click here if YOU NEED HELP NOW!

INSURANCE MENTORING.

EFFICIENCY_IAQ helps the customer understand the insurance dimensions. We help by performing a review of your full policy to help sort through the legal description of your COVERAGE and EXCLUSIONS definitions to understand (a) how to “characterize” the loss, (b) do so in a way your reimbursement is not diminished, or your claim is denied outright.

IMPORTANT FACTS OF LIFE (INSURANCE), YOU NEED TO KNOW

  1. Note that your insurance makes no promise to pay or pay in a timely fashion. They only promise to review your claim, make a “determination” and pay based on what they can see. For this reason, the claims process is fragmented and incremental… If the problem, its “source” and its “path of travel,” are hidden in a wall or behind fixtures a determination of whether a claim is even valid or providing a “realistic” dollar amount for mitigation and repair may be slow in coming from your insurer’s claims adjuster, falling later in the process and after work has begun.

  2. IF YOU MUST WAIT… have us come take a look and record what you need to support a claim later, its free. EXAMPLE: If you have a water loss it is CRITICAL you have someone like EFFICIENCY_IAQ meter & log where the water was when discovered; BEFORE IT DRIES. This will allow you to PROOF the scope of the loss to the insurer later. Make no mistake, discourse with your insurer is a legal process and what you say, record/preserve matters. ALSO… take TOO MANY pictures – digital film is cheap…😄

  3. Finally, most insurance policies make the property owner responsible for SECONDARY DAMAGES. Be sure to integrate this aspect into any plan for delays in your effort to correct a loss. If you misstep, there may be more out-of-pocket cost to you. In the future, EFFICIENCY_IAQ will add topics on insurance logistics to our FAQ library so visit us often.

INSURANCE MODELS, TYPES

EFFICIENCY_IAQ works with property owners and the properties can have a variety of uses. Different use cases require a different insurance model be applied. Let’s look at a few common insurance models we see often in the list below.

  1. Rental Property Insurance – designed for landlords

  2. Tenant Renters Insurance – designed for the tenant, not the property owner

  3. Homeowners Insurance – designed for the property owner who lives there

Before we compare these models, let’s look at some basic pillars of a policy and understand how we weave them into an assessment of the policy.

Back to Top of Page

COVERED LOSS (COVERAGE section of your policy)

EFFICIENCY_IAQ’s team has been working with customers for over 12 years. We have found people never plan for these losses so insurance, inspection reports, water appliance warranties are all very important to consider when one does budget planning.

For insurance we should review three BASIC pillars; the first one we look for, DEFINITION OF A COVERED LOSS which is what you base much of the rest of your insurance assessment upon. Be careful, as you read you will learn this is just part of the picture.

  1. What is covered

  2. Begin to understand how “full” coverage is defined … but don’t stop here…

EXCLUDED LOSSES, NOT COVERED (EXCLUSION section of your policy)

EFFICIENCY_IAQ’s team understands that people do not read their policies (a legal contract between you and the insurer). Understandable, but very dangerous for so many of us who do not.

COVERAGE definitions can appear obscure; like they cover anything (don’t be fooled). There is a complimentary definition that acts to offset coverages in the EXCLUSIONS section. This provides a complete definition; tells you when you need to modify your policy to get proper coverage.

For insurance we should review the second of those three BASIC pillars; the EXCLUSIONS which, when compared to the offsetting COVERGE, is what you base a buying decision on; what endorsement is needed (as part of our project post-mortem we discuss what ENDORSEMENTS you want to shop for if you do not have what you need).

  1. What is the offsetting coverage?

  2. Compare the offsets to understand the “full” coverage (or lack of it)

  3. Buy an ENDORSEMENT?


Back to Top of Page

ENDORSEMENTS (AN ADDENDUM section of your policy)

EFFICIENCY_IAQ’s team understands that an insurance contract between you and the insurer can and typically does (8 out of 10 policies we see) fall short on coverage for a basic water or contaminate losses. Buying a few (1- 3) well-chosen endorsements can correct this.

