Once there was a maintenance man who worked in a famous art museum and was directed by his supervisor to touch up the white paint on the wall of a certain gallery within the museum. As he was ascending his ladder he accidentally tipped over his gallon of white paint and it splashed across the surface of a 550-year-old painting from a world-famous artist that hung in the gallery.
Of course, the painting was insured and the curator immediately filed a claim. The insurance adjuster took a few photos and shared them with his boss who said “We need to send out an engineer.”
The engineer arrived to examine the painting and noted that the framed canvas was designed and intended to hold paint of various colors. Since the canvas and frame were still intact, he recorded that the painting was still “functional”. The painted surface had white paint splashed across the smiling face of a woman named “Lisa” or something, but he reported the damage was “cosmetic” in that it did not interfere with the “function” of the canvas to hold paint. It was, after all, covered with paint … and the gallery was filled with various paintings with random splashes and colors. He concluded that there was no “functional” damage and the insurance company denied the claim.
This story is fictional, of course … but the actions described represent those that are quite common with home and business property insurance claims.
Let’s look at the shingles on your roof, for example. The manufacturer of your shingles produces them in a wide variety of colors, shapes, and styles. When you selected them (or selected the house that already had them), you noted their color and design in context with the features of the rest of the structure, didn’t you? Of course, their designed purpose is to protect the roof from wear and water intrusion but they also were carefully and creatively designed to enhance the beauty of the home.
When a sudden storm pounds them with hail, along with the metal appurtenances, gutters, downspouts, and other surrounding materials, they will often be damaged. When they are damaged, you might contact your insurance carrier to file a claim for direct physical damage or loss to your roofing materials. The insurance adjuster will arrive, take a few photographs, and return to speak to his boss. When the boss does not want to pay you for your damage … he will send an engineer.
The engineer will often look at your shingles and surrounding metals for gaping holes. Finding none, he declares that the shingles and metals are still shedding water as they were designed to do, and the damage to them is not “functional” but merely “cosmetic”. Based on this report, the manager will deny the claim – for this is the very reason the engineer was hired.
Denying the claim because of an engineer’s definitions of damage rather than the insurance policy’s definitions of damage, however, can be improper. Some insurance companies have been successfully sued for such actions, as in the case of North-Shore Co-Owner’s Association versus Nationwide Mutual Insurance Company.
When you believe that your insurance carrier is trying harder to deny your claim than pay your claim, you may be the victim of improper claim handling, bad faith, or vexatious actions on the part of your carrier. When this happens, seek the advice of your attorney or a licensed public adjuster.
In search of an expert to provide them with a reason to deny a claim, many insurance companies will turn to the engineering profession.
There are highly respected and valued professional licensed engineers who design and build bridges and skyscrapers, who safely and efficiently channel waterways through and around large cities, who design and test the durability of aircraft and automobiles, who meet and overcome construction and building challenges around the globe – and then there are those who market themselves to insurance carriers for the purpose of providing written reports for them to use to deny insurance claims for wind and hail damage to homes and businesses. There is money in it. Insurance companies will pay them upwards of $2,500.00 per report. Most of these reports provide little more than boilerplate narratives regarding simple roofing materials and most of them contain little or no scientific or engineering data – but aside from their apparent lack of relevance, how accurate is the information that is provided?
As a public adjuster representing business and homeowner policyholders with their insurance claims, I read many of these reports and too often find errors, misrepresentations, and ambiguities salted among information intended to present a “scientific” spin on what are usually simple, routine observations that virtually anyone can make.
Much of what you will find in these reports, sometimes as much as two-thirds or more of the entire report, is a boilerplate filler of generic information that could be (but not always) relevant to their observations. It looks impressive at first glance, just as it is intended to, but is it even correct? Not always.
