Post- Hurricane Harvey: Helpful Tips to File a Property Insurance Claim

If your personal or professional assets were damaged during Hurricane Harvey, it’s likely that you have started the process of filing an insurance claim to cover the replacement of those items. Beyond calling the insurance company to get started, there are many things you need to know and strategies you can put in place to make sure your claim is processed in a timely manner.

1. Understand Your Policies and Coverage

The starting point should be learning what policies you have that may “cover” any damages to your property. Do you only have a dwelling-based policy? Do you have a separate policy for wind-damage, perhaps through the Texas Windstorm Insurance Program? Do you also have a National Flood Insurance Program (NFIP) backed policy through one of the carriers to protect against flooding? Report a claim to ever carrier under each policy that may apply.

Then find out how much coverage you might have and for what. You may have coverage for “living expense” to pay for lodging while your home is repaired. If your business was damaged, you may have coverage for lost revenue. Can you get a rental car? And for the purpose of repairs, you and your contractor must know how much is allotted to rebuild and repair.

If you have an agent, call them up. Or call the carrier itself to speak with a representative. Either way, read the policy! There is no substitute for educating yourself.

With this information, you can then do your best to maximize the total in your own pocket.

2. Report the Claim and Meet All Deadlines

Waste no time. Report the Claim ASAP to any carrier whose policy may cover the damage your property sustained. Many policies have strict timelines to report and for good reason. The carrier might wish to dispatch its adjuster to assess the damage while it is still fresh, or before secondary damage occurs (e.g. You do not need to wait to report a claim until you have all of the information. The claim can always be supplemented later with photos, reports, and an estimate for repair from your preferred contractors.

Then figure out all other deadlines that your policy might impose. Calendar them and never miss one. You do not want to give your carrier an excuse to reject your claim and blame you for it.

3. Inventory Damaged/Destroyed Contents

Your immediate impulse might be to throw out all of your ruined furniture onto the curb. But first, please inventory EVERY item that is destroyed. This is critical to later making your claim for reimbursement for each of these items. Pictures are good. A list with pictures is better.

You may then throw it all out. With adequate documentation of what was lost, a carrier or a future adjuster cannot demand or expect for a property-owner to save the damaged content. Similarly, a property owner need not have evidence of the original purchase.

4. Keep a Record of All Communications and Actions

Make sure that all your communications with the insurance company & contractors is IN WRITING. If you speak over the phone or  meet with either, send a polite email after restating the important decisions, topics covered, or plans made.

Just as importantly, keep a journal/diary of all events, dates, actions, costs, decisions, etc. that occur. Write down notes alongside each of these events that will serve as a log of what occurred. This will be critical for multiple reasons, not least of which to help you stay organized. Should there ever be litigation later on in the process, this will make your lawyer’s job that much easier.

5. Find Yourself a Contractor and Perhaps Your Own Adjuster

The adjuster can be your best friend, or biggest impediment to maximizing your claim. Some adjusters have all the experience in the industry, and will do you justice. Others have never held a hammer, but instead attended three days’ worth of a crash-course education. Yet, despite their zero experience in construction or even simple home maintenance, they are tasked with assessing the wide array of damage done to your property.

It is best to have your contractor there for the adjuster’s inspection. The hope is to assure that the adjuster sees the same damage as your contractor and concludes that your contractor’s list of recommended repairs (and price tag to do so) is accurate. If the adjuster reports to your carrier the same repairs recommended by your contractor, you’re doing great.
There may be more than one adjuster from the different carriers. And there may be a different one to assess your loss of contents.

6. Meeting the Adjuster

The adjuster can be your best friend, or biggest impediment to maximizing your claim. Some adjusters have all the experience in the industry, and will do you justice. Others have never held a hammer, but instead attended three days’ worth of a crash-course education. Yet, despite their zero experience in construction or even simple home maintenance, they are tasked with assessing the wide array of damage done to your property.

