Wildfire Took Your Home? Don’t Count on Insurance: Viewpoint

By Liam Denning | April 12, 2019

  • April 12, 2019 at 4:41 pm
    Peter J. Crosa says:
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    Having personally handled tens of thousands of claims across the country, I have encountered numerous occasions when a policyholder was under-insured. This phenomena of under-insurance often arises at the policy procurement stage. Property owners tend to compare insurance on a cost basis. Premium cost is primarily related to building value.

    When a consumer thinks a premium quote is “too high,” the first step for a competing producer is to consider whether he’s placed an unrealistic value on the building. Can the building value be lowered resulting in a lower premium quote?

    Albeit, there is some judgment in placing a value on a building but the uniformity and standards in building valuation software make it difficult to deliberately falsify the rebuild cost of any given building. Arbitrarily lowering the value of a building is not easy without the tacit approval or at least complicity of the building owner who is all too happy to say and do anything that will lower his premiums.

    After a loss, it’s the adjuster who bears the bad news. “You’re under-insured and there will be a penalty.” That’s when the property owner proclaims complete ignorance as to how the values were derived and broadcasts bad faith proclamations to the media.

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