Episode 92: Spring Storm Claim Playbook

Spring storms don’t just damage property, they scramble the story of what happened. One day it’s hail. The next it’s wind-driven rain. Then a ceiling stain shows up weeks later and everyone argues whether it’s a new loss, wear and tear, or “damage creep.” We walk through how we actually sort these files out in the field, especially when the insured sees one big problem but the evidence points to multiple incidents, multiple deductibles, and a timeline that has to be proven with photos and attic inspection.

We dig into the roof-claim pressure points adjusters face right now: wear and tear vs direct physical loss, repairability, granule loss myths, and why cosmetic damage endorsements are becoming more common. We also talk matching statutes, discontinued materials, ITEL reports, and the real-world detail people miss: even if matching product exists somewhere, freight and sourcing can change the math and the fairness. Along the way, we share what we’re seeing in expert witness work, including how poor documentation and unclear communication can turn a normal property claim into a complaint or lawsuit.

Then we get into policy mechanics that spike confusion during hurricane season and heavy rain events: concurrent causation, anti-concurrent causation states, and the practical need for wind and flood adjusters to coordinate so the insured isn’t left in the middle with an uninsured gap. We close with a simple adjuster framework: establish cause of loss early, verify functionality, document every step, and explain estimates so the insured understands why a contractor scope can be higher than a covered scope.

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For more insights, you might consider a career in liability adjusting or if you're searching for reliable adjusting services, visit Auten Claims Management.

To explore more about Chantal Roberts and her contributions to the industry, visit CMR Consulting.

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Transcript

Welcome And Spring Weather Talk

William Auten 0:06

Hello, I'm Bill Aughton of Autin Claims Management.

Chantal Roberts 0:09

I'm Chantel Roberts of CMR Consulting, and welcome to the Art of Adjusting podcast.

William Auten 0:14

Today we're going to talk about life as an insurance adjuster from the perspective of property, auto, liability, or workers' compensation adjusters. Our goal is to bring interesting topics in the world of claims adjusting to people who are working as an adjuster now and to people who are considering a career as a claims adjuster. Good morning. Hey Chantel, how are you? I'm doing well. How are you? Doing really good. It's springtime. Today's supposed to be in the 70s. First time in a but a little while that it's been that kind of that kind of weather for us. So we're looking forward to that.

Chantal Roberts 0:46

Yes.

William Auten 0:47

Um, and spring is always volatile when it comes to weather.

Chantal Roberts 0:51

Let's talk about that.

William Auten 0:52

A lot of ups and downs and ins and outs and all kinds of fun stuff.

Chantal Roberts 0:56

Let's talk about that because I have a little evergreen tree that's that's been growing for like five years now, and I swear it looks like it's dying, but chat GPT tells me that it is not, that it is just that it is just winter stressed, quote unquote, and uh win stressed. And I'm like, dude, I don't know what to do with you. It's brown because it's been today will be 78, tomorrow will be 50 something. Then we go up to the 60s. I it's it's killing me. It's absolutely killing me.

William Auten 1:33

Well, April, well, March and April tend to um tease everybody and uh give you some nice days and then hit you with snow and wet weather when you least expect it or want it. Mostly want it.

Chantal Roberts 1:48

Yeah, yeah. And then of course, that leads to the whole wind, uh tornado alley kind of deal. And and and then we will because we have wind claims, it may lead to interior water damage. And so we're gonna be talking about wind, water, and property claims.

William Auten 2:11

Yeah. Probably a little hail too.

Chantal Roberts 2:14

Oh, yeah. Well, you can't have spring weather without the hail. Yeah, you can't, absolutely not. And so be sure to like, subscribe, follow, comment, all of that kind of stuff because it really pushes pushes us to other people who are insurance professionals, adjusters, and industry partners. So that's my little spiel for today.

William Auten 2:39

Yes, nice spiel.

Chantal Roberts 2:41

All right, thank you. I practiced it in the mirror beforehand.

William Auten 2:47

Right on. I can tell. Anyway, uh, we are uh we're talking about a spring storm loss profile. Yes. So what does that mean? Uh so we're talking about wind-driven elements like rain and hail and falling trees and and limbs and freeze freeze thaw cycles uh and damage coming from that.

Chantal Roberts 3:11

Um yeah, and a lot of times these things overlap, and it's really hard to figure out well, when did this thing happen? And and and one of the things too is we may have damage creep, which I'd like to talk about in just a minute.

William Auten 3:28

Interesting. Yeah, so uh yeah, overlap can happen all the time. You know, the uh insured will call, hey, my uh my roof is leaking in my living room over the window, and it's leaking in the bedroom over the window. And um, I'm pretty sure it has something to do with the tree that fell, but that fell in the back of the house. So I'm not sure what's going on there. Yeah, can you send somebody out? So uh that sounds like they probably have an ice dam situation, which is more of a winter claim, but we see them up here in the north in March.

Chantal Roberts 3:58

Um that's because y'all are crazy for living up there. It's cold. Yeah, we've talked about that before. See all of the episodes, see all of the previous episodes.

William Auten 4:06

Uh it's not that cold though. I just recently drove through a part of New York State that's very flat, and um, and I did some research on that area. There used to be a uh a large lake there to 10,000 years ago.

Chantal Roberts 4:20

Uh uh.

William Auten 4:22

And um uh that was when the ice age happened. Now, what I didn't realize is where the area where I was driving through the ice is said to have been over a mile thick.

