UNEXPECTED DISASTERS can come in many forms including floods, wind damage, fire and vandalism. When damage is extensive, the reflex reaction is to pick up the phone and call the insurance company, but filing an insurance claim and negotiating with an insurance company can be a difficult and sometimes overwhelming task, especially when there are immediate repairs to be made and owners to placate.
When it comes to settling an insurance claim, the odds are often stacked in favour of the insurance company. Lack of insurance-specific knowledge is likely the norm for condominium managers trying to navigate fine print on a policy or submit a claim, which may result in claimants missing out on hundreds, thousands or even millions of dollars that they have every right to collect.
A public insurance adjuster can provide important advice and backup. In contrast to staff adjusters, who work for insurance companies, or independent adjusters, who work on behalf of insurance companies, public adjusters are employed by policyholders. For remuneration, most public adjusters charge a percentage of the settlement amount obtained.
A public adjuster’s roles include:
- Evaluating insurance policies to determine what damage is covered
- Making recommendations for policy improvement in the case of future losses
- Detailing and substantiating damage to buildings and contents
- Determining values for settling damages
- Negotiating a settlement with insurance companies on behalf of the insured.
What is Adequate Coverage?
To help protect themselves and their clients better, property managers should consider the adequacy of coverage. Notably, condominium buildings are often insured only for replacement cost at present-day prices. This value does not take into account any remodeling or upgrades such as lobby renovations, new flooring, window retrofits, landscaping, paving etc. Similarly, individual unit owners may have invested in upgrades that were not part of their units at the time of purchase.
The gap between actual insurance coverage and value after upgrades on the unit holder’s policy can be substantial so owners can be left frustrated at the shortfall when a claim is made. Condominium boards should review their policies regularly and perform mandatory reviews of individual unit owners’ policies to ensure that they are up-to-date, and account for upgrades and renovations. The condominium ownership then effectively guards against the potential of a major financial hit in the event that they have to pick up some of the repair and/or demolition costs. Disputes between insurance companies when there is ambiguity regarding who is responsible for the claim can lead to a prolonged standoff between companies representing the condominium manager and the unit owner. This delays repairs and rehabilitation and frustrates all parties. Mediation – perhaps conducted by a public insurance adjuster familiar with the finer points of such disputes – may help assign responsibility for the claim and hasten a resolution.