Articles Out of the Ashes Protecting Your Property Public Adjusters Smooth Claims Process   Top of Articles Chicago Tribune, Friday, May 10, 1996 Out of the Ashes Public adjuster helps maximize return on insurance losses Public adjuster Dorian Bezanis sorts through a fire-ravaged building in Chicago last winter.      It's not exactly one of life's great philosophical questions, but Dorian Bezanis has pondered it anyway: What's the value of a half-roll of fire-damaged toilet paper?      Not exactly a question many homeowners have considered and, faced with sorting through the rubble of a home ravaged by fire, even fewer would likely contemplate such a thought. But finding answers to such esoteric and detail-oriented questions is a part of Bezanis' job as a public adjuster, a livelihood built around negotiating insurance claims for homeowners, renters and property owners.      "When a fire occurs, most people make only one call-to their insurance company," says Bezanis, a licensed public adjuster and vice president of Chicago-based Alpha Adjusting Company "They don't know public adjusters exist, so they try to handle their own insurance claim, and a lot of them fail to negotiate or provide an accurate accounting of the items that have been damaged. As a result, they don't get the full value of their claim."      Seriously, though, a half-roll of toilet paper?      "The point is that all of these things cost money to replace, and that's money out of (the insured's) pocket," Bezanis says.      Public adjusters such as Bezanis operate in a little-known niche in the insurance claims business. In Illinois, there are only about 100 public adjusters licensed by the State Department of Insurance.      After a fire occurs, the first reaction of many homeowners is to call the insurance agent. The insurer will send out a claims adjuster, who works with the insurer to assign a value to the damaged items that can be itemized and proven to have existed.      Public adjusters, on the other hand, are paid to prepare, present and negotiate property loss claims to achieve the greatest settlement for the insured.      "The (claims) business is very, very subjective, and when you have a claims adjuster who's working for both the insurance company and the insured, there's a conflict of interest," Bezanis contends.      The fee for a public adjuster's services typically is based on a percentage of the total settlement. The standard fee in the Chicago area is 10 percent of the settlement. A claims adjuster for an insurance company charges no fee to the insured party.      Bezanis got into the public adjusting business in 1990, after more than a decade in building trades. Prior to joining Alpha Adjusting, Bezanis renovated several fired-damaged buildings on Chicago's North Side and in the suburbs. His first introduction to the public adjusting business came in 1987 when Curt Yearwood, president of Alpha, provided public claims adjusting on a burned-out building in Uptown Bezanis was renovating.      Over the next 13 years, Bezanis and Yearwood crossed paths on several other buildings. In 1990, Bezanis joined Alpha Adjusting and moved in to adjusting on a full-time basis. Over the last half-decade, he has seen a lot of home and property owners make common mistakes: Not knowing what they're entitled to. Whether it's a roll of tape or a plaster ceiling, virtually all have some value, Bezanis says. Not taking the time to conduct a proper inventory. Content claims are very laborious, Bezanis says. A recent claim for a one-bedroom apartment dweller took Alpha Adjusting two days for on-site inventory, plus additional time to input raw data into the computers, he says. Not presenting the claim case correctly. Having the claim inventoried and presented in an organized manner are important, as is establishing a fair value for items. How much, for example is a 5-year old sofa bed worth given depreciation? Estimating replacement costs. When structural damage is involved, many homeowners get repair estimates from contractors recommends by an insurance company or they'll be solicited by a construction company, Bezanis says. "Contractors, be they the best contractor around, look at things and say, 'How do I fix this?' " A skilled public adjuster will present more options than just a replacement by correctly valuing the damaged property, he says. Whining. Policyholders often forget that the insurer's claim adjuster is a human being, Bezanis says. "The company adjusters constantly have people pulling on their shirt sleeves saying, 'more, more, more,' and that's counterproductive. It's not effective negotiating."      Another negotiating mistake many policyholders make is that they take things personally, Bezanis says. "A lot of times, if the insured doesn't like what the claims adjuster says, they begin to lose their calm, and staying calm and presenting the facts is the best way to negotiate."      One of the hardest challenges in his business comes when a client calls the insurance company adjuster first, then decides he or she wants to hire a public adjuster, Bezanis says.      "It's human nature," he says. "Once (the company adjuster) has made a decision, he wants to stick to his guns. When a company adjuster goes to property before us and makes out his scenario, that's where we end up butting heads."      "We're in a business about justification," he says. "If you document the claim correctly, you'll be able to justify the facts."   