Hello everyone and welcome back to another interesting article about insurance claims.

Today, I’d like to help you understand how to assess a claim so that you can determine whether or not it’s worth signing. 

In other words, when you get called by a client who has some sort of damage on their property, you have to be able to determine – on the spot – if the insurance claim is worth signing, by assessing the situation right then and there. 

I, for example, walk out of approximately 30 to 40% of the houses I walk into, without signing any claims at all. There can be any number of reasons for this to happen, which we will go over today.

Therefore, let’s see how to determine whether it’s worth it for you or the homeowner to file an insurance claim based on the facts of loss.

You can never know the claim’s exact worth down to the last dollar because you cannot but an estimate right there on the spot.

However, you can determine if the claim is worth the effort based on the damage to the property. So, let’s take water damage for example. 

If there’s a small pipe burst that leaks behind the drywall, and the only damage that it has caused is to the drywall, then the claim may not be worth it. The best you can do is advise the homeowner to fix the damage themselves, since it will only cost a couple of hundreds of dollars to make a whole in the drywall, make the repair, and repaint that wall

The hustle over filing an insurance claim over such types of damage may simply not be worth it. However if the damage is more extensive, then you can certainly file a claim.

Here are the three most important factors you should keep an eye out when assessing damage.

• Roof damage.

• Flooring damage.

• Damage to kitchen or bathroom cabinets.

If any of these three factors are present in your assessment, you might be inclined to file a claim. If none of these three things are involved, you should probably walk away.

As mentioned before, flooring, roofing and cabinets are good indicators that a claim is worth signing.

However, even then, it’s not a 100% guarantee that a claim will be worth it if there’s a very high deductible in the policy. That said, it’s very important to take a look at the deductible.

For example, let’s say there’s extensive water damage to the flooring in one room, and that floor is not continuous throughout the house.

The flooring must be replaced, alongside some other things, such as baseboards and maybe some drywall. Still, the damage is secluded to only one room and the rest of the house is just fine. 

If the homeowner’s deductible is $5,000, you might be inclined to advise the client to not file a claim. They may not even have to spend that much for the repairs, so the insurance company isn’t obliged to cover the loss until the deductible threshold is exceeded.

Aside from looking into deductibles to determine the claim’s worth, you also have to look at the facts of the loss.

Let’s take our previous water damage example. The floor experienced water damage and you need to determine where this water damage is coming from and for how long.

This is the part where you need to have a team of experts on speed dial.

That said, you’re a PA, not a plumber or a roofer or an electrician. Since you’re not an expert in these traits you have to call someone who is an expert to determine the source of damage.

The main reason is that you don’t want insurance companies to bring in their own teams of experts and form their own bias determinations first. You have to do so first before filing a claim or immediately after.

Your experts need to do two things. The first is to determine the exact cause of damage and the second is to make the repairs.

Therefore it’s important for your experts to find the source of the loss, make the repair and document it. This can be very costly depending on the scope of work, which can help in making your determination about filing a claim or not.

By asking the right questions to the insured, you can also determine how long it has been since the loss was discovered. If for example the insured has allowed this leak to occur for an overly extended period of time, you might advise the insured that this would not be covered in the policy and avoid filing a denied claim

Another reason why you need experts you can trust is water mitigation.

Your experts will make an honest determination and they will tear down the wall, fix the issue, dry the excess water and whatever else is necessary to fix the problem. 

On the other hand, water mitigation experts the insurance company sends out will not do their job as well as they should. 

They are not to blame since they are afraid that the insurance company will get upset because they did what they had to and now the insurance company has to pay them more. Plus there are many guidel and limitations set forth by the insurance company.

Your team, on the other hand, will do their job well and you’ll know, based on their determination, whether to sign a claim or not.

The last thing you want to do is go over the insurance policy and review it.

I only sign the claim if the policy owner is comfortable in doing so and I also determine whether the claim is worth signing while I review the policy. 

I made a video on how to review the insurance policy on the spot in 5 to 10 minutes, so you should check that out. It can help you out a lot.

In any event, you want to review the policy with the client to determine what their coverages are. Here you can see limits, exclusions, deductibles and so on.

If, for instance, the water damage is limited to $10,000 and the damage is worth quite more than that, you may have to walk away because you can’t get much out of that claim.

This will help you help homeowners understand the situation, as well as help you determine if the claim is worth it or not. 

Of course, homeowners will be concerned that the rates may go up if they file a claim or that they may get dropped if they file too many claims.

You have to explain to them that these things can happen but there are other insurance companies that will jump at the opportunity to take them on.

That’s all for this article. I hope this will help you assess the situation and determine if the claim is worth signing or not. As a PA, it’s sometimes better to walk away even though you’re there to help others with their insurance claims.