Various types of casualty events, including fires, floods, explosions, windstorms, and even the unavoidable burst water pipe, will likely occur at some point in your community's lifespan which means your board will have to submit an insurance claim. That process can make your association feel as if you're going through a second disaster while you're trying to recover from the first one. Host Donna DiMaggio Berger and guest Ken Shriberg, a public insurance adjuster with a track record for turning underwhelming settlements into substantial lifelines, will arm you with the knowledge to face insurance challenges head-on.
Donna and Ken walk through the hidden damages that can derail recovery efforts, emphasizing the significance of exhaustive inspections and the transformative impact a public adjuster can have on your recovery. They recount real-life tales from the field, illustrating how an eagle-eyed adjuster can turn a modest $2 million claim into a $28 million game-changer, emphasizing the importance of expert evaluations in rectifying overlooked destruction.
Donna and Ken also tackle the often-overlooked challenges that association boards face, from understanding convoluted insurance policies to the art of negotiation, and how these hurdles can impact the rebuilding process. They debunk the 10X sales mentality, advocating for collaboration and exceptional customer service as the cornerstones of a successful recovery. By the episode's end, you'll be equipped with a view of how seasoned professionals, from adjusters to attorneys, play a pivotal role in guiding communities through the aftermath of casualty events, ensuring a fair and comprehensive path to restoration.
Conversation highlights include:
Various types of casualty events, including fires, floods, explosions, windstorms, and even the unavoidable burst water pipe, will likely occur at some point in your community's lifespan which means your board will have to submit an insurance claim. That process can make your association feel as if you're going through a second disaster while you're trying to recover from the first one. Host Donna DiMaggio Berger and guest Ken Shriberg, a public insurance adjuster with a track record for turning underwhelming settlements into substantial lifelines, will arm you with the knowledge to face insurance challenges head-on.
Donna and Ken walk through the hidden damages that can derail recovery efforts, emphasizing the significance of exhaustive inspections and the transformative impact a public adjuster can have on your recovery. They recount real-life tales from the field, illustrating how an eagle-eyed adjuster can turn a modest $2 million claim into a $28 million game-changer, emphasizing the importance of expert evaluations in rectifying overlooked destruction.
Donna and Ken also tackle the often-overlooked challenges that association boards face, from understanding convoluted insurance policies to the art of negotiation, and how these hurdles can impact the rebuilding process. They debunk the 10X sales mentality, advocating for collaboration and exceptional customer service as the cornerstones of a successful recovery. By the episode's end, you'll be equipped with a view of how seasoned professionals, from adjusters to attorneys, play a pivotal role in guiding communities through the aftermath of casualty events, ensuring a fair and comprehensive path to restoration.
Conversation highlights include:
Hi everyone, I'm attorney Donna DiMaggio-Burger and this is Take it To the Board where we speak Kondo and HOA. Casualty events come in many forms, such as fires, floods, explosions, windstorms and even the inevitable burst water pipe in a multi-family building. Unfortunately, at some point your community will be subject to a casualty event, which means you will also have to contend with submitting an insurance claim. Submitting that claims process can make your association feel as if you're going through a second disaster while you're trying to recover from the first one. That is why I've wanted to have a public insurance adjuster on the podcast to give us some insight and tips on how to ensure that your recovery from a disaster is as painless and complete as possible.
Speaker 1:My guest today is Ken Schreiberg. Ken has been a licensed public insurance adjuster since 2006. He is also an improved instructor for the Florida Department of Financial Services and the DBPR. Ken's experience in business, construction insurance, economic and criminal law, cause and origin and fraud investigations provides him with a deep understanding of property claims, loss investigations, reconstruction requirements and claims handling practices. Ken's single largest condominium association property loss claim was settled for more than $28 million. Ken has also performed many corporate insurance fraud investigations and loss appraisals. As an appointed appraiser. He has taught many courses on licensure, how to spot red flags associated with fraud, and he is a retired board member of FOPIA, which is the Florida Association of Public Insurance Adjusters. He has many more accreditation so we'll put a link to his bio in our show notes. So, ken, welcome to take it to the board.
Speaker 2:Great, great Thanks for having me Don. It's a pleasure.
Speaker 1:Ken, can you start out by explaining the role of a public insurance adjuster and how it differs from other professionals in the insurance industry?
Speaker 2:Yes, yes, thanks for asking. I'd like to associate public insurance adjusting actually with my other profession as a private investigator, because the elements of what is required kind of goes hand in hand. Other than an attorney, which not effectively would handle a claim from start to finish, a public adjuster represents an insured on the entire claim process, all the way, from the first what we call noticeable loss to the insurance company, the investigative elements, as well as the proper preparation of all the documentation, photography and other elements, so that the insurance company, when they have their assigned adjuster, they can have a great picture, a great storyline of what happened and what we are claiming should be covered under the policy that was in effect at the time of the loss.