Chantal Roberts 4:35

Wow, you know that's what Greenland is. Like they say that 90% of the island has never, or continent, whichever one you want to call it, but I guess island, uh, since we only have seven continents. Anyway, that 90% of the island has has not been looked at, you know, explored because a lot of under the ice. Yeah, it's like a mile thick.

Overlapping Losses And Two Deductibles

William Auten 5:02

Yeah, it's crazy to even imagine uh imagine that. So I don't want to hear any complaints about snow and ice. Um we got it pretty easy to since the ice age, but um yes, we do. Nonetheless, um, overlap. We have uh so you know those two incidents I just talked about, they're actually two separate incidents, and they would be subject to two separate deductibles.

SPEAKER_02 5:29

Yes.

William Auten 5:30

And uh the adjuster should um, you know, note that in the file. If it's an independent, you're gonna have to tell the carrier they probably need to open two separate claims. If you're a staff adjuster, you should be doing that and explaining to the insured how the coverage works and all that, because they're gonna not be happy if they have to pay two deductibles.

Chantal Roberts 5:50

No, but you should absolutely open two files. And so often I don't see where carriers are opening two files. But if you think about this logically, unless the insured has a flat roof or something to that effect, and most of the time they don't, uh except maybe out in you know the western states or something to that effect, but you've got a gabled or a sloping roof, so you will have a an apex on it. And if the tree fell in the back of the house, rainwater is not going to go up the interior of the roof over the little point, you know, the apex, and then down the other side of the roof to leak on the front part of the house. I mean, that's just physics, not to mention logic. Yeah.

William Auten 6:44

And is it possible for it to leak on the front of the house when the tree uh damaged the back of the house? It is possible because the way the roof slopes, you never know. So due diligence uh comes into play. Um, just because there's two different looking types of damage at the property doesn't necessarily mean that they're not related.

Chantal Roberts 7:06

So um you would need to. I want to make sure that the adjusters understand you either you or your field adjusters have to physically be in that attic. Yes, taking photographs. And if there and and what you have to show is not only if it did happen, like the front leak was caused by the tree falling in the back, and you would know this because you would see water running, I don't know, along the trusses or something. It could happen, like you said, it could happen.

William Auten 7:43

It's your job to verify, exactly.

Chantal Roberts 7:46

Or I don't know, maybe the insulation got sop and wet, but you would think that that would be more interior water from the back before you get to the front.

William Auten 7:55

Anyway, I'm saying a beautiful adjuster will always verify with photographs and uh yes, and and if you don't know, um find somebody who does find uh somebody either at your office who who's been you know around the horn a uh a few times or um maybe a trusted contractor. Uh if or even an engineer, if you're you know, if the claim is large and uh warrants the expense of an engineer, that might be an option also.

Chantal Roberts 8:27

Yeah, and I want to talk a little bit about damage creep because I feel like we're going we're going to talk about this just a little bit, and I'm seeing it a little bit in my expert witness cases. So I thought it might be good to address, and it was something that I learned painfully, very painfully learned over Hurricane Katrina. And this is when our field adjusters would go out, take pictures of the roof, for example, but wouldn't go inside because at the time the insured would say, Yeah, there's nothing damaged on the inside or whatever. And two years later, a year later, or whatever, they're now claiming interior water damage. Well, the insured never mitigated their losses because they feared that cashing the check or beginning repairs or whatever would somehow hamper or hinder a future claim. And of course, that's the discussion that you have to have with the insured as well. However, let me stay on this topic. The the deal is that we would actually get a lot of complaints and lawsuits saying that the field adjuster had never been up on the roof. And so we started requiring the adjuster to take a picture of their shoe on the roof.

William Auten 9:48

Oh, interesting.

Chantal Roberts 9:49

To prove that they have been there.

William Auten 9:52

And I've actually heard that before.

Chantal Roberts 9:54

So and then we would have the adjuster ask, is there any interior water damage? No, great. Okay, so we're gonna come in and take pictures showing that there's no interior water damage. So that if interior water damage occurs or is claimed at a later date, it either is one, the insured hasn't uh mitigated their own losses, which is contrary to their duties in the policy, or it's a new loss. It it if you don't take these pictures inside or in the attic space or whatever, then you may be taking that damage as part of the original loss, and it's and it's damage creep because either we've got a new loss or the insured didn't do what they were supposed to.

William Auten 10:51

Right. It can happen um in a way that there is coverage also. Yes, absolutely. Ice dams are probably the the biggest um um culprit here because you can't really if there if there is damage to the roof, you can't really get up there. Once it starts leaking, you kind of have to hold on and wait until it's done because the ice is so thick up there. You the I've seen um I've seen adjusters, I'm sorry, I've seen contractors utilize uh heating elements up there to try and mitigate it. Uh, but by the time they're up there and doing that, the water's already moving through the attic and everything. And um and you can put buckets down and towels and wait it out, and usually it doesn't take long, you know, a few hours it leaks through, and then it's just a matter of cleanup and repair.

Chantal Roberts 11:45

And that's not to say that again, too, like you said, it there may not be covered loss, because also the the one thing that I'm seeing adjusters not explain to their insureds, and again, at least it comes from this fear that the insured doesn't want to mitigate any of their losses or do any of their losses for fear that they'll mess something up. And and this is when you have to have that conversation of saying, okay, so not only is it your duty, but but also there's the there could be a supplement, and and we would pay for covered causes of loss or damage that result from this accident. So, you know, start tearing it down. Contractors know what to do. You you gotta do something with it. We've given you at least what we think is gonna repair it. And if you find more damage, give us a call. I'm not seeing that a lot in some of the claims that I'm getting as an expert witness. So that also leads to damage creep because the insureds are paralyzed with fear about doing things.

