How to maximize a property insurance claim with a public adjuster

0:00Yeah. So, first of all, in in each state it's different, but most states you can't you you're either a licensed public adjuster and you're a contractor. You can't do both. And Indiana is kind of that way. So, anyone saying, "We're going to handle the claim." Well, a roofer is a roofer. He cannot negotiate the claim. He cannot discuss claim policy with the adjuster. There's, you know, he's there to put the roof on. He could say what you know what the damages are going to cost or what it would cost to replace the roof but technically anything to do with the insurance he can't do.

0:32Whereas all you know our city or we do is handle claims, negotiate claims, get our clients paid and then they're able to pick that that contractor, right? Cuz what those stormchasers do is they'll sign, you know, they don't even sign or give you estimates. They sign, you know, work authorizations. These contracts that state whatever the insurance pays, we'll do. We're taking the money, we're taking your deductible. You don't see a penny. — Well, in our case, you know, we got you, you know, we got you paid on each claim. You're then able to get bids, you're able to get estimates on on each claim.

1:03but the goal is ultimately to put all that money in your pocket and you decide, hey, if the building's only two years old or the damage, you know, is not that significant. Hey, you don't have to replace it. You've got the ACV check, you can take that money and put it into somewhere something else. — Yeah. And can you explain the ACV track, what that means? — Yeah. Yeah. So the actual cash value. So each when when when we estimate damages and we settle with the insurance company, it's always based on the replacement cost value. What does it cost to replace today? Then you take the depreciation based on age condition.

1:35You depreciate that replacement cost value item. And then that's how you get to your actual cash value. What is it worth now? So on a claim, let's say you replace the roof a year ago. Now it suffered damage. Well, it cost 20,000 to replace today. It's only one year old. So, we're only going to, for example, depreciate $1,000. I'm just throwing numbers out there. Then you would be getting an actual cash value of $19,000 minus your deductible. Got it. Yeah. Yeah. And I think that's what a lot of people don't realize. Is that there's there is depreciation over time.

2:08And I can tell you like so, so when Andy and I started working together, on this particular instance, we kind of weighed out the options and he, you know, he he had to go to battle with the insurance company on some of the things that they said were damaged or not damaged, you know, compared to what reality was. And so I I look back on that I'm like, had I not had your experience, I would have I mean the payout would have been a a fraction of what it actually was.

2:42Because you went back and forth with them so many times. And I mean, I think the whole insurance business right now is kind of built on the fact that we're going to pay as little as possible and hope that people don't fight back because it's their right to get the money, but you know, if they accept our offer, then we're not going to offer them any more than that. We're going to offer them the bare minimum. So, has that been your experience recently? — Yes. So, you just quoted a famous book that in our industry we we refer back to. It's called From Good Hands to Boxing Gloves.

3:13There was actually just if you maybe watch there was a a Senate hearing right now against All State and State Farm and they quoted that book u from good hands to boxing glove and and it's a book about if your listeners ever want to check out it's a great book but it's it's u it's all state hired McKenzie group they came in and they kind of showed them you know how they can really take their company to that next level you know again all states I think you know in the billions right now which good for them. Great.

3:44But basically that their whole their whole research and everything they presented to all state was 90% of claims or 90% of claims go un unf meaning that the homeowner or the insured doesn't do anything. Meaning they really they just take the check and then they're done. Mhm. — So, so their goal was if you want to go to that next level is if you underpaid all the claims only 10% or only like 5% people will actually u very small amount will actually fight the claim.

4:16— So that's exactly what you just said. Yes, that's what happens if they know and now it used to be just all state but now everyone's taken that model and everyone does the same thing meaning they'll underpay claims. They'll delay them as long as they can and know then either deny it, look for a way to deny it. And if not, they'll just underpay it and most likely you would have taken a check because you would have been in a hurry, hired a contractor, done the work. Because you don't know any, you know, people don't know any better. — Yeah. Yeah. When that check is in in front of you, it's like you kind of feel like, well, take it or leave it are the options, but you don't realize that.

4:50No, you can actually push back, especially if you have the knowledge of saying, okay, this is why. Because you have to have the supporting evidence and if you do — then you can often increase that claim amount. So, and it's a great point, too, on the, you know, on the the stormchaser point, like when I was comparing options. The big difference to me was, you know, this one guy in particular was like hounding me like you know, these guys get on it and they're like, you know, calling you every single day saying, "Oh, just sign this thing and we'll take care of everything." And he was like, you know, we'll we'll take care of it for whatever claim we can get.

