Don't let this happen to you!

Each of the properties pictured below was damaged by severe wind and hail.  Unfortunately for the property owners who believed and trusted that their property & casualty insurance companies would properly and fully pay their property damage claims, the total of the claims settlement offers to the owners of the five properties shown came to just $9,000.  However, after applying the proprietary insurance claim process training methods taught by 3RSystems, LLC, the property owners were eventually paid the additional $126,266 (in total) that the insurance companies had unjustly attempted to withhold from them. 


Roof insurance claims contractors

Become an informed consumer

Knowing the intrinsic value of truly educating oneself on any subject that one might purport themselves to be an expert in, I decided that what was needed in order to better serve the tens of thousands of insurance premium paying property owners who suffer wind and hail and other property damage every year was a substantive and comprehensive contractor property damage insurance claims repair process training program.  Contractors who completed the program would then be able to offer verifiable proof of their expertise to their potential property owner customers who suffered insurance covered property damage.  Seeing the need, I then took steps to create, publish and offer the program to contractors so that those with the wisdom and the foresight to understand the value in educating themselves on the process could truly best serve their insured customers who had suffered damage to their properties.

The result was and is the most advanced and comprehensive insurance claims repair process training program available anywhere in the country today - the 3RSystems, LLC Insurance Claims Consultant (ICC)™ insurance claims repair process training program.  Contractors who are armed with the knowledge gained through their study of the 3RSystems, LLC Insurance Claims Consultant (ICC)™ insurance claims repair process training program become powerful advocates for property owners with insurance covered damage.  Their knowledge gained from the program which also includes my perspective as a successful insurance and investment advisor and Pro Se litigator over the years in a number of serious court cases, powerfully assists those property owners by leveling the playing field and putting them on the same footing as their P&C insurance companies and their staff and independent adjusters (IA's) who typically will do everything in their power to pay substantially less then what they should be paying to their insured customers - if they can get away with it.      

Contrary to the popular belief of far too many property owners who haven't suffered damage to their properties as a result of a severe weather or other disastrous event and therefore have never had to file a claim with their property & casualty insurance company, as supported by "The Insurance Hoax" and "What Your Insurance Company Doesn't Want You To Know Regarding Your Insurance Claim", the likelihood of any of them initially being offered a full, proper and fair settlement payment on their insurance claim is less than 1%.  More often than not, as clearly illustrated in the pictures above and in the linked articles, they (you) will be offered a percentage settlement that is far below the actual cost of repairing the damage.  

In June of 2017, a severe wind and hail storm that came through the northern Twin Cities (MN) suburbs caused nearly $1 billion in damage to approximately 33,000 mostly residential properties.  Estimated damage per property - $30,000.  It is a certainty, based upon my forty plus years of experience, that each of those property owners was unjustly underpaid on their property and casualty insurance claims  - on average, by a minimum of $2,500 dollars.  Money saved by the insurance companies just on that storm alone by intentionally underpaying their customers claims equals an estimated $82,500,000.   Following is just one example how troublesome it can be for property owners to get their claims fully and fairly paid and get on with their lives.

In 2008, I contracted with the owners of the ranch property shown above to help them to get their insurance company (then, Farmers insurance) to fully pay their wind and hail storm damage claim.  Although it took four inspections (1 initial and 3 re-inspections) and far too much time to get several insurance adjusters to admit to and pay for all of the damage to all of the buildings, Farmers did eventually pay the entire claim at approximately $71,500.  In the June 11, 2017 storm, the owner's property was again hit by a major wind and hail storm that caused essentially the same damage as the 2008 storm and they again asked for my help in assisting them on their claim that was contracted through another contractor.  Having been dissatisfied with the way they were treated by Farmers insurance, they had switched from Farmers to another of the top five P&C insurance companies.  (not to their benefit as they learned on their 2017 claim)

After numerous re-inspections of the damage which is essentially the same damage as occurred in 2008 and with labor rates alone 40%+ higher than in 2008, the insured's new insurance company repeatedly denied legitimate damage and delayed final settlement of the claim for over eight months.  Believing they (the adjuster and the insurance company claims managers) could intimidate me with the threat of penalties if I attempted to negotiate the claim with the insurance company on behalf of the insured's (see: NNPAO/UPPA laws and rules*), both took their sweet time in responding to my requests to move the claim to final settlement.  They believed (in this case) they could continue to and did, stall the claim with the expectation the insured's would either give up the fight and accept their low and insufficient offer or hire a public adjuster who would, if successful in moving the claim to proper full payment, take a substantial cut of the claim as their fee.  Any fee paid to a public adjuster (or an attorney) would have been subtracted from the claim settlement money thereby leaving the insured's with that much less money with which to pay their contractor for the repairs.  Seven months after the storm and five re-inspections later to cover damage that the adjuster repeatedly and intentionally omitted, the insurance company offered to pay $72,736 as the total claim payment to the insured's, which was substantially below the contract price of slightly over $100k.   

