Month: September 2011

Texas Wildfires Total Loss Insurance Claim – Update to our 2nd posting

It seems that just when you think you have addressed things properly, something else comes up that causes you to take notice.  We recently posted advice on dealing with a home that was burned to the ground and what to expect from a fire loss regarding proving your damages.  Following our post, a very vigilant blog follower who experienced what he considers to be a total loss from fire to his home, sent me a note reminding us of Texas

Statute 862.053 that reads as follows:

Sec.A862.053.AAFIRE INSURANCE: TOTAL LOSS OF REAL PROPERTY.
(a)  A fire insurance policy, in case of a total loss by fire of property insured, shall be held and considered to be a liquidated demand against the company for the full amount of such policy. This subsection does not apply to personal property.

(b) AAAn insurance company shall incorporate verbatim the provisions of Subsection (a) in each fire insurance policy issued as coverage on real property in this state.

(c) AAThe commissioner shall require compliance with this section.

Our last post was probably not very clear when we described a house that was burned to the ground.  What we need to clarify is “what”   is considered a “total loss” and who determines what a total loss is.  We have had reports from the field of some people being paid in full for their policy limits and some being told that while the house is burned, the slab is still usable.  The questions remain for us as to whether a usable slab causes the home to be considered a total loss and the statute does not seem to define it either.

We wanted to collect various opinions from some of the attorneys we work with and Sergio Leal with Merlin Law Group reviewed this statute and took the initiative to follow up by posting a blog dealing with how the courts have defined a total loss.  Please view the following link to make your own assessments as to what might qualify you for a total loss.

http://www.propertyinsurancecoveragelaw.com/2011/09/articles/insurance/texas-fire-insurance-claims-how-the-law-handles-total-losses/

If you have not been paid full policy limits for your burned down home, you may want to consider asking your insurance company about the above provision. We would like to hear from you on this topic as to whether you have been paid your policy limits.  I want to give our blog follower all the credit for being vigilant enough to bring this to our attention.

Bastrop, Texas Wildfire & Fire Insurance Claim Story?

Bastrop, Texas Wildfire Insurance Claim

Your home is gone, the insurer will have to pay the policy limits… Right?

I have been a public adjuster for many years and have seen just about every loss situation you can imagine. After seeing the wildfire damage in Bastrop, I could not help but envision the following story wildfire insurance claim unfolding….
These videos is a possible senario of Bastrop, Texas Wildfire Insurance Claim.

Wildfire Insurance Claim – Part 1

Bastrop Wildfire Insurance Claim – Part 2

Texas & Bastrop Wildfires Claims Part 3 – Cost of Clean Up & Additional Living Expenses

Bastrop Wildfire Claims: Cost of Clean Up & Additional Living Expenses

I spent last week meeting with property owners in the Bastrop area who are dealing with the aftermath of the horrible fires that dealt a blow to not only their personal financial condition, but also to the hearts of those who live there. In several meetings I noticed how emotions would seem to overtake those who spoke about the ordeal. However, Bastrop citizens are like a lot like other small town Texans in that they choose to pick up a shovel and start rebuilding their lives. This blog post will help provide insurance policy claim information related to the Texas and Bastrop Wildfire insurance claims.

Although FEMA employees seem to outnumber the entire population of Bastrop right now, being self-sufficient Texans the Bastrop citizens seem to be taking the bull by the horns, cleaning up, and taking care of themselves. I wonder if FEMA has lacked in applicants for assistance in Bastrop, because I noticed the following link on my email–(http://www.fema.gov/news/newsrelease.fema?id=57985). The link seems to be encouraging people to sign up even if they are concerned that they may not qualify. Sorry FEMA, but being a native Texan I can tell you that we are not like other places, and you will find few of us sitting on the curb waiting for the federal government to rescue us. Witnessing the “pull yourself up by the bootstraps” mentality has been an inspiration to me over the last week.

With all the discussion of clean up and living assistance for those with damaged homes, two insurance policy conditions come to mind for me. The first policy condition I am referring to is called “debris removal”. Whether you know it or not, your insurance policy likely has a provision to cover removal of debris that is a result of this fire. This will typically cover the demolition and removal of the burned structures on your property and may cover some of the trees involved if they have fallen on, or affected the structure. The amount you are entitled to is typically 10% of your main dwelling coverage limit. So for example if you carried $200K on your home’s main structure, then you likely have access to $20,000 in order to clean up. While many well intentioned folks have gathered fellow church members and friends to get to work with shovels in hand, I have some good news and bad news.

