Monthly Archives: February 2013

Missouri Home Owner’s Policy – Changes to Your Deductible

February 23, 2013 By in Home Owner Insurance Issues, Property Insurance Tags: , , , , , , , , , , , Leave a comment

Many insured Missouri home owners are caught off-guard, at the time they file a claim and can afford it the least, when they discover that their “deductible” has increased to several thousands of dollars.  (The policy’s “deductible” is a dollar amount that is automatically subtracted by the insurance company from any amount that is owed, per occurrence, to the insured as a result of damage or loss to the home.)

When many home owners first insured their homes, their policies originally had a $500.00 deductible that eventually changed to $1,000.  Now, with recent renewals, insurance companies have begun to assign a deductible amount that represents a percentage of the total value of the policy.  By this, if a home is insured for $300,000, a 1% deductible allows for each claim to carry a deductible amount of $3,000.  This means that a claim against the policy for a $7,000 to repair will result in a payment of $4,000.

A recent Missouri client was surprised and upset to learn that his deductible had increased from its original $1000 to over $5,000 when he filed what was his very first claim after decades of coverage.  While we were able to successfully negotiate an agreement with his insurer to waive this deductible amount for his claim, this was an exception to the rule that is not always available – as was the case of another client who discovered too late that she had a significant $2,300 amount to be deducted from her settlement of $6,400.

These increases in the deductible amounts are reported to the home owner at policy renewal on the “Declarations” page that is sent at the time of each renewal.  Unfortunately, many home owners will simply file this important page with their policies without reading and noting the change.

Take the time, today, to read your most recent declarations page to see if your deductible has changed.  It is possible to negotiate a lower deductible with your insurance company, in some cases, with a slight increase in your premium … but this must be done and in effect PRIOR to the date of any loss or damage.

Copyright 2013 James H. Bushart

New Scam Law Protects Missouri Seniors

February 1, 2013 By in Health and Safety, Home Owner Insurance Issues, Property Insurance Tags: , , , , , , , , , , , , , , , Leave a comment

Photo by Sora Shimazaki on Pexels.com

The following is a recently enacted Missouri law that protects seniors from certain scams regarding contractors.

     Up until 8/28/12, a building or remodeling contractor could intentionally deceive a homeowner and steal money intended for materials and/or labor for unnecessary work and similar scams and, if successfully located, be sued.  Typically, the contractor (after losing a lawsuit) would file bankruptcy to avoid paying the judgment, change the name of his company and move on to other potential victims.

     With a new law that recently makes the financial exploitation of a senior a felony, a contractor who performs such acts can be arrested if his victim is 60 years old or older.  After his arrest, his ability to make restitution and repay the money to his victim could get him a lighter sentence.

     Missourians who encounter such scammers should contact their local law enforcement officials, immediately.

Missouri Revised Statutes
Chapter 570
Stealing and Related Offenses
Section 570.145

August 28, 2012

Financial exploitation of the elderly and disabled, penalty–definitions–certain defense prohibited, additional violation, restitution.
570.145. 1. A person commits the crime of financial exploitation of an elderly or disabled person if such person knowingly by deception, intimidation, undue influence, or force obtains control over the elderly or disabled person’s property with the intent to permanently deprive the elderly or disabled person of the use, benefit or possession of his or her property thereby benefitting such person or detrimentally affecting the elderly or disabled person. Financial exploitation of an elderly or disabled person is a class A misdemeanor if the value of the property is less than fifty dollars, a class D felony if the value of the property is fifty dollars but less than five hundred dollars, a class C felony if the value of the property is five hundred dollars but less than one thousand dollars, a class B felony if the value of the property is one thousand dollars but less than fifty thousand dollars, and a class A felony if the value of the property is fifty thousand dollars or more.

2. For purposes of this section, the following terms mean:

(1) “Deception”, a misrepresentation or concealment of material fact relating to the terms of a contract or agreement entered into with the elderly or disabled person or to the existing or preexisting condition of any of the property involved in such contract or agreement, or the use or employment of any misrepresentation, false pretense or false promise in order to induce, encourage or solicit the elderly or disabled person to enter into a contract or agreement. Deception includes:

(a) Creating or confirming another person’s impression which is false and which the offender does not believe to be true; or

(b) Failure to correct a false impression which the offender previously has created or confirmed; or

(c) Preventing another person from acquiring information pertinent to the disposition of the property involved; or

(d) Selling or otherwise transferring or encumbering property, failing to disclose a lien, adverse claim or other legal impediment to the enjoyment of the property, whether such impediment is or is not valid, or is or is not a matter of official record; or

(e) Promising performance which the offender does not intend to perform or knows will not be performed. Failure to perform standing alone is not sufficient evidence to prove that the offender did not intend to perform;

(2) “Disabled person”, a person with a mental, physical, or developmental disability that substantially impairs the person’s ability to provide adequately for the person’s care or protection;

(3) “Elderly person”, a person sixty years of age or older;

(4) “Intimidation”, a threat of physical or emotional harm to an elderly or disabled person, or the communication to an elderly or disabled person that he or she will be deprived of food and nutrition, shelter, prescribed medication, or medical care and treatment;

(5) “Undue influence”, use of influence by someone who exercises authority over an elderly person or disabled person in order to take unfair advantage of that persons’s vulnerable state of mind, neediness, pain, or agony. Undue influence includes, but is not limited to, the improper or fraudulent use of a power of attorney, guardianship, conservatorship, or other fiduciary authority.

