CREJ - Property Management Quarterly - July 2017
Denver has been a temporary home to many out-of-state insurance adjusters the past few months due to the May 8 hailstorm in the metro area. Insurance companies sent members of catastrophe teams to quickly evaluate damages and prepare estimates upon which insurance companies issue initial payments – and then they are gone. Property owners are cautioned to be leery of all unethical opportunists after significant weather events – a warning to question incomplete or inaccurate reports and estimates prepared on behalf of insurance companies also is appropriate. An accurate, defendable assessment is needed on every property claim. If within the path of the storm, whether damage to your property is evident and significant – or if damages are not apparent – a thorough assessment of your property should be conducted. Take steps to protect your property. Address the needs of your tenants, be proactive in the claims process, and consider seeking assistance from reputable consultants as part of your team to address issues with consultants retained as part of the insurance company’s team. Addressing permanent repairs should not begin until an agreement is reached on the required repairs and costs associated with completing the repairs. If you filed a claim for damage, a representative of your insurance company should have inspected the property by now. This individual may have limited experience and limited authority on the claim; and may have taken more time informing you of damages that aren’t covered as opposed to those that are covered. While this individual prepared and submitted for approval an estimate of damages to the insurance company, this individual may not address required repairs to your property. Even if an experienced, local, in-house claims adjuster prepared the estimate, your insurance company must be open to input from you and your team to address reasonable and customary repairs and expenses as part of the claim. Until you have a reputable general contractor or roofing contractor – who tells you that the damage is limited to the roof, assesses the damages and prepares an estimate – you may not know if the estimate from the company adjuster is relatively accurate or lacking in scope and costs. If the parties are unable to agree that the roof was damaged by the hailstorm, it may be necessary for samples of your roofing membrane or shingles to be cut for testing. There are costs associated with such testing and chain-of-custody procedures to follow to ensure that the parties adequately preserve the integrity of the sample(s). Agreement as to how these costs are captured and paid as part of the claim should be reached prior to taking the samples. There are reliable testing facilities, including those typically used by insurance companies, but you should have a voice in selecting the designated testing facility. Property owners should be mindful that not all roofing contractors, general contractors, engineers, construction consultants, public adjusters, insurance adjusters, and others within the property and casualty insurance industry adhere to proper and ethical adjustment practices. You and representatives of your insurance company are to carefully assess damages as you seek to obtain the indemnification provided within the policy covering your property. Suggestions by insurance company representatives as to expenses that are not covered should be met with a bit of skepticism if not specifically noted in your policy. Whether you wait for your insurance company’s repair estimate or you have an estimate of damages prepared and submitted, you will want repairs addressed by a professional contractor who will stand by his estimate and work product. The parties are to work cooperatively together to reach agreement on damages – not to minimize and ignore, nor fabricate and embellish, damages. The National Roofing Contractors Association and the Colorado Roofing Association websites provide useful information regarding the selection of a professional roofer. On the CRA website is a publication from the Denver District Attorney’s Office – with an admonition: “Don’t always choose the lowest bidder – almost all complaints to the DA’s office are contractors with very low bids. You get what you pay for.” Insurance company representatives are aware that low, inaccurate and incomplete estimates do not provide a true measure of damages to your property. Assertions from insurance company representatives who profess to have secured a “comparative” estimate from a contractor for repairs in a low, lump-sum bid without necessary details should be challenged. This is especially true of contractors who often work with representatives of your insurance company – and are aware you already have a contractor. Knowing they won’t be retained, estimates are prepared with a wink and a nod at costs significantly less than your contractor’s estimate with assurances the work will be completed for the lower price. This is inappropriate. Take responsibility for your claim and insist on cooperation from your carrier. Request a local representative with whom you can address claims-related matters and schedule necessary inspections of the property be designated on your claim. Question the motive of insurance company representatives who insist you do not need outside assistance.