RE: “Isabel”, is a Hot Potato headed behind? – 6/20/2004 12:42:08 AM
-Gale
Steve I have not forgotten about writing the article concerning the software angle that I said I would post. I was at a convention this week in a hotel without internet but next week I will be at a convention that I will have high speed so if I have time to get edited what I have written I will try to post it this next week. I am in for 32 hours this weekend before I hit the road Monday for a week but then will be in the office for a few weeks.
This week the issue of the insurance commissioner/carrier relationships did come up and clearly as long as a commissioner can be swayed by big bucks and a carrier can greatly reduce its payout by paying into a commissioner’s /reelection/retirement/etc account a fraction of these savings some will go for the short term gain at the risk of losing everything.
I think most all parties agree based upon just that one link posted to the article by a former insurance commissioner that until the system is reformed that those at the top will continue to have a chance to fleece homeowners. Until homeowners become concerned and form lobbying groups in each state we will continue to hear more cases of homeowner abuse in the years ahead I expect. Steve what do you think it will take for homeowners to take charge of the factors that leave them exposed to system abuses?
< Message edited by Gale -- 6/20/2004 12:45:16 AM >
RE: “Isabel”, is a Hot Potato headed behind? – 6/20/2004 12:55:53 PM
-Leam Kincaid
Thank you Linda and Kevin for your input on the Public Adjuster-Independent Adjuster post. I’m inserting this (slightly modified) reply on this post because of similar claim issues cropping up during hurricane Isabel.
I feel that accounting for the (incident caused / indemnity covered) scope is foremost important to apply towards the good faith and reconstruction aspect of the claim settlement process, and that balanced professionals on both sides of the policyholder fence should maintain their place in the claim settlement / reconstruction process.
I strongly contend though that adjusters and contractors working together, for the benefit of all, are best for the insured.
As a side point, I do not see how consumers are “harmed” when that time proven and complementary process is used appropriately. I can see harm being laid on consumers if Safeco type claim settlement rationale in Texas (‘contractors who speak with adjusters are now acting illegally as unlicensed adjusters’) were to be taken seriously there or anywhere else. In my opinion, based on previous experience, the claim scope settlement-reconstruction process can become bogged down on its own merit for various circumstantial reasons, but for an insurer to twist the meaning of a legislated consumer protection decision designed to protect people from unscrupulous public adjusters, and, in effect, use it against trusting consumers / adjusters / contractors is, to me, unconscionable.
Not to get too far off topic, the claim documentation that Mr. Poe shared with me shows consistent hail-rain “scope” not being accounted for by certain carrier-adjusters in his area. And I don’t mean subtle scope damage; I mean glaringly clear multi-trade scope damage that, via some major insurers, and some vendors, is consistently being “overlooked” by their (seasoned) adjusters.
The same, and other documentation, also shows scope repair cost ratios that are a closer fit for NEW 2000-2500 s.f. size type projects being applied to 40 s.f. scope type repairs, (e.g. bathroom ceilings removed, replaced, primed/painted/texture for $68). The insurer(s) aren’t even inserting a note regarding that that kind of scope repair-to-cost ratio estimating approach is a (obviously) minimum charge scenario.
I can see consumers easily overlooking those kinds of claim estimating details, and many others, since the majority I’ve experienced use ‘how much did they” give me”‘ rationale, instead of the ‘is all scope and inherent repair processes and appropriate cost ratios accounted for’ rationale that a responsible construction business-project investor would use.
When I’m asked to work with a client as the managing contractor, in an insurance claim situation, accounting for “incident” related scope damage, that stands out in contrast to possible maintenance or intentional damage scope issues, is on the top of my list for helping “incident” related projects to run as smoothly as possible.
Accounting for ALL scope up-front helps all involved in taking care of the policyholder-client-person equation.
Sometimes I’m asked “Can you work with this [adjusters] estimate”? I’ll look the estimate over, and if the damage scope and repair processes and financial numbers make sense, then I’ll agree. If not, I’ll show the homeowner, and adjuster if need be, what the issues are and how I feel we need to proceed from there.
