Answers to Your Questions about Hurricane Insurance Claims Part 1


Hurricane Town Hall: In part one of this video, Attorney Mark Nation answers questions from home and business owners regarding hurricane insurance claims.

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0:10 - Vinyl siding too. 0:11 And a great point, your policies, 0:14 most, every one of your policies, 0:17 is a replacement cost policy. 0:21 That means the insurance company, 0:23 and here's how I tell the jury. 0:26 I give you my opening statement on a roof case I just did. 0:30 Insurance company issued this policy 0:33 when the roof was 18 years old. 0:37 And when they did that, they said on our solemn oath, 0:41 we promise that we will replace that 18 year old roof 0:45 if it becomes damaged in the next 12 months 0:47 as long as you pay your premium. 0:50 My clients paid their premium, nothing happened. 0:53 Next year they renewed the policy 0:55 and the insurance company said our solemn oath, 0:58 if something happens to this 19 year old roof, 1:01 we will replace it, not repair it, replace it 1:05 as long as you pay your premium. 1:07 And I walk to it. 1:09 Got to 23 years old, they promise on their solemn oath 1:14 if anything happens in the next 12 we'll replace this roof. 1:19 Three months later my clients have a storm, 1:20 damage, first thing they say is your roof's too old. 1:27 That doesn't sell well to a jury. 1:29 And the same thing applies to siding. 1:32 Replacement costs means it. 1:34 Some people feel bad, I got an old roof 1:36 and now I'm gonna get a brand new one, is that even fair. 1:38 Yes that's what your premium paid for. 1:41 They calculated that into your premium to say 1:44 we're gonna sell this person a replacement cost policy, 1:48 meaning we'll buy them a new. 1:50 And I've got clients with homes build in the, 1:53 I have one in 1800s. 1:56 But 1950 home, 1960 home, 1970, it's a replacement cost. 2:01 I've got lots of cases right now with cast iron pipe system 2:05 underneath the house, has deteriorated, 2:08 the insurance company promises 2:09 we'll pay it, we'll replace it. 2:11 They have a tear out provision for plumbing 2:14 and they're fighting it cause why, it's old. 2:16 Well of course it is, you insured it, you knew that. 2:19 And so for vinyl siding, it's covered, 2:22 it's a replacement cost, and they gotta replace it 2:24 and you've got code enhancement coverage 2:27 in almost every one of these policies 2:29 that say if you gotta bring it up to code, 2:32 you've got extra coverage to do that too in your policy. 2:35 Either 10, 25, sometimes 50 percent. 2:38 Usually it's 10 or 25. 2:45 If the county won't permit it, see I don't do permitting, 2:48 but I'm pretty sure our general contractor 2:50 here is gonna tell you. 2:51 If the county won't permit it, unless you replace them all 2:55 and it seems like you would have to replace them all, 2:59 then you do need to do that. 3:01 And your policy probably has an 3:03 enhanced coverage for law in ordinates. 3:06 That's the increase cost due to 3:10 a change in law in ordinates. 3:13 But that's an extra coverage, you may or may not have it, 3:16 you probably do but there's a limitation to it. 3:19 But I would make a totally different argument on that. 3:22 I would say the one window, you can't replace it 3:26 with what was in there. 3:29 The only windows you can get are 3:31 gonna be hurricane resistant windows. 3:33 So we're gonna put a hurricane resistant window in here 3:36 because that is the repair that you need to do 3:38 for that opening. 3:40 Guess what, matching statute. 3:42 They gotta do them all, and the insurance company's 3:44 gotta pay for them all. 3:50 Did they pay the total amount of the policy 3:53 plus enhanced coverage, you've got debris removal, 3:56 5% debris removal that's ahead of that. 4:00 You've got ordinates in law that's gonna be 4:02 as soon as you sign the contract with the contractor, 4:06 do you have one yet, a contractor. 4:09 - [Lady] I've talked to a couple. 4:10 - Okay well you be careful. 4:12 Because some contractors take what's called 4:15 an assignment to benefits and it's an assignment 4:17 of all your claim, your entire claim. 4:19 It's gone, yeah but it's stuck in there. 4:22 You look for those words, assignment of benefits. 4:24 And you gotta be careful. 