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Property Damage Claim Profits At Your Expense

Posted by Joe Brennan | Posted in Fire Insurance Claims, Homeowners Insurance, Independent Appraiser, Insurance Advice, Insurance Claims Help, Insurance Dispute | Posted on 09-06-2010

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property damage claimProperty Damage Claim – The insurance sector declared record gains since 2004. According to the Insurance Information Institute (III), property insurers net income had grown $24 billion dollars from 2005 to 2006. In 2005, the industry earned profits of $49 billion; across 2006, the number accelerated to $73 billion! Keep in mind that such profits were obtained within two of the most costly hurricane damage years in history – 2004 and 2005.  These particular statistics are leading several to wonder, “Why are insurance company revenues so substantial?”

Things analysts are reporting – According to insurance market experts, insurance carriers have expanded their gains using several processes:

  • Accelerated Prices: Insurance companies have raised their premiums across the board. The III announced that profitability in the property-casualty lines have multiplied by an annual average of 46% since 1994.
  • Paying a Fewer Number of Claims: Insurance carriers have additionally slashed the amount of settled insurance claims. Again, across the board. The III announced that property insurers paid-out 64% of the premiums they collected on covered claims through 1994. Through 2006 and 2007, the pay-outs were reduced to 55%.
  • Getting Out of Dodge: Soon after a sizable impairment, insurance firms frequently get out of harms way. As an example, a large number of providers would no longer offer insurance to individuals in the southern states that were overwhelmed by Hurricane Katrina. This was due to substantial losses they sustained. Quickly excluding a book of business through these zones, though in fact their right, leaves the property owners scrambling to find alternatives.

It actually seems tremendously basic. Consume way more assets, commit to a fewer amount of claims, and escape from burden regions. Regrettably, it’s the people that are typically the ones to pay the expense – also, the instant things like this happen, individuals frequently feel powerless to fight.

Since the insurance business is simply not federally regulated, each individual state’s insurance dept is responsible for managing insurance carrier practices in their state. In most cases, such state operated services simply won’t have the staff members needed to take care of each claim situation they acquire.

It’s for these reasons that the insured must discover how to defend themselves by reading their policies and learning precisely what there options are. Hopefully, no property owner must suffer an insurance dispute together with their insurance company. On the other hand, in the event that you do, the Insurance Appraisal Clause found in property insurance policies is there to protect you. Uncover much more on the subject of the Insurance Appraisal Clause and how you can affordably preserve your home and assets from insurance industry profitability. Don’t be a victim of a property damage claim.

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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
Ph: 919-669-9111
Fx: 919-573-9595
info@insuranceclaimsgroup.com

Insurance Claim Help and questions about Independent Appraiser Services is available by visiting Insurance Claims Group | Insurance Appraisal Services | Insurance Appraisal Process | Insurance Appraisal Umpire | Fire Insurance Claims

Comments posted (4)

Another factor worth investigating is the fact that these few years have had a huge amount of foreclosures. I am interested on if this had any effect on the profits.
I suspect some of the high risk policy holders may also be of high risk of mortgage default. When houses go through foreclosure, they often are “vacant”. As this is commonly a non coverage clause in policies, I suspect alot of losses denied. Of course, this would cause a positive pay out to pay in ratio.
As a side note, when a foreclosed property is covered, there is usually no contents, no ALE… and the carrier pays the mortgage company, as they are now the insured. Mortgage companies usually do not hire publicdefender Adjusters and rarely are invoking appraisals.

Joe,
Excellent insight on the property claims industry. Who would have thought they still made such huge profits in 04 and 05 when 8 major hurricanes came ashore in those 2 seasons. People almost actually had sympathy for the the insurance companies.

I only know my house is in distress as far as mortgage goes but I had a water line burst in the third floor bathroom, I had waited the better part of a month until the fill in adjustor showed up and he low balled it so bad its not even funny!

I now got a public adjustor involved which is taking the position of appraiser and he told me not to touch anything!

I am now two months into this thing my house is smoldering with mold and must and fallen ceilings and I can not even safely stay there and I have only received about $3500 which is for the low ball repairs as if I was supposed to know how to fix everything!

I started using some of the money just to commute back and forth.

I don’t know how long I can afford to commute back and forth 15 miles everyday and watch my house mutate!

What gives?

Unfortunately, this is a very common story. Your public adjuster will know that you have coverage for “Additional Living Expenses” (ALE). This will provide coverage for staying n a hotel, the additional mileage, wear on your car, and fuel cost generated by the damage to your home. It can be frustrating and it’s good advice not to “complete” repairs. However, you should not let the mold to continue to grow. For one, most policies have a mold limit of 5k to 10k. Secondly, it’s you duty as the policyholder to mitigate against further damage.

You should take plenty of pictures and then use the 3k they paid to have a water damage company come in and remove the damaged drywall and mitigate any further mold growth. Then do not “complete” any repairs by replacing drywall or painting and such. Your photos will be proof of the loss and all will be covered… either way it’s still a fight.

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