It is best to have your contractor there for the adjuster’s inspection. The hope is to assure that the adjuster sees the same damage as your contractor and concludes that your contractor’s list of recommended repairs (and price tag to do so) is accurate. If the adjuster reports to your carrier the same repairs recommended by your contractor, you’re doing great.

There may be more than one adjuster from the different carriers. And there may be a different one to assess your loss of contents.

7. After the Meeting

Remember Tip No. 4 above! After the adjuster leaves, send an email thanking him for his visit, and restating the key points/issues discussed and agreed upon (or the disagreements between you).

This contemporary, written log of what occurred, what was said and what was agreed upon will make it all the more difficult for either the adjuster to backtrack, or for the carrier to later disagree, deny, or under pay.

Then learn what will happen next and when and what is expected of you. Are you expected to take action? When will the carrier issue the first payment and for how much? Will the payment be made to you or your mortgage company? If the latter, then you will need to speak with your mortgagor.

8. Follow Up! Follow Up! Follow Up!

Do not expect this process to be on auto-pilot. And do not expect anyone besides you to care as much about your own property as you. Follow up with the adjusters, the contractors, the insurance representatives, etc. as needed. Do not drive them nuts. But remember the old adage: “the squeaky wheel gets the grease.”

9. Do Not Jump to Hire an Attorney

Read this article following the 2015 Memorial Day Flood in which it is advised to not hire an attorney too soon into the claims process.

In it, I strongly advise policy-holders to avoid involving an attorney in their claim for as long as possible. A solid attorney with experience in “First-Party Insurance” litigation can best help once you are at the end of the line with your claim, yet still facing problems from your carrier (e.g. underpayment, non-payment, late payment, wrongful denial of coverage, etc.). But you must first live up to all your responsibilities.

Involving an attorney before the insurance company denies your claim, or underpays it or otherwise wrongs you ensures that a portion of the carrier’s eventual payment will go to the attorney, rather than towards your recovery.

But should your insurance carrier fail to live up to its commitments under the policy (which is a contract!), then you should immediately speak to an attorney. You should never accept anything less than 100 cents of every dollar you are owed (well… perhaps I’d advise you to accept 95ȼ or more of every dollar if that’s what you were offered).

This article is re-purposed with permission from The Goldberg Law Office, PLLC.

Five Things To Know About Lawyers’ Professional Liability Insurance

Your law firm has made the wise decision to purchase lawyers’ professional liability insurance, or as it’s commonly referred to LPL coverage.  Now it’s time to get acquainted with that coverage.

I often hear clients and prospective clients say, “Mr. Hirsch, why do I need to get acquainted with my policy? They’re all the same, or I’m never going to need it.”

After quietly cringing, I usually retort; you wouldn’t purchase a new vehicle without test driving and researching it, would you?

The short moral of the story is no two lawyers’ professional liability policies are created the same. They are built by a group of humans usually consisting of lawyers, underwriters, financial gurus and other experienced insurance professionals.

Every insurance carrier has its own expert create a policy form by putting in features they feel will help sell that policy, but also make the program profitable.

The important part is knowing some of the important features in the policy so that you can use them when it’s absolutely necessary.

Let’s take a look at my top five features of the typical Lawyers’ Professional Malpractice Insurance policy.

1.  Pre-Claims Assistance:

I’ve had numerous clients over the years email me and ask me for advice about a situation, incident or potential claim that has arisen with a lawyer in the firm and whether they should report that as a claim?  Here’s my advice to the firm.

First, I’m always going to make sure you refer to your actual policy about what triggers your policy’s claims made coverage. It’s important that you have read the definitions and familiarized yourself with what’s in your policy.  You can usually find the Pre-Claims Assistance under the insuring agreement, coverage or supplemental coverage portion of the policy.

