By Jeff Gelles - Inquirer Business Columnist

Hurricane-force winds walloped the Jersey Shore that Saturday in mid-March as a nor'easter blew through. Eighty miles inland, Larry Collins' part of Upper Bucks County didn't fare much better, taking torrential rains and gusts near 55 m.p.h.

Collins worried as windows rattled and shingles blew off the house he shares with his 83-year-old mother, Minnie Smith.

Smith was terrified by the storm's fury. Collins was concerned about the damage. One thing neither worried about was the financial effect, even after Collins ventured outside and found rain gutters dangling, the front deck damaged, and an awning partly collapsed.Collins and Smith were protected by their homeowners' policy from State Farm, the company with the "good neighbor" slogan.

But six weeks later - with the awning, deck, and other damage still unfixed - they weren't quite so sure.

For much of that time, Collins and his mother have been at an impasse with State Farm. Their contractor - suggested by State Farm's agent - estimated repair costs of about $12,500. State Farm's adjuster, who visited two weeks after the damaging storm, put the damages at less than half that amount. He cut a check on the spot for $4,132 "and told me several times to get that right in the bank," Collins recalls.

I'd like to report that this case had a happy ending, and that may be where it's heading.

I contacted State Farm spokesman Dave Phillips last week, and within a day Collins got a call from an adjuster who said he was reassessing the claim. The adjuster even gave a last name and phone number - the first time that's happened in half a dozen calls, Collins says.

Phillips told me he couldn't talk specifics, but said the company was looking into the case.

"Our main intention right now is to get the issue resolved," Phillips said Friday. "Our practice at State Farm is to deliver and to pay the right amount - to get a claim resolved and to make sure our policyholder comes first."

I hope that's the outcome. But Collins contacted me in part because he saw last week's column about a new book on the insurance industry and its author Jay M. Feinman, a law professor at Rutgers University-Camden.

Collins asked a reasonable question: Was his case an example of the claims-practices trend identified by Feinman and other industry critics - a trend Feinman summed up in his book's title, Delay, Deny, Defend?

Those critics say that insurers, just like policyholders, face a "moral hazard" - a term referring to the potentially reckless behavior of those protected from its full consequences by insurance.

The moral hazard facing insurers is even more straightforward, Feinman says, and also a matter of incentives: that a dollar saved in claims is a dollar made in profits.

Insurance has a long, venerable history, punctuated by some disturbing episodes. Feinman believes that one has been under way since the 1990s, when Wall Street's press for higher profits led some insurers to revamp their practices at the urging of consultants such as McKinsey & Co.

Essentially, Feinman says the consultants urged insurers to overlook their own moral hazard and turn their claims units into a profit center. He says the result - also fostered by the use of complex computer models to estimate repair costs - is that some insurers systematically lowball claims.

As you'd expect, the large insurers drawing most such criticism, such as Allstate and State Farm, have strenuously denied the accusations. State Farm says it followed key recommendations from McKinsey & Co. only "for a short period of time in the 1990s as a way to go after insurance fraud."

Feinman says there's too little information to say whether State Farm's seemingly lowball offer to Collins or the delays he's faced since are part of larger trends or isolated incidents.

He says a second estimate would have helped, even if Collins acted reasonably in assuming it was unnecessary because he'd hired a contractor recommended by a State Farm agent.

I should note that Collins' contractor, Alex Shelmet, says he was offended by the State Farm adjuster, but calls the experience unusual.

"I've never been questioned like this by an adjuster," says Shelmet, owner of AJ's Home Remodeling & Repairs, of Chalfont. "My prices are very well in line."

So what does Feinman recommend?

First, he says consumers should be better shoppers. Don't just focus on price. Look for whatever comparative data you can find on claims practices and customer satisfaction - and urge your state to make more information available on policyholders' complaints.

Second, recognize there are variations in policies, such as whether a policy covers damage if a sump pump fails or an oil tank leaks. Get an agent who can explain the gaps, and ask if riders are available to cover risks that worry you.

Finally, if bad luck strikes, recognize that slogans like "good neighbor," "good hands," and "on your side" are just slogans, just like that Geico gecko is just a darned cute animation.

"When you have a claim, the insurance company isn't your enemy, but the insurance company isn't your friend, either," Feinman says. "You don't have to assume that what they tell you is accurate with respect to your coverage or how much your claim is worth."

Feinman advises consumers to document damages, familiarize themselves with special rules covering emergency repairs, and be assertive about their rights.