Speaker 1:Let me stop you there, because a lot of people will say well, yeah, we have an adjuster, the insurance company step one out.
Speaker 2:What are you talking about? That's a great one. So, insurance companies it's hard to recognize because of all their advertisements, but at the end of the day, an insurance company is a for-profit business. It's a for-profit industry and they have to. They, the insurance companies, have to please their shareholders, their stockholders. That's profit-driven. Unfortunately, that doesn't always relate to everything being perfect. So, with that being said, the adjusters that work for the insurance companies there are two of them generally that are licensed under the state. One is company insurance adjuster and they are appointed to the insurance company as a direct employee. And then you have an independent adjuster. I actually question that title because it's not so much independent but they also work for the insurance company, but they're a contracted adjuster or a contracted adjusting company and under the title of independent adjuster. And then you have the third type, which is the public adjuster. That works exclusively for the insured, the property owner, and the biggest element of that is that we, as public adjusters, have a fiduciary responsibility to the insured. Nobody else has that in the industry.
Speaker 1:Okay, so the first two insurance adjusters that you mentioned, which are working for the insurance company, they do not have a fiduciary obligation to the insured, meaning the policyholder, the association or the unit owner.
Speaker 2:They do not. They do not Actually. They work directly or through contract for the insurance company to represent the insurance company's best interests. The insurance company's best financial interest is what it really comes down to Now we all have.
Speaker 1:But what does that look like? Going out there and saying there's nothing to see here, there's no damage? I mean, walk us through that. So the insurance company sends out their adjuster. What's his or her job?
Speaker 2:Well, let's say that I don't like to talk negatively about others in general, but let's say that they seem to have blinders on where we're going to look at everything. We're going to look at first the policy to see what coverage is that the association may have, and we're going to determine okay, we understand what you purchased as far as coverage. Now let's look at the damages and let's first we also have to make sure the damages are specific to the loss. Any preexisting damages are never covered under insurance policy. So if there are any preexisting damages, we have to separate that. We don't want it to get intertwined and complicate the claim process.
Speaker 1:What if the preexisting damage is because they still have an open claim from last year that hasn't been settled? So they were hit by a windstorm and they're still working that out and that damage is still there, it hasn't been repaired. Now they get hit again. How do you adjust when you've got those circumstances?
Speaker 2:What I would do is the existing damage that's on the open claim stays with the open claim and any new damages get separated out.
Speaker 1:So it's a little complicated from the construction element standpoint but you have to kind of put percentages on it Does it matter who gets there first to the site, whether it's the adjuster for the insurance company or the association, has picked up the phone and contacted their own public adjuster.
Speaker 2:That's a very, very good and very important question. Unfortunately, I have seen all too many claims where we walk in after the fact of the association whether it be a property manager or a board member thinking that they're doing the right thing, the best thing, and they just say something that gets misunderstood by the insurance company personnel who's answering the phone and all of a sudden you get a denial letter that you know, and I'll give you a good example. People would call in and say, oh, I have a flood, I have water everywhere, it's a flood. Okay, so the pipe burst and to a normal person we would all say flood, but under coverage, under policy coverage. That's not a flood.
Speaker 2:A flood is an event of rising water, two acres or more, blah, blah, blah and that's always under a flood policy that's separate from all perils policy. So, with that being said, we don't want to misinform the insurance company of the damages that we have. Another one is mold. They see mold and they call up and tell the insurance company I have mold. So, yes, you have mold, but the mold was caused by something else, and that something else is usually covered, and that is really what the claim is about. It's about the water damage and where the water came from. So those are two very good examples of why it's great, it's important it can make a break in association's claim to have your representative, have your public adjuster representative, come in from the first moment and properly document what's the cause of the losses and properly record it to the insurance company on your behalf.
Speaker 1:Because it sounds as if if you're doing this on your own, without the benefit of your own adjuster there, that maybe the insurance company's adjusters ears are going to perk up when they hear something that they can put in the category of exclusion under the coverage.
Speaker 2:That all too often happens, unfortunately.
Speaker 1:yes, I want to ask you this so you're being called out, and you're being called out, obviously, to make sure that the association or the unit owner is going to get the coverage that they paid for correct. So they've had a casualty event, they've had a loss. Now they need to make a claim. So what tools or methods do you use to assess the extent of the damage?
Speaker 2:That's where my private investigative background kicks in, and I use the same philosophies and tools that I was taught for my degree in criminal justice. And you look at the site, the damages, first, as I noted. After you understand what coverages are in play, you look at the damages and you document them all. You never have too many or enough photos or videos to document damages, never, never too much, especially in digital age. Today it doesn't cost anything to snap more photos, so always take plenty, and that's something we're actually. The property manager and the board can step in and do that, as they're calling their public adjuster. And then what we would do is we would use technology to our advantage to not only properly document what the damage costs and scope is, the scope of work for the repairs but also to communicate with the property manager and the board so that they can also keep the residents updated. And as keeping residents calm after a storm is imperative for a successful reconstruction effort, and we just saw that with Ian, so many people were out of their homes.
