What Can We Learn From Hurricane Sandy? Bad Faith Insurance and Public Adjusters

Hurricane Sandy

Two years after Hurricane Sandy ravaged the East Coast, FEMA has agreed to re-open over 140,000 of the insurance claims filed by homeowners after the storm. This move comes after thousands of homeowners have made allegations of fraud against insurance companies who denied homeowners their full coverage amount, through means such as denying the existence of structural damages or claiming damages were pre-existing.

Of the 144,000 insurance claims filed after Hurricane Sandy, approximately 90% had adjuster’s reports while 10-13% had engineering reports. In the years since the disaster, an increasing number of allegedly doctored reports have come to light. Brad Kieserman, newly appointed Deputy Associate Administrator for Insurance, has even confirmed that he has seen evidence of doctored reports since taking his post. Such reports deny damages or severely understate the extent of the damages, allowing insurance companies to duck an untold amount of fair payouts to claimants. FEMA’s decision will allow any victim of Sandy that has not filed formal court charges to request their case be re-opened, reexamined, and reevaluated.

Unfortunately, underhanded tactics to successfully lowball policyholders is less uncommon than one would like to believe. Insurers have a litany of ways to shortchange insurance claimants, including delaying payments and using computer programs to manipulate data to decrease the estimated payout necessary. With large storms such as sandy that create an immense amount of property damage insurance claims, there are always a large number that turn into bad faith claims.

For anyone who feels they have been duped or unfairly denied repayment from an insurance company, it is possible to get help. Hiring a public adjuster is one way policyholders can seek aid; since public adjusters are not associated with the insurance company, there is no pressure for them to underestimate the amount of damage that has been done to a home to keep the ‘cost of doing business’ down.

However, not all public adjusters are created equal! For anyone thinking about seeking assistance from an insurance claims adjuster, there are several things to watch out for to avoid being duped:

Make Sure the Public Adjuster Is Licensed

Before agreeing to work with a public adjuster, it is absolutely necessary to ensure that they are properly licensed to practice in the state in which they will be working. Additionally, make sure the individual is actually licensed and not simply operating under the license of their company or another insurance adjuster.

Ask For References

A good public adjuster should be able to furnish references upon request and those considering hiring the insurance adjuster should contact these references. It is also a good idea to ask for examples of claims the public adjuster has handled in the past several years. Again, it is necessary to be certain these are references and claims that have been handled personally by the individual with whom you are working.

Discuss Payment Structure

While many insurance adjusters handle their payment processes differently, it’s important to clarify terms of payment before beginning. As an insurance holder, it is best to find an adjuster that bases their own payment off of the money they are able to get you from the insurance company. Often this will be between 5-15% of the claim.

Suffering a through a hurricane, tornado, or other natural disaster is a scary experience and the rebuilding process is already difficult enough without having to battle insurance companies for a fair payout. For anyone who feels they have received unfair treatment from an insurer, there are ways to get the money you are owed. Finding a reliable public adjuster is one way to make the process go as smoothly and as quickly as possible.

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If dealing with a claim, include the cause of loss/damage