Adjuster Stories: My Wild Ride Adjusting Insurance Claims

CONTENTS

Introduction

Chapter 1

Chapter 2

Chapter 3

Chapter 4

Chapter 5

Chapter 6

Chapter 7

Chapter 8

Chapter 9

Chapter 10

Chapter 11

Chapter 12

Chapter 13

Chapter 14

Chapter 15

Chapter 16

Chapter 17

Chapter 18

Chapter 19

Chapter 20

Chapter 21

Chapter 22

Chapter 23

Chapter 24

Chapter 25

Chapter 26

Chapter 27

Chapter 28

Chapter 29

Chapter 30

Chapter 31

Chapter 32

Chapter 33

Chapter 34

Chapter 35

Chapter 36

Chapter 37

Chapter 38

Chapter 39

Chapter 40

Chapter 41

Chapter 42

Afterword

To my father -

He was a one-of-a-kind man who I always looked up to.

He isn’t with me anymore and I miss him so much.

Every time I think of him I hear his voice and see his smile.

INTRODUCTION

In my twenties I decided to change my occupation and try insurance adjusting. I had my boots on the ground in fourteen states during my career and I met thousands of nice people who needed my help. I personally inspected over 15000 claims and supervised thousands more. Thirty plus years flew by quickly.

Friends sometimes asked me to tell them about an interesting or an unusual claim. I watched the reactions on their faces when I told them a story based on the essence of the actual claim. They always paid close attention and asked questions. I had become a fireside storyteller.

I realized that all of my stories, unless I wrote them down, would simply be lost if something happened to me. If they died, they would remain dead forever. They run around in my head all the time. A single word that I might hear today could cause me to remember a particular claim as if I had worked on it yesterday. How many stories are there? I don’t really know, but some days bring other stories back into my mind and into the daylight.

Most of you probably have never read much, if anything, about adjusting an insurance claim and you may be biased in your view of members of my profession. I conducted a survey of people at a local shopping center asking them only one question. The question was Using only one word, please tell me what you think of an Insurance adjuster? I expected mostly negative responses, but I was surprised with the answers. They ranged from parasite, crook, and thief to sympathetic, kind, and helpful.

Being an adjuster gave me an opportunity to help many people as well as myself when I became an insured and made a personal claim. In the last chapter I describe how my adjusting experience saved me from facing a potential financial disaster.

In the process of working on the book, I found myself captivated by both the pleasure and the complexity of writing. All of the stories in this book loosely represent different types of claims I was involved with in some way. All of the names of the individuals mentioned are fictitious except for Robert Page. He was my friend who was taken away by Hurricane Hugo.

I am very grateful to each of you who helped me with this project, especially to Laura Steckman for editing, Margery Boyle for working with my old pictures and getting them ready for the book and website, my friend Norman Reed and his brother Mark for creating the website, and my wife Natalie for her essential contribution to the creative process. Without their help, this book would never be what I hope it might become.

Please enjoy Adjuster Stories: My Wild Ride Adjusting Insurance Claims. Thank you so much for keeping my stories alive.

CHAPTER 1

Dri—ck, dri—ck, dri—ck, dri—ck… What a strange sound, I thought. There it is again. Dri—ck, dri—ck, dri—ck… I decided to investigate and got up from the kitchen table, leaving my bowl of corn flakes, and stepped into the hallway. The sound changed from dri—ck to drip. I walked down the hall to the front entrance and was hit by a drop of water immediately on my right forearm. I looked up and saw a circular stain with water, slowly gathering into a sufficient mass and weight to allow it to fall onto the floor. Looking down, I saw a 24 inch puddle, slowly expanding larger on the slate floor as the water continued to drop.

I hurried back to the kitchen and grabbed my mom’s dish towels. I then walked back and placed them on the top of the water. I ran up the hallway steps and knocked on my dad’s bedroom door. A minute earlier he had finished taking a shower. I told Dad there was a water leak in the entrance hallway ceiling. Upon hearing my news, Dad began to investigate the cause of the water leak. The problem was not visible from inside the bathroom. We would later find out that the pan underneath the shower stall tile had cracked and allowed the water to escape. The water trickled down onto a floor joist. When the drops grew heavy enough, they fell directly down onto the hallway ceiling and then seeped through the drywall, making the circular stain that I first noticed.

