What Every Municipality, Council Member, Mayor Should Know
In 2011 Huffington Post published an article entitled: “Insurance Claim Delays Deliver Massive Profits To Industry By Shorting Customers.”
This article explains that insurance companies use tactics everyday to underpay the property owners resulting in huge profits for the insurance behemoths however there are many other devastating results to the rest of America.
When the property owner’s insurance company under pays them for a claim it results in contractors hired to complete projects that cannot be completed properly because the funds were not paid, which results in corners cut, improper construction, items damaged that are not restored as they should be and often not restored at all. This has a cascading effect on the value and safety of the property and over time can devalue whole communities, cause property owners home owners to want to leave, the less the community or neighborhood is wanted the more people avoid it. and the less it is worth, taxes go down, increase crime and the need for resources go up, the cost of the neighborhood to the municipality goes up and the revenue goes down. Retailers leave too and the neighborhood continues it’s downward slide. Someday, maybe years away, a developer will buy up the neighborhood and strike a deal with the city to revitalize the neighborhood, getting the property for cheap and often tax breaks and other tax payer funded benefits.
Currently, neither contractors nor property owners have the knowledge or the tools to obtain fair scopes of work. For contractors it means facing a restoration with half the money and for property owners it means choosing what not to do or choosing improper construction to lessen the cost.
Even when Contractors have the proper knowledge … it’s not enough! Why? When contractors have the knowledge, they will have the tools to obtain fair agreed upon scopes of work, which translates to fair settlements for the insured and the amount of funds necessary for the restoration to be completed correctly. However, because most insurance companies use extreme delay tactics the contractor cannot wait it out that long. State laws have been lobbied for by the insurance industry to favor their big companies and make it so these behemoth insurance companies have no real penalty for shorting grandma, or your neighbor, or yourself. There is no attorney that wants to take on these enormous companies with unlimited budgets for what would be a pittance because of the law that limits the penalties. So, small claims are nearly impossible to get a fair settlement unless you have the ability and reward for going the distance.
Because most contractors are small businesses, payment delays can bankrupt them. From the contractors point of view, they are $5,000 or $10,000 short and they can spend countless hours and effort to get it or move on. This results in construction corners being cut, items that should be done not being done. The contractor is forced to focus on the most profitable portions of the claim and ignore the rest. This works great for the insurance company because it reinforces their underpayment.
When property owners have the proper knowledge they can be rewarded with fair settlements and restoration and remodeling done correctly. Unfortunately they are in the same boat as the contractor. The insurance company will delay, delay, delay until they give up. When properties are poorly cared for, run down from not being paid properly by the insurance company, the neighborhood is less attractive, people and their families move away, and when people don’t want to live in a neighborhood the neighborhood as whole goes down in value, crime increases, and retailers and resources leave the community. The community needs more and more resources such as police presence and costs the municipality more and more.
If a home owner does find a way to get a fair settlement though, their property values are higher giving them more equity and a bigger and the property is a better resource to use if and when it is needed. Greater wealth means better retirement and less reliance on government institutions and their community.
When property is better cared for it has greater street appeal. The community has more pride in their home and their neighborhood.
Municipalities get higher taxes when properties are cared for because the properties are worth more. More value equates to more taxes. Neighborhoods that are cared for have less crime, are less of a risk to their community, and cost less to their municipality. Less crime and risk means less police incidents and less fire and first responder needs.
Less crime will mean better risk for insurance companies, higher values means higher premiums for insurance companies.
What the article doesn’t speak to is the fact that the insurance industries have lobbied state governments in to legislation that gives the upper hand to the insurance companies and removes teeth from laws so they can do what they want. For example, Colorado passed laws limiting legal exposure for the multi billion dollar insurance companies be limiting what the penalties are. For example, the new law states the insurance company cannot unreasonably delay the claim settlement and if they do the penalty is two times the claim. But wait there are some that believe that the two times is for the amount delayed. Who cares, either way grandma is F _ _ _ ed. Think about it. Grandma has a hail claim. Proper restoration completed in compliance with code and manufacturer’s instructions lets say results in what should be a $30,000 restoration. However. the insurance company sends grandma a detailed estimate she can’t read and the bottom line is that they are willing to pay her $10,000 but only $5,000 now and $5,000 when the restoration is complete. If the property owner has “Cause of Damage” knowledge and if they have the construction knowledge to know what the code is, what the instructions from the manufacturer say to do they can present those to the insurance company in a supplemental request. They can request that second adjuster come and re-inspect if there are damages not included in their estimate. You would think that would work.
