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Commerce department, public adjusters step in

While trying to recover losses from the June 17 tornado and subsequent damaging storms, insurance policy holders may come into conflict with their insurance company over a fair settlement.

The Minnesota Department of Commerce and/or a public adjuster may help to resolve the dispute.

"We help with insurance issues by keeping customers informed of what they can and should do about filing insurance claims. We also set standards about what we expect insurance companies to do. It is a two-party transaction where both have responsibilities and expectations," Rochelle Barnhart of the Minnesota Department of Commerce said in a written statement.

The Department of Commerce has already been contacted in some cases, and the resolution process may be a long road ahead.

"We have received some calls from homeowners in the Wadena area and are working on the individual cases," Barnhart said. "Some things take longer than others."

"The Department of Commerce sent several members of its Consumer Response Team to Wadena soon after the June storms," Barnhart said.

Team members provided a packet of information for homeowners on filing insurance claims.

If you have a conflict with the insurance provider, the packet says you should try to resolve the conflict with the company first.

• Review the specific terms of the insurance policy. For example, some policies do not cover the undamaged part of the property or tree removal if the tree did not damage the structure itself.

• Ask questions and find out if you and the insurance company interpret your policy differently. Get it in writing.

• Document the relevant details and communications and appeal to your agent and insurance claims executive. Ask for a second inspection by a different adjuster.

• Negotiate for a fair settlement -- don't just rush to take the first offer if it does not meet your expectations.

• Ask for an appraisal of the loss. Three people will appraise the loss: one chosen by you, one chosen by the company, and a third chosen mutually.

Storm victims who cannot reach an agreeable settlement with their insurance companies can file a complaint form to request help from the Consumer Response Team of the Minnesota Department of Commerce.

To contact the Consumer Response Team, call toll free (800) 657-3602.

Another option to resolve an insurance dispute is to hire a public adjuster. Public adjusters are licensed by the Department of Commerce to document losses and negotiate with the insurance company's adjuster.

Ben Johnson, a public adjuster, has worked with similar cases in Albert Lea which was also hit by damaging tornadoes.

Johnson says not all insurance companies are helpful.

"[Insurance companies] are choosing to deny or belittle the claim as much as they can ... Most of them have changed their tune to, hey we're out for our stockholders' interest," Johnson said.

Johnson said in Albert Lea, for example, a house was left standing but structurally damaged. The insurance company was only going to pay for repairs without an engineer to perform a structural assessment for whether the house should be entirely taken down and replaced.

Johnson said public adjusters are usually paid 10 percent of the settlement rather than an up-front fee. They are affordable for people who do not have money to pay up front, he said.

Johnson and the Minnesota Department of Commerce packet both warned against building contractors claiming they can represent homeowners to the insurance companies.

"That's illegal," Johnson said. Only licensed public adjusters are allowed to perform this function. Illegal adjusters often will not negotiate a full settlement anyway, which is why some insurance companies will allow them to negotiate, he said.

To check if a public adjuster is licensed and/or has a disciplinary action, call (800) 657-3602 or check online at

Barnhart said homeowners having problems with insurance claims should contact the Minnesota Department of Commerce.

• By email:

• By phone: (800) 657-3602

• By regular mail: Minnesota Department of Commerce, Market Assurance Division, 85 7th Place East, Suite 500, St. Paul, MN 55101

"Not all problems are resolved in a way that makes the insurance company happy, and not all conflicts are settled in a way that satisfies the expectations of a homeowner," Barnhart said.