The $72,736 claim settlement offer which was just slightly higher than what Farmers insurance paid on the claim over nine years ago and around $30,000 below the contract price agreed to by the insured's did not include payment for additional damage discovered after later re-inspections and also did not include what is known as General Contractor Overhead and Profit (GC O&P).  Having been educated about what GC O&P is and when it is due on a claim, one of the insured's asked the second adjuster, who was only slightly more competent than the first adjuster who was not, why no payment for contractor overhead and profit was included on the insured's loss reports.  He lied directly to her when he told her that GC O&P was included in the line (damage description) items on their loss report.  The independent insurance adjuster, two local insurance company claims managers and a Denver, CO based senior claims director all refused to pay the GC O&P owed on the claim saying that the claim, which involved replacement of damaged roofing, siding, screens, shutters, gutters and downspouts, cupola repairs, house wrap, satellite repairs/re-sync, deck repairs, sanding and painting, furniture manipulation, electrical work, coordination of porta pottys, materials measuring, ordering and distributing dumpsters, installer scheduling, dump trailers, permits, window repair and more - amongst the five different buildings, was "not complex enough" to warrant the payment. 

Lack of complexity is not a valid reason for withholding GC O&P from any insured property owner.  Courts across the country are nearly 100% in agreement with the following regarding when GC O&P is owed:  "If it is reasonably likely that an insured will hire (need) a general contractor to complete the repairs, GC O&P is owed on the entire amount of the claim" even if the insured does not do so.  

Having made the above perfectly clear to the insurance company claims employee's mentioned above, on February 2, 2018, I sent to the insurance company's main claims office an email with a notice warning them that if they did not honor the GC O&P precedent as described through the above links and agree to fully, fairly and properly settle the insured's claim by February 5th, the local media would be knocking on the doors of the personal residences of the adjuster and insurance company claims managers to ask why.  On the morning of February 5, 2018, the #3 claims manager from the insurance company called me and agreed to a final and proper settlement to the insured and their contractor in the amount of $96,946.  The contractor agreed to lower their contract price from the slightly over $100k to match the final settlement offer. 

*No Negotiating (by contractors) / PA's (public adjusters) Only (NNPAO) 

Unauthorized Practice of Public Adjusting (UPPA)

For decades, construction contractors have negotiated with property & casualty insurance companies on behalf of their insured customers in order to affect real, true and accurate (RTA) property damage insurance claim settlements that would allow the contractors to properly account for all of the damage and make the repairs in a professional manner.  P&C insurance companies don't like that fact that professional contractors who know better than anyone overall (including insurance adjusters) how much it really costs to repair storm or other insurance covered damage and what needs to be repaired claimed that contractors "cost" the insurance industry millions of dollars every year by over charging.  If they could get legislation passed into law that prevents, restricts or prohibits contractors from negotiating on behalf of property owners with damage they knew they would be many millions of dollars ahead - each and every year, fully disregarding the fact that their insured's will be left unfairly underpaid those same many millions of dollars legitimately owed to them by their insurance companies.  So they did...

Insurance policies are required to be written in such a manner so as to be easily understood by a person of average intelligence.  In other words, the average insured property owner.  Unfortunately however, most insurance policies are intentionally written in such a manner so that, unlike professional construction contractors who can understand and interpret policy language, most insured's cannot.  With that in mind, although the people behind NNPAO/UPPA legislation knew better than to directly prohibit insured property owners from asking and allowing their contractors to negotiate their insurance claims on their behalf, the affect was the same.  Insured property owners can still negotiate their own claims (at least for now) but because 99% of insured's have no real understanding of how the claims process really works and what they are up against, those insured's who do attempt to negotiate settlement of their own property damage insurance claims are at a tremendous, often costly and stress inducing disadvantage. 

Pushed through to mostly non thinking, ill-informed state legislators by American Legislative Exchange Council (ALEC) legislator members…and passed…for the benefit of the P&C insurance industry in general and likely, State Farm in particular, NNPAO/UPPA laws have hurt and continue to hurt insured property owner customers in a big way…all across the country.  

The nationwide push for NNPAO/UPPA legislation first came to my attention in the late summer of 2010. Although I’d seen some evidence in 2009 that the “movement” had started, it wasn’t until Minnesota contractors received a bulletin in September of 2010 from then disgraced and soon to be retired Minnesota Commerce Commissioner Glenn Wilson, Jr. that threatened that any contractor who did what contractors have been doing for decades, negotiate insurance claims on behalf of their insured customer’s, would be in violation of the Minnesota Public Adjusters law and could be penalized, that it became clear that the push was gaining momentum nationwide.  

In 2011, then Texas Governor Rick Perry and reported recipient of $100’s of $1,000’s of dollars in campaign contributions from the American Legislative Exchange Council (ALEC) appointed ex-insurance executive Eleanor Kitzman as insurance commissioner.  Kitzman then, along with pushing NNPAO/UPPA in her state...on behalf of the P&C insurance industry, approved large premium hikes for P&C insurance companies that allowed State Farm and Allstate to beat the industry average in 2012. According to the Dallas News (May 2013), "The profits were so favorable that outgoing Texas Insurance Commissioner Eleanor Kitzman — who declined to block any big premium hikes during her tenure — kept the numbers confidential while she was still trying to win confirmation from the Senate." Although Perry would probably have re-appointed Kitzman for another term, with her (and Perry's) favors to the P&C insurance industry exposed, the bipartisan Senate was having none of it and voted against her re-appointment. 

Around the same time, then Colorado Representative and ALEC member Glenn Vaad and Georgia Representative, ALEC member and thirty-five year Allstate agent Howard Maxwell introduced their states NNPAO/UPPA bills.  Interesting and important to note that two different State Farm insurance company General Counsel's names, Roland Spies and Emory Wilkerson appeared as supporters of the bills.   Numerous other states followed with their own NNPAO/UPPA bills that contained nearly the exact same template language.

