Homeowners are tallying up the damage inflicted by a brutal winter, and insurance claims are sure to mount with each discovery of a damaged roof or burst pipe.
The challenge for many is knowing whether they are getting the full compensation their policies should provide.
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"We expect insurance companies to stand behind us when disaster strikes, but far too often we see insurance carriers deny, delay and underpay legitimate claims," says Phillip Sanov, a Houston-based attorney and head of the Lanier Law Firm Bad Faith Insurance Practice Group.
Insurance companies, increasingly focused on their bottom line and appeasing shareholders, will try to cut corners when it comes to claims, Sanov says.
"Its not necessarily the individual [claims adjuster] who comes out and has his feet on the ground," he says. "He has to answer to two or three levels above him and do what he's instructed to by the corporate office somewhere. It's a trickle-down effect."
Underpaying claims happens as often as it does because many policyholders have little understanding of the nuances of their coverage. There are also emotional considerations. After snow crashes through a roof or gale-force winds shatter windows, many homeowners just want to deal with the emergency at hand, avoid a prolonged battle and cut their losses.
"Insurance companies know that nine out of 10 policyholders are just going to give up and say, 'It's not worth it, I don't want to fight anymore,'" Sanov says. "It's only 10% to 20% that will really pursue a claim and get an advocate to fight for what they deserve."
The Florida State Legislature's Office of Program Policy Analysis and Government Accountability issued a report last year that looked at the relationship between public adjusters, policyholders and the state-run Citizens Property Insurance program -- an insurer established for those otherwise unable to afford or get coverage -- in the wake of the 2005 hurricane season.
That audit found that policyholders who retained public adjusters for their claims got 747% higher compensation than those working solely with their insurance company. For non-hurricane claims, policyholders got 574% higher compensation.
"The average insured does not know what he is entitled to," says Joseph Zevuloni, president and CEO of Zevuloni & Associates, a Florida-based public adjusting firm. "They will look at something that is broken and try to figure out what it will cost to fix. However, there are other damages they are not trained to look for or know any better. By the time they find out, the insurance company may say that they waited too long, never reported it, that they don't deserve it or it is not included in their policy."
Six steps homeowners should be prepared to take before and after filing a claim:
Carefully Review Coverage
Don't wait for an emergency or need to file a claim before you fully review and understand your existing policy. Before filing a claim, review your policy in light of the damage or have a professional do so to fully understand what your policy covers and what it doesn't. Coverage should be periodically reviewed to make sure it is adequate and fits your needs.
"Examine your policy ahead of time and know what they are paying for," Zevuloni says. "The average consumer who goes out and buys a policy has no clue what it actually says. Many terms and much of the language are intentionally very ambiguous. The average consumer cannot interpret it accurately without some professional assistance."
A policyholder may be underinsured or face exclusions for things they need.
"Let's say your house was built 30 years ago and it doesn't conform to the same building standards as today," Zevuloni says. "If you apply for some kind of a building permit they will require you to do certain things to bring it up to code. The policy should provide for that. If it doesn't have that language, you are out of luck."
Take Photos and Video
The availability and ease of digital cameras allows homeowners to provide the insurer with "before and after" documentation.
"A week before a storm hits, go take pictures of your walls and your roof," Sanov says. "The most reasonable thing for a person to do is to take pictures inside their home, of the walls and the ceiling. The carrier will not be able to claim damage was pre-existing or normal wear and tear."
Document the Damage
Beyond photographing or making a video to show damages, homeowners can hire their own adjuster, who will act independently of one provided by the insurance company.
Keep track, and have duplicate copies of all estimates and receipts. Also, repare a detailed inventory of all damaged possessions, with their approximate age, initial price and estimated cost to replace.
Make Temporary Repairs
Don't wait for an insurance adjuster to start making temporary repairs. Broken windows and leaking roofs should be fixed right away so the insurance company cannot dismiss some claims as the result of waiting too long to do so. Save all receipts and documentation, as the insurer will likely reimburse most of these expenses.
Don't Assume Something Isn't Covered
Just because a claim is initially rejected doesn't mean the policy doesn't say otherwise.
"This happens to us all the time -- an insured will call in and say their claim was denied because mold is not covered and even their agent agrees," Zevuloni says. "But if the mold was caused by a water leak or water damage, it may be covered. If there is causation, the coverage may be limited to $10,000 to $15,000 on most policies, but it is covered."
Gird for Battle
"It does become more of a fight," Sanov says. "You hate to talk in those term, but policyholders are fighting with their insurance company. As claims mount and each adjuster is given a bottom line to preserve, the problems multiply and become greater and greater all the time. It is hard, in the position I'm in, to say anything in defense of them, given the way I've seen policyholders treated."
For those concerned that countering a claim will be costly, Sanov says most attorneys and public adjusters work on a contingency basis. Many states also allow the cost of such expertise to be reimbursed by an insurance company if an initial claim is found to have be inadequate.
Policyholders need not fear their insurer dropping them or raising rates if they challenge a payout. "They will not drop you because of a claim," Zevuloni says. "They will only drop you if you are a risk to them -- if they find out, for example, that you store propane tanks in the house or you have exposed wiring."
-- Written by Joe Mont in Boston.