The Top 3 Most Denied Property Loss Claims

As public adjusters, we negotiate with insurance companies every day.  We see firsthand the reasons they cite for denying claims by policyholders – both homeowners and businesses.  To help you position yourself for a successful claim process, we compiled the top reasons insurance companies cite for denying a claim.

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 1.  Water seepage

Seepage of groundwater into your house is NOT a covered event in a standard homeowners policy.  In your homeowners policy, the language is very clear: once rainwater hits the ground, it’s considered surface water or groundwater.  This means that if water seeps through your foundation, you have no coverage AT ALL.  On the other hand, if there’s a heavy rain and water seeps in through walls that are above grade, you will have coverage for that (NOTE: this is only true for an all-risk homeowners policy).  

Both the Business Owners and the Commercial Property policies contain this exclusion for seepage and groundwater.  But there is a key difference – in a commercial application, for any interior water damage to be covered, the roof or the exterior of the building must first be damaged by a covered cause of loss.  So, the roof must first be damaged.  Say there is a windstorm and a fallen tree slices your rubber roof.  If the windstorm lifts a section of that damaged roof and allows water into the envelope, that’s a covered event.  Rainwater seeping into a building around a door or window is not a covered loss in a commercial policy.

2.  Frozen pipe vs. burst pipe

In general, water damage from a burst pipe will always be covered under both a homeowners and commercial insurance policy.  Things can get tricky, however, when frozen pipes are involved.  For the most part, frozen pipes will NOT be covered, unless you can demonstrate that you maintained adequate heat.  Which brings us to…

3. Failure to maintain heat

Most insurance policies -- both homeowners and commercial – 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.

Please note that these tips are based on standard homeowners insurance policies.  It is very important for you to read your individual policy as forms vary drastically.  Should you want SMW to review your policy, please contact us to discuss.

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’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.

Swerling Milton Winnick Public Insurance Adjusters, Inc. Leadership Members Accept Officer Positions with MAPIA

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Hats off to Swerling Milton Winnick’s very own Diane Swerling and Mindi Labella, who recently had the honor of being appointed to officer positions with the Massachusetts Association of Public Insurance Adjusters (MAPIA), the state organization charged with representing professional public insurance adjusters throughout Massachusetts. Diane will assume the role of MAPIA Vice President, while Mindi will serve as MAPIA’s Treasurer.

Both Diane and Mindi have committed to serving one-year terms in these statewide leadership positions. Diane has previously served as Treasurer of MAPIA, and as President of the National Association of Public Insurance Adjusters (NAPIA), the national organization representing public insurance adjusters. Diane also served as a member of the NAPIA Board of Directors from 2016-2018.

The appointments were announced at MAPIA’s annual meeting and education seminar, held on September 27 at the Boston Marriott.

During the seminar portion of the meeting, MAPIA members had an interactive session led by attorneys Tony Antonellis, Chris Reilly and Brendan Labbe of Sloane and Walsh LLP, one of New England’s leading litigation law firms. Attorneys Antonellis, Reilly, and Labbe provided property insurance law updates such as maintaining heat, examinations under oath, proofs of loss, collapse, reference, BI/EE claims, subrogation, and much more.

The entire Swerling Milton Winnick team congratulates Diane and Mindi on this hard-earned recognition. We’re looking forward to a very productive year for MAPIA!


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.

Your Business Has $1M in Coverage and a $100K Loss. How Can You Be Underinsured? Coinsurance.

Let’s say your business has a commercial insurance policy with $1 million in coverage, and one of the buildings covered by your policy suffers damage that will cost $100K to repair.  You should be all set, right?  Not always.

How can this be so?  

Coinsurance.

Coinsurance is a clause in commercial policies that allows the insured to save money on the premium, which is of course very appealing to any business owner.  But such savings can affect the payout of a claim, depending on the percentage of coinsurance selected.

This is an issue that can arise depending on the decision you make regarding the coinsurance percentage.  If you elect to insure your property for 100% of its value, the limit of insurance you are paying for must equal 100% of the replacement cost of that building.  Thus, if your commercial property would cost $2M to replace, you should carry a limit of insurance totaling $2M.  If you only carry $1M in coverage, then you are only insuring for 50% of the property’s value and therefore not meeting your 100% requirement.

This exposes you to out-of-pocket costs in the event of a loss.  If you had that $100K loss highlighted above, for example, the insurer would only pay you for 50% of the loss – leaving you responsible for the other $50K.

You don’t have to choose 100% coinsurance – you can choose 80% or 90%.  Why opt for 80?  Let’s look at the following real-world example to get a sense of how coinsurance works.

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A golf club’s main clubhouse, which is valued at $250,000 (the “Property Value” or cost to rebuild with “like kind and quality”), experiences a fire in the kitchen that causes $40,000 in damage (the “Amount of Loss”). The golf club had elected a coinsurance rate (the “Coinsurance %”) of 80 percent, a limit of $100,000 (the “Limit of Insurance”), and a deductible of $500 (the “Deductible”).  After the fire, it was determined that the cost to rebuild the clubhouse was $250,000.

Is this property adequately insured? We can find the answer in 4 easy steps.

 Step 1: Coinsurance requirements

Determine how much insurance you should have carried to meet the coinsurance requirements. To make this determination, multiply the Property Value ($250,000) by the coinsurance requirement (80%). Thus: $250,000 X 80% = $200,000.

Uh oh – looks like you’re underinsured. Let’s keep crunching the numbers to see by how much.

 Step 2: Coinsurance penalty

To calculate the coinsurance penalty, divide the Limit of Insurance ($100,000) by the amount of insurance you should have carried ($200,000 – as calculated in Step 1). Thus: $100,000 ÷ $200,000 = 0.50.

 Step 3: Calculate the amount of loss payable

Multiply the Amount of Loss ($40,000) by the coinsurance penalty (0.50, as calculated in Step 2). Thus: $40,000 X 0.50 = $20,000.

 Step 4: Apply the Deductible

Now subtract the deductible ($500) from the amount of the loss payable ($20,000, as calculated in Step 3). Thus: $20,000 - $500 = $19,500.  This amount is what the insurance company will pay you. The remaining $20,500 is not covered and will come out of your pocket.

The following diagram captures these steps in an easy-to-follow graph:

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Want to see an example of adequate insurance?  Take the same scenario above, only increase the Limit of Insurance from $100,000 to $200,000. Use the same numbers otherwise (Property Value, Coinsurance %, Deductible, and Amount of Loss).

Here it is in graph form:

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Another example of how Coinsurance can affect the amount collected after a loss is the following:

A well-appointed private golf club has 10 buildings on its course grounds, insured by a commercial package policy that includes $2.5 million in “blanket coverage” for the structures. This means that the cost to rebuild all 10 structures listed on the policy in the event of a catastrophic loss would total approximately $2.5 million when added together.

