Absorbing the deductible: How deductibles work in Florida property insurance claims

There are certain situations when making a homeowners insurance claim that allow you to offset or eliminate the deductible, but they can be confusing

Almost all insurance policies contain deductibles, and your homeowners insurance or commercial property insurance policies are no different, but the application of those deductibles can be confusing.

VIP Adjusting’s public adjusters have come across countless situations where even the people working for the insurance company can make mistakes and misapply the deductible.

What is a deductible for your homeowners or commercial property insurance?

A deductible can be looked at in any number of different ways for your homeowners insurance or other property insurance, but essentially, it’s the insured’s responsibility to participate in the claim. It can be considered a type of co-insurance, but ultimately, it just means the insured is responsible for participating in at least an amount equal to the deductible.

Homeowners insurance policies in Florida usually carry a deductible of either $500, $1,000, $2,500, $5,000 or in the case of a hurricane, the deductible would likely be a percentage of the policy limit. The hurricane deductible is usually significantly higher than the “all other perils” deductible. 

Before the time comes to make a claim, or there’s even damage to a property, an insured homeowner should be aware of their deductible and make an effort to have at least this amount in an emergency savings account. 

One of the purposes of a deductible is so that if there is a covered loss to a home, but it isn’t really anything major (the example we usually use is a small hole being knocked in the wall), the insured isn’t calling their insurance company every couple weeks just because they have rambunctious kids. That financial obligation for the homeowner in the event of a claim for property damage also should encourage the homeowner to be more responsible too, since they have some skin in the game, so to speak. 

How is the property insurance deductible applied?

The deductible can actually be applied or accounted for in a couple of different ways. The most common way the deductible is applied for a Florida property insurance claim is to subtract that number from the Coverage A (dwelling coverage) amount. 

This method is usually most convenient for everyone involved because it’s usually the portion with the largest damage and makes the least impact on the homeowner. Instead of coming up with the deductible up front, the homeowner would then only have to figure out how to pay the amount at the end of repairs because they can use the insurance proceeds to pay the rest up front (assuming they’ve been paid fairly). 

Subtracting the deductible from the Coverage A payment is also convenient because the mortgage company will be listed on this check and may be slow to process the insurance claim checks. If there are claims for additional living expenses, loss of use, or contents, those checks would come directly to the insured and could be deposited immediately to allow the homeowner to use these proceeds interchangeably with the dwelling payment, making the funds more liquid.

There are other less common ways to apply the deductible, though. Some insurance companies will apply the deductible to these other coverages. Unless your insurance policy specifies, it’s really up to the insured and insurer to agree on these things, and if there’s a dispute or confusion, a public adjuster would be able to assist you in this situation.

Another less common method of applying the deductible is for the insured to actually pay the deductible up front. This can mean you pay it to the insurance company (we think this is stupid because if they’re going to issue you a payment, you giving them money and them giving you back money is just the same as subtracting it from the total claim amount, but with more steps, even though we’ve seen it done this way anyways...), or the more common of this scenario is for you to pay your deductible to a contractor up front. This could mean, for example, if you have a water mitigation contractor perform drying services that cost $5,000, and you pay your $2,500 deductible to that contractor, the insurance company would only pay the remaining $2,500 of that bill, and your Coverage A Dwelling, contents, and additional living expenses/loss of use payments would all come without any further deduction.

So what is “absorbing” the deductible?

Ok, ok, so technically, there is no such thing as “absorbing” the deductible. That’s more of a colloquial term for “applying the deductible to amounts in excess of the policy limits.” That more accurate description gives a hint into what needs to happen for the deductible to be “absorbed.” You have to have losses in excess of the policy limits.

That does NOT mean that your property has to be a total loss, though. Florida homeowners insurance policies have multiple coverages, including “other structures” which are usually limited to 10% of the Coverage A Dwelling limit, and include things like fences, sheds, and other similar structures. Coverage B limits are usually easily exceeded in the aftermath of a hurricane.

There are also coverages for additional living expenses (which sometimes have monthly limits you may exceed) and contents. Florida property insurance policies also contain a number of sub-limits for certain items. Mold usually has a $10,000 sub-limit that can be relatively easy to exceed. There are also sub-limits for landscaping damages, and trees which can be easily exceeded following a storm. These are the most common sub-limits but your policy certainly has a number of these types of special limits that your public adjuster can review and discuss with you. 

Now, on to this concept of absorbing the deductible. If you have insured losses that exceed a policy limit, then you, as the insured, are not only covering the amount you’re required to cover to obtain coverage (also known as the deductible), but you’re actually contributing even more than you’re required because there are losses over the limit. For example, if you have a mold remediation as part of your claim that costs $20,000, the policy limit is $10,000, in order to complete it, you have to pay the other $10,000 which more than meets your $2,500 deductible. 

If you’ve got this kind of out of pocket cost for insured losses, it would be improper and inequitable for your insurance company to then deduct an additional $2,500 from another coverage. Believe it or not, our public adjusters have written statements from desk adjusters at one company stating that despite this concept, their company policy is to incorrectly apply the deductible. 

Without “absorbing the deductible” the policy limits would be deceptive

Another way to look at this concept is that if there wasn’t a way to absorb the deductible, then the insurance company would never actually have to pay the policy limits. If you have a home that costs $250,000 to rebuild and there was a total loss caused by fire, the insurance company would only have to pay $247,500. That may seem like a drop in the bucket in that example, but it’s not what the insuring agreement says (and Florida’s Valued Policy Law says the limits are to be paid, but that’s for another post). 

It would cause a whole lot more problems if the insurance policy was for a mobile home or manufactured home and the policy limits were only $15,000. In the event of a total loss on that policy, the limits should be paid, just as any other policy, but improperly applying the deductible can leave the insured really hurting out of pocket.

That’s the important part of this concept. The insured’s participation out of pocket. It’s required to be at least the amount of the deductible, and once that threshold is met, the policy is supposed to pay the actual amount of the loss to restore the insured to pre-loss condition. 

We know these concepts can be complicated and this just adds on to the list of why having a public adjuster in your corner can be invaluable. When the insurance company’s first priority is to its shareholders, it pays to have your own professional looking out for your best interests. 

If you are a homeowner or business owner in Martin County, St. Lucie County, Indian River County, or Brevard County, from Hobe Sound to White City, to Indian River Shores, to Palm Bay and Melbourne, VIP Adjusting’s public adjusters are standing by to assist you with your property damage insurance claim needs. Call now or contact us for a free consultation.

Insurance Company Delays with Boilerplate Document Requests

Some Florida insurance companies submit boilerplate document requests to create delays and set claimants up for failure

There’s one insurance company in particular that does it on every single claim. The claim gets reported and an automated boilerplate letter gets sent with ten or more vague document requests without anything known about the claim or if the requests are even relevant. 

Other insurance companies do it, too, but there’s on in particular. Ask our public adjusters and we’ll tell you who it is, but for now, we’ll tell you how it creates unnecessary delays and could prevent you from recovering altogether. 

The insurance policy says the insurance company will “adjust all losses with you”

When you submit a residential or commercial insurance claim for property damage, it’s supposed to be a two way exchange of information. The claimant or insurance policyholder is supposed to provide information relevant to the insurance claim, which includes information on causation and damages, valuation, and sometimes, prior claim history.

Likewise, an insurance company is supposed to provide information to the insured and their public adjuster as well. The insurance company should share its valuation of the damages, and other information related to its investigation, like conclusions and engineer reports, and any other information related to the claim. After all, if the claim isn’t covered loss, a homeowner still needs to stop the problem and repair the damages to make sure the home remains livable and is safe for those who visit.

