Wrong Frank. Obviously you don’t know what has happened to everyone involved in this disaster. I’m sure that comment would not have come from you if you were one of the families that has had to deal with this mis-treatment from the insurance companies! We have been out of our home for 8 months and will NOT be back into our home until one year after this disaster and it all comes down to the insurance companies “screwing” the insured.
If there can be a bright spot in tragedy, thanks to the publicity, the government (FEMA, NFIP) is finally taking seriously the suggestions for improvement and simplification of a comprehensive insurance product. The insurance companies do not retain risk in this program, they merely apply the rules established by the government. The focus of this lawsuit should be more accurately aimed at NFIP, not the rules applicators.
Problem is people dont always read their policies, and ask questions. The terms of what flood policies will cover is very limited, just because you dont read it, doesnt mean an insurance company should just go ahead and pay it because you had a loss. I agree that people effected should be compensated for their loss, but per the terms of the policys coverage.
If you take out Flood insurance, to cover damage caused by a flood, then that is exactly what it should do. If it is not intended to replace items or cover the full cost of repair the policy and marketers and sales peopl should ensure the clients are made fully aware of this.
if building industry costs skyrocket (as they do after a disaster demand and supply + greed), and this should be built into the rate/pricing model or alternatively it should be illegal to rise prices above a fixed % after an event like this, then nobody becomes king and nobody gets screwed.
AS FRANK SAYS MORE MONEY FOR LAWYERS. THEY WILL CHARGE FOR THE REFILING WHEN THEY FINALLY FIND THEY HAVE MISFILED AND THE JUDGE WILL ALLOW THE AMENDMENT BECAUSE HE IS A LAWYER TOO. THE COMPANIES ARE NOT INSURERE IN THIS CASE BUT ADMININTRATORS. THE INSURER IS THE USA TAXPAYER.
Yeh, My file was reopened. Answer was
no. I don’t care what the adjuster got.
I just want enough to go home. I should
not need to go $50,000 in debt when
I have over $200,000 in coverage.
Flood insurance policies should be worded different. It should say the figure $200,000 doesn’t mean a thing.
It just looks good on paper. Don’t in
your wildest dreams think you can really get that.
don’t people realize that the more the adjuster can write up in damage, the more he/she gets paid? and didn’t everyone get the letter from NFIP asking if they wanted their file reopened to allow up to policy limits? i guess we should just sue, right?
Trouble is I couldn’t even get enough
to cover the repairs. Where was I
to find cheap Charlie to repair the
damage. Maybe the flood adjuster could
recommend someone.
The flood policy states that it pays only for damage caused by flood, not wind, nor any other peril, just flood. Like any property policy it pays for actual loss sustained due to a flood. A major problem that has occurred is that people were carrying limits well in excess of the actual replacement value of there homes. Not there fault but a fact just the same. The policy will only pay the cost to replace the property with like materials. If it will only cost $50k to replace a bldg and the coverage is for $100k, you will only get $50. Ask your bank why they require a property limit equal to the loan value when they fully know that the policy will pay what it cost to replace it.
I’ve seen insurance companies pay/administer these policies every way that is possible. Some Flood Adjusters are honest and accurate,& even occasionally generous. Some are Rotten and terrible individuals with stinking attitudes that should not be in the business they are in.
Most insured’s do not understand what is covered or how to make an effective claim, so lacking those skills would be better off letting a Professional represent their claim. If you have the time and the skills to adjust your own claim, “Go for it.”
Unless you have access to estimating software with a valid pricing database you are pretty much just guessing, or at the mercy of whichever adjuster you get.
Yes, some carriers tweak their prices down, based upon unrealistic expectations from local contractors, then deny any manipulation. Actually, the guy they got their prices from died about 20 years ago. If you don’t need a public adjuster, OK fine, until you see how your adjuster is going to treat you, it’s sort of a crap-shoot anyway, but after the adjuster has made his mind up, Good Luck on getting any additional consideration.