William Auten 12:59

The um the concept of a supplement. Well, okay, let me talk about a few different things. I've heard insureds saying they didn't want to cash the check because they thought it would terminate the claim. You brought that up. Um, it an adjuster should be explaining that that does not terminate the claim. Sometimes uh there's a lot of carriers that will take a proof of loss on really relatively small claims. Uh so$2,500 they'll or and above, they'll take a proof of loss and they'll have the insured sign it. And if they require it's notarized, then the insured thinks it's this super official document, which it is, but it does not close the claim and it does not finalize the claim. I've even had this discussion with adjusters who say, well, they can't make a supplement, they've signed a proof of loss. Well, that's not the truth at all. Right.

Chantal Roberts 13:50

And if you read, by the way, adjusters, if you read, literally read the proof of loss down on the bottom, small print, it says this is this doesn't close the claim or something legally that fashion. All it is is a proof that a loss occurred in that amount for this policy on this date.

William Auten 14:09

That is your warned statement that a certain type of damage or loss occurred on a certain date, and it's it's um it's your statement to the insurance company that something happened. That's all it is. That's pretty much all it is. All it is it's very formalized, yes, and it's not the easiest thing to read. Um I did a uh I did a video for agents back in I don't remember 2014 or 2013. It's still on YouTube, I think, for my old company, uh explaining what a proof of loss is is uh the most boring video you ever want to watch. But so if you need something to fall asleep with, guys, but if you ever have a question about what a proof of loss is and its function and what all that stuff on the form means, uh you can watch that video and it explains it pretty well. Um, but the one document that will terminate a claim is a policy holder's release, which is sometimes used, but um not very often in totally different things, totally different things.

Chantal Roberts 15:17

So anyway, anyway, so I wanted to just discuss damage creep because the insureds are often nervous because they get a contractor's estimate that is very different than what ours is. So, anyway, um we will probably talk about that more. So, early cause of lost determination requires a lot of discipline. It requires you, like we said, to be sure you get up in the attic, take pictures of the entire roof or ceiling or whatever. Uh again, I always like to have the contractor with my field appraiser or adjuster so that we don't get into this battling estimate kind of deal. We can try to get all of this done. And and not necessarily one fell swoop, but there you go.

William Auten 16:19

Yeah. Um we're gonna move on here to wind versus wear and tear versus water damage.

SPEAKER_02 16:28

Yes, that's a big, big issue.

William Auten 16:30

When did when would we see most of that kind of um those kinds of issues? And I'm gonna say uh claims that involve roofs.

Chantal Roberts 16:41

Yes, yeah, yeah. And this is this is becoming more and more of an issue. Another thing that I am seeing is of course, everything is uber expensive, and so people are not taking care of their roofs, are not doing preventative maintenance. We've had a hail storm come through recently in Kansas, maybe a month and a half ago, and the amount of contractors that I have calling me wanting to put a new roof on my house, and the amount of sales, roofing salespeople who are stopping by our house, I I am literally considering putting a note on the door saying, we are adjusters, we don't need a new roof. Go away. Because as soon as I say, and it's kind of it's really kind of funny to watch them do the backpedaling, because as soon as I say, Yeah, we're adjusters, I don't like I don't even need to say anything else. They just start backpedaling, but think about what we've got. Does my does my roof have hail impacts? Yes, absolutely. Does it have some wear and tear? Yeah, sure it does. Uh, do I need a new roof? Not right now. However, I do want to talk to you, and I know that that you're probably answering to get in here. I want to talk about this new idea that has come out, and Chip Merlin has even mentioned it, where even one hail storm could cause our roof to act as if it's 10 years older or whatever.

William Auten 18:27

Well, um I guess the the question comes down to direct physical loss, yes, um repairability. And uh you know, if those two conditions are met there where you if you have actual loss to the the item damage per se, then um and you can't repair it, what are what is one to do? So I've been on I don't know how many roofs in my life every time I go on a roof. It doesn't matter whether there's been a storm recently or not, there are uh granules from the shingles in the gutter. Yes, it doesn't matter how old the roof is. Uh it happens on brand new roofs after the first rainstorm. Um yet that is often pointed to as evidence that oh, your roof is now compromised because of a storm. Well, that's wear and tear. That's normal wear and tear. Unfortunately, what people I guess don't realize is asphalt shingles they work really well. They're they're everywhere we use them, but they wear out. They're not the best possible option for a roof covering because they wear out. And there's kind of a reason for that. Uh, there's a whole industry that depends on them wearing out and and making new products. Steel, uh steel roof is gonna last a really long time. Uh clay tile roofs last pretty well. They are um a little more fragile, maybe, than a steel roof. None of these are um completely impervious to damage. Right. Steel roofs, you know, if a major hailstorm can act can cause denting and cosmetic damage to a steel roof. Yes.

Chantal Roberts 20:27

So let's talk about that one too, because I've sat in with engineers who have who have shown me that uh because you hear this about steel roofs, and this is more commercial than it is homeowners, but the the public adjusters plaintiff attorneys will say that the steel roof, once it's impacted, it's like clear coating or UV rating or something to that effect, some invisible kind of shield that we can't see with our naked eye, but can be seen with a microscope, has been busted. And while that may or may not be true, what we're looking at is the functionality of the roof. If the roof still discards water and doesn't let water inside, keeps the inside dry, then the then the roof is still functioning. And so, like you said, it might be a cosmetic issue more so than something that needs to get repaired or replaced.