For large claims or complex situations, Feinman also recommends that policyholders get professional help from an experienced lawyer or public adjuster.

Ultimately, Feinman says, state regulators need to work harder to make the market more transparent and help consumers fight bad decisions because moral hazard definitely cuts both ways.

The owner of Anthony and Cleopatra's Catering Hall in New Jersey, submitted a Wind/Rain claim to his insurance company. The insurance company was quick to offer to replace the entire roof and allow for some repairs to the inside of the building. The total settlement was just over $13,000.00. The roof replacement took up most of this settlement. The owner realized that he had to do more repairs than what the insurance company offered, since there was still a musty smell in the building. Most of this catering halls business was weddings. The owner, who owned the building free and clear, was about to take out a mortgage to make the repairs.

A few months later, Brad Johnson, currently a Regional Manager in Ohio, attended a banquet. During the banquet, Brad noticed water damage to the ceiling tiles. He spoke with the owner who told him that he felt the insurance company had paid more than he had expected. The owner agreed to allow the claim to be signed up, since Metro worked on a percentage of the settlement over and above the original settlement. The insured felt as though he had nothing to lose and welcomed the opportunity to have his claim re-opened. Dan Young, the Metro assigned adjuster, was able to successfully re-open the claim. In addition to the original offer of $13,000.00, Dan was able to convince the insurance company to agree to pay an additional $40,000.00. Now the property owner could replace all of the musty smelling carpet as well as replace all of the mismatched ceiling tiles that the insurance company thought was no big deal.

The best news of all was that a few months later, Anthony and Cleopatra's Catering Hall was named the best place in South Jersey to hold a wedding. Thanks to Brad's keen eyes, the owner of the catering hall was able to restore his catering hall the way it should have been.

Having your own personal claims adjuster will ensure the utmost good faith would be adhered to in your insurance investigation. He or she will contact the insurance company for you and schedule the investigation and our team will take on all communications throughout the life of your claim. Our goal is to move this claim through their system as quickly as possible.  

Initially an investigation conducted by the insurance company adjuster, responsible to his employer, is designed to identify fraudulent claims, moral hazards, third parties with insurable interests and opportunities to minimize your settlement. Many of these concerns and questions have already been addressed during Metro’s initial scope that is scheduled within 48 hours of your meeting with our representative. Our team will secure all documentation, damage repair and replacement estimates and organize a properly prepared “Proof of Loss”. Every claim and insurance company is different and therefore difficult to estimate how long it will take to process your claim.

We ask for your patience throughout the process. You will be kept current of all aspects. Internally we are negotiating the best settlement for you and you will be copied on all written correspondence used to expedite your settlement.

When damage to property or a personal casualty event occurs due to crime like vandalism, theft or accidental damage occurs from negligence of old plumbing, bathtub overflow, leaking toilet or shower; First things first when filing your property claim. If a crime has been committed, call the police. Be as cooperative as possible with local authorities such as police, rescue, or the fire department. Be sure to get a police report and document all the names of the officials that you come into contact with.

Next step is to mitigate any future loss or damage. This may require temporary repairs from a plumber if you are not handy with leaky pipes. At this point, it is always best to keep calm when considering your next steps. Good documentation, damage estimates, determining actual cash value and photographs are the homeowner’s responsibility and mandatory when filing a property insurance claim.

Now would be a good time to call your public adjuster, prior to your first phone call to your insurance company, at least to understand your policy coverage’s.  

• Are you covered for this loss?
  
• Is there a personal property inventory form?
• Do you know where your policy is located
• Did your insurance provider provide you with a claims kit?

Good record keeping will speed up settlement of your claim and helps reduce your risk of a denied claim. Compile a room-by-room inventory of damaged goods, and include manufacturer's names, dates and places of purchases, and prices. Try to locate receipts or proofs of purchase, especially for major appliances, and note manufacturers' names, serial numbers, prices, and dates of purchase. Separate the damaged from the undamaged property and put it in the best possible order for the insurance adjuster's examination.

When working with Metro, you will first meet with a professional representative that will spend quality time reviewing your policy with you using an experienced eye to identify coverage limitations, policy exclusions and legal language that your insurance company may use as leverage to deny your claim. Your Metro claim advocate will conduct an inspection of the damage using a checklist and detailing damage you may have missed without a trained eye for consequential damage caused by your direct peril. With this information, together we can determine if you have a claim worth investigating and you may choose to engage our services at this time.

