Missouri Approves Bill to Protect Consumers from ‘Storm Chasers’

May 5, 2011

  • May 6, 2011 at 10:20 pm
    JB says:
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    I don’t see how they can keep contractors from representing the insd if the insd approves it and/or negotiating for the insd to get better/more than the adjuster initially offers. All of that is legally at the discretion of any insd and most often helps them. Of course if this does happen there will be an increase in PA involvement which usually isn’t what most of us want. But if carriers would stop the VERY normal and routine initial low ball offers (often due to poorly trained greenhorn adjusters) then they wouldn’t have nearly so much to worry about in the first place.

    • May 7, 2011 at 5:03 pm
      T says:
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      I’m not saying insurance companies are perfect, however they are more legally restricted on what they can and can not do, due to insurance regulation. Most consumers are ignorant of what it cost to replace damage. I come from the construction industry and it is easy to make a homeowner believe that they have more damage than there really is and that I am your friend and will be able to get the insurance company to pay for a new roof and then make the insurance company out to be the bad guy for “low ball offers” or “not paying a claim”. We all know that all roofs are different ages, made from different materials and the storms are all random. Just because 3 people got a completely new roof next to you does not mean you have damage too. Trust me I know, I see both sides and this will be good for the consumers overall. The insurance companies are still legally obligated to pay for damage due to the contract (policy) you purchase from them. I recommend making sure you have a good policy to start with and you won’t have any claim problems.

    • June 24, 2011 at 9:28 am
      Mark says:
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      JB,

      You made a very interesting comment. I believe the term you wish to use is called “Institutional Bad Faith”. This happens when “low ball” offers become the rule rather than the exception. The Xactimate estimating platform has “transitioned” from being an insurance claims estimating system to becoming a claims managment system. For a good example of claims management (HMO) search youtube videos. You will see a former healthcare CEO testify in front of Congress how she sold her soul to advance her insurance career. As a claims rep she denied an important life saving surgery to an insured in order to save her employer thousands of dollars and advance her career. She mentions now (after the man died) how much it hurts her conscience.

  • May 7, 2011 at 1:40 pm
    michael says:
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    Ihave to give kudos to the insurance lobbyists. What a scam to allow the carriers to short claim millions of customers yearly.Make sure you buy stock because this bill will open the door to billions of extra profit for the insurance companies.Again they have very smart lobbyists to push a bill that will be drastically detrimental for the consumer.Shame on Jay Nixon if he signs a bill against the consumer to benefit the insurance companies.There have been numerous class action suits against carriers from short claiming actual damage.The execs are high fiveing at corporate and already ordering new yachts.What a scam.I can tell you that the best policy is Buyer Beware not a windfall of profit for insurance companies.If Nixon signs this Shame on Him.The carriers will rewrite the book on standard claim practices.

  • May 8, 2011 at 1:39 am
    michael says:
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    This is a bill that will line the insurance companies coffers by billions a year.Our polititions gave the oil companies the right to rape this country why not let the insurance companies add billions to their bottom line.What a sham.Buy stock because now the insurance companies will raise the typical standards of defined damage.Today the normal policy of adjustment of a typical hail damaged roof is 10 hail hits per 10’x10′,give these robbing barons a inch and they will take it a mile.The standard calculations of defined damage and compensation will be solely up to the carrier.The day they know that a competant contractor can not meet on site to professionally assess the damage for the customer rampant short claims will be the norm. The insurance companies will take advantage of the consumer as they will now have the upper hand in assessing the damage on their own.If this bill passes it will be quite detrimental for the consumer. The lobbyists for the insurance companies come across with this as sheep but in wolves clothing with this bill.What a great idea for them. There have been many class action lawsuits won against large carriers for not paying out claims to true value of loss.I have been in the restoration business for 20 years and have found that it is quite the norm for the adjustor to short the claim by thousands and thousands of dollars.It is part of the job of a contractor to make sure that the customer is paid properly to repair or replace items or portions of the building that sustained damage.In my profession it not uncommon to re-assess a original scope of loss provided by the adjustor by double and in many cases triple. This isnt just a claim or two a year it is every claim that crosses our desk.The average consumer will be taken advantage of,believe me this is a bill that should be called “Lining the coffers of the insurance companies” The adjustor works for the interest of the carrier ,we as contractors work for the customer.This bill will allow the insurance carriers to rewrite the book on how to handle losses.I can see the future at the boardrooms just pay this and let the consumer fight for what he is owed until they just flat give up in frustration.Believe me this happens hundreds of times a day.Would you want to go to court and you are barred from hiring representation.What a SHAM.I’ll bet the execs at the main offices are high five-ing and ordering new yachts.What a slap in the face for the consumer.If Jay Nixon signs this bill SHAME on him.

