Leveling the Playing Field
Dear Michael-
I hope this finds you well. First, I would like to thank you for taking the time to read this letter in its entirety. I understand you likely get many emails, letters, calls and inasmuch as you would like to, you likely find that its difficult to address everyone’s concerns timely, simply due to the volume of correspondence. I trust that you will get this into the hands of the appropriate department so that our mutual customers concern(s) along with ours are reviewed and addressed appropriately. State Farm as a whole appears to be customer focused and I am penning this in an effort to provide some real insight into the claims process from the perspective of not only policyholders we are advocating for but also as a State Farm policyholder myself.
As you are aware State Farm in recent years has utilized the expertise of a third-party vendors to perform their field inspections. We understand this is common practice across the board and most carriers outsource and utilize third party adjusting firms. What’s unfortunate is that in many instances despite field concurrence during inspection that there are identifiable damages due to a covered peril, once the management team reviews the supports it appear often inevitable that they will overturn the assigned/paid field representatives’ professional opinion. I would surmise that State Farm as an insurer has a certain set of parameters to which any third-party adjusting firm assigned and paid by State Farm has to follow. We appreciate that State Farm has certain protocols and boxes that need to be checked to substantiate the decisions that their third-party vendors have to follow. However, if State Farm has chosen to hire the respective third party to conduct the inspections on their behalf and if these adjusters have been trained and worked other deployments for State Farm, in other states successfully and their professional opinions are trusted and supported then the question is why here in Illinois does it appear the protocols differ or professional opinions discounted?
The process often seems very subjective and ambiguous from the outside looking in. As an example, say neighboring properties that have different field adjusters and that have been inspected with our PA (Jason Elders) for the same damages often have a very different result. It becomes a difficult conversation to have with a homeowner when they know that their neighbor has the same insurance as they do and it simply appears the luck of the draw relating to the field rep and his/her manager’s review. As an example, claim # 1326v402v was inspected and State Farm agreed with damages to 9 shingles. It was our opinion that indeed there was additional damage that was missed at inspection however, we agreed to attempt the as written repairs. As is a part of our process before removing/replacing any shingles we first seek to identify the shingle type, manufacturer etc. RLS report was received and we went to the home and placed the shingle on various slopes and then submitted photos of the existing shingle with the RLS identified shingle. These were submitted to State Farm for review. With no further supports State Farm agreed that a gross mismatch was indeed in the direct line of site of the homeowner or in our words from the homeowner’s perspective and therefore they wrote to replace the roof. We did not even have to perform the repairs to show that it was unrepairable. A picture that we submitted is below. We are grateful for this result as indeed the roof is not repairable and had the attempted repairs been undertaken the roof would have suffered additional damage.
Here is another example, Claim 1322k276N the same scenario exists here. The State Farm estimate shows 19 shingles need to be repaired as they were acknowledged damaged. We maintained the same process with this claim file and brought the RLS identified shingle to the home and placed the identified shingle on the existing roof. State farm insisted this was a close enough match and closed their file. The Homeowner wrote a DOI complaint as he could not understand how they could come to the conclusion that this was in line with the Standards for Prompt, Fair and Equitable Settlements.. See excerpt below. This policyholder got a letter from State Farm and was very upset and distraught looking to our firm for the nest steps. Later in this letter we will discuss the “appraisal clause” language in the State Farm policy and why this homeowner is reluctant to invoke appraisal process.
Section 9. Standards for Prompt, Fair and Equitable Settlements Applicable to Fire and Extended Coverage Type Policies with Replacement Cost Coverage. A. When the policy provides for the adjustment and settlement of first party losses based on replacement cost, the following shall apply:
(1) When a loss requires repair or replacement of an item or part, any consequential physical damage incurred in making such repair or replacement not otherwise excluded by the policy shall be included in the loss. The insured shall not have to pay for betterment nor any other cost except for the applicable deductible.
(2) When a covered loss for real property requires the replacement of items and the replacement items do not match in quality, color or size, the insurer shall replace items in the area so as to conform to a reasonably uniform appearance. This applies to interior and exterior losses. The insured shall not bear any cost over the applicable deductible, if any.
We understand storms are directional and despite homeowners voicing “my neighbors got a roof” which we hear often not every home suffers the same documentable damages. Other factors play into the identified damages. For instance, tree cover, positioning of the home to other structures bordering the home, age and condition of the exterior materials on the home. That said as a practice Keywest Adjusters is very mindful of these factors and consider them when addressing damages at inspection. Our frustration lies with the fact that our firm often gives a clean bill of health to homeowners which honestly not all of them are happy with but homeowners insurance is not designed to be a maintenance policy. Therefore, when we assert real identifiable and documented damages and obtain field concurrence why is coverage denied? We will always advocate for our customers with documented supported damages and will continue to do so vehemently.
