Condominium Insurance | Part 1
UNIT OWNER'S COVERAGES

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Swerling Milton Winnick has been one of the premier condominium insurance adjusting firms for the past 40 years. After handling hundreds of large and complicated condominium losses, the one predominant problem that we run into is a lack of adequate coverage for the unit owners. Most unit owners have purchased insurance to cover their personal property and loss of use of their unit, but that coverage is usually minimal and inadequate. 

Below, we share coverages that in our experience are important for all condominium unit owners to review with their agents, determining what limits are correct for each individual situation.

 

Unit Owner Policy

The most popular coverage form for the unit owner is the ISO form HO-6. This form was specifically designed for unit owners and provides coverage for Building, Personal Property and Loss of Use. If you rent out your condominium unit, this policy will also provide coverage for the loss of rents you may suffer if the condominium is damaged. When choosing the limits and endorsements for your unit’s policy, make certain that you provide your agent with a copy of your condominium association’s by-laws, so the agent can provide the best coverages for your situation.

Since the building coverage for a condominium is usually provided by the condo association, the limits on the unit owner’s policy for the building is usually minimal. When choosing a limit on the building portion of your unit owner’s policy, the agent must consider what type of coverage the association’s policy is providing. If the association’s policy provides building coverage on an “all-in” basis, then the unit owner’s policy should only provide a limited amount of coverage, which at a minimum will include an amount equal to the association policy’s deductible. If the association’s by-laws only provide limited insurance for the building, then the limit chosen should coincide with the coverage provided by the association. For example, some condominium by-laws will state that the flooring and/or wall coverings are not covered by the association’s master policy; therefore, you will need to provide coverage under your unit owner’s policy. 

The HO-6 policy only provides building coverage on a named peril basis. In order to obtain additional coverages for the building, one must add the HO-17 32 endorsement. This endorsement provides coverage on a “special” basis. An example of how this would benefit a unit owner would be wind-driven rain. If your policy only has coverage on a named peril basis, damage caused by wind-driven rain that enters your unit around an exterior door or window would not be covered.  However, if your policy is endorsed with the HO-17 32 endorsement, this type of loss would be covered. Again, the limits on your building coverage would apply, so make certain the building limit is appropriate.

 

Personal Property

The most important coverage under the unit owner’s policy is the personal property coverage. The limit of liability is entirely up to the unit owner. In our experience, most unit owners do not have enough coverage for their personal property. Don’t underestimate how much money you have exhausted on your contents! 

Again, the coverage for personal property under the basic HO-6 policy only provides coverage on a named peril basis. In order to obtain “all risk” coverage for your personal property, you must attach the HO-17 31 endorsement. We also recommend adding the replacement cost endorsement, HO 04-90, which provides current-day replacement value as opposed to a depreciated value. 

 

Loss of Use

This portion of the unit owner’s policy provides coverage for the unit owner to rent a temporary location while the building is being repaired or provides the owner with coverage for lost rental income if the unit is a rental property. 

SMW finds that the limit on this coverage is woefully inadequate. For example, it is not unusual for the repairs to a condominium building in Boston to take at least one year. SMW has handled several condominium losses in which it took more than two years to repair the building. Therefore, if you are out of your unit for 24 months and the rental of a similar unit is $3,000 per month, you will need a limit of at least $72,000 for the loss of use of your unit. 

The limits for this coverage are usually tied to the amount of coverage you choose for your personal property limit, and since we usually find that the personal property limit is inadequate, the limit for the loss of use is also inadequate. Make certain that you discuss these issues with your agent based on the amount you would need to rent a temporary location while your condominium is being repaired. 

 

Loss Assessment Coverage

After a major condominium casualty, the condominium association may find that repair costs are not all covered under the association’s insurance policy—and the association will pass that shortfall on to unit owners as an assessment. Coverage for this shortfall is covered under your unit owner’s policy.  The base policy only has a limit of $1,000 for loss assessment coverage.  This amount is usually insufficient. Your agent can add additional amounts of coverage under a separate endorsement for a small premium.

 

Check back later in June to read Part II, in which we’ll discuss master policies.