William Auten 21:32

There's um I've seen endorsements that uh take away loss for cosmetic only damage. And um, I've not read them in detail, uh, so I'm not really sure how they work or what they say.

Cosmetic Damage Endorsements And Roof Schedules

Chantal Roberts 21:46

Basically, it it says exactly what what that is, is if this loss is is deemed to be cosmetic in nature and that the roof still serves its functionality. And that's the big word right there that the roof is still functioning as a roof should function, which is to take water away, keep the interior dry. Then we, as the insurance company, are not going to pay. I have also started to see a lot of, and this is especially out in the West, where they may have the concrete tiles. And those are very interesting because you have to walk on them a certain way, because even just walking on them, unlike mostly our asphalt roofs, where we could walk on it without really damaging it, although some granulars will come off. If you just walk on a concrete roof, even me, I would break a tile, unless I walk on it very, very specifically because of the way that they are positioned. Okay, besides that point. So a lot of people feel that once the concrete is broken, then it's not doing what it's supposed to be doing. A lot of insurers now are having entire roofing schedules that say if you have an asphalt roof and it's 12 years old, we're going to deduct this much depreciation until you replace it. If you have a clay tile roof or a concrete roof or steel roof, blah, blah, blah, blah, blah. And these are things that must be explained to the insured at the very beginning of the claim. Because if you don't adjusters, you're going to end up in a world of hurt. So you're going to end up in an argument.

William Auten 23:50

Talk a little bit about why these endorsements even exist because 10 or 20 years ago, maybe maybe 20 years ago, you really didn't see them.

Chantal Roberts 24:09

I don't want to cast dispersions on on whole entire industries. However, it is the popular opinion that this is from the contractors and public adjusters and plaintiff bar who come into an area. Florida is an excellent example where they may have hurricane damage or a lot of windstorm damage, something to that effect. And then these roofers and these contractors, public adjusters, demand that the entire roof be replaced when maybe only one slope would need to be replaced or something to that effect. This has led to, of course, our loss indemnity cost just skyrocketing. And so our premiums aren't able to, of course, keep up. And it's kind of like a perfect storm because then the Department of Insurance is not approving the insurer to increase the premiums as I teach in my RMI class. And so now we've got insurers who are going bankrupt, you know, like they did in Florida a couple of years ago. I think there were eight of them that went under, all because of a lot of claims with a particular topic that many people don't understand, and then a few bad apples spoiling the bunch.

William Auten 25:46

So that's the that's a shorter. I agree on you've identified the cast of characters properly, and and uh everything you said is absolutely spot on. I would just add that uh the um the effort that has the effort that has been undertaken by those folks to blur the lines between the wear and tear exclusion and the direct physical loss exclusion is where the problem lies. Insurance companies set out to say, look, you know, maintenance and wear and tear and stuff, that's not really insurable. What we insure is uh fortuitous loss, something that happens suddenly, uh something unexpected, like a tree falling on a house or a fire. And what has happened is they've they've taken that um they've taken the quote unquote damage and described that in a way that makes it sound as if it's fortuitous, and that now you've got a situation where it's direct physical loss. And um that complicates things. So the insurance companies, the only way they can respond is to put more details into their policies to create a further separation between what wear and tear really is versus what a fortuitous loss really is, and um that battle of words is never going to end, I guess.

Chantal Roberts 27:18

Um, and I'm telling you what is also what I am afraid that our end, and this really doesn't have anything to do with adjusters per se, except that adjusters experience it when the claim comes down, is a lot of our municipalities or our states or our cities or even some of the counties may be believing this, or if you have an hoa, for example, or county, wherever I'm thinking of a particular place in Colorado where I have seen this, that the code is now you can't reuse any slopes. You know, if you're only replacing one or two tiles on one slope and the insurance company goes, okay, fine, if I got to replace like an entire slope or whatever, I'm going to harvest those tiles and use them somewhere else on the insured's house. There's code now saying you can't do that. You have to buy an the actual product. And I swear the code says something to the effect of it has to be shrinked wrapped with the name attached and the product bin number and blah, blah, blah. And of course, nine times out of 10, these companies have gone out of business or that particular tile or shingle is no longer made. So you have to get a whole new different shingle, which means we go into the matching issues. And I'm afraid that our underwriters and agents don't know this when they're pricing the product, which means again, we're all gonna go back into this spiral of getting into a disagreement over what's wear and tear, what can we replace, what can we repair. The adjuster gets caught up in this later on. But if you are an adjuster, you need to be sending, you know, underwriting notes, letting the underwriters know, hey, this is a code for the entire county or whatever. Uh just FYI. That's what you can do as an adjuster.

William Auten 29:26

Well, I think um the industry as a whole has a target on its back um because they're they're large businesses that make billions of dollars every year in in revenue and in profits. They're always going to have a target on their back. And in some states, you just have louder voices making the case against these um the the the standard exclusions that apply in most cases. You've you've just got um uh kind of this groundswell of people arguing against those and for coverage where it normally didn't exist, and then you've got legislators that are kind of on board with it for whatever reason. So you wind up you you wind up with these big cultural shifts or or pockets, I guess. Yes. Um where you've got these weird, these weird rules and laws and regulations around uh the handling of insurance claims. Yes. Um, you know, I mean you you and I have talked a lot about the depreciation of labor. There's still a very bright line between the states that allow it and don't allow it. Or you know, uh where I should say states that will not allow depreciation of labor and states where it really doesn't matter to the to the insurance regulators. Right. So um but this I'm sorry, go ahead. Well, that's just the nature of of state regulated, you know, insurance coverage.