    • May 10, 2011 at 9:28 am
      Tim says:
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      Unfortunately for the contractor who is local to the state of Missouri . He will no longer to be able to negotiate with the insurance company to resolve the claim for the homeowner .
      70 % of most claims are incorrect and there are things that insurance companies leave out intentionally and only until the job is complete do you find the errors .
      I think its just a move the insurance companies are going to ensure the Homeowner pays their deductible, which is great for us good contractors because we are not losing profit on jobs to be competitive with the chasers .
      Wait until the insurance companies force the customer to go to a 1 or 2 % deductibles and the customer has to pay a $ 5k deductible.
      The thing I do not like is the part where we can`t negotiate with the insurance company when the 80 yr old customer or uneducated customer ask your help to get all the work done and there are things missed on the scope like amount of layers , pitch .
      The customer will eventually complain to their agent who will then be given the task of doing the negotiation for the homeowner or they lose that customer.

  • May 9, 2011 at 10:40 pm
    mary smith says:
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    Looks like the insurance industry has bought the Missouri Congress. Since when do insurance companies get to dictate homeowners protect their property? Anyone who has read their insurance policy knows that it is full of exclusions and double talk. What is wrong with allowing a legitimate liscensed contractor represent me in my insurance claim? I admit there are “unscrupultous” contractors out there but to restrict free enterprise with more red tape the Missouri Congress is allowing insurance companies to continue to take advantage of their customers that are not made aware of their rights under their policy.

  • May 10, 2011 at 1:25 am
    Ryan says:
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    I’m not a roofer, but I’m apparently an “unscrupulous contractor” or “storm vulture” who chases storms and if this passes it will only be a matter of time before it is applied to our line of work. I find it funny when I talk to the insurance adjusters at the job site, on an elevator or even at the bar and they tell us how they always write all their claims low because they (insurance companies) want to cut their losses just in case the customer cashes the check and doesn’t repair the damaged property. So, when the consumer comes to us with their check, we end up either having to do a supplement, which can take up to a week to get done or fix the damage for the amount of the check (pay their deductible). Don’t you idiots (government) realize when we say pay your deductible, we aren’t actually paying the deductible. It really means we are fixing the damage for less than the actual cost of the repair. I don’t see how this constitutes an unscrupulous act or defrauding vulnerable citizens! The insurance company gets their deductible money and shouldn’t be concerned with anything after that. I think you need to look up the meaning of unscrupulous because I think you have us “storm vultures” confused with the insurance agencies. Stay out of my business government, I think it’s pretty obvious you don’t know as much as you think you do considering the state of our economy.

  • May 10, 2011 at 8:43 am
    Jim says:
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    Insurance companies are low bidding to start. I think its ridiculous that this is even a consideration. I have filed claims in past and I know that the insurance companies always bid low. I have had the same contractor for years, and now if I need to get work done, he isn’t allowed to negotiate with my insurace company?? I’m pretty sure part of my policy states “if there are differences from what we have(agency) and what your contractor says, have him call us to work it out. Just another way for insurance companies to screw their homeowners. My contractor is the only one that protects me from their ridiculous estimates.

  • May 10, 2011 at 12:19 pm
    Tim says:
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    I love the part about making it more illegal to offer to pay deductibles, but making it unlawful for homeowners to have a professional represent them through their insurance negotiations is terrible for consumers in MO. Insurance companies will be offering very low settlements in MO now and getting away with it. MO legislature passing a law that prohibits its private citizens from contracting with other private citizens is craziness!

