Insurance Academy

Explaining a Policy to Someone Who Knows Better

By Patrick Wraight | May 2, 2018

A good friend and colleague forwarded me a press release written and sent out by a public adjusting company. Since I was wondering what to write about this week, I’m truly grateful for the article, but when I read it, my head exploded, so #thanksAndy for your help this week.

Some ground rules for today’s post. Understand that the customer is my highest concern. I believe that there are many in the insurance universe who feel the same way that I do. I think that there are public adjusters that are pro-customer and I do not hold that against anyone. I am not anti-public adjuster. Now that I got that off my chest, I want to respond to this press release that is at best deceptive and at worst a complete misrepresentation of how insurance companies write their policies.

I don’t want to specifically identify the insurance company or the public adjusting firm, but I may inadvertently reveal who they are just by responding to the public adjuster’s charges. Let’s get going.

“The United States property and casualty insurance industry has trillions of dollars in assets, has staggering profits of over $70 billion a year, and pays its executives more than any other industry in this country.”

Since the writer doesn’t quote his source, its immediately suspicious to me, but I’ll leave the data alone for a minute. What I can’t leave alone is the tone. From this sentence, I get the idea that the author isn’t involved in the insurance industry. Yet, he actually runs a large public adjusting firm that operates in seven states. It seems to me that he is a part of the insurance industry that he’s going to spend over 3,000 words blasting.

What does a public adjuster do? Public adjusters are engaged in the claims process by the customer. If the customer disagrees with how their insurance company adjusts their property claim, the customer can hire a public adjuster to adjust the claim and represent them before the insurance company. I think that’s a great thing. Sometimes a second set of eyes, hands, and legs can help paint a more complete picture of an event.

How do they get paid? They normally get paid based on the payment that the insured receives from their insurance company. In the end, the public adjuster is part of that industry with trillions of dollars in assets. Sorry, public adjuster, you can’t paint yourself as an industry outsider. You’re just as much a part of the industry as I am. Yes, I consider myself in insurance. I’m an insurance educator.

**Important note: I’m not quoting policy language on purpose. If I did, this post would run over 4,000 words and we don’t have that kind of patience. You may read on now.

“Limited Matching Coverage for Vinyl or Aluminum Siding and Roof Materials for Composition Shingle Roofs”

What does all this insurance lingo mean to the insured that has this policy? What if the insured has a $15,000.00 15-year-old composition shingled roof that has a life expectancy of 25 years and was just damaged by a wind storm that blew off 40 shingles from two slopes of the roof?… If the insured with the $1,000.00 deductible is confused after all this, can the insured still collect the $6,500.00. The simple answer is yes, if the insured pays for the roof out of his pocket first as outlined in section b. above. … “

Here, he makes it sound like this is a required part of the policy for all policy holders. The truth is that this policy language is an option available to insureds. They will save some money up front for a reduced limit of liability for roofing and siding materials. The policy provides that if there is a limit on the declarations page, the insured has chosen to limit how much can be spent for certain losses and it requires that the insured make the repairs that they are claiming. That means that the insured would be reimbursed for their loss or (watch this) it could be that the company would adjust this loss and make payment to a contractor when an executed contract for repairs is submitted. This provision, while limiting and not something I would recommend, is clear in its intent and another reason that the insurance consumer really should have an agent help them make sound choices in their insurance purchases.

Shocking. An insurance policy that asks the insured to use the money that they receive for what it is intended for, rather than paying a public adjuster. It’s a concept that our parents taught us (go to the grocery store, buy eggs and milk and bring me the change back) when we were kids.

“Plumbing system”

I will give the public adjuster credit here. I’ve never seen this definition of plumbing system before.

Without question, the every day insured believes that a shower pan, bath or shower units are all part of a plumbing system. I went around to all of the plumbers I know and questioned them about this policy verbiage. The short of it is, they could not believe what they just read. Watch out, the exterior drainpipes connected to your interior drainpipes are not a part of your plumbing system. Furthermore, “an in ground sprinkler system” is part of a plumbing system, but a sprinkler system attached to water distribution pipes by any type of hose” is not part of a plumbing system. Where do they dream up this policy language?”

I find his conclusion suspect because it seem possible that he worded his questions to his plumber buddies in a way that he got the answer he wanted. He understands that the definition of plumbing system is used to limit the insurance company’s liability specifically to the pipes in the walls and under the floors in dealing with a very specific portion of the policy, coverage for water damage.

The term plumbing system is used twice in this policy. Once, in the definition of a household appliance, making sure that appliances are not considered part of the plumbing system. The other is in the limited water damage coverage and this definition allows the company to provide appropriate coverage for water damage.

It would be interesting to note here that part of the reason that this particular company felt the need to be so specific in their policy language may have to do with certain actors in the insurance universe who attempted to inflate certain water damage claims. It is possible that this public adjuster knows certain other public adjusters who may have engaged in their own deceptive practices. In 2016, most water damage claims submitted to Citizens Property Insurance were submitted by an attorney or public adjuster before the customer even had a chance to contact their insurance company.

By the way, the policy isn’t excluding damage for the stuff that is not considered part of the plumbing system, it’s just being specific about what counts as plumbing when there’s a water loss. Surely, no plumber would call a leak in a shower surround a plumbing leak, would they?


“These sections make it more restrictive than the HO-3 Appraisal Condition. It gives {XXX} the right to interfere with a process that is supposed to be independent.”

I have totally left the long appraisal section, and the rest of the public adjuster’s rant against it out. My take on what he wrote is pretty simple. It goes back to the beginning of the section, which simply tells the insured that the right of appraisal may not be assigned. That makes that public adjuster mad. It means that the insurance company has no intention of dealing with anyone, other than the insured, if a claim has to go to appraisal.

Is that a problem? I don’t know. If your source of income is making sure that insurance companies pay more for a claim than they plan to, it might be.

The whole thing

In the end, the public adjuster’s press release reads like one very long advertisement for his firm’s services, especially as we get to the end of it. On the one hand, I’m not opposed to advertising for one’s services. I’ve been known to use this forum to advertise for the Academy ( On the other hand, this isn’t a press release that gets blasted out to actual news organizations and I don’t pretend that this is something that it isn’t. This is the Academy blog and blogs are for opinion, education, entertainment (and sometimes a shameless plug).

About Patrick Wraight

Patrick Wraight, CIC, CRM, AU, is director of Insurance Journal's Academy of Insurance. He can be reached at

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