Friday, November 30, 2007

Fire Recovery: How to Deal with Your Insurance Company

Having a fire destroy your home is a devastating thing to endure. While having insurance is a blessing, the companies have the potential to make a bad situation ten times worse once they get involved. So this doesn't happen to you, I'm going to relay the lessons I learned when my apartment building went up in flames in December 2006.

1. Read Everything your insurance company gives you.

Sounds simple enough, right? It is, but let's take it a step further to Understand Everything. The forms the company will want you to sign will be chock full of legalese. To everyone outside of the lawyer set, these documents can be extremely daunting. Don't let it intimidate you. Take your time and read over it paragraph by paragraph if you have to.

2. Listen to what your insurance company is telling you vs. what others tell you.

Especially where these documents are concerned. If someone says that the document just does this or that, read it to make sure that the person is correct. Look for clauses that contradict their statements. Have them point out the section they're talking about. Read that section for yourself. If it doesn't say what they claim it does, do NOT sign the form until you have clarification.

In the aftermath of my fire, I was convinced to sign forms that released the cleanup company that my landlord hired from all liability. I was told that the form needed to be signed before my insurance company could even go in to assess the damage. My insurance company urged me to sign the form. They even downplayed my concerns and reassured me that it was just so they could enter the premises.

Additionally, the abatement company forced all the tenants to sign the form again when we came to pick up our salvaged property. We were told that the form just allowed them to release the property to us. By then I'd wised up a little and read the form with an eye to understanding. It said nothing about releasing the property to us. What it did say was that we agreed not to sue the company for any damage they did to our property. When the form didn't say what I was being told it said, I questioned the liaison about it. He even pointed out the section in the contract, but it still didn't say what I was told. I read it aloud proving him wrong and was still able to gather the first round of my belongings. That leads me to:

3. Question Everything.

If something doesn't make sense to you, ask about it. If you don't understand a term, ask for the other party's definition of the term. If you don't feel you're getting a straight answer from the people involved, call other professionals from the same industry, just in another area.

My fire was in Long Beach, California. When I came across this issue of people giving me wildly different answers on the same question, I called an abatement contractor in Ohio. He answered all my questions and gave me an idea of what should happen. That was very helpful when the company handling my clean up did not do what I expected and wanted them to do.

4. Do NOT let your insurance company issue a two party check to any contractor or anyone else.

Normally, these checks would require your signature as well as the contractor's for the company to cash it. Back to Read Everything, the contractor I dealt with initially included a clause in their "Oh it's just so we can start work" form that allowed them to cash the two party check without my signature. Needless to say, when they didn't do the job I expected them to, I had no leverage whatsoever to make things right.

5. Don't let the insurance company subrogate at your expense.

As noted on "The most common form of subrogation is when an insurance company pays a claim caused by the negligence of another."

Recovering from a fire takes time and it takes money. My insurance company was chomping at the bit to pay off my claim and move on. The reasoning behind this, I was told, is that they wanted to get me back on my feet as soon as possible. To make that happen, they didn't want me to have to wait for my landlord's insurance company to pay for my clean up. It's quicker if they pay the claim then sue his insurance company to recoup my entire policy.

Sounds great on the surface. What really happened is that my policy paid for asbestos clean up then my insurance company got all of their money back. Except, I was still out over half of my policy because I paid for clean up for which I was not even liable. The kicker, even though my company subrogated the claim, "it's not their policy to reimburse the insured" even though my continued loss was still substantially higher. It would've been much better if I'd held out and waited for the landlord's insurance company to pick up the tab.

6. Don't let the insurance company rush you.

Take time and think out all your options. This includes tallying up your loss. Sit down and figure up the value of all your property. Separate it into "sentimental, but replaceable" vs. "irreplaceable." Replaceable is the first TV set that you bought with your own money. Irreplaceable is the poem your son wrote you for your birthday. Fight tooth and nail for the irreplaceable FIRST.

Stands to reason, the replaceable is much easier to salvage and the clean up company will try to get you to agree to let the rest go. Don't do it. Get creative if you have to, but depending on the extent of the damage you should be able to salvage quite a bit that the company will try to get you to forget about.

In my case, the fire went to six alarms, but thankfully the only apparent damage inside my apartment was scorch marks above the door. The issue that got me was the asbestos contamination. The company only wanted to clean things that were non-porous from the unit. This goes back to reading, understanding and getting a clarification on what's in the forms you sign. I didn't understand that all of my books and notebooks and papers that contain everything I've ever written since I was 12 were considered porous and thus not salvageable.