Unfortunately, most people and even most contractors do not have this knowledge. Even more unfortunate is that the insurance company can simply say no to a fair settlement and most often they do. So Grandma gets $5000 and she hires that roofing company that went door to door after the storm. They tell grandma that they have met with 1000’s of adjusters and no one does it better than them. The details of that we can get into another time. That contractor is faced with repairing grandma’s home for $10,000. There is no way possible to do it right so they send a supplement and ask for more money. The insurance company may agree to another $5000 or so but probably not more than $10,000. They take what they can get and do the work that is most profitable for them. If grandma goes to an attorney she will be informed that they are not interested in filing because she it would cost her more to pay them than she would get back. They won’t take the case on consignment because there is not enough upside. The case if it goes all the way to jury will likely take 18 month and cost $80,000 to $150,000 and the amount they can get… IF THEY WIN is their fees and up to two times the claim amount they win. Lets say they prove the amount should have been $30,000. The most the attorney can get is $90,000 after a year and a half. This amount may seem like a lot to you and me and to grandma but it’s not worth it for the attorneys. What happens if grandma is savvy and if she can convince the attorney to take the case, often an attorney not very good will take such a case and hope to do no work other than to file and see if they can get a quick settlement. That could be $20,000 and take six months and after her split with the attorney maybe she gets enough to fix her house. MAYBE! Now before the law was changed the penalty was not limited and juries awarded grandma $250,000.
People see that amount and they think, damn, that’s why our insurance is so high. NOT TRUE.
Grandma doesn't deserve all that money! NOT TRUE.
The fact is that an insurance companies know one out of a few thousand will take legal action so they keep delaying and shorting grandma and the other property owners they insure. These are not rich people with large claims, these are everyday people struggling to make ends meet. It’s the people that need the fair settlement the most.
Even if people and governments don’t think grandma deserves a large payout then perhaps that money could go to communities, maybe the attorney get up to 33% and the grandma splits with balance with the community 50 / 50. Anyway, the way it is now the insurance companies cheat grandma, have only large profits to show for it and every homeowner, property owner, every community and municipality pays for it. Remember, look at your policy, Rate / premiums are not lower. It’s an excuse to screw us all and it profit mongering that is killing our country, our state, our cities and towns. Without big penalties these multibillion dollar companies won’t change their behavior. They will cheat America until they have every last dollar. They do not care what happens to anyone except their bank account. Big penalties have always made insurance companies play fair. There is enough incentive for attorneys to take them on and the balance is struck. Remember these attorneys don’t get a dollar unless the win and they don’t win unless the insurance company is screwing grandma.
If your argument is less lawsuits I would say then make the penalty even bigger and give the incentive to the insurance company to settle quickly and fairly.
What can be done short of billions of dollars being spent to lobby the states back to legislation that levels the playing field?
We want to educate the cities and towns, the property owners, the contractors.
We want to help setup a system that empowers people, owners, contractors, cities and benefits them as well as the states, and federal government, A case could be made that paying fair settlements to property owners benefits everyone including the insurance industry.
What we do
We start by showing the city how they can impact and change the situation, it can be setup so that it does not cost them resources or tax dollars. The city can hold contractors to a higher standard and insurance companies too. It will benefit the city, the citizens of the city and the contractors. Your city can change the entire story!
As part of the city’s changes we can teach the contractors, give them the power to obtain fair settlements and profit from them while making sure the work is done correctly.
Finally, we can educate the property owners and or give them a solution. Education to show them how to ensure fair settlements and proper restoration so that their net worth increases due to these specific actions. Solutions that they can use to end up in the same place through other less onerous means.
