Even if you do know that, do you know why you should request a roof inspection BEFORE small issues become costly? To learn why, you can LISTEN to a recent client’s comments (linked below).
You will hear her warnings about the tactics of her insurance company, plus her gratitude about the rapid help she got from Canyon State Restoration. Here’s the short version of what Rachel shared with me earlier in July.
“MY INSURANCE ADJUSTER WAS PLAIN WRONG. MY ROOF WAS NOT FINE!”
When her home in Mesa was built, the exterior of the roof was built properly, but the layer under the roof tiles had large gaps that were hidden under the tiles. The roof looked fine from a distance, so she did not suspect any issues at that time.
DO INSURANCE COMPANIES DESERVE YOUR TOTAL TRUST?
When I heard Rachel tell her story, the idea that the roof was fine seemed obviously ridiculous. If there was no leak in the roof, then how did all that water end up in her ceiling? (Note that the house did not have any AC water lines above that ceiling and was only 1-story, so the only logical source of water was from a roof leak.)
So, while it can be disturbing to speculate that the insurance adjuster may have intentionally misled her, it certainly is possible, right? Further, there are decades of successful court cases against dozens of prominent insurance companies that are even more disturbing.
Haven’t heard of those lawsuits? That is how the insurance companies want to keep it! I will link several examples below.
SO WHY DID HER INSURANCE ADJUSTER TELL HER THE ROOF WAS FINE?
Of course, I cannot be sure. First, what I assume is that Rachel’s insurance adjuster was actually telling her is that he didn’t find an issue that he was ready to approve to pay for.
Maybe he was not competent to inspect her roof closely enough to find the issue. But I doubt that strongly.
Maybe he was competent but just happened to be negligent that day (very distracted, busy, exhausted, etc). Again, I will explain below why I doubt that, too.
Maybe he intentionally did not perform a thorough inspection. While that is unethical, that is entirely possible.
Or, maybe he found exactly what was wrong with her roof but intentionally used confusing terminology to discourage her from pursing any additional payment from them. That is… not just possible, but apparently a standard procedure of many big insurance companies.
HOW DID INSURANCE COMPANIES CHANGE THEIR TACTICS IN RECENT DECADES?
Pictured here is Professor Jay Feinman, of Rutgers University School of Law. Below is a quote from one of his 7 books.
“Denial of valid claims [is] commonplace and [is] DESIRED by insurers rather than infrequent.”
Was it always like that? Apparently not.
In the early 1990s, big insurance companies including (Allstate and State Farm) hired a consulting firm named McKinsey & Company. The goal was to find ways to increase the overall profits of the insurance companies. That is exactly what happened.
“It’s more than just a change in one company. The basic concept, is that [the insurance company] gives customers a choice: accept a settlement now for a fraction of the true cost of damage, or expect to spend several years in grueling litigation. McKinsey predicted that NINETY PERCENT of claimants would be forced to capitulate because they’d need the money in a prompt settlement.”
WHY DON’T YOU HEAR MUCH ABOUT LAWSUITS THAT INSURANCE COMPANIES LOST?
Most disputes are settled prior to going to court. Even when a lawsuit does get filed, most casess are settled “out of court.” That is for two reasons.
The first reason is what the attorney mentioned above: most homeowners are too financially desperate to afford years of legal expenses out-of-pocket. If their home has been destroyed (or even just damaged to the point that the local government has “condemned” the building as unsafe to enter), that is a major hardship. They may suddenly need to get a motel or other emergency rental. The insurance company is still denying the claim and paying little or nothing. The homeowners generally still owe a mortgage and, ideally, want to preserve their credit rating. And of course the insurance companies have specifically calculated that homeowners are going to cave in NINETY PERCENT of the time.
The other reason is that insurance companies also want to avoid the big awards that sometimes result from a court decision. However, it is not that a few extra million dollars here or there is a problem for them. They are rich beyond the imagination of most people. The issue is that losing even a single big lawsuit can result in a flood of publicity that causes them to suddenly lose thousands of customers (monthly revenues). That would create a long-term problem for them.
EXAMPLES OF SPECIFIC LAWSUITS THAT INSURANCE COMPANIES LOST
In spite of all the incentives for out-of-court settlements, some civil lawsuits against insurance companies still go all the way to a jury trial. In fact, some even go beyond that stage. Even after juries award large claims to property owners, insurance companies sometimes continue fighting the lawsuits, like by sending them to appeals court or even all the way to state or federal supreme courts.
$1 MILLION IN PUNITIVE DAMAGES (ON TOP OF BASIC COMPENSATION)
The insurer denied Whiten’s 1994 “insurance claim after a fire burned their house down. They originally alleged arson, which was proved/admitted to be completely FALSE and lacking ANY evidence. They then entered protracted litigation (over 2 years) over the issue to force Whiten to make an unfair settlement for less than she was entitled to. Conduct was planned and DELIBERATE.”
$2.5 MILLION PUNITIVE DAMAGES + $1 MILLION FOR EMOTIONAL DISTRESS (ON TOP OF BASIC COMPENSATION)
For instance, a more recent supreme court case in Kentucky in 2015 resulted in punitive damages of $2.5 million plus another $1 million for emotional distress (well, $925,000). That also was a lawsuit about property insurance.
