Some homeowners affected by Superstorm Sandy are finding their flood insurance cheques are nowhere near large enough to cover repairs, and that can be attributed to the inexperience of adjusters who were hired in a hurry after the disaster, says one industry veteran.
“Let me ask you this: If you were doing an article, is it better off having someone with no experience writing the article, or someone with experience?” asks Paul Davis, president of Davis & Fox Insurance Adjusters in Toronto. “I think we know the answer. Emergency services are what they are, and trying to put the person back to where they were before the damage sometimes takes longer than during a normal loss. You don’t employ to meet spikes in demand.”
In the case of New Jersey policyholders, they claim they are being shortchanged by in some cases tens of thousands of dollars, because of adjusters’ inexperience and their overreliance on computer programs, rather than construction know-how, to estimate rebuilding costs.
And experience isn’t something you acquire overnight, says Davis, who has some 40 years in the business.
“Because we’ve handled so many claims, the difficulty that each claim may present, there is always a different way of approaching whatever that claim is specific to that individual,” he told Insurance Business Online. “A lot of people just process, and then there are people that understand the problem and can somehow work around the problem and get a result. The experience normally provides that.” (continued.)
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Critics point to policyholders like John Lambert and Lee Ann Newland, whose house in Neptune, N.J., is still a mess one year after Sandy filled it with 1.4 metres of water.
If you buy drywall, flooring or a new boiler in New Jersey, you have to pay sales tax. But when the insurance adjuster was using computer software to calculate the cost of repairing the home, he neglected to click a box adding taxes to the estimate, according to a consultant hired by the couple.
That cost the family $11,000, and they say it wasn’t the only thing left out of their claim: The adjuster failed to account for phone jacks that needed to be replaced, ceiling paint in one room, pipes that rusted because of contact with salt water, baseboard heating in places and other items.
“It was stupid things. Little things. But it added up to be a huge amount of money,” Newland said.
She is trying to get the insurance company handling her claim to add $49,000 to her settlement. “In our case, that is the difference between us rebuilding, or not.”
Insurance companies dispute that large numbers of customers are being paid less than what they are owed. They say the vast majority of adjusters do a methodical, professional job, and any oversights are easily corrected if homeowners can produce proof that a covered expense has been overlooked.
“In a big event, you are going to get some people entering the industry… and a percentage of those people are going to do great, because they are good people and they are smart, and they want to do a good job,” said Jeff Moore, vice president of claims for Wright Flood, which handled more Sandy-related flood cases than any other company. “And there will be another percentage that don’t do so well… and those are the ones you get to write about in the paper.”
For Davis, he understands the pressures placed on adjusters in the aftermath of disasters like Hurricane Sandy. Although not a part of the claims associated with the flooding in southern Alberta and Toronto this past summer, he was up to his eyeballs in claims during the flooding of 2006 that hit that same Prairie province.
“I used to handle property claims all the time. I specialize now – I grew up handling property claims,” he says. “I handled the flooding when it happened back in 2006, and I processed hundreds of those claims. It is a thankless job, everybody wants their problem solved today, and unfortunately the system doesn’t provide enough people to solve a person’s problem immediately.”