Chantal Roberts 31:06

So there is, uh don't get me wrong, there is coverage for law and ordinance and increased costs due to code and and that sort of thing. But I I we need to be taking that into consideration if you're an agent listening to this, look at your building codes because they're all going by building codes, is what they're going by. And let's price it right, but also it it gets into our aging roofs and and maybe our prior repairs and that sort of thing, because we can see in these kind of mixed apparels or whatever, like, oh, now there's a roof leak in the living room, blah, blah, blah. Well, yes, there is, but right over the living room is that cracked concrete tile that you've attempted to fix because and we can see it because it has epoxy. You know, you've like glued it back together and put this old tile on instead of what you were supposed to do, which is fix the entire roof, which we know is expensive. That's why you're trying to go around and and say, Hey, I've got a hail storm, I need my roof replaced, like all of the roofers are doing right now in Kansas.

William Auten 32:25

Yeah, it uh certainly does complicate things. Um and you know, insurance companies are routinely blamed for um you know just wanting to deny delay and defend, right? And um it's not always the case. And I would say that when it comes to the like wear and tear issues, uh, they're just trying to get the language right so that they don't go out of business. Because you know, if they your premiums are going to continue to go up if if every roof claim on the face of the earth has to be paid because of some laws, even though there's a question as to how the damage actually occurred.

Chantal Roberts 33:10

Um which is why the adjusters must document the sequence of failure. You know, that's they have to tie it to the the loss and the damage. Yes, absolutely. Like, yes, there was a hail storm on this date, or there was a you know, Derecho winds, you know, on this date, and that's what lifted the shingle up and bent it, and now we see a water leak in this particular area.

William Auten 33:46

Yeah, let's talk a little bit about concurrent causation.

Chantal Roberts 33:51

Mm-hmm.

William Auten 33:52

So uh that's basically when you've got two intervening causes that that um that cause damage.

Chantal Roberts 34:00

Yes. And okay, so most of the way that the policy is written, uh nine times out of ten, it's it's kind of like multiplying by zero. And and then there's an exception to the exclusion on that. So just stick with me on it. So concurrent causations, nine times out of ten, the way that the policy is written, and of course every policy is kind of different, is that if you have two causes of loss, one is covered and one is not covered, like wind and flood, for example, then we don't cover either one, period. Now the state said, well, that's not fair. You should at least cover the wind part of it. I mean, that's what you're doing, right? You should at least cover the wind since you're saying wind is covered. All right. So then there are some states that have become anti-concurrent causation, which means you pay as the insurer, you pay for the loss that you would pay for. So in the event of flood and wind, instead of saying, you know, wind is number one and then flood is zero, and so you take one times zero and you would get zero with no coverage. Now you're saying, no, no, no, no. Anti-concurrent, you just take out that flood claim and you would pay the wind claim.

William Auten 35:29

Right. So and that makes logical sense, really, because you're you're just focusing on the damage that is covered and you're eliminating the stuff that isn't covered.

Chantal Roberts 35:40

Absolutely. And again, I would encourage our adjusters when we have these two kinds of claims like wind and flood, which we'll start seeing a lot of come hurricane season, which starts June 1st. Yay, hurricane season. I haven't I haven't heard how bad it's gonna be. Yeah, I well, I was gonna say I haven't heard how bad it was gonna be. So maybe I shouldn't say yay, hurricane season. But when you have these two kinds of policies, like a flood policy and a wind policy, adjusters work with the other adjuster, the other insurer, especially when the the house, let's say, is is just destroyed. We don't know which came first unless the flood claim came later. For example, when Katrina hit, we knew that we had wind. And then in some instances, the houses weren't inundated with flood water until 48 hours later. So, you know, even though we weren't able to see that house until months later because of the amount of claims, we would call the the flood adjuster, and your insured would be able to get you that information and say, dude, what do you want to do here? You know, um, that kind of a deal.

William Auten 37:08

So uh so I was down for Harvey in Houston, and um there was very little wind damage. I looked at hundreds of roofs down there, uh commercial and and residential. And um boy, I just we didn't see hardly any wind related damage at all. It was all flood, and it was you know, Houston is known for for that. Um because they just had that that that hurricane just came in and parked over it and just rained and rained for like two weeks. So um there were really wasn't a whole lot of arguments about wind versus flood, right? It was fairly obvious. You got three feet of water in your house, that's flood.

Chantal Roberts 37:58

That's flood.

William Auten 37:59

No damage to the roof.

Chantal Roberts 38:00

Well, you know, or the second story or whatever, yeah, absolutely.

William Auten 38:05

Right, yeah, right. But in places like Florida or Louisiana where you do get a lot of wind, or or even on the east coast where you get a lot of wind, um uh it complicates things a little more. But you have to use your best judgment. Um, and you had mentioned you know, the flood adjuster will be there along with the homeowners adjuster or commercial adjuster.

Chantal Roberts 38:29

Well, hopefully, yeah, hopefully.

