Getting More Insurance Money When Damage Occurs

damage-lgAfter Hurricane Wilma caused horrible damage to hundreds of associations in 2005, we learned the following:

1. Some insurance companies refused to pay any claims for several years.
2. Some insurance companies paid 50 percent of the actual damage.
3. Some insurance companies paid 10 percent of the actual damage.

Based on the above, you need to know the following:

1. Insurance companies are NOT your friend.

2. It is in the insurance company’s best interest to tell you that you are not covered or offer you 10 % of your damages.

3. You should not trust an insurance company adjuster to properly adjust your damage. Since there are so many stories of associations that were under-paid by their insurance company, we offer the following suggestions, so the next time your association suffers damage, you will be “armed” and ready to get the amount of money your association deserves.

4. After you report the damage to your insurance agent, do not give any statements to the insurance company without an attorney present.

5. After your association suffers damage, the insurance company may ask to see association documents. You may be asked to produce minutes of board meetings where your board discussed at a meeting damage to the building; a water leak; a roof problem or cracks in the cement. The goal of the insurance company is to show that your association knew of damage to the building before a hurricane, fire or tornado occurred. The insurance company will argue that your building was damaged prior to an event and try to use that to avoid paying your association. Therefore, your association should consult with your association attorney to see if it is necessary to put anything in the minutes that discusses damages to your association. In other words, if there is a problem with your roof, building, windows, doors, etc., does that discussion need to go into the board minutes? The insurance company will only use that against your association. If the law requires that it be put into the minutes, your attorney can assist in the wording of the minutes.

6. If your building has damage from normal wear and tear or from an incident, it may be in your best interests to report the damage to your insurance company. The report is not to seek insurance money but to put the insurance company on notice of the damage. Before contacting your insurance company, you should consult with your association attorney to discuss if this is advisable.

7. Do not sign a release given to you by your insurance company. The insurance company has a contractual obligation to pay your association the full amount of damages. You need to ask your attorney why your association should sign a release given to you by an insurance company. Even if your association received money from your insurance company, your association can always seek more money with a supplemental claim.

8. It may be in the best interest of your association to hire a public adjuster. This professional will assess the damage of your association and work on YOUR behalf. Most public adjusters work on a contingency basis. When the insurance company sends their adjuster to look at the damage, generally the insurance company adjuster will adjust the claim to the benefit of the insurance company.