  • May 10, 2011 at 1:11 pm
    JB says:
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    Unless the policies and laws in Missouri are uniquely different from everywhere else the insd can name anyone of their choosing to meet with, discuss, or negotiate with the adjuster/carrier. The carriers are trying to structure things where they can dictate the settlements and now more than ever (with so many inexperienced adjusters) that is horrible. The insd’s will simply hire PAs on nearly every claim and PA firms that specialize in small claims will pop up and the insd will lose for this and the carrier’s will too as they will still have to issue the left out items but take much longer to close a file. This really only stand to help the PA in this scenario. Carriers may make it harder on insd but they too will lose in the long run by trying this.

  • May 11, 2011 at 1:34 am
    Andrew says:
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    Sounds like the “storm chasers” are flooding the message board…there is NO reason that a contractor should offer a “kickback” to an insured for making an insurance claim…no wonder my insurance rates have gone up 40%, some of those guys are eating up the deductible and trying to convince ME that I need to make a claim on a roof that has NO damage…

  • May 11, 2011 at 1:38 am
    Andrew says:
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    Always a good time to hear the storm chasers gripe…

    • June 7, 2011 at 5:23 pm
      Restoration Owner says:
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      PLEEEASE when was the last time you heard the insurance company paid to much.NEVER.The insurance carriers constantly low ball claims.For the state of Missouri to pass a law like that there had to be suitcases of money floating around.How dare the state tell a property owner that they cant have a consultant on site to negotiate a loss.The average property owner has no idea of what it takes concerning construction or rebuilding their loss. In Missouri there were 7647 complaints filed against insurance companies for dealing in bad faith. And now the state gives them the right to settle claims with out any professional on site to help negotiate a fair settlement? What in the hell was the senate thinking ? Believe me the carriers are frothing at the mouth that this bill stays in the same context.Believe me it wont….

      • June 25, 2011 at 12:50 pm
        Andrew says:
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        Well the insured can have a consultant on hand that is licensed to handle a claim…they are called public adjusters and they can be hired by an insured if they feel a claim isn’t fair..contractors are not always licensed to settle claims, they should stick to what they know…
        Another point is that the margin that some contractors are charging are HUGE! It’s about a 50% markup after materials and labor! Most contractors spend about two days fixing a roof…should it really cost a home owner $8000 to have four people install a roof over 2 days time?!

        • April 22, 2014 at 11:56 pm
          Jason says:
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          Yes, it should… Have you seen what it costs to also pay insurance for the men on the roof (work comp) and general liability … you are uneducated in the process. You OBVIOUSLY have no idea what it costs to run a business… This was an insurance company dream that they could pull one over on an entire state… Would you go to court without a lawyer to represent your best interest??? Idiot… Have fun when your house burns and your insurance company lowballs the settlement … It’s ridiculous to say that an 80 y/o has the capacity to evaluate a claim and agree that it should cover the repairs the insurance company is obligated to pay. But often doesn’t… And, Public adjusters typically take 10% of the settlement they negotiate… again leaving the customer short…

  • May 11, 2011 at 8:31 am
    JB says:
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    I agree the deductible issue with contractors is wrong. There will always be bad contractors and there will always be bad carriers too. The real issue I see is the consideration to prevent an insd in allowing a contractor to negotiate on their behalf. There is no debate here- THAT IS WRONG. It’s the insd’s responsibility to prove they have covered damages to the carrier and if they enlist the help of a contractor to assist in this there is nothing a carrier can do about it. Just like a carrier can enlist the help of an engineer or other specialist to aid them with their investigation too. Carriers will NEVER get away from having to negotiate claim settlements and they cannot prevent an insd from getting a professional to assist them with that process. That will never fly.

    • May 13, 2011 at 8:05 pm
      Andrew says:
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      If the insured is worried about being lowballed and wants representation, they should hire a “licensed” public adjuster to represent them who is in the business of working with insurance claims, not the company that is fixing the roof…roofers are licensed to fix roofs, claim handlers are licensed to handle claims

  • May 18, 2011 at 7:54 pm
    Storm Chaser says:
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    With this consumer protection measure-Who then will protect these homeowner from storm vulture-insurance adjusters who sometimes minimize and even deny real damages. They can deny, delay and confuse homeowners-who have paid premiums faithfully. Cut the slogans-in a storm-these adjusters are usually out of state workers as well. And even so called “not for profit” mutual insurance companies have to compete and pay salaries and have incentives to keep their costs down. As in denying or minimizing a claim.
    Contractors work hard alert homeowners to real damages, and take photographs for those same homeowners/policyholders. What is wrong with that? Work gets contracted, that in many cases would otherwise be left undone, despite the fact it is a covered and named peril in the homeowners insurance policy. The way I see it-vultures can certainly be on the insurance company side. What can you say about some insurance practices-wolves in sheeps clothing.