P&C insurance industry crony legislators, commerce and insurance commissioners and others in positions of power who want to keep their after public service career options open put their support behind the legislation they know full well is anything but consumer protection but present it that way to their constituents (AKA voters) in the hope that none of them would be the wiser.  Under the guise of "consumer protection", those and other interested parties pushed for legislation that would control the populace (in this case an estimated 75,000,000 + insured property owners from around the country) and ill-informed less experienced citizen legislators voted/vote on the misleading legislation so they can/could tell their constituents they were "lookin’ out for them” when the next election cycle comes around.

The simple truth;  departments of commerce and insurance, departments of labor and industry, and all of the P&C insurance industry friendly legislators, lobbyists and related individuals who supported and still support NNPAO/UPPA legislation nationwide, do so with the full and complete knowledge that by limiting, through law, the rights of insured property owners by requiring them to either pay a public adjuster to negotiate on their behalf or trust their insurance companies to deal fairly with them, P&C insurance will save hundreds of millions of dollars every year by not having to fully and properly pay their insured's claims.  The language which is almost if not exactly the same in every state where the model template “No Negotiating” language shows up is as follows:

THE BILL…“A residential contractor shall not represent or negotiate, or offer or advertise to represent or negotiate, on behalf of an owner or possessor of residential real estate on an insurance claim in connection with the repair or replacement of roof systems, or the performance of any other exterior repair, replacement, construction, or reconstruction work."    

THE BULL…..The NNPAO/UPPA legislation is typically introduced by veteran legislators on behalf of whatever special interest group or groups they may support or who support them (or employ them as is the case with Georgia's passage of their own "no negotiating" bill several years ago where nearly all of the bill’s authors are employed in the P&C insurance industry) then passed onto various committees made up of other veteran and inexperienced legislators.  If the veteran sponsoring legislators can convince the less experienced and often ill-informed legislators that the legislation has merit, it gets voted on and signed into law by ill-informed Governors who fail to consider the harm that doing so will cause. 

Premiums for property and casualty insurance policies are logically, actuarially based on what it would cost a property owner whose property was damaged to have the damage repaired using the real, true and accurate (RTA) cost that an experienced professional fully licensed and insured contractor using quality materials and experienced installers would charge in the future.  However, the insurance settlements that most insured's are offered are typically based on the "survey" costs of lower quality materials and less experienced contractors who may or may not carry general liability (GL) and workmen's compensation (WC) insurance.  Those pricing surveys are conducted by a subsidiary owned and controlled by the same organization that advises property & casualty insurance companies on how to price their premiums.  The end result is that the P&C insurance companies charge premiums based on higher future potential settlement costs and then typically attempt to pay their insured's claims at below current pro contractor real, true, and accurate (RTA) market rates - if they offer anything at all above the deductible.   

For example:  Assuming the real, true and accurate (RTA) value/cost of your repair is $40,000, more often than not, through their staff and/or independent adjusters who always have job security in mind, the insurance company you send your premiums to will usually attempt to dramatically underpay your claim.  If the RTA cost of your repairs is $40,000 and your insurance company offers you $25,000 and you accept their offer, you will forever forfeit the additional $15,000 owed to you by them. 

Using the above wind and hail damage claim example where the insurance company only offered $25,000 on the RTA valued claim of $40,000, we'll compare the old claims filing process to the new NNPAO/UPPA process.  Always keep in mind that contractors cannot force insurance companies to pay what the insurance companies ultimately know are inflated claims that exceed RTA values. 

Under the old process, insured's would sign a contingency agreement repair contract with a contractor that promised to complete the repairs after the insurance company agreed to properly, fairly and fully pay for the repairs.  An insurance adjuster would meet with the contractor and eventually negotiate a final price - which, at the true current RTA value, would have been $40,000.  In 95% of cases, the adjusters initial claim settlement offers would be (as is the case presently) closer to the $25,000.  Eventually, if the contractor is well versed in the process, he/she would move the settlement offer as close to the real, true and accurate (RTA) $40,000 pro contractor price as possible then agree to complete the repairs at the stated price.  Within a relatively short period of time, the repairs would be completed and the insured could move on with their lives. 

Under the new process with the NNPAO/UPPA laws in place, similar to the ranch claim described above, the insured's would still sign a contingency or similar repair agreement contract with a contractor but because the contractor is prohibited from negotiating with the insurance adjusters and claims managers and they offer the $25,000 as all they will pay, the contractor and the insured are both stuck.   If the contractor "dares" to confront the adjuster and/or claims manager regarding the underpayment attempt, the contractor is threatened with penalties for violating NNPAO/UPPA laws.  The insured's who are perfectly within their rights to confront the adjusters and claims managers who are making the underpayment attempts likely have no idea how to deal with those people and are therefore dependent on their contractor for help that the experienced contractor can no longer provide.  The insurance company is now free to play the waiting game so well defined by Rutgers Law Professor, Jay M. Feinman, in his book, "Delany, Deny, Defend".