From what I’ve seen, per what Mr. Poe is dealing with, understated (hail-rain) scope, repair processes and subsequent maladjusted repair cost economics is consistently showing up, and then when questioned, the insurers refuse to re-inspect, or drag their feet in replying to the insured, or apply the appraisal process clause prematurely* or expect project costs to ignore roofing component costs as part of the overall investment cost risk.
*I say prematurely because even though the right for either party to the insurers’ contract can initiate the appraisal process, that process seems to be being used abusively by an insurer as a tool to bog down claims, verses warranted [initial scope] damage (re-evaluations) being accomplished first.
Overall, there seems to be A LOT of unfair and armchair type “adjusting” practices taking place in Texas, with naive consumers and educated contractors caught in the middle of it all. I wonder, if they get smacked with a hurricane, would Safeco then resort back to it being “OK” for adjusters and contractors to work together so as to be able to expedite claim-construction issues in a concise manner? One would hope so.
All said from my end, it appears to be a given that some insurers are making it clear that consumers need, or will need, (honest) public adjusters there in Texas. I applaud Mr. Poe’s and other’s efforts to do what they feel is fair and necessary so as to bring those so called “good faith insurer-adjusting” issues in Texas into the light of national public scrutiny.
RE: “Isabel”, is a Hot Potato headed behind? – 6/20/2004 5:47:11 PM
-Gale
Leam that was a good post that pulls together a lot issues on the subject of misadjusted claims. When the answer becomes clear how/why these Isabel claims issues and hence class action lawsuits occurred we will be closer to understanding similar issues in TX, CA and the rest of the country. I think most agree there can issues with the pool of adjusters handling claims as well as adjusting software they use but since none of the adjusters or software vendors are calling the shots at the carrier level it is clear the basic problem lies with/in those who are calling the shots.
In my view we do not have 50 evil insurance commissioners that is creating the problem by selling out to the carriers for cash. I am going to assume there are no crooked commissioners in office today since I have seen any evidence supporting any other view. What I do see from the “Revolving Door” article is the strong possibility some commissioners could more motivated by money than I would like to see.
If I am an insurance commissioner coming from the insurance industry and planning to return to the payroll of some carrier when I finish my term as commissioner could I not hurt my future potential income if I really did battle with the carriers if the carriers were abusing homeowners?
Sure this is an issue for all office holders. We know some that leave office are offered high paying jobs in the industries they were involved in regulating or sending contracts. Even Bill Clinton said recently he never had any money all of the years he was in office as compared to now.
Leam there is a place for the public adjuster it appears from what I read on CADO. If the PA is protecting the insured from poor quality adjusters that is one thing but if the homeowners have to pay PA’s money to combat the upper management practices that are anti-homeowner than I have a real problem with that.
Beating up the adjusters every time there is a problem with a claim is getting to be old in my view. As the CEO of my company I know there is no employee or any practices in place that I can’t make go away if I so choose. The CEO of a carrier can do the same. In other words if a carrier is using non trained or incompetent experienced adjusters it is the fault of the CEO and not that adjuster that is botching the estimating process.
Of course a CEO of a large carrier will not sit in on the interview of each adjuster that will do claims for his company but the CEO must make sure his direct reports are acting in the best interest of the company, which mean the best interest of the policyholders. It is not in the best interest of the policyholders for a carrier to systematically over or under pay claims. The CEO must set the ethical tone if a company as a whole is going to act in an ethical manner. That regional manager has to know without question that he will lose his job if he decides to cut corners at the expense of the policyholders.
Since we can hear stories that are 180 degrees apart about the same carrier it is my position we are seeing regional/division management that have gone bad. Do not some CAT adjusters prefer one storm manager to another at the same carrier because some are better than others in their skill sets?
All I am saying is it is easier in the long run to change a company from top down than bottom up. This last week I saw on one of the financial networks where one of the guests suggested Tyco as a good stock to buy today and as you could guess he was taken to task on his view. He said it had been a sound company for years but bad management had created problems but they are all gone now and the new management has the company back on track.