Don’t forget these adjusters are just people, so, when you come up to them spouting “Policy Limits” without any supporting documentation, they tend to group you with all the other crazed, greedy, people they have already dealt with in the past. It’s Insurance, not the “Lottery.”
Nationwide’s name does not appear in the class action suit. I am quite happy about that fact. During Isabel, I was employed by Nationwide and worked “flood duty”. Although I did not adjust claims, I set up appointments so in some cases I was the initial contact. Nationwide’s complete attitude was making the insured as comfortable as possible and settling the claim as quickly as possible. It was a satisfying experience.
In Texas Allstate, USAA, TWIA (Texas Windstorm Insurance Association)and Safeco, and certain claims adjusting services and adjusters, are knowingly underpaying claims (en massse) also.
One method in particular, that slides right past most homeowners, is where the primary-general contractors 10% overhead and 10% profit cost factor lines are showing in the insurers estimates, but are not truly 10% and 10%.
Here’s some reasons why…
Some “insurers” have an unwritten “rule” that [states] ‘only when 2 or more trades are needed for a reconstruction project is a primary-general contractor “allowed” to be the homeowners contractor-of-choice’.
That “rule” not only defies recognizing the appropriate primary-general contractor construction business / full replacement values already factored into a premium…it also defies fair-competive market trade practice.
In short, certain insurers do not want consumers to call a general contractor for single trade reconstruction issues even though premiums (paid) have full replacement costs of the home already factored in. They claim that a homeowner should contract the single trade scenario on their own.
But is that what consumers have pre-paid for? Carefully consider the inherent value of a premium by reading the following TDI bulletin…
Full replacement of a structure and construction products, processes and pricing is actuarially based on “Cost plus 10%” type construction business economics math in a particular region. (10% equaling a reasonable (pretax) profit on the whole investment “cost”).
Since FULL replacement of the structure has been anticipated in the premium, and primary-general contractors place new (and replace) structures, than an insurer should have no problem with a homeowner hiring a general contractor for a single or multiple trade reconstruction issue.
FULL replacement (primary-general construction business processes/ costs) are woven into the structure, and are proportionally indemnified. A general contractor is afforded by the premium no matter if FULL or PARTIAL reconstruction issues come up that an insurer has to pay for.
Remember the TDI bulletin points…
1. “The DEDUCTION of prospective contractors’ overhead and profit and sales tax in determining the ACTUAL
cash value under a REPLACEMENT cost policy is improper, is not a reasonable interpretation of the policy language, and is UNFAIR to insureds”.
2.”–Premiums charged must not be excessive for the risks to which they apply”.
3. “Under a replacement cost policy, the liability limits of the policy and the premium paid by the insured are determined on the basis of the replacement cost of the structure”.
*(Replacement costs are based / determined, in part, on primary-general construction business products, processes and pricing. Construction business investment costs plus 10% profit is part of ALL of the replacement costs the structure built into the premium).
4. “The value of contractor´s overhead and profit, as well as sales tax on building materials, has been included in the limit of liability for which the insured has paid premium.”
*(Primary-general contractors, and their subcontractor cost VALUES, are already actuarially factored into the TOTAL VALUE of the premiums “limit of liability”).
5. “If the insurer in determining actual cash value excludes costs that are included in the determination of liability limits, on which the insured´s premium is based, the insurer reaps an illegal windfall because the insurer receives premium on insurable values for which loss may never be paid”.
*(Insurers who “exclude” primary-general contractors from single trade (ie; roofing or painting or carpet, etc.) work have “excluded costs” already included in the determination of the liability of limits the consumer / premium has proportionally paid for. Not including those values in a claim payment results in too much premium being charged.)
With the above said, insurers who precharge for construction business values, and do not proportionally repay them, are, according to TDI, acting in an illegal manner.