When this two-way exchange of information breaks down, it invariably favors the insurance company.

Vague boilerplate document requests

A claim for water damage might get a response from the insurance company that looks like this:

We are formally requesting that you provide the following:

1) A signed, sworn statement in proof of loss and detailed repair estimate pursuant to policy language highlighted below

2) Any Emergency Mitigation Invoice/Documents

3) Any Emergency Mitigation Dry out logs & Contract

4) Any Emergency Mitigation Color Photographs

5) Any and all plumbing receipts, invoices, reports, proposals, photographs related to the alleged loss

6) Any and all receipts for repairs completed or commenced by you relative to the damages you claim arose out of the loss

7) Copies of all receipts, contracts, estimates, invoices, reports, permits, or material purchase receipts for any and all repairs, remodeling, or renovations begun/completed in the last 5 years

8) A photo of the damaged property prior to any repairs/EMS

9) Any photos or video taken by the insured (or anyone else) at time of loss

10) Water Usage Records or water bills for the preceding two years

11) Electric bills for the preceding two years

12) Condo/Homeowner Association Incident Reports

13) Prior Claim Information and proof of repairs

14) Recorded Statement of the insured

All of these requests for documentation and other actions related to an insurance claim are often followed by a regurgitation of language and provisions from the insurance policy that may or may not say you actually have to provide any of that (that’s a whole other topic entirely, but the short answer is that it is usually limited to whether or not a request is “reasonable”).

Sure, an insurance company is entitled to many of these things, but the reason that the vague requests are made in writing are twofold: first, it creates delays that favor the insurance company, and second, if you don’t respond to just one of these requests, they may try to claim later on (usually incorrectly) that if you file a lawsuit that you’ve prevented them from conducting their investigation and you shouldn’t be allowed to recover at all.

Each one of these requests is a potential landmine and it pays (pun definitely intended) to have an experienced public adjuster by your side when reviewing and responding to these requests.

Insurance companies creating delays saves them money

The more an insurance company can drag out a claim, statistics show, the more money they save, either from the time that they hold on to your money, or that an insured will inevitably get frustrated and give up or take less.

These requests are designed to create just these types of delays that favor the insurance company. 

Five years worth of documents related to home maintenance and repairs? Do you need to go back through old credit card statements for that thing you bought at Home Depot four and a half years ago? They seem to imply you should. You may not have those records in your possession or they may not even be stored online anymore and after you take the time to look and that one specific delay is over, the insurance company can later use that missing item to point the finger back at you and try to undercut your claim.

What about the utility bills? Do you even keep those? Are they stored online? If not, you might have to request them from the water company or municipality, or get power bills from Florida Power & Light (FPL). It might take 30-60 days to get copies, and every 30-60 day delay adds up in favor of your insurance company. Before you know it, your claim that was supposed to take 90 days has taken a year or more.

How about reports from a condominium association or homeowners association (HOA)? These may be helpful for your claim, but a lot of condominium associations and HOAs take a while to get you documents, or may even refuse to provide it as some type of work product, especially if the association is not professionally managed. This can put you in an indefinite holding pattern while you’re waiting for your claim to be paid. This is a tough situation to wait in while your home is damaged and you’re waiting to do repairs.

Creating “conditions precedent” to avoid paying

Insurance policies in Florida all have a vague provision that says no suit may be brought unless there has been full compliance with the policy. That means you can’t file a lawsuit, should the need arise because an insurance company is unreasonably delaying or hasn’t fairly paid for your claim, if you haven’t complied with the insurance policy. They may be in the wrong, but then again, technically, so are you.

As we mentioned before, a lot of those requests above are conditioned on whether or not the request is reasonable, and a lot of time the standard is whether you attempted to comply or substantially complied. For example, that Home Depot receipt from 4.5 years ago? If you at least tried to get it, but couldn’t obtain it, that doesn’t prevent you from filing a lawsuit.

The first item on the sample list above, however, the proof of loss, is almost always absolutely mandatory. Florida’s courts have routinely held that if a proof of loss is requested and you don’t provide one, your suit will be dismissed. Unfortunately for homeowners, a proof of loss can be complicated and usually requires a public adjuster or attorney to explain and assist in its completion. It’s worth noting that a general contractor cannot legally assist you in completing a proof of loss and an attempt to do so would be a felony by the contractor. 

Didn’t you say the exchange of information with the insurance company was supposed to be a two-way street?

Yes! We did! Thanks for remembering. Florida’s legislature has written a series of requirements prescribing good faith claims handling procedures that insurance companies often ignore. 

Fla. Stat. 626.9541(1)(i)3.h. Requires that an insurance company clearly explain the nature of requested information AND the reasons why such information is necessary. VIP Adjusting’s public adjusters often respond to these boilerplate requests with the good faith intent of fairly resolving an insurance claim and ask for this very simple request; that the insurance company explain why such information is necessary. It is almost uniformly ignored. 

That response, however, protects an insured homeowner in the event they need to file a lawsuit. 

Many of the items on that list may be duplicitous. If a pipe leaked and you have provided a photo of the damage pipe, video of the leak, and a repair invoice from a plumber (or better yet, saved and produced the damaged plumbing component that caused the leak), do you need to provide water bills for several years and condo/HOA incident reports? Maybe. If the insurance company thinks the leak was ongoing for an extended period of time, or if another party was responsible for the pipe and the insurance company can subrogate. Maybe not, though. It’s up to the insurance company to have that dialogue with you. 

What about prior claim information? Again, maybe, maybe not. It depends on the insurance company’s intent and investigation. If you had a prior claim that was similar in the same location, they may want to know if you have overlapping damages and completed repairs to the prior reclaim so you aren’t double-dipping. If you’ve never had another claim, or a prior claim was on the opposite side of the house, the request may not be valid. 

Often, VIP Adjusting’s public adjusters have noticed that the insurance company’s intent often isn’t on ultimately receiving the document requests, it’s usually just for the purpose of creating delays and trying to set you up for failure. (Reading between the lines, yes, we’re saying that many of these requests are made in bad faith)

Sometimes, the delays work despite a public adjuster’s best efforts

A public adjuster can battle the insurance company’s tactics for you and do most of the heavy lifting, but some participation is required from an insured. We had a claim recently where our public adjusters prepared an estimate for the insured and provided it for approval with a sworn statement in proof of loss form, which requires a notarized signature of the insured. Despite repeated follow ups, the insured took more than seven months to get the document notarized, and even then wouldn’t provide any other documentation, validating the insurance companies tactics and rubber stamping the delays.

We understand all homeowners are different. Some people just aren’t good with paperwork, and some procrastinate. In these instances, this tactic from the insurance company is targeted directly at you because it allows them to justifiably delay and possibly prevent you from recovering altogether. If you’ve paid your insurance premium and you’ve suffered covered damage to your home, you should be fairly compensated for your claim. 

If you’ve made a claim and received a document request like the one above, call the public adjusters at VIP Adjusting today for a free claim review. We’d be happy to go over the requests with you and come up with a strategy that puts the power back in your hands. 

Florida’s Property Insurers and the "Right to Repair"

Each property insurance company in Florida has tactics they use against claimants - “Right to Repair” is One

Last week we wrote about some bad actors (public adjusters and attorneys) in the minority who cause harm to the insurance industry causing problems for homeowners. This week we want to discuss one specific insurance company tactic that was recently in the headlines.