Speaker 1:Some of them are still out of their homes as a result of that horrific storm. You mentioned technology. What kind of technology?
Speaker 2:Well, the number one. You have digital cameras and different quality digital cameras. We also have a 360 degree camera where we can pan, tilt and move about the room as if we were there days, weeks, months later. And additionally, we have an estimating software which is updated monthly with the regional pricing from general contractors and trade contractors and whatnot, and that's important. You know some people, they have the software, they have a version of the software where they're not paying for the regular updates and really they're not using the software for what it's meant to do and really it's meant to be precise as possible. Additionally, we use communication software with the insured, with the association, so that way there is no breakdown in the communication process. Another tool that I use, that's simple and it's education, education, education, education. For me, as noted with my continuing education instructor element, I've taught many courses not only to public adjusters but also to the insurance company personnel and including SIU, which is Special Investigative Unit, it's important to educate them on what's going on in the industry as well.
Speaker 1:You have stressed your investigative background. I want to dig into that a little bit. A lot of times with clients I'll get a call and they'll look and they'll say, well, it doesn't look like there's any damage After the storm. They're looking at the building. They don't really see much, but that doesn't mean that there's not damage there, that the structure has not been significantly weakened by that hurricane. What do you do to figure out that you as a professional do that. Some layperson, some volunteer, board member or manager cannot determine just by looking at the building.
Speaker 2:That's also a great question. I relate that back to my renovation history. For many, many years I was traveling across the Eastern Coast and Caribbean Islands renovating major hotel resorts. You'd be surprised how much damage you find after you remove drywall, after you go into addicts and crawl spaces, because those are the areas that people don't see on the surface and those are the areas which are going to show damages. If you don't have it opened up or if you don't know where to look, those damages are going to stay. Now we're going to get into, I know, legislative elements later on, but now the timeframe to report a claim, whether it's a new claim or an opened or supplemental claim, is drastically limited. It's really important to have a professional public adjuster come out and, more importantly, one that knows what they're doing, who has experience in these large-sized projects, these large-sized claims. They know where to look for the hidden damages that actually are most important.
Speaker 1:In your experience, Ken, how aggressive are the insurance companies adjusters in seeking out hidden damage?
Speaker 2:I talked earlier about the blinders. Unfortunately, not all but many these days. The industry has changed over the years. The insurance companies adjusters. Historically, from my experience, they used to really be very, very thorough. They used to try to find coverage for damage and they were very thorough with their inspections. These days, unfortunately, the adjusters are given way too many claims. They don't have a lot of time to go inspect each claim. They're just not able to do the detail that we would spend making sure that all the damages are documented.
Speaker 1:I'm going to give you an example. I had a condo client in Southwest Florida, in Naples, condo. But it was consisted of freestanding villas and they were hit by a hurricane several years ago. They called their insurance company to make a claim. The adjuster insurance companies adjuster came out. He looked up. Now there were almost more than 40 freestanding villas. He looked up at a few of them. He said about 12,000 in damage here.
Speaker 1:Client contacted me and said we're being asked to sign this full release. I said 12,000, did you get a public adjuster? Did you get your own adjuster to go out there? The president of the board at the time. She said no, we didn't. I said I suggest you do that. She called a public adjuster, got him out. Ultimately the claim was $1.2 million. One of the questions I wanted to ask you for our listeners is how many roofs would be representative. Let's say you have 40 different buildings and the insurance company's adjuster comes out and looks at three. Is there some sort of yardstick that's reasonable where you have to look at half? Do you have to look at all of them?
Speaker 2:Your story is an excellent one, Pretty usual In fact.
Speaker 2:I have my own from when I first started the adjusters group, what we call TAG, I did an association with approximately 150 to three unit buildings. There were some buildings where there were eight units. It was all considered condo association as opposed to homeowners association. The 718 statutes are obviously component on the condo association, one specifically for insurance. The insurance company initially came out. This was before I actually got involved. I only got involved because they were promised a check and they didn't get one. It was $2 million they were promised that was their claim.
Speaker 2:I found that they had only looked at about 12 roofs. These are big barrel tile concrete roof tiles and very expensive. We ended up inspecting, our firm ended up inspecting, with about 25 inspectors, the entire property. It took weeks. It took weeks.