4:26 Some are very reputable contractors and they take an 4:29 assignment just for the work they actually performed. 4:32 Some of them take your whole claim and they say bye 4:35 this claim's mine now. 4:37 And so you gotta be careful. 4:38 But so is your concern that it's gonna be more 4:40 than your policy limits. 4:42 - [Lady] It's gonna be more than my policy limits. 4:43 - Yeah. 4:44 Do you have, you need to look at your policy 4:46 and see if there's an inflation guard in it. 4:48 Inflation guard. 4:50 Make sure you get the debris removal, 5% extra, 4:55 maybe 10 but probably 5, for debris removal. 5:01 Law in ordinates coverage because the windows 5:03 will probably be under there. 5:05 Think of these each as a bucket of money. 5:08 And the bucket's only got so much money in it. 5:10 And so you've got coverage A for your dwelling, 5:13 that's your house. 5:14 Coverage B is for fences and other structures, 5:16 I don't know if you have a shed or something, 5:18 that's for other structures. 5:20 Coverage C is for the personal property, 5:22 your stuff inside the house. 5:24 D is for when you're out of the house 5:27 while they're doing the repairs. 5:29 They still gotta pay you that. 5:30 You just gotta be careful, make sure 5:34 you maximize each one of those buckets. 5:36 And make sure they're not dipping, they're saying 5:38 well let's take it out of this one, this little bucket here 5:40 and max out that out. 5:42 Sounds like you need to max them all out. 5:44 And they're moving in the right direction, 5:46 it sounds like it, if they're already 5:47 covering the coverage A limits. 5:49 But you gotta get the other coverage. 5:56 That's a great question, and in case it didn't picked up 5:58 the question is many people have public adjusters 6:02 and when does the public adjusters job end 6:06 and the lawyers job begin. 6:10 There's a couple different ways to approach that. 6:14 If the claim is denied, 6:16 if the insurance company says no. 6:19 At that point you need a lawyer. 6:21 Cause the public adjuster is not gonna be able to 6:23 help you with the denied claim. 6:26 That's gonna require that we go into litigation. 6:30 If there is negotiating back and forth 6:35 between the public adjuster and the insurance company 6:40 and that seems to be progressing in the right direction, 6:45 then you should let that public adjuster continue, 6:49 but keep your wits about you. 6:52 If it is, people have a lot of claims, 6:55 so on both sides right now, 6:56 the insurance companies have a lot of claims 6:59 that they're dealing with. 7:01 And the public adjusters have a lot of claims 7:03 that they're dealing with. 7:05 And you just gotta be careful, 7:07 I don't know who's who out there. 7:10 I don't know who you've hired. 7:12 But you need to be careful that people 7:14 are not splitting the baby. 7:17 Cause a lot of times there's so many claims 7:20 going on out there, it's just easier 7:23 for folks to split the baby. 7:27 It's a $20,000 claim, the insurance company 7:30 says well I'll give you 5,000, 7:32 and somebody says 12,500 can we just do it 12,500 7:36 cause I got more, we gotta get to the next one. 7:39 Yeah let's do that. 7:40 And then they come and explain to you and say here's why. 7:45 They might be right, they might not. 7:47 I can tell you when I'm dealing with, 7:50 and a lot of times people, I obviously we're negotiating 7:54 the settlement of the claim. 7:56 And I tell my contractors just give me the number. 8:03 Do not give me an inflated number that you want me to then 8:06 kinda negotiate down from, I don't do that. 8:10 Just give me the number. 8:11 And I'm gonna stick to that number 8:13 and the insurance companies know very well I don't move. 8:18 If that number, if there's coverage, and if that number, 8:20 I'm confident in that number. 8:22 So don't give me an inflated number, I don't want it, 8:24 cause I'm not negotiating. 8:27 It makes life a lot easier. 8:29 If it's a $15,000 claim and I tell the insurance company 8:34 its $15,000 I'm not moving. 8:37 And you gotta pay my fees and cost over and above that. 8:40 They know that I'm telling the truth about that 8:43 from 27 years of experience. 8:46 So a long answer to your question with the key being 8:51 make sure you keep your eye on the ball 8:53 and make sure nobody's sort of splitting the baby, 8:56 trying to just get it done so they can get to the next one. 9:03 So there's a law in Florida that's called 9:05 the valued policy law. 9:06 If your house is a total loss or a constructive total loss. 9:10 Or if it costs say more than 50% to rebuild it, 9:15 it's a total loss, they gotta pay the policy limits. 