The drips from the ceiling had lessened when dad turned off the shower. It soon became clear that the pipes were not spraying out pressurized water. I heard Dad muttering a four-letter word that started with an S under his breath. Since the towels were soaking up the water, there wasn’t anything else that we could do to minimize damages. Dad walked to his living room desk as I went to grab a couple more towels in case they were needed. He made a call to a plumber and then started looking through his lower left desk drawer. He located a folder that contained information about our Homeowner’s Insurance. He called his agent who informed Dad that a claim would be reported to Erie Insurance. By mid-afternoon the Erie adjuster had contacted my father and he made an appointment to come and take a look.

The plumber visited us about two hours later. He cut a hole in the entrance hallway ceiling, looked up through the ceiling with his flashlight, and reported that all the pipes were fine. He observed moisture on the bottom of the shower pan and said that the leak was coming from it. He told dad that the sliding doors needed to be removed from the stall along with the shower pan and the two layers of tile above it in order to make repairs. He couldn’t match the existing tile, but what he recommended would be a close match and work out nicely.

I was fourteen years old when this event took place. We lived in Glenshaw, Pennsylvania. I had gotten home from school a few minutes before the adjuster arrived. I was standing quietly and listening very closely as the adjuster spoke to my dad. The adjuster knew exactly what was needed to fix the problem. He discussed the coverage and told dad he would drop an estimate off the following day. He then added, You were lucky that you saw the leak so quickly. If it occurred over an extended period of time, the damage wouldn’t have been covered.

I didn’t know it then, but this incident would leave an impression on me which would one day change my life. I do remember thinking it must be nice to be able to travel away from an office and meet people wherever they live. The concept of helping people seemed like a wonderful career.

When it was time for me to select a college, I applied to four universities. One didn’t accept my application and the other three did. Those schools were Waynesburg College, Penn State University, and North Carolina State University. I had always wanted to go to Penn State, but at that time the university was involved in a big construction project on the main campus. I would have to attend school at a commuter campus for at least one year before I could transfer to the main campus. That wasn’t appealing to me. My immediate fall back choices were Waynesburg and North Carolina State University.

Dad and I made a trip to North Carolina. It was NCAA Basketball tournament time. Our hometown Duquesne Dukes were playing UNC that evening in an early NCAA round. The azaleas and spring flowers were in full bloom. The pretty flowers were a sharp contrast to those at our home where nothing had yet awakened from the winter slumber. We took a tour of the campus and I was impressed by how big this college was compared to Waynesburg College. We drove away from the main campus to view Carter Finley Stadium. It was a nice looking stadium and I could imagine the excitement taking place there on game day. Then we visited Reynolds Coliseum. The on-campus basketball arena with 12,400 seats impressed me. While researching the school, I had become interested in the prior success of the basketball program. It had a good history. Little did I know they would go 27-0 in 1973, but they did not get to play in the NCAA Tournament because of a recruiting violation involving David Thompson. In 1974 they would win the NCAA title by defeating UCLA in the Semifinals and Marquette in the National Finals. I graduated in 1973, but 1974 was exciting.

Located across from the coliseum was the Student Supply Store. It was last place that we visited that spring day. We walked through the store filled with T-shirts, books, and school supplies. When we were about to leave, a saleslady walked up to me and said, Young man, I think you are going to be one of our new students in the fall. Let me just take you around the store and show you everything we offer. Southern hospitality was something different. As dad and I walked back to the car, he said, The saleslady was really a wonderful person, wasn’t she? I had been thinking the same thing. After we left the campus, Dad said to me, I guess we ought to ask Waynesburg for a refund of our deposit, shouldn’t we?

My college years passed very quickly. I had not completed my language requirement as my senior year closed. Without passing the two required courses I could not graduate. Fortunately, my German professor realized that I was a lost cause and she helped me to reach an accommodation with the dean that let me receive my diploma at the end of the first summer session.