Call 215-909-4928 for 24/7 Emergency Service!!!

Here's why working with a public adjuster can be good for an independent insurance agency and for its customers:

1. After a disaster, insureds have hundreds or even thousands of questions and worries. In a large-scale disaster, many of your local customers will be coming to you for answers. You may find yourself answering the phone every few minutes to address more questions and to resolve their fears. As an agent you will find it necessary to read the policy and then get back to the insured with their answers. You may find yourself at odds with the insurer if you add your own opinion or interpretation of the policy language and it differs from the insurer's. This is an area where a public adjuster can add value since they will be the ones working directly with the insured and the insurer to address all coverage issues.

2. Customers who have suffered a loss are very emotional and upset. You will likely be the first person they call about their loss. Your customer will be in need of some immediate assistance and resources. Some of the things they will need are emergency services and temporary housing. Customers will also ask you to report their claim for them and will inquire as to the entire process. It is likely they will ask for a copy of their policy with a full explanation of their coverages. This is an important process that can be handled by a public insurance adjuster.

3. For the insured who experiences a disaster, working with numerous company adjusters, independent adjusters and contractors can be cumbersome, time-consuming and sometimes may even be infuriating. However, you as an independent agent want to stay neutral - you don't want your customers yelling at you for decisions the insurer may be making and you certainly do not want your insurance company clients upset with you either. This can be a very challenging position to find yourself in. This is another reason why it makes sense to engage a public insurance adjuster – they are outside of the decision making process and will be an advocate for the insured.

4. Our experience in adjusting large losses and large scale disasters has shown there are a large number of insureds that are under-insured. This is usually the result of the insured shopping for the lowest rates and ending up with inadequate coverage limits. If your insured finds themselves under-insured, the natural thing for them to do is to point their finger at their agent and accuse them of not properly insuring them. Sometimes, a very skilled and astute public adjuster can find additional coverage within the policy to minimize the impact. When selling a policy I recommend the agent spend additional time with the insured to fully explain the coverages that may quickly reach or exceed limits in case of a large loss – such as personal property with the sub-limits; additional structures; landscaping; and building code upgrade to name a few. A good public adjuster will look for all coverages within the policy with a goal of minimizing the effect of an under-insured situation.

5. During the entire claim process it is common for the insurer and insured to have differing opinions on a variety of issues. A professional public insurance adjuster will relieve the burden from the agent by answering and explaining coverages, processes, values and options available to them. In addition, the public adjuster will be able to obtain a value of the loss that is independent from the insurer's. The goal of the public insurance adjuster is to pursue all coverage the insured is entitled to under the policy. Our experience has shown this is not always the same goal the insurer has. A professional public insurance adjuster can be a strong advocate for the insured and will work with the agent, insured and the insurer to resolve the claim expeditiously for its full value.

6. Remember that a professional public insurance adjuster is the only adjuster that can represent the insured. The company adjuster and independent adjuster are only authorized to work for the insurer. If the customer does not engage a public insurance adjuster, then they will find themselves without their own representation – or will rely upon their agent to perform that work and you will quickly discover you have a second full-time job. It is an arduous and tenacious task to juggle all elements of a claim and one that should really be performed by someone that does this on a full-time basis.

If you help your customer pick a claims professional who understands the insurance claims business, adheres to a professional code of ethics and has an excellent reputation, you will have done a great service for them.

Guidelines for How to Pick the Right Public Adjuster:

They should:

• Be licensed in the state the loss occurs in
• Be a member of the National Association of Public Insurance Adjusters (NAPIA)
• Have experience with a range of disasters and worked with many insurance companies
• Possess local knowledge of contractors, repair and remediation prices, building codes, etc.
• Have knowledge of your insurance company - its top adjusters and claims handling processes and policies
• Provide references from satisfied customers

Sometimes, your insurance company’s adjuster is slow to act on your claim. Sometimes, he’s wrong. Maybe you need to find a good adjuster to help you. Here’s how to find one.

Angry that your insurance company isn't moving as fast with that claim check as you'd like? Or maybe the adjuster's offer is less than you need to cover your losses? Perhaps you need your own adjuster.

Public adjusters assume all of the duties necessary to have your claim processed, including making an inventory of the loss and presenting your case to the insurance company. A good public adjuster has experience in the industry and will understand your contract and the company's responsibilities right down to the fine print. In exchange, a public adjuster receives a percentage of your claim.

