The Days of Blindly Trusting Your Insurance Company Are Over
James Rode
In general, when times are good for insurers, policyholders typically get what they pay for, i.e., the higher the premiums – the better the claims are processed / paid and vice-a-versa. In other words, the insurance system, process and promise often works particularly when insurers properly rate a risk and your premiums have been making them profits via their selected investments.
As almost every businessowner learned the hard way, when their pandemic interruption claims were summarily rejected by insurers, policyholders can't indiscriminately trust paid-for property insurance to come through in the worst of times. In too many cases, this has also been true for homeowners with stucco filing covered ensuing water damage claims as well.
When times have gone bad despite being sophisticated financial institutions in the disaster / risk rating business, insurers have cited unforeseeable circumstances (i.e., risks) and requested governmental bailouts. Viscerally, bailouts for too big to fail insurance companies seem un-American and/or inequitable to smaller businesses. It is, however, the less transparent insurer survival and/or profit-making approach of simply trying to pay out less in claims than what they get in premiums irrespective of the validity of the claims that erodes the trust between insurers and policyholders. In 2009, MLA and its clients frequently experienced, “the sky is now purple,” or “we do not pay for that (anymore)” adjusting approach from certain insurers dealing with cashflow management issues and/or fighting for their own financial survival.
Since the COVID-19 pandemic began devastating lives and livelihoods, the reasonable expectations of too many small businesses such as restaurants and bars across the nation that their business interruption insurance would help them survive was wrong. It turns out that, in large part, insurers protected themselves against the risk of pandemic closure orders and damage, but not their customers, and without fair warning.
Over the approximate ten years MLA Claims has been assisting homeowners with “stucco claims,” we have observed far too many instances of insurers wrongly denying ensuing water damage claims by misapplying provisions of the complicated contract of adhesion to the layman homeowner to avoid or minimize payments. With the widespread usage of stucco in major regions (i.e., the large exposure) certain insurers have tried to slowdown the covered water damage claims payments faucets. For more detailed information about “stucco claims,” please see our previous blogs on this issue.
Today, I do not think policyholders find these examples and thoughts to be surprising (please see J.D. Power 2022 US Property Claims Satisfaction study). The days of blindly trusting your neighborly or good hands insurance company are over. Before filing your property insurance claim, contact a reputable property claims specialist to consult as to whether an advocate is needed on your property claim.
ABOUT THE BLOGGER
Bob Landow specializes in resolving complex commercial property losses stemming from catastrophic events such as fires, hurricanes, earthquakes, and floods across the country, throughout the Virgin Islands, Mexico, and in Puerto Rico.
Bob has handled all types of claims for clients ranging from small businesses to Fortune 500 companies and large municipalities. Bob’s experience includes handling a mine collapse for an energy company, a power failure for a major acute care hospital, and a hurricane that caused wind and/or flood damage to hundreds of city-owned properties including office buildings, fire and police departments, and wastewater treatment plants for one of our nation’s most populated cities.
Bob has adjusted over $1,000,000,000 in commercial property claims including over $350,000,000 in business interruption losses. Bob reached a $264,000,000 settlement relating to damage resulting from Hurricane Katrina to three separate hospital campuses in New Orleans, Louisiana.
Bob is a licensed public insurance adjuster in 35 states and/or jurisdictions. Bob earned a B.S. in Consumer Economics from the University of Maryland and an MBA from Georgetown University’s McDonough School of Business. He lives in Wayne, PA with his wife, Arlyn, and their three daughters.
For further inquiries or to schedule a free consultation, please contact MLA Claims via e-mail adjuster@mlaclaims.com or via telephone 610.940.4400.