5:26You know, we'll we'll pay for your roof minus your deductible, which sounds great. It sounds appealing, but at the same time, like you said, like the damage is done. It should be up to you to decide when and how you replace it. And these guys, like he wanted me to sign something saying it's up to them. Like they're going to take all the money that we get, no matter how much it is, and and replace this roof, which may the payout may be way more than what it actually would cost me to hire a you know, a different roofer to do it. So, you know, it's it's your right to get that that cash and make the decision, which I think was the big, benefit that I found with working with you guys is like they actually just sent cash or checks and and we could decide, you know, what damage needed to be replaced and if it needed now or, you

6:14Know, down the road a little bit, which which is a good option to have. And people don't know Kirby. So, as soon as there's a claim, right, you I think you mentioned they call their agent and their agent says, "Well, I got a guy. I have a couple guys that do roofing, that do claims, you know, that that do construction." And then you got people knocking. If it's a fire, there's 10 people knocking on your door. There's there's always everyone just trying to take the entire pot. — Yeah. And and people are so afraid thinking, okay, well, I'm just going to trust the agent and whoever restoration companies they send.

6:46All of a sudden, there's three different vendors pulling your stuff, you know, boarding up your windows and throwing stuff out. You know, then we come in, we're like, who are all these people? Now, you've already got checks and then the client's left with a small amount of policy because they've eaten up their policy limit. So, people don't understand that money for their entire claim is theirs. It should go to them and they're in charge then to pay people, get estimates and use that money for repairs. — Yeah. — Or or or they don't have to because you are owed the actual cash value. There's a lot of claims we go in on Kirby where we are our goal is ultimately with the insured is just get the actual cash value check as as high as we can so they get that money and then they don't want the property.

7:24They might want to move on to a next property or might want to do something else with the money. — Yeah, that's a good point. And and some of these national restoration companies that you see on TV, I've priced them before compared to like a local contractor and it's like multiple times as much money for them to come in. So they come in, they take the entire amount charging that that much. Whereas if you had gotten the check, you could either do it yourself if you want to do the work or you could hire a local person. We're way cheaper and then you know, it's much more it's a much better financial decision.

7:56So I love that. Well, and I think that your Mike I think when he was on your podcast, you know, his situation was a little bit different. He had a fire, so it's a much bigger claim, but same thing ultimately he had his own contract. Most people in real estate and most people, you know, I we own real estate my wife. So, when I looked at your claims when you call when we talked, I look at it from a we look at it from a standpoint of, okay, if I was in Kirby's point, you know, in in in his shoes, how would I want this handled? Do I want some of these properties actually? Am I going to fix them? Or maybe I'll use that money to invest it somewhere else. So we look at it that you know and we looked at all the properties said okay these are for sure some of them didn't have that much of a damage but we could still maybe claim it but we look at all the options and then present it to our client not just file claims because hey let's file a claim for everything for Kirby and then see what happens and you know see what sticks that's

8:45That's the wrong way but again stormchasers and and these people that solicit most of the time these are guys that are just signing contracts they're getting paid they don't have no clue what they're looking that they they know there was, you know, there's everyone else is knocking, so there's something. So, it's just a game of numbers. If they sign 10 roofs, five get approved, five they do, the other five, that's when we get the calls. We had a, you know, we had a guy we signed you know, a couple claims and then these other ones, you know, we have claims that they they just they denied us or they only Well, it's too late.

9:17Why isn't that that guy? Oh, he was just a you know, they're just a roofing company. Oh, because now they're just a roofer, but before they were going to handle everything. — Yeah. Yeah. Yeah. — So, and there's and in and roofers and contractors and PAs coexist in many states. In some it's, you know, in Illinois, for example, it seems like, well, either you're one or the other, but in most states we go into, people love working with PAs and we love working with contractors and we work together to help people. — Yeah. — And that's how it's supposed to be. So, — yeah. Absolutely. What are the biggest mistakes you've seen property owners make in this process?

9:54I know we've talked about some already. — Yeah. Starting with the with the policy itself, a lot of people, they have to be, you know, really really careful when going from a long-term rental. So, let's say you own 10 properties, they're all long-term rentals. All of a sudden, you say, "Hey, I'm going to turn couple of these into Airbnbs, — short-term rentals, — and now a fire happens." And now the policy strictly has a clause or an exemp exclusion that states we do not if it's a short-term rental, we do not cover it. Airbnb, they'll literally state those.

10:25And a lot of people we've we've actually known that we've gotten calls from have been denied because of that exact reason. So, I would start with making sure if you are doing short-term long-term your policy, you advise your agent what your goal is or what you're doing. If you're living at the property in one unit, maybe the other two are short-term rentals. Make sure you say the exact even in an email to the agent so everything is out there. So, if something ever comes back, you had it on paper. No, I advised this is my property and this is the intention I had in this property. — Yeah.

