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Show Summary
In this conversation, David Melzer, a public adjuster, shares insights into the world of insurance claims, particularly focusing on the importance of early involvement in the claims process, understanding insurance policies, and the role of public adjusters in advocating for homeowners. He discusses the challenges faced by homeowners in California, especially regarding fire damage coverage, and emphasizes the value that public adjusters bring in maximizing claim payouts. The conversation also touches on the compensation models for public adjusters and when homeowners should consider involving an attorney.
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Investor Fuel Show Transcript:
David Melzer (00:00)
But so that I think is aa kind of a helper for homeowners to make sure that they actually do have adequate coverage because you’ve got this loan department double checking the coverages and they’re not super thorough but they at least do a somewhat high level precursory review of it to make sure that people have fire insurance.
Dylan Silver (01:50)
Hey folks, welcome back to the show. Today’s guest, David Melzer is the owner and president of Property Claims Consultant, a public adjusting firm that represents property owners when insurance claims turn adversarial. He specializes in high stakes fire, water and catastrophe losses going head to head with insurance carriers to make sure clients are paid what they’re actually owed. David brings a straight talk perspective on risk claim strategy and how to avoid getting steamrolledby the insurance process when it matters most. David, thanks for taking the time today.
David Melzer (02:25)
Absolutely Dylan, thanks, I’m excited to be here.Dylan Silver (02:28)
It’s great to have you on here. I’ve had a few public adjusters on the show and from different areas of the country. And we were talking a little bit before hopping on here about how it’s different in certain areas and you’re in California, but you’ve got experience in multiple areas. How did you get into the public adjusting space?David Melzer (02:47)
So I used to work for the insurance company as an insurance adjuster.Dylan Silver (02:50)
That’ll do it. That’ll do it.David Melzer (02:51)
Yeah,I worked for two of the large insurance companies for about 10 years and kind of had like an epiphany back in 2016, 2017. Like no one’s gonna say like, I’m not happy with this life that I’m set up with. What do I do to kind of get out of the rat race? I guess if you take the Kawasaki, Kawasaki, what was his name? Rich Dad Poor Dad.
Dylan Silver (03:15)
Robert Kiyosakiyeah, yeah.
David Melzer (03:18)
kind of statement there. So I ended up getting into real estate for a little while. And then that I had a huge loss at one of my properties. And then that turned me into this. And I was like, ⁓ if I can represent myself and be successful in that world, why can’t I do this and allow everybody to have access to that kind of expertise and success when it comes to these real estate or these property insurance claims? And so here we are. I sold that property back in 2020 and opened my company back in 2020. And here we are.Dylan Silver (03:47)
You know, the the idea of having someone to go to bat for you with insurance, I think a lot of people can understand the idea of this, right, especially whatever kind of insurance you’re dealing with, you tend to feel like, they are they trying to not pay? Is that is that the goal here? Like, I’m paying these people monthly, are they trying to not pay? But when when it comes to your home, of course, now now everything is on the line. And what I’ve seen and having spoken with other public adjusters is, you know,David Melzer (03:55)
Australia.Dylan Silver (04:15)
people oftentimes try to work things out with their insurance company and it’s not until it’s clear that they’re not gonna pay with what they feel like is necessary to restore the property or what have you, that then they start reaching out to folks like yourself.David Melzer (04:32)
Yeah, and that’s kind of the unfortunate mishap is we often get contacted when things go south, real south, and then we’ve got to kind of work the thing from the beginning again for these clients. And so I often say that, you know, the earlier we get involved, the more successful we’re going to be on the claim. Absolutely, because it allows us to be able to help create that narrative of the claim from the beginning forward and not say, we’re going to come in three months, six months, a year into the game, whatever it is.and have to sort of like recreate the narrative, recreate all of the damages, look at it from like a forensic perspective and kind of display that to the insurance company. When we’re involved from the very beginning, it absolutely helps and maintains the success of that from that moving forward. I mean, my response to clients is, hey, even if you’re using one of my competitors, get someone involved earlier than later because it’s gonna behoove you a lot better in the long run.
Dylan Silver (06:12)
I’ve heard from multiple people now that if you’re going to an insurance provider for homeowners insurance, property insurance of any kind, right? And you have specific needs that you want, you want to be protected like in fire. And in the case of, you know, California where you’re licensed at, it’s important that you know for sure that you’re going to be covered in the case. Because I’ve heard from multiple people that there’s cases where people thought they were covered, maybe that it was spoken verbally.But then when it came to what their policy actually covers that certain things were omitted or specifically excluded.
David Melzer (06:46)
Yeah, yeah, I ran into that exact same instance with another investor, a real estate professional that I know, where they had a vacant property. They thought they had the policy written for vacancy. They had a multi six figure vandalism, a theft of this property. It’s a hundred thousand square foot warehouse that they were working on rehabbing up and then renting out and their insurance declined it. And they reached out to me and I was like, hey,this is what we need to do to display it. And in fact, it really should have been covered, but it was just written incorrectly.
