Homes are constructed in accordance with local building codes. These codes permit a home to withstand certain wind speeds and a certain amount of force. Once a home is subjected to wind speeds or force which exceed those which it was constructed to withstand, the home becomes over-deflected. Depending on the direction of the wind and debris, a home can also be twisted or torqued resulting in a “racking” of the structure. Evidence of the same is indicated by nail pops, cracking of taped joints, doors sticking, etc. The catastrophe adjusters sent out by insurance carriers are presumably trained to assess storm damage and determine what caused it. However, more and more when confronted with a policyholder who believes their home has sustained structural damage which would result in more significant repairs or even total replacement (a higher claim payout), the insurance company’s adjuster advises he will call in a structural engineer to inspect the home. While on its face this seems reasonable and is welcomed by the policyholder, all too often and unbeknownst to the policyholder, the fact is the engineer is one which is routinely used by the insurance company and even on their "preferred list.” The insurance company and its adjuster know beforehand the opinions of the engineering firm (usually from out-of-state) from past retention and prior reports for the insurance company. Seldom, if ever, are such engineering reports prepared objectively and truly intended to provide an unbiased opinion of the dwelling’s post-storm condition. Instead, they will routinely contain boilerplate language and even paragraphs used in other reports prepared for the same storm for the same and other insurance companies. Representing little more than a trip to the “company doctor,” these reports even contain language that they are prepared exclusively for the benefit of the insurance company and cannot be relied on by anyone else. Meaning, if you wanted to later sell your home and tried to use the insurance company’s engineer report to assure the buyer there was no structural damage suffered during the storm; you could not.
The Solution - If you believe your home has sustained structural damage, you are most-likely correct. For no one knows your home better than you do. In order to protect yourself, it is always best to retain your own local engineer, on your own, and obtain a truly objective assessment and report. This will provide you both peace of mind and allow you the evidence needed to refute any biased pre-determined opinion and report of the insurance company’s hand-picked engineer. We have obtained a multi-million dollar class action verdict here in Oklahoma against State Farm for using these very types of biased engineering reports against its policyholders. Nevertheless, it continues to be a favored practice of insurance companies after catastrophic storms and earthquakes here in our state. Consequently, it is always best to obtain your own engineer report for your home.
Insurance companies have language in their policies, approved by our Oklahoma Insurance Department, which permit them to deduct or “hold-back” deprecation from your initial claim payment. However, the amount of depreciation withheld, and more importantly HOW IT WAS DETERMINED, must be documented in your estimate. Currently, most insurance companies use claim estimating software that simply provides a column for “depreciation” with no explanation or proof as to how it was determined. This is referred to as “unsubstantiated” depreciation and is improper. Depreciation cannot be properly calculated without assessing and showing the 1) age; 2) life expectancy; and, 3) condition. Logically, different components of your structure (home) and your personal property have different life expectancies and are in different conditions. Require the insurance company’s adjuster to “show his work” as to the specifics of how any depreciation was calculated. If you do not agree, document your disagreement.
We have always been amazed how our premiums and policy limits increase each year, because according to the insurance company’s explanation, the value of our homes and personal property and the costs to replace each have increased. YET when we suffer a loss and are paid for our claims, the amount is reduced by the decrease in value (Depreciation). The value increases when we pay premiums and decreases when we are paid for our claims. This is neither consistent nor fair. Consequently, make the insurance adjuster “show their work” on your estimate - documenting how any item was depreciated and the basis therefore.
There is a new recent practice of using restoration companies to “RESTORE” your personal property (Contents) instead of actually “REPLACING” it. The insurance companies have calculated the amount of money which can be saved by using their selected vendors to clean your personal property instead of replacing it. These restoration vendors market their services to the insurance companies by showing the amount of money which can be saved by “cleaning” your property instead of allowing you to actually replace it. The insurance company will electronically assign your contents claim to its “preferred” vendor, and they will show up on your doorstep usually within 24 hours of your catastrophe loss, bagging and taking all your personal property which they deem damaged to their facility for restoration. The insurance company specifically trains its adjusters NOT to leave a blank personal property inventory form with you. The idea being, you will list your damaged personal property as needing to be replaced, whereas their vendor would label it “restorable” instead - thereby avoiding the increased cost of paying you to replace it.
The problem with this cost saving practice is that insulation and glass CANNOT be removed from textiles (clothing, bedding, etc.). During litigation, we have discovered the so-called restoration process is nothing more than running your personal property through a regular washer and dryer at a grossly inflated cost to you. Neither can “RESTORE” your personal property to its “PRE-LOSS” condition - free of insulation and glass shards. The very nature of our tornadic catastrophes here in Oklahoma cause shattered windows and insulation to be sucked from walls and ceilings. Once both, along with other debris and water, are blasted throughout your home, completely removing the same from your personal property is virtually impossible. They must be replaced in order to place you back to your “PRE-LOSS” condition. Attempting to payout less using such a process is neither reasonable nor in good faith. You are entitled to the cost to actually replace your personal property (assuming you have a replacement cost policy) and should insist on the same.