I handled a huge fire loss several years back when I was working in claims. It seems the wife left the hair dryer plugged into the wall in the bathroom. The hairdryer caught on fire and burned a good portion of the house away before the authorities had arrived.
The slow response is attributed to the house being in a remote area near the Canadian border. This was not only unlucky for the insured (and gave them a lower protection class), but also presented a problem for me as well.
I needed an independent to go out and get evidence, photos, and details. I had three choices – one adjusting firm 60 miles southeast, an independent adjuster of Canadian origin 80 miles northwest, and an engineer who moonlighted as an adjuster 10 miles from the location. Which one would I choose?
My experience in claims has taught me that hiring an independent adjuster can be easy, but nerve racking. There are three factors to consider.
Size of the claim
From the photos the agent sent me showed a burned out frame of a house. Based on those, I set a reserve of $300,000. A claim this size is going to require a certain skill set.
The claim was going to require someone who had dealt with contractors and public adjusters before. They would have to know fire experts in the area and engineers to assist in the rebuild. I couldn’t settle for someone who was a burst pipe – water claim expert.
Region they service
Each municipality has their own set of rules. It is a small part of what makes this country great. We all do our own thing. The problem that presents is the independent adjuster you choose should have a basic understanding of the local and state rules. That means details like demolition, septic tanks, concrete removal, and set back requirements.
I don’t want to be two weeks into a rebuild and have the municipality come out and have us tear it down again because the contractor the independent advised was knowledgeable really wasn’t. That adds a lot of time and expense. No one wants to tell the insured that the Loss of Use has run out because we wasted our time. Worse yet, we don’t want fines driving up our costs.
Lastly, I have been burned before. The independent who is stretched so thin, he/she cannot produce reports on time. Or the adjuster that isn’t familiar with the rules. The Fair Claims Act requires a short completion time for determination of the claim. That means I require that report back within maximum 72 hours of assignment.
That can be crucial to indemnifying the insured. If I have to follow up more than twice, chances are I am not using that independent again if I can help it.
For this claim, I ended up going with the independent 60 miles southeast of the location. He had handled many claims in that locale before and had family in the area. He had hired the local adjuster, with my approval, for some expert engineer work.
The rebuild took two months without any major problems. And, best of all, the insured was happy and moved back in to their home soon enough. Isn’t that what it’s all about?