Don’t start repairs until your public adjuster has scoped the cost of your claim https://swerling.com/dont-start/
•On the residential side, say a homeowner spent $100k to repair custom cabinets or replace granite countertops. If there was no agreed upon estimate, it can become a situation where the carrier is only willing to pay $50K. This is the danger of doing repair work without knowing beforehand what the budget is.
•On the commercial side, businesses are often eager to reopen so they are prone to rush the reconstruction before finalizing agreements with the carrier. One restaurant owner went full steam ahead with renovations and submitted construction bills for $300K to her insurance carrier. The carrier replies that they would pay only $100K.
•If we had an agreement upfront on the scope and cost, the restaurant could have proceeded without a problem. Instead, she submitted her construction bills, some of which the insurance company reviewed and deemed “upgrades” rather than like-for-like replacements.
Property Managers: Do you know why you need a public adjuster for your property insurance claim? https://swerling.com/pmdoyouknow/
•PAs expedite the process. This is critical, because if you’re managing a property with 30 units, you can expect tenants from each unit coming at you with questions and concerns.
•Do you know how to make a claim for tenant relocation? For a PA, this is simple – they can provide the necessary information to easily navigate this and other areas, such as personal property coverage and moving expenses.
•Just as you would get expert attention for a pressing legal or tax matter you may face, you will benefit from having a public adjuster manage your claim through the entire insurance adjustment process.
Policyholders Beware: Sump Pump and Sewer Backup Language https://swerling.com/sump-pump/
•If your sump pump fails resulting in water damage, it is likely excluded from coverage in most homeowner and commercial policies. Homeowners can get some relief through a sump pump endorsement on their policy. This could get you anywhere from $2,500 to $5,000 in coverage.
•As with sump pumps, you can purchase an endorsement specifically for sewer backups that will provide coverage. These endorsements are intended for sewer backups that happen off premises – usually out on the street where the building stands. This type of event could stem from city workers cleaning the main sewage line in the street.
What is Code Coverage? https://swerling.com/what-is-code-coverage/
•Is code coverage included in all policies? In most homeowner policies, there is 10% percent of the coverage A limit available to use for code coverage. Generally, we recommend carrying about 50% of the building coverage.
•How does code coverage work in a commercial policy (CP)? Code coverage in CPs is different than in homeowner policies. In a CP, there are three code components: A, B and C. A is always included in the building limit of liability. B is for demolition-related items related to code. C represents the increased cost of construction. Commercial policyholders must buy coverage for B and C, so we recommend you combine those in your CP policy.
•What are the biggest deficiencies in terms of code coverage? The biggest shortfall is usually the amount of code coverage people carry. Another big code-related problem is getting the insurance carrier to agree with what the building departments are mandating. What the inspector sees as a requirement, the carrier may view as unnecessary. If there’s a dispute, public adjusters will engage a code expert to help aid the cause and reach a consensus.
Condo Owners: Understand the Master Policy Covering Your Building https://swerling.com/understandthemp/
•Get proper coverage for yourself. It’s short money to get good loss of use coverage.
•Work with your insurance agent. Typically, the insurance agent for the Master Policy sends out an annual letter via the Board to all unit owners. This letter should explain what’s covered under the Master Policy. This letter should clearly lay out what’s covered, what’s not covered, and the recommended amounts of insurance each unit owner should have on their HO-6 policies to fill in the gaps.
•Keep in mind that these coverages should be for a major claim – a catastrophe where people might lose all of their personal property and end up living elsewhere for a year or more. People should always be carrying enough insurance for the worst-case scenario.
Do You Know Which Version of Business Personal Property Coverage You Have? https://swerling.com/bppversions/
Recently, some insurance carriers have redefined “business” within homeowner policies. Under this new definition, “business” can now mean:
1.A trade, profession or occupation engaged in on a full-time, part-time or occasional basis; or
2.Any other activity engaged in for money or other compensation, except the following:
•One or more activities, for which no “insured” receives more than $2,000 in total compensation for the 12 months before the beginning of the policy period;
•Volunteer activities for which no money is received other than payment for expenses incurred to perform the activity;
•Providing home day care services for which no compensation is received, other than the mutual exchange of such services; or the rendering of home day care services to a relative of an “insured.”