William Auten 38:31

Um, and you know, I've been on those visits and they're looking at different things than I am, and and right uh, you know, we we shake hands and exchange business cards, and pretty much, you know, unless there's a dispute, we never really talk again.

Chantal Roberts 38:43

Uh right, but the thing, the thing I I am trying to, I guess emphasize is let's not have an estimate where the insured is left with something uninsured, uh, you know, because oh, the wind people are supposed to cover it. Oh no, that's the flood people are supposed to cover it, you know. Right, right. It let's come to an understanding. It doesn't mean that we're our estimates are going to be the same, but there may be one or two parts that could go either way. Well, then adjust the claim because both of you are adjusters. That's literally your job title.

Flood Gaps Plus Backup Versus Overflow

William Auten 39:26

Yeah, in my Harvey example, there wasn't a lot of of exchange of in of claim information because it was a really bright line between flood versus anything else. But when you've got other areas where uh the line is blurred, and you know, did that um you know, did that section of the the house come down because of flood water or because uh the wind blew it apart? Um, those are things that you you do have to work with the flood adjuster to come up with uh an agreement as to who who covers what. And um exactly now the problem, the real problem occurs when you've got flood and wind and no flood coverage. And that that happens quite often. Unfortunately, we just had a rain event here where there was a lot of areas that flooded that normally are never exposed to flood hazards. And the reason that happens is if you know it's a very hilly and mountainous terrain up here in upstate New York, and um the water, the creeks and stuff that flow down from these hills and mountains get clogged up sometimes with ice or trees or whatever, and you wind up with flooding in areas where you never really expected flooding. When that happens, you've got people who suffer flood damage with no flood coverage, and that that can be a tough spot to be in.

Chantal Roberts 40:51

And be sure you look at your policy language because there is backup and overflow a lot of times of policy when we were looking at that. You know, backup means uh something has has stopped and uh is something that causing the barrier, and it's usually through a sewer system or plumbing system or something to that effect. But regardless, something has stopped the water and now it is backing up into the house versus overflow, which is something that is like, oh, there's so much water, it's going over the banks or whatever, and the sewer system can't handle it or whatever, and it now overflows two different things. It might look the same, but two different things with uh coverages, and you got to look at that.

William Auten 41:41

Yeah, the overflow uh is generally like the the analogy is if you poured coffee into your coffee cup until it overflowed and leaked onto whatever and caused damage. So um, but overflow of a river or a creek doesn't fall into that category. That's um that becomes then that's flood, that's groundwater.

Chantal Roberts 42:06

Yeah, uh and there's normally dry land, yada yada, yada.

William Auten 42:10

Yeah, there's actually land uh language about creeks and streams and rivers, I think.

Why Contractor Estimates Look Higher

Chantal Roberts 42:17

Um anyway, the point being, read your policy, but I did want to like point put that in there, uh, you know, just boom. So I think we've kind of talked about the functional cosmetic repair versus full replacement based on scope and contractor pressure versus evidence-based scoping. That I think we should touch on just real quick uh before moving on, which is again, I had mentioned a lot of times our insured is a little confused, which is normal because who knows anything about insurance? Who wants to learn insurance? Nobody. And and so the insured would have an estimate from the contractor of, let's say,$100,000, whereas the adjuster, the the insurance adjuster's estimate is, I don't know,$50,000, let's say. And then once RCV or depreciation is applied, all we're paying is, I don't know,$30,000. And the insured is going, that's$70,000 difference. What is what what what is it? What's wrong? And one of the things I think we should start talking about with our insureds is the fact that the contractor will write all of the damages. We may only write the covered damages, which means there could be damage out there that you definitely, Mr. and Mrs. Insured, have to fix. It just ain't covered, so I'm not gonna write it. Or there would be costs involved with. The loss that are reimbursable, which I would really love our adjusters to start putting in even the reimbursable things on the estimate so it shows that we've considered it. For example, permits to get construction going. Most of these places will require the contractor to file a permit cost and they will pass that on to the insurance company or code upgrades or debris removal. All of that is like reimbursable. You know, that has to be incurred, quote unquote. But I wish we would put a little line saying debris removal TBD, so it shows that we've considered it because when the insured is comparing the things trying to be apples to apples, they see that we're not having a lot of things that the contractor is having on their estimate, and they think we're lowballing.

William Auten 44:59

Sure. And trying to so some claims you go to and you can write a complete global estimate from start to finish. And um that estimate can represent the actual cost of the claim where you can write a check to the contractor less a deductible, and um the story's over. That's not all of them, and I would argue that probably that's a minority of them, because most claims uh uh involving damage to a building are complex. And you may have hidden damage that nobody can see until they start um doing the repairs apart.

Chantal Roberts 45:38

Also have damage create right there.

William Auten 45:41

The building inspector may go out there and say, Well, I see what you did here, but what we actually have to do to meet code is this and this and this. And if you've got code upgrade coverage, uh that's another thing that could be added on. So um there's a lot of reasons why the original estimate is going to differ from the um um the contractor estimate or the final estimate.

Chantal Roberts 46:03

Yeah, the final cost. Right.

William Auten 46:05

And um, I mean, I I've finalized a claim where the uh two months later the heating system failed, and it turns out that the that uh some damage from a uh small fire in the place, uh smoke damage actually caused premature corrosion in the heating system components, the electrical system, the and and that had to be replaced months after the claim was closed. It happens, you know.

