In recent months, we have all been witness to the wildfires, tornadoes and floods that have torn through cities and rural areas across our country.
As so many property owners are learning, time does not heal all wounds, especially those inflicted on them by some — not all — insurance companies attempting to avoid or minimize payments through sneaky and dishonest claims-adjusting practices, such as lowballing loss values.
If anyone doubts that statement, then I recommend doing a Google search on: property damage undervalued by claims adjusters.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
“Guy,” a longtime reader and claims adjuster for a regional homeowners insurance company, told me in a video chat, “This is a time when the power difference between management and claims people in the field becomes evident. We were told in meetings, ‘If you want to keep your job, write loss reports the way we tell you and to hell with accuracy.’” Guy requested anonymity so he could speak candidly.
He showed me photos of an insured’s damaged home, his original repair estimate and the “revised final estimate” from management. “They are ripping off the insured, and just as soon as these jobs are done, I am out of here,” he said.
What to do if your insurance company isn't playing by the rules
The question that frustrated property owners often ask is, “What can I do — who should I hire — if my own insurance company is not responsive, or it appears that I am being jerked around? Should I retain an attorney or a public adjuster?”
When you’re faced with this choice, it could very well be one of the most important financial decisions you make when your life is turned upside down.
I ran this important question by Los Angeles-based independent insurance broker Karl Susman, who writes articles for Kiplinger.com and is a CBS News consultant.
Additionally, I spoke with John Petrov, a public adjuster based in Diamond Bar, Calif., who explained the role of a public adjuster (PA).
“All claims adjusters have the same job,” Petrov said. “Those who work for insurance companies try to minimize the payment of claims, while public adjusters work for the person harmed. A PA’s job is to handle your claim correctly and honestly and help you obtain everything you are entitled to, not to cut corners in order to keep the boss happy.”
In my law practice, I’ve known many PAs who worked for large insurance carriers, became disillusioned by shady claims practices, went out on their own and, as I heard repeatedly over the years, “It just felt good, as I was really helping someone for a change.”
Greatest risk you now face: Being pressured into signing a contract
I asked Susman and Petrov: After living through a natural disaster — seeing your home, business, all the things that have meaning in your life just disappear — what is the greatest risk you now face?
Petrov replied, “Allowing yourself to be pressured into signing up with someone who just appears out of thin air, promising to handle the claim.”
He underscored: “That’s how PAs get a bad reputation. Never hire a public adjuster who just shows up and hands you a contract. You are vulnerable.”
Susman agrees: “There may come a time when you will need a PA, but never select one who is looking for you. Stay local, as you should for attorneys, and referrals from trusted sources are important.
“Remember, unlike your insurance company’s claims adjuster, who is paid by them, you are giving a percentage of the money your insurance company pays on the claim to the PA. Take your time and research that person and their company before signing.”
What to keep in mind if you have a claim
Susman and Petrov provided these tips to try to make the process of filing a home insurance claim less intimidating:
- Promptly file the claim with your insurance company. Policies contain time limits for filing claims.
- While it is certainly appropriate to schedule a consultation with an attorney, generally there is no reason to run up attorney fees at the beginning of the claims process. “However, if you are asked to give a statement under oath, hire an attorney for that,” Petrov stressed.
- Allow the claims process to proceed normally. If it appears that, even after speaking with a claims supervisor, you’ve hit a brick wall, then it is time to speak with a PA.
Take your time when considering offers
With large losses, clients tend to feel a sense of urgency. They need money as soon as possible to begin putting their lives back together.
Therefore, beware of rushed, lowball offers and pressure to accept them, especially after a natural disaster.
That is what often creates the need to hire a PA. And, yes, you will pay their fee (which varies by state), but the net result could be much better.
If you want to learn more about this and other insurance topics, both Petrov’s website and Susman’s website have highly useful information.
Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.
Related Content
- How to Get Your Insurer to Pay Your Home and Auto Claims
- How to File Tornado Insurance Claims
- Insurance Bad Faith After Natural Disasters: What to Know
- Why Does One Claim Jack Up My Insurance After Years of No Claims?
-
How to Stay Safe During Summer Storms: What to Know About Lightning RisksLearn how to protect your home, electronics, and personal safety from lightning strikes this summer — plus what your insurance might cover.
-
Ask the Editor — Tax Questions on Disaster Losses and moreAsk the Editor In this week's Ask the Editor Q&A, we answer tax questions from readers on paper checks, hurricane losses, IRAs and timeshares.
-
Why Smart Retirees Are Ditching Traditional Financial PlansFinancial plans based purely on growth, like the 60/40 portfolio, are built for a different era. Today’s retirees need plans based on real-life risks and goals and that feature these four elements.
-
To My Small Business: Well, I've Been Afraid of Changin', 'Cause I've Built My Life Around YouWhile thinking about succession planning might feel like anticipating a landslide (here's to you, Fleetwood Mac), there are strategies you can implement to manage the uncertainty and the transition.
-
Stock Market Today: S&P 500, Nasdaq Near New HighsThe S&P 500 hasn't hit a new high since February. It's been since December for the Nasdaq.
-
The Bull Case for the Second Half of 2025This strategist sees a volatile market segueing to a strong close this year.
-
7 Essential Investing Rules We All Should KnowThe best time to start investing is right now. That's just one vital rule investors should be familiar with. Here are six more.
-
This Savings Account Earns You More Than $4,000. Here's HowSee how a jumbo CD can help you reach your savings goals quicker.
-
These Are the Key Tariff Issues to Watch in Coming MonthsWhile they're not dominating headlines right now, tariffs are not over. Some key dates are coming up fast that could upend markets all over again.
-
Technology Unleashes the Power of Year-Round Tax-Loss HarvestingTech advancements have made it possible to continuously monitor and rebalance portfolios, allowing for harvesting losses throughout the year rather than just once a year.