Top of Articles Talking To The Boss, February 1996 Protecting Your Property By DORIAN BEZANIS      "Fire" is a word that inspires fear in business owners. It can threaten everything an owner has worked for. Most business owners have insurance, but they may not have enough. Owners also must evaluate if they purchased the right coverage and whether they will receive a fair settlement if a disaster occurs.      Business owners often delay re-evaluating their insurance policies. Perhaps they purchased only minimal coverage during the business' infancy and neglect to increase the insurance package as the business grows. Then when a loss occurs, it is too late for them to change those policies to match their current needs.      Here are some basics to consider when evaluating your coverage: Building coverage - If you own the building, don't equate its purchase price with the correct value of insurance. You should base coverage on the actual cost of reconstruction in today's market. Also, try to stay away from policies with co-insurance. Business personal property - Building owners should make sure that coverage is included for fixtures, such as stoves, refrigerators, tools and other equipment used at the property. If you rent, everything you own would be under this coverage, including raw materials and inventory, products in various stages of completion, completed products, furniture, fixtures and equipment, and improvements. Extra expense - What if you had to relocate due to a loss? Maybe you need to install a three-phase electrical service at your temporary location. Coverage for this kind of expense is very important if you want to keep your business running following a disaster. Bear in mind that the insurance companies are usually only willing to incur such costs if they will offset the business-interruption loss claim. Business interruption - This type of coverage insures against the loss of net income plus continuing expenses. The business' books and records are the primary basis for this part of the claim, so they need to be monitored carefully throughout the life of the business. Loss and recovery      When a loss does occur, the dollar amount of recovery on any property claim hinges on highly subjective factors, such as scope, pricing, depreciation and co-insurance.      "Scope" refers to what is actually damaged. Rarely is a loss an obvious "total." To an adjuster, "total" means the total amount of the policy limits.      "Pricing" means the cost to repair or replace each of the damaged elements. In any marketplace, costs vary for millwork and plaster, equipment, partially completed products and other items.      The initial insurance reimbursement for any loss is the depreciated value - the actual cash value of the loss. In replacement-cost policies, the depreciation is recoverable, but not until the property has been fully repaired or the equipment and products replaced, the insurance company has reinspected the property and the business owner has documented expenses.      Many commercial policies carry a co-insurance provision. In such cases, the percentage of recovery is determined by the ratio of the amount of insurance required. Proper presentation of this element can mean the difference between 100 percent recovery and only a partial recovery.      To assess a loss, both damage and cost of restoration must be calculated in extensive detail. It is unrealistic to expect that the insurance company's representatives will prepare these evaluations in a manner most favorable to the insured. While the best companies strive to be fair, they still must be concerned with the bottom line, just like any other business.      You may want to consider hiring a public insurance adjuster. Public adjusters are licensed to prepare and present claims and negotiate with insurance companies on behalf of the insured. A good public adjuster will maximize the insured's settlement and minimize the disruption and aggravation that accompany a property loss.      Hopefully, your company won't have to deal with a fire or other disaster, but it's worth your time to be prepared just in case. Dorian Bezanis is vice president of Alpha Adjusting, Inc., a Chicago-based public adjusting firm. He can be reached at 773-973-7100. Top of Articles Learner Publications, August 14, 1996 Public Adjusters Smooth Claims Process By CHRIS LARSON Correspondent      It's something you hope to never have to face: a fire or a storm destroys part or all of your house. Of course, you'll probably have insurance against such a loss, so there's at least some financial security. All you have to do is call your insurance company, get the settlement check, and start rebuilding.      Well, not so fast. There's someone else you may want to contact before the claims process gets too far along - a public adjuster. Like their counterparts employed by the insurance company, public adjusters are charged with determining the extent and value of damages to your home and personal belongings. The difference is that while the insurance adjuster is working for both you and the insurance company (a situation that some would say poses a conflict of interest). The public adjuster works only for you, looking to make sure you get the most money possible from your insurance claim.      Public adjusters are able to operate because of the subjectivity inherent in the claims process, says Dorian Bezanis, vice-president of Rogers Park-based Alpha Adjusting. "What's damaged? What's the value of the damages? Every contractor has a different opinion of what's damaged, and a different estimate of the cost." Personal property damage can be subjective as well; the value depends on factors like when and where it was bought, current prices, and depreciation.      