There has been an increase in complaints to the Better Business Bureau for many insurance companies have been denying residential claims for storm damage. You may be curious to know that a large portion of insurance companies have outsourced their claims department. This gives the insurance company a buffer between you and them. Your agent will often apologize for the denial of your claim and express remorse. They will explain that the independent adjuster is the person who has the power to refuse or validate your claim for storm damage.
Let us evaluate the top 5 reasons why residential claims for storm damage get denied.
The independent company has the responsibility for inspecting all residential claims for storm damage. They have the power to approve or deny your insurance claim. However, the independent company receives their orders from the insurance company. I find this a conflict of interest for the independent adjuster has to consider the ramifications if to many claims are approved. I have met with many adjusters who have told me that if they approve more than 70% of the claims that their annual contract would not be renewed by the insurance company.
The adjuster is the person who evaluates the property for damage. He or she may be very experienced in residential construction or they may have none at all. It is hit or miss with the adjuster you get to process your claim for storm damage. The inspection for damage is very subjective to say the least. I have seen homes torn to shreds with hail damage and the adjuster would deny the claim as mechanical damage. Mechanical damage is a term used for pop nails or it could be for poor craftsmanship. The inspection is purely subjective on the part of the independent adjuster. On the other hand, I have seen times when there has been minimum damage and it could go either way and the adjuster would approve the entire claim. The key factor for approval or denial is dependent upon the experience level of the adjuster who has the responsibility of mitigating the claim for storm damage.
I have had many adjusters convey to me that they were going to deny the claim, but to request a second inspection from the insurance company. I found it strange that an adjuster would tell me to request a second inspection for storm damage. I had worked with this one particular adjuster many times who explained the rationale behind this odd request. He explained that insurance companies have insurance on their insurance policies. The insurance company will often times tell the independent adjuster to deny all claims for they are out of money for the quarter. The adjuster explained that when the money became available for the next quarter they would be allowed to approve the claim. In a nutshell, your insurance provider is waiting for the secondary insurance company to reimburse them for your claim prior to approval.
If weather conditions are bad in your area, this could hurt your chance of getting your claim approved. This may seem odd, but independent adjusters have a certain amount of time to complete the claims they receive from the insurance company no matter how bad the weather. As you can see, if the adjuster gets behind in his reports the only way he can get caught up is by denying a few claims to off set the days of bad weather. He may be inclined to tell you or your contractor to resubmit for a second inspection. This makes no sense for it is an inconvenience to the homeowner as well as a waste of time. The insurance companies are concerned with keeping their double A plus ratings with the review board. If the weather is bad in your area, do not be surprised if your claim gets denied.
Most insurance adjusters are from out of town. They travel from state to state following the storms. You will have a better chance of getting your claim approved if you file shortly after the storm. The adjusters know that if they approve a claim that they will be responsible for the loss report statement until all repairs are completed. Basically, if the roof was measured to be 3900 square feet and there was a discrepancy about the size of the roof structure, then the adjuster is required to come back to the property and remeasure the roof with the roofing contractor. The adjusters are off on their measurements quite often. They measure tight to keep cost as low as possible for the insurance company. Therefore, they come back to about 60% of their claims that they have approved. Toward the end, when request for inspections begin to decline, the independent adjuster will start denying claims in an attempt to keep him from having to come back to that state to mitigate a claim. Once the independent adjuster leaves the state, rarely will your claim be reopened for review.