I screamed "bloody murder" when the company tried to toss all of those items. They ignored me until I found the government agency that regulates them and had to step in with the threat to pull the contractor's license until the matter was resolved. By this point, my insurance company had completely abandoned me. They cut me check for the remaining amount on the policy and got out.

7. Don't let the insurance company use the same clean up professionals your landlord hired.

It doesn't matter if they're already on the scene or if they're the third largest contractor in the state and the insurance company would've used them anyway. Insist that they find another consultant and contractor to handle your clean up. At the end of the day, the initial companies on the project work for your landlord first and they will treat you accordingly.

If you're unfamiliar, the way asbestos abatement works is that you hire a consultant to test for the extent of contamination. Once he gets the results, he writes up what's called a Procedure 5. A Pro 5 is just a detailed work order for the contractor to follow. The contractor is only responsible to do what the consultant prescribed.

If I'd hired my own people from the beginning, I wouldn't have found myself in the subsequent five-month fight to retrieve my writing. There's no record that the initial consultant even tested my apartment for contamination. Instead, I suspect they tested the most damaged areas and wrote up the Pro 5 based on those results. After I wised up, I spent the other half of my policy hiring a second consultant and contractor to retrieve my property. The second consultant found that my property was not contaminated until the initial contractor came in to do their clean up.

I pray you never suffer a loss due to a fire. But if you do, please learn from my mistakes.

Make sure you:

1. Read/Understand Everything your insurance company gives you.

2. Listen to what your insurance company tells you.

3. Question Everything that doesn't make sense.

4. Do NOT let your insurance company issue a two party check to any contractor.

5. Don't let your insurance company subrogate at your expense.

6. Don't let your insurance company rush you.

7. Don't let your insurance company use the same clean up professionals your landlord hired.

Until next time! Don't be weary in well doing.

Fire Recovery: Having Insurance

I confess. I used to be a serial non insurance having lump of humanity. I’m talking no health insurance, no renter’s insurance and I’m still convinced credit card insurance is nothing but a big ole scam. I only had auto insurance because I was still on my Dad’s policy not because California

requires it. There was a life insurance policy in there somewhere only because Dad got that one, too. When you’re barely scraping by, insurance is the last thing on your mind. After tithes, rent, food, gas and bills, I wasn’t trying to part with anymore money than I had to. Maybe once I’d gotten a higher and more stable income, but not right now.

And then a friend of mine started hosting financial seminars. They taught us how to build wealth the right way. Imagine how surprised I was to learn that part of building wealth was having insurance. As a layperson, it seemed counterintuitive to me. I mean, why pay out on something that you may or may not ever need? Then the speaker said something that still echoes in my head years later.

“Protect what you have.”

It was like a light bulb went off in my head. What was the point of working your butt and sacrificing so you could save the magic number 20% of your salary if it would only get wiped out at the first emergency? I was a believer. But the procrastinator in me still put things off. Until I was given this really cool Tablet PC and had it stolen along with my car keys and wallet from a resort in Palm Springs. Imagine how sick I was to learn that a simple renter’s insurance policy would have covered a percentage of the theft. Within a month, I had my policy.

Best decision of my life.

Just over a year later, my apartment building went up in flames. Even though the situation turned into one heck of a nightmare when my landlord refused to return my property that was damaged by neither fire nor water, my insurance policy went a long way toward getting me back on my feet. It even gave me the ammunition I needed to take on my landlord and win. All because I protected what I had.

The apartment complex consisted of 150 units, all of which became uninhabitable after the fire. Out of the hundreds of people who lived there, I was one of less than 10 people who were insured. Without insurance the other tenants were left to the mercy of the landlord who allowed the clean up company he hired to blatantly steal cash and jewelry and laptops and God only knows what else from people who were already devastated and homeless after the fire.

So what’s the moral of this story? No matter how evil or unnecessary you think insurance is, buy a policy anyway. Because if the unthinkable happens, the last thing you’ll want to deal with is how much it’ll cost you to get back on your feet. You don’t have to go for the biggest policy right off the bat. Take an honest look at what you have and insure what you can afford. You can always add more coverage later. Also, look at any discounts for which you might qualify simply by having both an auto and renter’s/homeowner’s policy with the same company.

It’s all about protecting what you have so you don’t have to start over from scratch.

Until next time! Remember that there’s no law against love, joy or peace.

