Don’t let the clock run out on your client’s insurance claim

By: Evan Wolfe, Property Damage Attorney

If you are a residential property manager and you do not have a client with a pending insurance claim for hail, smoke, water, fire or other property damage, you probably have not been in Colorado that long.  Don’t feel left out, an insurance claim will probably come across your desk very soon.

As part of the property manager’s responsibilities, handling insurance claims for their owners is becoming more and more common.  Everything falls into your lap.  Inspecting the damage, calling in the claim, meeting with the insurance company adjuster, retaining experts to prove the damage and if necessary, hiring a public adjuster and or attorney to force the insurance company to pay what is rightly owed.  If you think that the insurance company will voluntarily cough up what it will really cost to fix the property, without a fight, again, you have not been in Colorado that long.

This article is not about how to properly handle the owner’s insurance claim, which was the topic of my presentation to NARPM® Denver Chapter, at their August lunch.  For a detailed outline of that presentation, please contact us through our website, and we will be glad to send you a copy.  This article will focus on one of the major tricks that the insurance companies play with their policyholders, after a claim is filed.

The trick is what I call, “Let the clock run out”.  In Colorado, most commercial insurance claims, which include those for multi-family rental units, must be settled within two (2) years of the date of loss, or a lawsuit against the insurance company needs to be filed.  This is referred to as the “Statute of Limitations”.  Basically, if a lawsuit is not filed within two (2) years of the date of the storm, the insured will forever lose their right to receive compensation for their claim.

No one likes to get involved in litigation, as the main complaint is that now, the claim will take several more years to resolve.  Roofs will leak, siding will deteriorate, windows will loosen and at the end of the day, it is usually the property manager that is bearing the brunt of the owner’s complaints, aggravation and frustration.

What is even worse, is when the Statute of Limitations runs out, and a lawsuit has not been filed. Over the years, I have seen Property Managers become legally liable to the owner for the full amount of the damages, because they may have breached their fiduciary responsibilities to that owner, by not properly handling the insurance claim, and in some cases, have let the Statute of Limitations run out.

How can this happen?  The insurance company is “making payments”, they are “helping get the claim resolved” they are “sending another check.”  If you ever found yourself making these statement, you were being lured into the insurance company trap, that will end with them walking away paying only pennies on the claim, and you, holding the bag.

Let’s assume that you reported the claim within 30 days of the storm and the insurance adjuster gets to the property in another 30 days.  This is reasonable, but 2 months have lapsed.  After the initial inspection, the adjuster calls you in another 30 days and tells you that he needs to bring his roofing consultant to inspect the damage. “This is company policy” he says, and again this does not seem too unreasonable.  However, the date of the inspection is 30 days past that and now it is 4 months since the storm.  Because the adjuster is so busy will all the claims from the storm, he has to reschedule the inspection and now 5 months have gone by.

After the inspection, the adjuster tells you that he will have his report to you in a few weeks and because his roofing consultant did not gethis report to the adjuster on time, the day you receive the adjuster’s report, accompanied with the small payment, marks 7 months since the date of the storm.  Obviously you are not happy with the first payment so you request a re inspection.  Because the re inspections are handled by a different department, it is not until 9 months since the storm that the re inspector visits the property.

When you get the revised report, 11 months after the storm, and you are still not happy with the result, you can get your own estimates from roofers, a public adjuster and sometimes an engineer.  All of this takes time and once you submit your reports, the insurance company has to put together more experts on their side and by the time all the additional inspections are done, and the reports are furnished, 16 months have lapsed.  I have seen many claims die on the vine, as the Property Managers let the insurance company drag their feet and suit was not filed.

DO NOT be lured into this trap.  The solution is very simple.

Immediately after the storm, call in the claim and demand that an adjuster inspect the property within 2 weeks.  Make sure this is in writing.  After the inspection, demand that you get the initial report and check, in another 2 weeks.  Do not let the company delay any longer than that.  If you feel that the initial check is not enough to completely repair all of the damage, start putting together your claims team.  You will need an experienced contractor to bid the repair job, and if he or she is ignored by the insurance company adjuster, then you may need a public adjuster.  They are great at compiling the numbers to repair the damage, but the insurance company knows they cannot file suit and there is no incentive on the insurance company part, to settle quickly.

A common trend in Colorado, is to add an experienced Insurance Claims attorney to your claims team, as the right attorney can help speed up the process.  Insurance companies do not want to get sued and if they are properly pushed into the corner, they usually settle fairly quickly.  Recently we helped a local property manager, who had been fighting with the owner’s insurance company for almost 2 years and was unsuccessful in obtaining any money on the claim.  By pushing the company into the corner, we were able to obtain a full settlement in less than 2 weeks.  This happens very rarely and every claim is different.

When most people hear “attorney” they think that the claim will automatically be delayed for months or even years.  This is possible with an attorney that does not specialize in this area.  You owe it to yourself and your owners to find out how an experienced Insurance Claim attorney can actually help speed up the process and get the claim paid quickly.  Several of the tactics that are used to accomplish this will be discussed in a future article.

For more information on this and any other insurance claims questions you may have, please email us at

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