The second bit of advice, and something that’s often over looked in professional liability policies, is that almost every reputable carrier selling LPL insurance now offers free risk management hotlines, where the insured law firm can call a 1-800 number and speak with a insurance defense lawyer about your firm’s situation or incident before the actual claims reporting process.

Generally, the insurance carrier hires an outside law firm or will have in-house staff counsel available. These on-call attorneys will give free legal advice about your firm’s situation or potential incident. These defense lawyers are experienced in lawyer’s professional liability attorneys, and more importantly, are familiar with your firm’s LPL policy. Some of these risk management hotlines offer continuing legal education hours for your firm’s lawyers, as well.

There’s a lot of incentive for an insurance carrier to provide this type of pre-claims assistance. The sooner the insurer learns of the client’s problem, the more likely the chance of a better resolution. Even where circumstances later become a claim, early involvement can help mitigate and prevent mistakes that might increase the cost of settling a claim and can create a chain of documentation that assists in the ultimate resolution.

To encourage the use of pre-claims assistance, most insurers do not include expenses related to pre-claims assistance within an insured’s loss history. This eliminates the risk of a premium surcharge for using the service.

Often the expenses the insurer incurs in providing legal or other assistance to resolve a problem get paid out of the policy limits and not subject to a deductible.  Please make sure you refer to your policies risk management hotline features to get a full understanding of the features available to your firm.

2.  Disciplinary Coverage:

In 2011, the State Bar of California reported 16,156 new complaints against California lawyers. Use this blog as your friendly reminder of the great risk a grievances present to your law firm. They can often be messy and the severity can sometimes resemble a legal malpractice claim in total defense costs.

While it seems fairly straight forward, different LPL policies have different coverage limits and different types of coverage for which they will provide defense costs. Make sure you understand how the limits of the disciplinary hearings coverage work in your policy.

Limits for disciplinary hearings coverage are most often a sub-limit, which does not affect or erode your actual limits of liability of your LPL Policy. However, there is most often a per proceeding limit within that sub-limit and an aggregate limit for total proceedings.

The amount of disciplinary coverage can range from $10,000 – $100,000 depending on the policy and generally not subject to a deductible.

Since it’s likely a reimbursement by the insurance carrier, the law firm sometimes can pick their defense counsel. The reimbursement usually provides for attorney’s fees and reasonable costs, expenses, or fees paid to third parties, resulting from any one disciplinary proceeding.

Pay special attention to the definition of a “disciplinary hearing” in your LPL policy. Definitions often include, but are not limited, to state or federal licensing boards, peer review committees, courts, bar associations, or a regulatory body. You can always find any definition you need clarification on in the definitions portion of the policy. This will lay out exactly who or what is covered.

The very definition might determine whether this coverage would apply to your specific proceeding. One caveat – make sure you follow your policy’s procedure to disclose the grievance proceeding in writing to the carrier. Remember your firm’s LPL policy is the controlling document, so make sure to follow its reporting procedures accordingly. Never deviate or you run the risk of voiding coverage altogether.

3.  Punitive & Exemplary Damages:

Punitive or exemplary damages seem to be a very hot button topic in the legal field. Punitive damages are intended to reform or deter the defendant and others from engaging in conduct similar to that which formed the basis of the lawsuit.

The purpose behind punitive damages is to punish the defendant for outrageous misconduct and to deter the defendant and others from similar misbehavior in the future. While some states refuse to award punitive damages in any action and some have limited those damages, they certainly exist.

There has been a significant increase in Fair Debt Collection Practices Act (“FDCPA”) actions against lawyers in recent years. This has become a leading cause of claims in LPL the last few years. It’s important to determine whether your LPL policy covers awards arising under the FDCPA. Make sure to check your state’s laws on punitive damages, as well.

Most older LPL policies exclude punitive and exemplary damages in the definition of damages.  Some polices do not specifically exclude coverage for punitive and exemplary damages, however there is no direct language as to whether they are covered in the policy.