The core issue bringing on the class action lawsuits in Isabel as well as across the country is not adjuster issues but CEO issues. I do not think we are talking about a bunch of evil CEO’s either but that claims handling issues are perhaps of such a low level of concern to upper management that they just turn it over to others. Some of these others may have the view they are saving the company money when in fact over the long haul they are wind up costing the carrier many times more than they save in the short run.
We need commissioners that are looking out for the policyholders more their income when they return to a carrier’s payroll. We need CEO’s that set a high ethical tone for the entire staff of the carriers. We need CEO’s in touch with the policyholders. What would a CEO learn if he rode as an adjuster’s helper with a different adjuster each week on the next storm?
A very successful chain of food stores required upper management to be in the field two days each month. One day was spent on the cash register and the other stocking shelves during the hours when the most customers were in the store. Management out of touch with the policyholders is the only issue I see as the cause for the present and near term class action lawsuits.
< Message edited by Gale -- 6/20/2004 11:18:41 PM >
RE: “Isabel”, is a Hot Potato headed behind? – 6/20/2004 10:14:16 PM
-Leam Kincaid
Thanks for your reply Gale.
For the record, I’ve worked with bright, high quality and down to earth staff and independent adjusters. Also, none of my observations are meant to bash anyone. And “a” claim or a hand full of claims is not at stake here. Many, many claims are at stake.
The job that daily and catastrophe adjusters have to do is a uniquely complex one. The ability for the high quality adjuster to maintain their focus, which is to help insured ones while following (sound) carrier instructions, and make a living, is a commendable and challenging calling to follow, and I hope that all of the good people that are in the adjusting field remain committed to that calling and all that it entails. I do not share the same sentiments for others that follow carrier instructions so as to be able maintain their own standard of living, to the detriment of their neighbors’ reputations and welfare.
I suggest that CEO’s are quite aware of what it takes, from the trenches on up, to cover their company’s operating costs and satisfy stockholders who have gotten use to certain returns on their investments. Hard markets call for hard CEO type decisions, and the glossing over of those decisions.
If you will, carefully follow the nine page Allstate letter to completion, especially keeping in mind the blue lead information at the top of pages 1-8 (and especially page 5)…then reflect on the following neighborly and commendable admonition from khromas to Todd Brooks on CADO 12/18/2003;
(The khromas reply was addressing Brooks receiving his new adjusting license, and Brooks considering employment with Allstate).
Brooks,
“I would not advise calling Allstate if you wish to keep your integrity intact.
After almost 7 years with them and having held a variety of positions, including the sole Quality Evaluator for the entire southern half of Texas, I finally became fed up with their approach to requiring every adjuster to knowingly underpay every claim and left them this past July.
The head of Allstate in Texas – Gary Briggs – had the nerve to stand up in front of an agent’s meeting last spring and say (QUOTE) “I love the new HOA+ policy! It doesn’t cover anything and WE STILL GET TO KEEP THEIR MONEY”!
I used to tell people whose claim I was handling that “the good hands of Allstate were right here” as I held out my hands for them. I could no longer do that in good faith and look myself in the mirror so I left.
One of these days the Texas DOI is going to catch up with their property handling practices and then it will all hit the fan! Good luck with anyone else!”
Kevin Hromas
Gale, the reasons behind Gary Briggs exclamation and part of Allstates profitability margins may very well be connected and may support “why” (so-to-speak) Mr. Poe submitted 5 Allstate claims in 2003 to the TDI and why they are now in the TDI’s legal department. It will also be interesting to see how Allstate (and other carriers) conducted themselves while settling Hurricane Isabel and California fire claims.
At least Kevin, unlike some other Allstate adjusters-associates, had the level of personal integrity needed to not want to harm consumers-people for profit…and so made his livelihood elsewhere.
< Message edited by Leam Kincaid -- 6/22/2004 9:06:42 AM >
RE: “Isabel”, is a Hot Potato headed behind? – 6/25/2004 4:36:59 PM
-katadj
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RE: “Isabel”, is a Hot Potato headed behind? – 6/20/2004 12:42:08 AM
-Gale
Steve I have not forgotten about writing the article concerning the software angle that I said I would post. I was at a convention this week in a hotel without internet but next week I will be at a convention that I will have high speed so if I have time to get edited what I have written I will try to post it this next week. I am in for 32 hours this weekend before I hit the road Monday for a week but then will be in the office for a few weeks.