People’s Trust Insurance Company pioneered Florida insurance companies in using a program for direct repairs after a homeowner has sustained property damage, but an ongoing lawsuit alleges that the company pays bonuses to its contractors for cutting corners on those repairs.

What is the “Right to Repair”?

The right to repair, also referred to as the option to repair, direct repair program, or managed repair is an option in many property insurance contracts that allows a property insurance company to be in charge of the repairs that are performed when a home has been damaged instead of paying a homeowner to repair the damages themselves or find their own contractor.

This option for the insurance company is similar to language in auto insurance policies where instead of paying an insured who has been in an accident a some amount of money to shop around and get their car fixed, the insurance company may have a list of repair facilities that the insurance company knows and trusts will charge a fair price and who will presumably do a good job with the repair. 

In theory, this method can eliminate a lot of headaches both for the insurance company and the insured. It reduces the risk of a less-than-reputable repair person charging an unreasonable amount or trying to rip off an insured and creating an unnecessary dispute between the insured and insurance company, it reduces the risk of shoddy repairs, and most importantly it puts the insured back to pre-loss condition.

But, does this successful auto insurance solution translate well to homeowners insurance? Not exactly.

The People’s Trust Right to Repair

As we mentioned, People’s Trust Insurance Company was a trailblazer in Florida’s property insurance industry in exercising the right to repair. They weaved the whole idea of managing repairs throughout their business model. People’s Trust’s founder created a construction company that he wholly owned called Rapid Response Team, and if you made a claim to People’s Trust, they would send this wholly owned (read: conflict of interest) contractor to your property, charge you your deductible, and then try to profit by completing the repairs as inexpensively as possible. 

This method creates all kinds of problems, as you can imagine, where the insurance company is trying to maximize profits by charging premiums, maximize profits by delaying and avoiding paying claims, and maximize profits by trying to complete the repairs on a shoestring budget.

In practice, we saw nothing but problems come out of the managed repair program, and because they were profiting on every aspect of a homeowner’s insurance, we saw People’s Trust Insurance Company quickly rise in the number of policyholders they had throughout Florida, often undercutting other insurers and offering rock bottom premiums. After some initial complaints, People’s Trust started making people sign a waiver when they initially received their policies from an insurance agent that People’s Trust/Rapid Response would be performing the repairs if the homeowner made a claim for property damage.

Not long after People’s Trust started these practices, a number of other Florida insurance companies followed suit. None of the insurance companies had their own in-house contractors, but all the insurance companies who started down that path saw it as an opportunity to control profits by directly controlling the contractor who would do the repairs.

The Right to Repair Converts the Insurance Contract into a Construction Contract

When an insurance company exercises the option to repair, legally, it converts the insurance contract into a construction contract. Despite all the headaches and pitfalls of having contractors trying to cut corners during the repairs, an insured homeowner is often put into a better legal position because the conversion of the insurance policy into a construction contract removes the coverage limits, essentially meaning that whatever damage exists, the repair must be completed in a satisfactory manner by the insurance company, and meet all applicable building codes. 

The insurance company, then, steps into the role of a general contractor and project manager. Whatever general contractor the insurance company hires (and the homeowner typically is not given a choice like with auto repair facilities), then becomes a subcontractor of the insurance company.

The insurance company dictates a scope of repairs and an amount they will pay, and the general contractor then is in charge of meeting or exceeding that budget. Supplemental claims are typically met with extreme scrutiny.

In practice, we have seen contractors operating on such small margins dictated by the insurance companies that repairs often go incomplete, contractors walk off job sites, or in some extreme cases, we’ve seen contractors who have gone bankrupt and out of business before the job is finished and repairs are completed.

We initially said that exercising this option puts the insured homeowner into a better position legally, but for that to be enforced, it can often take significantly longer than a normal claim and require litigation to remedy. No homeowner wants to go through litigation if they can help it, but if your repairs have been botched or the job has been abandoned while your home is still damaged, you may not have a choice.

The People’s Trust Lawsuit

Recently a south Florida attorney filed a lawsuit alleging that People’s Trust and its affiliated companies used a deceptive and fraudulent business scheme related to the right to repair, often disguising this option as a nominal premium credit, only to then cut corners on performing the repairs to an insured’s damaged home. 

Our public adjusters can’t speak to the allegations in that complaint, specifically, but we sure have seen some serious problems with the right to repair, both for insurance claims with People’s Trust/Rapid Response Team and with other Florida insurance companies.

Some Horror Stories from VIP Adjusting’s Public Adjusters have witnessed

One of our public adjusters had a client whose repairs were performed by People’s Trust and Rapid Response team. The homeowners’ personal property were all placed in storage, Rapid Response Team performed about 95% of the repairs and then just disappeared from the job site. The insured couldn’t get Rapid Response Team to finish the punch-list repairs to complete the job, Rapid Response Team left a permit open resulting in a $10,000 fine to the homeowner, and no one would respond as to how to return the personal property to the homeowners. All their furniture was indefinitely in storage, meaning they had to continue to pay to live elsewhere for more than a year and a half.

Another insured with a different insurance company had a plumbing leak in a supply line to the dishwasher in their kitchen island. The insurance company’s contractor repaired the leak by digging through the floor (also referred to as “trenching”), but when repairing the damages to the home did a substandard job, leaving gaps in the floor throughout the home, unfinished thresholds, visible drywall patches, mismatched colors, and other substandard workmanship in almost every part of the home. While the homeowners were justifiably upset at the quality of the home’s repairs, the dishwasher leaked again because the contractor had reinstalled it improperly adding insult to injury. In this instance, the contractor walked off the job declaring that they had lost money on the job, and the insurance company refused to address the substandard repairs and the second leak. It was later learned that the contractor had declared bankruptcy following this job.

Yet another insured with a different insurance company had a plumbing leak that damaged wood flooring throughout a home. The insurance company’s contractor improperly installed the replacement floors without a vapor barrier which almost immediately buckled and caused significantly more damage than the original leak. Despite the new damage being within a week of completion of the repairs, the insurance company tried to disavow the damages, instead claiming the damages were the result of high humidity levels.

As it pertains to People’s Trust, we’ve also witnessed some unethical legal practices from them, as well. True to their business model, People’s Trust Insurance Company also has an in-house legal department with in-house attorneys. This is permitted by the Florida bar, however, in-house attorneys are generally not permitted to provide legal services for outside clients for a number of reasons. First, non-lawyers are not permitted to own an interest in a law firm and the attorney’s representation for an outside entity would essentially constitute the insurance company acting as a law firm. For that same reason, entities that are not law firms cannot represent clients. Notwithstanding these regulations, People’s Trust Insurance Company’s in-house attorneys routinely represent Rapid Response Team, despite the fact that they are separate legal entities.

The Moral of the Story

When staring down an insurance company looking to profit from the repairs by minimizing losses, you’re facing an uphill climb, especially if your insurance company regularly elects the Option to Repair, but the guidance of an experienced public adjuster can put you in a better position than you ordinarily would be and make sure the seeds have been planted to protect you in case the repairs should go sideways. If you find yourself on the receiving end of this type of tactic, feel free to contact VIP Adjusting’s public adjusters today for a free claim review. 

You might also be interested in:

Water damage claims resulting in Mold Damage

Sink hole claims can be particularly tricky with the Option to Repair

Insurance Claims as a result of Fire Damage and Smoke Damage

Public Adjusters: Are they the problem?

Homeowners Insurance Companies in Florida like to point fingers, but are public adjusters the ones to blame?

