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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.

Coverage Outside the Policy Due to Insured’s ‘Reasonable Expectations’

As an adjuster, I don’t talk to judges but I do “measure and document” the valuation of insurance claims and present those claims to insurers. I was recently asked by an ttorney to present a claim that demanded coverage be applied outside of the policy.

We see demands all the time to “reform” the policy and sometimes we see insurers rolling over as well and paying those claims as well; although, this is not something that is common.

Sometimes insurers pay “reasonable expectation” claims that literally amaze me. After the Chediski Rodeo fire, I talked with many individuals who were under-insured and two asked me if I could get their policies “reformed.” Of these two, both were insured by State Farm. I declined, referring them to attorneys who might help them if their agent had “failed to place the proper coverage”, which would be an extra-contractual claim. Both insureds declined and pursued their claims on their own. One was paid. The other was not. It amused me that the one that was paid was a destroyed second home of a famous football player. The one that was not paid was the claim of a “commoner”.

Why some insurers so easily pay celebrity claims is beyond me but these insurers must want to take care of the famous or politically connected. You may recall that State Farm paid money to Paula Jones that laid her claim against Bill Clinton to rest. State Farm paid that claim under Bill Clinton’s Umbrella Policy despite State Farm’s own practice of denying claims where “a law may have been broken.”

Let’s face it, reasonable expectations can differ from individual-to-individual depending on that person’s sense of entitlement. However, some non-politically or famous insureds do have a causal base to pursue such “reasonable expectations” claims based upon many factors which include (1) the agents’ responsibility to place proper coverage (See Southwest Autobody v. Binson), (2) notices to the insured in policy renewal billings, (3) advertising brochures and other reasons which may create reasonable expectations.

The reasonable expectations doctrine applied in Arizona includes the theory that when insurance terms cannot be understood by the reasonably intelligent consumer, the court will interpret those terms in a manner that allows the benefit of those terms to inure to the consumer even when there is no coverage. (Hanks v. American Family Mutual, Gordinier v. Aetna Casualty).

I believe that the doctrine of reasonable expectations will gain momentum. For years, we have been involved in claims that involve “matching” issues only to see insurers hang onto their wallets and not pay such claims. However, things are changing and these claims are getting paid, even though I know that realistically, insurers cannot take the hit for all economic losses that an insured might encounter. As a consequence of this, insurers are responding with pointed language in their policies that no matching losses will be considered. We’ll see where this issue goes from here. But … in the meantime, insureds will continue to make such claims if it makes sense knowing that insurers won’t roll over easy, unless they are making payments to Bill Clinton or football stars.