Chantal Roberts 46:34

Yeah, absolutely. But think about again coming from the insured's point of view, where the insurance company is the big bad wolf trying to lowball and delay, deny, defend. And here is the person that the insured has researched and trusted to repair their property, that being the contractor or the public adjuster to write the estimate. And that differs so much from your estimate. And and I really do wish that we would put these little things on there so that they see, yeah, we are gonna pay for them. We're not forgetting it, but it's not due now. Like we know there's gonna be code upgrades that we're gonna have. We know that there's gonna be debris removal, we just don't know what the price is, right? We can't put it on there, but we're considering it. Yeah, I don't I don't know if that really makes sense, but it it I I think it would reassure the insured to say, oh, they are looking at it. This is this is one of the reasons why, in addition to you verbally explaining it to the insured.

William Auten 47:53

Yep.

Chantal Roberts 47:53

Okay.

William Auten 47:54

Anything can be considered. Uh doesn't mean everything will be paid. Exactly. Uh there may be real solid reasons why it can't be. But um yeah.

Openings Language In Home Versus Commercial

Chantal Roberts 48:06

Yeah, okay. So storm openings created or openings created by uh, you know, the the covered peril or what have you. Sometimes I was thinking again of wind versus flood, but you know, sometimes you've got the flood taking up the whole first story or whatever, but you still have busted out windows up on the second story. Well, obviously that's wind.

William Auten 48:34

Right.

Chantal Roberts 48:35

So um and that might be interior water damage too.

William Auten 48:39

Yeah, so homeowners policy uh will pay for interior water damage if the roof leaks. Um doesn't really say what has to happen to that roof for it to leak. That's why we pay for ice dams. On a commercial policy, it's a little different. You do need uh an opening created by wind or some other uh direct cause of loss. Um ice damming on a commercial policy is generally not covered unless there's an opening created by wind.

Chantal Roberts 49:12

So so I hear a lot, and I never know how to respond to this. I hear a lot of public adjusters or contractors talking about oh, well, there is openings created, or I guess there are openings in a roof. And I think you and I have talked about this before. I there are openings in a roof because when we attach the uh, I don't know, the furlings or the asphalt shingles or whatever, we're nailing them in so the nails go through the roof and the membrane and all that, and you can go up into the ceiling and see where the roofs are or the nails are coming through the the plywood on. And I'm like, that's not really that's not damaged though. Yeah, that's not an opening though, guys. You're really stretching the language and torturing the language, but how do you respond to that? Because it makes sense to an to an insured, and remember, an insured is not as savvy as we are in the insurance profession about insurance, by the way, guys. I'm not saying they're not savvy, they are savvy, but you know what I mean.

William Auten 50:20

I I think the language of the policy requires that it's a storm-related opening or a wind-related opening.

Chantal Roberts 50:29

But didn't you just say that in homeowners it doesn't really say that?

William Auten 50:32

It it doesn't.

Chantal Roberts 50:34

So then it could be any kind of opening, and wouldn't wouldn't a nail going through the roof be an opening?

William Auten 50:41

Yeah.

unknown 50:41

Okay.

William Auten 50:42

It's totally covered. Water that comes in through those those little holes or creeps up behind the shingles or whatever in a homeowner's policy, or even if you have an old worn-out roof and it's shedding water every day, and then one day it the the the wear and tear is such that it starts to leak now, and you've got interior damage. I don't think you you could make an argument that wear and tear is the underlying cause.

Chantal Roberts 51:14

And then I think there would be denied.

William Auten 51:16

But the direct well, the direct damage though is water damage. So I think I'd pay to repaint the ceiling or repair the ceiling, but you know, I would tell the insured you gotta get a new roof, it's wore out, and uh and leave it at that.

Chantal Roberts 51:29

Yeah, because that's wear and tear.

William Auten 51:32

Right.

Matching Statutes And ITEL Reality Check

Chantal Roberts 51:32

Right, okay. Matching.

William Auten 51:36

Matching, yeah. Okay, so there are states that have matching statutes. Yes.

Chantal Roberts 51:42

Um, Florida and Texas are some.

William Auten 51:44

Yeah, Connecticut is one up here. Um so in those cases, from a practical standpoint, if you've got uh generally speaking, for most roofs, if you've got a few shingles missing, you're probably gonna replace the slope. Um are you gonna replace the whole roof? Sight lines come into play then, and um, you know, unless you can find an exact match, you're probably gonna be closer to airing on the side of caution to replace the entire roof than than just a slope.

Chantal Roberts 52:20

Um I want to interject something real quick because I learned something, you know. I I talk with some public adjusters, and we've had some public adjusters on our podcast before. Uh, I particularly love David Princeton. I I feel that he is very down to earth, and I don't think he abuses the system the way some people do, but and and I hope I didn't offend him.

William Auten 52:53

Of course.

Chantal Roberts 52:53

I and I hope I didn't offend David by saying that.

William Auten 52:57

David's not the only one out there.

Chantal Roberts 52:59

I mean, yeah, I know, I know. I love Nathan too, by the way. Love you, Nathan. Okay, so anyway, um, so so what I was what I was saying is uh I and I think it was David or it might have been Nathan, I I don't remember which, but I was reading one of their LinkedIn posts, and they were talking about how all of these adjusters, all of the insurance companies like ITEL, for when you have uh carpet that's not in stock anymore and you send this.

William Auten 53:29

To be clear though, itel is not an insurance company.