This article explains that insurance companies use tactics everyday to underpay the property owners resulting in huge profits for the insurance behemoths however there are many other devastating results to the rest of America.
When the property owner’s insurance company under pays them for a claim it results in contractors hired to complete projects that cannot be completed properly because the funds were not paid, which results in corners cut, improper construction, items damaged that are not restored as they should be and often not restored at all. This has a cascading effect on the value and safety of the property and over time can devalue whole communities, cause property owners home owners to want to leave, the less the community or neighborhood is wanted the more people avoid it. and the less it is worth, taxes go down, increase crime and the need for resources go up, the cost of the neighborhood to the municipality goes up and the revenue goes down. Retailers leave too and the neighborhood continues it’s downward slide. Someday, maybe years away, a developer will buy up the neighborhood and strike a deal with the city to revitalize the neighborhood, getting the property for cheap and often tax breaks and other tax payer funded benefits.
Currently, neither contractors nor property owners have the knowledge or the tools to obtain fair scopes of work. For contractors it means facing a restoration with half the money and for property owners it means choosing what not to do or choosing improper construction to lessen the cost.
Even when Contractors have the proper knowledge … it’s not enough! Why? When contractors have the knowledge, they will have the tools to obtain fair agreed upon scopes of work, which translates to fair settlements for the insured and the amount of funds necessary for the restoration to be completed correctly. However, because most insurance companies use extreme delay tactics the contractor cannot wait it out that long. State laws have been lobbied for by the insurance industry to favor their big companies and make it so these behemoth insurance companies have no real penalty for shorting grandma, or your neighbor, or yourself. There is no attorney that wants to take on these enormous companies with unlimited budgets for what would be a pittance because of the law that limits the penalties. So, small claims are nearly impossible to get a fair settlement unless you have the ability and reward for going the distance.
Because most contractors are small businesses, payment delays can bankrupt them. From the contractors point of view, they are $5,000 or $10,000 short and they can spend countless hours and effort to get it or move on. This results in construction corners being cut, items that should be done not being done. The contractor is forced to focus on the most profitable portions of the claim and ignore the rest. This works great for the insurance company because it reinforces their underpayment.
When property owners have the proper knowledge they can be rewarded with fair settlements and restoration and remodeling done correctly. Unfortunately they are in the same boat as the contractor. The insurance company will delay, delay, delay until they give up. When properties are poorly cared for, run down from not being paid properly by the insurance company, the neighborhood is less attractive, people and their families move away, and when people don’t want to live in a neighborhood the neighborhood as whole goes down in value, crime increases, and retailers and resources leave the community. The community needs more and more resources such as police presence and costs the municipality more and more.
If a home owner does find a way to get a fair settlement though, their property values are higher giving them more equity and a bigger and the property is a better resource to use if and when it is needed. Greater wealth means better retirement and less reliance on government institutions and their community.
When property is better cared for it has greater street appeal. The community has more pride in their home and their neighborhood.
Municipalities get higher taxes when properties are cared for because the properties are worth more. More value equates to more taxes. Neighborhoods that are cared for have less crime, are less of a risk to their community, and cost less to their municipality. Less crime and risk means less police incidents and less fire and first responder needs.
Less crime will mean better risk for insurance companies, higher values means higher premiums for insurance companies.
What the article doesn’t speak to is the fact that the insurance industries have lobbied state governments in to legislation that gives the upper hand to the insurance companies and removes teeth from laws so they can do what they want. For example, Colorado passed laws limiting legal exposure for the multi billion dollar insurance companies be limiting what the penalties are. For example, the new law states the insurance company cannot unreasonably delay the claim settlement and if they do the penalty is two times the claim. But wait there are some that believe that the two times is for the amount delayed. Who cares, either way grandma is F _ _ _ ed. Think about it. Grandma has a hail claim. Proper restoration completed in compliance with code and manufacturer’s instructions lets say results in what should be a $30,000 restoration. However. the insurance company sends grandma a detailed estimate she can’t read and the bottom line is that they are willing to pay her $10,000 but only $5,000 now and $5,000 when the restoration is complete. If the property owner has “Cause of Damage” knowledge and if they have the construction knowledge to know what the code is, what the instructions from the manufacturer say to do they can present those to the insurance company in a supplemental request. They can request that second adjuster come and re-inspect if there are damages not included in their estimate. You would think that would work.
