On the Level: Bob Freitag, a former property insurance ‘guy’ who now works representing policy holders

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Property insurance companies are in the business of selling a product they don’t want anyone to actually use.

Bob Freitag knows this because he used to be in the property insurance business, with Allstate.

But now he’s in business for himself, representing people who buy property insurance. He owns a licensed public insurance adjustment firm, and he says his job is to wring the most money he can out of the insurance companies when a fire destroys a home, a flood swamps an office computer network or hail punches holes in somebody’s roof and siding.

Thousands of other public adjustors work across the country, according to National Association of Public Insurance Adjusters Executive Director David Barrack. And like Freitag, almost all of them learned their trade by working for the opposing team.

Ten years ago, the 45-year-old graduate of Western Carolina University left the insurers behind and went to work for the insured, founding the Indian Trail-based AmeriClaims Inc., which now includes three other adjusters licensed in the Carolinas and Florida.

We met Freitag, a husband and a father to two teenagers, at the Starbucks in the Promenade at Providence and followed him a nearby burned-out house whose owners are clients. He got soot all over his nice white AmeriClaims shirt. It was not insured.

You made your bones working for an insurance company. I started in Florida at the time of Hurricane Andrew, 1992. That’s when I became a property guy for Allstate. Before that, I did casualty, auto. But when Andrew hit, I became a property guy because there were so many property claims, residential and commercial. Then I transferred to Chicago to do eco-claims.

To do what? Environmental claims, asbestos, silica, EMF, anything out of the norm.

EMF? Electro-magnetic fields. Like damage done by nearby high-tension electrical lines. Then I went to Richmond, Va., to open a claims office for a division of Allstate, which was purchased by (the) St. Paul (Cos). Then I transferred to Charlotte to do underwriting – which was interesting, but it involved a lot of deskwork, and I missed being in the field. Then I got into public adjusting.

So now you’re biting “the good hands people” that fed you. Ha. We’re licensed and work only for the insured, the owners. We don’t work for insurance companies. I spent so many years on the company side, I know what adjusters need. They set a reserve, what they think a claim will cost, a guestimate. And we help them get what they need – make their jobs easier. But, again, we work for the insured.

What exactly do you do? Walk us through it. We start out by looking the owners’ policy to see what kind of coverage they have. Then we get an understanding of the scope of the damages, and what it will take to put it back together. Most people don’t understand that YOU have to prove your loss to the insurance company. They won’t do it for you. The adjuster will meet with you and will take photos to document the damage, and then they’ll say, here are the forms, get them back to us when you’ve filled them out. Well, hello! What do you do with them? It’s complicated. There are different components to all claims. There’s the structural damage, the contents damage and the additional living expense, if it’s a residence, while the structural damage is being repaired or replaced. If it’s a commercial property, there is business stoppage for retail and business firms, or loss of rental income in the case of apartments and office space for lease. And then we go in and assess the claim versus the policy.

How do you get paid? We work for a percentage, usually 10 percent, from the policy holder. If it’s a massive claim, that percentage comes down. But we get policy holders on average 40 to 300 percent more for their claims. We just concluded an apartment fire. The insurance company initially offered $47,000. It was the center unit in a three-unit building, and if you looked at it, it didn’t look too bad. But the center unit is where the electrical feed came in. There was asbestos in there and lead-based paint, too. We finally settled for $185,000.

Nice. How do you find business? Reading the papers and watching local TV news? That’s exactly what we do. And there are services out there that report fires. And we get referrals, property management firms. We’ll go out and look at the policy first for them to see if it makes sense to hire us. If people don’t have insurance or are under-insured, it usually doesn’t make sense. But if you’re properly insured, we can really make a difference. And it’s a messy business, I can tell you.

You’re an expert in navigating the insurance company paperwork, bureaucracy and mind-set, but you’re not in construction. How do you estimate structural damage? We document the damage using contractors, independent contractors who give us estimates to repair and replace — mostly fire restoration contractors. Owners could hire contractors to document damage, too, but — and this is important — general contractors are not allowed, or licensed, to negotiate for the policy holder. Since 2007 or ’08, a lot of building contractors have been jumping into restoration work. But only licensed public adjusters can negotiate. You’ve got to be licensed just to do marketing in this business.

Most of your references have been to residences. Is your work mostly residential?  We do a combination, but more residential. There are more residential fires – simply because there are more houses than commercial properties. But most commercial properties are worth a lot more and the insurance is more complicated.

And most of your references are to fires. It’s mostly fires, some flooding, hail damage, storm damage. But it’s mostly fires.

Not to be unsympathetic, but a lot of disasters are the result of stupidity. What’s the weirdest “fail” you’ve ever seen? Down in South Carolina, there was a train parked in a rail yard, and somehow one of the cars got loose, became unhitched. It went down a sidetrack — one of those splitters in the track. At the end of the sidetrack there were these blocks to stop the cars, but it rolled right through them. Somebody had built a convenience store right at the end of the sidetrack, and the car went all the way through the store and wound up right in the middle of it. It was a mess. They wouldn’t let anybody in there until they got the train car out, and when they did that, the place basically collapsed, so it was a very difficult job.

That sounds like a YouTube video. So you negotiated with the business owner’s insurance? Or the railroad? And what about the person who built a convenience store there in the first place? We represented the business owner and filed a claim through their insurance. The insurance company probably went back to the railroad and subrogated it. We call it subrogation – trying to recover your losses. We can’t argue liability or negligence. We just work with the insurance companies and let the insurance companies pursue their own recovery. That’s how they keep their costs down. Insurance people don’t want customers who are going to file claims.

Did they rebuild the store? They did not allow them to build anything there.

I bet all your old insurance company buddies just love to see you coming, don’t they?

(Shakes his head and smiles, but says nothing.)