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Common Insurance Questions, Answered

Updated 5/16/2018 6:54 pm.  Also includes info from United Policyholders.

Since the October 2017 Northern California Firestorm, as a service to fire survivors, Linh Pham has voluntarily been educating insureds about fire claims.  His information, including what is offered below, is based on his experience as a former large-loss insurance adjuster using Xactimate, as a construction industry professional, and now as a scope writer who helps insureds understand their coverage and helps them with their claims by preparing “scope of loss” estimates to provide to their insurers. He typically charges 1-1.5% of an insured’s dwelling coverage to prepare a scope of loss.  Check the Events page to see if Linh is participating in upcoming seminars.

Linh says, “Please keep in mind that the following replies reflect my own experiences working as an insurance restoration builder/contractor, and working as an insurance adjuster before that. I am not an attorney or a Public Adjuster, so the following opinions should not be construed as legal or claims handling advice. With that disclaimer in mind, I hope the following replies are helpful to your friends and neighbors.”

The information below is directed to State Farm claimants,

but much of it may apply across insurers.


Q:  I’m on my seventh Adjuster! They are just screwing with me, right? 

A:  No, State Farm is not purposefully doing this to delay claim settlements.  When there is a catastrophe of this magnitude, carriers often involve their Catastrophe/Storm Teams, and when those teams are fully deployed, they ask their regular adjusting staff for volunteers.  The period of commitment for these volunteers is 4-6 weeks, as that is about the limit that most can be away from their families without undue hardship.

Q:  I have to keep explaining the same thing over and over again to each new Adjuster! 

A:  Yes, but not all Adjusters have the same level of experience.  Sometimes, getting a new Adjuster assigned actually improves your situation.  You do have to tell your story over again, but at least you have the benefit of a claim that is already in process, and there is usually a point where the new Adjuster can pick-up where the prior one left off.  You also have the benefit of more information than the new Adjuster coming in, and with knowledge comes greater sense of control.

Q:  I am afraid to talk to my new Adjuster; it will just be another bad experience. 

A:  From some of the nightmare stories that I am aware of, often, the new Adjuster is a change for the better.  The initial wave of State Farm Adjusters varied in experience level.  They actually had some new property adjusters who had never handled larger losses be assigned million-dollar plus losses. 

Give your new Adjuster a chance and ask them point blank:
1) How many years of experience do you have adjusting residential property claims?
2) How many Large Loss property claims have you handled? and
3)  Have you handled losses of this magnitude where the re-building is literally a new construction, from the foundation up? 

These questions should put that Adjuster on notice that you know the difference between an experienced adjuster and one who is not.  If you have had a string of inexperienced adjusters and the new one is no better, you are in your within your rights to request an experienced Large Loss Adjuster.  State Farm has them on staff, but there are just fewer of them.

Q:   My new Adjuster lowered the dwelling estimate provided from an earlier Adjuster. 

A:  That should be viewed as a red flag when a new Adjuster lowers your estimate amount, especially if you know that you are already under-insured.  There can be legitimate reasons why they lowered your estimate, but mostly involve a mistake made by a prior adjuster.  If they cannot explain to you with clarity the reasons why they are lowering your estimate, then ask the questions above about the experience level of your Adjuster and you’ll have a better idea if this adjuster knows what they are doing or not.  You can always escalate this to the Adjuster’s supervisor, and if the Adjuster that has lowered your estimate is inexperienced, ask the Supervisor for a new adjuster.

Q:  My Adjuster is willing to do a category inventory to try to get me 100% of my contents coverage.  Can I trust them to do that?  What if I already accepted the 75% without inventory, but an inventory now totals less than that? 

A:  Yes, any help that they offer to help with your inventory listing is a good thing, for the most part, especially if you know that your actual loss exceeds your Contents limits.  Even if the listing is lower than the 75% advance, it can serve as a placeholder, as once the adjuster has completed the listing, he or she will send you the listing for your additions and revisions, so you have another opportunity to add to the listing. If the listing does not look like it will exceed the 75% advance payment, they will not ask for that money back, so there is little risk there. 

The “category inventory” is used as a tool to minimize the level of detail that is required under normal circumstances for an inventory listing.