I always wanted to follow in my dad’s footsteps and become a salesman like he was. He dealt with bulk material handling equipment and I could see myself selling conveyors and cranes. N.C. State University did not offer a business major. As a result, I had planned to obtain a liberal arts degree and then go into sales. Life didn’t exactly work out that way.

During the spring semester I applied for my first full-time job, which was in retailing. I was fortunate that a national retailer hired me at a graduate salary and allowed me to attend evening classes until I graduated. I started with the title of assistant manager. My time working at the Raleigh store was brief. Several months later I was transferred. At the new store I developed management skills and was taught all about retailing by the office manager. She was a wonderful person and an excellent teacher, whom I would come to view more or less as my second mother. She knew pretty much everything about retailing. She always called me Mr. Scott and not by my first name Jonathan.

Retailing wasn’t going to be my future and I decided it was time to try something different. One Sunday I glanced at the employment ads in the local paper and saw one under Insurance for candidates interested in becoming insurance adjusters. They were looking for college graduates and offered a training program. I remembered the adjuster who came to help my father so many years ago. I contemplated the prospect of being able to help people outside the confines of an office and anticipated observing things that the average person would never see. I completed a cover letter and a resume that would change my life for the next 30+ years.

I wondered then as I still do now, if there is another job where one person is responsible for so much of a corporation’s assets as is an adjuster. Good adjusters are worth their weight in gold several times over. Bad ones can cause immense problems. They may spend money incorrectly and through bad decisions may get their employer involved in costly litigation. Litigation can lead to punitive damages or extra contractual damages being awarded.

CHAPTER 2

I started my new adjusting career six weeks later. My supervisor was Ryan O’Connor. If his last name doesn’t give it away, I can attest to the fact that he was a true Irishman. After work he would stop in at a nearby pub and order a brew. After taking several sips, little red bumps slowly started popping up on his arms and neck. He told me he was allergic to something in the beer but he didn’t care because it tasted good. He was a great guy and a good teacher. I was lucky to have the opportunity to learn from him.

When I walked into the office for the first time, the first thing he said to me was, You will be leaving on Sunday to go to Albuquerque, New Mexico. Make sure you kiss your wife goodbye because you are going to be gone for weeks. The training center is located in a remote area and you are going to feel pretty isolated. Some of the work weeks are six days long. They will not send you home during the training period nor will they pay for your wife to come and visit you. They will also put you up with a roommate, which is probably not something you will like. Now I have to figure out what to do with you for the rest of the week.

For the remainder of that week we talked about many things. I rode along with him to inspect several losses. The only advice he gave me during those initial claims was Don’t say a word other than hello and if you are asked any questions don’t even try to answer them. Just pay attention to what I do.

The area served by my office was quite large and it could take several days to inspect claims scattered through it. Technically, I worked for an independent adjusting company. Any insurance company could be one of our clients. Sometimes we were asked to investigate, evaluate and settle the case. Other times we received a limited assignment. We might be asked to obtain a statement from a witness, take a picture, or draw a diagram of an accident site. It just depended on what they assigned us to do. In the 1970s few insurance companies had staff adjusters residing in our area and inspecting losses in the field. There were almost no four-lane highways once you got out of town. It could take you a whole day just to drive back and forth working one or more cases. The more cases we had in an area the more economical it was for us. Each file was billed separately. The less driving time involved the higher our profit margin. In those days quite a few insureds didn’t have phones in the mountains. We sent letters and waited for them to get in touch with us.

The first case I worked with Ryan was a grease fire loss. We drove up and down the mountains and finally arrived at the insured’s house. Ryan asked me what I thought we should do before we went inside. I said, I don’t know. I guess we ought to see how bad the problem is. He just chuckled and we went inside.