Also, insurers who preach-practice the ‘2 or more trades are needed before general contractor oversight is warranted’ philosophy are also consistantly-simultaniously defying their own “rule-of-thumb”…
How so…?
When a property becomes (hail, wind, rain, fire, etc.) damaged, and needs roofing, painting, siding, window, doors, guttering, etc. repair or replacement, insurers are EXCLUDING roofing costs from primary-general contractor (2-3 or more trades needed) quantified estimates.
Subsequently, the primary-general contractor overhead and profit lines appear on an insurers estimate, BUT, (after having manipulated their estimating software), have been reduced or eliminated all together. Most consumers, who are not construction business estimators, are deceived and fooled by that one underpayment scheme alone.
Visually the insurer underpaid claim estimating scheme looks like the following abbreviated construction estimates…
Roofing Sub——–$5,500.00
Guttering Sub———$840.00
Windows Sub———$485.00
Garage Door Sub —$900.00
Sheet Rock Sub—$1,400.00
Cabinetry Sub——-$3,400.00
Painting Sub———$1,200.00
Total Sub Trades-$13,725.00
NOW compare an exact “fair and reasonable” / “competitive” [Allstate, Safeco, TWIA] type “Costs plus 10% profit” construction business estimating-claim settlement practice…
Roofing Sub——–$5,500.00
Guttering Sub———$840.00
Windows Sub———$485.00
Garage Door Sub —$900.00
Sheet Rock Sub—$1,400.00
Cabinetry Sub——-$3,400.00
Painting Sub———$1,200.00
Total Sub Trades-$13,725.00 (So far, the Contractor-Insurer-Adjuster estimates are equal)
Double Check—Contractor O&P totals equal $2,975.07 minus Allstate O+P totals of $1,645.00 = $1,330.07 kept by Allstate.
*By using some construction business estimating software slight-of-hand trickery the roofing sub-trade costs and materials tax are ZEROED OUT of the Allstates Primary-General Contractors estimate totals so the Overhead “Savings” (coupled with materials tax-O&P NOT factored into the sub-sub-total) equals…
* Allstate Primary-General Contractor 10% Overhead is $501.38 short.
** Allstate Primary-General Contractor 10% Profit is $735.87 short.
*** Materials tax dollar investment is $92.82 O&P short.
Participating insurers (Allstate, Safeco, TWIA, etc.) explanation to consumers is that ‘the (roofing, carpet) contractors overhead and profit is already included in the estimate, so the general contractor overhead and profit should be reduced proportionatly’.
Such non-sensical double speak will get by, (or be meekly accepted by), most stressed out policyholders who just want the whole claims “process” to end.
*(Just do the math. If the final (primary-general) contractors’ 10% profit line is NOT 10% of the insurers estimate, the claim has been underpaid).
Allstate, Safeco, USAA, TWIA are invited to contact us if they feel they are being slighted or feel their estimating-claim settlement schemes / practices will be defendable in front of 12 educated people.
These are just a couple of examples how some insurers in Texas are estimating-conducting their daily and catastophic claim settlements. Their estimating methods are being exposed, just like Hurricane Isabel estimating practices are being exposed, except that much, much larger claim settlement numbers are at stake in Texas…
Another get rich scheme for attorneys. It is obvious that the attorneys have no clue about a flood policy.
Wrong Frank. Obviously you don’t know what has happened to everyone involved in this disaster. I’m sure that comment would not have come from you if you were one of the families that has had to deal with this mis-treatment from the insurance companies! We have been out of our home for 8 months and will NOT be back into our home until one year after this disaster and it all comes down to the insurance companies “screwing” the insured.
If there can be a bright spot in tragedy, thanks to the publicity, the government (FEMA, NFIP) is finally taking seriously the suggestions for improvement and simplification of a comprehensive insurance product. The insurance companies do not retain risk in this program, they merely apply the rules established by the government. The focus of this lawsuit should be more accurately aimed at NFIP, not the rules applicators.