The main clubhouse has a limit of liability of $1M.  The clubhouse experiences a total loss that amounts to $1M.  However, the insurance company realizes that the remaining 9 buildings that are listed on the policy do not have enough coverage on them to meet the $2.5M coverage limit.  If it is determined that the total amount to rebuild all buildings is $3M, the insured will only receive 83% of the insurance settlement.  ($2.5M/$3M=83%). Therefore, if you use blanket coverage for your buildings, you need to be certain that the total amount of coverage is adequate. 

Coinsurance is a complicated topic, so hopefully this helps you grasp its complexity. Be sure to have your agent walk you through all related aspects of coinsurance – and be sure you have enough coverage based on an accurate property value!  Otherwise you run the risk of paying more out-of-pocket should you experience a loss.


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.

Swerling Milton Winnick Offers Free Claims Advice to Victims of Columbia Gas Explosion

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Swerling Milton Winnick principals Diane Swerling and Paul Winnick spoke to Fox News about the Columbia Gas explosion in Lawrence, which displaced thousands of residents from their homes and businesses.

 In the interview broadcast on September 18th on Fox 25, Swerling and Winnick explained the critically important Civil Authority coverage provision, which is designed specifically for situations where people are forced out by a civil authority due to a catastrophic emergency.

 Any of these impacted residents who have a homeowner's, renter's or business policy should have Civil Authority coverage, Diane explained. In a homeowner's policy, for example, there are two weeks of coverage for additional living expenses. Maybe a family has to rent a room in a hotel, or must pay for meals at restaurants due to the displacement. If these expenses were incurred due to the gas explosion, they are covered – there's no deductible or waiting period.

 See the related news article here.

 The entire Swerling Milton Winnick team is providing free advice to anyone impacted by the gas explosions and fires in the Merrimack Valley and can be reached at 781-416-1000.

 


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.

Think your National Flood Insurance Program (NFIP) policy has you fully covered? Think again.

In my early days as a public adjuster, I worked with a grizzled old pro who was a leading flood adjuster.  He once concisely explained to me the basic purpose of NFIP flood insurance:

 “The point is to get homeowners some relief – it’s not supposed to make you whole.”

 I’ve been thinking about that pithy summary as Hurricane Florence barrels towards the East Coast.  Forecasters are calling Flo a “once in a lifetime” storm that might hit the Carolinas with torrential rain, high winds, and a deadly storm surge that could uproot trees, cripple power lines, and dump more than 3 feet of floodwater in several coastal areas.

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 If you run a business or live anywhere near this area, you’re no doubt asking yourself one key question: Am I covered?

 You may not be fully covered if you only have a flood policy through NFIP.   In residential policies, the coverage limit for a single family residence is $250K for the structure and $100K for personal property.  The maximum coverage limit for businesses is $500K for the building and $500K for your business personal property.

 This is important to understand because, in my experience, people who buy a flood policy through NFIP think they have comprehensive flood insurance.

 This is a myth!

 In fact, these policies are not only limited by dollar values but also limited in what is covered.  NFIP policies are limited when it comes to damage that is below-grade – that is, related to flooding.  These policies mainly cover unfinished drywall, insulation, mechanicals, plumbing, electrical but not paint, wallpaper and flooring. 

 So, if you have a policy through NFIP, read through it very carefully to understand what is covered and what is not.  If you want full flood insurance protection, you will have to purchase a complementary policy through a private insurance provider – it may be costly depending on the location of your property.  It will be worth it, of course, in the event of major flood damage.

 But if you only have a flood policy through NFIP, give it a good read and understand what it actually covers. Remember: it’s only supposed to help you get you back on your feet – not make you entirely whole after a flood loss.

 


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.

Understanding the Commercial Package Policy

If you’re part of a business or a private ownership group, you might have a “commercial package” policy for your entity’s buildings.  Unlike in a homeowner’s policy – which automatically contains a provision that covers the “replacement cost” of buildings, structures, or other property – your commercial package policy does not automatically include coverage for relevant personal property.

So do your due diligence – and know the values you want to assign to each property item.

The commercial package is just what it sounds like: it lets you choose various coverages and endorsements and package them into a single insurance policy.  Here are a few tips to help you put together a package of coverage that’s tailored to your unique needs:

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Building and Personal Property Coverage Form – This commercial policy can cover:  a. Your Buildings; b. Your Business Personal Property; and c. Personal Property of Others.

a.     Buildings – Under this policy form, you must make certain that all of the buildings that you wish to insure are listed in the policy.  Don’t assume that every building on your property has coverage just because you have listed your main building and carried a limit for that building.  

Know your values – It is up to you, the insured, to make certain that the limits applied to your buildings or personal property are accurate.  This is especially true if your policy has a coinsurance requirement.   If the value assigned to any of these structures is from 20 years ago, you should probably increase your limits to reflect the current cost of construction.  Otherwise, you could face a big hit when coinsurance is applied.

Understand your “blanket” coverage – If you have several structures, you might obtain blanket coverage based on a cumulative tally of the value of all structures added together.  Understand that this limit is NOT a catch-all to ensure broad recovery.  You still have to meet the coinsurance requirement, which means you must have coverage at the appropriate value levels for the structures.

b.     Business Personal Property – This coverage is for your Furniture and Fixtures, Machinery and Equipment, Stock, All other personal property owned by you and used in your business, and leased personal property that you are contractually required to insure (for example, a copy machine that you lease on a monthly basis).  If you are a tenant, there is also coverage for your interest in the betterments and improvements that you make to your leased property.

Know your values – Again, the amount of coverage that you carry for this insurance should be the total of all the above listed items that you own.  We will also point out that if you have multiple buildings listed on your policy, a limit for the Business Personal Property should be listed and covered for each of the buildings.  Just because you have Business Personal Property coverage for your main building does not mean that you have Business Personal Property coverage for all the different buildings on your property. 

c.      Personal Property of Others – This coverage covers personal property of others that is in your care custody and control and is located in or on the building described in the Declarations or in the open within 100 feet of the described premises.

Not all businesses need to obtain this coverage.  Actually, most commercial businesses do not need to carry a limit for this insurance.  A good example of a business that would require this insurance is a fitness facility - a business where several different people may have personal property stored in lockers that could be damaged if the building sustained a loss, such as a fire.

