How Are YOU doing?
February 2, 2008
Like most Americans, I sit in wonderment watching rich bankers and their friendly politicians loot the wealth of the American proletariat using one "b' word (bailout) when the other "b" word (bankruptcy) is much more appropriate. I shake my head while the Chicago Political Thug Machine moves to Washington to reward their friends through so-called stimulus bills. And my heart goes out to people who are sorely affected by an economy our new President takes pleasure in proclaiming is a disaster. A good friend who supported the candidate I didn't vote vote for tells me that I will not see any more good economic times in the remaining years of my life. I am not alone in participating in conversations with others as we tell each other impact of how this political irresponsibility has changed all of our lives. Many people have asked me, "how has this economy affected you?"
I'm here to tell you.
On the surface, insurance adjusting seems to be a recession-proof business. I've heard the jokes over the years that, as times get rough, more fires seem to happen but I haven't found that to be the case. We don't work for insureds who cause insurance claims to happen. The most obvious reason is: "we don't get paid".
I've seen down economic times and good economic times knowing that there will always be a business cycle. But this time it is different. Just as FDR's "New Deal" prolonged the depression until a war bailed out the American economy, one stimulus bill after another in this "Raw Deal" economy has changed the way public adjusters do business as well.
In the recent past, we settled a claim with AIG that was over a million dollars. Of course it took AIG some time to agree that the claim was as as much as we eventually settled, but the most perplexing thing was the delay in getting the payment. AIG has been the recipient of billions of dollars in government aid but it took them almost ten months to make payment AFTER THE CLAIM WAS SETTLED. The insured believes that, without our help, he would still be waiting for payment or would not get one until he ponied up the money for a lawsuit.
Look at it this way. Insurance companies make money on premium collections but they also have the ability to make much more through their investments. Consider that their investments are not doing too well lately. Real estate values are in the tank. Insurers realize that the stock market is down just as do individual investors and those with 401 K retirement plans. That is why some insurance companies are trying to buy banks—so they can get a bailout. With insurance companies so concerned about the bottom line, don't you think that would have an impact on insurance claim payments?
Another issue we deal with is homes that are going into foreclosure. When homes go into foreclosure, the insurance settlement money goes to the mortgage company. We have had this happen to some of our clients. It is most unfortunate. Fortunately when you have an insurance advocate on your side, the claim can move more rapidly.
There is an insurance loss estimating software company that allows insurance companies to alter the data base in estimating the value of insurance repairs. If some contractors are hurting and are willing to work for less, is it not unrealistic to believe that the insurance company will move the numbers in the data base down, thereby impacting claims as well?
In talking with an Insurance Adjuster of one of the major insurance companies recently, he told me that he and another claim adjuster were the only TWO "large loss" adjusters left in the State of Arizona. The insurance company, concerned about costs, had increased both of their work load.
Our lives are changing. It would be fool hardy to believe that the insurance adjusting industry is not going to change as well. That is why insureds quickly realize that they don't have a claim every day. The insurance company does.
And we work on them all day long as well.