NORTHBROOK, Ill.—August 20, 2020—In this edition of Straight Talk with Jeff Cross, Peter Crosa, an independent insurance adjuster, and Harvey Cohen, a Florida attorney specializing in insurance law, discuss some of the problems restoration clients can face when trying to get their insurance company to cover the work after a loss. Cross asks Crosa and Cohen to look at one particular case in Tennessee where four months have passed since a tornado destroyed a couple’s home and the work is still incomplete. Taking this case as an example, the experts explain the industry pitfalls that lead to restoration bottlenecks where work is stalled, damage is worsened, and payment is uncertain.
The Tennessee case begins with a “coverage issue” that seems to take some time to figure out; however, Crosa points out that an issue like this should be resolved quickly. The insurance company make a decision about whether the event and necessary repairs qualify for coverage or not. Insurance companies have a duty to make these decisions quickly so the work can move forward, but Crosa says that doesn’t always happen. Cohen adds that most states set a time limit during which an insurance company must pay, deny, or investigate a claim. In his state of Florida, the statute is 90 days, and he has found that insurance companies will sometimes state that they are “investigating” the claim, in effect delaying a decision (and payment) for as long as possible, which of course leads to frustrating restoration delays for the customer.
Cohen also notes that sometimes insurance companies deny claims seemingly at random—for example, refusing to pay one hail damage claim in the same neighborhood as others that were paid. That’s where Cohen’s role as an insurance attorney comes in to advocate for the insured and get the claim paid. Crosa agrees that the industry as a whole is unpredictable, and he notes that different companies sometimes have wildly different approaches to the same issue.
Another common cause of restoration bottlenecks the Tennessee couple faced is delays due to third-party administrators. The couple contacted their insurance company immediately, but it took 15 days for the insurer to contact a TPA and for the TPA to contact a restoration contractor. In that time, the house sustained even more damage because it was unprotected from rain, wind, and other elements. The insurance company may now argue that they are not responsible for all that damage, but customers often don’t know what their responsibilities are in this situation or how to properly document the events to protect themselves. Cohen stresses that the insured has a responsibility to mitigate the damages, even if the insurance company is delaying payment. Clients should document everything with notes, photographs, and receipts to demonstrate what the insurance company is responsible to reimburse, but at times it is necessary to engage the help of an attorney like Cohen if the insurance company refuses payment.
Crosa reiterates the importance of documentation and advises clients to keep in close touch with their agent, who should help to resolve any issues between the insurance company and the insured. Cohen encourages anyone struggling with insurance claims to seek legal advice if the agent is unable to resolve the issues. Restoration contractors can assist their clients by being knowledgeable about these issues to help the process move along as smoothly as possible, resulting in a good outcome for client and restorer alike.
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