Florida’s homeowners insurance companies are always looking to pass the buck or explain why they think they aren’t responsible for paying more for insurance claims for property damages. These insurance companies sometimes tell homeowners and insureds that they shouldn’t have hired a public adjuster, that it will just makes things more contentious and the insurance company or independent adjuster was planning to “take care” of a homeowner, but now they can’t because a public adjuster is involved. 

Is the insurance company telling the truth? Or is this just a talking point?

Every industry has bad actors, including public adjusting and attorneys

Florida sometimes feels like the insurance fraud capital of the world. Right up there with all of the head-shaking and eye-rolling news stories of “Florida Man,” it seems that with an equal amount of regularity there are news stories about public adjusters coordinating one scam or another. 

In the spring of 2019, an insurance fraud ring in South Florida was busted submitting phony property damage insurance claims involving 35 suspects led by a public adjuster, her relatives and employees, an insurance agent, a plumber, a handyman, a water mitigation contractor, and, believe it or not, her ex-husband who was a police officer at the time. 

At the time of publication of this article, there’s are ongoing matters involving a Florida attorney and law firm, public adjuster, and a water mitigation contractor either submitting fraudulent claims or manipulating valid claims to extort Florida’s insurance companies for additional benefits that wouldn’t have been justified had the public adjuster or attorney been reasonable at any point along the way. This alleged ring has resulted in multiple bar complaints against the attorneys and the law firm, an investigation (ongoing) from the Department of Financial Services, and a civil RICO lawsuit against all of the people involved from the state-run Citizens Property Insurance Corporation. 

Public Adjusters are only as good as their individual ethics

Despite the big headlines, these types of behavior are contained within the vast minority of attorneys and public adjusters. Florida’s legislature has acknowledged that the profession of public adjusting engages the public trust, and includes a high bar for licensing and a dedicated enforcement agency providing ongoing monitoring and investigation of anyone alleged to be conducting themselves in a way that is improper. 

Just as some individual attorneys, or areas of legal practice have gained the reputation of being “ambulance chasers,” the actions of some risk jeopardizing the reputation of the public adjusting industry as a whole.

VIP Adjusting makes sure to hold its public adjusters to the highest standards in order to provide representation to our clients throughout Florida’s Treasure Coast and Space Coast. 

What happens if insurance company talking points spread?

Unfortunately for the consumer, the insurance company talking points that public adjusters are the problem have been picked up by Florida’s Chief Financial Officer, Jimmy Patronis, the individual in charge of public adjuster regulation. In the aftermath of Hurricane Michael, and while Hurricane Dorian was approaching Florida, Patronis was reported to have held a private telephone call with representatives of Florida’s insurance companies saying that he would do what he could to eliminate the road blocks provided by public adjusters and attorneys. Subsequent to that, Patronis publicly bashed public adjusters and attorneys, blaming them for claim delays and assisting the legislature in proposing more restrictive regulations on public adjusters, citing the minority bad actors, without acknowledging them as a minority, as a reason for the attacks. 

In reality, a public adjuster is only as beneficial for the consumer as that public adjuster’s ethics. To make sure you’re not getting caught in a trap set by your insurance company, or being grossly underpaid, it’s best that you vet any public adjuster you consider hiring. Ask questions. Request CVs and references for the public adjuster. Read reviews online. 

Pursuing an insurance claim for damage to your home or business is about more than just a number. It’s about rebuilding your life or your livelihood. If you haven’t established you can trust your public adjuster, you shouldn’t be signing a contract with that public adjuster.

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Why you should hire a public adjuster

VIP Adjusting’s Mission

More about the background of VIP Adjusting’s public adjusters

Will THAT cause my homeowners insurance premium to go up?

As public adjusters, our clients often ask us whether making a claim will cause premiums to change.

The public adjusters at VIP Adjusting have been representing clients in Port St Lucie and Martin County for years, and even though we’re not insurance agents, our clients are often curious how making a claim will affect their premiums or whether or not they’ll be “dropped” or non-renewed. Okay, “curious” isn’t the right word. Concerned is perhaps a better description.

Our public adjusters never want to encourage a homeowner to make a claim for damage that isn’t covered, under deductible, or otherwise frivolous, but when the concern arises in connection with a legitimate insurance claim for property damage related to increasing homeowners insurance premiums, or the possibility of being dropped by your homeowners insurer, here’s what we usually tell our clients. 

Homeowners insurance premiums normally go up in Florida every year anyway

Making a homeowner’s insurance claim for property damage isn’t like automobile insurance where one claim is going to make your premiums skyrocket. Instead, your homeowners insurance premiums are more likely to be reflected by your location (either proximity to the coast for hurricanes, or certain zip codes), the age of your home, and your overall claims history.

One claim isn’t likely to make your premium go up, but if you have multiple claims in a certain period of time, it’s possible. 

Homeowners insurance underwriting in Florida is pretty mysterious, so we’re just telling you what we have experienced. It’s unlikely your agent can even get underwriting information. Short of working in the underwriting department, you’ll probably never know for sure.

To an insurance company, it’s all about risk. If your house is at a higher risk of having damage, they’ll either raise your premium, or try to slip in a coverage limit and offer a more competitive premium. If you have old cast iron pipes, you’re at a higher risk of damage from a plumbing leak (with an expensive repair), you might see a higher premium, or a lower premium, but with a cap on coverage related to plumbing. This is important to discuss in advance of a claim with your insurance agent.

If you have three plumbing leaks in the span of a year or two, they might re-evaluate the risk and up your premium. This is an indicator of an increased risk. Being the victim of a hurricane, however, doesn’t change the risk for the property at all.

But hey, this is Florida, and we’re talking about insurance. Insurance companies raise premiums every year anyway. Our public adjusters typically recommend speaking with your agent about a month before renewal to get quotes in case there are new companies willing to insure the home, or rates have changed. It can’t hurt.

If I make a claim for damage to my home, won’t the insurance company drop me?

It’s not common that an insurance company drops someone for making one claim, but it can happen. It might have been in the works anyway before you made a claim. Insurance companies throughout Florida are always changing and sometimes they change areas they cover, or agents they allow to write policies on their behalf. It’s possible that your claim changed your agent’s claim ratios and the insurance company has decided to drop your agent. 

Anything is possible, but if you have a legitimate claim, you shouldn’t stress about this possibility too much because Florida has a government run property insurance company that is a failsafe for anyone who can’t get insurance, or who can’t get competitive insurance rates. 

You must make repairs following a loss or damage to the home, though

After you’ve made a claim, you do have to make repairs or else you can be dropped, even by Florida’s insurer of last resort. The reason for this is because homeowners insurance provides more than just property insurance coverage. Homeowners insurance also provides liability coverage in case anyone is hurt on your property. If there’s damage to the property that is unrepaired, the likelihood of it causing injury is increased, and because of this, you can be dropped even during the policy period before the expiration. 

This sometimes happens when a mortgage company is holding the insurance proceeds hostage and a homeowner can’t get the repairs completed, leaving the homeowner in a terrible position.

VIP Adjusting’s public adjusters have been through these scenarios many times with our clients in Stuart, Hobe Sound, and Sebastian. Although it’s not the main focus of a public adjuster assisting you with an insurance claim, we will always be there for our clients to offer our advice and share our experience.

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Central Florida has seen a recent spike in strong storms resulting in tornado damage

How does selling your home affect your insurance claim?

In Florida, if you sell your home while the claim is pending, what happens to the insurance claim?

You may have suffered a loss while your home was already listed for sale, or you may have decided while battling your insurance company for a fair payment that you’d rather sell the home as-is. Or maybe you haven’t been paid enough to complete the repairs and can’t stand to live in a damaged home while you’re litigating your homeowners insurance claim.