This redefinition changes what you can recover in an insurance claim for damage done to your home. You now have to ask yourself if you have derived more than $2,000 in income from that family piano in the 12 months prior to the policy period. If the answer is no, then – under the new definition of “business” – that piano may not be considered Business Personal Property. Therefore, you cannot submit a claim for it.
What Does an Insurance Advisor Do? https://swerling.com/insuranceadvisor/
•Insurance advisors typically provide risk management and insurance consulting services. Think of them as an objective guide to navigating risk.
•When insurance advisors take on a new client, they take the time to carefully interview them. They study what the business does; they review the business contracts and existing insurance. Then the insurance advisor identifies every exposure to potential loss that the business has.
•The insurance advisor identifies what the client can self-insure (and what they can’t). This clarifies what insurance they can buy and ensures that it’s appropriate and properly written.
•Insurance advisors are not loss control experts, but they can empower their clients to focus on pre-loss mitigation. That way, underwriters will view them favorably in terms of risk.
What Does A Salvor Do? https://swerling.com/salvor/
•Salvors are brought in by the insurance company as a key partner in helping sell equipment and other salvaged items left in the wake of a property catastrophe.
•The salvor has several important roles: salvaging items, doing inventory on behalf of the insurance company, and verifying the inventory prepared by a public adjuster or by the insured.
•Sometimes they do ‘side-by-side’ inventories with the PA and/or insured.
•They can usually find a buyer for just about any damaged property. They have a network of buyers and seek the profile that best fits the type of stock involved.
•Pricing is an art when it comes to the valuation of damaged property. Most salvors will either negotiate or bid prices for the property items in a claim.
Legal Alert: MA Superior Court Rules On Matching Issue https://swerling.com/matching/
•Property owners, take note: The Massachusetts Superior Court issued a decision in an important case revolving around the contentious issue of “matching” – this involves the degree to which an insurance carrier must “match” materials when repairing property (typically a roof or siding) as part of an insurance claim.
•In these cases, the insurance carrier wants to repair (pay for) only the damaged portion of the roof or siding. This short-change position ignores the reality of how materials age, or stop being manufactured – making it impossible to match the new with the previous materials.
•In these cases, the insured often has to demonstrate that the materials used in the repair cannot be matched. It leads to drawn-out fights that extend the claim, and spark reference or litigation – which is why this recent decision is so important.
Attorneys: Consider Partnering With a Public Adjuster https://swerling.com/attorneyspartneringwithpas/
Here are just a few of the typical questions that may arise in the claims process. Knowing the answers to these would be comparable to knowing the nuances of tort or property law.
•What does the term “replacement cost” mean, and what does it apply to in terms of property?
•What are the relevant statutes in Massachusetts for property insurance claims?
•What’s the timeframe for filing a proof of loss?
•What are the differences between a condominium’s master policy (which covers the building) and individual unit owner policies?
•How does ordinance or law (code) coverage work?
•How do you properly support and document a successful insurance claim?
•What are the options when a client gets an inadequate offer from the insurance carrier?
•When is the best time to retain a PA?
You know the law; we know the policies. There are many benefits to you and to your clients in partnering with a PA.
Replacement Coverage: Now You See It, Now You Don’t https://swerling.com/solpart2/
•If the statute of limitations is two years, as it is in Massachusetts, then insurance claimants must file suit within two years of the date of loss, regardless of when the policyholder first became aware of the loss.
•But most policies also provide replacement cost coverage for new materials of like kind and quality to replace older, depreciated property that has been damaged. The policies providing this additional amount do not make that coverage available until the policyholder incurs the cost of replacement and the work is actually done.
•Policyholders have two years from the date of loss to make repairs in order to qualify for the “holdback”- and this contracted limit of time usually applies whether or not the parties have actually agreed on the amount of loss or had it determined by the Reference procedure.
•The best course for policyholders and their representatives to follow is to try to reach agreement on the amount due as soon as possible and begin work quickly. If circumstances arise which prevent moving ahead, document these and report them to the insurer. Otherwise, it is quite easy to be SOL on this two-year contractual limitation period.
