it kind of gets messy.
• 34:43
  Speaker 2: You're trying to do the right thing.
• 34:46
  Speaker 2: Your insured is looking to you.
• 34:48
  Speaker 2: They think that you're holding out on them.
• 34:51
  Speaker 2: The contractor thinks you're lowballing them.
• 34:54
  Speaker 2: Everybody that is friends with your insured is telling them that you're lowballing them.
• 35:00
  Speaker 2: The insured sees all of these attorney ads that say is the insurance company trying to screw you over?
• 35:06
  Speaker 2: Blah, blah, blah.
• 35:08
  Speaker 2: So I mean you can't say like, hey, go repair your property or whatever, but you have to say you know you need to protect your property from further damage.
• 35:17
  Speaker 2: There's a difference.
• 35:18
  Speaker 2: I can't tell you to go repair, you can't tell them to go repair their property.
• 35:23
  Speaker 2: It's their property, but they have to protect it from further damage.
• 35:27
  Speaker 2: And you do need to warn them like, hey, look, if you don't, if you don't and ensuing loss comes, you know additional well, they won't even know what ensuing loss if additional damages come from this burst pipe or this leaky HVAC system or leaky roof or whatever we happen to have, your policy may not respond to this, because the policy does not respond to additional damages if the property is not protected.
• 36:06
  Speaker 2: So these are some very nuanced, nuanced things that have to be conveyed in a verbal setting.
• 36:16
  Speaker 2: And once we've conveyed them in a verbal setting, then we can write it down.
• 36:22
  Speaker 2: But if you just write it and say, hey, you need to protect your property from further damage and additional damages may not be covered, they don't know what this means and what they see.
• 36:35
  Speaker 2: What they're reading.
• 36:36
  Speaker 2: They don't have a context.
• 36:38
  Speaker 2: They don't have a context.
• 36:39
  Speaker 2: What they are reading is that you're going to deny any future claims, so they're not going to do the work until everything gets you know down on paper.
• 36:51
  Speaker 2: And that's really never going to happen, until the repairs get done.
• 36:54
  Speaker 2: And that's kind of the you know paradox here.
• 36:59
  Speaker 2: You know, be calm, be confident, stay neutral.
• 37:03
  Speaker 2: But you're again, you're translating legalese or insurance ease into everyday language.
• 37:14
  Speaker 2: You know, if you, I can't tell you to start repairs, but I can tell you that the policy says you need to protect it from further damage.
• 37:24
  Speaker 2: If you find additional damage, stop what you're doing, take some photographs, send them to me, contact me, let me know, I'll reopen the claim and if it is related to this first loss, this loss right here, the loss that we're talking about I will issue you payment.
• 37:42
  Speaker 2: If it's related to another claim, we will start up another claim.
• 37:46
  Speaker 2: You will have to owe another deductible, but we'll take a look at that.
• 37:51
  Speaker 2: If it's covered, I will issue payment for that, less your deductible, but it'll be another claim.
• 37:58
  Speaker 2: So talk about those instances.
• 38:01
  Speaker 2: Talk, you know, let them know that they are in control and I think that would also help alleviate some of this fear that they have, because when you give people control, they don't feel, they don't fear.
• 38:19
  Speaker 2: Oh, I can't even talk.
• 38:20
  Speaker 2: That's like a lot of, that's a lot of Fs, and none of them are F bombs.
• 38:24
  Speaker 2: So, wow, they feel more in control.
• 38:31
  Speaker 2: So, yeah, okay, so let's talk.
• 38:36
  Speaker 2: Here's some of the practical stuff that you can use.
• 38:39
  Speaker 2: The policy language is your friend.
• 38:42
  Speaker 2: The policy language, the policy, the insurance policy itself is an insurance contract.
• 38:48
  Speaker 2: It's a legal contract.
• 38:50
  Speaker 2: This is the contract that the insured signed onto, even if they didn't understand it, this is a legal contract that they signed, document of course, every conversation.