Although the contractor has pushed as far as they can without violating the NNPAO/UPPA laws, rules and regulations, once the insurance company claims manager says that's all they're going to pay, the insured's only options are to either hire a public adjuster to move the claim to fair and full price, hire an attorney, or give up and hope the contractor can complete the repairs at the insurance company's less than sufficient price.  If the insured hires a public adjuster to move the claim towards RTA values, they will typically charge the insured a fee ranging from 10% to 15% of the entire claim or 25% of the additional $15,000 (on the $40,000 RTA claim).  When it comes to that point, as was the case with the "ranch" claim previously discussed, many months may have already passed.  Any fee paid to a PA is then deducted from the contractors RTA price.  Notes:  1. Most thinking PA's will never contract with an insured if they believe they cannot increase the total settlement to the RTA price. 2.  Most people don't even know what a public adjuster is or does.  3.  Insurance companies understand #'s 1 and 2.      

Public Insurance Adjusters - From Defense to Offense

For years, the American Bar Association had been after Public Adjusters trying to prevent them from negotiating (for a fee) on behalf of property owners with insurance covered damage, calling what Public Adjusters did, an "unauthorized" practice of law.  However, seeing an opportunity ripe to be seized upon – that is, state legislators attempts to prevent contractors from “negotiating” their customers insurance claims through the passage of NNPAO/UPPA laws, rules and regulations, (i.e.; according to them, acting as “Public Adjusters”) – the PA lobby, who the ABA had let up on in recent years, decided to go on the offense against contractors. 

In March of 2011, NAPIA attorney Brian S. Goodman, Esq. , said this: “Interestingly, and paradoxically, we are now finding that while we no longer have to fight the issue of the unauthorized practice of law, we have to take the offensive and fight the “unauthorized practice of public adjusting”, as, in this down economy, we are finding that roofers and general contractors in the United States are advertising their services - “essentially” - as public adjusters.”   (actually, only doing what they had always done, negotiate the claims on behalf of their customers)

One of the most disingenuous excuses the PA lobby and the P&C insurance industry cronies use for wanting to prohibit contractors from negotiating on behalf of their customers is that they “charge to much”.   Insurance Federation of Minnesota President, lawyer and insurance industry lobbyist Bob Johnson said awhile back that by keeping contractors from "overcharging", this would help the P&C insurance industry to remain viable in a time when their overall profits have gone down in recent years.  So, what was behind that temporary profit down turn?  Some of that may be due to a temporary increase in the number of claims to be sure but, as in any cyclical business, some years are better than others.  Even after Katrina, however, P&C insurance overall had earned record profits.  The real reason behind the temporary drop in P&C insurance industry overall profits?  It is the same reason behind the cumulative several trillion plus dollar drop in the value of millions of individual investment portfolios a few years ago - the "Great" recession.

Just as those events had negatively affected each of our investment portfolios, they had also negatively affected the portfolios of P&C insurance and Warren Buffet, whose Berkshire Hathaway fund, BTW, earns 51% of their money from the float on their insurance investments (i.e. - premium income, some of which should have been paid out on claims but was not). And now, with the market back up, P&C insurance has, just as most investors have, recovered much of the investment value they had temporarily lost. It really has nothing at all to do with contractors “over charging” insurance companies.

Reality…a severe wind and hail storm comes through Anytown, USA and causes $25,000 in damage on average to 5,000 properties. In Minnesota, for example, there are approximately 30 licensed PA’s and, according to one MN PA I talked with several years ago, most of them have little interest in working claims of that size. Suppose just 10 of those PA’s are interested in taking on the “smaller” wind and hail damage claims. How long would it take those ten PA’s – or even all 30, to adjust those 5,000 claims? Forever! P&C ins knows that while a few property owners with damage who even know what a PA is or does, may actually hire a PA who will likely get the claim paid at top dollar.  

But the rest of those property owners, at least in states where NNPAO/UPPA laws apply (which, at this point in time, is most states) and therefore, their contractors are prohibited from assisting those property owners on their claims, will be left having to trust their P&C insurance companies to deal fairly with them and fully pay those claims.  And, because ALEC and the NAPIA have been successful in getting legislation passed that prohibits (in most states) PA’s and contractors from having any free enterprise, free market working relationships between them, many contractors are often properly reluctant to bring them into the picture.  

The simple truth is this, the construction industry has matured over the years and has caught on to what the P&C insurance industry has been getting away with for decades.  As a result, P&C insurance and its minions whose livelihoods depend on upholding the myths and fallacies described here and elsewhere have chosen to fight back. But, because they have no substantive arguments in support of their claims, they must spin and obfuscate in an attempt to frighten their customers and the general public by laying the blame on knowledgible professional contractors who are simply holding the P&C insurance companies accountable to do the right thing.      

The current reality of the NNPAO/UPPA push as of late?   Believing they’ve made progress in getting contractors out of the way by prohibiting them from negotiating their insured customers claims, those same Busy Body Bureaucrats and other P&C insurance industry connected individuals are now pushing to place restrictions on PA’s.  Several years ago, ex-TV editor and ex-weather reporter Mark Kulda said the following during a local TV interview: …"On any insurance claims, rather than hire a public adjuster… most homeowner's claims are handled successfully. If you do have a dispute the best source is to always go back to the insurance company first”. Kulda is currently the V.P. of Public Affairs for the Insurance Federation of Minnesota who is working on a bill that would tighten regulations on public adjusters. Along with falsely blaming contractors (pre-NNPAO/UPPA legislation), for pushing up claim amounts and therefore premiums, he and others in similar positions are now also blaming PA’s for doing the same thing.