This week the issue of the insurance commissioner/carrier relationships did come up and clearly as long as a commissioner can be swayed by big bucks and a carrier can greatly reduce its payout by paying into a commissioner’s /reelection/retirement/etc account a fraction of these savings some will go for the short term gain at the risk of losing everything.
I think most all parties agree based upon just that one link posted to the article by a former insurance commissioner that until the system is reformed that those at the top will continue to have a chance to fleece homeowners. Until homeowners become concerned and form lobbying groups in each state we will continue to hear more cases of homeowner abuse in the years ahead I expect. Steve what do you think it will take for homeowners to take charge of the factors that leave them exposed to system abuses?
< Message edited by Gale -- 6/20/2004 12:45:16 AM >
RE: “Isabel”, is a Hot Potato headed behind? – 6/20/2004 12:55:53 PM
-Leam Kincaid
Thank you Linda and Kevin for your input on the Public Adjuster-Independent Adjuster post. I’m inserting this (slightly modified) reply on this post because of similar claim issues cropping up during hurricane Isabel.
I feel that accounting for the (incident caused / indemnity covered) scope is foremost important to apply towards the good faith and reconstruction aspect of the claim settlement process, and that balanced professionals on both sides of the policyholder fence should maintain their place in the claim settlement / reconstruction process.
I strongly contend though that adjusters and contractors working together, for the benefit of all, are best for the insured.
As a side point, I do not see how consumers are “harmed” when that time proven and complementary process is used appropriately. I can see harm being laid on consumers if Safeco type claim settlement rationale in Texas (‘contractors who speak with adjusters are now acting illegally as unlicensed adjusters’) were to be taken seriously there or anywhere else. In my opinion, based on previous experience, the claim scope settlement-reconstruction process can become bogged down on its own merit for various circumstantial reasons, but for an insurer to twist the meaning of a legislated consumer protection decision designed to protect people from unscrupulous public adjusters, and, in effect, use it against trusting consumers / adjusters / contractors is, to me, unconscionable.
Not to get too far off topic, the claim documentation that Mr. Poe shared with me shows consistent hail-rain “scope” not being accounted for by certain carrier-adjusters in his area. And I don’t mean subtle scope damage; I mean glaringly clear multi-trade scope damage that, via some major insurers, and some vendors, is consistently being “overlooked” by their (seasoned) adjusters.
The same, and other documentation, also shows scope repair cost ratios that are a closer fit for NEW 2000-2500 s.f. size type projects being applied to 40 s.f. scope type repairs, (e.g. bathroom ceilings removed, replaced, primed/painted/texture for $68). The insurer(s) aren’t even inserting a note regarding that that kind of scope repair-to-cost ratio estimating approach is a (obviously) minimum charge scenario.
I can see consumers easily overlooking those kinds of claim estimating details, and many others, since the majority I’ve experienced use ‘how much did they” give me”‘ rationale, instead of the ‘is all scope and inherent repair processes and appropriate cost ratios accounted for’ rationale that a responsible construction business-project investor would use.
When I’m asked to work with a client as the managing contractor, in an insurance claim situation, accounting for “incident” related scope damage, that stands out in contrast to possible maintenance or intentional damage scope issues, is on the top of my list for helping “incident” related projects to run as smoothly as possible.
Accounting for ALL scope up-front helps all involved in taking care of the policyholder-client-person equation.
Sometimes I’m asked “Can you work with this [adjusters] estimate”? I’ll look the estimate over, and if the damage scope and repair processes and financial numbers make sense, then I’ll agree. If not, I’ll show the homeowner, and adjuster if need be, what the issues are and how I feel we need to proceed from there.
From what I’ve seen, per what Mr. Poe is dealing with, understated (hail-rain) scope, repair processes and subsequent maladjusted repair cost economics is consistently showing up, and then when questioned, the insurers refuse to re-inspect, or drag their feet in replying to the insured, or apply the appraisal process clause prematurely* or expect project costs to ignore roofing component costs as part of the overall investment cost risk.