SO WHAT HAPPENED AFTER RACHEL’S INSURANCE ADJUSTER SAID HER ROOF WAS “FINE?”
INFRARED CAMERAS WITH THERMAL IMAGING REVEAL THE PRESENCE OF HIDDEN WATER
Do you see the blue section of the photo above? That blue area is from was a leak from the roof down in to the ceiling of that kitchen. Right after a heavy rain, that area would be wet to the touch. But no one is going to accidentally touch the wall or ceiling there and notice it is wet.
Note that the same section of ceiling is shown further up this page as a close-up. The water stain is very clear if you look at the close-up. However, in the photo that is not a close-up, the faint water stain is very easy to miss. (By the way, these latest images are not from Rachel’s home in Mesa.)
RACHEL CALLS THE STATEMENTS OF HER INSURANCE ADJUSTER “RIDICULOUS”
Rachel: I had all the damage in the same spots again. I… had to talk to the insurance company about it. They said “it’s very similar to the report you gave in 2014.”
I said, “that’s because it’s the same spot… cause your adjuster told me there was nothing wrong with the roof!”
So I didn’t fix the roof and, next thing you know, we get a couple of big monsoons then [in 2017] and… the ceiling in the kitchen was starting to crack and bubble because there was so much water coming in. It was ridiculous!
BUT HER CASE IS JUST ONE OF MANY CASES OF INSURANCE COMPANIES DELAYING APPROVALS FOR WATER DAMAGE IN PHOENIX
Was it ridiculous that the insurance adjuster had left her with the idea that the roof was fine? Or, was it a direct result of how insurance company staff are generally trained to minimize and delay expenses (as in claim approvals)?
What I can say for sure is that Rachel’s issues were quite small relative to some. For instance, an elderly homeowner in Mesa in 2016 experienced something rather infuriating. Her name is Brenda and here is a very short portion of what she said about her experience.
“If you weren’t here… you know, I can’t believe what would have happened. They were trying to screw me! I’m so glad you’re here. Thank you….”
To read the story of an insurance adjuster that got so aggressive with her that she actually started crying (and then she reported him to his company for misconduct), click the next link. Beware, because you may find it a bit disturbing. Click here to read the horror story of the “crazy adjuster.”
(There is good news though, because our restoration specialist Dane was present at the time. So, he was able to quickly de-escalate the situation and then get the adjuster’s supervisor on the phone to clarify everything, to apologize to Brenda, and to re-assure her that her insurance claim would be approved without any further delays.)
Again, note the very first thing Brenda implied: “If you weren’t here,” then things could have been much worse. That situation happened when the adjuster knew that a water damage technician was present. When it is just a vulnerable homeowner and an adjuster alone, the extent of the misconduct can result in things like the $925,000 award for emotional distress that I referenced above.
SO, IS INSURANCE MISCONDUCT FREQUENT? YES. CONSTANT? NO.
Some companies are more notorious than others. The American Association of Justice ranked major insurance companies and named Allstate as the worst. Other major property insurance providers on the list are State Farm, Farmers, and Liberty Mutual.
On the website of a local attorney in Phoenix, you can read the entire list including details of why each particular company was included in that list. By the way, his entire legal practice is helping homeowners in Phoenix to sue their insurance companies for intentional delays, deceptions, and other fraudulent or negligent practices. Here is the list: https://www.surranoinsurancebadfaith.com/the-10-worst-insurance-companies/
DO YOU NEED A LAWYER TO FORCE THE INSURANCE COMPANY TO HONOR THEIR POLICY? NO.
(Actually, if your situation is not recent, then the answer might be yes.) However, year after year, I record testimonials from water damage clients in Phoenix who give emotional recommendations about how Dane has helped them get their insurance claims fully approved without resorting to a lawsuit. Here is one of them:
Robyn: “The thing that I have learned from this… (if anyone else was in this situation), is do not go through it alone. Do not try to battle insurance alone. Unless you know the insurance business in and out, you will lose yourself tens of thousands of dollars….”
Interviewer: “That ís startling!”
Robyn: “So, don’t try to do it by yourself! That’s my bottom line advice to anyone who has a flood or fire or any other kind of issue.”
Interviewer: “If you knew somebody who needed assistance with any kind of damage restoration service, who would you recommend that they contact (if they were in central Arizona)?”
Robyn: “Oh, without a question, I would recommend that they call Dane at Canyon State.”
Here is a longer audio recording in which she gives more details: http://canyonstaterestorationaz.com/testimonial/
JODY ALSO RECOMMENDS DANE (BECAUSE OF HIS FAST RESPONSE AND SKILL AT DEALING WITH INSURANCE “B.S.”)
Anyway, earlier in July of 2018, I interviewed Jody in Peoria (northwest of Phoenix). He detailed how Dane responded fast and helped resolve several complications with his insurance company. (I have heard about several cases of insurance companies “ripping off” homeowners, although this was still one of the most “dragged out” cases of that in Phoenix that I recall.)