Shaun Marker and Jeremy Tyler, attorneys at Merlin Law Group in Florida, recently posted a pair of blog posts - here and here -- regarding the difference between "supplemental" claims and "reopen" claims. Indeed, there is a difference, and Shaun and Tyler did a good job showing why. The distinction is especially relevant here in Tennessee after the recent flooding, as many Nashville and Middle Tennessee residents will find additional, previously unknown, damage in the months to come.
Thanks as always to the fine minds at the Property Insurance Coverage Law Blog.
Today my law firm launched a new website, www.tnfloodclaims.com, which we will use to try to address many of the issues affecting people affected by the recent floods. We've included some information about negligence claims against insurance agents, some basic tips for making a flood insurance claim, and other information we hope policyholders will find helpful.
With the flood waters receding, public adjusters are finding plenty of business. Many people have a misconception that public adjusters work for the insurance company, but the opposite is true. Public adjusters are licensed professionals who are employed exclusively by policyholders who have sustained a loss. Very simply, their job is to work with the insured to obtain the best possible settlement. Public adjusters can help policyholders understand their coverages, analyze the loss, communicate with the insurance company, and a host of other things.
In preparing to write this post, I called Phil Breeden, the President of FirstCall Claims, which is the largest public adjusting firm in Tennessee. Phil's group has been in business for over twenty years and so I asked him his views about how public adjusters help policyholders. I agreed with him when he indicated the importance of having professional help when navigating the world of insurance claims, particularly in light of the emotion and stress that often accompanies major losses. He stated,
The insurance companies have an adjuster on their side, and the property owner has the right to a Public Adjuster. Even though you might have called your insurance company, per your policy, you are still faced with the task of claiming and collecting on your own, which is not an easy task.
Public adjusters can be a valuable resource for insureds, particularly after a catastrophe when storm adjusters roar into town for the insurance companies to adjust claims in mass. But be wary of unlicensed public adjusters. Tennessee requires that public adjusters be licensed, and you can check to be sure a public adjuster is licensed here.
Over the past couple of days, that's a phrase I've heard several times, and its an issue that raises an interesting question -- Are insurance agents potentially liable for the flood damage suffered by Tennessee residents across the state? I think the answer is yes.
This is really a more complicated question than one might think, but one thing is for sure in Tennessee and that is an insurance agent has a duty to his client, the insured, to make sure that he or she is appropriately insured. In fact, the very reason people use insurance agents is to gain the benefit of having someone on their side who is inside the industry, knows the language, and to advise them as to what additional coverages that might be necessary.
One common recurring theme is the scenario in which the agent never mentions flood insurance at all. There was no reference at all to the fact that flood damage is excluded from general residential and commercial policies, no mention of the fact that flood damage is available at an additional cost, and no advice at all concerning the uninsured flood risk. I believe this scenario can create liability for the agent for the otherwise uninsured flood loss.
My read on Tennessee agent liability law is that it is much more favorable than many of our sister states. There are several cases that provide some sound principles for trial courts to follow in the circumstances that face us. For example, the Tennessee Court of Appeals has expressly held that an insurance agent cannot unilaterally make a decision as to whether or not a consumer needs certain coverage, but rather the agent has a duty, as a matter of law, to educate the client and give him or her the option of obtaining the additional coverage. This is a sound principle that resonates with common sense. People rely on their agents to help them understand complicated insurance policies that 95% of the population doesn't even read, much less understand. If there is a gap in their coverage, they rely on their agent to advise them of that fact. If an agent fulfills that obligation, then the consumer can make an informed decision about whether to take on the additional premiums.
I would encourage anyone who was shocked to learn that they don't have insurance coverage for flood damage to contact a qualified attorney. My firm, Gilbert Russell McWherter PLC, is offering free consultations to those who believe they may have a claim. Even if you don't, we're happy to field calls from all affected citizens and to offer practical advice on getting past these incredibly difficult times.
My home and garage were victim to the flood also, but we were much more fortunate than our neighbors, whose homes were totally destroyed. Those of us who work with insurance take much knowledge for granted. But, many people have had a tough time finding information, and have had to act without direction from anyone just to salvage what they can. So, remember the following at least:
1. PLEASE make sure you document your claims. I know – from personal experience – that taking pictures of ruined items is not the first thing on your mind as water is still present, but make sure you document the condition of your property, and the damage. Most companies are overwhelmed due to the nature of this disaster, and much of your property may be gone by the time an adjuster actually visits your home. Pictures are an absolute necessity.
2. Also, although I think this is mentioned in the FEMA materials Brandon references, you will need to get two (2) estimates for most items.
3. Finally, if you - like us – are replacing your HVAC units, and will be claiming those on your flood policy, preserve the units for the inspection of the company or FEMA representatives.
I wish all the best. If able, help those who have suffered more than you. And – putting off the lawyer hat and putting on the parent hat – get the kids involved in helping. It teaches them a great lesson about priorities.
FEMA has published several tips for filing a flood insurance claim that can be accessed here and here. Be sure to note that a proof of loss must be submitted within sixty days. It also has a brochure that addresses common myths about the NFIP (National Flood Insurance Program) that can be downloaded here.