Code Coverage – Be sure you have enough coverage for code-related claims.  When determining the amount of loss to a building, the insurance policy will only pay to replace what existed at the time of the loss.  If your building does not have a fire suppression system or an elevator for ADA accessibility, these amounts will not be part of the initial insurance claim.  After a loss you may be required to install these items, but you will need to have purchased Ordinance or Law Coverage in order to obtain payments from your insurer.  This coverage should be discussed with your agent, and in our experience is one of the areas where policy owners often fail to get enough coverage. 

These tips will help you understand the commercial package policy, and hopefully will inform you in making exactly the right coverage selections.  

Look for more insight on coinsurance and Ordinance or Law in upcoming posts.


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.

Want To Speed Up Your Claim Process? Then Slow It Down!

Are you just beginning the claim process?  If you’ve suffered a loss and you’re making a claim under your homeowner or commercial insurance policy, you’ll want to speed things along.  Want a tip for speeding up the claim process?

Slow it down!

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As public adjusters, we run into situations where the insurance company moves quickly to clean up a damaged house or office after an event such as a fire or a flood.  The insurance company adjuster thinks it's helpful to go in and immediately remove all the damaged furniture and personal belongings – even the fixtures.

This is NOT helpful to your claim.  And in the overall scheme of the claim process, it will slow things down considerably.

First of all, you will want a complete inspection “take-off” of the building damage and inventory of the personal property.  If the insurance company adjuster hires a remediation team to strip out the fixtures “full gut”, you will lose all evidence of those custom countertops, the hand-crafted trim, and the grasscloth wallpaper that was specially ordered by your interior designer.

The same rule applies to your personal property.  Don’t throw away that sofa – it was purchased from a high-end decorator and was made with imported fabric. If you don’t get a scope and price agreement with the insurance company for this unique piece of furniture, you may recover only the value of a department store model.

Think about it this way: after a fender-bender, you don’t take the dents out of your car until you know how much money you’re getting.

Preserve the evidence and get quotes for EVERYTHING.  Only then should you make decisions about what gets tossed in the dumpster.

If you have a public adjuster – and you should – let them prioritize the buckets of coverage you will use.  Do you have enough insurance to pay a restoration company to “gut” the entire house and then rebuild?  They might charge two to three times the amount another contractor will charge.  That payment gets taken out of your coverage, which is a limited pool of funds.  If a huge chunk gets gobbled up by remediation – or worse, to send old and unwanted clothing to the dry cleaners – it can’t be used in other aspects of the process.  After your coverage runs out, you’re personally on the hook for related expenses.  These are issues where you’ll want to get advice from your public adjuster as one wrong decision could be detrimental to the claim.

You’re not properly managing the claim process unless you know – and endorse – everything. Every single activity and cost associated with your policy needs to be understood and signed off on by you.

If you’re not effectively managing your claim, then your claim is managing you.  Don’t let the process run things for you – slow it down.  Halt all activity until you have a moment to get informed about everything that’s happening.  Get bids and make informed decisions.  Once you have pulled in the reins, you can quickly choose the steps you want to take.  

Here are some tips to help you manage the claim process the right way:

Know Your Coverage Limits – Remember: this is a zero-sum game. The coverage limits in your policy may look adequate, but they can add up very quickly. You are personally responsible for all costs in excess of that amount.  And keep in mind that every dollar you spend on one item leaves one dollar less for another, perhaps more helpful, ancillary service.

Do Your Due Diligence – Talk to your entire professional services team for guidance on what you need and how to proceed.  This team includes your personal attorney, your insurance agent, and your accountant – anyone who has a professional interest in your well-being.  Get recommendations on what services you need and who to hire.  This is a good time to get a list of qualified public adjusters, and to start vetting them to determine the right fit for you.

Understand the Costs – Before anyone else starts spending your money, ask questions about the services they’re providing.  Insurance agents and their adjusters often contract with remediation services to clean house very early on in the process.  This expedites the claim for them but can run counter to your own claim interests.  Remediation services can be very expensive – did the insurance adjuster compare multiple bids?  The remediation team isn’t worried about making a list of customized cabinets and high-end furniture, which you will need to optimize your own claim.  They just want to gut the house and move on to their next job.  Before you know it, your entire coverage limit has been gobbled up by an expensive remediation company.  And only after the fact are you realizing that they have undermined your ability to itemize lost personal property.

Itemize and Inventory – We touched on this above.  Don’t let anybody take anything out of your property until you have compiled a comprehensive list of all personal property.  This is where a public adjuster can be invaluable.  If you spent $10K on a designer couch, you want to be able to demonstrate that in your claim.  You can’t do that if it hits the dumpster before you arrive (at which point the insurance company will offer you $2k for it).  Do you have custom cabinets?  You must itemize them or risk losing out on the claim.  Granite countertops are pricier than Formica – that needs to be accounted for before they are hauled to the dump.

Mitigate and Protect as Warranted – As the insured, you do have a responsibility to mitigate and protect your property.  So, don’t let your “slow it down” mantra result in a 6-month work freeze.  We warned you against runaway clean ups, but sometimes it’s appropriate for remediation and other construction specialists to do demolition right away.  If an area won’t dry on its own, that area should receive priority demo attention before it buckles or collapses.  As long as the remediation team runs it past you and your public adjuster, it’s ok to let them proceed with demo that mitigates against further damage.

Recognize a “Dead Loss” – Sometimes a property is a total loss and a full demo is in order.  You still need to protect your interests in this case.  You or your public adjuster can get bids to demo the entire property if this is necessary.

If your house or business has a fire or some other catastrophe befalls it, you will be cast into a claims system that can rapidly spin beyond your control.  Managing your claim the right way means slowing down the process to carefully choose the steps you want to take.  This will allow you and your public adjuster to document and strategically use the insurance funds coming your way.  By understanding the process and all related costs, you are more likely to get the best return for your coverage.

And remember:  If you’re not properly managing your claim, then your claim is managing you.


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.

The "Full Compensation" Rule - Understanding the Equitable Doctrine of Subrogation

If a third party damages your property, the first thing you do is go to your homeowners or commercial insurance policy and check your coverage. Sometimes you will find that you are underinsured, and don’t have enough insurance to cover all your losses.

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What happens then?

You look for a third party who may have liability – and you go after them for the costs you incurred.  This is the point when you may be introduced to the legal right of “subrogation.”

Subrogation answers the simple question in scenarios like the one described above: if the insured is not fully reimbursed for his/her losses, who gets the first dollar of recovery from the third-party tortfeasor?

To clarify this important but complicated subject, let’s look at an example.  Suppose a utility truck from the electric company backs into your house, which promptly collapses.  Damages are $800K – but your homeowners insurance only has coverage up to $500K.  You don’t have enough insurance to cover all your losses.  What do you do?

You look for a third party who has liability, of course.  The electric company clearly fits the bill here – the company’s driver and truck caused the accident, after all – so you file a 3rd party claim against the electric company.  In this instance, your insurance carrier will have a “subrogation interest” in your third-party lawsuit against the electric company.  This is because the insurer paid the $500K on your claim, but the third party (the electric company) was at fault.

A few important points to keep in mind here:

  • Your insurer does not acquire a subrogation right until after you (as the insured) have been fully compensated for your loss
  • This doctrine is equitable – meaning it’s a principle of law established by precedent – but some states do permit parties to ‘contract around’ this doctrine
  • In Massachusetts, we follow the “Made Whole” doctrine regarding subrogation – meaning the subrogating party doesn’t get paid until the victim does (i.e., the victim is first in line for payments)

So you should review your homeowners or commercial policy with your insurance broker to ensure that you have enough coverage to sustain an unexpected loss.  If you are underinsured when you suffer a loss, see if there’s a third pocket of liability you can use. Your insurance company will probably then move to subrogate.

Subrogation is an important legal principle that is sometimes hard to understand.  If you find yourself in a situation involving this ‘full compensation’ rule, your insurance company may have to stand in your shoes, legally speaking, to get money back if there’s a third party at fault.


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.

Replacement Cost Coverage - What Does Your Homeowners Policy Provide?

Do you have “Replacement Cost” coverage in your homeowner policy?  This would cover damage to a building, structure, or other real property that you own.  You probably do, even if you aren’t explicitly aware of it – or don’t know exactly how it works.  Here are some insights to introduce you to this important coverage provision and help you manage expectations in the event you need to use it.

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Claims involving Replacement Cost usually arise in the event of property damage involving a residential homeowner policy.  If a tree falls through the roof of your house, for example, your policy’s Replacement Cost provision speaks to your various settlement options – usually under the Loss Settlement clause of the policy.  Most homeowner claims, as far as building coverage goes, will settle on a Replacement Cost basis.

Homeowner policies these days typically contain Replacement Cost coverage; in fact, it’s automatic if the covered real property (your home or other building/structure) listed in your policy is insured for at least 80 percent of its estimated value (Note: the estimated value of the structure does not include the value of the land on which it is constructed).  So if your home is worth $100,000, and you are insured for $80,000, you will be covered for Replacement Cost within your homeowner’s policy.  For personal property, you need to purchase an endorsement that will provide replacement cost coverage.

What does this mean?  Well, if your home suffers a loss, it means that you’re getting New for Old. That is to say: you’re getting a new roof, even if the roof that was destroyed was 20 years old and already nearing the end of its “useful life.”

This is a crucial element in homeowner policies.  Insurance policies didn’t always allow New for Old – you used to get only what you had at the time of the LOSS. So if your roof was 15 years old, and had a lifespan of 30 years, you would get one half the value of the roof.  This is the depreciated value, or Actual Cash Value.  Insurance companies held fast to this “indemnification” model right up until Replacement Cost entered the scene and all insurance companies had to follow suit.

Even if you understand the concept of Replacement Cost, and you know you have it in your policy, there are additional points you may not know about. Such as:

  •  You don’t get New for Old payments up front – initially you will receive the depreciated value of the claim (i.e., the Actual Cash Value).  Policyholders often expect to receive the Replacement Cost settlement immediately.  Not so!  First you must make the repairs and show the insurance company that you spent the money you’ve already received.  Only then may you receive a check from your insurer for the Replacement Cost.  (NOTE: this check will neither exceed the actual amount necessary to repair/replace the property nor the limit of liability under the policy).
  •  In Massachusetts and several other states, “replacement” can mean more than just a repair – it also means you may elect to purchase an entirely new home.  In lieu of making repairs, one can purchase a new home for the replacement cost settlement.  The land value of the new purchase would have to be subtracted from the sale price, and then the value of the residence could be used as the replacement cost figure.  (NOTE: If you elect this replacement cost option, you (or your public adjuster) should first obtain the insurer’s approval since the replacement property must be amenable to the insurer for purposes of releasing the withheld depreciation.)
  •  If you do decide to purchase a new home (instead of making the repairs), Massachusetts law requires that the new home be within the Commonwealth of Massachusetts and be a residential property only.
  • Replacement Cost does not include the increased cost to comply with codes or ordinances. Say you owned a home built in 1996, and the energy code at that time required insulation specs to be R13.  If you go to rebuild in 2018, insulation must now comply with a code requiring a minimum of R21.  Ceilings, meantime, went from R21 to R48.  Typically, your insurance company only accounts for what you had at the time of the loss (indemnification), and thus you’re only entitled to what you had at the time of building the structure (which has, of course, depreciated).

These tips are limited to residential coverage – there’s more to come on the commercial side in upcoming posts.  Also, the Replacement Cost coverage discussed above is not for personal property. To ensure Replacement Cost coverage for personal items, you should include such an endorsement in your policy.


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.

Small Business Owners: Are you sure you have enough coverage? | Part 2 of 2

In Part I of this two-part blog post, we learned about Joe and Maria, a husband-and-wife team who own Joe’s Pizza. Their pizza shop is a multi-generational family business that is beloved by its local community. When a catastrophic event breaks out, Joe and Maria face a reckoning familiar to many small business owners: do we have enough insurance coverage?

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If you’re a small business owner, here are a few key points to keep in mind when selecting insurance for your operation. These will hopefully help you avoid what Joe and Maria had to go through:

1.     Buy enough ‘Personal Property’ coverage. Ensure that you have enough coverage for stock, equipment, improvements and betterments. If you install the floor, redo the ceiling, paint the walls, run electric and gas lines, put in counters and install hoods – this policy will cover anything that you pay out of pocket to improve the building. Remember to review your limits regularly. Even though the insurance company does account for some inflation, it rarely reflects the actual current cost of important improvements – installing an Ansul system for fire suppression, for example. And remember: keep all paperwork and receipts for improvements! In the event of filing a claim for a loss, you must demonstrate that you spent this money, and you will be required to prove the “insurable interest” with documentation.

2.     Extend the ‘Period of Time’ for however long you will need. If your business relies on sophisticated and/or expensive equipment, think about this: how long will it take to replace that specialized machinery and fully resume operations? In the event of a catastrophic loss, it might take months to examine the loss and get the insurance company to settle your claim. Meanwhile, you’re dependent on the ‘Time Element’ coverage, which is 12 months in a standard BOP. Be sure to endorse your policy and extend it to however long you think you will need to replace such equipment and resume operations – including the possibility of temporary relocation while your site is being restored.

3.     Bolster your ‘Payroll’ coverage. Standard BOP coverage only gives you 60 days of “ordinary” payroll coverage – that is, coverage for all employees at the time of the claim. After that, the insurance company looks to your policy to see who you listed as “key employees.” These can be names or titles of those employees who are indispensable to running the business. Will you feel bad about laying off employees? Do you want to keep paying skilled pizza makers, for example, while you renovate? Make sure you have the right policy for what you want to do and have adequate payroll coverage for those people you can’t afford to lose.

4.     Buy ‘Extra Expense’ coverage. A BOP also provides you “extra expense coverage.” This coverage starts immediately for expenses that are: 1. incurred; 2. above normal; and 3. helpful in putting you back in business. Under a BOP, there is no dollar limit on these expenses. If you have a small outage, you can use that Extra Expense coverage to buy signs and advertising that promote your grand reopening. Or you can use the Extra Expense coverage to pay a realtor to find space, pay temporary rent, or to outfit the temporary location. So squeeze every drop from it!

Taking advantage of these tips all starts with having a plan in place to recover as quickly as possible from any loss that might befall your business. If you’re a tenant, it’s especially important to review your coverage as you are at the mercy of your landlord. It could take years to recover from a fire – so be sure to select coverage that carries you beyond 12 months. Businesses that have poor coverage often don’t even know it until it’s too late.  In a case like Joe’s Pizza – and, possibly, in your own – asking the right questions in advance and buying the right coverage can make all the difference between reviving the business and closing up shop for good.


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.

Small Business Owners: Are you sure you have enough coverage? | Part 1 of 2

Does your town have a favorite pizza joint? Mine does. Let’s call it Joe’s Pizza. It’s a small, family-run operation that has been a valued local business for generations.

Joe’s business has been in the same downtown location for 30 years. He and his wife Maria run the show, and have 6 or 7 hourly-wage employees; several of them have been on staff for more than a decade.

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Joe doesn’t own the building. He has a long-standing lease with the building’s owner, who values Joe as a tenant. This landlord keeps the rent at a relatively low rate despite a growing demand for retail space in this increasingly popular commercial district.

But what if Joe’s business experiences a catastrophic event? As a business owner, it’s not enough for Joe to be really good at making pizzas. To protect against catastrophe and ensure the ongoing viability of his operation, he also must be knowledgeable about other areas of business, such as insurance. Knowledge and skill in this will determine his ability to recover from a big loss.

Suppose that, one day, Joe’s shop has a fire. He’s not at fault, fortunately – his specialty pizza oven malfunctioned somehow. This technical equipment glitch somehow sparked an after-hours blaze that ruined Joe’s entire pizza shop and caused serious structural damage to the building.

In the immediate aftermath of the fire, Joe and the landlord (the owner of the building) express to each other their mutual desire to rebuild and reopen Joe’s Pizza shop on the same site. Joe dutifully contacts his insurance agent to commence the claims process, and the landlord does the same.

This is where Joe’s story can go one of two ways. If Joe has the right insurance coverage, he will be reimbursed for all the improvements he’s made, be able to replace all the sophisticated equipment his business requires to operate, and continue payroll for all employees throughout the rebuilding process. If he doesn’t have enough coverage, Joe will face a series of challenges that could force him to relocate or shut down the business altogether.

Which way would your business go?

Like many small business owners, Joe likely opted for a Business Owners Policy (BOP) for his insurance coverage. This is a sound selection because it gives owners like Joe basically everything they need without having to shop around for more complex Commercial Policy (CP) packages, which require insureds to select exactly what they need.

Whether it’s a BOP or a CP, there are certain key endorsements that small business owners like Joe should be sure to carry in their policy. Purchasing the right type and level of protection will make the difference as to whether someone like Joe will reopen their business or be forced to close it for good.

If you’re a small business owner, the bullets below summarize the key points you should keep in mind when selecting insurance for your operation. In Part II of this two-part blog post, we will elaborate on each of these four points and provide details on items to inform your decision-making.

  •  Buy enough ‘Personal Property’ coverage.
  •  Extend the ‘Period of Time’ for however long you will need.
  •  Bolster your ‘Payroll’ coverage.
  •  Buy ‘Extra Expense’ coverage.

Taking advantage of these tips all starts with having a plan in place to recover as quickly as possible from any loss that might befall your business. If you’re a tenant, it’s especially important to review your coverage as you are at the mercy of your landlord. It could take years to recover from a fire – so be sure to select coverage that carries you beyond 12 months. Businesses that have poor coverage often don’t even know it until it’s too late.  In a case like Joe’s Pizza – and, possibly, in your own – asking the right questions in advance and buying the right coverage can make all the difference between reviving the business and closing up shop for good.


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.

Subrogation Lessons from the 2018 NAPIA Annual Meeting

Last week, the Swerling leadership team traveled to Hershey, PA to attend the 2018 National Association of Public Insurance Adjusters (NAPIA) Annual Meeting.  This annual event is a terrific opportunity to connect with public adjusters from all over the country and discuss the priority areas for our industry.

During the session, NAPIA general counsel Brian Goodman, along with NAPIA past president Randy Goodman, presented a case study that brilliantly captured the must-know elements of a critical area for our industry – subrogation.

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Titled “A Tale of Two Cities – Subrogation and Litigation in the Fire Context,” the Goodman brothers highlighted the relevant and often complicated issues related to priority of claims between a subrogating insurer and an underinsured and injured claimant. The presentation examined a case that presents salient adjusting issues impacting first-party property claims and the order of payment for these claims after a property loss.

Are you familiar with IPE oil? Your local fire department certainly is. House fires are often caused by rags used to wick up IPE oil while, for example, staining a homeowner’s deck. When stored improperly, these IPE-soaked rags can spontaneously combust and spread flames to the house and other paints/solvents stored nearby.

The case in question centered around causative elements of the fire as a result of the mishandling and storage of IPE oil. More broadly, it highlighted the key elements of general subrogation, including the reality that it can be an equitable, contractual or statutory right. The key question in subrogation cases is typically this: If the insured is not fully reimbursed for its losses, who gets the first dollar of recovery from the third-party tortfeasor? It’s well worth noting, as the Goodmans emphasized, that the answer to this question will vary from state to state.

We will be examining this critical issue more closely in upcoming posts, including one or two that feature an actual interview with Brian Goodman. Stay tuned!


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.

Does commercial property insurance cover preventive snow removal? No, says Massachusetts Superior Court.

If your company does business in Massachusetts, you should double check your commercial property insurance policy in advance of next winter’s snowfall. According to a recent decision by the Mass. Superior Court, rooftop snow removal is NOT covered by commercial property insurance, and such policies typically apply only to damage or loss – not preventive maintenance costs such as rooftop plowing.

You can read Mass Lawyer Weekly’s excellent summary of the case, Roche Brothers Supermarkets, LLC v. Continental Casualty Company, by clicking here (subscription required).

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In the case, Judge Mitchell A. Kaplan considered the question of whether or not the commercial property insurance policy held by the Roche Brothers Supermarkets chain covered $800,000 that Roche Brothers spent clearing snow from the roofs of its various locations during the winter of 2015.

Roche Brothers claimed that it should be reimbursed by its insurance company, Continental Casualty Company, for the $800K cost it incurred for roof-top snow removal for its corporate buildings. In support of this claim, Roche Brothers pointed to language in its commercial policy insuring against “risks of direct physical loss of or damage to property.” Roche Brothers believed that this language extended to expenses incurred to prevent the risk that its property would be lost or damaged.

Judge Kaplan disagreed with the Roche Brothers interpretation, ruling that there is no coverage under the policy for such preventive efforts to protect against property damage.

This one could very well end up in the Mass. state court of appeals. Either way, commercial policy holders should be aware of this significant issue – snow season is always on the horizon!


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.

Local Insurance Agents Deliver More than the Big National Companies

By Diane Swerling

“Buy local!”

That’s not just a farm-to-table rally cry from your town food co-op. It’s the answer I reliably give when someone asks me whether they should buy insurance from a locally based agent, or from a national direct carrier.

And I get asked this all the time. As a public adjuster, I’m uniquely positioned to see first-hand the value of each option. I work closely with agents and with large “direct writer” insurance companies, and I understand the advantages each can offer to an insurance consumer.

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The Lure of Online Rates

It’s an especially timely question now, as consumers are more empowered than ever before to compare rates and arm themselves with inside industry information. The big carriers are benefitting from web and mobile services that allow anyone to conduct a simple search at any time and get an immediate quote for their general insurance needs.

This is where the big carriers often score with consumers. If you go online and punch in some basic information, you’ll receive a very reasonable quote from Large Insurance Company X. Take that quote and compare it to what you get from your local insurance agent. Maybe the quote from the big guys is a little bit cheaper.  For many people, that’s the end of the analysis. They bottom-line it, see a few bucks saved, and go with the big national carrier.

But if that same insurance shopper talks to me, I’ll encourage them to look again. More specifically, I’ll explain to them the numerous advantages of going with the local insurance agent – several of which lead to eventual bottom-line savings. Others may be harder to quantify – what price do you place on peace of mind? – but are just as valuable to you as a home or business owner.

 

A Personalized Policy

When you sign up online, you get only what you identify as a need for you. The agent experience, on the other hand, is much more tailored to your particular needs. S/he will ask you the right questions to determine exactly what coverage you need, and as a result your policy will be much more comprehensive and individualized.

Think of it like a well-informed waiter guiding you through the “fresh catch” section of a seafood menu – you need guidance and expert recommendations to ensure you place the right order. Face-to-face discussions with experienced local agents can provide creative strategies and options for your exact needs. You might realize that installing loss-free credits is a money-saver, for example, or that you can bundle your auto and home insurance to save money. Compare these thoughtful solutions to the check-the-box approach you get online.

And what happens when you suffer a loss? With a local agent you’re not stuck calling a 1-800 number call center – you have a dedicated service team member who picks up the phone directly and responds to your individual questions. This is one of the benefits of the personal rapport you build with a local agent: you’re not just a number. In the event of a claim, this relationship means that you have an advocate who can navigate the claim experience for you.

Moreover, many consumers who buy online don’t even know what their policy is lacking until it comes time to file a claim. Then they have a rude awakening when they realize that the online enrollment left them with inadequate coverage – and without an advocate to help them with the process.

 

Short Money Means Short-Sighted

When dealing with a loss, having a local agent greatly expedites your claim. As a public adjuster, I often witness delays and disconnects that occur because the direct carrier is located out of state and must ship in adjusters and other claims team members who don’t do a lot of work in my geographical area. They often don’t know the local construction codes and inspection services, or the types of housing specific to this region.

This lack of local expertise draws out the claims process – and is why local agents excel in comparison. The local agents know how to fix on-the-ground problems, because they have the right relationships with key players in the area. They know who to call and how to advance the claim while the out-of-staters are flying blind.

 

The Value of the In-person Experience

When you walk into your local insurance agent’s office, you will likely see a wall bearing a host of logos. These are from the many different insurance companies the agency represents. This provides a great advantage to you in getting competitive rates, since they can quickly check numerous prices and types of coverage. Given the complicated nature of insurance, it is invaluable to have someone local who can break down all the details of your policies and ensure there are no hidden surprises should you ever need to make a claim.

“Buy local!” It’s not just for community-supported agriculture – it also makes sense when purchasing your insurance coverage.


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.

5 Key Questions to Ask When Purchasing Insurance Coverage | Part 2 of 2

Whether you’re a commercial business owner or a residential homeowner, your property needs protection. You want exactly the right insurance coverage to protect your assets against unexpected weather and other catastrophic events.

 How do you ensure that you have exactly the right coverage? In the first installment of this two-part blog post, we examined the function of Replacement Cost Coverage and discussed the value of including Code coverage in your policy. In this second installment, we’ll help you understand “Loss of Use” and “additional living expense” coverage, as well as coinsurance and what you need to do to get paid promptly and completely for your claim.

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 Ask the following questions when you sit down with your insurance agent to discuss your coverage. The answers will help you understand critical coverage elements that are sometimes overlooked or misunderstood.

 

3. What am I entitled to under my “Loss of Use” and “additional living expense” (ALE) coverage?

These are two very important provisions to understand because your policy should ensure that you can “maintain your standard of living” after a loss. At the same time, your insurance agent may have limited understanding of your particular housing needs. If you have a 5-bedroom house on a quiet cul-de-sac that is very close to your kids’ school and other activities, that’s incredibly valuable to you. If you lose use of that property because of a catastrophe, your coverage – which is time-limited – kicks in. Based on that housing profile, it would be unfair to receive a temporary replacement that is a 3-bedroom house on a busy street 15 miles from school. Moreover, if it’s a big enough loss, 12 months of coverage under your insurance policy may not be long enough.

 Your agent – or your public adjuster – can explain that loss of use coverage is an actual incurred coverage, based on documented actual expenses (usually in the form of receipts and cancelled checks). The insurer will pay you any additional expenses you incur above and beyond your normal living expenses. Your agent or adjuster should also explain that once a building settlement figure is reached, the “clock starts ticking” with this coverage. Repairs should begin as soon as possible after the building check is received. Any improvements affecting the time of repairs and delays on your part to commence repairs will not be covered.

 

4. How does coinsurance affect the amount of the loss that’s payable?

This applies to the commercial setting only – the homeowner equivalent of coinsurance is a topic for another post – and it’s an area rife with confusion and misunderstanding. Your agent can explain why premiums are lower when you have co-insurance. In exchange for this reduced premium rate, you (the insured) agree to carry insurance at least equal to a specified percentage of the replacement value of the covered property. But be forewarned: coinsurance can greatly affect the amount of the loss payable, as demonstrated in the following example:

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If coinsurance is right for you, ask your agent to ensure that you are not under-insured.

5. What is the procedure for insurance check endorsement and disbursement?

If you have a mortgage on your insured property, the mortgagee will be named on the building portion of your insurance settlement check as the insurer must protect the rights of the mortgagee.  Therefore, it becomes your responsibility to have your mortgagee sign off on the check.

 Your insurance policy should include the names of “mortgagees” – banks or other financial institutions with whom you have a mortgage for your insured property. Thus, when you seek recovery, any building checks from your insurance company will be made payable jointly to you and to your mortgagee(s).

 But…what if your original mortgage gets sold to another financial services institution? It happens all the time – one mortgagee sells a book of mortgages to another mortgagee. Sometimes you don’t even notice – and your insurance agent won’t know if you don’t advise them of it. When this occurs, the mortgagee name on your insurance policy must be changed. If you don’t realize the mortgagee has changed until you’re in the middle of the claim, how do you endorse the insurance check that gets sent to you if it doesn’t even have the right name on it?

 To release that money, there is a process. Your bank (who owns your mortgage) should explain the appropriate procedures you must undertake for insurance check endorsement and disbursement. Understanding this process in advance can greatly expedite payments and work during the repair period. Because the lender has the right to hold insurance proceeds, it may disburse for repairs and restoration in a single payment, or in a series of progress payments as the work is completed.


Don’t be shy – ask away!

Remember – you’re not asking these questions because you don’t trust your insurance agent. Rather, you’re asking them because you want clarity and full mutual understanding of what your respective duties and obligations are. Taking the time early on to get a grasp on these key issues will ensure that your insurance claim – should it ever take place – proceeds smoothly and expeditiously.

 We hope this two-part blog was useful.
Look for more updates in coming posts!


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.

5 Key Questions to Ask When Purchasing Insurance Coverage | Part 1 of 2

Whether you’re a commercial business owner or a residential homeowner, your property needs protection. You want exactly the right insurance coverage to protect your assets against unexpected weather and other catastrophic events.

How do you ensure that you have exactly the right coverage? In this two-part blog series, we’ll help you get started by asking some key questions designed to give you the information you need to make this critical self-assessment. Ask the following questions when you sit down with your insurance agent to discuss your coverage. The answers will help you understand critical coverage elements that are sometimes overlooked or misunderstood.

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1. Does my policy include Replacement Cost Coverage, and how does it work?

This is an important area of your policy that is sometimes hard to understand. The term “replacement cost” is a bit misleading, because when you suffer a loss, you don’t actually get the full cost of replacing the lost item. Instead, you receive the actual cash value-equivalent, which is the full cost of the item less the depreciation amount. Suppose you suffered a property loss – a tree fell on your house, for example – and it will cost $100K, on the date of loss, to repair or replace the structure with material of like kind and quality. Using this “replacement cost” as a baseline, your insurance company will then determine the structure’s “depreciation” – a reduction in the replacement cost based on the age, condition, and structure itself. If the amount of depreciation totals $10K, then the “actual cash value” – that is, the replacement cost less the depreciation -- of the damaged structure is $90K. And the actual cash value – in this case, $90K – is what the insurance company will pay you. UNLESS: your policy includes a “replacement cost endorsement.” If so, you can also recover the $10K in depreciation that you would otherwise lose. (Note: most states have a Statute of Limitations – in Massachusetts, for example, it is two years – and you must file your claim for damages within that window or you could face a denial of claim by your insurance company. Don’t be late with your filings!)

 

2. Why should I include Code Coverage in my policy?

Because the replacement cost claim does not include code upgrades, it’s often worthwhile to augment your policy with code coverage. Ordinance or Law/Code claims are handled separately from base building claims, and code coverage is paid on an incurred basis.  

If you end up making a code claim, you must provide the specific code(s) cited that were enforced and make sure they correspond with all relevant invoices. Typically you need an architect, contractor, or professional for each pertinent trade to cite the specific sections of the code, and to provide the contact information of the inspector or code official of the town who is enforcing these sections of the code. If a specific code is not being enforced there is no coverage under the policy. Your code claim will also need a proposal that outlines the increased cost of construction for each code upgrade.  

Ask your insurance agent about code claims, and whether it’s best to place the code items in a separate proposal or at least separate them within the same proposal. This serves to alert the insurance carrier of your anticipated claim and provide them the opportunity to review and respond – and hopefully avoids any issues after completion of work when an insurance carrier might refuse to pay part or all of the claim.


Don’t be shy – ask away!

Remember – you’re not asking these questions because you don’t trust your insurance agent. Rather, you’re asking them because you want clarity and full mutual understanding of what your respective duties and obligations are. Taking the time early on to get a grasp on these key issues will ensure that your insurance claim – should it ever take place – proceeds smoothly and expeditiously.

For answers to other pressing questions, check out
PART 2 | 5 Key Questions to Ask When Purchasing Insurance Coverage
in an upcoming post.


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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.

Are You Insured for a Catastrophic Loss?

This past year saw many catastrophic insurance events. Puerto Rico, Texas and the Dominican Republic were devastated by hurricanes. Californians saw their homes burned to the ground and their neighborhoods destroyed.

            Caribbean, 2017

          Caribbean, 2017

As homeowner representatives, when we see this type of devastation first-hand, we wonder whether our clients would be adequately insured should they suffer a catastrophic loss.

While it’s natural to think, “That won’t happen to me,” as public insurance adjusters, we do see losses in New England that are just as devastating as the California fires. 

  This fire destroyed a family’s Georgetown, Massachusetts home and all of their possessions.

This fire destroyed a family’s Georgetown, Massachusetts home and all of their possessions.


Taking a quick look at your homeowner’s policy can let you know if you are properly covered.  In Massachusetts, as in most states, the Declarations page on your policy looks like this:

Coverage A – Building

If your house (Building Coverage A) burned to the ground would the limit of coverage be enough to rebuild?  Insurance is based on a “like kind and quality” replacement factor.

 

Coverage B – Other Structures

This includes structures on the “residence premises” set apart from the dwelling and connected to the dwelling by only a fence, utility line, or similar connection.
Examples:  detached garage, tool shed, etc.
>> This coverage is typically 10% of the Coverage A limit.

 

Coverage C – Personal Property

Personal Property owned or used by an “insured” while it is anywhere in the world.
>> This coverage is typically 50% of the Coverage A limit and 70% if endorsed with a replacement cost endorsement.  You can increase this amount to a limit of your choice.

Keeping in mind that the average home contains 40,000 items of personal property, would your limit of liability be enough to replace everything from furniture and electronics to your favorite cashmere sweater or signed Patriots jersey?

It is the homeowner’s responsibility to put together a list of all personal property - after a total loss due to fire or hurricane, would you be able to remember what was in every room and prepare a detailed inventory?  We suggest that you take photographs or videos and keep them stored offsite or in the cloud.

 

Coverage D – Loss of Use

“Loss of use” insurance covers any expenses that you incur while your residence is not fit to live in so that your household can maintain its normal standard of living.
>> This coverage is typically 20% of Coverage A.

Loss of Use coverage allows you to stay in a hotel, rent a house or rent a mobile home on your property.  You may also have to rent furniture and incur additional mileage costs.  Would your limit of coverage be enough?  Renting furnished homes can come at a premium, and factoring in the claims adjustment time plus the repair period, you could be in this rental for one to two years.  This coverage typically has a dollar limit but some insurers use a 12-month limit - which we strongly discourage.

 

While we hope that you never need to turn to your insurance coverage after a loss, as weather events become more frequent and severe, the insurance experts at Swerling Milton Winnick want to see you prepared – and we are always here to answer any questions you may have.  Stay tuned for our next blog post discussing proper insurance for business owners. 

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

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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 on Fox News Discussing Storm Recovery

In the wake of the powerful Nor’Easter that brought gale force winds, snow and major flooding to New England this week, Diane Swerling sat down with Fox 25’s Ted Daniel to discuss what homeowners should do if their property has been damaged, including:

  • Report claims to insurance company as soon as possible;
  • Prevent further damage to your property where possible, and salvage what you can;
  • Note and photograph all damage and losses; and
  • If you need temporary housing, check your insurance policy for “loss of use” coverage – your policy may cover additional living expenses so that you maintain your standard of living up to a certain amount.

And if your property suffers storm damage, call us at Swerling Milton Winnick, the largest and oldest public insurance adjusters in New England. After large storms like these, it may be difficult to get insurers or remediation professionals to call you back. For immediate answer and assistance, make us your next call.  


After the Hurricane: Experience and Expertise

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Swerling Milton Winnick Public Insurance Adjusters, Inc. has helped business, home and resort owners, condominium complexes, hotels and others recover after every major hurricane for the last four decades, and we are in Florida and assisting clients in the Caribbean in the aftermath of Hurricane Irma to help clients recover once again.

Swerling Milton Winnick Vice President Diane Swerling was recently interviewed in an article explaining the difference a public insurance adjuster can make in the wake of hurricanes like Harvey and Irma:
https://www.usatoday.com/story/money/personalfinance/2017/09/14/when-use-public-adjuster-hurricane-insurance-claims/666392001/

We are licensed in Florida and have extensive experience and 24/7 availability. Swerling Milton Winnick provides unparalleled expertise resulting in the best possible recovery for our clients after hurricanes and major storms. 

After major hurricanes like Katrina and Andrew, clients with complex losses in Florida, Puerto Rico and the Caribbean turned to Swerling.

Be assured we will be there for you, bringing decades of post-hurricane experience to bear. To hear directly from our clients about how Swerling helps after hurricanes and other storms, please visit our testimonials.

 Call Diane Swerling or Paul Winnick – we are ready to work with you on the road to recovery.


Condominium Insurance | Part 2
MASTER POLICIES

In Massachusetts and most of the New England states, the building coverage for a condominium falls under the association’s Master Policy of Insurance.  Most condominium by-laws state that it is the association’s responsibility to insure the building.  Therefore, if one or more unit owners decide not to carry insurance, the building will be able to be repaired by the association.  However, there are still several areas where the Master Policy of Insurance may only provide limited coverage or no coverage at all:

  1. Ordinance or Law Coverage (Code);
  2.  Management fees;
  3.  Limits of Insurance;
  4.  Co-insurance;
  5.  Public Adjuster fees.
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Ordinance or Law coverage provides coverage for upgrades to the building that are required by the local or state authorities that govern the rebuild after a loss.  For example, a building that was built in 1980 may not have been required to have a fire suppression system but after a 2017 loss, a fire suppression system may be required.  The cost to retrofit a system into a building can be extremely expensive.  The base amount of Ordinance or Law coverage under the typical Commercial Package Policy is only $10,000.  Therefore, if the association does not purchase additional coverage through an endorsement, there can be a huge shortfall after a loss. 

Many condominium associations have a management company.  After a casualty loss, the management company performs a vast array of services immediately and these costs are typically covered under the insurance policy.  However, management agreements may also have a clause that allows the management company to assist in the reconstruction process for a fee based on the amount of the repair.  Insurance companies fight these fees stating that the insurance policy only pays for the direct cost of repairs and not for the management contract.  Again, these fees may not be covered by the association’s insurance policy.

Most condominium by-laws require the association to insure the building for 100% of the replacement cost of the building.  We find that this is usually not the case and most buildings are underinsured.  The association’s policy typically has a co-insurance clause.  This allows the insured to receive replacement cost coverage even though the building may only be insured up to 80% of its replacement cost value.  However, if the building is grossly underinsured, then the association becomes a co-insurer with the insurance company.  For example, if the cost to replace the building is $1,000,000 and the limit of insurance is only $500,000, then the insured is a co-insurer for 50% of the claim.  There may be no intent to carry a low limit of liability on the association’s part, but as construction costs increase, the limit of insurance must also increase with inflation and the marketplace. 

SMW suggests that all associations have an appraisal completed to make certain their limits of insurance are accurate.   With improper limits of insurance, the association can get hurt by receiving the low limit of insurance or only a percentage of the loss - and reconstruction may not be financially feasible.

We would be remiss if we did not inform the association that public adjuster fees are not covered costs under the majority of insurance policies.  But our condominium association and unit owner clients unanimously agree that our services in the claims handling process are invaluable to an association - which is usually run by a volunteer board whose lives have been disrupted and who have jobs and families to care for.

 

Should you increase your coverage?

Condominium owners should consider increasing the building coverage on their unit owner policy in several situations, including:

Unit owner policies may provide more comprehensive coverage than the association’s policy.  Wind-driven rain that may enter a building through a window or seep through roof penetrations are not covered losses under a commercial policy but an all risk unit owner policy will cover these losses. 

Second, some association policies will not cover a frozen pipe loss from your neighbor if they do not maintain heat in their unit.  Your neighbor’s actions could cause a water loss but the association’s policy may not provide coverage.  Again, if you have an all risk unit owner policy, coverage would be afforded for the building damage. 


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.