Beyond the Surface: The Cost of Overlooked Property Damages

When disaster strikes, the visible damages are often just the tip of the iceberg. Hidden damages—issues like structural integrity, damaged subfloors, or even simple items like soaked or smoked insulation—can be overlooked during initial inspections. These concealed issues can escalate, leaving property owners to face significant repairs and financial burdens when not identified and accounted for by the carrier adjuster. Unfortunately, insurance carriers often overlook these damages, leading to significant delays, underpayment, or denial of claims. To navigate this complex landscape, policyholders need a thorough damage assessment, and public adjusters are key to uncovering unseen damages that could impact their settlement.

Understanding the concept of hidden damages is crucial, especially for property managers, contractors, and facility managers handling commercial properties, multifamily buildings, or large facilities like hospitals and schools. These issues, if not detected early, can lead to costly long-term problems.

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What Are Hidden Damages in Insurance Claims?

Hidden damages refer to damage that may not be immediately visible after an event, such as a storm, fire, or flood. These issues often lurk beneath the surface, only becoming apparent after they have worsened. Common examples of hidden damage include:

1. Water Damage and Microbial Growth: Water damage is one of the most common and costly types of losses, often leading to microbial growth behind walls or under floors. Microbial growth can create serious health risks and weaken the structural integrity of the building, but it is not always visible during an initial inspection.
2. Foundation Cracks: Severe weather or structural shifts can cause cracks in the foundation, compromising the stability of the building. These cracks can go unnoticed for months, if not years, until significant structural issues arise.
3. Smoke damage: Smoke damage from fires large and small will spread throughout a building, including adjacent spaces and/or those not directly affected by the fire. Smoke causes incredible unseen damage over time to insulation, drywall, structural elements, and especially all electronic devices exposed.

Hidden damage poses a significant threat to your property because it tends to worsen if not promptly addressed. When overlooked by insurance adjusters, overlooked damages can leave property owners footing the bill for repairs that should have been covered under their insurance policy.

Hidden Damages Missed by Carrier Adjusters

When filing an insurance claim, property owners typically follow a straightforward process. After a loss occurs, they call their agent to file a claim, and the insurance company then sends an adjuster to assess the damage. The adjuster’s assessment forms the basis for the settlement offer. However, this process becomes more complicated when hidden damages are involved. Many times, carrier adjusters only focus on visible damage and may intentionally or not overlook hidden issues that could drastically increase repair costs.

The Office of Program Policy Analysis and Government Accountability (OPPAGA) conducted a study revealing that public adjusters secure significantly higher settlements, to the tune of over 700% more, than those obtained by property owners on their own. This is often because public adjusters are representing the sole interest of the insured, have the experience necessary and are trained to identify hidden damage that carrier adjusters often miss during their initial and even subsequent inspections. Public adjusters ensure that no damage goes unnoticed and that policyholders receive fair compensation for both visible and hidden damages.

The Why Of Insurance Companies Underpaying And Denying Insurance Claims

Insurance companies are profit-driven entities, and their adjusters may prioritize minimizing payouts. Experts such as Jay M. Feinman, author of Delay, Deny, Defend, have highlighted how insurers often engage in bad faith practices by delaying payments, denying valid claims, or offering significantly lower settlements than warranted. This often leads to the underpayment of claims, especially when hidden damages are involved.

The National Association of Insurance Commissioners (NAIC) has set guidelines for fair claims handling, but unfortunately, insurance companies don’t always comply. This makes it critical for property owners to understand their rights and know when to push back against an insufficient settlement offer.

The Role of Public Adjusters in Uncovering Hidden Damages

Public adjusters, unlike carrier adjusters, work exclusively for the policyholder. They advocate on behalf of property owners to ensure all damages—both visible and hidden—are accurately assessed and included in the claim. Organizations like the American Policyholder Association (APA) and the National Association of Public Insurance Adjusters (NAPIA) back public adjusters as Consumer Advocates in the insurance claims process, helping to level the playing field between policyholders and insurance companies.

Public adjusters have specialized training and experience in identifying hidden damage, particularly water damage, which often leads to microbial growth and other costly repairs. They take the time to investigate the property thoroughly, documenting every potential source of damage. This thorough documentation not only increases the likelihood of a higher settlement but also helps prevent future disputes with the insurance company.

Consider the following information as part of, or the, text in this section using the same voice as the rest of the article:

A Consumer Advocate, as it pertains to public insurance adjusters, is a professional dedicated to representing and protecting the rights and financial interests of policyholders during the insurance claims process. Acting as an intermediary between the insured and the insurance company, the public adjuster ensures that claims are accurately documented, properly filed, and thoroughly negotiated to secure the maximum settlement allowed under the policy.

Key characteristics of a consumer advocate in this field include:

1. Policyholder Representation: They work exclusively for the policyholder, not the insurance company, ensuring there are no conflicts of interest.
2. Claims Expertise: They bring specialized knowledge of insurance policy language, claims handling procedures, and damage assessment techniques to help policyholders navigate the complex claims process.
3. Fair Settlement Advocacy: By challenging underpayments, wrongful denials, or delays, they protect policyholders from bad faith practices by insurance companies.
4. Education and Empowerment: They educate policyholders on their rights, duties, and options under their insurance policy, fostering informed decision-making.

In essence, public insurance adjusters serve as consumer advocates by leveling the playing field between policyholders and insurance carriers, ensuring fair treatment and equitable claim resolutions.

The Financial Burden of Hidden Damages

As a policyholder, it’s essential to be proactive when dealing with damages to your property, especially hidden damages. Here are several key strategies in doing so:

1. Conduct Regular Inspections: Periodic inspections, including photos or videos, of your property can help you spot potential issues early. Focus on areas prone to water damage, such as basements, roofs, and plumbing systems, to catch problems like microbial growths or leaks before they worsen.
2. Hire Professionals for Thorough Assessments: After any major event, consider hiring a public adjuster to conduct a detailed evaluation of your property. Don’t rely solely on the carrier adjuster’s inspection.
3. Document Everything: Take photos and keep detailed records of all damage and repairs. This documentation is invaluable when negotiating with your insurer and can strengthen your case if hidden damages are discovered later.

By taking these steps, you can avoid the long-term financial burdens that come with hidden damages and ensure that you receive the full settlement you’re entitled to.

Your Rights as a Policyholder

Knowing your rights is crucial in the insurance claims process. As a policyholder, you are entitled to:

• Full Disclosure: Insurers are required to provide clear information about your coverage, including all benefits, as well as any exclusions or limitations.
• Appeal a Denied Claim: If your claim is denied or underpaid, you have the right to appeal and present additional evidence.
• Seek Professional Representation: You can hire a public adjuster or attorney to represent your interests and negotiate with the insurer on your behalf.

Understanding your policy in detail and knowing your rights can give you the confidence to challenge any unfair decisions by your insurance company. As Bill Wilson, author of When Worlds Collide, emphasizes, “policyholders often don’t realize how nuanced their coverage is until it’s too late”.

Take action now to protect your property and your peace of mind. Contact Velocity Public Insurance Adjusters today for a comprehensive claim and policy review to make sure you’re covered—both now and in the future. Don’t wait for hidden damages to surface—act today to safeguard your financial future.