Experts Warn of Complicated Insurance Claims Process

The Fort Worth Museum of Science and History is still closed after major damage from burst water pipes during the winter storm.

They're predicting huge losses after the sprinkler line burst, sending water pouring into most of the building.

Offices, educational rooms and gallery spaces took on water damage.

“Even in such a short time it was running, inches of water was flowing over the museum school, the lobby and the offices," said Dr. Doug Roberts, Chief Public Experience Officer for the museum.

After that, Roberts said it turned to survival and cleaning up what they could until North Texas thawed out. The museum, which still had electricity, even opened up its doors for staff who didn’t have electricity and needed at least a warm place to stay.

Luckily, precious fossils and other historical artifacts were saved. Visiting hours are still temporarily suspended but the hope is to open up parts of the building soon.

Since the museum is a nonprofit, they are still accepting community donations to cover costs that insurance might not handle.

“I really felt like a sense of community during the storm because we weren’t alone," said Roberts. "We’re at a phase where we hope the insurance will cover things -- but just like in a personal situation -- you always find out there is some fine print and that this thing wasn’t covered or that thing wasn’t covered."

However, this is a very complex insurance situation. So much so, that the museum is relying on licensed public insurance adjusters to advocate for them through this complicated process.

"I am watching contractors from all over the country slowly flood their way into Texas," said Daniel Robosky, who runs RoboSky Consulting, the firm representing the museum through their claims. “We have absolutely been inundated with work over the last two weeks here for sure. The statistics are already showing that this could be one of the top three or four largest storm events in U.S. history."

He warns that contractors might not be doing the proper work your insurance company is asking for.

"That's why representation on these large loss claims like this is important," Robosky said. “The museum is a really complex claim and doing what we do for our clients, I can’t imagine putting yourself in that position where you’re trying to navigate that by yourself -- 90% of people don’t know what’s actually in their insurance."

He said it's more than just calling your insurance. Multiple claims might have to be filed for different types of damages. For example, the museum has four different types of claims being filed.

“One that’s going to deal with just content, fossils, the stuff that’s in the education side of the building, classrooms and offices. Another one that’s dealing with nothing else except for the financial side of it like business interruption, how much lost revenue are they going to have because certain parts of the building being shut down?" said Robosky. "There's another that going to be looking at the structural damage. Then one that is specific to the roof."

Robosky said he's helping clients like the museum get the work done and not get taken advantage of.

Multi-step process

Usually, property owners are dealing with three phases to dealing with a storm like this. The first step is to mitigate. For homeowners and businesses, it's important to vet every contractor you work with and make sure they have the proper licenses.

The next step is remediation.

"Which is saying, 'OK we’ve stopped the bleeding, so now let’s bandage the wounds. That's when you’re doing some more extensive work," Robosky said. "For example, the water is all extracted, you’ve done your due diligence and pulled out wet materials, an industrial hygienist has come out and test for microbial growth. This is where you’re actually starting to assess the extent of the damage and taking those things out that you can prepare up for the reconstruction side of things."

The third step is reconstruction. In this phase, when it's time to hire someone for repair work, don't get stuck in a conversation with your insurance about bids.

"Just like anything else, you go to three auto body shops to get the dent fixed on your car and your insurance is going to pay for the cheapest one," Robosky said. "The same thing happens when it comes to property losses. The idea of working off of bids is not advantageous to the client."

Some insurance companies will try to dispute damages to see if it was really caused by the storm or if it was due to a lack of upkeep from something else. That's why it's important to document everything.

"One of the big things that everybody needs to understand, is that everybody has insurance policies that -- to some degree -- there is a limit that you have to meet to maintain policy compliance," he explained.

That means homeowners and business owners need to take a closer look at their policy to see if they need to contact a mitigation company up front.

"So that’s the insurance company kind of putting a disclaimer in there saying you can’t just sit around and wait for someone to solve your problem. You have to be proactive, you have to hire a mitigation company to come out and assess your property and do some minimal repairs to prevent further damage," Robosky said. "A lot of homeowners and business owners that will think they have to wait for their insurance company to come out and tell them what to do, when in their policy, it states that they have to do something to mitigate their own risk."

Beware of 'storm chaser' contractors

And be aware, Texas contracting laws allow for so-called 'storm chaser' or 'fly-by-night' contractors to operate.

"Texas is unique in that the contracting laws in the state allows for a lot of fly-by-night contractors, where they were roofers last week -- then this massive storm hits and now they want to be mitigation companies, plumbers, electricians," Robosky said. "There’s unique situation that you don’t see in a lot of other states these guys can kind of jump around."

He said there’s nothing in the state laws that dictate what those certain contract workers can and can’t do. 

"There are specific licenses for plumbers and HVAC guys, but when it comes to a lot of construction trade, you have mitigation companies coming into Texas from out of state, even local guys that are coming in and doing work," he said.

Robosky warns not to trust someone that rolls up in a pickup truck and knocks on your door. They can often times take advantage of storm victims by either doing too little work or even too much work that the insurance won't cover.

"You have these guys come in, they say, 'Oh, your insurance company is going to cover it. And when they do the work, they either don't do enough or do too much and then leave the client sitting there saying who's paying for this? And unfortunately a lot of times they are the ones that get stuck paying for it."

Bottom line, make sure you never pay anything upfront to anyone.

"A lot of times, the insured is left to say, 'Well this is what my insurance company told me so this must be accurate.'" Robosky said. "We come in and we are the advocate for them. To make sure that their carrier pays what they should be paying on a claim."