If you’ve had a fire, flood or other property loss resulting in an insurance claim, and need a public insurance adjuster in Massachusetts, New Hampshire, Rhode Island, New England or anywhere in the U.S. or Caribbean, call Swerling Milton Winnick.  We are the oldest and largest public adjusting firm in New England, and our team of experts will give you personalized, 24/7 attention to successfully resolve your residential or business insurance claim.

Private adjusters work on the behalf of the insured, not insurance company

By Lew Sichelman, Universal UClick
Printed in The Chicago Tribune
December 1, 2016

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When Vince Barnaba discovered water had flooded his vacation apartment in Ocean City, Maryland, this spring, he did what any homeowner would have done: He had his plumber shut off the water to his unit. Then he called his insurance company to file a claim.

But the insurer said he should file a claim with the company that insured the building, which has a central water supply. So he did. And when the second insurer refused to cover the damages because the refrigerator water line had been leaking for more than 14 days -- even though he hadn't visited the place in the previous six months -- Barnaba was befuddled. Neither company wanted to cover his damages, which were substantial.

The 80-year-old Barnaba was thinking about hiring a lawyer to help him with his predicament when someone suggested he hire a public adjuster: an insurance professional who works on behalf of the insured rather than the insurance company.

Fast-forward a few months, and after some dickering back and forth between his adjuster and the two insurers, Barnaba is now in receipt of checks totaling nearly $54,000.

Moreover, his adjuster has put the insurers on notice that he expects them to compensate his client because he was unable to use his apartment this summer -- they had dragged their feet so long that the repairs didn't start until mid-August.

"I'm overjoyed; we were getting nothing," says Barnaba. "If I didn't have this guy, I wouldn't have been able to get anything. I was lost; I didn't have the energy to fight them."

The public adjuster's cut: 10 percent. And even that surprised Barnaba. "It has been worth every dollar," he says. "I thought I was going to have to pay 30 percent, and I would have been happy to pay that."

Like Barnaba, most people don't know public adjusters even exist. But they do, and despite being bad-mouthed by the insurance companies, they do good work.

"They don't like us," says Bob Rodriguez of the Reliable Adjustment Co. in Cinnaminson, New Jersey. "Doesn't that tell you something?"

Part lawyer and part accountant, public adjusters protect you from being taken advantage of, whether by mistake or intentionally.

In Barnaba's case, for example, the 14-day clause cited by his insurer reads that the insured is required to mitigate damages within two weeks after discovering a problem, not, as the insurance company's adjuster said, that the insured has two weeks once the leak starts. That's a big difference, especially in a vacation home that gets limited use.

Rodriguez says he almost always extracts "a better settlement" than what's initially offered by an insurer.

Like realty agents who work solely for buyers—so-called buyer brokers—public adjusters assist homeowners in settling property insurance claims. They work only for the insured, never for the insurance company, to make sure you receive all the benefits provided for in your policy.

The insurance company's adjuster is supposed to be fair, and they usually are. But they work for the company, and their job is to pay out as little as possible under the terms of your policy.

Public adjusters come in handy in the immediate aftermath of a loss, no matter how devastating and stressful. They are able to present your claim and back it up in order to obtain the most favorable outcome.

Not only are they familiar with the insurance business and its customs and practices, these experts understand a policy's language -- verbiage that seems like gibberish to the layman. Many public adjusters are also trained to identify covered damage and estimate appropriate repair or replacement costs.

Like any professional, there are good public adjusters and not-so-good ones, so you should do your homework before hiring one. In particular, beware of contractors who hold themselves out as public adjusters.

Find out how long he or she has been in business. Obtain references and check them out. You'll definitely want to talk to previous clients to find out how they fared. Make sure the adjuster is licensed in your state by calling the state insurance office. All but seven states currently require licenses. Also, find out if your state limits what public adjusters can charge. Texas, for example, limits their fees to 10 percent of the settlement claim.

You can find an adjuster at the National Association of Public Insurance Adjusters' website, napia.com, under the "Find an Adjuster" tab.

(Lew Sichelman has been covering real estate for more than 30 years. He is a regular contributor to numerous shelter magazines and housing and housing-finance industry publications. Readers can contact him at lsichelman@aol.com.)

COPYRIGHT 2016 UNITED FEATURE SYNDICATE

DISTRIBUTED BY UNIVERSAL UCLICK FOR UFS

Improvements and Betterments Coverage

WHAT IS AN IMPROVEMENT OR BETTERMENT?