Chantal Roberts 53:31

Yes. Let's talk about it real quick, not an endorsement. Although if you want to offer us money, itel, feel free. We would take it. Uh and what ITEL is, is a company that you could send a sample to. And ITEL will tell you as the adjuster where the or what kind of carpet, what kind of tile, what kind of asphalt shingle it is, if there are any in anywhere in the United States, who the manufacturer is, yada, yada, yada, blah, blah, blah. And nine times out of 10, this is what insurance companies are using to say, okay, so you've got a roof that needs to be replaced, or maybe just a slope that needs to be replaced. And you are saying, Mr. Contractor, Mr. Public Adjuster, or Ms. Public Adjuster, or Ms. Contractor, Mr. and Mrs. Insured, that you cannot get this roof because shingles are no longer being made. But I can tell you this is where there's a storage facility that has 300,000 shingles of that exact kind of shingle. And so the insurance company will go, you can go there and get it and have the same matching roof. Well, either David or Nathan, they had said the issue is that insurance companies don't necessarily understand when a contractor goes to Home Depot or the roof shingle place or whatever, they often get a contractor discount and it's local. So there's no shipping charges. So all they got to do is pick it up and take it, and all of that is built into the pricing. But if we have to order shingles, let's say our insured is in Kansas and we have to order these shingles from this warehouse out in Florida, it has to be shipped here. So we have to add that on. So is it really a difference? Is there really a cost savings? Is it really the same? And I thought, you know what? It that is actually something I have never considered before. So I'm just throwing it out there, it's a good argument, it's something to be considered. There you go.

William Auten 55:54

Sure. Yeah, and but that happens, and and I've actually seen that um laid out in ITEL reports. Um, and if it's not, it's at least commented on by an adjuster. Um, it should be. Yes. Um, it's an added cost. And it may be that the ITEL price after that shipping is more than it would be to um just replace it with something local.

Practical Adjuster Framework And Documentation

Chantal Roberts 56:20

Yes. And therefore, adjusters, again, this is the one thing I'm gonna tell you to do in that particular instance. You need to document your file that you went through all of these steps. I know it sounds like it's a pain in the rear, but you have to for bad faith issues because if I'm not seeing it as an expert witness that you went all the way through all of these considerations, then of course I'm gonna try, you know, I'm gonna believe what the plaintiff, which is the insured, is saying that you didn't consider these sorts of things. So you got to say, I looked at the ITEL thing, I did the pricing, it's just cheaper for to do it this way versus that way, and we're gonna go that way. You got to explain your logic. Okay.

William Auten 56:58

Yes. Well, why don't we move on to the practical adjuster framework and then uh close things out here.

Chantal Roberts 57:08

Yeah, because we're we've just been chatting away and try to keep this thing going. So, what what are the steps that we've got to do in our framework, Bill?

William Auten 57:17

So, first establish the cause of loss. And um by doing that, you're gonna want to set you'll then be able to separate what may be caused by a storm or some fortuitous event or some covered event versus what may have been there prior to the storm or what may be considered wear and tear, uh, rather than direct physical loss or fortuitous damage. And um verify functional damage if you've got this, um, if you've got these endorsements that that pay won't pay for cosmetic damage, you're you're gonna have to nail down, okay, does this does this um reduce the functionality of the materials or whatever of the item and then document everything? Uh as we just said, make sure you're documenting that you're going through all the steps to make these verifications. Yes. And through the process, you got to communicate that all properly to the the stakeholders, namely the the policy holder and uh any of their you know contractors or public adjusters. You I don't know how much you owe to the contractor necessarily, but um the insured at the end of the day is the person that has to really understand it.

Chantal Roberts 58:33

Yeah, yeah, absolutely. And I mean, you know, know that these spring storms that we're discussing, they are complex. It requires a lot of communication, which we don't necessarily have the time for, but it's going to save us time down the road, which is why we need to communicate with our insureds up front. And time and headaches. Yes. And and that documentation also helps us when you're documenting your file. It's gonna make it more watertight, unimproved in intended. Yeah, and uh it makes the file more defensible. So we need to, of course, stay sharp and stay aware of what we are doing when we are handling these kinds of claims.

Next Episode Preview And Final CTAs

William Auten 59:31

Always imagine that you're uh you're in court on the stand being asked about your claim file. And uh if you keep that in mind when you're working your files, you'll um potentially be a little more thorough. Yeah.

Chantal Roberts 59:45

So yeah, so our next episode will drop on Thursday, April the 23rd. And it's we're gonna be talking construction because of course, spring is when the months are warmer, days get longer, and so buildings start getting done, roofing starts getting done, all of the fun stuff starts getting done.

William Auten 1:00:09

I'll wear my hard hat.

Chantal Roberts 1:00:10

Yep, absolutely. Oh, I might even have my little high visibility thing going. So awesome. Yeah, so we will see you in two weeks.

William Auten 1:00:21

Yes. Thank you, and uh take care.

Chantal Roberts 1:00:23

Thanks, you too. Bye.

William Auten 1:00:25

Bye-bye. Thanks for joining us on the Art of Adjusting Podcast, where we talk about life as an insurance adjuster. Hit that subscribe button real quick and tell all of your adjuster friends to check this out as well. For independent adjusting services, go to www.autin.claims. And for anyone interested in working as an independent liability adjuster, go to the contact us tab to join our roster.

Chantal Roberts 1:00:48

So this wraps up another Art of Adjusting podcast. If you enjoyed this podcast or this episode, please give us five stars and a review. It does help the algorithm pick us up. In the meantime, you can contact me at theartofadjusting.com for consulting and training purposes.