An engineer in several of his recent reports used by various insurance companies to deny claims includes the following language: “According to the National Roofing Contractors Association (NRCA), the lifespan of a roof is 20 years.” His report was peer-reviewed and stamped by another engineer with his firm – an engineering firm widely used by insurance carriers throughout the country. This claim by the engineer caught my attention because he was writing about a certain type of roofing material that carried a 30-year warranty and, as most people familiar with roofing materials know, various roofing materials have various lifespans – some as high as over 50 years.
I did not believe that the National Roofing Contractor’s Association would be so uninformed as to publish what he claimed they did, so I wrote to them and inquired as to where I could find the information from them that this engineer was quoting in his report used to support a denial of a cliam. The Vice President of Technical Services for the NRCA responded to me, as follows: “The 20-year figure is not from the NRCA. Lifespans vary greatly.” Thus, the engineer was not only wrong in his peer-reviewed statement of fact regarding the lifespan of a roof, but he also misrepresented the source for his errant facts.
Some engineers will provide comments and conclusions about the density or speed of hailstones as being less than required to damage roofing material and provide absolutely no information as to how they were able to measure the density or speed of the hailstone that melted away months or years before their observation. We are to simply take their word for it, like the quotations from the NRCA, perhaps.
The engineer paid by the insurance company might use ambiguous language that appears to say something but doesn’t. For instance, did the engineer say that large hailstones did not strike your roof, or did he simply say that he did not observe evidence of large hail strikes? There is a difference. Could there be evidence that he did not “see”, such as bruised indentations on weathered asphalt composite material that is soft to the touch? Did he say this, or did he leave it to the insurance company to use in the manner of their own choosing?
Insurance carriers, being corporations who have a fiduciary duty to protect the financial interests of their shareholders as well as a contractual duty to fulfill their promises to their policyholders, will often find this conflict of interest resulting in their wrongful actions of grossly underpaying or wrongfully denying their policyholders’ claims. The misuse of engineer reports is one of the ways they do this.
Often, insurance companies will knowingly allow the engineer’s errant attempts to interject policy interpretations into his report to be used to deny a policyholder’s claim. I have personally reversed an attempt by an insurer to deny an insurance claim because the engineer reported that the damage to the roof “could not be seen from the ground” when there was nothing in the policy to exclude damage for that reason, as one of many examples.
An expert witness in court must present his credentials, provide his testimony under oath, and be subjected to cross-examination, but insurance companies present biased hired guns as experts in the claims process and deprive vulnerable policyholders of necessary funds to restore their homes and businesses, with impunity.
The advice to not believe everything you read should be extended to engineer reports paid for by your insurance company to deny your insurance claim. Have them closely reviewed by your own expert for accuracy, relevancy, and truth before accepting that your claim should be denied as a result of an engineer’s report. Whatever you do, do NOT let the insurance company’s engineer be the final word on the validity of your claim.
There are two kinds of roofs on Missouri homes and business structures. There are those that have storm damage and those that will have storm damage. Understandably, the various insurance companies from all over the country that sell policies in our state will offer a wide variety of coverage options that are not always fully understood by the property owners before disaster strikes.
Learning after the roof has been damaged that you have been saving pennies per year by NOT including coverage to match replacement shingles or siding, or learning that hail dents that destroy the appearance of your metal roof is not considered “damage” by your insurance company, can result in costly out of pocket expenses that you thought were covered by insurance.
The Missouri Department of Insurance has created an informational and interactive website that helps you to understand your roofing coverage for each insurance carrier. While I recommend that you visit their site, I urge you to take the time to read and understand your insurance policy, as well. Have your agent clearly explain to you, when necessary, what it does and does not provide and ask lots of questions.
Considering that when an insurance company’s claims department is on its absolute best behavior, its job is the same as any corporation that is run by a board of directors. That job is to put the monetary interests of their shareholders (not their policyholders) at the top of their priority list. Their duty to you, as a policyholder, is not fiduciary (as it is with their shareholders) but contractual. Thus, even when you are dealing with a fair and reasonable adjuster, you need to know what your contract with them says. That contract is your insurance policy.
