I was raised in a public adjusting family. Being part of this family meant that I heard the words, “read the policy” a lot. I was taught that you should know the insurance policy like you know your Bible or if the Bible isn’t your thing, like the back of your hand.
Last year Donelan Andrews purchased a $400 travel policy from Squaremouth. She read the terms and conditions of the insurance policy right away. Inside the policy she found a provision that allowed a $10,000 prize to the first person who read and contacted the company with their find. Squaremouth called it the “Pays to Read” contest.
Part of the way we win our insurance claims is by reading the policy and using the language of the policy to hold the insurance company accountable for their own words. Doing this day in and day out you soon learn to read the fine print in your every day life as well. Reading the fine print is one of the most empowering things you can do in your life. Too often we are willing to accept injustices because we think we have no power to change our situation. Reading your contracts empowers you to either argue for what is due to you or gives you the assurance that you were not being taken advantage of in the first place. Either is empowering and freeing.
The following are three examples in my own life where I read the contract.
I purchased a new home. The home was a new build and we were purchasing straight from the builder. In one of our final walk throughs I noticed there were no towel bars or rings. I messaged the realtor and customer service team and they both responded that towel hardware is not provided by the builder. The realtor even responded by saying, “I know it’s weird but we stopped doing that a few years ago.” I then spoke with the construction supervisor on site who also said that the towel hardware would not be provided. I pulled out the long real estate contract and provisions and found where it stated what color the hardware would be. I forwarded the language and I am now living in a home with installed hardware!
My children are part of a soccer club. Over the last year I have felt frustrated by some of the management and processes I have seen. Other parents also expressed their concerns to me. I heard about a plethora of letters that were sent to the board to have some of these things addressed which never were. One day I mused that there must be something that actually holds the club accountable. I found the club bylaws and discovered that the club was required to have delegate meetings which would allow for every team to assign a delegate to represent their team. This would allow the delegates to attend meetings and have a vote in club business as well. Within months of bringing this to the board a delegate meeting was held. Complaints that were falling on deaf ears were now actually being heard.
A few years ago, I signed up with a chain gym. During the time period of the contract I underwent shoulder surgery. I contacted the local franchise to try and stop my membership. The club refused to stop or refund my membership fees. I talked to associates and the manager. They contended that they did not have to end my membership because of a surgery because there were accommodations they could make around the injury. Once I reviewed the contract I found the exact language that I was able to provide to the headquarters to get the contract cancelled and my prepaid monthly dues refunded.
There are other times when I haven’t won. Once I waited too long to submit a health insurance claim. It was denied. I read the policy and the time period of which a claim can be made was clearly less than the time I turned mine in. While I was disappointed in myself for not filing the claim in a timely matter, I at least had peace that there was nothing more I could do and that the company was honestly handling the claim.
Take control of your life and circumstances by committing to reading your policies and contracts. If you don’t do this before an issue arises it is not too late. You might not ever find a $10,000 prize winning contest in your policy but you’ll find that it always pays to read those agreements.
Everything starts and ends with the insurance policy as it is the legal contract with the insurer. As my dad says, “the policy giveth and taketh away”.
When I was growing up I had four siblings as well as a dig and a cat. However, my mother. my mother used to say there was another person who lived in our house. His (or her) name was “Not Me”. “Not Me” was a pesky fellow. Did someone leave the empty milk cartridge in the fridge? Was mud tracked on the carpet? Were fingerprints left on the glass of the family car? “Not Me” was usually the culprit. You may even had or (still have) a “Not Me” in your house too. “Not Me” leaves a mess for everyone else to clean up and takes no responsibility.
In the insurance game there is a “Not Me” as well. When a third party is considered at fault for a loss “Not Me” can show up. If you are rear-ended while parked at a red light, the other driver is at fault. If you have a fire in your house and it is traced to the electric conduit, the manufacturer is at fault. It seems that a first instinct to try and go through the other person’s insurance company when the other person is at fault. however this is typically not the best course of action.
Every insurance policy has a subrogation clause which allows the insurance company to recoup money that they paid out on a claim if it is discovered it is someone else’s fault. When it is, someone is liable and it shouldn’t impact your rates if you file a claim. When you file a claim with your own insurance company you have more rights and better service because you are dealing with your own insurance company where you have a contract for them to indemnify you. However, when you file a claim with your own carrier “Not Me” may confuse the situation. An insurance company is no different from others. If they can do less work they probably will. If there is a liable party, your carrier may ask you to file directly through the liable party’s insurance company.
Filing a claim on the third party’s insurance claim can lead to protracted issues. You don’t have the same rights on a third party claim (a claim against someone else’s insurer) than you would have under your own policy so you may not have had things you expected to be afforded such as a rental car. When you file a first party claim (one against your own carrier) your insurer should work with you to get you paid directly from your insurer and within the terms of what your coverage affords (such as additional living expenses and replacement costs). When your carrier is finished with your claim they can subrogate against liable party’s carrier.
Even though your insurance company can subrogate against the wrongful party to be compensated for what was paid out on your claim, that does not mean that your claim will be any easier. Getting paid on an insurance claim can be difficult and there is no better entity to understand this than insurance companies. That is why in your first party claim your loss will be verified by several parties and supporting documentation will be required. This is done in order to make sure that the claim is paid when it is presented to the third-party carrier.
Because of this a public adjuster is helpful on these kinds of claims. Hiring someone who knows what exact documentation you might need can speed the process and help make sure you are paid fairly.
Many times, we hear from people who believe that they have a subrogation claim when there is not one. For example, your neighbor’s tree falls on your house. You believe It’s your neighbor’s tree so it’s his or her fault. Not necessarily. If your neighbor was negligently cutting it down and it hit your home then it might be a subrogation claim. A more common situation though would be if there were severe winds that broke the tree that fell on your home. This is simply an “Act of God” and that’s why you carry your own policy.
The worst-case scenario is if you have a loss that there is no liable party and your own insurance policy doesn’t cover it. Then you are truly dealing with “Not Me”. It’s not your insurance company’s fault, it’s not your neighbor’s fault, it’s not the city’s fault, it’s not your fault either. “Not Me” is a stingy person and you could end up having have to pay for your damages on your own.
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.