Contractors are Illegally Attempting to Adjust Insurance Claims: Consumers beware, When and if you are solicited by a Contractor that states he will adjusting your insurance claim, or assist in the adjustment of the settlement you need to know this very may be an illegal. Contractors are arrested all the time for Unlicensed activity, as its considered a 3rd degree Felony.Read more here: LINK
The McKinsey Report and ALLSTATE: LINK
What is the McKinsey report?
Allstate reportedly hired the McKinsey Company, a New York consulting firm, in the mid 1990’s to show the insurer how to increase their profits. McKinsey told them to avoid paying claims, and when they do pay – pay less. Allstate allegedly saved $700 million and increased their stock price at the same time after taking McKinsey’s advice. The most damaging part of the reports involved two analogies where McKinsey said that, 1) policyholders who accepted lower settlement offers were “in good hands” (Allstate’s slogan), but those that fought the settlement offer should get Allstate’s “boxing gloves”, and 2) Allstate should take an “alligator approach” to claim payments and settlement offers – meaning that the company should just “sit and wait” in the hope of frustrating policyholders to accept less or simply go away.
When Charlie Kennedy discovered a crack some years ago in his Mount Dora
home, he was sure his insurance company would cover the repairs.
But when the claims adjuster from State Farm arrived, the results weren't
encouraging: The damage to his garage had been caused by a sinkhole, the
adjuster said, and the policy on Kennedy's Spanish-style 1926 home didn't
Kennedy wasn't convinced that was the case, but he wasn't sure what to do
next. Then he had an idea: Why not hire someone with the expertise to
evaluate the situation for him and the savvy to negotiate with State Farm on
"If you have something wrong medically, and you have an opinion from a
doctor, if it's serious enough, why not get a second opinion?" he explained.
Employing an intermediary can mean letting the building contractor
communicate with your insurance company -- or it can mean retaining a
lawyer. But for some homeowners, it means hiring a "public adjuster," a
little-known type of loss specialist devoted to helping policyholders
realize the full potential of their insurance policies.
"If you were getting a divorce, would you let your spouse's attorney tell
you what you're entitled to?" asked David Beasley, president of Insurance
Recovery International, a Winter Springs firm of public insurance adjusters
and property-loss consultants.
The way Beasley, a former loss adjuster for Nationwide Insurance, sees it,
insurance companies' adjusters are expected to settle customers' claims with
as little financial outlay as possible. They don't want the homeowner
getting outside advice.
"One or two insurance companies have even written into policies that they
[policyholders] can't call a public adjuster" without contacting the
insurance company first, he said.
Beasley doesn't know whether that rule has ever been contested in court, but
the Maitland-based Florida Association of Public Insurance Adjusters has
tried -- and so far, failed -- to get the state Legislature to have insurers
include a notice in their policies about a customer's right to contact a
lawyer or public adjuster.
"Our job is to represent the insured," he said.
Blaine Vermeulen, owner of Insurance General Contractors in Mount Dora, is
both a licensed building contractor and a certified public adjuster. He
sometimes negotiates with insurers on behalf of a customer -- but as the
contractor hired to repair the damage, he said; his training as a public
adjuster simply helps the client get the best possible settlement.
Other public adjusters say they won't combine those two roles, preferring to
avoid any conflict of interest that could arise between the job of
negotiating the claim and the job of making the repairs.
The Florida public-adjusters group -- which has about 500 members, most of
them adjusters and lawyers -- has asked state officials to tighten the rules
that dictate who can offer their services as a public adjuster. They also
want the state to standardize the job's training requirements.
"Just as in any field, whether it's an attorney or CPA [certified public
accountant] or what have you, there may be people that take advantage" of
others during a personal or financial crisis, said David Barrack, executive
director of the National Association of Public Insurance Adjusters.
Members of the Florida association are supposed to adhere to the group's
ethics requirements and inform clients upfront about the percentage of an
insurance settlement that they intend to take as a fee. (It's usually 10
percent to 20 percent, depending on the nature of the claim.)
Still, can't cost-conscious consumers just negotiate with their insurance
companies without someone else getting involved?
Certainly, said Beasley, the Winter Springs public adjuster. But if a
homeowner is worried about a claim, and serious dollars are at stake, he or
she might want someone else to look over the insurer's paperwork.
Kennedy, the Mount Dora homeowner, ultimately asked Vermeulen, the
contractor with public-adjuster training, to look at the crack in his
garage. Vermeulen examined the crack and Kennedy's policy, then convinced
the insurer that the damage was not the result of a sinkhole.
The company paid for the repair.