Improvements and Betterments are defined in the ISO coverage forms as “fixtures, alterations, installations or additions made a part of the building or structure you occupy but do not own; and you acquired or made at your expense but cannot legally remove.” Since the improvements are permanent repairs to the building, the lessee is insuring their use interest in the improvement or betterment.

 

WHAT THE COVERAGE IS:

The improvements and betterments coverage exists as part of the Business Personal Property coverage limit in the Building and Personal Property Coverage Form (CP 00 10) and the Business Owners Coverage Form (BP 00 03). Therefore, when insuring your business, be certain your insurance agent knows if you are planning to perform renovations to the property you are leasing. The renovations need to be insured properly under the correct coverage in the policy. 

In order to make claim for improvements and betterments, it is necessary to show the insurer that the lessee installed the improvements at their own expense. The insurer may require proof of the work, i.e., paid invoices and cancelled checks.

 

PAYMENTS UNDER POLICY:

Under the Loss Payment section in the policy for Tenants’ improvements and betterments; payment calculation is as follows:

(a)       Replacement cost if you make repairs promptly;

(b)       A proportion of your original cost if you do not make repairs
promptly. We will determine the proportionate value as follows:

(i) Multiply the original cost by the number of days from the loss or damage to the expiration of the lease; and

(ii) Divide the amount determined in (i) above by the number of days from the installation of improvements to the expiration of the lease.

If your lease contains a renewal option, the expiration of the renewal option period will replace the expiration of the lease in this procedure.

(c)       Nothing if others pay for repairs or replacement

After a major loss, loss payment (b) is the most common payment option.  Therefore, the tenant is only collecting on a pro-rata basis for the Improvements

 

LEASE

The wording in the lease typically speaks to who is responsible for the repair work after a casualty loss. Every lease is different so the party responsible for performing the repairs should be spelled out in the lease. Just because your lease requires you to maintain the HVAC system does not require your insurer to pay for a new HVAC system if the system is damaged by a fire. The HVAC system must have been an improvement made by the tenant in order for coverage to apply or specifically called out to be insured by the lease. Providing your insurance agent your lease is extremely important. Your agent can understand your requirements and make sure you have the proper policy and limits of insurance. 

 

TRADE FIXTURES

Each business has unique features that may be considered trade fixtures as opposed to an Improvement or Betterment. For example, a business that sells books may have installed several shelving units to display the items for sale.  Just because the shelves are affixed to the building, they are not necessarily an Improvement or Betterment; they could be a trade fixture. Trade fixtures are items that may be attached to the building but that the tenant is able to legally remove upon completion of the lease. It is important to differentiate a trade fixture from an Improvement or Betterment because the loss payment for the trade fixture can be at replacement cost while the Improvement or Betterment may be settled at a pro-rata payment.

 

CONCLUSION

Improvements and Betterments are difficult claims and disputes often arise between the insured and the insurer. If possible, make certain the language in the lease is clear and concise in regards to specific coverage for the improvements made. Clearly list and attach to the lease improvements that you make at your own expense and provide that information to your agent or broker.

 

EXAMPLES

SMW handled a total loss to a building that was leased by a restaurant group. Under the terms of the lease, the tenant was not only required to insure their business personal property but also the entire building. Fortunately, the tenant had the proper coverage and the building and all of the Improvements were covered by the tenant’s insurer. 

SMW handled a water loss for a tenant who built out the entire first floor of a commercial building that had apartments above. A pipe burst in one of the apartments and the commercial space was severely damaged. The commercial tenant had coverage under their Business Personal Property coverage but was grossly under insured when it came to the costs of the build out. The agent was not notified that the tenant paid for all of the improvements and betterments and therefore, the limit of liability for the BPP coverage was only intended for the stock, furniture and fixtures of the tenant. The tenant was not able to rebuild after the loss.  

ANY QUESTIONS OR COMMENTS, PLEASE FEEL FREE TO CONTACT SWERLING MILTON WINNICK AT 781-416-1000 OR EMAIL US AT DIANE@SWERLING.COM.


If you’ve had a fire, flood or other property loss resulting in an insurance claim, and need a public insurance adjuster in Massachusetts, New Hampshire, Rhode Island, New England or anywhere in the U.S. or Caribbean, call Swerling Milton Winnick. We are the oldest and largest public adjusting firm in New England, and our team of experts will give you personalized, 24/7 attention to successfully resolve your residential or business insurance claim.