10:55— second, when you do actually have a claim, — the the most important is definitely, you know, protecting it from further damage. — If there's a fire, they broke some windows out, put a roof, a hole in the roof, you know, try getting it tarped and try boarding up, closing everything, taking any really like valuables or anything like that. And then, that's it, right? You want to close it off, board it off, mitigate from further damage. That's the biggest thing because insurance companies always look at that. Did the insurance the first thing they ask when we call a claim in like for your claims, did he did did they did you guys mitigate?

11:30Well, in your terms, there's no hole, there's no openings, there's nothing really to mitigate. But if let's say, high, you know, the winds came in and tore off shing parts of your roof, then yeah, I would have said, "Hey, Kirby, you got to get your roofer in there. Make sure he throws tarps here, tarps here." So then — it's protected because now if a rainstorm comes in, water gets inside and you didn't mitigate there, they can deny the claim. — Wow. — Or deny the damage that's inside — because they can say you never mitigated. So that's one of the biggest. And then following that is, you know, call a public adjuster if you don't know one.

12:05— try to ask for references. If not, Google is a good good option or other associations. But you want to get someone right away because the when you call that claim in to your insurance the the words can matter. You can say one word and it can mean denial or delay of a claim for three months plus or you know I mean it can it can matter by that much like using the word flood when it's a pipe break. You know mold's not covered. Now people say well we had water and there's mold everywhere.

12:37Well mold's not covered. So now there insurance right away puts up a red flag and says this is probably long-term damage. So being careful what you say is is one of the biggest thing. That's why, you know, we advise, we always tell people when I'm on this podcast, I always say call a public adjuster. Not just saying our company, but call anyone. Because it's going to save you a ton of money, push the claim quicker. There's just so many benefits. — Yeah. You're like a totally untrained person going up against someone who's like a a ninja at this who, you know, they're trained to not pay you as much as possible.

13:10So, you really need someone who knows how to speak the the language. And to your point around the the policy, I think those are all great takeaways, things I wouldn't have thought about. But, to your point around the policy up front, making sure you have the right policy, I think that's a a good point if if you're doing short-term rentals. And I I obviously have a a coaching program where I I teach people how to do you know, high cash flowing short-term rentals. And I get asked all the time about what insurance company to use or what policy to use. And proper insurance is one that's like one of the leaders in the space.

13:44And I always tell people get a quote from them just because they are a leader in the space. But what I've seen is that typically their quote is about two to three times as high as a local insurance broker. And it it seems like their policies are very comprehensive, but I also feel like you're paying for like these one in a million scenarios that probably aren't the best use of your money. And when you look at that compared to like a typical short-term rental policy from a local broker, it's less comprehensive, but covers all the main items.

14:17Are there are there certain things when you're buying insurance like specific coverages you feel like, okay, you really need to have this, and then others that you feel like are a waste of money? Yes. For sure there's Yeah, there's there's a ton. One that that every policy should have is law and order ordinance included in it, which is if something happens like for your in your properties, you had law ordinance coverage, which meant, you know, they paid 10,000, but now the law the the the city mandates that you put ice and water and mandates this and this on the roof, right?

14:51Well, now we can get that at least agreed to upfront once you replace the roof. The insurance owes for that. You know, that's that starts adding up. Well, if you have a fire and now the entire electric has to be brought up to code, insulation has to be brought up to code because the the the energy codes and and the building codes change, you know, through the years. Every year everything gets updated. — So, that's a that's a big one. Also, some pump water backup coverage. If you have a finished basement, you're renting that basement. If you're even if you're not and it's a finished basement and water backs up and you know out of the sump pump or the sump pump malfunctions and you don't have that well now the entire basement's on you know that coverage is not that much.

15:30It's a couple bucks a month. But you're adding 20 25,000 you know of coverage in for that basement you know. — So that's a big one. What you have to be aware of is exclusions. Right now, a lot of policies, especially especially older properties, they're they're excluding, you know, damage to roofs, meaning, you know, they'll pay for anything, fire, anything, but if if a damage happens to your, you know, to your roof, either they'll throw in a really high deductible or exclude certain damage to your roof.

16:04So, basically, a lot of things we're seeing now on roof claims, basically you're only covered for fire, water, anything outside, you know, wind and hail, it's with with high deductibles, with the exclusions, you're not even worth filing the claim. And that's why with yours, the first thing we did was we wanted to look over all the policies cuz you had, I think, three or four different carriers between all the properties. So, we wanted to make sure, you know, what kind of coverage you have. And in knowing for example you had Erie I think Eerie insurance on one of them. We know ex we know Eerie policies.

16:35We know that they like to throw those exclusions for metal and other stuff. So we wanted to make sure that we knew what the policies showed before we actually filed the claims.