Problem is people dont always read their policies, and ask questions. The terms of what flood policies will cover is very limited, just because you dont read it, doesnt mean an insurance company should just go ahead and pay it because you had a loss. I agree that people effected should be compensated for their loss, but per the terms of the policys coverage.
If you really want to get screwed, hire a public adjuster.
If you take out Flood insurance, to cover damage caused by a flood, then that is exactly what it should do. If it is not intended to replace items or cover the full cost of repair the policy and marketers and sales peopl should ensure the clients are made fully aware of this.
if building industry costs skyrocket (as they do after a disaster demand and supply + greed), and this should be built into the rate/pricing model or alternatively it should be illegal to rise prices above a fixed % after an event like this, then nobody becomes king and nobody gets screwed.
AS FRANK SAYS MORE MONEY FOR LAWYERS. THEY WILL CHARGE FOR THE REFILING WHEN THEY FINALLY FIND THEY HAVE MISFILED AND THE JUDGE WILL ALLOW THE AMENDMENT BECAUSE HE IS A LAWYER TOO. THE COMPANIES ARE NOT INSURERE IN THIS CASE BUT ADMININTRATORS. THE INSURER IS THE USA TAXPAYER.
The problem with your suggestion of suing NFIP is that the flood policy specifical prohibits suits against them.
Can you tell us in how many of these alleged bad faith cases a broker represented the policy holder?
Yeh, My file was reopened. Answer was
no. I don’t care what the adjuster got.
I just want enough to go home. I should
not need to go $50,000 in debt when
I have over $200,000 in coverage.
Flood insurance policies should be worded different. It should say the figure $200,000 doesn’t mean a thing.
It just looks good on paper. Don’t in
your wildest dreams think you can really get that.
don’t people realize that the more the adjuster can write up in damage, the more he/she gets paid? and didn’t everyone get the letter from NFIP asking if they wanted their file reopened to allow up to policy limits? i guess we should just sue, right?
Trouble is I couldn’t even get enough
to cover the repairs. Where was I
to find cheap Charlie to repair the
damage. Maybe the flood adjuster could
recommend someone.
The flood policy states that it pays only for damage caused by flood, not wind, nor any other peril, just flood. Like any property policy it pays for actual loss sustained due to a flood. A major problem that has occurred is that people were carrying limits well in excess of the actual replacement value of there homes. Not there fault but a fact just the same. The policy will only pay the cost to replace the property with like materials. If it will only cost $50k to replace a bldg and the coverage is for $100k, you will only get $50. Ask your bank why they require a property limit equal to the loan value when they fully know that the policy will pay what it cost to replace it.
I’ve seen insurance companies pay/administer these policies every way that is possible. Some Flood Adjusters are honest and accurate,& even occasionally generous. Some are Rotten and terrible individuals with stinking attitudes that should not be in the business they are in.
Most insured’s do not understand what is covered or how to make an effective claim, so lacking those skills would be better off letting a Professional represent their claim. If you have the time and the skills to adjust your own claim, “Go for it.”
Unless you have access to estimating software with a valid pricing database you are pretty much just guessing, or at the mercy of whichever adjuster you get.
Yes, some carriers tweak their prices down, based upon unrealistic expectations from local contractors, then deny any manipulation. Actually, the guy they got their prices from died about 20 years ago. If you don’t need a public adjuster, OK fine, until you see how your adjuster is going to treat you, it’s sort of a crap-shoot anyway, but after the adjuster has made his mind up, Good Luck on getting any additional consideration.
Don’t forget these adjusters are just people, so, when you come up to them spouting “Policy Limits” without any supporting documentation, they tend to group you with all the other crazed, greedy, people they have already dealt with in the past. It’s Insurance, not the “Lottery.”