*I say prematurely because even though the right for either party to the insurers’ contract can initiate the appraisal process, that process seems to be being used abusively by an insurer as a tool to bog down claims, verses warranted [initial scope] damage (re-evaluations) being accomplished first.
Overall, there seems to be A LOT of unfair and armchair type “adjusting” practices taking place in Texas, with naive consumers and educated contractors caught in the middle of it all. I wonder, if they get smacked with a hurricane, would Safeco then resort back to it being “OK” for adjusters and contractors to work together so as to be able to expedite claim-construction issues in a concise manner? One would hope so.
All said from my end, it appears to be a given that some insurers are making it clear that consumers need, or will need, (honest) public adjusters there in Texas. I applaud Mr. Poe’s and other’s efforts to do what they feel is fair and necessary so as to bring those so called “good faith insurer-adjusting” issues in Texas into the light of national public scrutiny.
< Message edited by Leam Kincaid -- 6/20/2004 5:39:08 PM >
RE: “Isabel”, is a Hot Potato headed behind? – 6/20/2004 5:47:11 PM
-Gale
Leam that was a good post that pulls together a lot issues on the subject of misadjusted claims. When the answer becomes clear how/why these Isabel claims issues and hence class action lawsuits occurred we will be closer to understanding similar issues in TX, CA and the rest of the country. I think most agree there can issues with the pool of adjusters handling claims as well as adjusting software they use but since none of the adjusters or software vendors are calling the shots at the carrier level it is clear the basic problem lies with/in those who are calling the shots.
In my view we do not have 50 evil insurance commissioners that is creating the problem by selling out to the carriers for cash. I am going to assume there are no crooked commissioners in office today since I have seen any evidence supporting any other view. What I do see from the “Revolving Door” article is the strong possibility some commissioners could more motivated by money than I would like to see.
If I am an insurance commissioner coming from the insurance industry and planning to return to the payroll of some carrier when I finish my term as commissioner could I not hurt my future potential income if I really did battle with the carriers if the carriers were abusing homeowners?
Sure this is an issue for all office holders. We know some that leave office are offered high paying jobs in the industries they were involved in regulating or sending contracts. Even Bill Clinton said recently he never had any money all of the years he was in office as compared to now.
Leam there is a place for the public adjuster it appears from what I read on CADO. If the PA is protecting the insured from poor quality adjusters that is one thing but if the homeowners have to pay PA’s money to combat the upper management practices that are anti-homeowner than I have a real problem with that.
Beating up the adjusters every time there is a problem with a claim is getting to be old in my view. As the CEO of my company I know there is no employee or any practices in place that I can’t make go away if I so choose. The CEO of a carrier can do the same. In other words if a carrier is using non trained or incompetent experienced adjusters it is the fault of the CEO and not that adjuster that is botching the estimating process.
Of course a CEO of a large carrier will not sit in on the interview of each adjuster that will do claims for his company but the CEO must make sure his direct reports are acting in the best interest of the company, which mean the best interest of the policyholders. It is not in the best interest of the policyholders for a carrier to systematically over or under pay claims. The CEO must set the ethical tone if a company as a whole is going to act in an ethical manner. That regional manager has to know without question that he will lose his job if he decides to cut corners at the expense of the policyholders.
Since we can hear stories that are 180 degrees apart about the same carrier it is my position we are seeing regional/division management that have gone bad. Do not some CAT adjusters prefer one storm manager to another at the same carrier because some are better than others in their skill sets?
All I am saying is it is easier in the long run to change a company from top down than bottom up. This last week I saw on one of the financial networks where one of the guests suggested Tyco as a good stock to buy today and as you could guess he was taken to task on his view. He said it had been a sound company for years but bad management had created problems but they are all gone now and the new management has the company back on track.
