Category: Blog

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


Hurricane Irene Damage Claims

Hurricane Irene property damage insurance claims:

While Hurricane Irene’s winds didn’t live up to concerns, it appears that the flooding far surpassed all expectations.  When dealing with a flood claim you are facing an entirely different set of circumstances.  I would like to offer the followinng tips for dealing with your flood claim:

1. Take pictures and make a video of the structure in flooded conditon as soon as you return and prior to removing anything.  Allow the flood adjuster to see the home as is following the flood if possible.

2. Remove all wet and damaged contents and place it in a pile for inspection by the insurer.  DO NOT throw things out until you have photographed all items and have allowed the adjuster to inspect them.

3.  If you flooded to 4′ or less in side the structure, remove all water damaged building materials that are under the 4′ level.  If you have paneling you will probably have to remove the paneling to 8′ high because that’s how its produced and you can’t splice it.

4.  If you flooded to above 4′ in depth you will likely have to remove all items touched by the water up to 8′.

5.  Ensure that the adjuster views all removed items in person and if not take lots of pictures.

6.  *** You will be approached by numerous contractors offering to “demolish and dry out” your structure.  Be very careful because the flood policy will not normally cover large amounts of drying and when your claim is paid, they will only pay for removal and replacement of water damaged items.  Often times, drying contractors will attempt to charge exhorbitant fees to demolish and dry your facility and those per square foot fees often exceed what the insurer will allow for removal, drying and replacemetn combined.  Be very careful as to what you sign.

7.  Never sign a sworn proof of loss for the flood adjuster unless you wholely agree with the estimate as presented.  A common request you may hear from a flood adjuster is to sign the proof of loss for what he has written up regardless of the amount because “you can always file a supplement later”.  If you sign a sworn proof of loss for an amount you don’t agree with this may come back to haunt you later.   Press the adjuster to get the estimate correct up front!

8.  Be proactive regarding the removal of damaged items.  If you fail to take action and your home eventually dries out you may be stuck with decaying building materials simply because the adjuster deems them “now dry”.

9.  Never give the adjuster original docuements of any type.  Keep copies of everything and when you provide documents to the adjuster, ask the adjuster to sign for receipt of such items.  Request an address, phone, fax and email for the flood adjuster.  Remember they are likely from somewhere other than where your loss is and you want to be able to locate them later if needed.