    • May 19, 2011 at 11:47 pm
      Andrew says:
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      Most insurance companies act in good faith and will pay legitimate hail damage claims…lets face it, hail damage is covered under an insurance policy. However, if there the consumer ever has a concern about not being treated fairly, they can still have the ability to be represented by an independent public adjuster. A public adjuster acts as a advocate for the insured in case the consumer and insurance company can’t agree on a claim payout. They understand the insurance industry and can also help speed up the claims process.

      The measures taken by Missouri Senate will help keep my home insurance rates lower, however, because insurance is continuously being treated as a “maintenance” policy, I think that rates will keep increasing as long as insureds keep making hail claims on their 15 year old roofs and getting a check for Full replacement cost. I can definately forsee my homeowners insurance going up 20% each year because so many people make claims as a way to replace their old roofs.

      However, if the work is done by a reputable contractor, the roof will last at least 15 years until the next hail claim…

  • May 18, 2011 at 8:10 pm
    Storm Chaser says:
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    BUY insurance company stock. If you work for a mutual-ask for a raise.

  • July 6, 2011 at 9:52 am
    Ryan says:
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    If the State of Missouri would require contractors to go through a process to obtain a license to work then they wouldn’t have this problem. Every Tom, Dick & Harry with a ladder and a hammer can start a roofing company. To give Insurance Companies this much control is the most idiotic thing I’ve heard of.

  • September 26, 2011 at 6:26 pm
    larryb says:
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    September 26, 2011

    Missouri Jumps on the “No Negotiating” Bandwagon

    Missouri Senate Bill 101, sponsored by Senator Mike Parson and co-sponsored by Representative Bob Nance and Representative John Cauthorn – all Republicans – was passed and signed into law by Democrat Gov. Jay Nixon in June of this year. Interesting to note that, as I’ve pointed out before, the bill contained the same NAIC rubber stamp language as similar bills that have been passed in other states or are still under consideration in some others.

    While much of the bill language is appropriate in that it affords added protections for property owners with insurance covered property damage, it is the language usually found at the end of these bills that is problematic. The language below from the Missouri bill is similar to that found in other states bills and legislation:

    “6. A residential contractor shall not represent or negotiate, or offer or advertise to represent or negotiate, on behalf of an owner or possessor of residential real estate on any insurance claim in connection with the repair or replacement of roof systems, or the performance of any other exterior repair, replacement, construction, or reconstruction work.

    7. Any violation of this section by a residential contractor shall be considered an unfair practice pursuant to the Missouri merchandising practices act as codified in this chapter.”

    While not as blatant a conflict of interest as Georgia’s version that was sponsored by four insurance agents and an Allstate attorney (all state legislators) and supported by their new Insurance and Fire Safety Commissioner, “friend of NAIC” Ralph Hudgens, the lack of thought put into how the bill would affect many millions of voters is obvious.

    On his .gov website, Missouri Governor Nixon lays out the usual political talking point pablum about spending more for education, making government more efficient, putting families first, etc., etc. – same old stuff. But then, with the last part of the proposed legislation inserted into the bill (6 & 7 from above), the attorney in him takes over and he thinks only of protecting his cronies which are apparently, in this case, friends of the bar and the insurance industry – bill signed! Or, he simply doesn’t think.

    As mentioned previously in “Sausage Makers” – Chapter lll, the ABA has been after Public Adjusters for years trying to prevent them from negotiating (for a fee) on behalf of property owners with insurance covered damage. Calling what Public Adjusters do an “unauthorized” practice of law, the ABA has recently relented to some degree (not in all states) which has opened the door for the PA lobby to attempt to use the same tactic against contractors. Calling what contractors have been doing for decades, negotiating on behalf of insured’s with insurance covered damage, the “illegal practice of Public Adjusting”, the PA lobby has been pushing for legislation making it illegal to do so unless one carries a PA license. Of course, contractors are prohibited from employing or contracting with Public Adjusters.

