Protecting yourself from insurance companies with Andy Gurczak Episode - 535

I've had my own share of claims. So I would start off with saying, don't panic. And it's easy to say, kind of, don't panic, but slow down. If you do call in the claim yourself, don't hurry up, because something the insurance companies want to do is hurry the claim up. When they'll say, well, have you mitigated? Have you cleaned everything out? Have you thrown everything? Relax.

What if you're leaving tens of thousands of dollars on the table after a disaster? In this episode, we uncover the game-changing role few people know about and how it could drastically alter your next claim. So stay tuned as we explore the Insurance Claim Playbook strategies for getting every dollar. Welcome, enlightened investors, to Streams to Impact. As always, I am delighted that you are here with us. I'm your host, Dr. Allen. I'm a psychology professor and alternative investor, and this podcast was born from the belief that your calling is too important to be limited by financial stress. So each week we uncover how purpose-driven professionals are building wealth through secure high-yield investments and leaving a legacy that matters. With us today is Andy Gershak, and he is the founder of All City Adjusting, a licensed public adjusting firm dedicated to making sure clients get every dollar they deserve from their insurance claims. With over a decade of experience, Andy has protected thousands from being shortchanged and has consistently helped people receive more money. than what their insurance initially offered. Andy, I'm so glad to have you back with us. So, uh, let's go into the show and share with us just a little bit about what led you to the path of becoming an insurance adjuster, which is not a profession that I think most children grow up dreaming to become.

No, it was on my list of You know, when I was a little kid, right next to fireman, it was public adjuster. Allen, first of all, thanks for having me on the second time. I appreciate it. Yeah, I was in construction, actually in the fire restoration business, working for a gentleman when I met a public adjuster that was in the business for 40 years, one of the kind of the originals here in Illinois, who after years of pursuing finally took me under his wing and then taught me the business of adjusting. Which isn't— there's really not much books about it, classes. So I got kind of firsthand experience for my first 3 years, which is what I wanted. And that's kind of my way into the business.

Well, you know, there's always these serendipitous things, I think, that come along that shape a whole lot of our lives. It certainly has been that for me. I never thought I would be a psychology professor, and I I never thought I would be an investor. So serendipity, a wonderful thing if we can be flexible to follow it. Well, Andy, you have helped thousands recover more than their insurance initially offered. So could you just kind of walk us through, I don't know, perhaps a case study that can give us kind of a general idea as to how this process works?

Yeah. So there's kind of 2 ways we work in terms of when we come in or when we get hired. One is right in the beginning of the claim for clients that, you know, know about Public Adjusters. They'll call us right away. And we start the claim from the beginning, even calling the insurance with the claim, calling it in, handling everything from the start to finish. Some people don't find out about us until maybe 3, 4 months into the process, hopefully when it's not too late still, and they call us. So kind of 2 different scenarios when they reach out to us. Um, you know, we just finished a claim just really quickly. This is a claim with, uh, with State Farm. Uh, initial adjuster came out, she offered a settlement of $450,000. Um, the client called us because of the contractor, because the contractor thought there was stuff missing. We got hired. I know the adjuster reached out to the homeowner saying, you know, hey, you don't need anyone, you know, this is a good estimate. Uh, we're about $150,000 more. into that estimate. Um, there's still a couple items missing. So, um, if we— now this claim is now going on for 8 months. We just got involved about a little bit over a month ago. We're already at $150,000. If we were involved right from the beginning, that claim would have been already a lot more and would have been wrapped up, you know, 3, 4 months ago. So a little bit difference of when you hire us or anyone, you get, you know, the right party right in the beginning instead of getting someone later on in the But results are the same. There's always going to be an increase. If there wasn't, if we reviewed a claim or you called us, let's say day 1, say I had this water damage claim and we review everything, we might say, Allen, you don't even need a public adjuster. You don't really need anyone. You have a certain limit. That limit's going to be met, so you really don't need our help, right? We only want to get involved if we can bring value to you. So it's got to be beneficial for both parties.

Well, and just looking at this, this last case that you were working with, what would have been the difference if the, if the injured party had contacted you immediately rather than waiting in— what did you say, 8 months into the process?

It's been, it's been 8 months in the process. So let's say we were contacted from day 1. They would have had their personal property paid within 2, 3 months.