Speaker 2:The funny thing is that it doesn't take for a tile to be missing or on the ground for you to have damages. Major roof damages you could have structural, with the trust systems, with the sheathing that's underneath the wood that's underneath the tile. The waterproofing system could be broken. Those are all things that you can't see, especially from the ground. Quite often we do the pinky test, generally walking through an entire roof and doing a pinky uplift test with our pinkies to see whether there is any movement. Those are the things that aren't usually done. The insurance adjusters or the insurance companies whether it be the company or field adjusters or the contracted ones they don't have the time, they're not given the time, to do a proper inspection like that. At the end of the day, the association that was promised $2 million and you mentioned it earlier. We ended up getting them settled amicably without having to go to trial $28 million.
Speaker 1:That's the one I mentioned in the introduction.
Speaker 2:What did that?
Speaker 1:adjuster, say the insurance company's adjuster. When you said we inspected all the roofs and there's a lot more damage here, Did that inspector adjuster have anything to say?
Speaker 2:In the very beginning that insurance company was also on the brink of going out of business. They weren't that inclined to make payments. He disappeared in the process when I got involved Also. It's, interestingly especially unresidential, but the insurance companies recognize the value of public insurance adjusters. That's from twofold. Number one because we actually help make their job a little bit easier for the insurance companies that really do take care of their insurance.
Speaker 1:I was just saying it doesn't sound like it. Can you made them pay from $2 million to $28?
Speaker 2:million. Listen, I'm no magician and neither is any other public adjuster, especially one that writes an accurate estimate and presents the truth. When you do that, you build rapport in the industry, respect, and that's an important process. Important part of the process is to be known as being truthful, writing accurate estimates, not ballooning. You've got bad apples in every part of the industry and every industry, and those ones make it difficult sometimes.
Speaker 1:You went there and I wanted to talk to you about the bad PR that your industry has. I think it's actually gotten a little better, but you have had bad PR. Listen, the legal industry has as well, but you're an educator, as am I in my industry. You talk about accurate estimates. How accurate are your estimates? I'm not talking, I mean, from the tools you use. If you're looking at a building that's been damaged by a windstorm and you submit it, what's in your experience, how accurate are those tools you're using?
Speaker 2:That's another area where I go back to my investigative elements. Before I had performed insurance fraud investigations, I understand what the insurance companies are looking for. That are red flags. I try to teach people to do the right thing so that they don't have red flags. That's important for everybody that's submitting a claim should submit it truthfully, honestly and accurate, because doing otherwise, at the end of the day, the insurance companies are looking for bad apples, bad actors, and at the end of the day, they should be, because it costs all of us with our premiums when bad actors are not getting caught.
Speaker 1:You've seen people when you're dealing with insurance fraud throwing things into the estimate. That may be prior damage, maybe lack of maintenance, or are they just completely fabricating the number of windows they have?
Speaker 2:Well, that's a good one. I actually have to put a little history behind this, if you bear with me. It's my belief. It's my opinion from all of the research and homework and education that I've had and being in the industry over 17, 18 years now. When I first started doing public insurance adjusting, the relationship was a lot more friendly. It went a lot smoother. It was a lot more professional. Then in the early 1990s, all state insurance ended up hiring a consulting company called McKinsey and Company and they were looking for where they could make more profits, basically from the investments on the premiums. It was capped. They started looking at the claims component of the business and determine that that's where they could make more money. Now I'm not making this up. It's actually written by a Rutgers professor in a book that's called Delay, denying, defend.
Speaker 1:Sounds like a bad law firm.
Speaker 2:That caused. When the insurance company started working with that model to use the claims department as a profit center, I started seeing the insurance company start beating up on contractors' estimates and for the most part legitimate estimates. It was normal construction industry standards for the geographical area. But they just started beating up on their estimates and or sometimes their invoices for finished work. So then that had a little domino effect where the contractors and even some public adjusters started ballooning, inflating their estimates or their invoices to counteract against knowing that they were, that they were going to get beat up later on and maybe at the end of the day they thought they could get back to where they were supposed to be or they originally were. But then it's gotten out of hand and contractors, public adjusters the bad apples of all walks of the insurance industry started doing this game of back and forth powering on the pricing and the scope and beating each other up, and that really doesn't lead to an amicable, quick solution for the insured. It just drags out the process and unfortunately also now leads to red flags by the insurance companies are fraud.
Speaker 2:So I always say and I've always done is to present the facts for what they are. Support the facts in documentation, writing photographs and and be able to explain the reasoning behind it. And at the end of the day, the insurance company you know. If they say, oh well, you know, you say a claim is worth $5 million, let's just use the hypothetical number. And the insurance company comes back saying no, we believe it's 4 million.
Speaker 2:And I always come back and say OK, on my estimate. And we don't just do an estimate, we do actually a full loss report. It's all one report. It has all the coverages, it has all the information for everything that the insured should be provided, especially in the details that are needed for an association. It's sometimes 1000 pages of detail. And when they come back and say $4 million, I say, ok, you have my detailed loss report. You tell me exactly which line items you feel are not or should not be included, because how'd you come up with your full million? They generally I'd say 99% of the time don't come back with a response because they can't, because the accuracy was there and my closing ratio across the board, including even the most recent years that have been a little crazy, is running at about 95, 97% of what I originally asked for. Now that's considered outrageous in the industry, because mostly it's down to about 60% to 70% of that. Some of them are, and it's also because of the ballooning that's happening to counteract what the insurance companies were doing.
