No doubt about it. This has been a very rough winter that we lived through here in the Boston area.
While the calendar has turned to spring, many of us are still trying to fix the damage left behind by snow and ice from so many winter storms.
As I write this it still seems like we have imported the weather that Seattle or Portland, Oregon might be know for (even if it is true that Seattle has more sunny days than Boston). It is cold, overcast and wet. Not the best days for cycling (my other passion besides Spencer and Kristin hanging out on the side panel here). Nor is it good weather to hang out on the back deck which is something that I like to do during my lunch breaks.
But even if the weather were cooperating, I would not be able to use my deck. Why? Well, let’s just say that Mother Nature left me a souvenir and a reminder about her power.
With all the snow and ice that we got, it was hard to keep up and one too many snowstorms (coupled with a builder who decided to save money on lag bolts) finally collapsed the deck sometime in February.
I came home to a note from my neighbor – Don’t go out on your deck. Not that I was planning to go out in the middle of a dark night. But that is where the gas grill was located and I guess if I was a grilling fool I might go out and it would have been a long way down after that first step.
Mother Nature is still flexing her muscles especially along the Mississippi River. Now my deck is a small thing compared to the devastation left behind in the wake of multiple mega-tornadoes that crossed through the South sort of like General Sherman’s March to the Sea and swollen rivers now drowning hundreds of acres of farmland and threatening homes along the Mississippi.
But it is instructive.
A Teachable Moment
Let’s just say that you shouldn’t leave anything to chance. Sure, you may have a homeowner’s policy and you renew it each year. But don’t assume that the coverage that you had last year is going to help you this year. And you really need to review your policies with a qualified agent (or a good financial adviser) regularly.
Do you really have the right coverage? After you file a claim is not when you want to find out that you’re not covered.
I’m reminded of my neighbor – the same one who left me the note – who had his basement flooded after an ice storm and the power and his generator both went out. He ended up with an indoor pool in his basement when the sump pump stopped working. He didn’t know that he could have had a rider on his policy to cover sump pumps. That was probably a $5,000 mistake for a $50 to $100 rider on his policy.
The Insurance Claims Process
So after my little incident, I called my agent to file a claim. The insurance company had been very prompt in sending out paperwork and an adjuster.
Because it was tax season, I was unable to get way from the office to meet with the adjuster. I described the damage to him including the generator located under the deck and the gas grill that was on it. He took his notes but pretty much did his thing when he inspected the property.
In the end, the insurance company adjuster filed his estimate with the insurer and I received a copy. The insurer quickly cut a check for the amount shown on the estimate.
But I reviewed the estimate and noticed discrepancies. The dimensions of the deck on his estimate were smaller than the actual size. There was no note about the higher cost composite decking material that I had. Instead the estimate covered replacement with regular wood. There was no notation about the damages to the generator and electrical work needed to reinstall it. Nor was there any allowance for the damages to the items on the deck.
Now I understand that trying to inspect damage when snowbanks are four feet high around the deck and the deck itself is covered makes it really difficult to get a proper view of the damage. Nothing nefarious is going on here. And to their credit, the insurer did note that they would send out the adjuster again.
But there is no incentive on the part of the insurer or their adjuster to come back out. As far as they are concerned the property damage claim is settled.
This is why it is all the more important for you as a homeowner and policyholder to protect yourself.
How? Get professional help on your side.
Enter the Public Insurance Adjuster
OK. You like your insurance company. I’ve seen the ads. They offer great service and rates. The ads are cute sometimes. And in most cases, the insurance company estimate is more than fair.
But you owe it to yourself to get a second opinion. (Heck, that’s good advice on most things in life especially those concerning money).
This is where you call in the help of a Public Insurance Adjuster.
In my case, I called on the help of Matthew Alphen of Lynnfield, Massachusetts. I first met Matt years ago at a Kiwanis event and stay connected to him through BNI connections we shared.
Like other Public Insurance Adjusters, Matt is licensed by the state’s Division of Insurance. He represents consumers with claims.
He came out and did his inspection and his cost estimate is higher.
Granted the deck wasn’t covered in snow by that time so he didn’t have to trudge through the snowbanks that once surrounded it.
Granted he and other public adjusters have an incentive to provide an estimate that may be higher than the first because of the way that he gets compensated. Like most public adjusters he receives ten percent (10%) of the amount a homeowner collects from the insurance proceeds.
But that also means he has an incentive to do a thorough job when representing a homeowner.
Reasons for the higher estimate:
- He used correct dimensions
- He noted the materials used
- He researched the city building code and noted changes that would require upgrades needed once the deck is rebuilt
What You Can Do to Protect Yourself
Like I said: This is a teachable moment.
So here is a short list of actionable items to consider when dealing with insurance for your home. It can also be applicable for other types of insurance claims as well such as autos, rental property and business.
- Review your policies regularly with your agent. (While I do not sell insurance, I do help clients review their policy terms and coverages as part of my financial planning services). This is especially important to make sure that the agent has a correct description of the property and any changes or additions made are properly covered.
- Make sure your coverage includes a rider for inflation protection. Without it you may out-of-pocket to cover more of the repair costs yourself.
- Make sure your coverage also provides for updated building code protection so that any repairs that need to be done to meet the new rules are covered. Otherwise, it’s going to be out of your pocket.
- When you have a damage claim call a public insurance adjuster for a second opinion.
- Get a financial plan in place. A good fee-based or fee-only financial planner can provide a second set of eyes to help you review and find the right kinds of insurance coverage.