Mm-hmm.

Maxed out instead of— they just, I think, received a check, which is 7 months of their claim. Their dwelling, which is what we're handling, is now going on 8 months. That would've been done cuz we usually, when we get hired, within 10 days we have our paperwork, everything that's gonna get in, excuse me, to insurance. And then we negotiate. So probably 30 to 60 days they would've had a check and wouldn't have been going on with repairs. So they could have been halfway done with their repairs. Instead, now the repairs still haven't started. Uh, you know, you have a timeline for additional living expense and you have a limit, so you have to be also careful so you don't exceed that limit. And then you're out on the street paying a mortgage plus paying somewhere else to live because your home's not done. So, um, that's the difference in, in hiring a good public adjuster right from the beginning.

Well, Also, uh, in terms of, you said that the adjuster had missed something. Was it an inexperienced adjuster or was it intentional that they just really didn't want to cover everything possible?

They have guidelines. They call every insurance company, whatsoever they call their guidelines, right? The policy is what abides, like goes by the claim, right? Because the policy is the contract between the insured and insurance. Well, every insurance company says, well, we have guidelines. We don't pay for this, we don't do this. Well, that's not— you can't do that, right? Because then we have guidelines and we say you pay for all of it. It doesn't work that way. Your guidelines don't supersede the policy. But what this adjuster did, and it's a very experienced adjuster, actually known about this adjuster, it's a local one, they used the price list that cut the estimate by, I think, 25%, missed a lot of items. Windows were all wood. They claimed that half the windows were vinyl. They couldn't tell the difference. Difference between what a wood window with a steel cover was. They considered that vinyl. They didn't do their due diligence, you know, they didn't do their inspection well. So there's just a lot of items missed. Some stuff I can see by accident you miss when you're doing a lot of claims, but changing the prices of an estimate to the wrong one, I wouldn't call that a mistake. They, they're very notorious for doing that. There's actually been a lawsuit, um, I think State Farm actually upheld And won this one, um, because they're notorious for using a method that we call new construction, which lowers the price of an estimate very low, um, but it's only used for new construction when you're rebuilding from ground up, not for a remodel. Um, but State Farm's gotten away with it. Um, in this case, we were able to overturn it.

Well, firms, uh, flag probate claims, uh, For, I mean, firms like you fight for clients to get what they truly deserve. So give us a little more detail on what it is that you went in and did that was different than what the adjuster did.

So as soon as the homeowner contacted us with this contractor, we looked at the estimate. They sent us all the documents, some photos, the estimate, the policy. Right away, we knew there was a couple coverages that were omitted that they didn't include. Second was that price list we noticed that was used to kind of alter the estimate to be a lower payout. And then just from— excuse me— from photos, we could tell there's items missing that weren't accurate. Then we actually did an onsite inspection when we, you know, when once we look at and do our due diligence and we tell the client, well, we can take this claim and help you. We actually meet on site, go over and do our inspection. Our inspection is very thorough. You have to, like, you know, we are contingent on what we recover. Like, so we are providing, trying to get the max value for our client because it benefits not only the client but us as well. So we are trying to do our due diligence and really inspect the home, you know, from the, from the ground up, from left to right, just every angle. So we photograph it, we sketch it virtually, we do a virtual tour. Uh, video of it and just then take a whole day to put an estimate together, um, which really is— it takes a lot of time, but that's when you start, uh, really getting into the nitty-gritty and all the pennies and all the dollars come out. And then all everyone that works on our team has some kind of a background with construction, which when you know construction and you've built homes or you've remodeled homes, you know, when When the software tells you, hey, this is $5 to replace this piece of window, great. Maybe if this was like right up to the street, but this window is on the 3rd floor. It's a custom window. Like, no, now you have to take that window and break it down and add all this different labor and all this other different stuff that, that adjusters just aren't trained for it, right? They just put in the square feet, the program gives them numbers, and then they leave it like that. You know, so it's our job again, What insurance don't understand a lot of times is the burden of proof is on you. The burden of proof is on the insured. So it's not the insurance company to come in and just pay everything and say, you know, I can see the damage there and I can— no, it's, it's on you to prove the damage. So that's, that's our job once we get hired.

And, and another question is, I think that, um, the, uh, the insurance company is going to come out and, and like this adjuster did, said, well, you really don't need anyone. Else to intervene in this. And I think a lot of us, uh, as property owners, we can oftentimes look at what the adjuster has provided and go, well, yeah, you know, I'd like a lot more on that, but yeah, I think they're being reasonable. How do we as asset owners, how are we going to really determine whether or not we need to contact you?

Yeah. So you always have to, you should always contact a public adjuster. Why wouldn't you? You call me, Allen, doesn't cost you a penny. Me reviewing your claim and saying, yeah, you need help and you need someone, doesn't cost you anything. Or me staying, or you calling and looking over the claim and say, Alan, this is a small claim. I wouldn't even call this claim in because your deductible is $10,000. You have maybe $8,000 worth of damages. Don't call it in because now they're going to come in and photograph everything else in this home, and it's an older home. They might drop you because a lot of this stuff is old. So why go through that? So again, it's We're, we're not trying to file every client claim for our clients. We're not trying to go after every claim. We want to make sure it's beneficial to our clients because our clients are investors, our landlords, and they keep coming back. So we want to do right by them. I'm also an investor in properties, so I look at it both ways. What if it was my property and how would I go about it? So there's 2 different ways. And when people think about should they hire an adjuster because, you know, maybe they talk to their agent or their adjuster and they say, hey, you don't, you know, you don't need a Private adjuster, you don't need. Okay, but yet at that same time, they're recommending their own cleaning companies, their own contractors. They're trying to push in their own vendors. Everyone's working for the insurance company—the agent, the adjuster, the vendors—whoever's out at the property, whoever you've talked to is getting paid by the insurance company. The insurance company isn't there to to to make huge payments. They're to minimize the risk. They're to minimize the claim. And if you don't believe me, there was just a. Congress hearing that just was against Allstate and State Farm, that they kind of exposed them on all their tactics and what they do to underpay claims.

So, well, yeah, I mean, that doesn't—

sorry, there was a lot I threw at you in that one.

No, I'm sure that most of us understand that the insurance industry is there for themselves, for their profits. And with the recent assassination of the health insurance executive coming to light, that UnitedHealthcare actually has software that they, that they use in order to find ways and means to short people on their insurance claims. So I'm sure that they're doing that on property. you as well. Well, Andy, you, you say that you grew up with the motto, do it right or don't do it at all. How has that principle shaped the culture and client experience at All City Adjusting?

Yeah, that's a good question. Something that I always thought since I was a little, little boy, all of us in our family, You know, when we take on a claim or we don't take on a claim, you know, we're gonna do it right. No matter what we do, we're not gonna half, you know, the other word. Um, we're gonna do it right. So if we take a claim, we're gonna handle it right way. We're gonna think of our client. We're gonna take care of the claim. And we do it fully, like we're all fully invested. Everyone here at this office fully invested to every claim. Um, and, and it's a, it's a one team. We don't just take a claim, sit on it, don't do anything, or, you know, have the right, wrong people. There's a certain, The thing that I'll say, like, we only handle large claims, $100,000 and up is kind of our, uh, $100,000 and up is kind of our threshold, large claims, because we can travel. We've built a team around to handle commercial large loss fire, large water losses, hurricane. That's what we've built for. So when people call us and say, well, we— I had a, you know, shingles blown off my roof. Well, unfortunately, we wouldn't be the PA that you want. There's other PAs that could probably handle this better. And we'd rather be honest because if we just take a bunch of claims and then don't do anything, who do we do justice for? You know, and I know there's PAs out there that do it that way. We've just done things differently and it's what made us double and grow, uh, exponentially every year.

Well, in terms of people in your industry, are there a lot of people in your industry? I mean, can— could I go to just about any town, any community and find Uh, and the insurance adjuster?

At this, at this point in age, yes. I think public adjusting has become a very, you know, much bigger talked about profession. So I think so. I think a lot of contractors have become public adjusters too. So I do think you can. Now, most public adjusters, I would say 90% of them handle smaller claims, roofing, exteriors, and then the smaller portion actually handle large loss, fire, water, Um, commercial claims. So you just have to be careful and just do your due diligence on who you're hiring. Because again, right, most PAs will say, well, yeah, I'll take any claim you got, right? Just because you can take a fire, do you know how to handle the ALE, the personal property? Do you have people to write a full estimate for a structure? A lot goes into it.

