Homeowners Insurance Companies and the Dirty Secret: "Controlling Loss Severity"

A few years back I was employed by a homeowners insurance adjustment firm and saw what people with losses went through on a daily basis. Whenever a person suffers a loss to their home or personal property it is devastating to that family or individual. The homeowners insurance companies do whatever they can to make it even harder on these people. It was so disturbing and disgusting to me that I resigned from my position and started my own businesses online. This article is written from my experience in the homeowners insurance and adjusters field and the inside secrets of how insurance adjusters and homeowners insurance companies actually work.

Basically when a person files a claim with their homeowners insurance company, the company then picks their favorite adjustment firm, (read that as the one that saves them the most money every month), or they have their own in house adjusters and then the insurance company faxes them your claim form. From there a file is made and the wheels are set into motion to visit your property, take photos and write a report. The insurance adjuster will then show you the report and you probably won't even understand much of what they are telling you as they make it as difficult as possible for the average person to read the breakdown of the way they came up with the final figure that your homeowners insurance company is willing to pay you for your losses.

They then wave the amount in front of you telling you that this is the highest and only amount that the insurance company is willing to pay you for your losses and all you need to do is sign the paperwork and they will give you a check in the amount on the form that they themselves came up with. STOP! Do not sign this if you have no idea what you are signing!!

It's nothing less than preying on innocent people who have suffered through the loss of property and personal belongings. You just want your life back to normal and the opportunity to replace your items. But will you get enough of a settlement to replace all your losses? Probably not and here's some reasons.

The insurance adjustment firms know if they don't get the lowest possible settlement for the homeowners insurance company that hired them, that the homeowners insurance company wouldn't give them very much, if any work in the future. The adjuster's jobs depend on them low-balling every item you own and what you include in your loss claim form.

For example let's say you have a unique tiled ceiling where the original tiles cost $20 each but those tiles were no longer being manufactured. The job of the insurance adjuster is to try to convince you to take less money by recommending the "nicest" or "best" tile available right now, that will most surely cost less than your original tiles were worth. Obviously if you cannot get the exact tiles, the complete ceiling will need to be replaced, every single tile, but they will try to find a tile that looks "similar" to yours and try to convince you to agree to using these "better or more popular tiles" and replacing only the damaged tiles. They will attempt to convince you in every way possible that you will not even notice the difference once they are installed. Believe me, you will notice and be kicking yourself in the behind for being so stupid to believe their lies. Of course by then, it is too late to do anything about it, your claim has been settled and you have no options left at all.

Once you sign the papers agreeing to a settlement from the insurance company, that binds you to that contract and you no longer have any leverage to negotiate with the adjusters. Yes, they can and will negotiate with you BEFORE you sign the paperwork.

These insurance adjusters are charming and very smooth operators. I listened to their victory stories daily of how they convinced this person or that person to a much lower settlement amount and saved the insurance company money. They would talk about how the insurance company would then pay them more than was originally agreed. It was an unwritten, unspoken agreement with the insurance companies but everyone in the company knew. They would never say "I saved them $1,000.00 so they paid me an extra $500.00. Instead they would say something like, "I saved the homeowners insurance company $1,000.00 and surprise they added $500.00 more than we agreed to in my check." Of course this brought lots of praise from the owners and the coworkers. After all the owners would get a percentage of that extra kickback from the homeowners insurance company.

Always keep in mind that the saying "the squeaky wheel gets the oil" is very true in this area. If you call the insurance adjuster with questions or to give them information and you are asked your name and what the call is pertaining to and a "I'll check and see if he/she is in her/his office" line and then a "I'm sorry he/she is not available, can I take a message" line, you are more than likely being avoided because you didn't roll over and take their estimates and wanted to hash it out with them before they send their report to the homeowners insurance company. They know they are in control and you will eventually break and settle so you can repair your roof or have a tree removed from your living room.

Do not allow them to do this to you! Call many times a day if your messages are not being returned. Just call, call, and call until they break and answer the telephone and talk to you. It is your right to speak with them and once you show them you will not be ignored you will eventually get a returned call but most likely an answered call sooner if you keep tying up their secretaries and telephone lines. This cost them money. Cost them as much money as you can, don't take their excuse that the adjusters are all out on inspections and are too busy for telephone calls.

Even worse, they will eventually transfer you to an Office Manager or similar titled person. It is then this person's job to make you feel better about the situation by smooth talking you into believing they are doing the best they possibly can for you. Remember, the insurance adjuster works for your homeowners insurance company involved and they are by no means your friends. They are not trying to help you, no matter what they try to say to convince you of this, they are attempting to save the homeowners insurance company money period! They will minimize the damage or loss to every item you include in your homeowners insurance claim form!

If you are a reasonable person and asking for a reasonable settlement of your claim and you feel or know that you are being shortchanged, tell them you are going to call a lawyer first. This may be enough to get the insurance adjusters to give in a little more. If that doesn't work, consult an attorney. At the very least call and get some advice by making a free telephone call to one or more lawyers that specialize in real estate law and if you feel you need more legal advice ask them if they offer a free face-to-face consultation.

Feel free to send this to your friends and family so they can print a copy and keep it in case of a loss. This will save you and your loved ones a lot of headaches if you ever have a run in with your homeowners insurance company and their insurance adjuster.