The insured was a very nice person and we were there about 45 minutes. Luckily, when the grease in the frying pan caught fire, there was no structural damage, but there was sure a lot of black smoke that saturated the kitchen and several other rooms. I helped Ryan measure the interior to determine the square footage of each room. He explained that once the square footage was known a repair rate could be applied to the affected area to assist in completing an estimate. He said, Make sure you prepare your estimate room by room. If you don’t do it that way, you will not be able to show the insured each item that was included in the estimate. If the insured calls weeks from now, your memory will not be as good as it is today. It is easy to overlook something. After your report is sent in, you won’t be able to show how you calculated the loss dollars if you used lump sum figures. Anticipate the possibility that the Insurance Company might have questions about the estimate. If you list each item, it is easy to answer them.

I will always remember that day for another reason. On the way home, as we were at the top of one of the mountains, Ryan’s car ran out of gas. We coasted down the hill for several minutes and finally rolled into a service station. The vehicle’s momentum stopped right at a gas pump. I don’t think there was another gas station within 10 miles. Ryan had no money in his wallet and my wallet was empty. He went into the rear passenger area and located some change underneath the seats. It was enough to purchase just enough gas to get home. In the following months I saw him dropping change over his shoulder into the rear of his car. The only other memory I have of my first week was asking Ryan a lot of questions.

The training center was located just outside Albuquerque. The instructor began the first training class by asking the 15 of us to briefly state our name, hometown, and how long we had been with the company. The first person announced he had been with the company for six months. The comments of the next person I would always remember. He said, My name is Darrell Pender and I am from Waterloo, Iowa. I have been with our company for exactly five minutes and this is my first day with the company. When he finished, everyone in the room broke out into laughter. It was one of those moments that if you weren’t there, you just didn’t know how funny it really was.

The classes were very challenging. We spent 240 hours in the classroom and were given only one of the Saturdays off. The training was comprehensive, detailed, exhausting, perplexing, and competitive. We had to write numerous practice estimates. We spent one week discussing Liability coverage. I wondered how much of the information I would retain when I got home. Would I be able to answer coverage questions from my clients involving Homeowners and Fire policies?

The training center had a mockup of a roof in one of the buildings. The instructors showed us how to properly climb onto it. The mockup had sections demonstrating the various types of shingle damage we would see in the field. The instructors provided guidance we might use to figure out when we should allow for a partial repair or replace the entire roof. We had to write numerous practice estimates for the instructors to critique.

One entire week was spent teaching us how to estimate vehicle damage. I hoped that I wouldn’t get the chance to write many vehicle estimates because I never had any interest in cars. Fortunately, in my entire career, I probably wrote less than 500 vehicle estimates but I found it interesting to investigate the circumstances of what happened at the moment an accident took place.

When I got home and began handling my own cases, it seemed like I hadn’t learned much about coverage interpretation during the classes. As my cases got more complicated, it took me years to understand how policy language was legally interpreted in Personal and Commercial lines policies. The liability sections were easier for me to understand, but liability was an area that I didn’t really want to work in. Liability adjusters will tell you why they are at the top of the food chain as far as the skills that are required. I disagree with that view. The truth is the dollars spent every year on property claims are greater than those spent on the casualty ones.

CHAPTER 3

I learned quickly that it was important to show sympathy and empathy when they were needed in order to be successful. That didn’t mean I was always sympathetic or empathetic; however, I often sincerely felt both sympathy and empathy.

In one of my early claims a young couple was involved. The policyholders were Robert and Tammy Johnson. The loss notice indicated that their house had been heavily damaged by a fire. There was no contact phone number provided. I decided to visit the loss location and hoped to locate them. I found the insureds at a nearby neighbor’s house. Mrs. Johnson was about to give birth to their first child. It surprised me to learn that Mr. Johnson was only 16 years old and his wife was only 14. They had been married for about a year. The destruction of their small home came at the worst time for them.

Their insurance company was a regular client who often sent us claims involving fire policies. In this case a builder entered into a contract with the Johnsons to build an 800 square foot home. It had a block foundation and a wooden joist flooring system. The floors were made of plywood. No wall to wall carpet or tile was used. The exterior had inexpensive lap siding. The roof wasn’t shingled, but instead consisted of rolled roofing material. The interior did not have any real ceilings. There was only open-air until reaching the underside of the plywood, sitting on the roof rafters. It had a wood stove that was vented to the exterior for heat. The undersized kitchen had a small metal sink, a gas range, and about four feet of counter space. The cabinets were prefabricated and inexpensive. Of all the claims I had seen so far, this house—to be kind—was built poorly. I couldn’t believe I was looking at what had been a brand new house when the fire occurred.

