Home Insurance Alarm Bells Ringing In Houston

Even as another storm season is fast approaching, deadlines loom in May and July for many unsettled insurance claims from our past two weather events in Houston. Many of us still see blue tarps covering homes as mostly indicative of insurance issues. As a local contractor, we are all too familiar with too many of these heart-wrenching situations. At some point, we realized we should help get the home insurance alarm bells ringing in Houston. We hope that this will be a wake-up call for lots of folks.

Not Like A Good Neighbor

In one case, a homeowner who has dutifully paid her premiums for more than 55 years, with no claims, is devastated by a settlement offer that is one-tenth of the cost to rebuild her home. “How could this be?” she asked. Her disbelief that her company was not there like a good neighbor. To get her home fixed, like so many others, she must find a way to fund the repairs herself out of pocket.

Not In Good Hands Afterall

In another case, a 100% disabled US Army veteran and mother of three young boys found out quickly that they were not in good hands as her carrier advertises. They repeatedly denied her claim. A giant tree fell directly onto her home. The tree ripped through her roof into her Master bedroom and obliterated her backyard fence. As of this article’s publication, her home remains structurally unrepaired. It’s been since last May, and she’s had to battle her HOA and frustrated neighbors who don’t understand her plight. Her only recourse was to sell assets and ask friends and family for help as they could.

Many Unsettled Insurance Claims Abound

We’ve never seen it this bad in all our years in the contracting business, specifically when trying to help fix storm-damaged homes. We can go on and on, but you get the message. For whatever reason, many claims are being delayed, denied, or litigated. Homeowners submit their claims, only to be surprised by the need for more information or an outright denial. In many cases, it’s an expensive lesson learned. Exclusions added, amending older policies that the homeowner was unaware of, or the depreciation of the value to replace, catch nearly all by surprise. Time limits, which vary by insurer, require filing paperwork much quicker than people realize, and once those dates pass, you have little recourse. Actual Cash Value, or ACV, is another gotcha that surprises homeowners who thought they would receive replacement cost for their loss.

The insurance industry has undergone significant changes

Homeowners must be aware of these developments in their coverage. Many long-time homeowners are unaware of the significant changes that have occurred.

Despite what the commercials say, your insurance company is not your friend. They are no longer a mutual entity operating at cost-plus solely for the good and well-being of their members. They are a vast, powerful, and politically connected for-profit corporation that expects to maximize profits and minimize payouts. That’s a fact. See a list of resources and materials at the end of the article for more information. In the meantime, let’s review a few steps we recommend to help you protect your financial well-being.

If You Think This Doesn’t Apply To You, Ask Yourself This Question

If your entire roof is destroyed or your home is flooded with three feet of water indoors for several days, do you know how much you will receive for your claim? Do you know what to do? If your claim is rejected outright, are you prepared to cover the cost to make the necessary repairs? This is real. And, it’s up to you, the homeowner, one hundred percent. You need to have a plan.

Homeowners Insurance Annual Checklist

After dealing with numerous insurance situations and speaking with all parties involved in the insurance claims process, we wanted to present some steps you, the homeowner, can take to avoid being blindsided by a surprise insurance claim denial. Will doing these things guarantee you the outcome you expect? We cannot say, but you will know what to expect and what to do should you experience property damage or loss.

• Schedule a time with your insurance agent
• Roleplay what-if topics to cover with your agent, considering:
  • Fire
  • Hail Damage (roof, cars, fences, chimney, windows/sills, patio)
  • Wind Damage
  • Walls
  • Flooring & Carpeting
  • Posessions
  • Furniture
  • Moisture & Water damage (weather-related)
  • Moisture & Water damage due to plumbing leak
  • Mold (Interior, Attic, Exterior)
  • A tree falls on your home.
  • A Car runs through the wall or a garage
  • Theft from a break-in
• Consider forging a relationship with a Public Adjuster to review your policy and assist you in filing a claim if a loss occurs.
  • Review your policy using role-play, where you throw out likely scenarios.
  • Understand clearly the timeline you must adhere to to file a claim.
  • Just as with your agent, allow your public adjuster to review the coverage you think you have.
  • Use the same role-playing list of possible claims and the coverage you have for them.
  • Understand depreciation and actual cash value.
  • Know your deductible and out-of-pocket numbers.
  • Be sure to comprehend exclusions and what they mean exactly
• Document your property annually or when significant changes are made
  • Take high-quality, detailed photos and video of the entire property
    • Well-lit and detailed photos of the chimney, roof, attic, every wall, garage, ceilings, porch, patio, driveway, walkways, water well, and septic system. Also, don’t forget interior rooms, furnishings, closets, kitchen, appliances, cabinets, tools, yard equipment, and other essentials.
• Create a new folder each year for photo and video updates.
• File your photos in a folder or directory stored safely in the cloud (off-site in case of total loss)
  • Keep all correspondence and policy information in the exact location as the photos, and update them annually.
  • Alternatively, many people use a fireproof safe or create a “Go Box” containing essential documents and information in the event of a disaster.
• Have a pre-established contractor relationship in case of storm damage, as they can get busy quickly.

If you experience property loss

Time is of the essence.

Time is not on your side, regardless of the insurer. As soon as you can safely act on your claim, do so. Do not rely on telephone calls. Be diligent about getting written commitments and promises from people you can identify. Adjusters are busy people, so be persistent. Never assume your case is a slam dunk until you have a satisfactory written confirmation of a settlement you agree with.

• Mitigate further property damage when you can safely do so.
• All correspondence in writing
  • Phone calls and in-person discussions should be documented, including full names, dates, times, and outcomes.
• Keep your expectations in check and stay diligent.
  • Even if your PA or Attorney takes your case, it doesn’t mean your claim will be paid.
  • Keep your expectations realistic.
• If you experience a loss related to a declared disaster or emergency, you may be eligible for some state or federal relief.
• Casualty and theft losses not covered by your insurance company or relief programs may be deductible on your federal income tax return using Form 4684.
• Try to remain calm and courteous. After significant weather events, everybody is overwhelmed with calls and paperwork.
• Strive to be the cool, collected homeowner that the adjusters, agents, inspectors, and contractors are eager to assist during the fray. A pleasant voicemail is much more likely to get a prompt callback than a nasty one.

The following is a more comprehensive checklist for the Houston homeowners. Feel free to print and clip for guidance should you or someone you know need to deal with an insurance claim.

Further Resources

Professional help in the Houston area:

 
Denton Claims Consulting LLC
J. Aaron Denton, HCI-R, WRT
President – Public Adjuster,
1790 Hughes Landing Blvd
Suite 400
The Woodlands, Texas 77380
TEL: 832-482-1349  
Website: www.Dentonpublicadjusters.com

US Army Corps of Engineers – Operation Blue Roof
During declared emergency or disaster areas, this program is activated to help mitigate damage free of charge for homeowners.
https://www.usace.army.mil/Missions/Emergency-Operations/Blue-Roof-Info/

The American Policy Holder Association

Consumer advocates fighting insurer fraud.

apassociation.org

Insightful books about the insurance industry

• Pay Up!: Preventing a Disaster with Your Own Insurance Company
  by Chip Merlin
• Delay Deny Defend: Why Insurance Companies Don’t Pay Claims and What You Can Do About It
  by Jay M. Feinman
• The Claims Game: The Tricks and Deceptive Tactics Insurance Companies Use to Underpay or Deny Your Claim
  by David Skipton
• From Good Hands to Boxing Gloves: The Dark Side of Insurance
  by David J. Berardinelli