Fire Claim FAQ

insurance company adjuster tries to repair instead of replace

What Are Common Restoration Issues in Fire and Flood Restoration Claims?

Insurance claims are a contract negotiation. A major one equaling the damaged value of your home and personal property. You hired a professional to inspect your home when you bought it, a broker to represent you when negotiating its purchase, and yet another to sell the old home. So why would you negotiate a major damage claim on your home without professional representation?

How Does The Insurance Company Decide Whether To Repair or Replace?

Possibly the biggest problem with insurance claims is that the insurer can choose to repair or replace damaged items (subject to being of like kind and quality). This does not come up with things that are completely destroyed. Rather, the problem is when something is only partially damaged or the true damage is not obvious. In these cases the insurer will often opt to repair the damage in order to save money.

If the repair turns out to not be adequate, however, such as burned studs that are covered with Kilz instead of being replaced, and that causes future odor, then their decision to save money is at your risk for later problems. Wood floors that receive some smoke and a lot of water may be buckled. The insurer may push to sand and seal instead of replacing the floor. In this case you may need an expert in flooring to write an opinion about reverse buckling or that the sanded floor will lose too much thickness to ever be sanded again (therefore not like quality).

Insurance companies often want to clean the sticky fire residue from inside the ducts instead of replacing them. There are plenty of studies showing that smoke from the fire is highly toxic and is the main cause of most fire deaths but there is surprisingly little study on the toxicity of the smoke as it settles as residue. I personally don’t believe the current duct cleaning methods involving rotary systems can sufficiently clean a square vent. Is the indoor air quality in your family home worth the risk?

If you hire me to negotiate and adjust your claim, I will fight for these environmental health issues and many more.

What Does Like Kind and Quality Mean and What Are The Issues?

Most insurance policies obligate the insurance company to repair or replace damaged items with like (or similar) kind and quality. This simple language gets complicated in a number of areas. For instance, what if you have wood floors under your carpets? Do you get both replaced? Some insurance companies say they will only replace one floor. Is that the same kind as you had? No, of course not.

A big area of conflict is with older items that are not built the same way as modern fixtures. If your cabinetry has solid doors but butt joints, do you get better quality solid doors mostly made with modern dovetail joints or lesser quality hollow core doors usually made with butt joints? You want to match the solid doors and the insurance company wants to hold you to the butt joint alternative.

What is like kind and quality for an older oven made by a company no longer in existence? One from the company that bought them twenty years ago? These are the kind of issues that drive emotionally fragile disaster victims crazy but which the emotionally detached insurance company adjuster fights over and over from one homeowner to the next.

The most important thing to remember is that these are just things. Keep your calm and put your positions into writing to ensure their file reflects your measured and steady progress toward resolution of the claim. If you are reasonable in your demands then any delay caused by careful negotiations will be attributed to the insurer not living up to their obligations under the insurance contract. This will help you later if the insurer threatens to cut off your additional living expenses. If their negotiating conduct is especially egregious it may lead to a successful claim for improper claims practice (also referred to as bad faith insurance claims).

You can increase your negotiating position by hiring an experienced attorney to represent you during these exacting negotiations.

What Is Additional Living Expense Coverage and What Are The Issues?

Many insurance policies cover your temporary living expenses while your home is being rebuilt. Usually for the reasonable amount of time it takes for the reconstruction. Some insurance company adjusters will assert that the legitimate time it takes to properly negotiate a claim (which is also the negotiation for your construction contract) is unreasonably delaying the project. They therefore threaten to cut off your additional living expenses before the end of the construction.

This is a sharp negotiation tactic that forces many unwary and unrepresented homeowners to buckle and accept less than adequate settlements. This is a major contract negotiation, often for hundreds of thousands of dollars, and no one should be expected to hurry through such a process with the threat of having their temporary living arrangements pulled out from under them.

You have contractual rights to a certain standard of housing for a reasonable amount of time. Having the right representation can make the difference between bringing order and stability to your life and having the terms of your policy used as a pressure point against you.

Should I Hire an Attorney, a Public Adjuster, or Go It Alone?

After your fire is put out, you will notice strangers in cars watching your home. They will get out and confront you, introducing themselves as a public adjuster ready to help you negotiate your claim with your insurer. Under normal circumstances, only lawyers are authorized to represent another for any issue. In Illinois however, the Department of Insurance licenses non-attorneys to act as public adjusters to represent homeowners in adjusting their insurance claims. Generally the public adjuster is authorized to argue issues of valuation. But as discussed above, there are many issues beyond simply valuation such as coverage and contract language that require the skill and training of an attorney to succeed in getting your insurance company to pay the full amount afforded by the policy language.

So why don’t attorneys also show up on your lawn to pressure you to contract with them to adjust your claim? This is just one of the areas where attorneys operate under more restrictive rules of professional conduct designed to protect the public. Contrary to the myth of attorneys chasing ambulances, Illinois Rules of Professional Responsibility prohibit an attorney from face to face solicitation. So while these public adjusters may confront you without invitation (with the caveat that they cannot do so while the fire is being put out), you will never find an attorney doing this. You must reach out to them.

These same rules of professional responsibility require an attorney to put the client’s interest ahead of their own. This is called a fiduciary duty. What you will often find with public adjusters is that they are also contractors offering their construction services along with adjusting your claim. There is an inherent conflict of interest in this arrangement where the adjuster profits through adjustment of your claim. While it may be true that their interests and yours are aligned in getting the maximum recovery, there is another side to this. Contractors who specialize in restoration work are repeat customers for insurance companies but are only going to represent you on this one job.

This means that when the insurance company pushes back on replacing a particular item and insists on repair, the contractor/adjuster may not do what is right for you but rather what is right for their long term relationship with the insurer. An attorney would never get themself in this kind of conflict because the rules are clear and prohibit this type of side dealing for their own account.

So all things being equal, if an attorney will adjust your claim for the going rate of public adjusters, you are better off with an attorney and the rules of professional responsibility that require them to look out for your best interest. My rate for adjusting homeowner insurance claims is 10% of the negotiated replacement value.

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