How to Prepare for and
Recover from a Hurricane

IT’S HURRICANE SEASON, AND ESPECIALLY IF YOUR HOME OR BUSINESS IS IN A COASTAL AREA, KEEP THESE TIPS IN MIND TO PREPARE FOR A STORM THAT MAY BRING DAMAGING WIND, RAIN AND FLOODING:

  • Trim or remove damaged trees and limbs to keep you and your property safe.

  • Secure loose rain gutters and downspouts and clear any clogged areas or debris to prevent water damage to your property.

  • Purchase a portable generator or install a generator for use during power outages. Remember to keep generators and other alternate power/heat sources outside, at least 20 feet away from windows and doors and protected from moisture; and NEVER try to power the house wiring by plugging a generator into a wall outlet.

For more information, visit: https://www.ready.gov/hurricanes


If a hurricane or tropical storm has hit your area, before you go into your home or business:

  •  Walk carefully around the outside and check for loose power lines, gas leaks and structural damage. If you have any doubts about safety, have your residence inspected by a qualified building inspector or structural engineer before entering.
  • Keep a battery-powered radio with you so you can listen for emergency updates and news reports.

  • Use a battery-powered flashlight to inspect a damaged home. 
    Note: The flashlight should be turned on outside before entering - the battery may produce a spark that could ignite leaking gas, if present.

  • As you return home, watch for fallen objects, downed electrical wires and weakened walls, bridges, roads and sidewalks.

Do not enter if:

  • You smell gas.
  • Floodwaters remain around the building.
  • Your home was damaged by fire and the authorities have not declared it safe.

To read more about hurricane recovery, visit: 
https://www.ready.gov/returning-home


If your home or business has suffered damage in a storm, contact SMW.  We will:

  • Meet with you immediately to analyze and help you understand your insurance policy, and what happens next

  • Be onsite immediately to carefully survey the damage and work with professionals to make sure no further damage occurs (which may be required by your policy)

  • Meticulously detail and inventory everything in your home or business

  • Manage every detail – from where you’ll stay tonight to complex business interruption issues to working with remediation contractors – to obtain the best possible settlement – and let you get back to your life and work


If you’ve had a fire, flood or other property loss resulting in an insurance claim, and need a public insurance adjuster in Massachusetts, New Hampshire, Rhode Island, New England or anywhere in the U.S. or Caribbean, call Swerling Milton Winnick. We are the oldest and largest public adjusting firm in New England, and our team of experts will give you personalized, 24/7 attention to successfully resolve your residential or business insurance claim.

Diane Swerling Elected
2016 President of NAPIA

FROM LEFT TO RIGHT: Dayle Swerling Burke, Paul Winnick, President Diane Swerling, Ken Viafore & Roberta Swerling

FROM LEFT TO RIGHT: Dayle Swerling Burke, Paul Winnick, President Diane Swerling, Ken Viafore & Roberta Swerling

Diane Swerling, SPPA, Vice President of Swerling Milton Winnick Public Insurance Adjusters, Inc. in Wellesley, Massachusetts, was recently sworn in as President of the National Association of Public Insurance Adjusters (NAPIA).  Diane follows in her father’s footsteps – Bruce Swerling, SPPA, FPPA was NAPIA president in 1988 – as part of the fourth generation in her family to run Swerling Milton Winnick.  Diane attended her first NAPIA meeting in 2000, has served on NAPIA’s Board of Directors and became Secretary in 2010. 

LEFT:  Past President Scott Deluise putting on the Current President Medallion on Diane Swerling. RIGHT:  Brian Goodman, Esq (Counsel to NAPIA) officially announces Diane Swerling as acting President for 2016.

LEFT:  Past President Scott Deluise putting on the Current President Medallion on Diane Swerling.
RIGHT:  
Brian Goodman, Esq (Counsel to NAPIA) officially announces Diane Swerling as acting President for 2016.

