Using Public Adjustors to Make Money in Real Estate Investing

Using public insurance adjustors to make money is real estate investing is a best kept secret. You can possibly make money on a property that you don’t Negotiating With Lennar Homes own or buy as long as you follow certain guidelines. So besides not needing any money, credit or taking any risks, what is it that makes money?
Every property owner at some time faces natural or man-made perils to his property. These can be hurricanes, tornadoes, water damage from leaks, flooding, smoke or fire and even simple windstorm damage. The result is the property owner makes a claim to his insurance carrier. His carrier may pay for the damage after the deducible amount is subtracted, or they may not pay anything for various reasons.
If the claim is paid, the check from the insurance carrier clearly states that if the check is cashed, the property owner relinquishes all future claims from the insurer. However, this may or may not be the case and re-opening of claims or making new claims can be extremely monetarily rewarding to an investor. The investor doesn’t have to have an equitable or ownership interest in the property, just an Assignment of Claims form from the property owner.
Armed with the Assignment of Claims form, the investor will have his insurance adjustor review the claim and the loss and, if workable, the insurance claim can be re-opened or submitted if it wasn’t originally. The statutes of limitations Residential Real Estate Vs Commercial vary across the country so get with a professional adjustor to see what rights you and the property owner have. Next, the insurance company will review the case and make a determination if they feel the new claim is valid.
Often the insurance companies turn down re-filed claims or claims that were never opened. The never-opened claims sometimes have an issue of whether the original damage was mitigated or left to get worse. Not mitigating damage is often an excuse to decline a claim. If your adjustor thinks there is valid reason to move forward, the next step is to go before a neutral “umpire”: The umpire will review both sides and make a determination himself which is not binding on either party.
If the insurance carrier says no to the settlement offer, the next step is court. Once the case is brought before a judge, the outcome is cast in stone. The trick here is to make part of the settlement that the insurer will pay the attorney’s fees of the plaintiff (property owner). The adjustor will guide you at this step because the attorney will get paid if you win, if not, you will owe the attorney his fee. Usually the risk is worth the reward; however, there is always a risk of losing.
If the insurer is ordered to pay by the court, a check will be issued to the property owner (unless an Assignment of Claim is submitted), along with any mortgage lender on the property, the adjustor and possibly other interested parties such as the attorney. If all parties agree and sign off on the check, the disbursements can be made and you will get the amount that you agreed to with the homeowner – usually 50% of the net claim. The other 50% would have gone to the adjustor (10% by law in some states) and the attorney (15%+/-). So, on a $100,000 settlement before distribution, the adjustor would get $10,000, the attorney should get $15,000+/- and you and the original property owner will each get A� of $100,000 – $10,000 (Adjustor) – $15,000 (attorney) = $75,000. The split of this profit will mean that the property owner and the investor would each get $$37,500.
In summary, using an insurance adjustor in your real estate investing can be profitable, but being a partner with the perspective seller or homeowner can be even more profitable. Insurance carriers settle claims based on what is in their best interest, not the insured’s. Having an independent third party adjustor review any insurance claim is in the best interest of everyone involved. As a side note, the investor had no money in this deal and he actually never purchased the property because the homeowner wanted too much money.

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