How to Handle Large Losses – $2 Million Commercial Claim Study
What’s up, public adjusters!
Today we have a claim study on our hands.
In this post, you can learn how we handled one of the largest commercial claims we ever had at Elite Resolutions.
Before you get into all the good stuff, I would like to mention that most public adjusters want to handle large commercial claims.
Because that is where the money is.
However, with large claims, you also:
👉 Get a lot more work and pressure to deliver on time.
👉 Should be more careful about the mitigation and repair companies or contractors.
👉 Should realize there is much more at stake.
When you finish reading this claim study, you will learn how we handled a 1.8 million dollar water damage claim and exactly the steps we took to ensure the association gets paid as much as possible.
Let’s get started.
How to Approach a Large Commercial Loss as a Public Adjuster
This was a flood claim at an association with 63 units. Due to heavy rains, the entire parking lot flooded with several feet of water.
Every time a car would pass, small waves would enter all the surrounding homes. Most homes got anywhere between four and eight inches of water.
Usually, the association covers everything from the drywall on out, and the unit owner from paint inside, but this situation was a bit different.
There was coverage for some of the inventory, like bottom cabinets damaged by water, paint, and baseboards.
However, the claim proved difficult for two main reasons:
- It was a large association with 63 units. You can imagine how handling 63 claims at once feels like. That’s the scope of work we experienced.
- And second, it was a water damage claim which requires a different approach in many aspects.
First, when handling water damage claims, you need a slightly different letter of recommendation. I would suggest you look it up, and have one ready if you plan to help homeowners with flood damages.
To handle the claim, we applied our usual process from our public adjusting handbook, and read the policy to get a good understanding of what is and isn’t covered.
As it turned out, the association had upgraded its policy a couple of months before the date of loss. Their new policy covered up to three million worth of water damages.
Naturally, our next step was to inspect the property, have the water mitigation company inspect the property, and in the end, the insurance adjuster did the same.
A word of warning on the water mitigation companies. All of them will say they can handle a large loss if you ask them.
It is only a few weeks or months later that you realize they don’t have the equipment or the manpower to mitigate the damages on time.
So, be careful about the company you recommend to the property owners, especially with large commercial claims.
Finally, the water mitigation company got to work, mapped all the units, and started flood cutting.
Next, we had to submit the proof of loss.
There was a 60-day deadline for sending the proof of loss. You can imagine it was tough to submit proof of loss for 63 properties on time.
But we made it between days 45 and 50.
Our estimate was around 2 million dollars, but the first payment from the insurance company was approximately 1.5 million dollars.
At that moment, we had a choice to make.
Do we choose the appraisal process or go straight to litigation?
As you know, the appraisal process requires you to agree on the scope with the insurance company. Often easier said than done.
What to Choose - the Appraisal Process or Litigation
We first tried taking the appraisal process, but the insurance did not want to agree on some of the bottom cabinets and none of the upper cabinets.
They also refused to cover a wooden staircase that only got water damage at its base, but got crooked as a result, and had to be replaced.
The back and forth took some time, and after a few insults I received, we decided to go legal.
Insurance companies, and often homeowners, still see public adjusters as shady middlemen who try to pull some illegal stunts to get more money.
But that is usually not the case.
Public adjusters want to help homeowners, and yes, build their businesses in the process.
Considering all that, I would urge you to always play nice and be friendly with the insurance adjusters, even when they throw insults.
You can always go legal if you believe you are right, but arguing with them and acting unprofessional will not get you anywhere.
Take Water Damage Claims and Grow Your Public Adjusting Firm
Finally, after about a year, we settled at around 1.8 million dollars.
I was happy with the amount, but more importantly, the association and the homeowners were happy.
I hope this claim study shows you that large commercial losses require a special mindset and a lot of work.
But I also hope you will see there is nothing especially difficult about water damage claims.
Yes, the approach is a bit different.
But in the end, your goal is the same.
You want to help homeowners get the money they need to repair their properties. And your first step, as always, is to read the policy.
It’s time to take full control of your claims. Of your business. Of your life.
A community can help you get there faster. It can offer support during these tough times. Inspiration. Guidance.
Together, we can get you to where you want to be.
What are you waiting for?