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As a contractor, it’s illegal for me to step into a property damage claim and start telling the homeowner what is covered under their insurance. The reasoning is that I’m not a licensed insurance adjuster, and therefore, I’m not an expert in policy. Fair enough. But then what gives insurance companies the right to speak on things they aren’t experts in, such as water damage or construction?
Funny enough, they actually don’t have that right.
The system we’ve been working in has gone relatively unchallenged for a long time. Typically, you write your estimate, the insurance adjuster reviews it, and there’s a back-and-forth negotiation until you settle on a number… sometimes. But this system has been deteriorating for years, and now it’s finally reaching a breaking point.
I had a recent experience that perfectly illustrates why the system is broken. I ordered a mold test for a home that had suffered water damage and had been sitting for a while. In an email, the insurance adjuster asked for the invoice for the mold test and stated it wouldn’t be paid because it wasn’t needed. Now, remember, only one of us is an expert in mold and water damage—and it’s not him. So I asked whether he meant it wasn’t covered or if he believed it wasn’t needed. Those are two very different things, and I would hope he has some expertise in mold and water damage to make such a reckless decision. I further explained that I had sent my invoice to the client, as it’s my job to do so. Why would I send it to anyone else? He didn’t like my response.
I can only imagine how many lives this adjuster has put in danger by making reckless decisions on matters he’s not qualified to judge.
As restorers, we’ve made the mistake of operating under the assumption that we should negotiate with adjusters, believing they have a say simply because they control the money. The truth is, adjusters should only be speaking on policy and exclusions—not on what work is necessary.
When we talk about property damage insurance, we need to understand something called contractual obligations. This sounds like a big term, but it’s really about promises. When someone buys property damage insurance, they are making a deal or a promise with the insurance company. This deal says what the insurance company will do if something bad happens, like if there is a fire or a flood.
Now, let’s see how these obligations work in insurance contracts. When people sign up for property damage insurance, they are agreeing to a set of rules. These rules explain how the insurance will work. Important terms like “indemnify clients” come into play here. To indemnify clients means that the insurance company will cover the costs that the client has to pay when their property is damaged. This helps the client feel safe because they know they won’t have to pay for everything out of their own pocket if something goes wrong.
It's like having a safety net. For example, if a tree falls on your house and you need repairs, your insurance company will step in to help pay for those repairs because that is their job, as stated in the agreement. This is what makes understanding contractual obligations so important for anyone who has property damage insurance.
When it comes to property damage insurance, there are certain rules that help keep everything running smoothly. These are called guidelines. Enacting guidelines means creating rules that everyone has to follow. This ensures that insurance works properly and fairly for everyone involved.
Insurance companies often develop these guidelines to ensure they can provide the best help to their clients. They make sure that if something bad happens, like a storm damaging your house, the insurance can step in to help. These guidelines also help the insurance companies know how to handle different situations and what steps to take when someone makes a claim.
Now, let’s talk about exclusions in policies. Exclusions are things that your property damage insurance will not cover. Understanding these exclusions is important because it helps you know what is and isn’t protected.
For example, if you have insurance and your pet accidentally breaks a window, that damage might be covered. But, if a big storm damages your roof and that damage is listed as an exclusion, then your insurance won’t help you pay for the repairs. Knowing these exclusions can help you plan better and avoid surprises when you need to use your insurance.
When something goes wrong and your property gets damaged, it can be really stressful. This is where property damage insurance comes in handy. It helps you cover the costs of fixing or replacing what was damaged. Let’s look at the different costs involved and how insurance can help you manage them.