Your insurance company is prepared and well-practiced to fight and defend their rights under that contract. How prepared are you? Don’t let the first large claim be the first time you read it. Caveat emptor.
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.
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.
Here is a story about how an engineer might record the functional damage versus cosmetic damage in a fictional situation, first.
Once there was a maintenance man who worked in a famous art museum and was directed by his supervisor to touch up the white paint on the wall of a certain gallery within the museum. As he was ascending his ladder he accidentally tipped over his gallon of white paint and it splashed across the surface of a 550-year-old painting from a world famous artist that hung in the gallery.
Of course, the painting was insured and the curator immediately filed a claim. The insurance adjuster took a few photos and shared them with his boss who said “We need to send out an engineer.“
The engineer arrived to examine the painting and noted that the framed canvas was designed and intended to hold paint of various colors. Since the canvas and frame were still intact and obviously able to retain paint, he recorded that the painting was still “functional”. The painted surface had white paint splashed across the smiling face of a woman named “Lisa” or something, but he reported the damage was only “cosmetic” in that it did not interfere with the “function” of the canvas to hold paint. It was, after all, paint on a painting … and the gallery was filled with various paintings with random splashes and colors. He concluded that there was no “functional” damage and the insurance company denied the claim.
This story is fictional, of course … but the actions described are quite common.
Let’s look at the shingles on your roof, for example. The manufacturer of your shingles produces them in a wide variety of colors, shapes, and styles. When you selected them (or selected a house that already had them), you noted their color and design in context with the features of the rest of the structure, didn’t you? Of course, their designed purpose is to protect the roof from wear and water intrusion but they also were carefully and creatively designed to enhance the beauty of the home.
When a sudden Missouri storm erupts and pounds them with hail, along with the metal appurtenances, gutters, downspouts, and other surrounding materials, they will often be damaged. When they are damaged, you might contact your insurance carrier to file a claim for direct physical damage or loss to your roofing materials. The insurance adjuster will arrive, take a few photographs, and return to speak to his boss. When the boss does not want to pay you for your damage, he might send an engineer.
The engineer will often look at your shingles and the surrounding metals for holes. Finding none, he declares that the shingles and metals are still shedding water as they were designed to do, and the damage to them is not “functional” but merely “cosmetic”. Based on this report, the manager may deny the claim, depending upon the language in your policy.
Denying the claim because of an engineer’s definitions of “functional” or “Cosmetic” damage rather than the insurance policy’s definitions of damage can be improper. Try as some might, engineers neither write nor interpret Missouri insurance policies and, when they attempt to do so, they are often incorrect. Some insurance companies have been successfully sued for such actions when it happens, as in the case of North-Shore Co-Owner’s Association versus Nationwide Mutual Insurance Company.
When you believe that your insurance carrier is trying harder to deny your claim than pay your claim, you may be the victim of improper claim handling, bad faith, or vexatious actions on the part of your carrier. When this happens, seek the advice of your Missouri attorney or a Missouri licensed public adjuster.
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 LLC. 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.
An expensive slate roof with copper flashing was severely damaged by hail. The insurance company’s adjuster and his contracted engineering company agreed that it was damaged by hail … but still refused to pay for the repair.
The insurance company’s adjuster referred to a paragraph written on the third page of a letter that had been sent to the policyholder six months before which totally excluded hail damage to soft metals that did not result in leaks. He told the policyholder that the vast majority of the $69,000 (plus) damage to his roof would have to be paid at his own expense.
The policy holder’s roofing contractor referred him to me for assistance with his claim.
My close examination of the policy, the letter, and the engineer’s report (in addition to localized weather reports) revealed that the exclusion the adjuster used to deny coverage did not take effect until four weeks after the hail storm. Accordingly, his denial of the claim was improper and he owed the insured for the damages.
When I brought this to their attention, the insurance company reluctantly acknowledged their duty to pay. The policyholder was made whole and the contractor is now able to serve another homeowner in need of his services.
“No” is not always the final answer. Have a licensed public adjuster review your claim before walking away from your money.
