Missouri contractors cannot negotiate your insurance claim on your behalf with your insurance company. On August 28, 2011, the Governor of Missouri signed into law Senate Bill 101 which prohibits home exterior contractors from representing a policyholder or negotiating on their behalf with their insurance company for exterior work on their home as a part of an insurance claim.
Here is a link to the law: It is very clear.
So why do insurance companies continue to negotiate with residential contractors in spite of this law? Perhaps it is because, when they do, they can get away with underpaying your claim.
An insurance adjuster can say things to your contractor that he cannot say to you, your Missouri attorney or your Missouri licensed public adjuster because, unlike you (and those who lawfully represent you), the contractor is not a party to the agreement (the policy) between you and the insurance company.
Insurance adjusters will often withhold certain information from the contractor, misrepresent or not fully disclose your coverage to the contractor, and say things to your contractor such as “We are not paying that much for that building material … Your estimate is too high for labor and you need to revise that … We are not going to pay more than such and such dollars for this claim … We won’t pay your overhead and profit” … and so forth because they are not communicating with you or anyone lawfully representing you.
It would be an act of bad faith, and perhaps a vexatious act carrying severe penalties, for the adjuster to say such things to you or to your lawful representative. Why? Because certain communications and actions between insurance companies, their policyholders, and their lawful representatives are regulated by the Missouri Department of Insurance. Such regulations, however, do not necessarily extend to their relationships with contractors and other vendors. In their opinion, your contractor is representing his own interests and not yours.
For example, when an insurance adjuster makes a statement of fact regarding your coverage to you or your lawful representative, he must respond with supporting language from your policy upon demand. Not so, however, when the same demand is made by your contractor. Since the contractor is not a party to the agreement or lawfully representing anyone who is, he is not entitled to know all of the important information the policy contains. Withholding this information about your specific coverage from your contractor puts him in the dark and the insurance company’s adjuster in complete control.
Some contractors mistakenly believe that since they have worked with certain insurance companies or adjusters in the past, all policyholders with that company have the same or similar coverage – which is not true. Three or four neighbors living side by side on the same street can be insured by the same insurance carrier and have different policies with different coverage. Some contractors quote what they believe to be “state law” as to what an insurance company must pay for which is also not true. In Missouri, state laws do not govern or control all of the information contained in an insurance policy, and policy interpretation disputes are settled in civil court and are generally not legislated.
I hold skilled and experienced exterior contractors in very high regard. They are important advisors for you and/or your lawful representatives in settling a claim. Their skillful and experienced input in determining the full scope of the damage and what they charge for restoration of that damage is helpful, often vital, in settling your claim. It is when they extend beyond their valuable construction skills and expertise and go beyond the “low hanging fruit” that the adjuster would pay anyway and (as some contractors advertise) “push” the adjuster toward a larger settlement, complete documentation, communicate with the carrier on your behalf and settle your claim, those and similar actions may not be in accord with the law and their results may not produce all of the money that you are entitled to.
Most damaging is the harm some do to your claim before you finally bring in qualified and lawful representatives, such as your attorney or licensed public adjuster, to assist you. While their lack of ability to correctly interpret your coverage or communicate your rights under the policy may have limited their ability to help you fully resolve your claim, what they communicated to the insurance company (correctly or incorrectly) can interfere with a fair resolution and must be identified and resolved before progress can be made.
I work with many exterior contractors and help them operate within the boundaries that are set forth in Senate Bill 101, allowing them to focus upon their areas of skill and expertise to fully serve their customers’ construction needs. Their customers are able to recover from their insurers what they require to restore their home to its pre-damaged condition and the contractor makes what he bids for the work that is required. When it is done correctly, all parties are served in a win-win position. When it is done improperly, however, some or all come out on the losing end.
Not all claims require an attorney or a public adjuster to handle them. In fact, most can be handled directly by the policyholder with no representation at all, if they understand their rights under their contract with the insurance company and have a skilled contractor they trust to correctly inform them of their damage and what must be done to restore their property to its pre-loss condition.
No one but you, your Missouri attorney, or your Missouri licensed public adjuster should be communicating with your insurance company on your behalf, and remember that a “no” from the insurance adjuster to your exterior contractor is not be the final word on your claim for damage.
This Blog/Web Site is made available by James H. Bushart, Public Adjuster LLC for educational purposes only as well as to give you general information and a general understanding of the work of a public adjuster, not to provide specific legal advice. The authors and/or site manager make no representations as to accuracy, completeness, currentness, suitability, or validity of any information on this site and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. By using this blog site you understand that there is no public adjuster/client relationship between you and James H. Bushart, Public Adjuster. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state, nor should it be used as a substitute for competent maintenance or repair advice from a qualified contractor licensed to perform work in your state.