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Automobile Warranties. What are you buying?

I just hung up the phone from a robot call telling me that my car warranty was expiring and I needed to renew right away in case my car developed some catastrophic mechanical failure. I laughed.

In Arizona, car warranties are considered insurance policies and are governed by the State Insurance Commission. I recognize that there is some debate about this but will strongly assume that car warranties are covered by the insurance code as they are licensed and it is not uncommon for them to be so.

Last month I received a call from a gentleman who told me that his car warranty company had just stuck it to him and wouldn’t pay a thing and asked, since I was an adjuster, would I help him? I’ve never done anything like that but thought it would be a good opportunity to broaden my knowledge about this vast and peculiar industry we deal with. Not only that, i bought a new car myself this year and fell for the warranty pitch. Hey, nobody is perfect or the time share companies would be out of business.

I set out to handle his claim, I sent a letter. No response. I sent another letter. No response. Another letter, a phone call: nada, butkis. This warranty company loves collecting premiums but isn’t thrilled if someone presents a claim.

The client’s vehicle was turn down with parts all over the garage waiting for the Car Warranty Rep to arrive before authorizing a $ 9,583.79 repair.

The rep came. He grinned widely and then he jabbed everyone in the heart when he said “we don’t pay for carbon buildup”, reminded the client that it was his responsibility to pay for the tear down and marched away.

Shortly after that I became aboard. I know cars. I know all engines have some kind of carbon buildup but the car dealership’s shop has given us documents showing the cause of the loss to be 3, 5, and 7 cylinders had rings that seized. The car warranty company has ignored that diagnosis.

Still no response from Car Warranty Company and, get this, the Warranty Contract says disputes will be handled in Denver! If they ever call me back.

Car Warranties … What are you buying?

Adjusting Not Just for Anyone

One of Brown – O’Haver’s employees just told me that she was leaving. She was doing a great job and we have come to rely on her more and more in her role as a content specialist public adjuster. We appreciate her very much.

Recently, however, she came into my office to let me know she was leaving the adjusting field. When I asked her why, she let me know that, while she was content with her hours, her pay and her acceptance as an employee at our firm, she could no longer put up with (1) dishonest insurance companies trying to save money, (2) lying contractors and (3) greedy insureds.

Now not all contractors are liars and we only have a few greedy insureds as clients but that was her perception. She couldn’t put up with the business any longer.

Why would I put such devastating information in a blog? Obviously it is in Brown – O’Haver’s best interest to paint a rosy picture to obtain more clients because, frankly, we have found that we can’t just live on prayer. However, we also realize that sometimes industries do not level with people who are looking for work.

All industries have their issues. My son in law once told me that if you have a $50,000 job you will put up with $50,000 worth of crap. If you are making $100,000 you will be putting up with $100,000 worth of crap. So lets get real here. Yes, there are problems in the insurance adjusting industry but look at what nurses have to put up with. Give any sales organization bent on quotas and goals, a look and you will see that sales may not be a field for you even though some people are rockin and rollin in this job. And, what kind of guts does it take to become a law enforcement officer no matter what the pay?

Judge Judy left the bench where she was a public servant to change her career path. Martha Stewart left her job as a model to go to work on Wall Street and then left that to move on. Dr. Phil laments the time when he was a failing family therapist. Careers are not just for anyone.

Years ago I visited with a job search company where, for a fee, they will find you employment. We were high up in an office building in a major Capital city when he asked me what I wanted to do. I said, “… just about anything”. His response was to tell me to look out towards the high rise building under construction that you could see from his window..

“Do you see those people working down there on the ground?”, he asked. I nodded that I did. “Now”, he said, “do you see that guy up there”? There in plain view was a man who was hanging on , putting rivets in the large metal girders that were being lowered by a giant crane, “That guy up there is making almost ten times what the people on the ground are making”, he said. “And do you know why? He is doing some thing that others can’t (or won’t) do.

In the meantime, I am convinced that public insurance adjusters do “rebuild lives”. And even though things are not always peaches and cream, I find a great deal of satisfaction in my job.

Unauthorized Practice of Public Adjusting Verdict Upheld

This month a Texas Court of Appeals upheld an important ruling against a contractor who was involved in the Unauthorized Practice of Public Adjusting (UPPA).

Lon Smith Roofing & Construction entered in to a contract with Gerald and Beatriz Reyelts. In their  contract the roofer asserted that Lon Smith was being retained “to pursue homeowners’” best interest for all repairs, at a price agreeable to the insurance company” and to work out “the final price agreed between the insurance company” and Lon Smith. And that “the homeowner is responsible for paying the deductible and for any upgrades. “The final price agreed to between the insurance company and LSRC shall be the final contract.”

The company replaced the roof without notifying the insurance company and then sent a bill to the insurance company for payment. The insurance company denied the claim citing policy language which required the homeowner to allow the insurance company to inspect the damages.

Lon Smith Roofing then billed the homeowner multiple times demanding payment for their services. The homeowners asserted that based on the contract it was the roofing company’s responsibility to notify the insurance company. The judge eventually ruled in the homeowners’ favor.  Additionally, under Texas law (as is in other states) a person who negotiates and adjusts an insurance contract for the insured homeowner must be a public adjuster or attorney. It is a crime for a person other the homeowner to adjust a claim when they are not licensed. That fact alone was enough for the judge to state the contract that the homeowners had with the contractor was invalid. At the time that the original contract was signed that was the only law broken but as of today the law is that a contractor cannot also be public adjuster.  This is done in order to eliminate a conflict of interest on the claim (so even if he was licensed to negotiate and adjust ha claim a contractor could not legally be the client’s roofer).

Lon Smith Roofing appealed the verdict and two public adjuster associations stepped in to help with the appeal process. They worked with the client’s attorney in drafting and filing the brief that the appeals court reviewed in making their decision. The ruling markedly referenced a brief that was written by Brian Goodman, on behalf of a National Association which uses membership dues and donations to offset the expense of legislative and legal proceedings that could potentially impact consumers.

So how does this affect the consumer, the contractor and the public adjuster?

By upholding this ruling the court has chosen to protect the consumer. The consumer should not have to worry about their claim being in unlicensed hands. An unlicensed person can not review an insurance policy and cannot prioritize the consumer’s best interest when that person is acting illegally. This will directly and positively impact consumers by ensuring that they are using a licensed and potentially bonded adjuster who is knowledgeable and by making sure the insurance proceeds are in control by the consumer not the person practicing the unauthorized practice of public adjusting.

The contractor can focus on what the contractor does best: repair, restore, and build.

The public adjuster can work in tandem with a contractor instead of in competition. The public adjuster can focus on negotiating adjusting, submitting insurance forms and reviewing the policy without the concern of contractor’s improperly representing the insured and jeopardizing a valid claim.

The insurance industry benefits by not having to increase premiums because of fraud or incompetence perpetuated by those who are illegally operating as a public adjuster.