Condo Media - February 2018 - 30

MANAGING
CLAIMS
PROTOCOLS
AND PITFALLS

The feature article
reflects the importance
of communication
in managing
insurance claims.
But communication,
while essential, is just
one component in a
complicated process.
The points highlighted
here cover at least
some of the issues the
feature doesn't address
and summarize the
advice professionals
offer on how best to
manage claims and
avoid many of the
pitfalls in the claims
management process.

30

CONDOMEDIA

PROCEED CAREFULLY IN HIRING
COMPANIES AND CONTRACTORS.
"People will swarm the property the
day of the disaster," Wolf says. "Everyone wants to help-but they also want
to make a lot of money. You have to
be careful," he advises.
"Step back, take a breath, and
then proceed. Aside from emergency
remediation," he says, "put everything
out to bid."
CONSIDER HIRING
A PUBLIC ADJUSTER.
You don't need an adjuster to deal with
small claims, but industry executives
generally recommend adjusters for
larger ones. Association managers and
insurance agents oversee the claim
process, Greg Pierce notes. But adjusters "get into the nitty gritty of adjusting
claims. I'm an expert in insurance coverage," he says. "My job is to ensure
that the product I sell to an association
does what it's supposed to do. But I'm
not a valuation expert."
Public adjusters can draw on their
experience and their extensive data
bases to evaluate whether an insurer's
proposed settlement is reasonable and
fair. The insurance company's adjuster
represents the insurance company,
Pierce notes. That doesn't mean he
or she will intentionally understate the
damage estimate, he says. But it does
mean they "won't automatically come
up with the highest possible valuation."
A public adjuster can push back and
document the argument for a higher
settlement. "If you have a large claim
with complicated valuation issues,"
Pierce says, "a public adjuster can be
very valuable."
Doug Thayer, proprietor of Thayer
& Associates, agrees. He's found that
public adjusters will almost always
recover more for associations than the
associations would have recovered on
their own. And the higher settlements
"more than cover the adjuster's fee."
The adjuster also takes the lead in
reviewing the settlement offer and advising the board on whether to accept
it, Thayer notes. "That takes managers
out of the line of fire," he says, if owners complain that the board should
have demanded more.

Wolf says one of the first calls he
made after a fire destroyed a condominium community he managed was
to a public adjuster. "On a claim of
this size, you need a professional to
help you navigate through the claim.
Our adjuster found pockets of coverage we didn't know the association
had," Wolf says, including coverage
for almost 10 months of owners'
common area fees. "We were able to
tell owners they didn't have to worry
about their fees for a while," Wolf
says. "That was huge!"
MAKE SURE OWNERS RECEIVING
PROCEEDS FROM THE MASTER
POLICY SIGN OFF ON THE
DAMAGE ESTIMATE.
Attorneys suggest getting the acknowledgement in writing, so owners can't
argue later that the settlement was
inadequate and insist that the association make up the difference. Owners
have the option of rejecting the settlement. If they do, attorneys suggest
the association designate the owner's
attorney as special counsel to the association for the sole purpose of dealing
with the owner's claim. This keeps the
association out of the dispute and
(equally important) off the hook for
paying the owner's legal expenses.
DOCUMENT THE DAMAGE BEFORE
YOU BEGIN MAKING REPAIRS.
Insurers will want to see evidence of
the damage you expect insurance
to cover, Pierce says. "If you start
doing the work before the carrier
has assessed the damage, you could
encounter coverage problems later."
(That caution doesn't apply to emergency remediation, which, Pierce
notes, must be undertaken immediately to prevent further damage.)
It is also important to keep
the adjuster "in the loop"
as much as possible, Pierce
advises. "Make sure the
adjuster is involved in any
big decisions so there are
no misunderstandings
about whether the
damage is covered
and whether the repairs are authorized."
Condo Media - February 2018

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