As an example, Laura Weigert one of our mutual customers has filed two losses that we were involved in. First loss occurred on 6-29-20 claim # 1308s829w this was a lightning strike claim. We inspected the property with the field representative Andrew on 11-2-20 and found no hail damage to the shingles and agreed with the field representative. Pictures and field rep notes are in the State farm file. The second loss occurred on 9-7-21 with claim number 1326m244c and we initially inspected this with field rep Quinton on 11-19-21. We did document hail related damages to the shingles and collateral damages to include spatter however, Quinton who is a third-party adjuster working for Renfro indicated the hail hits were too “large” or that the hits are old. We got the estimate back with Zero damage.
We argued a reinspection and pointed out to State Farm that they in their files have pictures of the property from the earlier claim and should review those against the pictures from the recent loss date to confirm that indeed there would have been no other storm event than the 9-7-21 loss date to cause the hits to the shingles, collateral damages and spatter. State farm did grant a reinspection which we met Eberls on site on 4-5-22 to again document the damages, at this inspection there were also interior damages that needed to be documented for which the homeowner was present to allow egress to the inside. The policyholder and the PA felt reassured that this ship would be righted and that indeed the damages could only have occurred on the 9-7-21 loss date. We had every confidence State farm reviewed the old claim photos they saw no hail related damages to the shingles and no collateral but when we inspected the property on 4-5-2022 (and previously on 11-19-21) the photos do depict storm related damages. State Farm again denied the loss but offered no other date that the loss could have occurred. This policyholder as well wrote a DOI complaint as simple logic could not be applied here.
This is the last example and I most definitely could list many more but I feel that this is probably sufficient to drive our point home. Claim # for Ms. Neel. She also filed a DOI complaint and her partial narrative is below.
WE CALLED A CLAIM IN FOR STORM DAMAGE TO STATE FARM. OUR HOME SUFFERED HAIL DAMAGE TO THE ROOF, SIDING, GUTTERS DOWNSPOUTS AND ROOF METALS. THE ORIGINAL INSPECTION SET FOR 9-28 WAS TERMINATED AS THE 3RD PARTY ADJUSTER ASSIGNED BY STATE FARM STARTED THE INSPECTION INDICATING THAT HE SAW NO DAMAGE THAT CORRELATED WITH THIS LOSS DATE. WE TERMINATED THE INSPECTION JUST MINUTES INTO THE INSPECTION DUE TO THE 3RD PARTY ADJUSTERS LACK OF PROFESSIONALISM AND RELUCTANCE TO REVIEW AND ADJUST THE LOSS PROPERLY. I CONTACTED MY AGENT TO ASK FOR AN ACTUAL STATE FARM EMPLOYEE (ADJUSTER) TO REVIEW AND ADJUST THE DAMAGES. MY AGENT PROVIDED AN 855 NUMBER TO FACILITATE THIS. STILL STATE FARM CLAIMS REFUSED THIS REQUEST AND RESCHEDULED THE INSPECTION WITH THE 3RD PARTY ADJUSTER WORKING FOR RENFRO. I WANTED MY HUSBAND TO BE PRESENT FOR THE INSPECTION AND IT WAS RESET FOR 10-15. THIS DATE WAS RESCHEDULED TO 10-18 DUE TO WEATHER ON 10-15. THE 3RD PARTY REP DID ACKNOWLEDGE DAMAGE TO THE SIDING AND TO VENTS ON THE ROOF AND ON THE SHINGLES THEMSELVES. HOWEVER, THE 3RD PARTY REP SAID THE DAMAGE ON THE SHINGLES COULD NOT HAVE BEEN CAUSED DURING THE 9-7-21 STORM EVENT. WE HAVE ASKED AGAIN TO HAVE A STATE FARM EMPLOYEE COME TO THE PROPERTY TO LOOK AT THE ROOF BUT IN RESPONSE TO THAT REQUEST STATE FARM SENT NOTICE OF ARBITRATION.
