Flood and Fire Damage Insurance Companies Don’t Want You To Know This

by Neal Frankle, CFP ®

When it’s time to make a claim on flood or fire damage insurance, all you care about is getting taken care of. Even if you buy the right flood damage insurance, you aren’t out of the woods. I know this firsthand. Several years ago we had a huge flood in our home.

When all was said and done, my insurance company paid a total of $12,000 in damages. The onlyfire damage insurance problem of course was that the cost to restore the house was over $25,000. (Read Home construction remodeling tips before you sign any contract.) At the time, I didn’t think there was anything I could do about the low settlement the insurance company offered, but now I know better. If you want to protect your assets, don’t think you’ve done your job by simply buying homeowner’s insurance. What was the stroke of genius that could have saved me $13,000?

Contact a Private Insurance Adjuster

A private insurance adjuster maker her own assessment of your damages and works directly with your insurance company. She doesn’t work for the insurance company. She works for you. So she wants you to get every penny that’s coming to you. You can use this resource for both personal and business insurance claims. Adjusters who work for insurance companies have other priorities. Even if the insurance company’s adjuster is fair and honest (not all are), he still works for the company and not for you. You can’t have two masters. Someone’s going to suffer, and if you go with the insurance company’s adjuster, it’s going to be you.

What will the private adjuster do for you?

  • Give you a detailed damages report which includes what it will cost to restore your home
  • Get other specialists to provide reports if required
  • Arrange tests for hazardous materials like asbestos, lead paint, mold and other foreign materials
  • Prepare and submit the claim and all the paperwork
  • Negotiate a settlement with the insurance company

Remember, when you hire an adjuster, get a public adjuster and not an independent adjuster. The former only works for people with claims — not the companies. The latter is retained by the insurance companies and works for several at the same time. Since this person is paid by the insurance company, you can only guess how partial he is to you.

Have you ever had to go toe-to-toe with an insurance company? What happened?


photo by Marnanel, Flikr



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{ 1 comment… read it below or add one }

hgstern March 9, 2011 at 6:54 AM

Your post is in this week’s Cavalcade of Risk:


Please let your readers know.


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