Preparing for the Insurance Adjuster

When a property incurs structural damage, causing an insurance claim, a property manager has dozens of issues to handle at one quick moment. You must prioritize tasks immediately, and insure that every item is properly managed. Most stressful are the multitude of questions you, the property manager, must be prepared to answer. Being prepared for these questions, and for the loss, will alleviate much of the headache of having an insurance related property loss on your project.

The insurance carrier for your property will immediately send an insurance adjuster to evaluate the damage and settle the claim. The insurance adjuster should never be confused with a public adjuster, who would not normally be sent to your property by your insurance carrier. Whether an independent adjuster or a staff adjuster of a large insurance firm, insurance adjusters have very comprehensive jobs. They do not know what events will arise each day, what fires will happen, and what claims will be filed.

An insurance adjuster can have a jump start on a multi-family residential project (or any other large structure) if the Property Manager has a few additional items in their emergency plan, available to the insurance adjuster, assigned to work on their loss.

At the time of the loss, there are many things happening, and many details to record. It is extremely important for the property manager to preserve the scene until the adjuster can go to see the damage. Preservation of the scene may only be possible in the form of photographs. A property manager would be wise to have a disposable camera in the management office at all times. The more pictures, preserving detail, the better the adjuster will understand the extent of damage, and the more accurately and expeditiously the claim will be settled. Pictures should be taken with the intention of showing the extent of the loss. Any change in the building, caused by the loss, should be documented, including water in the basement, wet drywall, melted vinyl siding, altered utility service, etc.

Also remember it is usually the responsibility of the property manager to secure the building from further damage, vandalism, or unauthorized entry. Boarding the building, covering roof holes, cleaning fallen debris, inspecting utilities and weatherproofing the building will accomplish this requirement. The insurance company pays for damage caused by the fire or flood but will not pay for damage extended due to neglecting the security of the building.

The next concern of the insurance adjuster is to find out if a tenant caused the damage and if so, does that tenant have insurance. The direct cause of the damage will be determined by the jurisdictional fire investigator and will be made public knowledge in their report. Other than these items, most information needed by the insurance adjuster can be prepared long before any damage occurs.

To expedite an insurance adjuster’s processes, it would be ideal if the Property Manager provided them with a copy of the standard rental lease, and a floor plan and diagram of the building, unit and project, including the square footage of the property and the age of the building. If it is determined that a tenant caused the fire or flood, a copy of their specific rental lease would be valuable. It is also important for the insurance company to know of all parties with a financial interest in the property. This would include but is not limited to all mortgage holders, owners, investors or lien holders.

Records such as the number of each style of units on the property, current rents for each style of unit, and the number and style of the units that were damaged are needed by the insurance adjuster, and can be maintained throughout the year. This information is relevant specifically when lost rent compensation is being determined. The last bit of pertinent information is the occupancy records. The number of unoccupied units and their style is necessary for the insurance adjuster. All apartment style and rent information could be kept in a table format, and presented to the insurance adjuster at the time of the loss.

By a property manager having detailed information prepared for an insurance related loss, and available to the insurance adjuster, the claim can be settled immediately and the repairs to the damaged units can be completed quickly.

Written by Sharon Toepfer Burns, President of Toepfer Construction Co., Inc.