What happens to your insurance claim if you sell your home before the claim has been fully paid? VIP Adjusting’s public adjusters have helped many homeowners in Fort Pierce, Port St. Lucie, Stuart, and other parts of the Treasure Coast through just this type of situation. 

Your insurance policy requires you be paid “at least the actual cash value” for your claim

Your homeowners insurance policy is a contract between you and the insurance company. The policy contains a number of terms and conditions and in the section usually titled “Loss Payment” it states that the insurance company will “pay you at least the actual cash value.”

We recently discussed the comparison between actual cash value payments and replacement cash value payments, but what this means is that an insurance company is required to make payment of at least the amount of repairs, minus any depreciation up front, whether or not you’ve done the repairs.

You typically are entitled to recover the depreciation, or be paid the full replacement cost value when you do complete the repairs, or sign a contract to start the repairs. 

Sometimes, insurance companies are willing to pay the replacement cost value up front, usually for smaller claims, say for damage to a bathroom from a leaking pipe. Other times, the insurance company will pay the replacement cost value in exchange for a release, or as part of a settlement in litigation. In the latter instance, you may be giving up the right to recover other benefits under your policy, so the insurance company would be willing to pay the recoverable depreciation before you’ve started the repairs.

The ins and outs of these scenarios are one of many reasons you should have a public adjuster from VIP Adjusting looking out for your interests as you navigate your claim.

Selling your home waives the claim for recoverable depreciation

The rule of thumb for an insurance claim is that the claim is always evaluated as if it were frozen in time on the date of loss. What that means is that the damages, unless they get worse or are repairs are completed, are evaluated as they existed at the time of the loss and damage. 

The property owner had an insurable interest at the time the property was damaged, so even though selling the property extinguishes the seller’s insurance interest moving forward, there was still insurable interest at the time the claim became ripe under the insurance contract.

What selling the property does achieve, though, is it guarantees that the seller/insured will not complete the repairs. Since the repairs can never be completed by the seller/insured because of the sale, that claim to recover depreciation would be extinguished

Who collects the insurance claim proceeds if the damaged home is sold?

Typically, the owner at the time of loss, the original insured would receive the insurance proceeds, on an actual cash value (depreciated) basis, but, real estate sales are contracts as well, and the insurance claim can become a point of negotiation between the parties. 

Post-loss insurance claims are assignable in Florida, and can be included as part of the sale through a document known as an “Assignment of Benefits.” A higher price may be negotiated for the sale in exchange for the rights to the remainder of an insurance claim.

Your public adjuster or attorney can walk you and your realtor through this prior to the sale of the home, and that input may be invaluable since the value of the claim may still be unknown, or fall within a wide range. 

Depreciation tactics by the insurance company

If you opt to keep the actual cash value portion of the claim while the property was sold, you’re partly fighting about the scope and value of the repairs, which is a common fight, but you’re also fighting about the appropriate depreciation.

VIP Adjusting’s public adjusters have years of experience in the insurance industry, law, and construction, and know what building materials can and should be depreciated. The big ticket items that have a definite useful life applicable to depreciation are roofing systems and cast iron plumbing. Still depreciable, but subject to more discussion are laminate floors, cabinetry, wood floors, vanities, and sometimes paint. These items have a useful life but are in a much wider range of acceptability. Questionable building materials when it comes to depreciation as part of your homeowners insurance claim are things like tile floors and drywall or plaster. Things that are not depreciable are labor for the repairs or prep work or cleaning, supplies used in construction like gloves, tape, or masks, or rental equipment like dumpsters for debris removal.

Sale of the dwelling eliminates a claim for Additional Living Expenses or Loss of Use

If you decide to sell your property while the insurance claim is still pending, you no longer have an insurable interest in the dwelling moving forward. That means, you no longer possess a property that is uninhabitable due to damage. Naturally, that means that even though repairs are still pending on the damaged property, you have put yourself in a situation where you can buy another property to be your primary residence, or in the case of a rental property, you have recouped your investment and can buy another rental property.

Because of this, it is highly likely that you have extinguished a claim for Additional Living Expenses or Loss of Use under your homeowners insurance policy and as part of your claim. For all practical purposes, though, most people sell their home as the claim tends to drag on which would likely stem uninsured losses or losses in excess of the policy’s limits.

If there is a potential for the sale of your home while your claim is still pending, it’s imperative you have someone in your corner to stand up to the insurance company’s nickel and dime tactics.  If you find yourself in this situation, contact VIP Adjusting for a free claim evaluation today. 

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Claims where a homeowner is likely to sell the home with the claim still pending:

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ACV vs. RCV in homeowners insurance claims

How does depreciation work for property damage claims in Florida?

The purpose of homeowners insurance is to make a homeowner whole after he or she has suffered accidental damage to their property. Insurance is meant to restore you to the pre-loss condition with like-kind and quality materials.

When a claim is paid, the insurance policy typically requires the initial payment be “at least actual cash value.” An insurance company can choose to voluntarily pay replacement cost value, or it can withhold that amount until the repairs have been completed.

But what do these terms mean, and how might they apply to your situation?

What is Actual Cash Value?

Actual cash value is the value of the damaged materials as they existed right before the loss. It’s often described as the full replacement cost value, less depreciation.

Depreciation is a calculation of how much of the useful life of a material has been expended right before the loss occurred. 

The easiest analogy that people understand most easily is when thinking about used cars. Everyone knows that once a car is driven off the lot, the value starts to go down. They don’t last forever, and the more use they see (either through driving and mileage, or sheer age) the less likely they are to last.

In theory, your home’s building materials operate the same way. Roofs on Florida homes typically have a useful life of somewhere between 25 and 50 years, depending on whether a roof is made of shingles, tile, or metal. Cast iron plumbing typically has a useful life of 40-50 years. Paint typically has a useful life from 7-20 years. Cabinets have a really wide range of useful life because of materials. Solid wood cabinets have extraordinarily long useful lives, while some cabinets are made of materials slightly nicer than cardboard and have a short useful life.

What is Replacement Cost Value?

Replacement Cost Value is the cost to replace a building material with like-kind and quality materials at today’s prices for brand new materials, regardless of how old the damaged material was at the time of loss.

Replacement Cost is a standard often used with homeowners insurance because unlike our used car example above, there isn’t a significant market for used building materials like there is with automobiles.

If your home sustained damage to your kitchen cabinets as a result of a plumbing leak, and your cabinets were 21 years old, it is likely impossible to go out and find the exact number of cabinets, the exact lengths and sizes of cabinets, of the same or similar materials, that are exactly 21 years old. You have to buy new cabinets. Whereas, if you were in an accident in a 10 year old car, you could go purchase a similar 10 year old car, or parts for that same car.

What does this mean for my homeowners insurance claim?

Most insurance policies require the insurance company to pay at least the actual cash value up front. This means that you are paid the depreciated value for the damaged property, because this is what makes you whole... initially. Why? Because you might never do the repairs. 

You might decide to keep the money and leave the property damaged, or sell the property in as-is condition. If this is the case, you’ve been made whole because you were paid for what the damaged property was worth, similar to a used car. If your used car is totaled and they pay you the value, you can do whatever you want with that money.

If you decide to do the repairs, however, you likely can’t buy used building materials and need to buy new ones, so you are typically entitled to recover the depreciation when you’ve undertaken the repairs. If they paid you half the cost of your 15 year old roof when it was damaged, once the repairs started, you’d get the other half.