• 39:00
  Speaker 2: This is a legal contract that they signed, document of course, every conversation.
• 39:03
  Speaker 2: Use clear, unemotional, plain English words and then follow that up with writing.
• 39:19
  Speaker 2: I usually have two or three good examples, analogies to use, depending on who I'm talking to, you know, such as, like I said, so, if we're only dealing with the excuse me, the left side of the wall and your contractor has talked about the right side of the wall, that is going to be a different claim.
• 39:36
  Speaker 2: So we can open a claim for that.
• 39:37
  Speaker 2: You would owe a deductible and we can write you an estimate for that, no problem, but it's going to be a totally different claim.
• 39:44
  Speaker 2: It wouldn't be here.
• 39:45
  Speaker 2: So that could explain why.
• 39:46
  Speaker 2: Blah, blah, blah.
• 39:48
  Speaker 2: You know, you know, talk about how the it's your own house and one of the things and it's kind of like the nuclear option that I've had to use and I hate using it, but it is a nuclear option that I that I have had to use is, if you did not have insurance, what would you do?
• 40:13
  Speaker 2: You just ask.
• 40:14
  Speaker 2: You ask an open-ended question like that and I hate doing that.
• 40:19
  Speaker 2: It it's not one of my favorite go-tos.
• 40:21
  Speaker 2: Like I said, it's a nuclear option and I use it when everything else is not working and insurance don't like it either.
• 40:31
  Speaker 2: Because, remember, they don't understand why there are exclusions in the policy.
• 40:37
  Speaker 2: They don't understand why you're not paying the same amount that the contractor says.
• 40:43
  Speaker 2: And we can't bad mouth the contractor, we can't bad mouth the public adjuster.
• 40:48
  Speaker 2: You know we can't do any of those sorts of things.
• 40:51
  Speaker 2: And, by the way, I know that there are a few public adjusters who listen.
• 40:55
  Speaker 2: We can talk to the insured even though they have public adjusters.
• 40:59
  Speaker 2: It's not like there is a confidentiality, attorney client privilege thing.
• 41:06
  Speaker 2: But what I would do is get the public adjuster and the insured on the phone together and do a conference call.
• 41:15
  Speaker 2: I also, if I'm having a lot of problems explaining things to the insured, I often will get the agent involved.
• 41:26
  Speaker 2: If a public adjuster is not involved, I like to get the agent involved because the agent is someone that presumably the insured trusts.
• 41:37
  Speaker 2: So that is something else that can be a weapon in your arsenal.
• 41:46
  Speaker 2: Pretty much it, I would say.
• 41:54
  Speaker 2: It's a hard situation.
• 41:56
  Speaker 2: The rules aren't always clear, the policyholder doesn't speak, insurance ease, they are afraid.
• 42:06
  Speaker 2: They don't even know that they're afraid and you can't ask them.
• 42:10
  Speaker 2: What are you afraid of, because naturally that's going to put them on the edge.
• 42:13
  Speaker 2: You may ask them like an open ended question, like okay, so what's your biggest concern about repairs right now?
• 42:20
  Speaker 2: You know here's, by the way, just FYI.
• 42:24
  Speaker 2: Something that you need to be listening to as an insurance adjuster is if a loss, let's say, happens in January and you haven't closed your file, let's just say you haven't closed your file and you've paid them, you know, you've written the estimate, you've paid the insured and you are going about your business, blah, blah, blah.
• 42:50
  Speaker 2: I haven't closed the file.
• 42:50
  Speaker 2: And the insured calls you in March and says, hey, you know, we found some additional damages.
• 42:56
  Speaker 2: Blah, blah, blah.
• 42:57
  Speaker 2: And you're like, okay, great, yeah, no problem.
• 42:59
  Speaker 2: Um, how far along are you in repairs?
• 43:02
  Speaker 2: And the insured says, oh, we haven't started repairs yet.
• 43:05
  Speaker 2: That is a big red flag, guys.
• 43:09
  Speaker 2: This is where you need to stop what you're doing.
