October 5, 2017

Independent Insurance Adjuster J. F. National Producer # 82120xx MN Non-Res License # 205293xx

Minnesota Based Insurance Company Claims Manager C. B.

As of October 4, 2017, I am no longer a party to the repair contract written and signed by the named insureds and have been granted Power of Attorney by them which includes the power to negotiate on their behalf regarding the settlement offer on their property damage insurance claim.

History: The first adjuster sent to inspect the insureds property was unqualified and incompetent. He admitted that his EagleView roof measurements were incorrect (low) but intentionally recorded those false numbers as accurate on his loss report. He also under recorded other damage. The claims manger then approved the first loss report as accurate. When told that the existing siding was no longer available, he called the insurance company claims manager who told the adjuster to tell the insureds that another siding product was available that would match. That assertion by the claims manager was blatantly false. It was made by the claims manager with the expectation that the unknowing insureds would accept what was offered as sufficient.

The insured’s then called for a re-inspection of the property by another adjuster. When the adjuster (a window claims adjuster) arrived, he admitted that the first adjusters measurements were low and therefore inaccurate. Although definitive proof by way of a side by side comparison of the insured’s existing siding and the siding the claims manager falsely claimed would match was presented to the adjuster, he refused to acknowledge that proof. Instead, he stated that his claims manager told him to tell the insured’s they would only pay for the one elevation and if it did not match, the insurance company would send someone to inspect the installation. Several days later, the siding that the claims manager falsely claimed would match was installed at a corner post of the property which immediately proved the claims managers match assertion to be false.

It is likely that the adjuster and other adjusters and the claims manager and other claims managers from the same insurance company have both come across the exact same situation on other claims. It is also likely that many insured’s who trusted the adjuster’s and the claims manager’s assertions that the siding that the claims manager said would match now have mismatched siding on their homes. The claims manager does know or should know that the siding would not match. This needs to be investigated.

The 2nd adjuster then sent a revised loss report awarding additional dollar amounts based primarily on the increase as a result of adding to the roofing measurements. Although the adjuster and the claims manager has access to the insured’s 2008 claim for essentially the same damage that lists numerous separate repair line items that make up a complete and proper roof installation, the adjuster did, per the claims managers instructions, intentionally omit several line items which resulted in the claim still remaining underpaid. Several of those items are as follows: Drip edge and starter which are an integral part of any proper roof installation. The adjuster stated that the insurance company instructed him to include starter in “the waste” and state that existing drip edge that will always become damaged during any roof removal would not be paid for citing policy language that states they only pay for “direct physical damage”.

When the insured’s purchased their policy, they were not told that, if a claim was made, they would be paid at the insurance company’s pre-determined (Xactimate) rates, that roofing drip edge would not be paid, that starter and ridge would be “bundled” into the waste factor and that general contractor overhead and profit would be denied, if they mentioned it at all. What they were sold was a replacement policy that implied that their property would be repaired and returned to its pre-loss condition.

In regards to the drip edge issue (as well as the entire claim), under the doctrine of reasonable expectations, ambiguous policy language and/or adjuster and claims managers claims that this or that is not included, is to be resolved in favor of the insured’s expectations under the policy. The obvious and logical common sense reasonable expectation of the insured’s based on their past 2008 storm damage insurance claim experience was that drip edge, starter, ridge cap materials, general contractor overhead and profit were included in the policy they were purchasing. Had they been explicitly informed that those and other items were excluded from the policy, they would not have purchased it.

On the 2008 re-roof, Farmers insurance paid a reasonable and proper waste factor on the exact same roofing portion of the repairs at 15%. A specialized roof waste calculator designed by a degreed mechanical engineer and construction company owner showed an overall waste factor that exceeded the 15% figure allowed on the previous claim. The adjuster refused to acknowledge the true waste factor and stated he would only allow 10%. This was bad faith.

The adjuster was also told that the existing roofing product was an upgrade from the basic 30 year laminated architectural shingle which is a GAF “Natural Shadow”. Although the adjuster was informed that a purchase order of the roofing product from 2008 proved the existing shingle was a high definition upgrade would be made available to him, he refused to acknowledge that fact and instead, told the insured to remove a portion of the existing roofing from the actual roof, thereby leaving the decking exposed to the elements. He took the roof sample with him. Although he had listed in the 2nd loss report that the roofing material was high definition, he attempted to pay for it as a basic shingle. He later told the insured’s that he had been informed that the roof material was a basic shingle product – which it is not.

In late August, a 41 page report on the claim that included a print out of the correct waste calculations and pictures proving that the siding the claims manager falsely claimed was a match to the existing siding was not was delivered to the claims manager whose job it is to then forward the information to the adjuster. After waiting far too long to hear from the adjuster, the insured’s representative called the adjuster to ask why he had not responded to the report. When asked if he had received the report which included the siding pictures, he initially said he had not then said he had but that the pictures were “grainy” and therefore hard to decipher. When asked why he did not respond to the report to inquire as to what the pictures showed, he had no answer. When told that the installation of the new siding next to the existing siding proved what he had been told a month earlier, he said he would go to the property to inspect the siding himself.