Is there a catch to recovering depreciation?

Of course there’s a catch! Your insurance policy says it “will not pay more than it actually cost to repair or replace the damaged property.” So, if you had a 15 year old roof that was damaged by a hurricane, and they set the replacement cost value at $30,000, and initially paid you the actual cash value of $15,000, if the full replacement only cost $22,500, you would only receive the $22,500 you paid, and not the $30,000 replacement cost value that was set up front. 

This is a common insurance company tactic. If there are very wide differences between actual cash value and replacement cost value of your loss, you’d receive a very limited budget up front and be motivated to find a good deal so you don’t have to come out of pocket when doing repairs. The problem is, any bargain you find and negotiate isn’t a bargain for you, it’s a bargain that’s being passed on to the insurance company!

Do insurance companies abuse depreciation?

You bet they do! We mentioned above items that are commonly and justifiably depreciable. Roofs and cast iron plumbing have the most verifiable useful lives. Cabinets and paint have much more debatable useful lives. Insurance companies, though, push that depreciation button to their advantage.

VIP Adjusting’s public adjusters commonly catch insurance companies in the act. Some insurance companies depreciate drywall. More than once we’ve asked out loud “when was the last time you heard of someone tearing down and replacing all their drywall just because it’s old?” Never? Neither have we.

Sure, in theory every building material has a useful life, but who gets to decide? How is it calculated? Has the insurance company explained this to you? In the example above, does drywall have a useful life of 20 years? 100 years? 150 years? Is there any documented evidence of drywall ever failing because of old age?

Maybe even more egregious, we’ve caught insurance companies depreciating non-building materials. We’ve routinely busted insurance companies depreciating masking tape and prep-work for painting. That happens often. Less often, but more than once, we’ve caught an insurance company depreciating a dumpster rental for the dumpster that is used to remove the construction materials at the end of a job. 

Some “independent” adjusters just depreciate at a flat percentage across the entire estimate. This is improper and unethical.

Depreciation is one of those small things that are easily overlooked by homeowners as part of their insurance claim. VIP Adjusting is always forward thinking when it comes to your claim and we fight for you. We question the insurance company’s methods in depreciating because if they’ve withheld money up front that you’re entitled to, that’s more money in your pocket to do the repairs.

If you’ve previously made an insurance claim for property damage, contact VIP Adjusting today for a free claim review. 

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Plumbing Leak Insurance Claims: Save the damaged part!

If you have damage from a plumbing leak, keep the failed plumbing part from the repair

Plumbing leaks happen, and they cause damage. If you find yourself in that situation, your first instinct is never your impending insurance claim, it’s that there’s water everywhere, causing damage and you need it to stop.

Your insurance policy is a contract; a legal document. It requires you to perform certain actions, and when there’s a plumbing leak and water damage, it may seem like those actions are at odds with one another. You have to protect the property from further damage, mitigate the existing damages, preserve the evidence for the insurance company to inspect, and make sure not to prejudice the insurance company’s investigation.

Here’s how to balance all of those duties under your insurance policy:

Protect the property from further damage

If you’ve found water on your floor, you have to quickly diagnose the problem. There may be massive amounts of clean water coming from a supply line or a pressurized plumbing line causing damage. If that’s the case, turn off the main shutoff valve, typically found outside your home. Once the water supply is shut off, the ongoing damage will have stopped and you have time to call a plumber. 

If you don’t know where the main water shutoff is, you might have no choice but to call a plumber while the water continues to leak and cause damage. Your insurance company may try to use this against you, depending on how extensive the water damages are. A diligent homeowner should find out where their water shut off is in advance of a problem like this.

If the water damage isn’t being caused by a supply line or other pressurized plumbing, it’s either being caused by a broken cast iron drain line, or other waste/sanitary plumbing, or an appliance, like a washing machine or dishwasher. 

If the water on the floor causing damage is dirty or smells badly, it is likely coming from a broken cast iron drain line or appliance that carries dirty water. In that case, stop all appliances using water and refrain from using your showers and toilets until a handyman or plumber has been able to figure out what the problem is.

Once you’ve stopped the flow of water, take pictures. Take lots of pictures and document the conditions before any repair or other effort has started. Your insurance company requires that you document damages and now might be the best opportunity to preserve the conditions as they exist at the time of the leak.

Mitigate the existing damages

You’ve successfully stopped the supply of water that’s causing damage in your home, and at this point you may be waiting for a plumber, but you still have water that is soaking into the porous building materials in your home. Water is being absorbed by drywall, particle board, plywood, cabinets, vanities, laminate flooring or wood flooring, or even being absorbed into grout and mortar beneath your tile flooring. It could be clean water that causes staining and other damages, or it could be dirty water or sewage that requires special types of repair due to health and safety issues.

There is already some damage, but you can prevent it from getting worse. You can start yourself by using towels to soak up the water, and a shop vac if you have one, or a mop and bucket. Work on getting as much of the standing water up as possible. If you have more than one pair of hands, have someone take pictures of this process as well. If your towels are damaged cleaning up dirty water, you can claim these as part of your insurance claim.

Once you have a good handle on cleaning up the standing water, point some fans towards wet areas if you have them to help dry the damaged materials. 

The reason you want to clean up water as best you can is because in as little as 48 hours, under the right conditions, mold can begin to form and spread, posing a health risk to you and your family. Most insurance policies also cap mold damages at a relatively low amount, and preventing the spread and growth of mold can save you potentially huge out of pocket expenses.

Water mitigation contractors 

Depending on how much damage has been caused by the plumbing leak, and the type of water, you may also want to get in a special type of contractor that specializes in water mitigation. 

This water mitigation contractor will have been trained in water clean up, both clean water and dirty water. We caution you again to take pictures before they start because this is when things can start to move quickly and get you in trouble with your insurance company.

Water mitigation contractors may cut holes in building materials like cabinets and drywall to assist fans in drying areas of damage, or have larger machines that extract water from inside wall cavities or other areas. These contractors may also remove significant areas of drywall, remove damaged cabinets, or other damaged materials. If at all possible, take photographs and ask that these materials not be discarded.

Your insurance policy requires that you show damaged items to the insurance company, and if, in their haste, a water mitigation contractor throws all this stuff away and there are no photographs, the insurance company may never know what was damaged, giving them grounds to deny your claim. 

If you have a garage, keep the damaged materials there. If not, a storage shed, or outside protected from the elements as best as you can.

Preserve the evidence for the insurance company to inspect

In addition to requesting the water mitigation contractor to keep the damaged building materials (drywall, cabinets, etc.), the most important thing you can do is to save the failed plumbing part. As much as it is possible, save the damaged plumbing part.

If a supply line burst, get the broken copper pipe, or other plumbing material and keep it somewhere safe. The insurance company will want to verify what happened, and how. They may analyze it later in more detail or have an engineer verify that it is consistent with an accident and wasn’t purposely cut, or that there wasn’t some other type of insurance fraud.

If an appliance fails, keep the appliance somewhere it can be accessed. VIP Adjusting’s founder had an insurance claim related to a broken valve on a dishwasher. Six months later, the insurance company came and took the entire dishwasher to be kept as evidence while they pursued what’s called “subrogation” for indemnification against the dishwasher’s manufacturer.

The hardest failed plumbing part to save is a broken cast iron drain line. When cast iron plumbing fails, it becomes very brittle, and in order to get to it, you often have to dig a trench in the slab that can damage the cast iron line even further.

In this situation of damage caused by a cast iron drain line, it’s best to leave the line in place and let the insurance company do as much investigation as they want before you undertake any repair, as the alternative is very risky. 