    In all of this though, the PA lobby is really nothing more than a puppet of the P&C insurance industry who knows they can rely on an endless number of busy-body do-gooder ill-informed politicians and legacy seeking bureaucrats to green light their agenda which ultimately is to leave many millions of insurance consumers (AKA voters) with insurance covered damage with little to no protection from the bad faith practices of the P&C insurance industry.

    Mark Johnston, State Affairs Manager – Midwest Region, National Association of Mutual Insurance Companies (and, attorney/lobbyist) had this to say about the proposed Missouri legislation before it was signed into law by Gov. Nixon:

    SB 101 “will insure that homeowners and others who have suffered damage to their property are not then battered by the unscrupulous acts of ‘storm vultures, those out-of-area scam artists who flock to hard hit areas and defraud vulnerable citizens, particularly seniors.”

    “Those ‘out-of-area’ scam artists who flock to hard hit areas and defraud vulnerable citizens, particularly seniors”? Come on Mark, how about a little more truth and a lot less spin…Not every ‘out-of-area’ contractor is a scam artist and not every ‘in-area’ contractor is honest or even competent. (How about lobbying for some legislation that might protect vulnerable citizens, particularly seniors, from the fraud foisted upon them by their P&C insurance companies?)

    Other than his obvious spin and embellishment, I don’t necessarily disagree with the substance of Johnston’s argument for clarification on the process. But, as soon as the language found above in lines 6 & 7 is added to these rubber stamp bills, seemingly at the last minute in the hopes that no one will consider or ask why or how that language fits in with the rest of the legislation (it doesn’t), the red flags start showing themselves.

    Several months ago I spoke with Georgia Representative Howard Maxwell who sponsored his states similar legislation and asked him how the “no negotiating” language ended up in the bill. He told me that it was inserted at the last minute at the request of Commissioner Hudgens whose picture had appeared several months earlier on the NAIC website above a short article about him. Connecting the dots…

    As a shill for the P&C insurance industry (as well as an attorney), Johnston’s not going to put forth a clear, both sides argument, he’s going to do just what he did, paint contractors who successfully negotiate on behalf of and represent the interests of insured’s with property damage and help them to achieve the highest legitimate claim settlements with the same broad brush that he paints ‘out-of-area’ ‘Storm Vultures” as he calls them.

    The fact is, ‘6 & 7’ have no real relation to the rest of the bill language but that doesn’t stop most Governors from falling for the ruse. What the ‘6 & 7’ clauses really do is take away the power of premium paying insured’s to decide who they want to assist them with their insurance claims and leave them exposed to the bad faith practices of P&C insurance and that’s just plain wrong. Apparently however, Governor Nixon, like so many other Governors who have already signed similar legislation into law, didn’t get the memo, or just didn’t care and therefore never considered the consequences once his constituents have discovered what he did to them.

    If Governor Nixon was really all that concerned about making government more efficient and putting families first he would have studied the bill, removed the negotiation restrictions and then signed it into law. Maybe, they had to pass the law first so we could find out what was in it?

    Shame on you Governor Nixon. By signing 101 into law you took the authority of insurance premium paying voters away from them and forced them to either pay an unnecessary 10% to 15% fee to a public adjuster to do what contractors do just as well or better at no additional cost or trust that their P&C insurance company will deal fairly with them and we all know how that usually works out, don’t we.

    Welcome to the age of the world wide web!

    http://www.iccoa.com

  • October 3, 2011 at 12:32 pm
    Jeffery Miller says:
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    There are company’s out there Than Can help the Homeowner
    PROEX is one of them 1-800-319-0221 e-mail ProExGroup.com
    Also there really are not any Estimates in the insurance world
    There is the scope of work from the insurance company, Homeowners
    who get estimates thinking they get to keep moneys are in for a big surprise Make sure you read you insurance policy and understand it if you do not have your insurance agent explain..

    • September 23, 2012 at 1:19 am
      Paul Schutjer says:
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      Jeffery,
      Very good comment



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