Two Estimates and an Offered Deductible
You are the staff property adjuster on a $48,000 fire loss. At the inspection, the insured's brother-in-law introduces himself as a licensed public adjuster and says he will represent the insured - then asks you to "work off the same numbers" so the fee disappears. The insured's contractor submits a $61,000 estimate including general contractor overhead and profit, plus an unsigned $44,000 version marked "for the insurance company only." The insured asks you to fold his $2,500 deductible into the building payment because "everybody does it," and offers to steer real-estate referrals to you if you "take care of him." Your supervisor is unreachable, and the file is already past the Chapter 542 decision deadline.
1. List each issue in this file and the correct response to each.
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| Issue | Correct response |
|---|---|
| Two contractor estimates ($61,000 vs. a $44,000 "insurance version") | Treat as a potential misrepresentation. You may not settle from a document the contractor admits was prepared for the insurer's eyes. Build your own scope and price from the inspection and photos, and refer the discrepancy to SIU or management. |
| Offer of real-estate referrals | An inducement tied to claim handling. Decline in writing, state that it cannot be accepted, and record the conversation in the file. |
| Request to fold the $2,500 deductible into the payment | Refuse. The deductible is the insured's responsibility; absorbing, waiving, or rebating it is improper and, in a property claim, can shade into fraud. Pay the covered amount net of deductible and explain why. |
| Brother-in-law public adjuster | Not improper in itself - a licensed PA may represent the insured. But "work off the same numbers" off the record is not acceptable. Communicate with the PA as representative of record in writing and keep every number in the file. |
| Supervisor unreachable / deadline missed | Handled below - the statutory clock does not pause for staffing. |
The unifying duty: the adjuster owes the carrier good faith performance and the insured fair dealing. Neither permits a knowingly false payment or a private arrangement.
2. What is your obligation on the past-due deadline, and what do you do with an unreachable supervisor?
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Chapter 542's clock does not consult your org chart. A missed decision deadline exposes the carrier to 18% annual interest and attorney's fees, and a pattern of delay invites a Chapter 541 unfair-settlement-practice claim.
Today:
- Send written notice to the insured and the PA of the need for additional time with specific reasons, even though the first window has closed - a late notice is better than none, and the 45-day follow-up notices must then be calendared.
- Escalate in writing to the designated backup supervisor or duty manager and copy compliance. "Supervisor on vacation" is not a statutory exception.
- Diary the file with the exact due date and the reason for any extension.
- Keep the file contemporaneous. Do not backdate notes or reconstruct an approval that never happened - that converts a delay problem into a credibility problem.
You do not have authority to concede interest or fees. Your job is to stop the bleeding and get a documented decision made.
3. Can you settle on the $44,000 estimate to close the file quickly? Explain.
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No - three separate reasons.
- You would be relying on a document the contractor represents as prepared for the insurer rather than as an accurate scope. The adjuster's estimate must reflect the covered damage, not the number that closes the file fastest.
- It may underpay or overpay. A general contractor rebuilding a fire loss may legitimately be owed overhead and profit, so the $61,000 figure is not automatically inflated; conversely, it may include non-covered items. Neither the high nor the low number is evidence of the covered amount - the scope is.
- It destroys the integrity of the file. Once the record shows a knowingly one-sided figure was used, every other number becomes suspect and the insured has a ready-made bad-faith argument.
Correct course: complete your own scope from photos and measurements, price it consistently, attach the supporting documentation, and explain the differences in writing. If the contractor will not produce one honest estimate, note that in the file and deal with the insured directly.