Diane spoke to NAPIA members and officers on June 17th, at a stunning reception at the Montage in Laguna Beach, California:

“As President, I want to help and empower each of the officers to carry out their responsibilities so that we can be as efficient as possible. I am very much a team player, and I consider this a real team – we each have our role and our part. Together, our purpose is to maintain the Association’s strength, and to continue to help it grow and get stronger. We provide essential training, professional development, legislative support, ethical standards and a code of conduct, and also the opportunity for members to network with each other. We are an essential and important asset to our profession.”
— Diane Swerling, President, NAPIA

Diane’s colleagues and associates, including her fellow NAPIA board members, described her as “the most loyal person I know,” “super organized,” and “above all a leader.” They have “no doubts” that she’ll be able to achieve her presidential goals of efficiency, growth and upholding the highest ethical code of conduct and professionalism. 

Diane joined Swerling Milton Winnick in 1994, and in her 22 years there has helped thousands of families, business owners and real estate professionals deal with the complexities of property losses and insurance claims. 


If you’ve had a fire, flood or other property loss resulting in an insurance claim, and need a public insurance adjuster in Massachusetts, New Hampshire, Rhode Island, New England or anywhere in the U.S. or Caribbean, call Swerling Milton Winnick. We are the oldest and largest public adjusting firm in New England, and our team of experts will give you personalized, 24/7 attention to successfully resolve your residential or business insurance claim.

Chip Merlin Tribute: Diane Swerling Announced as New NAPIA President


Chip Merlin, Founder & President of Merlin Law Group, recently paid tribute to Diane Swerling on his property insurance blog. Please read the full story here: 

http://www.propertyinsurancecoveragelaw.com/2016/06/articles/insurance/a-special-fathers-day-as-diane-swerling-becomes-napias-president/

FROM LEFT TO RIGHT: Damon Faunce, Second Vice President NAPIA; Diane Swerling, President, NAPIA; Chip Merlin, Founder & President, Merlin Law Group

FROM LEFT TO RIGHT: Damon Faunce, Second Vice President NAPIA; Diane Swerling, President, NAPIA; Chip Merlin, Founder & President, Merlin Law Group


If you’ve had a fire, flood or other property loss resulting in an insurance claim, and need a public insurance adjuster in Massachusetts, New Hampshire, Rhode Island, New England or anywhere in the U.S. or Caribbean, contact Swerling Milton Winnick. We are the oldest and largest public adjusting firm in New England, and our team of experts will give you personalized, 24/7 attention to successfully resolve your residential or business insurance claim.

Is it covered?

WHO PAYS FOR WHAT AFTER A CONDOMINIUM LOSS:
What your condo association insurance covers – and what it doesn’t.

If you own a condominium, your condo association doesn’t just cut the grass and take care of common areas – they also hold a master insurance policy. 

After a loss, condo owners often find out that there are gaps between what the association covers, and what their personal condo insurance policy covers.  Or conversely, an owner may pay more to cover improvements and fixtures that are already covered by the association’s master policy.

There are three types of insurance that your condominium association could carry:

1)  Bare Walls coverage:  This is just what it sounds like – with “bare walls” coverage, the condo association’s coverage won’t pay to replace anything inside the walls of your unit.

2)  Single-Entity or Original Specifications coverage: With this policy, the condo association’s insurance covers anything that was in the unit at the time of the original sale.  For example, if your condo complex was built in 1991, and the original owner bought your unit with carpets, laminate counters and 1991 appliances installed, your condo association’s policy will reimburse you for the 1991 value of those installations.  However, if the appliances have been replaced since 1991, or the counters have been replaced with granite and the bathrooms have been upgraded, the association policy won’t cover those upgrades.

3) All-In coverage: This type of association insurance covers all improvements made by the unit owner, not just what was in the condo when it was first sold.  However, some association by-laws require that you inform the condo association of upgrades to your unit.  So if you remodel your bathroom, you’d need to give your condo association proof of its upgrade and value.

How do you know which of these types of policies your condo association holds? 

Your Condominium By-Laws dictate what is covered under the association’s Master Policy.  You should ask your insurance advisor if there is any language in the Master Policy that may operate to override the By-Laws.


If you’ve had a fire, flood or other property loss resulting in an insurance claim, and need a public insurance adjuster in Massachusetts, New Hampshire, Rhode Island, New England or anywhere in the U.S. or Caribbean, call Swerling Milton Winnick.  We are the oldest and largest public adjusting firm in New England, and our team of experts will give you personalized, 24/7 attention to successfully resolve your residential or business insurance claim.

