Public Adjuster Learns of Disturbing Trend for Recent Homeowner Insurance Losses

Carrier Dropped You after You Filed a Claim? You Are Not Alone.

I just got some feedback from an industry colleague this morning that made me sick as a Public Adjuster. Sadly, I fear that dozens or perhaps hundreds of homeowner’s insurance policyholders across Connecticut and New England (many of whom have been kept in the dark about the potential benefits of using public adjusters) have already been or will soon be forced to pay much higher premiums for property insurance because carriers have decided almost unanimously now that new unspoken rules apply and are in full effect.

Public Adjusters Push for Clients as Insurance Industry Pace Still Suffers from Past Winter’s Deluge of Claims

The winter we just survived was the worst on record here in Connecticut and public adjusters in New England are still quite busy serving clients who are repairing home and businesses that suffered ice dams, pipe freezes galore and worse. Most of the re-building and repair efforts are moving along, but, claims and recovery are still definitely moving forward at a slower pace than usual. For example, many customers are right now waiting for their insurance carrier to make the next move on a claim that has already been open for several weeks. “Patience” is the pep talk many clients have heard from public adjusters who have watched an already painfully slow claims process move even more slowly because of the extremely high number of claims filed for losses this past winter season.

And then, I heard this ugly news from the owner of a local plumbing business who talked to a manager at a local supply house this morning. The manager shared that at least a dozen plumbers have told him pretty much the same story – homeowners who have filed claims recently are being dropped by carriers and left sometimes with only the most expensive alternatives for property insurance coverage. I’m talking about clients who did nothing wrong other than file a claim for something like pipe freeze damage after paying insurance policy premiums religiously for years.

You Got Dropped and You did Nothing Wrong – A Game Plan from a Public Adjuster to Help You Move Forward

So, what should you do if you find yourself in a panic because you have an open claim for a frozen pipe flood, roof collapse or ice dam loss from this past winter and your carrier has dropped you? Here are some tips:

1. First, consider getting help with your claim from a public adjuster familiar with claims process. Carriers tend to sing a whole different tune when a licensed public adjuster levels the playing field by representing a client on a loss. Many carriers routinely take advantage of customers who are unfamiliar with the services and coverage to which they are entitled after they file a claim. You may have been dropped and excluded from future coverage by one particular carrier, but you don’t have to take a financial beating on your open claim too because the adjuster handling your last loss with that carrier noticed you didn’t have a public adjuster looking out for your interests.
2. Next, contact your agent or broker as soon as you hear you will be dropped. Have your agent or broker shop around for new coverage from a different carrier.
3. If that doesn’t work, in the short term, contact your mortgage company if you have a mortgage on the property and ask them to help you find insurance coverage. This doesn’t have to be coverage that lasts forever, and most likely your mortgage company will be glad to help you find coverage for the interim or longer. However, expect that this will be at a higher premium rate. It’ll hurt to pay the inflated premium, but it’s better than the risk of no coverage at all, which your mortgage company probably won’t tolerate.
4. As a last resort (at least from our experience as public adjusters here in Connecticut), you can try to get a policy through the F.A.I.R. plan and they’ll provide some form of coverage. F.A.I.R. is an abbreviation for Fair Access to Insurance Requirements, but, here locally in the Constitution State, F.A.I.R. is a misnomer of sorts because any coverage you get through a carrier in this program will be a noticeable downgrade in premium pricing (it’s high), policy coverage (it’s less), and customer service (it’s going to be worse). As distasteful as you think your insurance experience may have been by getting dropped by your previous insurance company, it’ll be worse if you have to ever file a claim with a F.A.I.R. plan carrier.

I hate to generalize or make assumptions, but I’m concerned that this recent ripple of dropped homeowner policies that I have witnessed as a public adjusters serving clients in Connecticut may actually be a much bigger wave, and, could be as record-making as the snowfall totals in Boston this past winter. This could be sad and costly news for many. Did I say it doesn’t cost anything to talk to a public adjuster before you file any claim?

Agent Tells Public Adjuster of New Limits by Insurance Carriers: 2 Non-Weather Claims per Customer

To further investigate this perceived trend from a perspective other than that of a public adjuster, I called a friend who has been an insurance agent for more than 20 years for one of the most popular carriers for homeowner insurance policies. We all know the name of his company. I have counted on this respected industry colleague in the past for information from the other side because I know he is as dedicated to his customers as I am to mine.

“Leon, you’ve got an industry that’s hemorrhaging on two fronts. One, you’ve got a client base that hasn’t been educated by agents, brokers or public adjusters about when to file claims and when not to file. My company held out on following suit for a while, but now, we’re beginning to do what all the other companies are doing. There are new limits. Everybody gets two non-weather related claims in three years. In some cases, you might get three. However, more often now, you get two non-weather related claims on your homeowner’s policy and that’s it. Now, more than two in that time period and you get dropped, and, you may have done nothing wrong.
The second issue is that the insurance industry is dealing with a record number of claims because of this past winter and carriers have had to pay out tremendous amounts of money. If you even call the carrier to ask a question about filing a claim that could be a strike against you. That alone sends up a red flag.”

“Oh,” I said, “So, you’re a problem in their eyes if you’re smart enough to ask questions about the claim before you file?”

“Exactly. That’s why I tell my clients, call me directly first before you call the 800-number. That call could end up on their C.L.U.E. report. ”

Another Tip from a Public Adjuster: Get a C.L.U.E.

For those not familiar, the C.L.U.E. (Comprehensive Loss Underwriting Exchange) report is a database of insurance claim information that carriers consult to investigate client claim history, however, public adjusters and policyholders themselves can use it too. Lexis Nexis generates the report and keeps it updated regularly. The good news here is that Lexis Nexis will send your C.L.U.E. report to you for free once a year if you contact them. This way, you can see what the insurance industry sees when they’re thinking about you and your property.
As a public adjuster, I have to add this: be sure that if you are going to call your agent or broker first that he or she is the kind of agent or broker who would advise you to get the assistance of a good public adjuster if you were in over your head on any homeowner property insurance claim. Keep in the back of your mind that your agent might have an interest in your not filing a claim for a loss. A good public adjuster will warn you that in some cases, insurance agents are rewarded by carriers for having clients whose low loss ratio makes it easier for the carrier to remain profitable.

Last Advice from a Public Adjuster: If You Have an “Active” Insurance Claim History, Think Before You File

So, with these new “unspoken” limits in mind, if I’m your public adjuster, and, you tell me that you had a non-weather related flood claim and you also had car burglary claim (the car wasn’t stolen, but someone broke in and stole property) in you driveway in the past 3 years, I’m going to tell you to think hard about your next claim on your present homeowner’s insurance policy because you might get dropped if you file it.

Are Other Public Adjusters and Agents Seeing Clients Dropped by Insurance Carriers Faster Now?

I wonder how widespread this recent trend is and I’d really like to hear from other Public Adjusters. I’d also like to learn what other property insurance industry professionals have witnessed and anything that might help a homeowner in jam with no coverage. Most of all, and probably because I’m a public adjuster, I want to hear from any recently dropped policyholders who can add to the discussion – thanks in advance, everyone.