3. Nothing in this section shall be construed to limit the remedies available to the victim pursuant to any state law relating to domestic violence.

4. Nothing in this section shall be construed to impose criminal liability on a person who has made a good faith effort to assist the elderly or disabled person in the management of his or her property, but through no fault of his or her own has been unable to provide such assistance.

5. Nothing in this section shall limit the ability to engage in bona fide estate planning, to transfer property and to otherwise seek to reduce estate and inheritance taxes; provided that such actions do not adversely impact the standard of living to which the elderly or disabled person has become accustomed at the time of such actions.

6. It shall not be a defense to financial exploitation of an elderly or disabled person that the accused reasonably believed that the victim was not an elderly or disabled person.

7. (1) It shall be unlawful in violation of this section for any person receiving or in the possession of funds of a Medicaid-eligible elderly or disabled person residing in a facility licensed under chapter 198 to fail to remit to the facility in which the Medicaid-eligible person resides all money owing the facility resident from any source, including, but not limited to, Social Security, railroad retirement, or payments from any other source disclosed as resident income contained in the records of the department of social services, family support division or its successor. The department of social services, family support division or its successor is authorized to release information from its records containing the resident’s income or assets to any prosecuting or circuit attorney in the state of Missouri for purposes of investigating or prosecuting any suspected violation of this section.

(2) The prosecuting or circuit attorney of any county containing a facility licensed under chapter 198, who successfully prosecutes a violation of the provisions of this subsection, may request the circuit court of the county in which the offender admits to or is found * guilty of a violation, as a condition of sentence and/or probation, to order restitution of all amounts unlawfully withheld from a facility in his or her county. Any order of restitution entered by the court or by agreement shall provide that ten percent of any restitution installment or payment paid by or on behalf of the defendant or defendants shall be paid to the prosecuting or circuit attorney of the county successfully prosecuting the violation to compensate for the cost of prosecution with the remaining amount to be paid to the facility.

(L. 2000 H.B. 1386 & 1086, A.L. 2003 S.B. 556 & 311, A.L. 2005 H.B. 353, A.L. 2012 S.B. 689)
*Word “of” appears here in original rolls of S.B. 689, 2012.

Copyright 2013 James H. Bushart

 

Property Depreciation – Age Should NOT Be The Only Factor

February 1, 2013 By in Home Owner Insurance Issues, Property Insurance Tags: , , , , , , , , , , , , Leave a comment

By James H. Bushart

 

Most insurance policies will define the terms by which the insurer will calculate ACV (“actual cash value”) in determining how much to pay and, usually, the factor of “age” is not one of those conditions. Still, the age of the property is often used as the primary determining factor when depreciating or subtracting from the replacement costs of an item of property that is being adjusted for settlement.

While it is true that an object’s age can correspond closely to its extent of physical wear and tear – it is not true in every circumstance. Age alone should not cause an object to lose a large percentage of its value and if the object is functionally sound, it should retain most of its value.

I have helped clients recover higher settlements from insurers who had initially calculated depreciation as high as 75% for perfectly working and maintained fireplaces that happened to be original to older homes. Plaster on the wall that was lost to fire was depreciated by more than 65% even though it was fully intact and functional prior to the fire and the insured home owner was entitled to a higher adjusted settlement. Countless other items and systems in the home have been grossly over-depreciated – at a great expense to the insured – for no other reason than their age.

In some cases, the age of the item may be incorrectly calculated and higher rates of depreciation can be mistakenly applied.  One recent case highlighted certain items as being subject to excessive depreciation due to what the adjuster determined to be advanced age when, in fact, the same insurance company had actually paid for their replacement less than a year prior when vandals had damaged the home.

Property owners should know and understand that an object’s amount of depreciation is identical to the amount of how much better, or more valuable, a new object is compared to the older object. This is what is actually being determined. Age is not always an appropriate measure of this and arbitrary deductions from replacement values that are simply based on age should be challenged by the insured. The adjuster must carefully listen to the insured’s arguments and negotiate in good faith.

If you feel that your property was unfairly depreciated and that your insurance company’s offer of settlement is unreasonable and unfair, contact me (if you live in Missouri) or a public adjuster licensed to represent you in your state.

[Update – 3/12/13 –  My client had a home damaged by a fire that needed extensive repair, as mentioned above.  The insurance company underpaid him … claiming a depreciation of 67% on the interior walls based totally upon their age.  After reopening the claim and further discussion with me,  they issued him an additional check for $11,438.00.]

 

Copyright 2013 James H.Bushart

%d bloggers like this: