Superstorm Sandy Is A Reminder That Insurance Claims Are Complicated

In 2002, I lost a detached garage to a fire when a tree near the structure was struck by lightening (see Fire #2 at The Fire House).  My insurance company concluded that I was due over $5000 for the contents lost and another $10K to rebuild (plus repair some minor damage to the house).  However, the designated dollars to repair and rebuild came with specific strings.  I received a payment for 75% up front, but would not get a full reimbursement until the construction portion was complete.

Explanatory Sections for my Four Reimbursement Checks

What I'm sharing is the bottom line of how things turned out.  The math to get to this point was full of details, deductibles, and percentages.  I've been through multiple college calculus and accounting courses. With that said, the math/computations for my claim were harder than they needed to be.  They left  me scratching my head and wondering, why? 

Once, when I was in Chinatown (New York) I watched a team of resourceful dudes working the crowd using a box as a table on a parking meter, three bottle caps, and a rubber band wound into a ball.  They were playing the shell game with anyone willing to whip out some cash for a chance to double their money.  The complicated calculations and arithmetic thrown at me by the insurance people reminded me in some ways of the mind-boggling shiftiness of those street hustlers.  The insurance company team had a solid sense of what was going on because they went through the drill regularly and I (as the policy holder making a claim) was at their mercy due to my lack of experience.

This gets me to the people of the East Coast with losses from Hurricane Sandy.  They are in the middle of a messy situation and part of the problem is the insurance companies.  If it sounds like I'm blaming the insurance industry for the problems in the aftermath of Sandy, I don't intend to.  These are not monks, nuns, and future saints, the agents and the powerful companies they represent are business people.  Businesses are focused on the bottom line and the more money they disburse to their policy holders the less they have for themselves and their shareholders.

Politicians were not involved in my garage fire, but if you've seen the news in the last two months it's obvious that they're wrapped up in Hurricane Sandy and I see this as part of the problem more than the solution.  Our Washington legislators get a lot of money for reelection campaigns from the Insurance Industry.  Once again, the insurers are just looking out for their own interests, most obviously money.  If the Insurance Industry can pass off any part of the expense to us, the American people, that's better for them.  Furthermore, do I believe the insurance industry wants to cut checks to rebuild after Sandy?  I do not.  They will because they have to, but not because they want to and when a camera is around they do it with a smile.  I think it works to their advantage to have the national reps in Washington in the picture so they can justify some postponements of claims and explain that they're waiting for the folks in D.C. to take anticipated action.  And no matter how much the taxpayers help out now, the insurance companies are still going to cover themselves by raising home insurance rates and using Superstorm Sandy as their justification.  They must have money in the vault for the next storm and they'll get it from us because they can.

I rebuilt the Hurricane House sixteen years after Hugo hit South Carolina and I'm certain that more than a few homes on the East Coast will still be in need of repair from Sandy in 2028, sixteen years after the superstorm.  It won't always be tied back to politicians and insurers, but in some cases it will. 

My garage fire claim was basic.  Replacement of a small, two-car garage, the contents, and some money for damage done to the house.  The people in the East Coast have bigger and more intricate claims and if the numbers and percentages are as twisted up as mine were, that just adds to their confusion...but that's how the shell game works.

See also - After Hurricane Sandy, Rebuilders Take Notice

Fire #2 at The Fire House

We could call The Fire House 'The Fires House' because this project started and ended with two separate, unrelated fires. 

The Detached Garage
Before Fire #2 (and the Garage Door)

In the 1990's, a dryer fire in the laundry room quickly got out of control, ignited some charcoal lighter fluid stored in the attic over the den, and exploded into an intense house fire.  That disaster ultimately resulted in the four bedroom ranch being condemned by local building officials after it had been vacant for years.  I agreed to buy The Fire House in 1999 and closed on the property in 2000.   The renovation took twelve months. 

Fire #2 happened in 2002.  I was visiting family in the Midwest when I got the news.  This was just ten years ago, but times were a little different.  We didn't all have cell phones with numbers programmed into them like we do now.  A neighbor had to find someone who had a number for my family up North.  Eventually, after the message bounced between a few people, my parents heard the news, got a hold of me, and said, "One of your buildings burned down." That was all they knew, so that was the message I got.  Yikes!  At that time, I only owned three buildings; The Fire House , The Cottage, and The Detached Garage at The Fire House.  The Cottage was still being renovated, but TFH w/ it's DG were finished and this property was on the market to be sold.   

Before my thoughts raced too far ahead, I made some calls back to South Carolina and confirmed that the DG was the one lost.  I felt some relief since (of the three) it was the least significant and the easiest to replace.  When reality set in, I had seven hundred miles to drive and think about the loss of my garage (while I tried to do an accounting in my head of the things I had in the DG versus what was in the houses).  When I turned the corner to see my property, I was surprised by the extent of the fire.  I had expected to see some evidence of the original outbuilding, but it was gone.  It was a small black pile of charred remains.  There was hardly anything left.  It made me think of that scene from the movie Independence Day when the aliens obliterate The White House.  It was like those same space guys flew over my building and fired away.  Crazy. 

My detached garage was gone.   

 

The Detached Garage after the fire.

This is the grand old tree I lost.  It was struck by lightening during a storm in the middle of the night.  We believe that the strike and the metal roof on the DG sparked the fire.  I had trim and left over paint from The Fire House renovation stored in the DG and this likely helped the fire grow quickly.  The firemen thought the rain on the outside allowed for the fire to build and gain strength on the inside.  I had a lawnmower and some gas and wood stored inside and all this caught fire and burned up.