After the Fire A Landlord’s Guide – The Insurance Adjuster

I had a major fire in one of my properties not too long ago. After getting the fire put out and taking care of the tenants I filed an insurance claim. I had to. My property was severely damaged and uninhabitable. Upon filing a claim, the first thing any insurance company does is send in an adjuster. The adjuster for my insurance company came out very quickly. He was there, inspecting my property just two days after the fire occurred.

As I wrote last time, he spent about two hours going through my property, looking over the damage, taking pictures and making notes. His job was basically the same of any real estate investor, and that was to estimate the cost of the repairs. How much was it going to take to put the property back to the condition it was in before the fire? I already had a rough estimate in my head, and now I had to wait to see if my estimate was close to his. I hoped it was. For if it was not, I was going to have a hard time getting my property back up and running.

Remember that insurance companies are in the business to make money. They do this by charging premiums and denying claims. So I must say that having the adjuster out looking over everything and then waiting for his report was a bit worrisome. What if he missed something? What if his estimates were low? What if he was just plain dishonest? Any of this and more could reduce the amount paid for my claim and thus make any future plans I had for the property much more difficult. I was, for now, in his hands.

In my estimation, and in terms of my insurance policy, the property was a total loss. That term “total loss” does not however mean perhaps what you think it does. The building was not totally destroyed. Not everything was totally lost and in fact large parts of the structure were able to be reused. In insurance terms, “total loss” means something a little bit different. “Total loss” in insurance terms relates to the dollar amount you have a property insured for. If the cost to repair the damage to a property is at or above the insurance amount, then the property is a total loss and the insurance company will pay out the full amount the property was insured for. Anything less is obviously not a total loss.

Would the adjuster agree with me that the property was a total loss? I was cautiously hopeful as I waited for him to make his report. That process would take about a week.

In the meantime, I found out that there happens to be an entire industry out there that contests adjusters and insurance companies in the hopes of settling your claim for a higher amount. In a purely coincidental occurrence, I happened to have lunch with just such a person. Imagine that. I just filed a major claim and then I happen to have lunch with someone who fights insurance companies over major claims. He was optimistic about my claim and actually took a look at my property. He gave me his card and told me to call him if I needed his services.

Would I need them? Stay tuned.