If you must proceed in addressing a cast iron drain line, first have a licensed plumber with a camera run it through the line and document by video all breaks in the line and mark them in the house with tape. Make sure you have a copy of this video before you do anything else.

In proceeding from there, when the floor is trenched, take photo or video of the area to prove it is the same area as the break from your video and get as much documentation of the broken cast iron plumbing as possible. If the cast iron line can be removed in a large piece, save it!

Don’t prejudice the insurance company’s investigation

This post is a very methodical description of what is an otherwise chaotic situation. You’ve had water damage your home. Your life has been turned upside down. You’ve spent money on plumbers and other contractors. You may have been unable to use some or all of your home’s plumbing system in the meantime. You might have had to move out of the home because the plumbing will be unusable for an extended period, or because the damage is too great. The last thing on your mind is your insurance claim, but it’s our first concern.

If you have done anything that allows the insurance company to question whether the loss happened exactly as you say, the insurance company can deny your claim outright, and they may be justified in doing so.

If you had water damage from a burst copper pipe and the plumber cut a hole in the wall, cut out a section of pipe that’s damaged and installs a new piece, but the broken pipe is discarded, how can the insurance company be sure someone didn’t spray the walls with a hose to try to get some money? This is why you need to preserve your evidence by saving the damaged plumbing parts.

Maybe you had a water mitigation contractor come in to perform drying services, and they did such a good job removing wet materials, there’s no evidence of damage remaining. How will the insurance company know there was any damage at all and a shady contractor didn’t just come in and cut out drywall to fake an insurance claim?

The scariest scenario is that you’ve had a failed cast iron drain line and can no longer prove it. Often times, between the trenching, flooring repairs, and significant areas of renovation required, these repairs of failed cast iron drain lines can exceed six-figures. If you can’t prove what happened in great detail, the insurance company may try to claim that even though you may have needed to replace this line, there is no coverage because there was no leak! We’ve seen it happen, and instead of getting fairly paid for your claim, a homeowner like this would be facing an uphill battle right from the start at a risk of not receiving a fair reimbursement for their claim.

A cautionary tale of a plumbing leak

One of the most absurd claims we’ve ever handled was for a homeowner that was very handy. In fact, the homeowner  was an air conditioning repair man. He had owned a home for barely two weeks and upon arriving home from work discovered water pouring out of a light fixture in his kitchen, with the water originating from the second floor of his home.  

Being as handy as he was, the homeowner turned off the water and waited for help from a friend while he cleaned up some of the water on his own. The water was clean, so he knew it was a broken supply line somewhere in his home.

Once he had his friend to help him, the friend turned on the water supply and the homeowner quickly realized the water was coming from a broken plastic tube from the wall to a toilet. He turned off the water to that toilet and localized the problem.

Now, here’s where our homeowner got himself into trouble. These plastic lines are brittle and break all the time, so he didn’t think it was a big deal. He went to a big-box hardware store, bought a nicer braided metal replacement in cash for about $5, replaced it, and threw the broken plastic one away.

The insurance company came to the home, couldn’t inspect the broken plastic plumbing to the toilet and sent an engineer to the property to assist them in denying the claim. The engineer, a paid shill from the insurance company said that even though the homeowner had owned the home less than a month, the big stain on the ceiling of his kitchen and damage to his kitchen cabinets was the result of years of water from people getting in and out of the shower in that upstairs bathroom, and dripping on the floor!

Because our client thought nothing of his insurance claim when he fixed the problem, he ended up having to proceed with several years worth of litigation in order to get paid for his claim.

VIP Adjusting’s public adjusters have seen all kinds of plumbing leak damage over the years and make sure to approach the situation from the perspective of your insurance claim, your potential recovery, and preservation in the event of litigation. If you’ve had water damage as a result of a plumbing leak, contact VIP Adjusting today so they can guide you through the claims process and assist you in documenting your damages and the conditions at your home.

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Homeowners Insurance Claim Supplements in Florida

Supplemental Insurance Claims for Florida Homeowners Bring Significant Rewards

In Florida, an insurance company is required to pay residential property insurance claims within 90 days pursuant to Florida Statute 627.70131. They are only required at that point to pay the actual cash value (an amount with depreciation withheld) of any undisputed value of the claim.

Many insurance companies use this as an opportunity to issue lowball payments hoping that a homeowner will accept that payment and never follow up. Unfortunately, that’s a good bet for a lot of insurance companies.

At this point of a claim, if a public adjuster, like VIP Adjusting isn’t already involved, they become an absolute necessity.

The insurance company told me they “closed” my claim!

As already mentioned, Florida law only requires an insurance company to issue an undisputed payment based on their own valuation within 90 days. Once they’ve done that, they can technically “close” the claim. They can’t extinguish the claim, but many insurance companies tell homeowners that the claim is closed, and this makes some people think there’s nothing you can do to get paid fairly for your insurance claim. 

A “closed” insurance claim is just an internal administrative status of a property insurance claim. Unless a homeowner has signed a release or the statute of limitations has expired, a property insurance claim in Florida is not closed.

And, no, cashing your insurance check does not mean you are in agreement with the amount they have paid you. VIP Adjusting’s public adjusters get asked this question by insureds all the time. The insurance company is obligated by law to pay you that amount. A check is not an offer of settlement.

What is a supplemental claim?

Once an insurance company has accepted coverage and paid a homeowner the undisputed actual cash value, their initial valuation and evaluation is complete. The claim can go in a number of different directions from there, but the ball is in the homeowners court and the insurance company is hoping to take advantage of that homeowners ignorance and inexperience.

A supplemental claim is any additional claim for more insurance proceeds.

How do you make a supplemental property insurance claim?

We’re glad you asked. In the simplest terms, to make a supplemental claim, you have to review the insurance company’s payment and dispute the amount you have been paid with justification.

You can do it yourself, if you’re well versed in construction, including pricing of labor and materials, and if you understand the formats of the insurance company’s estimate. It’s usually written in a software program called Xactimate, or to a lesser extent, Simsol or Simbility.

A contractor can prepare an estimate, but there are some ethical grey areas, both for homeowners and contractors. Contractors can prepare estimates as their license permits, but they can’t adjust your claim for you, which includes negotiating scope and pricing with your insurer. An insurance company may receive a contractor’s estimate to dispute the initial payment and then try to negotiate with the contractor to try to save money, or a contractor may try to negotiate the claim on their own anyway, despite being unlicensed to adjust insurance claims.

Florida’s Department of Financial Services has said:

"If you are acting as a public adjuster in any manner by negotiating or effecting the settlement of an insurance claim on behalf of an insured and you are performing any of these services for money, commission or anything of value without being licensed as a public adjuster, you could be subject to arrest and may be charged with a third-degree felony as provided by section 626.8738, F.S."

Many times a homeowner will think they can find a contractor through Angie’s List or HomeAdvisor who will come to their house and provide a free estimate that they can submit to the insurance company on their own. Please do not do this. Contractors can see right through this plan and do not take kindly to being used for free labor to help boost your insurance claim. 

Should you just hire the contractor and do the repairs out of pocket?

Even if you got a contractor’s estimate on your own, the insurance company may try to claim that if you don’t proceed with the repairs, they won’t offer any feedback on the contractor’s estimate. Your insurance policy does not say this. The insurance company may think it does, or even try to claim it does, but it does not. 

Any insurance company that tells a homeowner this is trying to trick you into taking a leap of faith, hire a contractor, pay out of pocket, and then it’s a whole new ballgame in the insurance company’s favor.

