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About: Dave

Name  :  David E. Young
 
E-mail  :  dave@brown-ohaver.com
 
Website  :  http://adjusteradvocate.com/
 
Profile  :  David E. Young, CPPA, SPPA Certified Professional Public Adjuster Senior Professional Public Adjuster Mr. Young is one of the very few individuals throughout the world who has passed both the Certified Professional Public Adjuster (CPPA) Examination and the Senior Professional Public Adjuster Examination (SPPA). He is a nationally recognized expert in the appraisal of insurance claims, having been retained by a national publisher to author writings to train attorneys in this provision of insurance law.
 

Posts by Dave:

Building or Remodeling

Have you planned renovations to your home? If so, you might need to review the insurance considerations such an undertaking might involve.

Standard homeowner’s policies are priced to cover a furnished home where no construction is taking place. If you are changing out a sink or a toilet, or even carpet, your policy coverage isn’t unaffected. But if you are doing renovations, you need a special course of construction policy.

The course of Construction Insurance exists to ensure buildings or projects under construction against the costs of repair or replacements in the event of an accident or a peril such as a vandal breaking into the property. Over the years we have seen many needs for a course of construction insurance. As a matter of fact, some of those insurance adjustings need to involve fires in such construction and reconstruction claims. The largest claim we ever worked on was for a very large, multiple-building apartment complex that was under construction. A plumber sweating a pipe caused that fire. In addition to fires, we have seen floods, vandalism, theft, and other unwelcome accidents to a construction project. The course of Construction (COC) insurance is also known as Builders Risk Insurance. Such insurance is designed to protect owners and contractors from devastating impacts such as fires. Construction fires can happen to anyone. We once adjusted a builder’s risk claim for the owner of the Arizona Cardinals.

As with most insurance policies, insurance companies are also considering the bottom line. In the case of the Arizona Cardinal’s owner, the fire voided all of the guarantees and warranties on the windows. However, because the windows looked just fine, the insurers had to be presented evidence, etc., as to why those windows had to be paid for. We were up to the job on that one. Further on that huge apartment complex fire, our work resulted in over four million dollars more for the job that was initially offered. We even went so far as to claim, with success, that the builder was due funds for opportunity costs because he had to postpone other projects to get the apartment complex up to its former progress point.

Other considerations also are considered when remodeling or renovating your home. If your property is vacant for over thirty or sixty days, (the time is defined by the policy) there is no homeowner’s coverage. Often when a home is left vacant for any length of time, anything can happen, even squatters moving in.

Actual Cash Value and Broad Evidence Value Settlements

Our office recently assisted two truckers with big semi truck claims. With both claims, the insurers found comparable vehicles to set valuations. We, of course, had to ascertain that the values offered were adequate. They were not but eventually we concluded the claims. I made the argument that the comparable vehicles had to be in the local area unless the insurer paid transportation to allow the insured to bring the truck to his area. It seemed only fair that the insurer would pay for transportation of the big truck when they said, “here is a comparable, go get it”! However, the insurer responded with the statement that: “we are only going to pay Actual Cash Value”. (ACV is usually considered the replacement that costs less depreciation.)

One of the insurers realized the validity of our argument and found a comparable vehicle in the local market but the other, Farm Bureau, did not after the Super Dump Truck was located at the other end of the country.

The term “Actual Cash Value” is found on seven pages in the insured’s policy but the term is not defined under the definitions. Because of the lack of definition, insured’s in other cases similar to this one, have had to ask a court for interpretation, noting that Actual Cash Value is frequently understood to mean “replacement cost minus depreciation.” While that definition remains a part of the idea of actual cash value, the definition used by many courts has been expanding over the years. The definition most often used today incorporates what is known as the “broad evidence rule.”

The Broad Evidence Rule is a valuation that does not adhere to the principle that the traditional measure of actual cash value (ACV) is the sole measure of value at the time of loss. This rule provides for the examination of every standard of value having a bearing on the property under consideration. In its simplest terms, the broad evidence rule means that the determination of the actual cash value of any property should include all relevant evidence an expert would use to set the value of the property, including replacement cost less depreciation and fair market value (which takes into account location, obsolescence, present value of expected income from the property, and economic conditions at the time of the loss). The rule applies equally to real property and personal property, commercial property and personal lines property, fixed equipment, mobile equipment, semi trucks and automobiles.

Since Farm Bureau is clinging to the idea that the insured must absorb the shipping cost to obtain a settlement, allowing Farm Bureau to reap a windfall in the process, we are going to have to call in reinforcements, because we are right on this one and at Brown – O’Haver we always fight for our clients.

Understanding the Deductible in Your Insurance Policy

The deductible in your insurance policy is often misunderstood. The deductible is the amount of money that you will have to pay out of pocket on each claim. Some policies provide for no deductible and others, such as some State Farm policies, have policies that tie the deductible to the limit of the policy.

I once assisted an insured in a $ 30,000.00 claim that had a deductible of ten percent. The policy limit was $ 280,000.00 so the deductible was $28,000.00 leaving the insured with just $ 2,000.00 to repair the damage to her home. She was surprised that she had that ten percent deductible and frankly, there are many people like her that do not even know what their deductible is. In order for some insurers to remain competitive, they structure their deductibles in order to decrease their claim payouts. That way they can reduce premiums. This is a good reason for insurance consumers to check their policy for the amount of deductible shown, or call their agent right away.

Generally, the higher the deductible the less the premium will be. A policy with a $ 500.00 deductible will cost more than a policy with a $ 1,000.00 deductible but sometimes the price difference is so small that you might just consider the lower deductible.

We must note that the deductible only applies to the damage, not the policy limit. For example let’s use a deductible of $1,000.00 with a $100,000 policy limit and you have a $ 90,000 loss, the amount the insurer will pay you is $89,000.00. But here is the kicker, if your loss is $105,000, and your deductible is $10,000, your insurer should pay you $95,00000 because the deductible is taken from the amount of the loss, not the policy limit. If your loss is $110,000.00, with a $10,000 deductible, the insurer will pay you $100,000.00. Many insureds and some claim representatives do not understand this but at Brown – O’Haver, we do. We will always do our best to collect the amount your insurer owes you for a loss. No more and no less.