Speaker 1:So I think our listeners are going to appreciate the backstory as to why there's the impression that some of these estimates are inflated. But the goal is to be made whole, not to make a profit on your insurance claim. I mean, insurance fraud is a crime. So if I'm hearing you and it's the same message I tell my clients you want to work with the professional advisors who have integrity, because if you don't, you're going to get caught up in it as well.
Speaker 2:That's correct. Honesty, integrity and ethical conduct. To me they're all the same. They're one and the same. You have to have a combination of that to succeed and, quite frankly, now the Department of Financial Services and DBPR are going after the bad apples. In order to survive and keep your license, it's required to have those things and at the end of the day, when all the dust settles especially from all the changes over the last year, as you mentioned, the heavier restrictions regulations on public adjusting regulation is good. It actually keeps the bad apples out of the industry or, if any of them are in it, it clears them out so that the professionals can be professionals.
Speaker 2:And at the end of the day, it's important, it's very important, to present the facts and be able to support them throughout the end. God forbid that. A claim just can't be settled by a public insurance adjuster and you have to involve a specialist attorney with a good law firm such as yours, that you need their assistance to take it. The last step that sometimes not needed last step, but generally it's the last step and you have to file litigation if all else fails. And for the attorney to do their job properly, you have to be a great public adjuster and give them a file that's complete, that tells the complete story, and tells it honestly, truthfully and with integrity, because that's what's going to be questioned at the end of the day.
Speaker 1:Yeah, that's the ammunition and I want to talk to you in a few minutes about bad faith claims, which is the litigation you're referencing, where you, as a public adjuster, have taken the claim as far as you can go and you know it's just not getting through to the insurance company. They're either denying the claim or they're going to. You know they're stuck on a certain number, but I want to take a step back because I think a lot of boards and managers feel like it's David versus Goliath, that it's not a level playing field trying to adjust their claim with a large insurance company. You know in your experience what are the common challenges that community associations face when they're trying to navigate the claims process.
Speaker 2:Well, number one they are all discombobulated. Everything's a mess, dependent on how many residents are in the community. Everybody's upset, everybody's franted and everybody's looking for quick solutions. And that's when things can either go really good or really wrong, dependent on who you bring in to help you. And I've seen the best intention residents, board members and property managers not only do their full-time job for their volunteer job that they're doing for the board, but then also try to take on a full-time job of an insurance plane and it just doesn't work.
Speaker 2:We do this full-time and especially residential claims.
Speaker 2:Sure, I could do that part-time and do something else, but an association claim, like I mentioned, we have like 20, 30 inspectors on the route all at the same time for two weeks straight and they knew what they were looking for.
Speaker 2:So it's not reasonable to expect that a resident or a resident, a board of directors or a property management company has that ability, the capability, the personnel to perform that properly, accurately, quickly understand the insurance policy language, to present it properly and get the wheel moving on getting inspections required, necessary inspections. We also say that you're not only just paying for the coverage, you're paying the premium for the insurance company to keep their word of paying for your damages later on if a loss occurs. But you're also required to perform certain duties. As the insured, as the association, you're responsible for performing certain duties immediately or quickly or as soon as possible after the loss occurs. And there's a laundry list of requirements and some of them are time specific and you're one minute late on any of those time specific, your claim is going to get denied and generally I mean I've seen that doesn't get overturned.
Speaker 1:That's so challenging because in a lot of these communities we have turnover on the boards, ken. So you may be in the middle of a significant claim and you may get a brand new board, or the majority of the board may get replaced. How do you contend with that? I mean, for instance, what's the typical timeline? And I know every claim is different but for a significant claim like the one you talked about, the one with all the roofs, the $28 million start to finish. How long did that take?
Speaker 2:Start to finish with the insurance claim was actually about 18 months in total.
Speaker 1:So we could have had two boards in that time.
Speaker 2:Oh, we did. We did. In fact we not only had two boards but we had a bunch of board members resigned because their obligations, their requirements, just to work with the residents on their elements. It was overwhelming for them. So there was a lot of turnover there, yes, but the prime group, the president, the vice president at the time, they were really solid and we worked well together.
Speaker 2:Everything that I've done I've had multiple businesses over the years, but everything has kind of been built off of a prior business and what I've learned from experience to taking those experiences to make the next one better. And the insurance adjusting has been the last 17, 18 years. So I've taken all my experiences from everything else and using it to the advantage of helping insurers properly go through the process. And the element that you're just talking about, I relate back to when I was renovating hotels. We had to go into hotels that were active hotels and do major renovations. Everything is built on what they call RevPAR revenue for available room. And when we promised the owner or manager of a property that we were taking down an entire floor let's say 40 rooms at one time, he already had those rooms booked and sold and paid for for like three days later. So if we didn't turn it over, they lost a lot of money, so that didn't happen.
