By Steven D. Venook,
State Licensed Public Adjuster
Documenting emergency repairs from windstorm or water damage requires a trained set of eyes and the experience and knowledge of how to best present a claim to your insurance company. It is not as simple as pulling out the master insurance policy and calling your insurance agent. In fact—that is the worst response.
When it comes to insurance claims, documented paperwork and photos (preferably before and after) will give you the advantage you need on your side. Whether it’s a major pipe burst, a sewer line backup, or windstorm damage from a hurricane, or a fire that spreads into the common areas, you need to know what is covered and what is not before you call your insurance company. In other words, you need to be proactive not reactive in order to protect the financial interests of all the homeowners.
It is vitally important that the board of directors acts quickly and arranges for emergency repairs in order to mitigate damages. At the same time, the board must maintain accurate minutes so that a flow of votes and decisions can be verified. You need all the backup you can get your hands on and the best way to do that is to plan for emergency repairs in advance.
Accept this fact and your condominium association will be better served—the insurance company will not do anything to assist in proving the damages. The condominium association board and/or property manager along with professional vendors will need to carefully and accurately document all damages with the realization that they may not all be covered.
Condominium association claims require tailored solutions unique to the particular property; every community is different and unlike residential or business claims, community associations need to be treated with “kid gloves.”
After hurricane windstorm damage or water damage or any covered peril, the problem could be all about interpreting governing documents, ownership interests, and insurance coverage analysis, which can be extremely complex. Or, the emergency situation could result in a combination of problems, such as roof leaks, damaged roof tiles, destruction of the clubhouse, pool area, signage, and any variety of common areas; all adding up to a smorgasbord of insurance nightmares for the homeowners and the association’s board of directors.
Unfortunately, property damage usually comes as an unpleasant surprise.
How Does a Community Association Deal with the Unexpected?
Insurance claims require that the insured establish a specific dollar value for the destroyed or damaged property; it is the foundation for determining the basis of an equitable settlement.
This is why retaining the services of an advocate, a licensed Public Adjuster—a professional that will become the community’s team leader in representing your claim accurately with all the required documentation, is the smart solution. Not only will this relationship potentially maximize your settlement, it will better address the needs and concerns of the entire community—the homeowners and the long term requirements of maintaining the property to a quality standard.
Think about it…board members are volunteers — civilians if you will — they are not prepared to deal with forensic roof testing and structural engineers or mold hygienists or the wide array of vendors needed to make repairs, let alone effectively deal with the insurance company and their adjusters.
Once you submit a claim, the insurance company is working hard to protect their financial interests; not the best financial interests of your condominium association.
It is after the effects of storms or covered perils that the services of an experienced and highly knowledgeable state licensed Public Adjuster can make a significant difference in how the insurance claim is documented and presented to the insurance company. A competent Public Adjuster is a team leader and the voice between the insured and the insurer; they are your liaison between the insurance company, construction and repair professionals, and attorneys. Through the services of a Public Adjuster, the board gets maximum representation and, in most cases, the maximum settlement for their claim. A Public Adjuster can wear many hats, including appraiser, mediator, and sparring partner with your insurance company.
Unfortunately, whatever the damage may be if “the board” views it as an insured property loss in their minds, before reviewing their policy or calling their agent, they will typically vote to get a roofing contractor or mold specialist or tree company or whatever vendor they deem appropriate and move forward with repairs without understanding the possible financial ramifications from a covered peril point of view. Simply put, most boards have no idea of what is covered and what is not.
What a board needs to do first and foremost is assess whether or not the entire damages are covered or if only a portion are covered under their existing policy. Again, the insurance company has their version of the answer, but it will not be what your community should be paid for a fair settlement. Typically, when you finally get your insurance agent on the phone you will get vague answers to your questions. It is often a “wake up call” to a hard to accept reality—what you think your policy covers and what it really covers are not always in sync; especially considering Florida’s current changing insurance environment due to recent hurricanes.
Important Note: As much as some board members will want to hire the cheapest vendor, maybe even a handyman, for the job, the community is best protected by contracting with a licensed and bonded company; a full-time, accountable, professional company.
Get references and carefully review the services, terms, and conditions of the contract. For example: are they going to remove the debris or stuff it in the community dumpsters? Have they agreed to a schedule for completion? Do they offer a warranty on their services?
Lastly, remember, board members come and go, so be certain to document all the damage with photos and in writing and inform all homeowners as to the board’s decisions and intentions. A happy community association is one where the board and the homeowners are working in unison as to the cost and time frame for repairs. It is a community-wide effort—don’t lose sight of that commitment.
Every year, millions of dollars in insurance benefits go unclaimed because board or directors and property owners are either not aware or not informed of everything they are entitled to claim under their insurance policy.
If the damage is severe, the insurance company will eventually send out their adjuster. This needs to happen as soon as possible. Remember, there are always deductibles in a master insurance policy so the board needs to get to the bottom line of the insurance company’s estimate and settlement sooner than later.
Keep these key points in mind:
- Information on repairs needs to be consistently documented. This is especially important due to changes in board members.
- Carefully prepare your claim. Get the facts straight from the start.
- After catastrophic damage, DO NOT BID OUT work before having an insurance settlement.
- After a storm, your property management company may be overwhelmed with clearing and cleaning up the property so don’t rely on them to present your claim.
- Removal of debris from buildings and community property such as trees and signs may not be covered.
- Many boards and community members don’t properly document the before look and the after the storm result. Have before and after photos available. To know what you have lost is to truly know what you have lost and that takes proof.
- Your insurance company is going to look at the surface of damage. That is where a Certified Public Adjuster can be a great asset in supervising the community associations’ insurance settlement.
- With a diagnosed disease, you get a second opinion. After windstorm damage or a lightning strike or a fire or a pipe burst or other covered peril, a Certified Public Adjuster will look at the damages with a professionally trained eye.
- Hold out for a fair and equitable settlement.
Adjusting condominium association claims requires clear communication, coordination, and a commitment to serving the board as a team leader with a take charge attitude. A Public Adjuster’s role is to see the claim through to a final, maximum settlement. A competent public adjuster will thoroughly review and understand the parameters of the policy and inspect and estimate the damages caused by the covered peril.
A conscientious, results-oriented Public Adjuster is in reality a special kind of detective—an expert in assessing the “true value” of an insurance claim based upon the damages, replacements costs, and the terms of the existing policy.
When your community is faced with a catastrophe or unexpected property damage, don’t react without knowledge of the true replacement cost. Be proactive and get all the information on the table so the board can make an informed decision on behalf of its neighbors. This way the entire community will be represented fairly and equitably in the final settlement.