Another quite transparent and feigned excuse the P&C insurance industry and the NAPIA uses to support NNPAO/UPPA laws that prevent contractors from negotiating their customers claims is that doing so results in a conflict of interest.  In the real world, free market pro contractors who contract insurance covered repair claims want to achieve the same goal as any other free market business - maximum profits and income.  The way they accomplish that is by helping their insured customers to achieve maximum claims payments that are not unlimited but rather simply relative to the insurance premiums they paid.  Since P&C insurance initial settlement offers that are typically based on inaccurate low ball pricing are not relative to the premiums paid by the insured's, they are therefore not free market but rather forced market.   The insured whose contractor cannot confront the insurance company adjusters and claims managers are held hostage until they either hire and pay a PA or attorney or simply give up.  If they give up and accept whatever lowball offer their insurance company gives them, the insurance company illegally profits from the process.  If the insured hires a PA who moves the total price to RTA, they must then subtract the PA's fee from the contractors contract price which then violates the terms of the contract...and that's just the way the insurance industry likes it.  They care not that an insured (or thousands of them) get into a dispute with their contractor.  All they care about is paying out as little as possible.

In economics, a free market is an idealized system in which the prices for goods and services are determined by the open market and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other (self proclaimed) "authority" - such as a P&C insurance company.  When an insurance company says they will pay no more than their initial low price offers, they have, in effect, "set" the price of the claim while knowing full well that doing so clearly violates fundamental free market principles.  Their out when that is the case, is to slightly increase the claim offer upwards in order to appease the insured customer and hope they will accept the insurance company's next "final" offer.  On the "ranch" claim, (with no public adjuster involvement) even though the insurance company increased their "final" offer at least six times until their final settlement offer met free market pricing, they never paid more than they should have.  Moving P&C insurance companies to fully, fairly and properly pay their claims at RTA free market rates is not, as they continuously claim, overcharging but rather, simply moving them to pay their claims at RTA free market rates.  Again, contractors cannot force insurance companies to sign insured's claim checks.

The P&C industry's (and the National Association of Public Insurance Adjusters) false cries of conflict of interest between insured's and contractors are not substantive.  An objective analysis easily reveals that the real conflict of interest is between the insured's/contractors who expect to be paid fairly and fully and the insurance companies who want to pay as little as possible.  That's why P&C insurance industry formulated and pushed for the NNPAO/UPPA state by state nationwide legislation in the first place.   

You pay premiums to your insurance company for coverage based on future RTA rates, therefore, it makes sense that your P&C insurance company should settle your claim at least at current RTA rates rather than attempt to leave you less than whole.  You deserve no less.  If however, your insurance company disagrees with you, your contractor and even the evaluation of numerous other professional contractors, they may choose to send one of their paid for structural engineers to conduct a "forensic investigation" of your claim. 

"Hired Gun" Insurance Company Paid Engineers

"State Farm has ordered an independent investigation in to one of its vendors and suspended work with Haag Engineering Co. based on an Oklahoma jury's finding that the insurance company used Haag reports to maliciously deny policy holder claims, a newspaper reports."  Insurance Journal   Okla. Couple Awarded $13 Million in Lawsuit Against State Farm May 30, 2006

Although HAAG didn't have to pay for what the jury believed were malicious claims denials made by them at the behest of State Farm insurance, they did likely lose millions of dollars worth of engineering assignments from State Farm and other insurance companies who had used them prior to the law suit.  I can imagine what the cost would have been (or would be) to any engineering firm who believed they could get away with defrauding and did, in fact, directly defraud various Government agencies whose stated mission is to protect consumers from such practices - tens of millions of dollars, perhaps...(see Hurricane Sandy class action lawsuits)

Although the term, "forensic investigation" sounds serious, in regards to the inspection of roof damage claims, it really is not.  Anyone willing to pay a couple of thousand dollars to do so can become HAAG Certified for wind and hail roof inspections in about a week.  In the great majority of cases, these folks will typically report the following on completion of their insurance company paid "forensic investigation" of the typical roof wind and hail damage claim - even in areas where every other home in the area was damaged:  No wind and/or hail damage but evidence of foot traffic, wear & tear, thermal expansion, improper installation, manufacturers defects, lichens, moss, anomalies, mechanical damage, intentional damage, improper maintenance, etc. - anything but actual wind and hail damage.  Based on the engineer's opinion that any damage found is anything but wind and hail damage, the insurance company denies the (your) claim.  Average per claim fee for their roof inspection service?  Around $750.  Average per claim savings to the insurance company who relied on the engineers opinion that damage was not weather related?  $8,000 to $10,000 dollars.  Fortunately, more and more juries are seeing the light these days and are disregarding insurance company paid engineers supposed expertise and authority on the subject.

Simple common sense combined with experience tells us that there are those who will put money and job security ahead of reality and truth. Engineers aren’t hired by insurance companies to find roofing, siding and related wind and hail storm damage, they are hired to disprove the existence of it. There is simply no other reason a P&C insurance company would hire them. If they don’t disprove the damage, the inspection assignments will eventually dry up. This doesn’t mean that all individual engineers who conduct storm damage inspections for the engineering companies who contract with P&C insurance companies to do such work are corrupt. It does illustrate however, where their loyalties are and why that should be taken into account by any reasonable person.  Damage, is damage, is damage.  If it is there, insurance company paid engineers need to approve it and P&C insurance needs to pay the claim!