Did You Know…
About Insurance Coverage Requirements?

most insurance policies require you to maintain heat in your home or building in order to be covered if your pipes freeze

Valentine’s Day 2016 brought more than chocolate and flowers – it also delivered record-breaking cold – and lots of frozen pipes.  The Boston Fire Department responded to 545 calls for burst pipes in 24 hours.

Will those homes and businesses be able to recover from their insurer for damage they may have suffered?

It Depends.

Most insurance policies require that you take “reasonable care” to maintain heat in the building or house, or that you “shut off the water supply and drain all systems and appliances of water.”  

If you are away on vacation and your pipes freeze – but you left your heat at a reasonable temperature and the boiler failed – your loss will be covered.  But if you were late for that flight to Florida and forgot to leave any heat on, your insurer can refuse to cover the loss.

Be sure to check back for valuable tips and information, and if you need assistance in resolving an insurance claim, call Swerling Milton Winnick. 


If you need a public insurance adjuster in Massachusetts, New Hampshire, Rhode Island, New England or anywhere in the U.S. or Caribbean, call Swerling Milton Winnick.  We are the oldest and largest public adjusting firm in New England, and our team of experts will give you personalized, 24/7 attention to successfully resolve your residential or business insurance claim. 

A Tribute to Our Past

At Swerling Milton Winnick, we are beginning the New Year looking ahead - while remembering those who gave us our unique vision to do so.   With that in mind, we’d like to pay tribute to Bruce Swerling (pictured left) and Marvin Milton (pictured right), two industry giants who we recently lost. 


Bruce Swerling

Bruce Swerling’s grandfather, Solomon Swerling, started SMW in 1898. In 1963, after graduating from Colby College, Bruce joined his father and grandfather in the family business, becoming a licensed public adjuster.  He became one of the best.  Awarded the National Association of Public Insurance Adjusters’ (NAPIA’s) Person of the Year award in 2004 and one of the few adjusters to be made a Fellow in the Profession of Public Adjusting, Bruce was revered in the industry:

“It was obvious that he was one of the best at his profession.  His peers recognized this as well,” wrote attorney Chip Merlin in a tribute posted on www.propertyinsurancecoveragelaw.com.

Bruce cared deeply about his clients, and knew that SMW was providing much more than a financial service: “As public insurance adjusters, it is our role to help people during difficult times. Business and homeowners need someone to stand up for them and it is very satisfying to be able to help them work through the complexities of an insurance claim to obtain the settlement they deserve to make them whole again,” Bruce said. 

Family mattered most to Bruce, and SMW was his family – literally.  Today, his daughters Dayle Swerling Burke and Diane Swerling carry on his legacy of helping clients in what is often their greatest time of need.  Diane will have him in mind this June as she is inaugurated as NAPIA’s President.


Marvin Milton

Marvin Milton was licensed as a public adjuster in 1958, following two generations of his family to help run SMW.  An accomplished scholar, Marvin graduated from Stanford University and came home to Boston to receive his J.D. from Harvard Law School.  An avid Red Sox fan, Marvin likened helping individuals after a loss to the underdog team the Red Sox were at the time:
“I often feel like David versus Goliath, going up against these large insurance companies. As an attorney, I am pleased that I can help my clients better understand the complex issues, especially the legal aspects, of their claims so we can get the best settlement for them.”

Like Bruce, Marvin was recognized as one of the best in the field of public adjusting. Marvin was the first person to be designated a Fellow Professional Public Adjuster by NAPIA for excelling in the practice of public adjusting. In 1997, he was named NAPIA’s "Person of the Year.”  Marvin believed in sharing his expertise, and was a leading lecturer and author on insurance and claims issues. His articles appeared in national publications, including National Underwriters, Best's Review and the New England Real Estate Journal, and he was a frequent lecturer on business interruption insurance for Northeastern University's Insurance Institute.

While we can never replace Bruce or Marvin, we strive to carry on their legacy of stellar client service, compassion, public service and professional excellence.


Based in Wellesley, Massachusetts, Swerling Milton Winnick Public Insurance Adjusters Inc. is the largest and oldest public insurance adjusting firm in New England.  If you have suffered a loss, we’d be honored to help you with your insurance claim, and encourage you to contact us.