• 43:13
  Speaker 2: This is where a reservation of rights letter or non-waiver or whatever happens to be in your state needs to happen, because now we've got 90 days of snow, rain, sleet, whatever wind getting into our area.
• 43:31
  Speaker 2: If it's a roof, wind getting into our area.
• 43:39
  Speaker 2: If it's a roof, maybe they didn't turn off the water.
• 43:40
  Speaker 2: It's still leaking, I don't know.
• 43:41
  Speaker 2: This is where you do need to do your reservation of rights letter and say, okay, this is the policy language, no kidding, like you need to do something.
• 43:53
  Speaker 2: I can't tell you what to do, but you need to do it.
• 43:57
  Speaker 2: And this is the clear notice.
• 44:01
  Speaker 2: We've already explained it to them back in January, but now, in March, you know, we we need to put them on notice that this is this is very serious, because what happens if they're still not doing any repairs?
• 44:14
  Speaker 2: I don't know.
• 44:15
  Speaker 2: In July, oh, my gosh, now we've got seven months worth of you know, rain, sleet, snow, leaky HVAC systems, blah, blah, blah.
• 44:27
  Speaker 2: You know we, as the insurance company, would not cover that ongoing loss, right?
• 44:34
  Speaker 2: The insured needs to know that.
• 44:36
  Speaker 2: More so, and I know you're sitting there going, yeah, but we told them in a letter and in a conversation Yep, nope, they don't remember it.
• 44:42
  Speaker 2: They do not remember it.
• 44:44
  Speaker 2: I guarantee you they don't remember it.
• 44:46
  Speaker 2: So this is why we have to send that reservation of rights letter, anyway.
• 44:52
  Speaker 2: So, yeah, helping them speak insurance, insurances, that's what part of our job is, and helping them make these informed decisions without overstepping our roles.
• 45:05
  Speaker 2: We're not here to tell them what to do.
• 45:06
  Speaker 2: We're here to help them move their claim towards closure.
• 45:10
  Speaker 2: And what happens if they don't do these sorts of things?
• 45:15
  Speaker 2: Again, it's their property.
• 45:17
  Speaker 2: It's not like you would walk into their house and mow their lawn or whatever if it needed to be mowed.
• 45:24
  Speaker 2: No, I mean you just, you just wouldn't do that.
• 45:28
  Speaker 2: That's, that's their job to do, okay.
• 45:32
  Speaker 2: So, um, I hope this helped.
• 45:34
  Speaker 2: I hope I gave you some, some language and maybe some structure on this.
• 45:38
  Speaker 2: You know, it's really kind of dancing on a knife's edge, so to speak.
• 45:42
  Speaker 2: It's, it's.
• 45:43
  Speaker 2: I find it difficult, I find it uncomfortable to be in this situation because you want so desperately to help these people and and you know they feel that you're jerking them around, but you're not really, um, you're, you're kind of bound by the fact that you can't tell them about things.
• 46:07
  Speaker 2: So, anyway, take care.
• 46:09
  Speaker 2: Uh, I'm hoping Bill will be finished with his honeydew list and be able to, you know, move on and we can talk more next week.
• 46:22
  Speaker 2: I don't have a topic, so who knows what we'll be talking about next week?
• 46:29
  Speaker 2: So, anyway, have fun, enjoy, like, subscribe, blah, blah, blah.
• 46:33
  Speaker 2: Share with your friends all of that kind of fun, jess, bye.
• 46:38
  Speaker 1: Thanks for joining us on the Art of Adjusting podcast, where we talk about life as an insurance adjuster.
• 46:43
  Speaker 1: Hit that subscribe button real quick and tell all of your adjuster friends to check this out as well.
• 46:48
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• 47:01
  Speaker 2: So this wraps up another Art of Adjusting podcast.
• 47:04
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• 47:10
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• 47:12
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• 47:14
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• 47:15
  Speaker 2: In the meantime, you can contact me at theartofadjustingcom for consulting and training purposes.