After inspecting the siding and comparing the new siding that the claims manager falsely stated would match and finding that it indeed did not, the adjuster prepared and sent in a 3rd revised loss report that listed replacement of all of the siding and included additional payment to bring the total settlement offer to $71,457.18. That amount was still slightly lower than what the insured’s previous insurance company paid for the same repairs in 2008 and substantially lower than the accepted contract price of $116,683 signed by the insured’s in August of 2017. Although the adjuster’s 3rd revised loss report was written on September 21, 2017 at 11:36 AM, the adjuster did not bother to send the revised report until September 26, 2017 which meant that the insured’s did not receive the revised report until September 30, 2017 – over three months after the storm.

Also intentionally omitted from the settlement offer by the adjuster and the claims manager was payment for general contractor overhead and profit. When that was brought to the attention of the adjuster by one of the two insured’s, the adjuster told the insured that Overhead and Profit is included in the line item pricing. On the insurance company’s Building Estimate Summary Guide however, general contractor overhead and profit are shown as being properly added to the claim subtotal.

As well, in a White Paper written by the estimating software company whose estimating software the adjuster is required to use, it states that while sub-contractor pricing is included in line item pricing, general contractor overhead and profit is not. In stating to the insured that general contractor overhead and profit is included in the line item pricing when the above says it is not, the adjuster did attempt to conceal the truth from her.

Although not yet proffered by the adjuster or the claims manager, the standard denial for not paying Overhead and Profit is that there are not enough trades on whatever repair job and/or the repair job is not complex enough. Although neither denial is substantive, both are regularly and fraudulently used by insurance adjusters and claims managers to successfully cheat policy holders out of settlement payments that are legitimately owed to them. In cases where claims managers consider paying some or all of a repair contracts overhead and profit, they often still refuse to pay it if the contractor does not submit sub-contractor invoices to the insurance company showing what was paid to which sub-contractor. Those demands are not however, legitimate demands but rather typical bad faith insurance company stall tactics.

When speaking with the contractor’s then representative, the claims manager stated that the insurance company’s pricing is the “industry standard” which implies that if a professional contractors pricing is higher, the contractor’s pricing is excessive. The insurance company’s pricing is not industry standard but rather, median range pricing that can range from lower to higher, depending on a particular contractors free market pricing. When an insured contracts with their contractor of choice that charges more than what the insurance company would hope to pay and the adjuster and claims manager states they will only pay what their estimating software pays, the adjuster and the claims manager have tortuously interfered with the contract and attempted to cause the insured’s to breach their contract.

In doing so, the actions of the claims manager who is employed directly by the insurance company would likely be defended by the company. The independent insurance adjuster and his employer however, who are 4th and 3rd parties and who believe they are protected by the Doctrine of Privity but are not, will be forced to fend for themselves. Neither is truly protected by the Doctrine of Privity however, since their violations are both violations of contract law and fraudulent misrepresentations that constitute a breach of duty of honesty imposed by society, and not contractual duties.


The Unfair Claims Settlement Practices Act regulates insurance companies’ claims handling practices by identifying unacceptable conduct. Common violations in catastrophe claims include: failing to disclose pertinent benefits; failing to attempt a prompt, fair, and equitable settlement; and misrepresenting pertinent facts or policy provisions. The Unfair Claims Settlement Practices Act states that the failure to disclose to a claimant benefits or coverage provided by the policy, when such benefits or coverage are pertinent to a claim, constitutes a violation of the act. An insurance company commits fraud when it knowingly misrepresents or conceals a material fact to induce a policyholder to act to his or her detriment.

For many decades, professional contractors who know more than anyone else what needs to be repaired after a property owner’s property has been damaged by a storm or other catastrophic event and know what it should cost to complete the repairs, were able to assist property owners in negotiating their insurance claims. Beginning around 2010 however, the P&C insurance industry began to push for state by state legislation that would to prohibit contractors from doing so.

Commonly referred to as “No Negotiation/PA’s only” legislation, written primarily by state legislators who are also employed by the P&C insurance industry, most states now have laws on the books that force property owners with damage to either pay a licensed Public Adjuster a 10% to 15% fee (taken from the insurance settlement) to assist property owners with their claims settlements or trust their insurance companies to deal fairly and honestly with them.

Since most property owners are not familiar with what a Public Adjuster is or does, nor familiar with the cost of hiring one, they are forced by the bad legislation to trust their insurance companies. There is more than enough historical evidence to suggest that doing so rarely favors the insured’s.

Insurance companies being fully aware of the legislation take full advantage of it and use it to threaten knowledgeable contractors into submission. If a contractor “dares” step over the “no negotiation” line, insurance adjusters and claims managers are more than willing to threaten the contractor with exposure. Knowing full well that after a sizeable storm there are never enough Public Adjusters available to handle all of the insurance claims, P&C insurance claims managers run roughshod over their insured’s knowing full well that most insured’s will, through the insurance industry’s companies well-known abuse tactics of “delay, deny, defend”, eventually force the insured into hiring an attorney, going to appraisal, or simply accepting whatever settlement the insurance company offers which is never relative to the premiums paid by the insured’s.  This saves P&C insurance companies many millions if not billions of dollars every year.

The above perfectly describes what has been done to the insured’s in this particular case.