Dylan Silver (07:19)
When people are you know dealing with larger properties like that, you know these things still come up. I’ve heard it happening in hotels, right? And so I don’t know if there’s a solution to this, but is there a way where folks can somehow feel more safe with the policy that they currently have or with a policy that they may be taking out?David Melzer (07:29)
So, yeah.Yeah, I mean, I think like a lot of public adjusters out there will do policy reviews and I do it often for some of our existing clients where they reach out and say, hey, you know, I got dropped by that insurance company or I was pissed off the way that they handled my claim. Can you review my policy? And I think having someone who actually knows the what the outcome of that claim is review your policy is going to be much more advantageous than the agent. And I don’t want to discredit, you know,
property and casualty agents, but they’re not really involved in the claim of the actual like, how much is the insurance company going to pay out on this claim if this were to happen? They really are writing the policies and they don’t always know the specific nuances of every single exclusion or condition or limitation on that policy.
Dylan Silver (08:27)
Break this down for me and our audience, maybe a little 101, because you’ve been on both sides. You’ve been in-house and then you’ve been on the public adjuster side. So the person that is writing the policy is completely detached from the people that are processing the claim.David Melzer (08:44)
Correct, yeah. So traditionally you have sort of like three major sections of the insurance company. You’ve got the sales agency, the sales side. Traditionally it’s from 1099 subcontracted agency partners. let’s just, I don’t want to specifically name one, but let’s use a large carrier. They use what they call, what is it? Like contracted agents, specific agents. So all of their agents can only write that insurance company. They just call it ABC Insurance Company.So they have 1099 kind of like small, small family shops that sell this policy. When they sell that policy, they, you know, they underwrite it through like an underwriting and pricing division within the insurance company. They’re the ones that help determine the price and what, if they want to write a policy in that area, et cetera, when it actually, so we’ve got the sales side, we’ve got the kind of underwriting department, and then we’ve got the claims department, none of which are intertwined at any capacity.
The only way is that if they uploaded documents or something to the system that triggers something, it might kind of intermingle or interconnect. But other than that, there’s like zero connection. What I also like to point out is the way that insurance agents are traditionally incentivized is that obviously they get a portion of the premium that they write. So if they sell 50 policies at $1,000 a piece, they might get
Dylan Silver (09:53)
Wow.David Melzer (10:08)
a 50 to 100 bucks, 200 bucks, 300 bucks on each one of those premiums. But the other component is that they’ve got what they call a loss ratio. So if these agents are writing policies that traditionally have frequent claims and high severity of claims, then it can impact the level of premium commissions that they make. to an extent, and again, I’m not really trying to discredit the agency, it’s just the way that the system is set up. Everyone from the insurance side of thingsis kind of rooting against you for the success in that claim.
Dylan Silver (11:15)
Yeah. Well, let me ask this and then maybe this is a really basic question. When, when some, something happens, fire damage, let’s say, and maybe the home is still, you know, you can still live in the home, but there’s been some type of fire damage. And so you’re like, okay, well, we don’t have to move right now, but you know, we, we, this is not good. We need this room repaired or roof or whatever. Right. You go to your first point of contact, which is typically the person you reached out to from there.Is it different at each company? Is that person sometimes going to advocate for you? Are they going to send it off to a different department? Or is that person really just a waypoint to, hey, you got to go to claims?
David Melzer (12:00)
So traditionally, when you file a claim for most large insurance carriers, there’s a bunch of smaller companies out there that operate a bit differently, but from the large carriers, you know the ones that we see at Super Bowl commercials and on you know pay-per-view items and things like that. When you file an insurance claim from them, you’re calling their 1-800 Center. Their call center, someone who’s just a call center operative, answers the phone, they have a series of questions they ask you, they get it filed and they start it.triage it into whatever department it might go into, whatever department in the claims department. Some people often say, I gotta call my agent to file the claim. Most times, more often than not, the agent just does the same thing for them. So at the end of the day, the way that the claim traditionally gets filed, sometimes you can do them online now through apps and things like that, but it really just goes through a call center or some sort of triage center. And then if it’s, you know, I’m here in San Diego, so let’s just say, for instance, it’s a fire.
to a single family house in San Diego and it’s ABC Insurance Company, you would call in, that call center might be in Tulsa, Oklahoma. They take that and then it usually gets routed over the course of a few hours, maybe a day or so to the local team and then traditionally routed down to an actual adjuster. If they have field staff at that time, then it would go to like a field staff adjuster. And then usually that staff adjuster is not incentivized but,
Usually one of their metrics is how quickly do they call and make contact on that claim with that homeowner? So their goal is the last two companies I was with, it was within 24 hours. That was kind of a pretty common theme of how quickly they wanted you to contact. So then they would make contact and that might be the first claims adjuster. They might get out there and they say, oh, yikes, we thought this was $100,000. It might be multi $100,000.
So it might go to another higher level adjuster. So I can sometimes, for these fires, we’ve seen it sometimes take upwards of a month to finally get to the capable, trained and competent final adjuster that’s gonna be handled.