Speaker 1:That's a little bit of pressure.
Speaker 2:That didn't happen. So we use that experience when handling an insurance claim with an association and going through with the board and or the property management company and understanding what the residents ultimately desire and trying to meet those needs. Another important component is building the relationships before you're scrambling around with a loss, and that's something that we try to pride ourselves in is building real relationships, giving your service without asking for money and being a true friend to these people. That ultimately me, actually in Florida, it's a matter of when there's a storm, not if so, unfortunately, most communities are going to be affected one time or another and it's important to build the relationships.
Speaker 2:You know, I last year I got my what's called an unaffiliated insurance agents license. So now, without being a public adjuster, I am able to read policy language and consult to associations as to what coverage is. Now somebody would say, oh well, that's what my insurance agent does. Yes, okay, but we try to work in parallel with your insurance agent and in assistance of your insurance agent because, once again, they also have full time handling you and many other associations and other businesses and maybe they don't have all the time to fully understand what your needs are and that takes time to understand what your community is built on, to understand the intricacies of the particular property and how that relates to purchasing and policy and proper coverages.
Speaker 1:So I can't even imagine how much you pay each year in license fees. You have so many licenses. I want to ask you about your philosophy on negotiations, because you mentioned earlier about something being amicably negotiated. So years ago I went to Philadelphia to take a Wharton professor Seward Diamond's course, his seminar on getting more. It was a negotiation course and I imagine different adjusters have different approaches when it comes to negotiation. What's your philosophy on negotiating?
Speaker 2:In regards to negotiating, because I have a fiduciary to the associations that I work for and I write accurate estimates my negotiating is more about building rapport with who I'm negotiating with, because everything else is fat, everything else is well-defined and there's not really much room, let's say, for the number. Now can the number change? Yeah, listen, I'm not perfect and I'm always willing to listen and learn. Maybe there's a better way to cut somebody's hair, maybe there's a better way to put stucco on a wall that I didn't know about and the insurance companies adjust. Explains that to me and if he's right, yeah, I'm going to agree, I'm going to make an adjustment, and that's part of the negotiating process is understanding who you're working with and having respect for them and being respected. Everything else is a matter of fact and you work through it to get to the end result.
Speaker 2:I'm known to put in extra effort way, way more extra effort than most people because I like to complete my job and my job is to settle claims. So I may not turn it over to an attorney as quick as a lot of others, a lot of other public adjusters or, quite frankly, even back in the day before, there were what we called AOB's assignment of benefits, contractors were signing contracts and just flipping it over to an attorney, and that helped create some of the problems of why we saw the heavy legislation. But there's always a time and a place for an attorney to get involved, and when they're needed they're great assets. But when you hire as a public adjuster, do your job, get it settled. That's what the association was asking you to do from the beginning.
Speaker 1:Well, who are you negotiating with? Who is saying yes or no to you on the insurance company's end?
Speaker 2:So, generally speaking, finding it more common now, with even association claims and commercial claims. Before it was just residential claims. If there was an adjuster assigned before we got involved and then we got involved, the insurance company would move it over to a more experienced, more tenured insurance company adjuster to work with us. I love that. I love work with people who have the same understanding as me, because that makes it a lot easier to get the job done. And seeing that happen a lot more now with the commercial and association claims is that the insurance companies they are hiring people who really just don't have the experience. And I don't know whether it's a matter of what's caused this maybe the senior people are retiring and just not filling the gap, but they're hiring people who just don't have the experience that's necessary to do a great job. And then when a public adjuster is brought in, when we're brought in, we seem to find that they do match us up with senior insurance company adjusters and that's a good thing.
Speaker 1:That's what you're dealing with. Listen, this all starts and your job hinges on the type of coverage that the association has. I have found that some association boards really don't understand the coverage they have until they are embroiled in the claims process. Can you give our listeners any tips on key considerations they should consider when selecting an insurance policy?
Speaker 2:Yes, and I'm going to first say that I totally understand what you were saying, that they don't understand what's in the policy. In these days it used to be like the policy was like reading a book and now the policy is like start on page four, he gets his page seven after reading four, five, six and seven, says you got to go back to two and halfway down to you got to look at that part. And then there's another endorsement page that says go back to seven and exclude seven, but you want to go to 10 now. So even for somebody whose experience, as I am, in reading the policies today especially, it's a nightmare, it's nerve wracking. So I don't expect any resident, any association board member, any property manager to understand it as well as I do, because even for me as a full-time job, it's a difficult element of the process.