Nationwide’s name does not appear in the class action suit. I am quite happy about that fact. During Isabel, I was employed by Nationwide and worked “flood duty”. Although I did not adjust claims, I set up appointments so in some cases I was the initial contact. Nationwide’s complete attitude was making the insured as comfortable as possible and settling the claim as quickly as possible. It was a satisfying experience.
5-30-2004
8:21 AM CST
In Texas Allstate, USAA, TWIA (Texas Windstorm Insurance Association)and Safeco, and certain claims adjusting services and adjusters, are knowingly underpaying claims (en massse) also.
One method in particular, that slides right past most homeowners, is where the primary-general contractors 10% overhead and 10% profit cost factor lines are showing in the insurers estimates, but are not truly 10% and 10%.
Here’s some reasons why…
Some “insurers” have an unwritten “rule” that [states] ‘only when 2 or more trades are needed for a reconstruction project is a primary-general contractor “allowed” to be the homeowners contractor-of-choice’.
That “rule” not only defies recognizing the appropriate primary-general contractor construction business / full replacement values already factored into a premium…it also defies fair-competive market trade practice.
In short, certain insurers do not want consumers to call a general contractor for single trade reconstruction issues even though premiums (paid) have full replacement costs of the home already factored in. They claim that a homeowner should contract the single trade scenario on their own.
But is that what consumers have pre-paid for? Carefully consider the inherent value of a premium by reading the following TDI bulletin…
http://www.tdi.state.tx.us/commish/bulletins/b-0045-8.html
Full replacement of a structure and construction products, processes and pricing is actuarially based on “Cost plus 10%” type construction business economics math in a particular region. (10% equaling a reasonable (pretax) profit on the whole investment “cost”).
Since FULL replacement of the structure has been anticipated in the premium, and primary-general contractors place new (and replace) structures, than an insurer should have no problem with a homeowner hiring a general contractor for a single or multiple trade reconstruction issue.
FULL replacement (primary-general construction business processes/ costs) are woven into the structure, and are proportionally indemnified. A general contractor is afforded by the premium no matter if FULL or PARTIAL reconstruction issues come up that an insurer has to pay for.
Remember the TDI bulletin points…
1. “The DEDUCTION of prospective contractors’ overhead and profit and sales tax in determining the ACTUAL
cash value under a REPLACEMENT cost policy is improper, is not a reasonable interpretation of the policy language, and is UNFAIR to insureds”.
2.”–Premiums charged must not be excessive for the risks to which they apply”.
3. “Under a replacement cost policy, the liability limits of the policy and the premium paid by the insured are determined on the basis of the replacement cost of the structure”.
*(Replacement costs are based / determined, in part, on primary-general construction business products, processes and pricing. Construction business investment costs plus 10% profit is part of ALL of the replacement costs the structure built into the premium).
4. “The value of contractor´s overhead and profit, as well as sales tax on building materials, has been included in the limit of liability for which the insured has paid premium.”
*(Primary-general contractors, and their subcontractor cost VALUES, are already actuarially factored into the TOTAL VALUE of the premiums “limit of liability”).
5. “If the insurer in determining actual cash value excludes costs that are included in the determination of liability limits, on which the insured´s premium is based, the insurer reaps an illegal windfall because the insurer receives premium on insurable values for which loss may never be paid”.
*(Insurers who “exclude” primary-general contractors from single trade (ie; roofing or painting or carpet, etc.) work have “excluded costs” already included in the determination of the liability of limits the consumer / premium has proportionally paid for. Not including those values in a claim payment results in too much premium being charged.)
With the above said, insurers who precharge for construction business values, and do not proportionally repay them, are, according to TDI, acting in an illegal manner.
Also, insurers who preach-practice the ‘2 or more trades are needed before general contractor oversight is warranted’ philosophy are also consistantly-simultaniously defying their own “rule-of-thumb”…
How so…?
When a property becomes (hail, wind, rain, fire, etc.) damaged, and needs roofing, painting, siding, window, doors, guttering, etc. repair or replacement, insurers are EXCLUDING roofing costs from primary-general contractor (2-3 or more trades needed) quantified estimates.