The core issue bringing on the class action lawsuits in Isabel as well as across the country is not adjuster issues but CEO issues. I do not think we are talking about a bunch of evil CEO’s either but that claims handling issues are perhaps of such a low level of concern to upper management that they just turn it over to others. Some of these others may have the view they are saving the company money when in fact over the long haul they are wind up costing the carrier many times more than they save in the short run.
We need commissioners that are looking out for the policyholders more their income when they return to a carrier’s payroll. We need CEO’s that set a high ethical tone for the entire staff of the carriers. We need CEO’s in touch with the policyholders. What would a CEO learn if he rode as an adjuster’s helper with a different adjuster each week on the next storm?
A very successful chain of food stores required upper management to be in the field two days each month. One day was spent on the cash register and the other stocking shelves during the hours when the most customers were in the store. Management out of touch with the policyholders is the only issue I see as the cause for the present and near term class action lawsuits.
< Message edited by Gale -- 6/20/2004 11:18:41 PM >
RE: “Isabel”, is a Hot Potato headed behind? – 6/20/2004 10:14:16 PM
-Leam Kincaid
Thanks for your reply Gale.
For the record, I’ve worked with bright, high quality and down to earth staff and independent adjusters. Also, none of my observations are meant to bash anyone. And “a” claim or a hand full of claims is not at stake here. Many, many claims are at stake.
The job that daily and catastrophe adjusters have to do is a uniquely complex one. The ability for the high quality adjuster to maintain their focus, which is to help insured ones while following (sound) carrier instructions, and make a living, is a commendable and challenging calling to follow, and I hope that all of the good people that are in the adjusting field remain committed to that calling and all that it entails. I do not share the same sentiments for others that follow carrier instructions so as to be able maintain their own standard of living, to the detriment of their neighbors’ reputations and welfare.
I suggest that CEO’s are quite aware of what it takes, from the trenches on up, to cover their company’s operating costs and satisfy stockholders who have gotten use to certain returns on their investments. Hard markets call for hard CEO type decisions, and the glossing over of those decisions.
http://www.allstate.com/investor/annual_report/2002/chair_letter.asp
If you will, carefully follow the nine page Allstate letter to completion, especially keeping in mind the blue lead information at the top of pages 1-8 (and especially page 5)…then reflect on the following neighborly and commendable admonition from khromas to Todd Brooks on CADO 12/18/2003;
(The khromas reply was addressing Brooks receiving his new adjusting license, and Brooks considering employment with Allstate).
Brooks,
“I would not advise calling Allstate if you wish to keep your integrity intact.
After almost 7 years with them and having held a variety of positions, including the sole Quality Evaluator for the entire southern half of Texas, I finally became fed up with their approach to requiring every adjuster to knowingly underpay every claim and left them this past July.
The head of Allstate in Texas – Gary Briggs – had the nerve to stand up in front of an agent’s meeting last spring and say (QUOTE) “I love the new HOA+ policy! It doesn’t cover anything and WE STILL GET TO KEEP THEIR MONEY”!
I used to tell people whose claim I was handling that “the good hands of Allstate were right here” as I held out my hands for them. I could no longer do that in good faith and look myself in the mirror so I left.
One of these days the Texas DOI is going to catch up with their property handling practices and then it will all hit the fan! Good luck with anyone else!”
Kevin Hromas
Gale, the reasons behind Gary Briggs exclamation and part of Allstates profitability margins may very well be connected and may support “why” (so-to-speak) Mr. Poe submitted 5 Allstate claims in 2003 to the TDI and why they are now in the TDI’s legal department. It will also be interesting to see how Allstate (and other carriers) conducted themselves while settling Hurricane Isabel and California fire claims.
At least Kevin, unlike some other Allstate adjusters-associates, had the level of personal integrity needed to not want to harm consumers-people for profit…and so made his livelihood elsewhere.
< Message edited by Leam Kincaid -- 6/22/2004 9:06:42 AM >
RE: “Isabel”, is a Hot Potato headed behind? – 6/25/2004 4:36:59 PM
-katadj
More newsworthy discussions, where o’ where, and when o’ when will it end?
http://www.dailypress.com/news/dp-33455sy0jun25,0,7179751.story?coll=dp-headlines-topnews
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