9:19 But remember those buckets that I told you about. 9:21 Coverage A is the dwelling, coverage B is 9:24 the other structures, C is the interior. 9:27 They're gonna have to, if it's a total loss, 9:29 let's say your stuff is destroyed they need to pay for it. 9:33 If it's not and they need to pack it out and store it, 9:36 that comes out of coverage C. 9:39 And then D you're alternative living expenses, ALE, 9:44 they're gonna have to put you up in a similar home 9:47 and they need to pay those expenses also. 9:53 In addition you've got additional coverages for 9:55 debris removal, additional coverage for law in ordinates. 9:59 You just gotta make sure that they're paying 10:01 not just the A policy limits, but all of the policy limits. 10:12 Not if it's a total loss, not if it's a total loss. 10:15 There was a case that came out after Ivan 10:21 that talked about how much they owned 10:23 under this valued policy law if the estimate is lower. 10:27 And then the legislature changed the statute slightly 10:31 to say it's the higher of, 10:34 or the lower of the policy limits 10:36 or the rebuild estimate. 10:40 But if you read it carefully that's only if 10:42 there are multiple causes of loss for that loss. 10:45 So let's say it's wind and flood. 10:48 In that case it will the lower of 10:50 the estimate or the policy limits. 10:53 In your case, if it's wind, that doesn't apply. 11:00 Excellent question, if you had to some work yourself 11:04 to prevent further damage, what does the insurance, 11:09 how does the insurance company compensate for that 11:11 and if so what rate. 11:13 You do have coverage, and in fact you have a duty under 11:16 your policy to perform repairs 11:21 to prevent further damage. 11:25 And a lot of policies that's an additional coverage 11:27 with the debris removal and the law in ordinates. 11:30 And so make sure that they are paying you 11:32 cause you have a duty to do that. 11:34 And so the question is how. 11:37 And you would be, if you have a license, let's say 11:39 you're a licensed contractor, you're just doing the work. 11:42 They've gotta pay a reasonable rate for that. 11:45 - [Man 2] Do they use the federal standard? 11:47 - No there ain't gonna be a federal standard. 11:48 They're gonna use usually a program called Xactimate 11:51 to give us what the labor rates are for that, usually. 11:55 And sometimes, well not sometimes, almost always 11:59 after a disaster like this, the Xactimate rates, 12:03 our contractor will tell you this, 12:05 are gonna be too low because the labor rates 12:10 have gone up here right. 12:12 It's a bidding war. 12:13 If you've got a hammer and a jig saw, it's a bidding war. 12:18 And people are paying a lot to get good labor in. 12:22 And so the Xactimate rates are really out the window 12:27 because you can't get the job done for what they're saying. 12:32 So you just gotta find out from a contractor 12:33 what is the labor rate to do that. 12:36 So it'd be the materials plus the labor. 12:42 Yeah there isn't like here's the, 12:47 what we look at, one thing, 12:48 it's a reasonable amount. 12:50 And if it would have been what do they gotta get 12:53 somebody a handyman in to do that work for. 12:59 Yes sir, after it. 13:02 And they're gonna try to stick people with, 13:04 I'm seeing it already, where they're using Xactimate 13:07 but the rates are this 13:10 and you can't get the job done for that. 13:12 Because the rate they're giving people are, 13:14 materials have gone up and labor rates have gone up. 13:16 - [Man 3] So how would you circumvent that problem? 13:18 - I get my contractor and find out 13:21 what the rates are that he's charging, 13:24 if he's bidding it out, what are the bids. 13:27 But if I'm going to trial thought what I'm gonna do 13:31 is going to several contractors and sort of get from them 13:35 a conglomerate of what it is everybody's paying, 13:38 and then I'll have an economist come in 13:40 and talk about those rates. 13:47 I cannot tell you how many times the adjuster 13:50 who's in the field says something to the homeowner 13:54 who's just flat out wrong or contradicted later. 