The good news is that if you hire someone to perform debris removal and you have the coverage, the cost is likely covered and you are free to spend your time in other pursuits. The bad news is that if you do the work yourself, most policies have a clause that allows you only minimum wage or some other grossly minimal pay for your time. By doing the work yourself you are giving your insurer a break from what they justifiably owe you. My advice is to look at your policy carefully to see if you have debris removal coverage before doing any work. If you do, find a reputable local demolition contractor who can do the cleanup and let them get to work as soon as your insurer has inspected the property.

The second policy condition I am referring to is ALE or additional living expenses. This coverage is for the additional expenses you incur over and above your normal living expenses while out of your home. To be paid, these must be incurred and you are entitled to assume equal living conditions to what you had prior to the fire.

Additional items that are covered under this coverage can be the cost differential to eat out now that you cannot prepare food at home, any additional travel expenses you incur to travel longer distances to school and work, dry cleaning now that you cannot launder your own clothes and any other costs you incur as a result of being displaced from your home. Like other coverage, ALE usually has limited coverage amounts that are specified as a percentage of your dwelling policy limit or as an incurred time line to make repairs or rebuild. ALE limits are often 10% to 25% of your dwelling limit amount or up to 1 year incurred to rebuild or repair. Read your policy carefully and make sure that you understand this coverage before you end up blindsided and out of money to live.

Wildfires in Texas part 2 – Will Insurer pay policy limits?

Wildfire Insurance Claim

Your home is gone, the insurer will have to pay the policy limits… Right?

I have been a public adjuster for many years and have seen just about every loss situation you can imagine. After seeing the wildfire damage in Bastrop, I could not help but envision the following story wildfire insurance claim unfolding.

Your home was totally destroyed by the recent wildfires and even though your world is turned upside down, you do have some sense of confidence because at least you know you are insured well and have no doubt that a check for the full amount of your policy will be forthcoming quickly.

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Help with your Wildfire Insurance Claim

Clay Morrison - Public Insurance AdjusterIf you are in a tough insurance claim situation, concerned about where your claim is heading, or something just does not feel right call me and I will be happy to discuss your situation. 

My name is Clay Morrison, I am a licensed public insurance adjuster and my toll free number is 866-723-5787.  Call me and I will be the expert who looks out for your best interests!

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Filing for the Wildfire Insurance Claim

You have maintained “full” coverage in the amount of $200,000 for over 20 years now with your agent who is also your neighbor, and have never made a claim for a single item. You make a trip to your agent’s office who directs you to the claim tent set up at the nearby Grocery store parking lot. When you arrive at the claims tent, you are greeted by a very friendly soul who says they are the field supervisor, and immediately begins pulling up your information on the computer to assist you on your wildfire insurance claim.

They verify that you are in a known fire zone, possibly on the confirmed total loss list and that you are definitely covered for fire. With great enthusiasm you are presented with a check for $1,500.00. You are a little dumbfounded and tell the supervisor that your house is gone- what about the rest of my insurance coverage?

The supervisor states that an independent field adjuster will be contacting you to make an appointment to view the property and as soon as that is completed you will be receiving payment for your claim with no explanation what “payment” means. You question further, but you are assured that “we will take good care of you”.

Feeling somewhat upset but still holding onto the belief that you will be paid in full for your policy limit amount you wait in anticipation for the call from the independent field adjuster for your wildfire insurance claim. The field adjuster calls, makes the appointment and subsequently meets you at the site.

After a brief inspection and a few questions, you ask the adjuster for a card so that you can contact him with further questions and as it turns out, he is out of business cards. He tells you that he will turn in his report to the insurer and they will be in touch. There is no confirmation of payment or how much.

By this point you are not feeling as much confidence as you did a couple days ago when you contacted your agent on your wildfire insurance claim. However you are still certain that a check for $200,000 will be arriving as soon as the independent adjuster turns in his report. Numerous days pass and no check arrives.

Finally three weeks after the independent field adjuster inspected your home an envelope arrives, and with great excitement you tear it open to find a check for $105,500 enclosed with instructions that explain that your total loss amount was $145,500 and that they have withheld $40,500.00 in recoverable depreciation that you may be able to recover someday depending on certain circumstances.

At this moment, you immediately realize that there must be a mistake and head off to the claims tent where all this started only to discover there is no mistake and you will have to call an 800 number in order to enquire as to why the claim was so underpaid.

At this point you are in denial, this cannot be happening- certainly this is a mistake in the system and they will rectify it. After all isn’t that how insurance works? The insurer will have to pay the policy limits….Right?

The answer is a resounding NO!

Much to the dismay of policy holders in the Bastrop area, a burned to the ground home does not mean payment in full of your policy limits. When a disaster occurs and your property is completely destroyed it is up to you, the insured to demonstrate why the property insured was worth every dollar that you were insured for.