So do you, do you work nationwide?

40 states, Alan, that we're licensed. I think 40 or 41 now. Yeah. So the girls keep— the girls just keep track of it. They just keep making— yeah, we've grown with our clients now. So as our clients have invested in other properties, have, uh, bought out of states, um, in different states, we've kind of grown with them and reciprocated our license to those states.

So it's a state-by-state licensure process?

State-by-state license. We have to be bonded by each state, have our license, and then we also carry insurance, which are not required, but we do carry professional liability, um, general liability, work with like all the, all the insurance and everything just in case You know, one of our employees is on site, gets hurt, something happens with emails or something, we have all the liability covered for everything.

Well, Andy, when a person faces a disaster, can you just take us through kind of a step-by-step process that— how should they really go about recovering from that? From their emotional well-being, from the first shock that happens to actually getting into that process of actually dealing with what has happened there?

Another good question. I've had my own share of claims. So I would start off with saying don't panic. And it's easy to say kind of don't panic, but slow down. If you do call in the claim yourself, Don't don't hurry up because something the insurance companies want to do is hurry the claim up when they'll say well have you mitigated have you you know cleaned everything out have you thrown everything relax do the bare like mitigate make sure you turn off the water if the pipe burst or you know but you start throwing stuff out or start covering up the damage and then they come in and it's gone you've just covered up it's just like covering up the scene crime scene right everything's cleaned up there's nothing to to investigate no more so you have to be careful you have to slow down once you do lock up the house after a Or you know if it's livable, you're there great. But if you're if it's a large loss and you can't, you want to inventory run a camera. You know every phone has a great camera now. Just record the whole property from outside and inside. Don't you don't have to take maybe every photo, but at least videograph everything. That way, if you do hire a publicist or something happens, now we have some kind of evidence. We can go through the videos. You know there's a lot of claims, Allen, that we get that are total losses, and there's no house left. And we're we're doing inventory list for personal property of people's. You know we get them. with them for a day, get all their photos, as many as we can, of their house, whatever they can, you know, any parties they had and photos inside or videos. And then that's what we use to recreate lists of people's homes. So, um, so don't hurry, take videographs. And then one big advice for, for, for homeowners or investors or anyone calling a claim is, you know, say, say as little as possible. A lot of people try to be, you know, too brutally— not just honest, but they just want to say too much. They talk too much and they say, well, yeah, I did this and I was doing— like, what happens is their claim gets flagged. All of a sudden they're delayed for months, and then in the end they're denied. And then they call us and now it's too late. So say as little as possible. Those are kind of the 3 big things. Say as little as possible, you know, videograph, photograph, or inventory, whatever document, whatever you can. And then, and again, slow down. That's kind of the 3 big pieces of claim handling for a homeowner.

Well, and backing this up just another step further, and that is, how can, how can we prepare for a disaster before, before we're hit with one? What are the things that we really need to do to be prepared? I think you could never be too prepared.

I mean, how could you? Never know if it's going to happen. Um, you know, the Palisades fires, and, and, you know, we were just talking about the, the, the Hurricane Helene that hit, uh, by you guys. Just hard to prove, like, you never know where it's going to hit, what's going to happen. You know, I'll only answer that question from my— from the insurance and the claims side that we see, is get your policy chucked. And get it, you know, we offer free policy reviews all the time for investors. Like, all our investors, when they buy properties, they'll send us their policies to review. It doesn't cost anything. And we're looking from a, you know, from another party, from another view. And we're looking from a claims view. So, now, we're looking at the property photos, the policy, and saying, hey, you're missing this coverage. You're missing this. Hey, you're underinsured. Or, you know, you don't have this coverage. That costs free. And those extra endorsements coverages can maybe be a couple dollars. I'll give you an example. Now, if you're an investor, you're a landlord and you own properties, rentals— State Farm, for example, and I refer back to them because this is, it's just easy, everyone is familiar with them— they used to offer lawn ordinance code or lawn ordinance coverage as additional, like it was automatic when you purchased the property with State Farm for a rental dwelling. Well, it's not automatic no more. So let's say you have a fire or you have a total loss, or even your kitchen, the ceiling collapses because a pipe burst. But now the electrical, the inspector comes in and says, hey, this electrical is out of code, all this electrical has to be upgraded. Well, you're paying out of that out of pocket unless you have that endorsement, which is $10 a month or like $50 a year. It's just ridiculous that it's not even— a lot of agents, so most of them don't even offer this. Like, they don't even mention anything. They'll sell you the policy and then you're Good. And they don't have this little endorsement that could be $50,000 extra if you have a fire or a total loss. That's there for any code violation, like anything that the city now— like insulation now has to be upgraded, maybe windows have to be a higher R-value. All that gets paid by this endorsement that's literally a couple dollars a year.