Unfortunately, most people and even most contractors do not have this knowledge. Even more unfortunate is that the insurance company can simply say no to a fair settlement and most often they do. So Grandma gets $5000 and she hires that roofing company that went door to door after the storm. They tell grandma that they have met with 1000’s of adjusters and no one does it better than them. The details of that we can get into another time. That contractor is faced with repairing grandma’s home for $10,000. There is no way possible to do it right so they send a supplement and ask for more money. The insurance company may agree to another $5000 or so but probably not more than $10,000. They take what they can get and do the work that is most profitable for them. If grandma goes to an attorney she will be informed that they are not interested in filing because she it would cost her more to pay them than she would get back. They won’t take the case on consignment because there is not enough upside. The case if it goes all the way to jury will likely take 18 month and cost $80,000 to $150,000 and the amount they can get… IF THEY WIN is their fees and up to two times the claim amount they win. Lets say they prove the amount should have been $30,000. The most the attorney can get is $90,000 after a year and a half. This amount may seem like a lot to you and me and to grandma but it’s not worth it for the attorneys. What happens if grandma is savvy and if she can convince the attorney to take the case, often an attorney not very good will take such a case and hope to do no work other than to file and see if they can get a quick settlement. That could be $20,000 and take six months and after her split with the attorney maybe she gets enough to fix her house. MAYBE! Now before the law was changed the penalty was not limited and juries awarded grandma $250,000.
People see that amount and they think, damn, that’s why our insurance is so high. NOT TRUE.
Grandma doesn't deserve all that money! NOT TRUE.
The fact is that an insurance companies know one out of a few thousand will take legal action so they keep delaying and shorting grandma and the other property owners they insure. These are not rich people with large claims, these are everyday people struggling to make ends meet. It’s the people that need the fair settlement the most.
Even if people and governments don’t think grandma deserves a large payout then perhaps that money could go to communities, maybe the attorney get up to 33% and the grandma splits with balance with the community 50 / 50. Anyway, the way it is now the insurance companies cheat grandma, have only large profits to show for it and every homeowner, property owner, every community and municipality pays for it. Remember, look at your policy, Rate / premiums are not lower. It’s an excuse to screw us all and it profit mongering that is killing our country, our state, our cities and towns. Without big penalties these multibillion dollar companies won’t change their behavior. They will cheat America until they have every last dollar. They do not care what happens to anyone except their bank account. Big penalties have always made insurance companies play fair. There is enough incentive for attorneys to take them on and the balance is struck. Remember these attorneys don’t get a dollar unless the win and they don’t win unless the insurance company is screwing grandma.
If your argument is less lawsuits I would say then make the penalty even bigger and give the incentive to the insurance company to settle quickly and fairly.
What can be done short of billions of dollars being spent to lobby the states back to legislation that levels the playing field?
We want to educate the cities and towns, the property owners, the contractors.
We want to help setup a system that empowers people, owners, contractors, cities and benefits them as well as the states, and federal government, A case could be made that paying fair settlements to property owners benefits everyone including the insurance industry.
What we do
- Educate
- Inspect
- Manage
- Property Owners; people that own buildings, houses, condos
- Communities; HOA’s, neighborhoods,
- Municipalities; towns, cities, counties, states, federal government
- Insurance companies
We start by showing the city how they can impact and change the situation, it can be setup so that it does not cost them resources or tax dollars. The city can hold contractors to a higher standard and insurance companies too. It will benefit the city, the citizens of the city and the contractors. Your city can change the entire story!
As part of the city’s changes we can teach the contractors, give them the power to obtain fair settlements and profit from them while making sure the work is done correctly.
Finally, we can educate the property owners and or give them a solution. Education to show them how to ensure fair settlements and proper restoration so that their net worth increases due to these specific actions. Solutions that they can use to end up in the same place through other less onerous means.