The call for an insurance company paid engineer is usually not made when an experienced and well trained pro contractor is assisting property owners with their claims.  If however, an insurance adjuster believes a contractor is less experienced and not well trained in the process, the insurance adjuster may attempt to intimidate the contractor as well as the insured property owner into accepting the insurance adjusters claim under payment or denial.  If the contractor and/or insured property owner does not accept the insurance adjuster's claim underpayment or denial, the insurance company may then call to have one of their paid for and likely biased engineering "experts" inspect the claim.

If your insurance company informs you that they will be sending an engineer to inspect your roof and/or other property for damage, go online and Google the following - "(name) engineering complaints".  If you find that the engineering company has complaints against it and you are properly concerned, you may be within your rights to deny them access to your property and demand that a truly independent engineering firm not connected to or paid by your insurance company conduct the inspection.

State Farm penalized in suit over tornado claims     The Disaster After the Disaster: Insurance Companies’ Post - Catastrophe Claims Handling Practices

Sandy Flood Insurance Issues Said to Be Focus of Criminal Probe     Evidence of fraud in Hurricane Sandy reports    

Okla. Couple Awarded $13 Million in Lawsuit Against State Farm     Guilty Pleas to Falsifying Reports on Hurricane Sandy Damage   

Supreme Court Upholds Hurricane Katrina Fraud Verdict Against State Farm    How Engineers Scam Homeowners After Disasters

 Federal Jury Finds State Farm Committed Fraud in Hurricane Katrina Claims

Settling your claim...the wrong way and the right way - "free" estimates?

You've been paying your premiums and your property has sustained substantial damage...what do you do next?  Rather than following "conventional wisdom" or any P&C insurance company's recommendation to get several free estimates, the correct approach - for property owners with insured storm or other property damage - is to choose to work with a 3RSystems, LLC trained ICC contractor who is willing to make a commitment to you by way of a "contingency agreement" contract that states that if the contractor is successful in helping you to achieve full and fair payment on your claim, you agree to have that contractor do the work.  A properly written contingency agreement contract will state that if the insurance company legitimately denies your entire claim, the contingency agreement contract will become null and void and you will owe nothing to the contractor. 

Whether titled as a Proposal, Agreement or Contract, as long as it contains an offer which is typically an offer to ensure the accuracy of the insurance company's claim settlement offer to make sure that all damage is accounted for and to complete the repairs as listed in the insurance company's final settlement offer that all parties have agreed to in exchange for consideration - the insured's promise to pay the contractor for the repairs and the insured's acceptance of and agreement to the terms, a legal and binding contract is established.  That, of course, makes much more sense then obligating yourself to a straight contract based on a "free" estimate written prior to coming to an agreement with the insurance company on what will be paid and at what price if the insurance company legitimately denies payment for items written into the contract.

After you have signed the contingency agreement contract, your 3RSystems, LLC trained ICC contractor will meet with your insurance company adjuster to assess the damage.  If an insurance adjuster has already inspected your property prior to your signing of a contingency agreement contract with your 3RSystems, LLC trained ICC contractor, it is likely that the insurance adjuster missed damaged items and/or underpriced repairs.  If that is the case (99% of the time, that will be the case), your 3RSystems, LLC trained ICC contractor will inspect your property for damage then compare his/her evaluation and pricing to the insurance adjusters estimate which would have been sent to you by the insurance adjuster. 

That estimate is called a "loss report" or "scope of loss report."  Keep in mind that, since the loss report that forms the basis of your claim is sent to you directly, you are never in the dark regarding what work is proposed and at what price.  If your 3RSystems, LLC trained ICC contractor finds that your insurance company missed and/or underpriced damage they will tell you and urge you to call for a re-inspection where your contractor and preferably a new insurance adjuster will meet to conduct a re-inspection.

Any contractor who writes an insured signed repair contract with a price that exceeds the eventual contractor / insured / insurance company agreed to proper RTA price and then refuses to adjust their contract price down to the agreed to RTA price should be turned into the proper authorities.

If an insurance adjuster has not inspected your property prior to your signing of the contingency agreement contract you will want to make sure that your 3RSystems, LLC trained ICC contractor knows when an adjuster will be doing so.  The when is determined by you when you demand that an insurance adjuster conduct their inspection on a specific date and time chosen by you.  Your 3RSystems, LLC trained ICC contractor whose training qualifies him or her to know best what is damaged and how much it will cost to repair the damage will meet with the adjuster to point out the damage then audit the loss report you will receive a few days later from the adjuster.  If damaged items are missing and/or the pricing is too low relative to the premiums you paid to your P&C insurance company and the true cost of repairs in your area (again, 99% of the time, that will be the case), your 3RSystems, LLC trained ICC contractor will be happy to speak with the adjuster or in house claims representative at your request regarding any discrepancies' in order to make sure your claim is fairly and fully paid. 

More on contingency agreement contracts:  Contingency agreement contracts are not blank contracts.  There are legal and binding agreements/contracts that either convert into a full legal and binding contract if the insurance company agrees to pay for the repair work as listed and priced by your contractor and approved by you or become null and void if the insurance company fully and legitimately denies your claim.  If your contractor's original estimate of the repairs is, for example, RTA at $25,000 and your insurance company eventually increases their settlement offer to an amount close to that RTA amount, it is in the best interests of all involved to agree on that amount as final then proceed with the repairs.  Know that staff and independent P&C insurance adjusters regularly miss, omit and/or deny legitimate damage worth hundreds of millions of dollars every year.  Everything that gets written into your contingency agreement contract is taken from the loss reports that are sent directly to you by your P&C insurance company so you will always know what work has been approved and at what price.  The only time the total price of your repair work might be higher than what the insurance company has agreed to pay and you have agreed to accept is when you have asked your contractor for an upgrade from the original materials that were damaged.