13:58 So did you look at your policy at all or do you have it? 14:02 - [Man 4] I don't have a (mumbles). 14:04 - You don't what? 14:05 - [Man 4] Have a (mumbles). 14:06 - Ah no I understand. 14:08 But I'll take a look at that for you 14:09 and see if you have coverage for, it's other structures. 14:14 But usually if it's not connected to the house 14:17 you're gonna have problem under the flood coverage. 14:26 If it's touching and there's a connection, let's say a bolt, 14:30 then it's usually gonna be under the coverage A dwelling. 14:36 That's usually gonna go under the dwelling coverage. 14:39 Now I'd wanna look at it a little bit closer. 14:42 A lot of time your coverage A dwelling coverage is gone, 14:45 you don't have any more limits 14:46 and you do have coverage B limits and so I look real close 14:49 at the policy and the terms in there to see which bucket 14:53 I'm gonna put that part of the claim in. 15:01 Flood versus wind, how do we prove what it is. 15:06 Well, the best thing that I've had is my client, 15:10 the last thing he did before he left the house 15:14 after Matthew is, he turned on a video camera 15:18 and pointed it at the ocean. 15:21 It actually ended up on CNN. 15:24 And I knew exactly what happened with the flood, 15:27 because we had a videotape of when the flood came 15:30 and what it did. 15:32 I'm betting you don't have that right. 15:35 - [Man 4] We have historical when it comes to weather, 15:38 weather forecasts and. 15:39 - Oh yeah. 15:40 - [Man 4] The event of that. 15:41 - Well and I've got a forensic meteorologist 15:42 and we'd look at all of that. 15:43 And so the question is how do we distinguish between the two 15:48 if you don't hand me a video of what happened. 15:51 And that is through a forensic meteorologist, 15:53 and then also through forensic examination of the property. 15:59 We look at what the damage is. 16:01 I know what damage flood causes versus water, one. 16:08 Two, the insurance companies have 16:10 the burden of prove in the case. 16:14 They have to prove, let's say it's the wind carrier, 16:18 the wind carrier has to prove 16:20 that the damage was caused by flood. 16:22 And many times they cannot do that. 16:25 They don't tell you that they have the burden to prove. 16:27 They make you think you've gotta prove all this stuff. 16:30 All you've gotta prove, there are 16:32 three questions on the verdict form. 16:34 Did we prove stuff got damaged, yes. 16:37 If we prove that, question two is 16:40 did the insurance company prove that it's excluded. 16:44 And a lot of times they cannot do that 16:46 because they can't distinguish between flood and wind, 16:50 they're just saying it. 16:52 Well saying it's one thing. 16:54 But proving it by the greater weight of the evidence 16:57 is something totally different. 16:58 They have to prove it by the more persuasive and convincing 17:01 force and effect of the entire evidence in the whole case 17:03 and they can't do it. 17:06 And so what I do is show the jury all the reasons why 17:11 they cannot carry their burden of prove. 17:13 Please do not, I was talking, you look at this stuff, 17:18 it will drive you crazy trying to figure out how do I. 17:22 Don't do it. 17:24 Just get their decision, both of them, 17:26 and let me look at them. 17:28 And I'll tell you if they're doing the right thing or not. 17:31 But this stuff will drive you nuts 17:34 if you try to go and figure it out. 17:35 And I'm telling you don't do it. 17:37 I'll look at it for free for you. 17:43 As a home owner don't be telling the adjusters 17:45 what caused the loss. 17:48 Do you know what I need to win the case? 17:50 There's one thing, there is one thing 17:53 I gotta have to win the case. 17:56 They gotta say no. 17:59 That's the one thing I've had in every case I've ever won. 18:03 They all started with no. 18:05 And so don't be afraid of letting them do their job. 18:09 I have a section in the book that talks about 18:13 stop helping me, right, clients. 18:16 Stop helping, and this is what it means. 18:19 Don't be telling the adjuster yeah I think it was the flood. 