How Do Loss Adjusters Arrive at the Amount to Pay the Claimant?

[Yrger]

I am from the Philippines.


Last year on Sept. 26, 2009, a terrible typhoon swept across the country -- the local name for the typhoon is Ondoy.

I have two homes in Provident Village, Marikina City, Metro Manila; this is the place worst hit by the typhoon and flooding, cars inside the village were hurled helter-skelter on top of each other, you can also imagine the destruction wreaked on homes and their contents.

Now, my two homes were insured for three million pesos each on the house and 500,000 pesos each on their contents.

The adjuster serving my insurer came up with total amount payable by the company to be for both homes and in regard to together the two houses and their contents, to be:

610,000 pesos.
​

How did the adjuster serving the insurance company come to that ridiculously low figure?

Family members and friends and others knowledgeable about insurance claims tell me that for the amounts the two homes were insured, I should be getting at least 1.5 millions on each house, and 500,000 pesos for the contents of each house.


Can anyone refer me to any literature in the web freely available to the public on how loss adjusters compute the loss claim of policyholders, in regard to typhoon and flood devastated homes and their contents?

No, I did not accept that amount.

On my objections, the company offered to increase the 610,000 pesos to one million pesos.

I still refuse.



Yrger

 

[somarco]

Re: How Do Loss Adjusters Arrive at the Amount to Pay the Claiman

Have you considered hiring an outside adjuster to work on your behalf? What does your policy say about the appeals process?

 

[Yrger]

Re: How Do Loss Adjusters Arrive at the Amount to Pay the Claiman

I read up on the Insurance Code of the Philippines and learned that there are two kinds of loss adjusters, socalled independent who work for insurance companies and socalled public who work for policyholders.

So I looked up the website of the Philippine Insurance Commission, and it has a listing of independent adjusters but no listing for public adjusters.

Just the same I poured over the list of independent adjusters, plenty of them, but at the bottom of the long list there are two public adjusters which are international ones.

On calling them up by phone I learned that they don't do home insurance, they are into ship insurance, and call themselves public average adjusters -- whatever that means.

A gentleman from the Steven Adjusters was kind to talk with me, and I told him that they should be able to help me because two flooded homes are similar to two boats sunk in a storm in the seas and miraculously floated back to the surface.

He told me it does not work that way with ships as with flood-devastated homes, because ship owners ad insurance companies already agreed in the policy on how much the insurer will pay the policyholder.


So, there are no public adjusters to serve policyholders, these people just have to trust in the goodness and conscience of insurers and their socalled independent adjusters.

Anyway, on further inquiries I found out that lawyers can also do the work of public adjusters if they are members of the bar, even though they are not licensed by the Insurance Commission to work as public adjusters.

I fear approaching lawyers because they charge very much, for every sheet of paper they use, for every minute of court appearance, for every trip, for every phone call, etc.

And right away they want to demand a retainer's fee before they take up your cause, which retainer's fee must be paid every month.


So, I say to myself that perhaps I can do a DIY job with my insurance loss claim, by reading about loss adjustment in the internet.

Sad to say, it is not like looking for websites teaching people how to fix their homes or how to cook, everything free just that we get to be exposed to the ads in their webpages.

After so much searching I came upon this website where there is a forum for people like myself aside from insurance agents.



Yrger

 

[brooks]

Re: How Do Loss Adjusters Arrive at the Amount to Pay the Claiman

I know nothing about laws, coverages, et el in the Philippines. I do have over 30 years experience in claims in the US.

You should have paperwork from your insurer that came with your settlement check. What does that say? It should indicate what they are paying for.

Your home covered for ACV or replacement cost? Contents coverage? ALE?

 

[djs]

Re: How Do Loss Adjusters Arrive at the Amount to Pay the Claiman

This is tough because nobody here (at least not I), know much about Phillipine insurance. There are bound to be a lot of variances that make any answer you receive from somebody out of the country pretty much useless.

If this was in the US, more specifically, California, then it wouldn't have happened because we don't have hurricanes here. I guess in the rare event we did......

Policies in general have 2 ways to pay for damage. You have to figure out which type of policy you have.

The first one is an ACV policy (actual cash value) which basically pays the depreciated cost for the home and/or the personal belongings. These are usually less expensive to buy, so people end up with them without realizing the risk they just took. In this case, making up some numbers, lets say the home originally cost $1,000,000 pesos to build, designed to last 30 years and it is 15 years into its life. The settlement would be approximately half the construction cost (this is a big oversimplification to illustrate the point).

The second type is a replacement cost policy. This policy will pay what it cost to rebuild the home or replace the personal property (with lots of exceptions). In this case, the same home as above, which cost $1M pesos to build originally, may cost $1.2M pesos to rebuild today, the settlement would be $1.2M pesos.

I won't get into whether or not it is a covered loss and types of perils, since it sounds like they have already agreed to pay the claim. I would check to see if they cause of loss (hurricane) affects how the claim is settled. For instance, here in California, damage caused by an earthquake is paid differently than damage caused by a fire. In many cases, the earthquake may not be paid at all, but if it is, it is basically a different policy that pays out, meaning different methods of settlement.

Also, you need to check to see if your personal property is paid at replacement cost or depreciated value (basically garage sale value). This makes a huge difference and this answer can be different from the coverage on the structure.

When you figure out if you have replacement value coverage, if such a think even exists in the Phillipines, then you need to see if the settlement is for the replacement value, or if there is a recoverable deprecation amount (basically, the difference between cash value and replacement costs) that is paid after the home is rebuilt or personal property replaced.

This is the type of thing where I do a lot of handholding with my clients when they have a claim for a home. It's confusing and frequently a long process.

Dan

P.S. The real question is what will it take to repair/rebuild the homes? Insurance will not pay more than that number, minus your deductible.