Finding an adjuster takes some research

"For the most part, people like using (a public) adjuster because they like the idea that someone is working on their behalf vs. someone working on behalf of the company," says P.J. Crowley, vice president of the Insurance Information Institute.

But the decision to hire your own adjuster is far from a slam dunk. Finding a competent public claims adjuster is a lot like finding a medical specialist during a health crisis: It takes some research at a time when chances are you need to move fast.

Because you will be paying the adjuster yourself, you don't want to hire one unless it's really necessary.

"If they're good, it really makes a lot of sense," says Chris Farrell, host of the nationally syndicated television show "Right on the Money!" and author of “Right on the Money: Taking Control of Your Personal Finances. ”And if they're bad at it, you've really created a nightmare for yourself."

There are some horror stories. "Some public adjusters, to justify their fee, will exaggerate their claim," says James Markham, senior vice president and general counsel for the American Institute for Chartered Property Casualty Underwriters and the Insurance Institute of America.

And some insurance company adjusters may bristle if you bring in your own expert, he says.

"Some company adjusters are instantly suspicious or even antagonistic whenever they have to deal with a public adjuster," Markham says.

Ask questions, do your homework

Most often, public claims adjusters are called in for large property claims, says Rick Lambert, chair of the agent and broker section committee for the Chartered Property Casualty Underwriter Society. For smaller claims (less than $25,000) or auto claims, which are typically based on a fairly standard formula, it's probably a waste of money to hire a public adjuster, he says.

If you have a large property claim and are considering a public adjuster, ask yourself two questions: First, is your company acting quickly to replace your losses? Second, have those efforts been effective and fair?

"Is the company out there within 12 hours, or has it been a week since the fire and no one's come?" says Lambert, also vice president of Early, Cassidy & Schilling Inc., an independent insurance agency in Rockville, Md. "Most good companies are going to come out there pretty quick."

Most well-known companies also are going to play fair when it comes to claims, he says. But, Lambert admits, in today's economy when companies are hurting, "Some are going to play hardball."

There are also a few other instances when it could be practical to hire a public adjuster:

You've sustained a partial loss. Half the house burned down. Now you've got to document which of your possessions survived the fire, which burned and which are damaged beyond repair.

You don't have the time to follow up on your claim. Whether you're a two-income couple with kids or a busy professional who travels frequently, filing a claim and following it through will take time, especially if you don't have a record of your possessions and their value.

You had loved ones injured or killed in the incident. If you're spending your days at the hospital or mourning a family member, you may not even want to think about the claims process.

The loss is business-related. Rather than assign an employee to handle the claim, some companies will outsource the job.
Even though you'll want to move fast, you still have to do your homework before you hire a public adjuster.

"It's delegating," says Farrell. "You're hiring their knowledge and expertise. It looks good on paper, but it's easy to get ripped off."

And while it should go without saying that you don't hire the public adjuster who knocks on what's left of your door after a fire or tornado, plenty of desperate folks have done just that and really regretted it.

Courtesy of Public Adjuster Information

Save On Homeowners Insurance And Keep Your House This may seem like old news but we are in a bit of an economic bind these days. Front and center in this bind is the home foreclosure crisis which is gripping America from coast to coast. Those who failed to make their mortgage payments and had their home foreclosed on are left scratching their heads wondering where they went wrong. It may have never occurred to them but homeowners insurance could’ve saved their home. To get the best coverage schedule your FREE policy review today.

Yes, believe it or not, an expense like homeowners insurance can actually help you with your mortgage expenses. It might sound backwards but as the saying goes, “you have to spend money to make money” and homeowners insurance is no exception. So how exactly can you utilize your homeowners insurance to prevent your home from being foreclosed on?

• Consider job loss insurance – Often added as a rider to a standard homeowners insurance policy, job loss insurance has risen in popularity in the wake of the foreclosure crisis. Purchased while still employed, job loss insurance pays for part or all of your mortgage should you be unemployed for a number of reasons.
• Receive an Insurance Policy Review – Many homeowners pay too much for coverage without knowing. The key to not falling into this trap is by fully understanding your current coverage in order to find the best policy at the right price.

Using Homeowners Insurance To Your Advantage If you own a home then you probably realize the importance of homeowners insurance. It’s something you need anyways so why not optimize it to work in your favor? Job loss insurance and comparing quotes are just two ways to make sure your home stays yours. Contact your public adjuster today about other ways you can save on homeowners insurance.