Once you understand your policy’s COVERAGE and EXCLUSIONS offsets you will know your weaknesses and be able to close those gaps. Not so fast though! Before the final decision look at the topic TIPS and TRICKS to learn how you can reduce the number of and cost of the endorsements you buy.

The third and last of those three BASIC pillars; the ENDORSEMENT which, when sized properly will close those gaps, provide “full” coverage and do so for a smaller premium ($$) in many cases.

  1. Consider the endorsement you need

  2. Do they include contaminate (mold) coverage you lack?

  3. Look at TIPS and TRICKS if the answer was yes…

TIPS and TRICKS (shall we play a game?)

So sorry for the 80’s movie reference but I’m serious. The insurers, many of them, are playing games with us so why shouldn’t we join in? I am referring to a little-known concept labeled, “SECONDARY DAMAGE TO A COVERED LOSS”. I know, it doesn’t sound fun but wait until you learn how to play; then tell me how you feel.

Contaminate coverage (just a mention of the four-letter word “mold”) is poison to insurers and a quick way to put an adjuster on the defensive. Endorsements to cover a loss that could add $50 to 100K to the claim are expensive. The reality is that most contaminate components to a water loss are closer to 8 to 15K (still nothing to sneeze at) when added up.

In the 90’s in Texas, there were monumental contaminate (mold) losses and no rules to speak of. The result was million-dollar settlements, establishment of the current set of rules (TMARR statute, one of the strictest in the nation) and a requirement by the TDI (Texas Department of Insurance) any carrier had a minimum requirement to talk to consumers about mold (IF they want to sell product here).

Enough of the history lesson! All this was important to know because insurers snuck two things into the standard insurance policy to compensate for the changes. They are: (1) the concept of a default coverage to cover mold losses AND (2) the feature(?), SECONDARY DAMAGE TO A COVERED LOSS.

The default coverage idea was all it took to allow the insurance sales agent NOT to review mold coverage with the consumer; avoid the new TDI regulation. Of course, the average insurance buyer would think $5K was a lot… little do they know.

Now comes the game. SECONDARY DAMAGE TO A COVERED LOSS. This is a definition which is a standard in many polices. Here is what you need to know to play:

Back to Top of Page

  1. This definition allows some or all; contaminate cleanup, containment, testing (otherwise known as mold remediation)

  2. This coverage is limited. It only applies if the underlying cause of the loss is a valid coverage definition in the COVERAGES section of the policy (sounds fair)

  3. It is located as a minor footnote in the EXCLUSIONS section… (hmmm, a funny place to put coverage)

  4. The offset in the COVERAGES section of the policy repeatedly reminds you contaminate cleanup (mold) is NOT covered (ok… that’s just backwards… or is it?)

OK… FINALLY… WE’RE READY TO PLAY THE GAME. Let’s be fair. First let’s play as if we’re the insurer.

The property owner calls (ring, ring). I have mold growing. Believe it may be a leak. So sorry Mr. Customer... I know you’ve been paying your premium for 20 years with no claims, but it appears you have no MOLD coverage… CLAIM DENIED… game over INSURER WINS… CUSTOMER GIVES UP.

OK… its our turn… the consumer is up to play…

The property owner calls (ring, ring). I have mold growing. Called EFFICIENCY_IAQ and they have verified it’s a leak which is a covered loss. So sorry Mr. Customer, but it appears you have no MOLD coverage… CLAIM DENIED… Just a sec Mr. Claims guy… I also have a beefy SECONDARY DAMAGE TO A COVERED LOSS clause in my policy so let’s get the claim started… DENIAL OVERTURNED, CLAIM APPROVED, CLAIM PAID… INSURER GIVES UP… CUSTOMER WINS

So… do you hire a trade company to characterize your loss from an insurer's preferred vendors list, using the insurer’s perspective? (Answer, I would not – ask us to help…)