You should consult with your broker, if no such language exists in the policy. However, I’m seeing a trend of newer LPL polices including punitive and exemplary damages, where insurable by law, in the definition in order to differentiate that policy form from the others.

It’s an excellent selling point, and these policies do exist because I sell them. You should consult with an expert broker in LPL about finding those particular policies that do include punitive and exemplary damages.

Depending on the types of cases your firm handles this could be a huge difference in covering the type of liability the firm might be exposed to.

4.  Mediation Incentive Deductible Clause:

Mediation Incentive Deductible Clauses are a relatively new supplemental coverage or incentive that I’m seeing in LPL policy forms, and it’s certainly a great selling point, if the firm carries a larger deductible.

The mediation incentive clause usually states that if mediation of the claim takes place either without institution of an arbitration proceeding or service of suit, or within a set period of time (ie., 60, 90 or 180 days) of the institution of such proceedings or service of suit, and such claim is ultimately resolved for an amount acceptable to the insured and the insurer by the process of mediation, the insured’s deductible is reduced by (50%) or some other amount.

Generally you can find this clause in the settlement portion of the LPL policy or possibly in the supplemental coverage. The rationale behind offering this clause is that both indemnity and defense costs will be typically lower when claims are settled by mediation, which can save the carrier significant amounts of money in quickly dealing with a variety of LPL claims.

Make sure to carefully review the LPL policy forms under consideration for the broadest provisions that give you the best opportunity to take advantage of this incentive.

5.  Extending Reporting Options:

What are extended reporting periods (“ERP’s”) better known as tail coverage? I strongly recommend you get intimately familiar with this provision in your policy.

I often get the following question. “What does the law firm or individual lawyer do when the firm dissolves or the lawyer leaves the firm?”  This is where tail coverage comes into play and will ultimately help the firm decide on their next move.

Tail coverage extends the period of time during, which an insured lawyer can report a claim based upon an act or commission that occurred after their retroactive date, if any, and prior to the effective date of the tail coverage.  There will always be an extended reporting period option portion of the policy detailing the different options available to the firm.

Remember the firm can only purchase tail coverage through its current insurance carrier, it is not sold, as a stand-alone product.

If the firm dissolves, generally LPL polices offer a 30-60 day period to purchase tail coverage after that policy cancels or expires. Once that window expires you can no longer purchase the tail coverage and the firm can go unprotected from claims that arise later.

In addition, some LPL policies offer individual lawyers the option to purchase tail coverage upon leaving the firm, but I would suggest you review the LPL policy to see, if such a provision exist.

Most, if not all, LPL insurance carriers offer tail coverage for lawyers that retire or cease the private practice of law.  Some carriers offer these (retirement or cessation of practice) lifetime tails for free after you have had three years of continuous coverage with that carrier.

Tail coverage pricing is almost always listed in your LPL form under extended reporting coverage. The premium for the tail coverage will depend on the length of the extended reporting period purchased.

Generally, ERP’s are calculated as a multiple of the regular policy premium for that period, (e.g., 100 percent of the annual premium for a 1-year ERP; 175 percent of the annual premium for a 3-year period; or all the way to an unlimited option, although not every carrier has an unlimited ERP option.

When determining the right length of an ERP for your firm, here are my suggestions to consider.

  • The most critical factor is the area of law your firm practices. This will determine the types of statute of limitations that may arise in cases the firm handles, which can lead to longer periods for a claim to arise and become known.
  • How many claims the firm has had in the past might also service as a good measure of the likelihood of a future claim.
  • Also, consider the firm’s caseload. How many files the firm has handled in past? How many closed files are there in that last 2 or 3 years?  This might be a good opportunity for the firm to review its file closing procedures and other firm risk management practices in the wind down.

Finally, if you’re still looking for coverage, complete our lawyer coverage indication form and we will connect with you shortly to answer questions you have, as well as provide another quote to consider.