Also, it is important to ask how many years of experience the Adjuster has in working with Contents losses.  Sometimes, the Adjuster that is assigned is a Contents Specialist, and they have more knowledge and experience handling large losses, so you are in better hands in that situation.  Also, ask them how many claims they are handling at this time, as the more experience an Adjuster has, the more capable they are in handling multiple losses concurrently.  Ideally, you want an experienced Contents Specialist as they are better equipped to handle your loss and close your file.  There is a saying in claims adjusting that applies to catastrophic losses: “A good claim is a closed claim.”   A Contents specialist is motivated to close claims, and can be a big asset with your claim. If they are not Contents Specialists, give the Adjuster a chance, and if it does not feel like they are experienced enough to help conclude your claim, request another adjuster to be assigned.  Do so in writing, and explain your reasons for your dissatisfaction.  Be specific as a State Farm Supervisor will not be willing to change out adjusters without legitimate reasons.


Q:  I think I am underinsured because the dwelling estimate from my Adjuster is less than $500,000.   How can I rebuild with that?  Am I underinsured? If so, what do I do? 

A:  You have to know you are underinsured, not just suspect it.  The way to find out is to get an estimate from a local builder.  They may not be willing to provide you with a detailed scope of loss, as new home builders are not expected to provide that level of detail and time commitments in providing such bids, but at least they can give you a good base estimate to let you know if you are underinsured or not.  Likely, if you own a semi-custom or custom home that is 1,600 sf or greater, and it is a total loss, meaning that there is no foundation left, $500,000 is not enough to re-build your home to pre-loss condition, you are underinsured at $500,000.  If you have a tract home and do not mind choosing an existing floor plan from the models that are available from the local production (tract home) builders, then you may be able to build back a home 1,750 sf and smaller for $500,000.  These are only generalities, as each home is different, and the cost of construction will vary greatly if your home is built on a hillside or not.  Also, quality of construction has a significant influence on the cost.  There are many variables to the cost of construction so the only way to know is to talk to some builders and get bids.

Q:  I already know I am underinsured, but my Adjuster won’t max out my basic or extended dwelling coverages. 

A:  In most cases, your Adjuster is waiting on a bid/estimate from your builder before they pay out additional funds.  They have put the ball in your court by telling you that it is your responsibility to get an estimate of repairs, and once you have decided on a contractor, they will work with that Contractor to reach an agreed cost of repairs.  Carriers often do not want to engage in settlement discussion with you or a builder unless you have hired a contractor to build back your home.  They consider it a waste of time talking/negotiating with a builder who is just bidding the project vs. the one that has the job of rebuilding your home.  Another reason for this is the builder which you decide to hire is much more dialed into the actual costs, and not just loose estimates.  It is not that your carrier is unwilling to max out your coverages; they just need confirmation on actual construction costs in order to do so.

Q:  My dwelling estimate is a total lowball, way below my basic dwelling coverage and doesn’t even go into the extensions. 

A:  This is likely due to having an inexperienced adjuster preparing your initial estimate.  I have seen this in 90% of the claims where State Farm provided an estimate within the first two months of the fire loss event of October of 2017.  Please refer to the reply above about the experience level of your original adjuster.  Again, the ball is in the Homeowner’s court in providing the carrier with an estimate that is more thorough and accurate than State Farm’s original estimate/scope of loss.  Providing a detailed and accurate estimate from your builder is how you deal with low-ball estimates.

Q:  My Adjuster’s dwelling estimate has maxed my basic coverage, but hasn’t dipped into my extensions, which I need to rebuild. 

A:  See my reply above.  In most cases, a thorough and accurate estimate from your builder will be the tool that gets you over the hump as most properties that I have come across are underinsured so it is not hard to get to your limits paid with a good builder’s estimate. 

Q:  Related to the above, how do I move forward if I don’t know how much money I have to rebuild? 

A:  The first step is in understanding what your policy limits are as that caps your re-building budget.  State Farm usually does a good job at providing Claim and Payment summaries so you know where you stand, but if there is any ambiguity, email your Adjuster to ask for a breakdown of your coverage limits as you feel that you may be underinsured and need to know what the maximum policy limits are on your policy.  Then, seek out bids on the re-construction costs and you will have a much better idea where you stand.

Q:  I am rebuilding, but my Adjuster won’t give me my O&L (Ordinance & Law aka code upgrade coverage) without incurring the actual costs, but I have State Farm endorsement 3422. 

A:  I have seen them issue payment of O&L on properties that are dramatically underinsured, with a contractor’s bid provided to SF with the O&L coverages broken out so that it is easy for SF to identify the Code Upgrade repairs.  Again, the carrier needs documentation in order to issue additional funds.  The burden of proof is on the Homeowners to provide estimates/scopes of loss from Builders to establish actual repair costs.