Speaker 1:And that gets me back to my comment a few minutes ago about David versus Goliath. It almost sounds, seems, like it's designed that way to confuse people. I had a client once that believed they had a windstorm deductible and it was across the board, but it was a deductible per building and they had 15 buildings and that really changed their claim, although we're not just talking about windstorm here. Right, I mentioned in the introduction all sorts of casualty events fires, floods, explosions in the electrical panel, even sinkholes. I've had two buildings. One had a plane fly into the building, one of those banner planes. Another had a car drive into the building and it was a four-unit building. So there's a lot of different casualty events, including water leaks which can run down an entire stack in a high-rise building and cause incredible amounts of damage.
Speaker 2:Yes, at the end of the day we're back to. The insurance. Companies are for profit businesses, so each year that they have to pay on claims they look back at that and say, okay, where was the biggest risk, let's exclude that risk or a portion of that risk next year and let's write in endorsement to exclude it next year. The problem that I'm seeing is the agents are so busy they're not even noticing that that exclusion is now there on the new policy. The association doesn't know that that exclusion is there on the next policy, even though it's on the first page after the address mailer page. Nobody reads their policy until after they need it.
Speaker 2:What's interesting, without going off too far, but most interestingly, is an insurance policy is one of the only things that you purchase without ever seeing it first. You have no idea what you're buying, except for your buying an insurance policy. You have no idea what's inside it. By the time you get it, a month, two months later, you're not going to read 30, 40, 50 pages. That even confuses me in the first few moments of reading.
Speaker 1:Is it the agent's job, Ken, to explain what the customer's purchasing? The agent does receive a commission on that.
Speaker 2:Yes, yes, very true, very true. The agent receives a commission but they're being sold as your agent, as the buyer, not from the seller. But with that being said, the agents are overwhelmed as well. They're overwhelmed that they're not getting paid the commissions that they used to. They're now having to play a role in some, sometimes with claims on the reporting, sometimes with getting the policy, the full policy, so that can be looked at.
Speaker 2:And especially with the premiums going up so drastically, a lot of people are shopping crazily and with companies stop writing for certain geographical areas, people are needing to replace insurance that they once had. So the agents I understand the agents are just overwhelmed and that's one of the things that I saw before it was happening. I saw it starting to happen before it even became an issue and that's why I went and got my under affiliated agents license to kind of work in parallel and hand in hand with the agents in understanding the property, the needs of the association and helping the agents help the insured, helping the property owner, the association, pick the right coverage, right policy.
Speaker 1:So you're an educator. How do you stay updated on all the changes in the laws that impact your industry?
Speaker 2:I spend and this is no joke, I spend about half of my time every week reading, learning, going to conferences, taking courses, reading blogs, journals, trade journals, and not only just trade journals relating to public adjusting, but trade journals regarding insurance, regarding case law journals, regarding insurance companies and reinsurance companies. When you have a understanding of the whole industry in its totality and not just the little parts, you're able to better meet the needs of your clients. Moving forward.
Speaker 1:I think the only thing you haven't done is gone to law school, so then you can handle the bad faith claims.
Speaker 2:Yeah, I'll put the disclaimer in now that I am not a licensed attorney, although a lot of people have said I should have got my license.
Speaker 1:Speaking of bad faith claims, you said that you're not one to jump the gun in terms of handing it off to an attorney. And listen, I think most attorneys appreciate that. I know for my clients. I want them to be able to work it out. It's going to be cost effective for them and if they can get it done through a public adjuster, they should. But at what point do you really decide? Okay, I can't really kick this ball any further down the field. I have to hand it off. We're really dealing with the insurance company acting in bad faith.
Speaker 2:Well, that's a great question. It takes a communal effort actually between yourself as a public adjuster and the association you're working for, because that's a big step. So sometimes I have clients that they say, ken, we want you to just keep doing what you're doing, we want you to keep trying, we want to see maybe you get halfway of what you are still missing, and that'll be okay for us. And today, now, with what they call the tort reform, the insured is no longer able to recover their attorney's fees.
Speaker 1:Well, that's in Florida. I just want to put that out there because we got listeners all over the country. So that's in Florida. We do have that tort reform.
Speaker 2:Yeah, yes, in Florida. So it's a big step, but when it's needed, it's needed Because the difference is so much that it's cost-effective to bring in the attorneys, who are specialists at their own level, above what a public adjuster can do. At that point it makes or breaks it for those claims that need that next step. With my understanding, the ethical conduct of public adjusters and insurance company adjusters and insurance companies, I often reference those regulations or statutory elements that were all required to follow and sometimes that actually turns. What I had an opinion was bad faith turns it around and gets them back on the right path. But sometimes you can't fix a car that is ready for the junkyard. So, yeah, when an attorney is needed and there's good, solid backup documentation, backup that the public adjuster has collected, it makes for a great bad faith claim that I'm sure you could talk better than I could about.