18:25 You don't know. 18:26 Let 'em do their thing, let 'em just go do whatever it is 18:29 they're going to do. 18:32 Because if you tell them yeah I think it was the flood 18:35 or I think it was the wind. 18:36 They'll put that in the report 18:37 and then I gotta deal with it. 18:40 Just say you're the professional, you tell me. 18:44 And let 'em do it. 18:46 I don't care what they decide, 18:47 I just need to get their documents 18:49 and then I'll let you know what I can do for you. 18:52 And don't let it drive you crazy cause it will. 18:55 People stay up late at night and then you're 18:57 gonna have to go to the psychologist. 18:58 And I couldn't more highly recommend it 19:01 but you probably have bigger problems to worry about 19:03 than reading an insurance policy. 19:09 Citizens depopulates and shifts some policies each year 19:14 over to carriers 19:18 that are not related to the state. 19:20 And that's common, you gotta do it, 19:21 you can't stay with Citizens if they're doing that. 19:24 And then people have a concern, well I've never heard 19:27 of this insurance company, what if they go under. 19:30 Don't worry about it, we do have in Florida FIGA. 19:35 The Florida Insurance Guarantee Association. 19:38 And so FIGA, if your insurance company goes under. 19:42 How many people here have Homeowners choice? 19:45 Okay. 19:46 So Homeowners Choice, their predecessor before them 19:49 had problems and then it shifted over 19:52 and Homeowners Choice picked up those policies. 19:54 So two things happen if an insurer goes under. 19:56 Sometimes another insurer like Homeowners Choice 20:00 will come in and pick 'em up and say 20:01 we'll handle those claims, we will accept those claims 20:04 and we'll pay those claims as if we were the insurer. 20:08 And sometimes nobody comes in because it's just a mess 20:12 and the state takes them over. 20:14 And they cover up to $300,000. 20:18 So the state will cover you up to $300,000 20:22 and so you've got that protection. 20:26 Hopefully that helps you but 20:27 there's nothing you can do to stop it. 20:29 - [Lady 2] If I'm in the middle of a claim dispute 20:32 with Citizens. 20:33 - Oh it doesn't matter. 20:35 Unless this new insurer says 20:38 we're gonna assume all those old claims too 20:40 and they usually aren't gonna do that. 20:44 They're gonna say this is our cut off date, 20:46 any old dates of loss that occur prior to X day 20:50 are gonna be on Citizens, after X, we're gonna assume. 20:55 Don't let it, again great question, 20:58 don't let it drive you crazy. 21:01 Just let 'em do whatever they're gonna do. 21:03 And if they pay it good, if they don't, you let me know. 21:10 I got a stack of verdict forms and jury instructions 21:13 that I've had approved by the district courts of appeal 21:16 throughout the state of Florida 21:17 that I take with me in every case. 21:19 There are three questions on the verdict form. 21:21 Did the insurer prove by the greater way of the evidence 21:23 that during the policy period they proved 21:27 that the home sustained direct physical loss. 21:30 Yes or no. 21:31 If your answer is yes, go to question two. 21:33 Question two, did the insurance company prove 21:35 by the greater way of the evidence that all of the damage 21:38 claimed by the plaintiff is excluded 21:39 by the specific terms of the policy, yes or no. 21:43 If your answer is no, your verdict is for the homeowner. 21:46 Third question is how much. 21:53 Yeah because, 21:55 here I'll tell you how you could be hurting yourself. 21:58 I had a case two years ago. 22:00 My client said you know what they told me to go get 22:03 a engineer so I went and got a engineer. 22:06 And I said do you know you've hired their favorite engineer? 22:10 Do you know that they had paid that company 22:13 six million dollars in the last three years? 22:20 No here's the question. 22:22 Sir, didn't you feel awkward walking around the house 22:25 with my client, 22:28 knowing that that company right there has paid your company 22:31 six million dollars and you didn't even tell her. 22:35 You didn't feel awkward at all keeping that to yourself. 22:38 Well no, I didn't think about it. 22:40 Well did you think to tell them that when you went 22:43 back to your office that day after inspecting the house, 22:47 did you think to tell her that 22:49 you had case with that guy right there? 22:51 That lawyer. 22:54 No I didn't think to tell him that either. 22:55 So you can harm yourself, I won that case, 22:58 as you might imagine cause the jury says 23:00 yeah we understand what's going on. 23:02 So you can, you need to ask the question. 