I obtained a copy of the contract between the Johnsons and the builder along with the mortgage documents from the loan closing attorney. There were no co-signers shown on any of the documents. I wondered how two under-age teens could be legally liable to repay the loan. I wasn’t there to figure it all out. I was there to determine the damages involved to the structure.

The Johnsons had financed the home with no down payment. The insurance coverage was equal to the cost of the home plus the value of the land. The Johnsons’ immediate problem in the event of a total loss was that the policy only paid based on the buildings value. That meant once the policy limit was paid they would still owe the mortgagee thousands of dollars. I wanted to tell them to seek out legal advice. Perhaps the mortgage was not valid because the teenagers did not have the legal capacity to enter into a binding agreement. I hated to see them on the hook for the remaining mortgage balance, but I couldn’t make the suggestion because I was representing the insurance company. They would end up owning a small piece of land but have no place to live.

I could see the fire originated at or near the wood stove. I had no prior experience with wood stove claims and little experience with burn patterns. Since the area of origin was obvious to me I needed to recommend the Insurer retain an expert. A brand new house shouldn’t catch on fire. Unfortunately for the Johnsons, the builder and the mortgage company were all part of the same corporation. Perhaps that was the reason the insurance company did not hire a fire investigator to establish the cause of the fire. An expert might have found negligence in the construction process. The insurer would in the end still pay the claim while possibly providing the Johnsons a basis to sue the builder for negligence.

Looking back at it now, this early claim and my moral dilemma both still bother me. I was not hired to conclude the claim, but instead to appraise the damage. I recommended the insurance company pay the cost to rebuild another house just like the one destroyed. I wondered if the builder built the young couple a new home.

On my way home I stopped in to see one of the insurance agents. I was required to make five marketing calls a week. While I visited the agency, one of their customers came in and reported an accident that had just taken place on the other side of town. The customer identified one of the two drivers involved. The agent recognized one of them as her customer. She made a call to the automobile insurer. She told them that there was an adjuster in their office and requested authorization from them to assign me the case.

As I approached the accident scene, the traffic was moving slowly. A Highway Patrol car with its blue lights flashing was parked in the middle of the bridge. The claimant’s vehicle was a brand-new Chevrolet pickup truck. Minutes earlier it had been driven off the dealer’s lot for the first time. The claimants Dewey Bennett and his mother Carla were sitting on the side of the road. He was obviously in pain. I parked on the shoulder of the road and walked onto the bridge. I learned the insured had left the scene a few minutes earlier in an ambulance. The Bennetts were awaiting the arrival of a second ambulance.

When I approached, the Police officer noticed my camera and tape measure. He asked me what I wanted. I told him I was an insurance adjuster and he spouted out, You need to leave. The last thing I need is an ambulance chasing insurance adjuster bothering anyone. I explained to him that I was not there to bother anyone. I represented the driver of the passenger car and it would be helpful for me to gain as much information as possible. He said, I guess I will let you speak with the Bennetts until the ambulance arrives but only if they want to talk with you. When the ambulance gets here you need to get out of the way.

After snapping several photographs of the insured’s car and the claimant’s truck, I walked over and introduced myself. Mr. Bennett said, I am 48 years old and I have never owned a new car or truck. I can’t believe on the day I finally buy a brand-new truck it is crushed just a few minutes later. I want you to write me a check, so I can go back to the dealer and buy a new truck today. I will sign any paperwork that you put in front of me if the case is resolved today. I replied, I don’t feel comfortable in potentially taking advantage of you while you are obviously injured. I will need to talk to our insured. Before I could say anything else, he said again, I want you to write me a check today or tell the dealer today that they will receive a check for the price of a new pickup. I am not going to repair the vehicle. It has two miles on the odometer.

I obtained all of the necessary contact information for Mr. Bennett and told