Historic American Homeowner Recovers After Devastating Fire
No one knows what little thing might have sparked the giant fire at a historic mansion in Muscatine, Iowa. On the afternoon of Tuesday, December 1, 2015, a fire of unknown origin ignited the beautiful two-story Queen Anne Style home, which David Morrison and his family owned and lived in for 40 years. Smoke and flames were already blasting from the basement and attic of the 5,500 foot structure when local fire departments arrived on the scene in response to an emergency 911 call.
The extreme heat from the blaze had weakened critical framing boards and support beams causing a collapse that endangered the more than 30 emergency responders onsite. In addition to the dangerous collapse, the smoke and steam caused limited visibility. These unsafe conditions forced the responders outside of the building where they continued to battle the flames and prevent them from spreading to neighboring homes. When the flames were extinguished later that evening, the local landmark was deemed unsafe due to major structural damage and was demolished.
Globe Midwest AI’s team was hired after discussions with Mr. Morrison and his attorney, who understood the value that a public adjusting team can bring to the insurance claims process. Once Globe Midwest AI’s property claim experts were onsite, they were able to identify the true value of the treasured local landmark and assist Mr. Morrison with a task that was far too great for any individual to face alone.
The late 19th century/Queen Anne style home was built by lumber industrialist and Huttig Building Products founder William Huttig in the late 1800s. The home was considered a town treasure and had been petitioned by the Muscatine Historic Preservation Commission to be listed as a historic site with the State Historical Society of Iowa before the fire, according to the Musser Public Library. This historical significance added to the property’s value in the eyes of both the owner and Globe Midwest AI’s experts.
Globe Midwest AI’s property claim experts faced many challenges in managing this claim including:
1. The insurance company attempted to pay a low dollar amount based on market value.
Insurance company adjusters are well trained and skilled at adjusting the claims that they are presented with. In order to limit the insurance company’s financial exposure, the insurance adjuster attempted to compensate the owner based on the lower market value of the property instead of following the policy’s required valuation method based on replacement cost less depreciation (Actual Cash Value).
Although the house was very old, it was in impeccable condition and built with beautiful custom hand carved wood features, ornate handmade plaster detailing, handblown black and green art glass bathroom tiles, genuine wood-paneling in the dining room, elegant Queen Anne style roofing with gables, two large turret towers on either side of the house, a five-sided one-story bay window and fish-scale siding. Because the home was so customized, it did not fit the neighborhood anymore and there were no interested buyers. As a result, the asking price was a fraction of the full replacement cost. Additionally, the policy did not support the use of market value as the basis for settlement. The adjuster was attempting to settle the claim using a valuation method that the policy specifically precluded. Globe Midwest AI’s lead adjuster researched the issue, prepared very detailed letters to the adjuster and ultimately overcame this undervaluation approach successfully.
2. The lack of an existing contents inventory coupled with the destruction of all the owner’s personal property created a challenge for the Globe Midwest AI team.
Insurance companies require policyholders to detail, document and prove the existence of every item for which they are asking to be compensated. However, the homeowner did not have a pre-loss inventory. Globe Midwest AI’s highly skilled and experienced contents team had to work with Mr. Morrison for many weeks to thoroughly list and detail all furniture, furnishings, decorative items, clothing, technology, equipment, etc. Every possible item that could be recalled was documented and priced by the Globe Midwest AI’s team. This task would have been impossible for Mr. Morrison on his own. Providing this information is an important and required part of filing a property insurance claim in order to receive the maximum financial settlement owed to the insured under their policy. Without doing so, the policyholder will not receive adequate compensation for all of his or her lost and damaged possessions — especially for the irreplaceable antiques and original historic furnishings that were housed in this historic home.
How did Globe Midwest AI’s experts overcome the insurance company’s attempt to settle the claim based on market value and ultimately prepare and document a replacement cost claim for a home which no longer existed?
Globe Midwest AI’s experts researched Iowa state statutes and found that the insurance company was obligated to pay the policyholder’s replacement cost less depreciation rather than the property’s market value. Although the insurance adjuster’s goal was to limit the insurance company’s financial exposure, in this case, the insurer’s attempt to compensate the owner based on market value was actually not permitted by regulators in that state. The team provided the insurance company with a substantial rebuttal that included an 8-year-old document produced by Iowa’s insurance commissioner which defined how Actual Cash Value had to be determined.
In order to prepare and support a replacement cost claim, Globe Midwest AI’s lead adjuster used many different resources to obtain photos of the interior prior to the fire. These included previous real estate listings, news stories from past years, historical society data, and most of all, detailed interviews with Mr. Morrison to sketch out the home and identify every room down to the greatest detail. After a month of interviews, research and negotiations, the insurance company’s representative agreed to pay the Actual Cash Value (replacement cost less depreciation) which increased their offer from a $250,000 settlement to a $620,000 settlement.
How did Globe Midwest AI’s experts create a personal property inventory from scratch when the property and everything inside was deemed a total loss?
After one week of onsite research and inspection and another 80 hours of phone calls, the firm’s inventory experts put together an out-of-site inventory with Mr. Morrison and were able to recreate almost every item in the house as it existed before it was destroyed. The inventory team systematically recreated everything that Mr. Morris had down to what was inside of his drawers, cupboards and storage boxes to come up with a 3,000 line item contents listing that exceeded $850,000 in value. Although the insurance company challenged some of the listed values, they ultimately accepted all of the items included in the contents claim.
Globe Midwest AI was able to successfully settle the dwelling portion of the property insurance claim within approximately 90 days of the fire. Although the home was deemed a total loss and was demolished soon after the initial loss, Mr. Morris’ dwelling claim was settled for $620,000 on an Actual Cash Value basis as opposed to the market value of approximately $250,000 that the insurance company had originally offered. In addition, the inventory team successfully settled the contents portion of the claim in the amount of $850,000.
Globe Midwest AI’s team researched, detailed and substantiated every aspect of the loss leaving no stone unturned. Then they presented and supported the claim to the insurance company with the ultimate goal of maximizing the client’s final financial settlement. By being thorough in examining and documenting the historical value of the home and the extensive contents damage, Globe Midwest AI’s experts were able get Mr. Morris enough money to relocate and purchase a beautiful and comfortable home in another state.
Not only were you able to get me a fantastic settlement on the house but you were able to get me a settlement on the contents that I could have never achieved on my own. I don’t know how you guys found me, but I could not be more grateful that you did.
David Morrison, Homeowner
Huttig House – Muscatine, Iowa