Wow, I certainly didn't know that. Any other surprises we should know?

Uh, policy exclusions. The— these policies now have more exclusions than actual endorsements. So, you know, we don't pay for this, and if this happens, we only pay for your roof on actual cash value basis. Allstate has that. It's called the RPS system, where it's like they pay you the actual cash value and then they say that you are responsible for the depreciation amount. So if you have a 20-year-old roof, you have $20,000 worth of damage, you might only get a check for $5,000. So again, you have to know what's in your policy. And when that question— the only way I can answer that question, Alan, is from this side, is protect yourself at least from the insurance claims side. You're paying a policy, you're paying a premium, why not make sure that premium actually is going to cover you if something happens?

Yeah, absolutely.

And, uh, and the best way to do that really is that third-party public If you have a public adjuster, whether, whether you reach out to us or you reach out to another public adjuster that can interpret policies, they don't— most PAs, I don't think any PAs charge for this. And a good PA will take the time to look over a policy and just, you know, it takes 5 minutes for us to look over policy and, and give you an insight and give you any details. And again, sometimes we look and say, hey, you know, your agent did a really good job. There's really— everything's included. You know, looks like the limit of the insurance is covered if a whole claim happens. You know, so yeah, that's definitely, definitely worth a call to a public adjuster.

Yeah, I think I'm wondering how many investors are doing that, but this is certainly a question I'm going to add to my due diligence list, is if asking if they have had a third-party Just start reviewing that policy.

And another thing, everyone, really quick, is a lot of people don't do this service or don't call because most people don't even have their policy. You know, they file— I know people, you know, they, they get a policy and they're like, hey, we got you a policy, you're covered, your premium is $1,500 because you purchased the building and all that. But no one actually ever sees their policy. And if they request it from their agent, they get a dec page, which is the first page, the declaration page, which just has your limits. But no one actually gets the full policy. And if you ask for the full policy, they say, well, we don't have it, we have to request it. Well, how have— how would you sell me a policy if you don't? I swear, I swear, Alan, you're gonna ask most agents that are like the big corporate agents that sell State Farm for their policy or what's in their policy, they have no clue because they've never seen their policy. They know the declaration page, the limits, but they actually don't know what's in the policy. They've never actually looked at the policy. 'Cause they never actually got a copy. I'm not even joking.

Wow. Well, this has been, this has been very revealing. Yeah, that's definitely gonna go on our due diligence checklist. I mean, I'm sure that most operators are having their attorneys review these things, but I'm wondering how many attorneys are really aware of these things.

And a lot of people are like, well, my attorney, we have this sometimes when we talk to people like, you know, you should hire a public adjuster. We're discussing with them like, well, we want to talk to our attorneys first. I'm like— and it's funny because people say attorney and they hold them as if they're attorney of everything. They know everything because they're— they have, you know, attorney in front of their name or behind or whatever. Um, most attorneys we deal with that people like say, hey, we want them to look over your contract, or they have no clue what they're looking— they don't know what policy is, they don't know what coverage is. They might know some basics. They have no clue unless you are a property like Property loss attorney, which we work with a lot of them. Great, smart. I mean, some of the smartest people you ever meet. If you don't deal with this in this segment, just because you're an attorney, you have no clue what you're reviewing in terms of a policy.

Well, very enlightening, Andy, and it has been a pleasure having you with us again today. And enlightened investors, you can find Andy at All City Adjusting. And, uh, he has just laid out to you a wealth of services that we all can take advantage of. So, Andy, thanks for being with us. And Enlightened Investors, thank you so much for being with us again today. And if you've enjoyed this episode as much as I have, please take a moment to like, share, and subscribe. And We'd really appreciate it if you would leave us a rating and a review. Until next time, live abundantly. We'll see you in the next episode.

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