Speaker 1:Well, we've touched on legislation a couple times throughout this episode, and there's been legislation aimed at your industry, the public, adjusting industry, specifically about how you can pursue customers in the aftermath of a casualty. Do you think that you're going to see more oversight and regulations in the future, or do you think your industry has woken up and you're doing a better job self-regulating?
Speaker 2:So it's kind of a combination of everything. I personally think that the legislators and the CFO patronis in Florida had a difficult job to do over the last three, four years or so. The industry just went crazy. I hate saying it like this, but this is the way that most of the people in the industry look at it is. It's almost adversarial the relationship between the insurance company and their adjusters and the insured and their people public adjuster, contractors, engineers, whatnot. So because of that image of it being so adversarial I've seen it just in recent years, additionally with the social media, everybody's, not everybody. A lot of people are pushing this sell, sell, sell 10X. Okay, well, in public adjusting it can't be sell, sell, sell 10X, because that's not what you're selling. It's not like you're selling a product and it's over.
Speaker 1:Can you explain 10X Ken?
Speaker 2:Yeah, I'll explain. 10x, as I understand it, supposedly businesses, the valuation of a business. If you were to sell a business, if a business is operating well, it's worth 10X what the revenue or what the net profit is, and they sell it as a short term, for just general selling these days. Build your sales 10X rapidly, build your company gross or net 10X rapidly. It's rapid, rapid, rapid sell, sell, sell and it just lost the element of customer service.
Speaker 1:How does that relate to the adjusting industry? You're called in when there's a casualty event? You can't manufacture casualty events. I mean they're inevitable and they're going to happen. But how does the sell, sell, sell mindset relate to your industry?
Speaker 2:Well, it doesn't work and legislation has now made it more likely that it's not going to work. And that's good, because those public adjusters that have a reputation of being a good public adjuster, they know how to do their job, they do it well. Those public adjusters are still going to have a job tomorrow. The ones that were running around sell, sell, sell how much money I can make and I'm not particularly concerned with actually servicing what I sold. Those people are going to go by the wayside. They're going to find another job doing something else, and that's good for those of us that do things right.
Speaker 2:So I'm not against regulation. I'm going to throw in another element that's very similar to the public adjusting problems that we had. That forced some additional regulation on us in the recent years Not so much this year but in recent years is assignments of benefit, a-o-bs with the contractors. With assignments of benefits, my company never I can't say never on an extreme, rare instance case, maybe less than half a percent we never allowed our clients to sign an assignment of benefits, assigning over their entire rights of their claim to a contractor whose real own interests are their number one concern.
Speaker 1:And oftentimes those contractors were out of state contractors who converged en masse to wherever the casualty was. And yeah, I agree, as attorneys we were horrified to learn if a community association board signed an A-O-B did not do any due diligence on that contractor. Again, our advice was always you have to triage. So if your roof has blown off, you need to tarp it. That doesn't mean you sign a $10 million repair contract at that point. The typical due diligence does not fly out the window along with your roof. You still have to engage in that. What you have to do is make sure you dry out the building and that you prevent further damage. But other than that, you should be engaging in due diligence, having your attorney review the contract and those A-O-B contracts were very troubling.
Speaker 2:In Florida they were extremely troubling because people figured out how to raid the system and just ballooned it into a bigger problem than it ever was. That's why, in Florida, they totally banned assignments of benefits and that was really good Good for the industry, good for the consumer, good across the board. If a contractor, it'll be nice when there's a day now that contractors, the bad ones, can't abuse the system. We need to get the insurance companies to also respect reasonable contractor's estimates and or invoices, get it back to a harmonious relationship of working together so that everybody communally can help be ensured the association, the residents, the people, the family these are families.
Speaker 2:That's the worst part about this job the emotional elements. Really, at the end of the day, these are people who are displaced from their homes, they're displaced from everything that they know, and especially if they're retired or children. So, with that being said, it's so important for everybody. There's so many different segments of this claim process and it's so important for everybody to work harmoniously to get people back to their life, get the community back up and running, get the economy of the community back into place, because that's the engine that keeps us all being able to be a community.
Speaker 1:Well, hopefully we will get there and I think that's a perfect point to say goodbye on a positive note of trying to strengthen our communities and hopefully, look, everybody's on a level playing field. You've got the right coverage in place. You've got the right adjusting people helping you and your made-hole.
Speaker 2:And for those times that you may need to have the right attorney, such as Becker and Paul Koff.
Speaker 1:Yeah, well, hopefully you can sort it out without needing to pull in the big guns. But, ken, I want to thank you for being here today. Thank you so much for your time and your expertise.
Speaker 2:It's been my pleasure, and thank you so much, donna, for having us.
Speaker 1:Thank you for joining us today. Don't forget to follow and rate us on your favorite podcast platform, or visit TicketToTheBoardcom for more ways to connect.