Colorado Real Estate Journal - August 19, 2015
If your property sustains significant damage, it is important to know whom to turn - - to for assistance for the many aspects of a property insurance claim. If the claim is not accurately adjusted and resolved in a timely manner with your best interests in mind, your profits certainly will decrease. Regardless of the type of loss, whether fire, hail, natural disaster or other, a thorough investigation and assessment is needed to capture all damages to the property. Upon notifying your insurance company of a loss, the insurance company either will have an in-house adjuster or an independent, outside adjuster contact you and schedule an inspection to assess the damage. In-house and independent adjusters work on behalf of the insurance company. As in any profession, there are good, competent, ethical and trustworthy in-house and independent adjusters with different claim authority levels. And there are in-house and independent adjusters who may not be qualified to adjust your loss. You do not have an opportunity to vet several adjusters to learn about their qualifications and background, and then choose which adjuster you would like to work with on your claim. Instead, you are provided with the name of the adjuster who you then meet at the property – hoping or believing the adjuster is competent and ethical. Many property owners opt to handle the adjustment of large and complicated property claims on their own or with existing personnel – perhaps confident they are able to add this responsibility to the long list of other responsibilities they address each day – or perhaps the owners are unaware of a public adjuster’s services. In Colorado, a public adjuster must be licensed by the Division of Insurance, and public adjusters serve as advocates for the policyholder in the accurate, proper and timely adjustment of first-party property claims. Statutes regulating the public-adjusting profession are in place (as an example, see CRS 10-2-103 or visit the Department of Regulatory Agencies website). A public adjuster assists by having others who are experienced in the claims process join your team to accurately capture damages to the property, equipment, business income and extra expense portions of your claim, and communicate directly with representatives from your insurance company. As you begin to process all that needs to be addressed, among your first priorities is to protect the property from further damage. Your maintenance staff may assist with certain immediate, temporary and emergency needs, but you will need others to assist in returning the property to its pre-loss condition. Also, you will need help assessing all sustained damages, which should not be limited to damages that are readily apparent. In order to determine structural damages, a thorough investigation is required to see if structural components are compromised in any manner. For damage from a fire, you want to eliminate smoke, ash and soot that traveled up, through, under and around all openings, behind walls, above ceilings and below floors. You do not want to remove soot from walls by simply wiping them. To eliminate the soot and smoke odor behind the walls, removing and replacing the walls is necessary. Your tenants will be none too pleased if, when returning, a smoke odor remains and inadequate repairs were suggested as proper. Heating, ventilating and air conditioning, electrical and plumbing systems need to be thoroughly inspected as well. If the loss is caused by water, you should remove the water quickly and properly dry impacted areas to avoid mold growth and subsequent damage. In addition to handling the building damage and repairs, you also must focus on those displaced. Whether your property is for commercial use, multifamily housing or another purpose, tenants are a source of considerable revenue. They will need a new, temporary location. How you assist them will play a large role in whether they return to the property. With proper business interruption and extra expenses coverage in place to assist in this type of loss – and with supporting information and required records – your profits should not be impacted by this loss. The claims process is long and time consuming. Over the course of many months, at times years, depending on the time to complete required repairs after the claim is resolved, copies of records and numerous written or verbal communications are required on all aspects of the claim. In-house and independent adjusters may assure you they and their consultants (including engineers, contents specialists and accountants) will handle your claim properly and there is no need to retain a public adjuster. You may be told a coverage, extension or limit is different than what you determined to be accurate. You may be informed that the insurance company will pay 50 percent of what you believe is required and supported as part of your claim. If so, you understandably would question the validity of the insurance company’s position. Yet, many accept the information provided by insurance company representatives as true. However, doing so may impact your profits. Work cooperatively with insurance company representatives, but hold them accountable.