There are over 180 public adjusters in Illinois, according to the state Department of Insurance, the agency which licenses them. The majority operate in the Chicago metropolitan area, so finding one shouldn't be a problem. The best way to get one is probably to ask friends or co-workers for a recommendation. That's the primary way Alpha receives new clients.      Public adjusters bring many benefits and conveniences to the insured, Bezanis says. Experienced adjusters will survey the physical property, making sure everything that's damaged or destroyed - even if it's hidden or easy-to-miss - is accounted for. They'll also take care of the time-consuming, sometimes-painful task of inventorying and pricing personal items. And finally, they'll work directly with the insurance company, negotiating the highest possible settlement for the homeowner.      Assessing the structural damages is a major part of a public adjuster's duties. In addition to the obvious losses - shattered windows, smoke-stained ceilings - a good adjuster will look for hidden damages, or things that may not cause a problem right away. Wood floors are a good example, Bezanis said. If he thinks the floor took in a lot of water from the firefighters' hoses and will start to warp in a few months, he'll make sure it's replaced right away.      Inventorying personal property is another instance where a public adjuster can help a homeowner. A homeowner on his own will be handed a stack of inventory sheets by the agent, and must itemize and price everything himself.      "It's a very laborious and sometimes gut-wrenching task," Bezanis says. "Very few people have the patience and the acumen to do the inventory accurately." Alpha makes sure every single damaged item - even old shoes or a bottle of shampoo - is accounted for. "If you leave stuff out, you're really losing money, money that you are entitled to."      Public adjusters will also do the inventory much quicker. "A homeowner going through his home might take two weeks to inventory everything, while a public adjuster will take three or four days," he said. That savings in time speeds up the claims process, getting the money from the insurance company to the insured quicker.      Like all public adjusting companies, Alpha stays familiar with the latest changes in pricing and labor costs. After all the personal effects and structural damages have been determined, Alpha calculates a dollar amount for the loss. The damaged personal effects are organized into bags for easy reference, and a thick printout, detailing the loss and the cost, is presented to the insurance agent.      "Usually, we leave that meeting with the agent with a clear understanding of what was damaged," Bezanis says. That's not to say the insurance company accepts everything and writes a check. "The agent goes back to the office, sits down with his red pencil and changes the numbers." The important factor, he adds, is that what is damaged is agreed on; the negotiating turns only on the cost of those damages. The public adjuster and insurance company typically make several offers and counter-offers before and counter-offers before a final number is reached.      When the settlement is agreed to by both sides, Alpha gets its percentage - 10 percent, the standard rate throughout the industry. While that amount may seem high, Bezanis believes that, even with the fee, the insured comes out ahead; the settlement is always higher than it would be without a public adjuster, and the insured also gets convenience and expert advice.      "Plus, we're essentially being paid by the piece, so the insured knows we're not going to leave anything out."      Bezanis emphasized that just because public adjusters can negotiate a higher settlement doesn't mean the insurance companies are trying to rip off their policy-holders. "It all comes down to a matter of perspective and subjectivity, of knowing what the fair prices are, and arguing those points." The insurance industry is relatively small, and Alpha tends to see the same agents on a regular basis. "We have good working relationships with the bulk of the insurance companies and agents," he says. "They know us, and we respect each other. Still, they aren't fond of us."      While public adjusters can be brought in at any point during the claim process, it's far better if they're contacted right away, Bezanis said. "We get calls from people who are pretty far along in the claims process, maybe there's an offer on the table and it's not what the insured expects. So they call us." While public adjusters can usually still negotiate a higher settlement, "it's really an uphill battle," he says, since the insurance company at this point has already done a lot of work on the case, and is less likely to adjust its figures much higher.      In the end, even with the conveniences, the money is what really matters. Bezanis believes that a typical homeowner, going through a major damage claim for probably the first time, is at a severe disadvantage without help from an expert. Aside from buying the home, the claim is probably the largest financial situation a homeowner will ever face, Bezanis says. "Just like you wouldn't go to court without an attorney, we believe that most people can't afford not to use a public adjuster."