Subsequently, the primary-general contractor overhead and profit lines appear on an insurers estimate, BUT, (after having manipulated their estimating software), have been reduced or eliminated all together. Most consumers, who are not construction business estimators, are deceived and fooled by that one underpayment scheme alone.
Visually the insurer underpaid claim estimating scheme looks like the following abbreviated construction estimates…
Typical-Basic “Costs plus 10% profit” Primary-General Contractor Estimate; (For Addressing Hail, Wind, Rain Storm Damage)
Roofing Sub——–$5,500.00
Guttering Sub———$840.00
Windows Sub———$485.00
Garage Door Sub —$900.00
Sheet Rock Sub—$1,400.00
Cabinetry Sub——-$3,400.00
Painting Sub———$1,200.00
Total Sub Trades-$13,725.00
Materials Tax———-$442.00
Sub-total————$14,167.00
10% Overhead——$1,416.70
Sub-total————$15,583.70
10% Profit————-$1,558.37
Contractor Total—$17,142.07
NOW compare an exact “fair and reasonable” / “competitive” [Allstate, Safeco, TWIA] type “Costs plus 10% profit” construction business estimating-claim settlement practice…
Roofing Sub——–$5,500.00
Guttering Sub———$840.00
Windows Sub———$485.00
Garage Door Sub —$900.00
Sheet Rock Sub—$1,400.00
Cabinetry Sub——-$3,400.00
Painting Sub———$1,200.00
Total Sub Trades-$13,725.00 (So far, the Contractor-Insurer-Adjuster estimates are equal)
Materials Tax———-$000.00 (Uh-Oh…Materials tax investment dollars moved)
Sub-total————$13,725.00
10% Overhead———$822.50 (How-why is this figure 10% of $13,725.00?)*
Sub-total————-$14,547.50 (Materials & Roofing sub-trade costs are not included.)
10% Profit—————$822.50 (How-why is this figure the same as the 10% Overhead sum?)**
Materials Tax———–$442.00 (These orphaned investment dollars have $92.82 O&P unaccounted for.)***
Allstate Total——-$15,812.00
Contractor Total—$17,142.07
Allstate Total——-$15,812.00
Allstate “Savings”–$1,330.07
Double Check—Contractor O&P totals equal $2,975.07 minus Allstate O+P totals of $1,645.00 = $1,330.07 kept by Allstate.
*By using some construction business estimating software slight-of-hand trickery the roofing sub-trade costs and materials tax are ZEROED OUT of the Allstates Primary-General Contractors estimate totals so the Overhead “Savings” (coupled with materials tax-O&P NOT factored into the sub-sub-total) equals…
* Allstate Primary-General Contractor 10% Overhead is $501.38 short.
** Allstate Primary-General Contractor 10% Profit is $735.87 short.
*** Materials tax dollar investment is $92.82 O&P short.
Participating insurers (Allstate, Safeco, TWIA, etc.) explanation to consumers is that ‘the (roofing, carpet) contractors overhead and profit is already included in the estimate, so the general contractor overhead and profit should be reduced proportionatly’.
Such non-sensical double speak will get by, (or be meekly accepted by), most stressed out policyholders who just want the whole claims “process” to end.
*(Just do the math. If the final (primary-general) contractors’ 10% profit line is NOT 10% of the insurers estimate, the claim has been underpaid).
Allstate, Safeco, USAA, TWIA are invited to contact us if they feel they are being slighted or feel their estimating-claim settlement schemes / practices will be defendable in front of 12 educated people.
These are just a couple of examples how some insurers in Texas are estimating-conducting their daily and catastophic claim settlements. Their estimating methods are being exposed, just like Hurricane Isabel estimating practices are being exposed, except that much, much larger claim settlement numbers are at stake in Texas…
Feel free to call us for further details.
(956)-969-4454