"The contractor is charging too much?"

Often, after an insurance company adjuster or in house claim rep has reviewed an insured's repair quote prepared by the insured's chosen contractor, they will call the insured and tell them their contractor is charging too much - even going so far on some occasions to imply that a contractor "is trying to rip them off" and suggest to or tell the insured to get other estimates.  Another common ruse is to tell insured's they know of other contractors who will do the job for much less.  This is nothing more than a bad faith attempt on the part of the insurance company adjuster or in house claim rep to cause the insured (you) to question the integrity of the contractor, cause strife between the contractor and the insured (you) and cause the insured (you) to consider illegally breaching their/your contract with the contractor.  Besides being bad faith, it is also Tortious Interference (i.e., causing harm by intentionally disrupting a contractual relationship or harming a business relationship or activity, for example, by raising suspicions or telling lies or simply implying that something is true).  Wayward staff and independent insurance adjusters concerned with staying employed commit the above offense on a regular basis. 

The fact that a contractor estimates property damage higher than an insurance company initially offers rarely means the contractor is pricing the repair costs too high.  Usually, it means that the insurance company is offering the insured substantially less than they should be paying relative to the premiums paid by the insured.  The insurance company does not care if the insured gets into legal trouble by breaching their contract based on the errant advice of a wayward insurance adjuster or in house claims rep.  Typically, all they care about is paying out as little as possible on each claim.

Remember - your signed contingency agreement contract will initially include everything including cancellation clauses (additionally, often separate) that will make up your contract except a description of the damaged items and the pricing.  That description and the pricing will all be shown on the loss report that your insurance company adjuster or in house claims rep sends you.  Once your 3RSystems, LLC trained ICC contractor properly estimates the damage and costs then agrees that the final loss report is accurate and includes all damaged items at a fair and proper RTA price, you and your 3RSystems, LLC trained ICC contractor will simply transfer that information onto the contingency agreement contract that has converted into a full contract because the insurance company has agreed to fully and fairly pay your claim as a result of your 3RSystems, LLC trained ICC contractor's efforts on your behalf.  At that time, you can then choose the colors, types of materials, etcetera, that you want as well as include any upgrades that you agree to pay extra for. 

Since, overall, contractors in general typically know better than P&C insurance company hired adjusters what needs to be repaired and what it should really cost, insurance companies, as illustrated previously, don't want them involved.  If your insurance company attempts to pay you $20,000 on a claim that a professional, fully insured 3RSystems, LLC trained ICC contractor would legitimately charge $30,000 for, that "costs" the insurance company money, at least in their eyes.  The job of the 3RSystems, LLC trained ICC contractor is to make sure the insurance company pays you fully and fairly on your claim.  In the above example - $30,000.  That "extra" $10,000 in the example above belongs to you, not the insurance company.

With a contingency agreement contract, even after your right to cancel has expired you are still under no obligation to the contingency contractor if the insurance company legitimately denies your claim - legitimately being the key word.  That should be clearly spelled out for you in "plain English" on the front of the contingency agreement contract and/or elsewhere.  If it is not, ask the contractor to confirm in writing that they will abide by those terms.

Since you pay insurance premiums based on the real, true and accurate cost to hire a professional contractor to complete the repairs, your insurance adjuster's "scope of loss" report should reflect those true costs rather than the below market pricing typically offered by insurance adjusters using the P&C industry's mandated repair estimating software programs.  You can trust your 3RSystems, LLC trained Insurance Claims Consultant (ICC)™ contractor to make sure that your property damage claim is paid at the maximum and proper RTA amount.  That way, your contractor can afford to take the time to complete your repairs the right way and use top quality materials and installers.

Do you have a mortgage on your property?

If so and your claim exceeds $10,000, you and your contractor will be required to submit paperwork to what is usually a third party "loss draft processor" who will oversee your claim and make sure that all of the repair work is completed before the final claim payment is released to you. Nothing wrong with that, prepared to deal with what often becomes one of the most frustrating and infuriating processes you've ever experienced. 

Although Countrywide Mortgage (Balboa) handles most of their own loss draft processing and Sterling National Corporation (previously known as Z C Sterling) handles a fair percentage, most of the loss draft processing done throughout the USA is handled by a Atlanta, GA based niche financial services subsidiary whose parent company was recently fined millions of dollars for selling "forced-placed" home owners insurance policies that were often priced as much as ten times higher than typical voluntary homeowner insurance policies. These people, while responsive to their customers (banks and mortgage companies, et al) demands, assume that no one else – such as insured's who want to get paid so they can pay their contractors so they can pay their employee's and their suppliers - will figure out who’s in charge and therefore, they play fast and loose with the payments that are ultimately owed to you.  Your 3RSystems, LLC Insurance Claims Consultant (ICC)™ contractor is trained on how to help you through the process to make sure it goes as smooth as possible. 