If you were paid, say $5,000 for a bathroom, and your contractor charged you $15,000, your insurance company has shifted all the risk to you while maintaining all the leverage. Why? Because now you’re out of pocket $10,000 and they have a whole new arsenal of arguments to try to nickel and dime you, and there’s nothing you or your contractor can do about it on your own.

They’ll say the contractor overcharged. They’ll say that the finishes you picked look too nice or too new or are too modern, and therefore you’ve upgraded. They only have to pay you to replace like kind and quality. Just because it looks nicer doesn’t mean it is, but they’ll use that argument to withhold money and to claim they’re doing it in good faith. 

If you take that leap of faith and hire a contractor, short of a jury verdict at trial, you likely will never see the full return of your money...

This is why you need a public adjuster

Have we sufficiently buried the lede? We did that on purpose because we wanted you to see how many perils and pitfalls there are with going it alone or trying to do it yourself with the help of a contractor. 

VIP Adjusting is staffed with licensed public adjusters (and an attorney) who have handled thousands of homeowners insurance claims. They have been through this process over and over. They’ve seen all the tricks and tactics and combatted them successfully. 

VIP Adjusting, as your public adjuster can evaluate the insurance company’s estimate, provide a comparative estimate on your behalf, and navigate the process moving forward. As your public adjuster, we can manage the insurance claim process wherever it goes, handling additional inspections, engineer evaluations, appraisal, supplemental payments, negotiated settlements in exchange for a release, and even help you through the litigation process, if necessary (unfortunately litigation has become a common extension of the claims process in Florida).

Knowledge is power and VIP Adjusting’s professionals will help you level the playing field with your insurance company. Once you have someone in your corner fighting for you, you’ve taken the first step to making sure your insurance claim puts you on the road to recovery and allows you to rebuild.

If you need to make a supplemental claim to your insurance company after receiving an initial payment, call VIP Adjusting today to have a free claim evaluation with one of our public adjusters. 

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More about VIP Adjusting’s background as public adjusters

What to expect if you have plumbing leaks

Public Adjuster vs. Independent Adjuster: What’s the difference?

How does a Public Adjuster compare to an Independent Adjuster?

These terms are definitely confusing, and we want to shed a little bit more light on what the differences between these types of insurance adjusters are, each type of insurance adjusters’ duties, and who they work for. Knowing the difference can make a huge impact on the final result of your insurance claim.

Aaron Fessia, Public Adjuster Inspecting Roof

Public Adjuster vs. Independent Adjuster

Public adjusters are licensed insurance adjusters that represent the general public, homeowners, business owners, and insureds when they’ve had property damage or other direct physical loss to their home or business. Independent adjusters are also licensed insurance adjusters, and have similar qualifications to public adjusters, but they work for and on behalf of the insurance company. 

VIP Adjusting is a public adjusting company operating in the Treasure Coast, representing the homeowners and business owners of St Lucie County, Martin County, Indian River County and the surrounding areas. We fight for you and act as advocates for your claim against the insurance company.

Public Adjuster defined

Public adjusters are sometimes also referred to as private adjusters, public insurance adjusters, or private insurance adjusters. They might also be called a “PA.” Public adjusters are licensed and regulated by the state of Florida through the Department of Financial Services and overseen by Florida’s Chief Financial Officer.

The term public adjuster is defined by Florida Statute 626.854 as any person, except a duly licensed attorney at law who, for money, commission, or any other thing of value, prepares, completes, or files an insurance claim form for an insured, or acts on behalf of or aids an insured in negotiating or effecting the settlement of a claim for loss or damage.

A public adjuster is also any person who, for money, commission, or any other thing of value solicits, investigates, or adjusts such claims on behalf of a public adjuster. Other individuals may assist a public adjuster in their duties, and other professions, such as general contractors may perform duties that are typically associated with their license (like preparing estimates). General contractors cannot, however, negotiate with the insurance company on an insured’s behalf.

Attorneys may act as public adjusters but are exempt from licensure

Attorneys are exempt from the licensing requirement because they are already qualified to evaluate Insurance contracts and negotiate settlements by nature of their bar license. An attorney who would like to obtain a public adjuster license must also go through the requirements and testing from the state of Florida. VIP Adjusting’s founder is both an attorney who is a member of the Florida bar, as well as a licensed public adjuster.

Public Adjusting engages the Public Trust

Because public adjusters work for homeowners and other citizens of the general public, public adjusting engages the public trust. That means a duty must be exercised where the interest of the claimant is fairly and honestly put above the public adjusters own interests. 

Public adjusters in Florida are held to very high standards, including multiple different required codes of ethics. One code of ethics is for all adjusters in Florida under Florida Administrative Code 69B-220.201. Public adjusters are also governed by Florida Administrative Code 69B-220.201(4)(5).

The public adjusters at VIP Adjusting are also members of the Windstorm Insurance Network and have been certified as appraisers and umpires, adding additional codes of ethics to which they have agreed to be bound above and beyond the ordinary codes of ethics. 

Public Adjusters work on behalf of the homeowner. Always!

Public adjusters fight for you! Their duty is to advocate for you and your claim. The purpose of insurance is to put you whole after a loss, subject to a deductible. Your insurance company is supposed to be restoring you to pre-loss condition, and your public adjuster’s job is to make sure that an insured gets paid fairly for their claim and that the insurance company is not causing unreasonable delays or taking advantage of the insured. 

Most public adjusters charge a percentage of recovery as a fee. Studies conducted by the state of Florida have shown that the average difference in payment between a homeowner making a claim on their own and a homeowner who has retained a public adjuster, more than makes up for the cost of paying a public adjuster. That figure is based only on the average dollar value of the claim without accounting for delays, denials, or other missteps related to a homeowners inexperience. 

Independent Adjusters work for insurance companies

What a misnomer, right? You read that right, though. Independent adjusters are licensed and governed by the state of Florida, similar to public adjusters, but their license does not allow them to represent homeowners or insureds. They work FOR the insurance company.

Independent adjusters either represent insurance companies directly, or work for third party adjusting companies that are retained by insurance companies on a job-by-job basis. 

Despite the fact that an independent adjuster’s salary is paid by the insurance company, many homeowners are lulled into a false sense of security because this adjuster interacts with them and may even seem very friendly. Independent adjusters may also make certain promises while walking through the insured’s home even though he doesn’t have the final say as to what gets paid. Homeowners may be confused thinking that because the adjuster is called “independent,” then his evaluation should be independent. This is not correct. 

When VIP Adjusting handles a supplemental claim for a homeowner, we often hear that homeowner refer to the prior evaluation by an independent adjuster as the report prepared by “my adjuster.” Remember, an independent adjuster works for the insurance company, NOT for the homeowner. 

Even when an independent adjuster is following all ethical guidelines, the continuation of his employment still hinges on the insurance company paying as little as possible for your claim, and even when an independent adjuster is well meaning, there’s a representative inside the insurance company that often reviews and modifies that estimate before it’s approved for payment.

What to do if you have damage

If you’ve suffered loss or damage at your home, it’s best to get in touch with a public adjuster like VIP Adjusting as early on in the process as possible. In addition to having experienced professionals working for you to make sure you’re paid fairly for your claim, a public adjuster also works to prevent delays in the claim, and protect you from the potential landmines of doing it yourself.  

VIP Adjusting always fights for you!

You might also be interested in:

Learning more about VIP Adjusting’s background

Why you should hire a public adjuster

Learn more about different types of damages that can result in insurance claims