Q:  I am not rebuilding, but my Adjuster won’t give me my O&L (Ordinance & Law aka code upgrade coverage) without incurring the actual costs, but I have State Farm endorsement 3422. 

A:  If you are buying a replacement home, then in most cases, they will agree to pay the O&L once you send them proof that the home you are purchasing is equal to or greater than your combined policy limits, including O&L.  Also, the burden of proof is on the Homeowner to provide the carrier with an actual cost estimate for the repairs/replacement of your property, and that is another way you can set your purchase budget.  If you are not re-building or buying a replacement home, then it is very difficult for you to get SF to pay out the O&L.  It is a use it or lose it type of coverage, in most circumstances.
NOTE:  A State Farm claimant whose policy includes endorsement 3422 reports on 5/16/18:   “I just received the limits on O/L without any commitment of any sort regarding rebuilding or buying elsewhere.  I had to submit a contractor estimate for O/L for our lost home, but the discussion of any kind of commitment to do anything was not part of that negotiation.  You have to be pushy, but you can get it.  Our stance throughout the process has been that we have no idea if we’re rebuilding until we have a budget, until the water issues are resolved, and until we see what building costs will be down the road when things settle down a bit.”


Q:  After our house is rebuilt we were thinking of switching insurance companies. Should we wait to change insurers until after the claim is completely closed out in a couple of years?  What about changing our auto, umbrella, etc. now? Is that a bad idea? 

A:  It is probably a good idea to wait until the home is substantially built before changing insurance companies, as if you change now, there is nothing on your lot to insure but for liability coverage.  There is no dwelling or contents to insure currently, so call your agent and see if you can get a reduction on your premium, until the home is substantially re-built.  That can save you a little bit of money on the premiums in the meantime.  As for any concerns that you may have about whether or not State Farm will treat your claim any differently whether or not you have a policy with them, the answer is, “No, they should not treat your claim any differently whether or not your policy is active or not.”  Once the home is re-built, you can go to another carrier and bundle your home and auto policies together, if that is what you choose to do.

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Linh Pham ~ Scope Writing Services ~ (360) 975-9989

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More Helpful Hints Courtesy of United Policyholders

At our May 31, 2018 workshop at the UU Church in Santa Rosa, UP will be focusing on Remedies for the Underinsured, and Settling Loss Valuation Disputes6-8 pm.  Meanwhile…

If rotating adjusters are holding up your progress, get the status report your insurance company is legally required to give you.

The law in CA is – if within a six-month period, the company assigns a third or subsequent adjuster to be primarily responsible for a claim, the insurer, in a timely manner, shall provide the insured with a written status report. For purposes of this section, a written status report shall include a summary of any decisions or actions that are substantially related to the disposition of a claim, including, but not limited to, the amount of losses to structures or contents, the retention or consultation of design or construction professionals, the amount of coverage for losses to structures or contents and all items of dispute. CA Ins. Code 2071

A reasonably accurate and complete dwelling scope and estimate is key to settling your dwelling claim. 

If your insurer/adjuster’s dwelling replacement number is lower than yours, you are in a very common situation. There are several ways to resolve this situation – Negotation, Mediation, Appraisal, Litigation.  Whichever of these ways you use, if your number and supporting documentation is reasonably complete and accurate so a disinterested person would say “you are right and they are wrong”, you’re on the right track. The key is to have good supporting documentation.

Adjuster mistakes on depreciation are super common and fixable by insisting they provide a basis for their math:  

CA law says, (f) When the amount claimed is adjusted because of depreciation, all justification for the adjustment shall be contained in the claim file. Any adjustments shall be discernable, measurable, itemized, and specified as to dollar amount, and shall accurately reflect the value of the depreciation. The basis for any adjustment shall be fully explained to the claimant in writing.

See More UP Tips and UP’s Scoop on Scope

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Neighbors Together SR does not provide any advice or endorse any service provider or agency. 

October 2017 Northern California Firestorm: Tubbs Fire in Santa Rosa: Coffey Park; Fountaingrove (Hidden Valley Estates (HVE) is lumped with FG); Larkfield-Wikiup-Mark West-Riebli; Rincon Valley-Deer Trail-Calistoga Rd; Bennett Ridge (Nuns/Annadel Fire) . . . See more . . . »

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