In Texas and many other places the insurer will only pay what you can prove the value of the home to be, regardless of how much insurance you carried. It is critical that you document your home properly in order to receive the full amount you may be owed under your policy. It is also critical that you perform this in a timely manner.

The longer it takes for your wildfire insurance claim, the more likely you are to end up shorted on the back end. Your insurer will utilize their adjuster to reconstruct your property on paper and if the total number that comes out of their software is lower than your policy limit that is what you will be paid. The moral of the story is to be prepared to reconstruct your property on paper to demonstrate the true value or find a professional to do it for you. What you receive for your wildfire insurance claim is up to you.

 

Texas Wildfires & Your Insurance Claim Part 1

Texas Wildfires Insurance Claim

Much of central Texas is dealing with wild fires that are consuming thousands of acres and is destroying hundreds of homes. There is no escaping a wildfire in the hill country because the landscape is filled with combustible growth everywhere due to the drought that has haunted Texas for months now. The first priority of everyone in this area should be preservation of life, things can be replaced. However, when the smoke clears and you return to your property you need to be prepared for the following situations when dealing with your insurance claim.

Scenario 1: If your home or business  is completely destroyed, you will need to file a Texas wildfire insurance claim.  By filing a total loos fire insurance claim, this does not mean that your insurer will “total” your home and pay you the policy limits contained within your policy. Texas is not a “valued policy” state. Valued policy means that if your property is destroyed by a covered cause of loss, the face value of the policy is due to the insured. In Texas you will only be paid for what the replacement cost of the property is regardless of how much insurance you carried.  You must be prepared to reconstruct the cost of replacing your property on paper and demonstrate what the true replacement value is to your insurer.  The insurance adjuster will be there to assess what his employer should pay you. It’s not the insurance adjuster’s job to assert your claim to the insurer- it’s  yours.

Scenario 2: Should you return to find a partially burned home you will have to be prepared to demonstrate to the insurer why those partially damaged portions of your home should be rebuilt correctly and not just patched. I have seen numerous occasions where lines are drawn in the sand by the insurer when it comes to properly repairing partially burned homes.  If you have significant partial damage and you feel that your home might be a total loss, you should push the issue with the insurer and be prepared to show why it’s not practical to repair your home.

Scenario 3: You return to find your home standing and looking pretty good from the outside, but enter to find an intense smell of smoke and some water damage from the fire departments wetting down the structure to save it. This will be prove to be a very tough claim for you as fires of this magnitude create smoke that is so intense it permeates every opening in the structure. You may discover that the insurer wishes to send out one of their vendors to “clean” the smoke from your home. While this can be effective in a limited number of cases with an isolated fire, it will likely not be effective in wildfire situation. Paper and fabric based products absorb the smoke smell and the odor will penetrate into your walls, insulation and attic. The only real cure is to remove these building products and replace them. You will have to be prepared to convince your insurer that this is necessary and that won’t be an easy task.

Finally, you have to consider your contents. If the contents are burned beyond recognition, your job will be to compile a list of contents that includes quantities, ages, and the cost to replace those items today. You will also have to prove ownership by providing pictures or other documents that actually demonstrate that you owned the items. Unfortunately it’s the insured’s job to prove what they owned and what those items are worth. If you return to find some contents only partially damaged then you will have to demonstrate why it’s proper to replace those items and not clean them.
Fire and smoke claims are challenging to say the least, and that is why it’s imperative for the policyholder to take the initiative on asserting and supporting their claim from the outset.

TWIA- The new process if you have a claim

If you are a TWIA policy holder, you need to understand the new process that you will be facing when you make a claim.   This new process brings back bad memories for me of a flow chart project back in college with a lot of “if then” statements included.  In this flowchart I see numerous issues that the policyholder needs to pay close attention to.  First, buyer beware if you should end up in front of an “expert panel” who will make a determination of whether your damage was from wind or flooding.  Next, it appears that appraisals will become much more frequent. While I am a proponent of appraisals, it should not be used as a tool for parties to attempt to avoid legal liability.   Third, I would never recommend that a policyholder take a premium discount of 10% in exchange for agreeing up front to be bound by binding arbitration.  Circumstances vary in every claim, and limiting your remedies up front is not prudent.  Lastly, the consumer now has only 60 days to dispute the amount of loss paid by TWIA if TWIA accept’s responsibility.  In the midst of a catastrophe this is simply not enough time for an insured to truly assess the costs of damage.   The link to the flowchart is below—let me know if it brings back bad college memories for you as well. #TWIA

http://www.texastribune.org/library/data/texas-windstorm-insurance-claims-process/