As Hurricane Dorian moves across the Carolinas following the devastation in the Bahamas and the brush across northeastern Florida, I think back to the most recent hurricanes to affect Florida. Hurricane Matthew in 2016, Hurricane Irma in 2017 and Hurricane Michael in 2018 all caused significant damage to various parts of Florida. As a result of these storms, I learned a lot about how insurance companies, particularly Citizens Property Insurance, handle hurricane insurance claims after large losses.
You see, in actuality, insurance companies have very few responsibilities to their policyholders and Citizens Property Insurance is no different. Here’s all that they have todo to avoid violating Florida’s property insurance regulations:
- Inspect your loss within a “reasonable time” from the time you filed your claim.
- Make a coverage determination within 90 days from the time the claim was filed.
Their third obligation is… well, nothing! That’s it! There are no other obligations that insurance companies must follow in order to stop from violating regulations! So how does Citizens Property Insurance make sure they are in compliance with these two regulations?
The Catastrophe Adjusters
On a regular day, insurance companies handle several thousand claims from property owners. A company like Citizens Property Insurance will staff adjusters to handle most of these claims. When they have overflow, they can outsource their claims to local independent adjusting firms who’ll then make sure that their cases are covered.
After a large event like a hurricane – like Hurricane Dorian – they tap into a national group of catastrophe adjusters, known in the industry as CAT Adjusters. These adjusters travel the country going from storm to storm writing claims for insurances in need. You can generally spot them driving their large pickup trucks with ladders strapped to the racks. Often, their trucks are pulling campers behind them.
Some CAT adjusters travel by themselves, others with a team, but their goals are the same: get in and out fast so they can get to the next storm.
This is not an easy lifestyle, and that’s why these adjusters are well compensated.
When there are multiple storms around the country at one time, such as Hurricanes Harvey in Texas and Irma in Florida in the same two-week span of 2017, the demand for CAT Adjusters skyrocketed.
Here’s an experience I had that illustrates just how much Citizens Property Insurance depends on them:
After Hurricane Irma went north along the west coast of Florida and caused significant damage, we had clients call Bulldog Adjusters from Captiva Island. Captiva Island is a half-hour boat ride away from Ft. Myers. Here I am on a boat with 15 or so other people, most of them locals, when I noticed an elderly gentleman holding a clipboard and measuring tape. I figured he’s either a contractor or an adjuster, so I struck up a conversation with him.
This man was an adjuster in his early 70s. He explained that he had worked as an adjuster for 40 years in Dallas, Texas and had been retired for the last 6 years. A friend of his had called him after Hurricane Irma telling him that he needed to get down to Florida since the fees Citizens Property Insurance were paying to CAT Adjusters were at an all-time high. Naturally, after 40 years in the business and 6 years in retirement, he had no real inclination to leave Dallas.
Then his friend emailed him a copy of the fee schedule and there he was on a boat to Captiva Island telling me all about how Citizens Property Insurance is paying him to inspect insurance claims.
This illustrates how insurance companies comply with the first regulation of “inspect the loss in a reasonable time”.
Now let’s look at how they comply with the regulation that they “make a coverage determination within 90 days from the time the claim was filed.”
After the CAT Adjuster inspects your loss, they provide a file to your insurance company that includes a description of the loss, photographs documenting the damage, and an estimate of repairs.
The insurance company will review the claim file along with hundreds of thousands of others and make a coverage determination. As long as they issue their position on your claim by sending a letter to you within 90 days, the insurance company has complied with the second and final regulation that they “make a coverage determination within 90 days from the time the claim was filed.”
How this affects your claim
Now that we have explained how insurance companies comply with the two regulations after a claim, let’s now look at how this affects Florida homeowners.
Insurance companies like Citizens Property Insurance earn money by bringing in more premiums (the amount you pay for your insurance policy) than the amount they pay out in claims and other administrative costs. Being cash flow positive on an annual basis is the name of the game. This means insurance companies have a strong incentive to “kick the can down the road” and they do this by making coverage and payment determinations that are inaccurate. Then they hide behind saying that “we have complied with our responsibilities”.
Insurance companies are not focused on making you, the policyholders, “whole” after a catastrophe. They spend their energy on managing cash flow while meeting the minimum regulatory requirements for the states their claims come from. This manifests itself by companies paying to repair portions of the loss instead of total replacement or ignoring entire areas of the loss altogether.
Imagine filing a claim after an event as significant as a hurricane and being told that the claim payment does not exceed your policy deductible. How about receiving a check from your insurance company for a few thousand dollars after consideration of your policy deductible?
After calling multiple contractors and waiting for days, possibly weeks, you finally receive an estimate for tens of thousands of dollars more than your claim settlement and now you are faced with making up the difference.
This is exactly what Florida policyholders faced after Hurricanes Matthew, Irma and Michael.
How can I obtain the claim payment I need to fix my home?
Always remember the burden of proof lies on the claimant (you).
You are responsible for documenting your loss. After you suffer damage, as soon as it’s safe, take photos of the damage done to your home. Take as many as you can. Videos work too.
If you spend any money to repair your home or protect from further damage in the immediate aftermath, such as a roof tarp or plywood for windows, keep records of these expenses. Doing so will strengthen your claim and serve to further document your loss. Now, when your insurance company inspects in the future, something which can happen multiple times, they will have a clear picture of how your loss looked right after the catastrophe.
Next, ask your contractor for a causation report.
It could take a while to finally get a contractor to provide you a written proposal to repair your damage and that written proposal only defines what work is being done, not why it needs to be done.
Providing a written proposal from a contractor is generally not enough to convince your insurance company that your roof was damaged by the hurricane. A report from a professional documenting the damage and explaining why it is consistent with storm damage may make all the difference.
The contractor’s report can consider your situation from many angles:
- Are the roofing material available?
- Will repairs match the existing materials or not?
- Can repairs be made up to local building codes?
Keep in mind that in Florida, your contractor is not legally allowed to negotiate your claim but is allowed and encouraged to provide reports to help you and your public adjuster negotiate with the insurance company.
Finally consider what avenues your policy allows for if your insurance company does not respond favorably to your request for additional claim funds.
Do you have home damage from a recent storm? Contact Bulldog Adjusters to find out how we make the insurance claim process less of a hassle. Our dedicated team has over a decade of experience and we work hard to make sure you get the largest possible settlement from your home insurance company!