In regards to contracting for storm damage repairs, doing the actual repair work is only 25% of the job - the easy part.  Dealing with and going up against multi-billion dollar P&C insurance companies, their claims reps and their lawyers who are regularly reluctant to fully pay their insured's claims is 75% of the job - the hard part.  If you want to make sure you are paid all of the money owed to you by your property & casualty insurance company on your damage claim you need an experienced 3RSystems, LLC trained Insurance Claim Consultant (ICC)™ contractor who understands the process from both the construction and the insurance side.

Additional advice and warnings

Never accept a claim settlement offer from any insurance adjuster or insurance company claims manger before you have had a 3RSystems, LLC trained ICC contractor inspect your property for damage. A very small minority of property owners with damage mistakenly believe that they can, after a contractor has done all the work in making sure that all damaged items are accounted for and properly paid for - in other words, fulfilled their obligation, cancel the contingency agreement contract turned full contract then hire a less experienced contractor to do the repair work for less money while pocketing some of the insurance proceeds for their own personal use.  This could be construed by the insurance company and others as insurance fraud.  Many insurance adjusters who know the insurance company's they represent want to keep payouts low will often attempt to cause the insured property owner to cancel/breach their contracts and choose a less experienced contractor who will do the job for less money.  Doing so would likely be an enforceable illegal breach of contract.  If any attorney advises you that doing so is acceptable, you probably need to find a different attorney who is more interested in protecting your interests than in getting paid a small fee while exposing you to potential legal trouble.

People who sell Property and Casualty insurance policies are some of the nicest people you'll ever meet.  Many insurance agents join numerous civic minded organizations and do many good things in their communities - just as they are trained to do by the insurance companies that hire them.  Doing so brings in business!  But, when it comes to helping insured's with their claims, by design, there is not much they can do to help.  Their job is to sell and service insurance policies, not adjust claims.  So, even if you've worked with your P&C insurance agent for many years and maybe even gone golfing together, don't be surprised to learn that your relationship with your P&C insurance agent may be of little interest to P&C insurance companies in general when it comes time to get your claim fully and fairly paid.

Before you sign, ask for proof of their 3RSystems, LLC Insurance Claims Consultant (ICC) training

Trusting without verifying that a contractor who claims to be an insurance claims specialist or expert really is one can be very expensive, time consuming and heart wrenching, among other things.  Rather than take the chance that a contractor who claims to be an insurance claims specialist or expert really is, or is not, you'll be much better off trusting a 3RSystems, LLC trained ICC contractor who will make every effort to assist you in making sure that you are paid full 100% RTA on your claim and make sure that your property is restored to the same or better condition than it was in prior to wind and hail storm or other damage.  If a contractor claiming to be a 3RSystems, LLC trained Insurance Claims Consultant (ICC)™ cannot provide you with proof of completion of the training program, feel free to contact 3RSystems, LLC through the contact link so the contractor's claim can be verified.

After over four decades of business experience which includes forty years of construction industry experience, twenty years of concurrent and verifiable insurance and investment industry experience and substantive and successful Pro Se legal experience, I put together the 3RSystems, LLC insurance claims process training program in order to teach contractors how to process property damage claims for full RTA value thereby benefiting insured's rather than P&C insurance companies.  3RSystems, LLC trained ICC contractors and their reps are put on a level playing field with the multi-billion dollar P&C insurance companies and their teams of independent and staff adjusters, in house claim reps and lawyers that all too often have the advantage over their "customers".  This means that you, as the premium paying insured (that makes you the boss, not the insurance company) with the help of your 3RSystems, LLC trained ICC contractor are more likely to be paid all the money owed to you on your claim in much less time and with much less stress. 

Want to make sure that your insurance company pays you everything they owe you on your insurance covered property damage claim?  Put your trust in a 3RSystems, LLC™ trained Insurance Claims Consultant (ICC)™ contractor.  You'll never pay more but you'll likely be paid much more on your claim then you otherwise would have so you can afford to get the job done right.


Larry M. Burtis, President - 3RSystems, LLC / Minneapolis, Minnesota  USA              

Since 1971 


If you are a property owner who suffered wind and hail storm damage to your property and need help with your claim or need a referral to a 3RSystems, LLC trained Insurance Claims Consultant (ICC)™ contractor in your area, feel free to contact 3RSystems, LLC through the contact page of this site.

If you are a roofing or general contractor or contractor rep and would like to know how to become qualified as a 3RSystems, LLC trained Insurance Claims Consultant (ICC)™ or a manufacturer/supplier who would like to know how to help your contractor customers qualify, feel free to contact 3RSystems, LLC through the contact page of this site.

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Disclaimer - Other than offering my experienced opinions as a matter of reference, I do not give accounting, tax, insurance, investment or legal advice. If you need accounting, tax, insurance, investment or legal advice, I recommend that you consult with a licensed accounting, tax, insurance, investment or legal professional.  BURCOS/3RSystems, LLC and its affiliates shall not be liable for, and the home owner/insured/property owner hereby disclaims and waives any rights and claims it may have with respect to, services provided by any company or contractor representing themselves as a trained 3RSystems, LLC Insurance Claims Consultant (ICC) contractor.

If you are a property owner who has filed a claim with your property & casualty insurance company for property damage which a professional licensed and insured contractor has told you is legitimate damage but your insurance company, through their adjuster(s) and/or an insurance company paid engineer and/or an "in house" insurance company claims representative, has ultimately said is not covered or does not exist, 3RSystems, LLC recommends that you consult with an experienced lawyer who practices and is well versed in construction and insurance law.