DIRECTLY ACROSS THE STREET JUST 21FT FROM OUR HOME STATE FARM ADJUSTED AND APPROVED OUR NEIGHBORS ROOF FOR REPLACEMENT. THEY ALSO DID CONFIRM THAT THEIR ACCUWEATHER WEATHER SERVICE DID ACKNOWLEDGE LARGE HAIL AT OUR ADDRESS. THEY DID BUY THE SIDING AND TURTLE VENTS. WE ARE DISMAYED THAT IT IS STATE FARMS INTENT TO ASK US THE INSURED TO INCUR COSTS TO TAKE THIS TO ARBITRATION TO RESOLVE THE DISPUTE WHEN CLEARLY THE DAMAGE WAS ACKNOWLEDGED AND WAS CAUSED BY THE STORM EVENT THAT OCCURRED ON 9-7-21. WE ARE LOOKING FOR YOUR HELP TO RIGHT THIS SHIP AND HOLD STATEFARM ACCOUNTABLE TO REPLACE THE ROOF OR SEND OUT AN ACTUAL STATE FARM ADJUSTER TO REVIEW THE DAMAGES THAT ARE EVIDENT.
We declined arbitration as if it were to be binding there were costs associated and the policy language indicates in the event there is a dispute parties are to seek “appraisal”. When our office discussed this with the third-party manager Bobby from Renfro he agreed that we would just have another inspection in spring. We performed this re-inspection on March 22 2022. The field rep assigned circled and identified damages and indicated that the loss would surpass her limit of authority and therefore she would need her manager to review and approve. This particular adjuster is from Louisiana and had previously adjuster losses in her home state and several others such as Texas. We understand the storm event in Texas and especially the hail strikes are on average much larger than that of those occurring here in the Midwest and Illinois. However, below is a picture of this policyholder’s roof. This is a classic hail hit with uneven edges and granule still in the center and bruising that was palpable. The policyholder received a denial letter. Of note we had several reinspection’s with this field rep and all of the files and her authority including estimate writing ability were removed and she was redeployed elsewhere. I would surmise that there were likely other circumstances that contributed to her departure however, every inspection she performed with our PA ended in the same manner despite varying discussions when in the field.
As you are likely aware, most carriers in recent years have looked inward in an effort to more effectively manage their risk. However, State Farm as an insurer, with the largest market share here in the Midwest has done nothing that we are aware of to address this as it relates to policy and coverage language. In our opinion, State Farm should utilize their tools and confirm age and condition of the risk that they are underwriting. In our belief, had State Farm been actively addressing and assessing the risks underwritten by them, taking into consideration the midwestern storm activity and the increasing number of contractors that are “knocking doors”, working to limit their risk by introducing endorsements (often with a buy back option) to address the issue. We feel had there been some due diligence that this topic would not be at the forefront.
Most carriers have added roof surfaces endorsements, metal marring exclusions, obsolete materials and matching language (despite Illinois having no legislation forcing and insurer to match existing materials). Many carriers have again looked inward to limit their risk and correctly assess and underwrite with premiums that correlate this risk and having sufficient reserves to pay for losses. However, we have not been made aware that State Farm has addressed or is addressing this situation. Instead, it appears that State Farm is managing their bottom line and risk by utilizing a 3rd party to adjust losses and then when the professional opinion of the paid representative does not meet the bottom-line requirements, the loss is denied. This perhaps is an overly broad conclusion but unfortunately with little supports to base an alternative conclusion on from the outside looking in this opinion appears justified. Seems like this is a backwards approach to managing risk, losses & overall profitability. This is a true disservice to many policyholders (including myself) that have been long time loyal customers to State Farm and expect that when a loss occurs their insurer will step in to make things right.
The difficulty that a policyholder has when there is a dispute in the damages and the cost associated with State Farm’s appraisal process is designed to deter homeowners from the benefit of a properly adjusted loss. I think you will agree that we understand not everything is covered and most often there has to be some subjectivity when adjusting losses based on education and prior experience. However, the swing of the pendulum when faced with nearly identical circumstances depending on the eyes on the claim is unexplainable. Moreover, to a policyholder with little knowledge base of the claims process except purposeful marketing “like a good neighbor” and little to no understanding of policy language and the ability to interpret it leaves most of our mutual clients very troubled. In fact, even most agents we have talked with are in the dark related to the State Farm specific appraisal process. (See second attachment where I discuss this further) It’s frustrating and makes folks just plain angry and upset. We are only hoping to level the playing field and bring some consistency to the claims process.
In closing, we are hopeful we can work together to improve the overall claims process and find some common ground amongst the parties. I have approximately 10 other files that I would very much like to have reviewed and addressed besides the aforementioned claim files so that we can all get a better understanding of the best way to help our customers navigate and protect the biggest investment they have entrusted to State Farm. Again, thank you for reading this and should you wish to discuss with our office directly, please call 847-613-5304 and we will happily do so.
Stacey Elders on behalf of Jason Elders PA License 189202
Jason Elders
Keywest Adjusters
223 Edgewater Dr
Bartlett, Il 60103
Cc: Keywest claim file Weigert, Neel, M Smith, Gonzalez
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