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Insurance Appraisal And The Insured’s Integrity

Posted by Joe Brennan | Posted in Homeowners Insurance, Independent Appraiser, Insurance Advice, Insurance Dispute | Posted on 10-06-2010


insurance appraisal integrity signInsurance Appraisal: As an independent insurance appraiser resolving insurance disputes as an impartial party, I often see that insurance companies are missing items in their estimates to return damaged properties to pre-loss conditions. Most of the time it’s because insurance adjusters are overloaded with claims, getting pressure from upper management, or most often the adjuster is just simply not qualified to review the damages in the first place. Now, there are some very experienced adjusters with backgrounds that qualify them as experts in the type of losses they adjust. You’d be fortunate to actually get one to visit your property in your time of need.

Most people would believe that the insurance companies are not providing the coverage they offerer in the policy. In some instances this may be true. However, what happens when the insured is trying to claim damages that just did not happen? What happens when the insured is committing fraud or is making false statements in an effort to collect insurance proceeds in excess of what they deserve. Yes, it can go both ways.

I was named an independent appraiser by Pacific Specialty Insurance for a Hurricane Ike claim dispute in Houston, TX. A joint inspection was setup between the other appraiser and myself. The insured accompanied us during the appraisal inspection. The appraiser for the insured was selected by the insured’s attorney and had visited the loss prior to our joint inspection. When we met at the loss the insured’s appraiser supplied his appraisal and amount of loss for $54,000+.

During our inspection the insured followed us around the property pointing out damages and explaining to both appraisers what had happened. As usual I took photos of all the damages pointed out by the insured, scoped the loss by measuring the roof, elevations, rooms, as well as taking notes on all the insured was advising that had happened. I tried to be pleasant and professional while listening to the insured make false statement after false statement. The events that the insured was claiming had happened were not even possible. It was that moment that I realized why Pacific Specialty had invoked the appraisal process on such a small claim.

We began on the exterior because the insured, his attorney, and appraiser had included replacement of all the siding on the home. They included replacement for the front elevation from storm damage and they included the other three elevations as the profile of the vertical cedar siding was no-longer manufactured.

The storm came from the south. The front of the home faced south. The insured claimed that the siding on his home was ripped from the front elevation by Hurricane Ike’s strong winds. He advised that almost half the pieces of vertical cedar siding was tossed into the road and across the street. With the wind pounding on the front of the home it’s more likely that the siding would be tossed around the sides of the home or to the rear. However, with hurricanes having circular winds and sometimes tornadic activity within them – it is possible.

The insured then claimed that he gathered the siding from the road, reinstalled it all back on to the front of the home, caulked it, and primed it prior to the adjuster arriving for inspection. Although unlikely – this too is “possible.”

insurance appraisal integrity1During my inspection of the front elevation I took the following photos.

The first photo here shows a flood lamp unaffected by the strong winds. Again, the insured is claiming that the winds sucked close to half the siding on the front elevation off the building and into the street. Yet, the light fixture and glass globe were unharmed.

insurance appraisal integrity2

I took several photos of rotted siding on the front elevation as well. Keep in mind the insured stated that he gathered the siding from the yard, road, and the neighbor’s yard across the street. He then reinstalled the siding back onto the home, caulked and primed it. To do exactly that; the insured also gathered all the little chunks of “rotted” siding and put the puzzle pieces back in the exact locations from where they came from. (Yes, he was asked to point out sections that had been blown off.) Also, lets assume the wind did not affect this particular rotted area, (again there were multiple sections) then what we are lead to believe is that the wind was strong enough to rip the solid pieces of siding from the home… but not the rotted pieces? Hmmmm.

insurance appraisal integrity3

In addition to the siding showing areas of wood rot, there were three sets of shutters on the front elevation. As you can see from the photo, the shutters also had significant rot and decay.

I guess the insured was able to gather the rotted shutter pieces and puzzle them back together as well. Not to assume anything I asked the insured, “Did the shutters get ripped from the house as well?” He replied, “Only the small set around the upper right window.” Interesting comment by the insured, considering the smaller set of shutters had the least amount of visible wood rot.

I would have never thought that Hurricane Ike could be so selective to rip solid cedar siding from the building, but leave rotted shutters intact.

The inspection continued inside the home to the master bedroom on the second floor. As per the traditional appraisal inspection I took photos and asked questions. I was suddenly taken back by the things coming out of the insured’s mouth.

insurance appraisal integrity pic4The insured claimed that the two windows in the master bedroom were blown in from the severe winds. Ok… that is surely possible. Next the insured explained to the two appraisers that rain water entered the windows and caused damage. Ok… from the photo we can see “some” water entry caused stains to the drywall sill and under the windows. So far, so good.

Next the insured explained that the water from the windows filled the room with 4″ of water! He stated that the water was at least 1″ over the 3″ base molding. Ok… although very unlikely from the amount of stains around the windows, I was trying to be open minded and thought to myself, “I guess it could happen.” The insured advised that a restoration company came out and sucked up all the water. So, I began asking questions.

Q: “When was the drywall and baseboards replaced?

A: “None of the drywall or baseboards have been replacement.”

Q: “I don’t see any damage on the drywall or baseboards. If the room was filled with 4″ of water don’t you think they would show signs of damage, staining, swelling, anything?”

A: “Well I painted the walls already.”

Q: “And, when was that done?

A: “About 3 weeks ago.”

insurance appraisal pic5It did not appear to me that the room had been freshly painted less than a month ago. So, I took this photo of the textured wall. The photo was to show the amount of dust clinging to the texture lumps on the wall surface. It’s practically impossible that this amount of dust would gather on the texture in 3 short weeks. (The dark gray spots are dust balls.)

When the insured answered my next question I was disappointed that he would compromise his integrity to such a great extent.

Q: “Can you show the damages to the rooms downstairs below the bedrooms?”

A: “Oh no, none of the water damaged any rooms downstairs.”

The insured did not even realize that it was impossible for so much water to fill a second story bedroom with up to 4″ of water and none of it to drain into the rooms below. I guess the carpet in the master bedroom was waterproof. I continued my inspection showing the rooms below the master bedroom did not incur any damages.

As usual I completed my appraisal estimate and prepared to present my amount of loss to the insured’s appraiser. My appraisal number for actual damages was $10,000+ more than the insurance company’s adjuster, but was also $30,000+ less than the other appraisers.

In less than 15 minutes of me explaining my position to the insured’s appraiser about the rotted siding and shutters, and also the 4″ of water that did not drain to the floors below, he agreed to sign an Appraisal Award form for the exact number of my proposed estimate – approximately $19,000 and change. He did not mention one more word bout his $54,000+ appraisal number.

So, it’s bad enough suffering a loss, and for many people having to battle with their adjuster for a fair settlement. Please, do not compromise your integrity by making false statements about your claim in an effort to profit from a loss. It’s illegal, your entire claim can be denied due to fraud, and your family will be left without you for the next few holiday seasons while you’re serving your prison sentence.

Insurance Appraisal is in the policy for the benefit of both parties. To resolve disputes using a less costly and less time consuming process…don’t abuse it!

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(C) Joe Brennan is President and owner/operator of Insurance Claims Group, Inc., a national independent adjusting, appraisal, and umpiring firm. We will answer your claim questions FREE as part of our FREE Insurance Advice and Insurance Claim Consulting Services.

Insurance Claims Group, Inc.
Joe Brennan
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