23:07 Do you do work for the insurance companies. 23:10 They usually if you ask them that come, I do some. 23:14 Well what's some, like 98%, or 1% of your work's 23:20 on behalf of insurance companies. 23:21 Let me get my engineer out there 23:24 because I don't want an engineer. 23:27 If you hire the engineer and he goes and goes I don't know. 23:31 That plays into their scenario a little bit. 23:36 I'd rather have my forensic engineer go out there 23:40 and say you know what, the cracks start at the top 23:45 of the wall, that means it's wind damage. 23:49 Cracks that start at the foundation means 23:51 there's foundation movement and it's foundation 23:54 so that's probably flood. 23:57 That may be one of the things we look at. 24:00 However, do you have sink hole coverage? 24:03 On your policy, do you know. 24:06 When the flood waters recede, what happens a lot of the time 24:10 is we have classic sink hole activity. 24:13 Not sink holes, big hole with a house in the ground, 24:16 but we have sink hold activity 24:17 which is defined as a weakening of the earth 24:19 supporting the foundation and it causes cracks 24:21 in the foundation working their way up. 24:24 That's covered even if it was caused by flood 24:26 under the wind policy. 24:29 All I need to know to get started on case 24:31 so I need to get a look at that. 24:37 Yeah and don't get too put upon about that 24:41 because everybody, whenever these happen, 24:44 everybody gets sort of pushed back. 24:47 But for a roof replacement, we don't need to have water 24:51 coming into the house to require the insurance company 24:55 to replace the roof. 24:56 What I want them to look at is the ceiling strip 25:00 underneath the shingle. 25:02 The shingles lay on top of each other, 25:04 there's a ceiling strip. 25:06 If that ceiling strip was, 25:08 if the wind was strong enough to knock the ridge vent off, 25:11 it was more than strong enough to lift up the shingles. 25:13 Do you have architectural or? 25:15 - [Lady 3] It's a metal roof. - [Man 5] Tin roof. 25:18 - It's a metal roof, all right. 25:19 Well we need to look and see if it was, 25:21 got up under between the fascia and there 25:26 and see if it's lifted. 25:27 Cause here's what happens. 25:28 It lifts it and it sets down, 25:30 it's doing this throughout the storm. 25:32 It's doing this. 25:34 If I was to pull a nail out with my hand, 25:36 what would be the best way for me to pull the nail out? 25:39 Like that, wiggle it right, wiggle it a little bit. 25:42 Guess what the wind's doing. 25:43 It's moving this up and down, moving it up and down. 25:47 And it's loosening the nail and ob longing 25:49 the hole that the nail's in, your nails are now loose. 25:53 They've gotta replace that. 25:59 It does but the only, 26:01 and the questions is if you have, 26:03 in your policy you do have coverage 26:05 where civil authorities have either prohibited you 26:09 from being there or mandatory evacuation. 26:12 It even includes if you got damage 26:15 and a cop says you can't come back. 26:18 Any of that, civil authority. 26:19 I assure you I used to be a cop. 26:21 So a man with a badge, and a gun, and arrest authority 26:23 saying you can't go there is a civil authority 26:26 saying that you're not allowed to go. 26:28 Don't go. 26:29 So yes, but the only thing that that's gonna get you 26:34 is these living expenses 26:38 while the evacuation is in force. 26:43 But then we're gonna have a little fight with 26:44 the insurance company about when that begins 26:47 because if there's no damage to the house, 26:50 then their gonna say it doesn't cover 26:53 and I'd have to look at the policy. 26:54 - [Man 6] Exactly. 26:55 - Yeah but only from the point of damage onward 26:58 they're gonna say, let's say it got damaged on the tenth. 27:01 Let's say it got damaged on the tenth. 27:04 Then the living expenses from the tenth until the civil. 27:08 - [Man 6] Yeah they kept us out for a week. 27:11 - You should be at the alternative living expenses, 27:13 additional living expenses during that time. 27:15 If you have a business policy and the same thing happens, 27:18 you can get business interruption coverage. 27:21 Alright, so we got a great point, I'm gonna stay here. 27:24 We're gonna let our employees sort of wrap this up. 27:27 If anybody's got questions, let's bring them up front. 27:29 Thanks for coming.