Tuesday, November 20, 2007

Lessons From: The Squirrel

So I was heading to work the other day and I saw this squirrel at the end of my street. This little guy was totally engrossed in a nut or whatever it was he was digging up and without a care in the world. Suddenly, this huge SUV roared by. The squirrel scrambled out of the way and partway up a nearby tree. As I turned on that street, I couldn’t help, but look back at the squirrel. He was breathing hard, probably from squirrel adrenaline, but I noticed that he never took his eye off that nut.

We can learn a lot from this squirrel where our dreams are concerned. No matter what life throws our way, we need to keep an eye firmly focused on our goals. Sure, we may have to scramble out of the path of SUVs and up a tree for safety, but we have to keep an eye on what we were previously doing. Once we get up the tree, we can’t stay there. Sure, it’s comfy and safe, but we’ll starve. We have to venture back out and work to get that nut.

What’s your nut? Is it buying a house or maybe changing a career? Let me encourage you to get out of that tree and start digging again. Sooner or later, when you work at it, the nut’ll be free and you can take it up the tree with you.

Until next time! May you be in health and prosper.

Wednesday, November 14, 2007

Fire Recovery: Be Prepared

In the wake of the fires that swept Southern California in late October, I wanted to share my experiences and lessons learned when my own apartment complex went up in flames in December 2006.

To give a little background, I lived in the Paradise Garden Apartment complex in North Long Beach. On Friday, December 8th, I came home from work to fire trucks and flames. The story going around that evening was that a woman was cooking and threw water on a grease fire. Later that night, the fire led every network news program and the cause was reported as arson because 12 separate units were on fire when the fire department first arrived.

I later learned that two women were cooking in a back unit on the first floor and started a grease fire. It quickly got out of control. They ran to the rental office in the front of the complex to report it, leaving their door open. The fire got into the ventilation system and quickly spread through the entire 150 unit building.

The next day we were told that the building was gutted, especially the 3rd floor. After worrying about the extent of the damage all night, the fire department finally deemed the building safe enough for tenants to enter the following day for ten minutes to retrieve important belongings.

If you ever find yourself in this kind of situation, the most important thing you can ever do is to keep a case packed with all your important documents inside and ready to grab at a moment’s notice. You might also consider scanning these items and storing them online. Either way, make sure you have the following in your fire preparedness kit:

~ All insurance policies
~ Copies of your credit cards (front and back)
~ Copies of utility bills (phone, internet, cable/satellite, gas, electric)
~ Copies of your driver license and/or passport
~ An extra set of personal checks
~ Copies of lease/rental agreement or mortgage papers

You’ll need your insurance policies for obvious reasons. You'll have to contact your insurance carrier and file a claim. Believe me, it’s much easier to contact them from numbers on the policy documents than to try to look them up later from another state. Although they’ll still be able to locate the policy, it’s a good idea to keep your policy number handy.

You’ll want copies of your credit cards and utility bills for the same reason. If you need to cancel your cards, you’ll have the phone numbers in front of you. You’ll certainly want to call all your utility companies to confirm that those services have indeed been turned off or you might later receive a bill. They tend to be pretty understanding if you explain that your residence burned down, but why waste that energy later when you’re going to need it to deal with many other issues.

It’s a great idea to keep copies of your identification handy as well. When they let us back in the building the next day, we had to prove that we lived there. Everyone trapped in the building that day had to escape over their balconies because the hallways and stairs were engulfed in flames. Having this kit with your ID near your escape route will allow you to grab it on the way out.

You’ll want an extra set of checks in your kit because you’re still going to have expenses and you’re going to want the paper trail especially as you deal with clean up companies. Even if you’re unable to get to your checkbook, you’ll still have access to your checking account via the checks. This is the other reason you want to have copies of your credit cards. If you don’t have to cancel them, you can still use the number for internet purchases that you may need to make in the meantime.

Finally, make sure you have copies of your lease/rental agreement or mortgage papers in this kit. Especially in the case of renting, you want have to have written documentation of your landlord’s responsibilities in the event of a fire or similar emergencies. Make sure you have documentation of your security deposit in case he or she shortchanges you as mine did.

Going through a disaster such as a fire is devastating enough. But if you keep a Preparedness Kit such as the one I described above you’ll take quite a bit of the strain off yourself. Even if you don’t think about it in your rush to escape danger, keep it in a safe box so it’ll be more or less intact when you or your clean up company are cleared for reentry. You’ll want it to be handy. If the fire department only gives you ten minutes to gather important items you want to make sure you have all of these documents.

Until next time, let patience have her perfect work.