Dylan Silver (14:06)
Now, I mean, we’re talking about several different segments of real estate here, right? But for everyday homeowners, know, this is your forever home or you’ve been here for a very long time, right? Something happens to your home. I’m imagining people’s first thought is not public adjuster unless they know about the space. Is the process different with every company as far as how public adjusters are paid? Is itfrom the insurance company? it from the owner themselves? Is it upfront? Is it at the end? Is it different based on who you’re talking?
David Melzer (14:42)
the most part and I’d say you more than 60 or 70 percent of the states in the US public adjusters work on a contingency basis against the claim. So let’s just say for instance that fire that fired a single family home you know traditionally people are probably going to work that claim for anywhere between 8 and 15 maybe 20 percent depending on what time they come in at the claim and so they would sign on let’s say for instance you know the homeowners sign you know realize hey this is substantial damages I don’t want to go out at this on my own.I’m gonna hire a public adjuster. Fire happened last night. They call a public adjuster. They come out the next day. Homeowner, you know, signs a contract to work with them. And so from there forward, ⁓ that public adjuster gets paid on a contingency basis of how the claim goes. It’s really like a very linear, I guess, approach. If it’s a straight percentage, it’s gonna be linear. There’s a few other states where you can work on hourly basis, but there’s a bunch more nuances about it and…
for the most part, they work on a straight line, flat contingency basis.
Dylan Silver (16:27)
Now, there are, I’m imagining, specialties within the public adjuster space. So of course, when we talk about California, the first thing that comes to mind, my lot of people’s minds is fire damage, you single family homes, you know, throughout California. What what right now? What right now are you seeing as a trend in California? Is that something that people are very keen on is, hey, we have to make sure that we’ve gotDavid Melzer (16:42)
Yeah.Dylan Silver (16:53)
you know, this fire damage coverage, or if not, we’ve got to reach out to someone like yourself or our folks still kind of in the dark about how to navigate that process.David Melzer (17:03)
Well, are you talking about just like fire coverage policy on a home or are you talking about if they had a fire to make sure that they get adequately compensated by?Dylan Silver (17:13)
Well,yeah, in both cases. I mean, the first thing for me that comes to mind is like this isn’t if someone is home is experiencing this now, like, they should at least have some awareness that they have to have the right policy in place because like everyone’s been, you know, made aware that that you have to have a specific policy. So are people generally more
keen and aware of that and then follow up to that is are you seeing more people reach out to yourself and to other public adjusters because of awareness in general of, know, hey, this is a tricky space to be in.
David Melzer (17:48)
Yeah. So to back up a little bit about getting the coverage itself, if you have a loan on a home, at least in the state of California, you have to have fire insurance. and whenever, especially with people that are paying like through compound accounts, they always track whether there’s an active policy that is applied to that loan. So you always have to have that fire coverage for the home. And obviously paperwork gets lost and things happen.But so that I think is a
a kind of a helper for homeowners to make sure that they actually do have adequate coverage because you’ve got this loan department double checking the coverages and they’re not super thorough but they at least do a somewhat high level precursory review of it to make sure that people have fire insurance.
But what we’re seeing out here in the state is that especially ever since these fires happened in January almost a year ago, a year ago tomorrow in the Pacific Palisades and Altadena area.
a lot of these insurance companies are continuing to leave the state and not writing policies in the state. So it often puts people onto the California Fair Plan policy, which has very limited fire coverage. people are being, and the pricing on that Fair Plan coverage can be double, triple, quadruple, quintriple what a normal policy would have been two years ago. So people are getting backed into that corner where
Dylan Silver (18:56)
Hmm.David Melzer (19:12)
There’s actually a restoration company that I work with where even him in the industry, he knew about it and he got canceled from one of his large insurance companies. He was paying $2,500 a year and had to go to the California Fair plan and now he pays $7,500 a year.Dylan Silver (19:27)
⁓ my gosh.David Melzer (19:28)
And that was actually just for fire coverage. So he has to get fire coverage through the California Fair Plan. And then he had to use one of the other larger insurance companies for like water damage coverage, vandalism and everything else. They have these wrap policies out here. So it gets a bit convoluted there. I think the answer to the other question was about awareness of it. And I think absolutely there’s a lot of awareness.Dylan Silver (19:52)
Just awareness, yeah, for public adjust.David Melzer (19:56)
And with the awareness comes a mixture of everything to where people hear the goods, they hear the bads, and often sometimes the bads outweigh some of the goods. it’s, I think a lot more people know about the value and benefit of public adjusters, but people are wary. know, they’re thinking, well, I can take a stab at this insurance claim on my own. I’m not going to pay someone 10%.I point out and I think a lot of the other good wholesome public adjusters out there is that if we have our 10 % commission on the claim, we’re not just getting you a 12 % more on the claim. We’re often doubling, tripling, quadrupling that claim value because of how thorough we are and how we do know to play the game. When we did some statistics on our claims from 2024, because I haven’t done 2025 yet.
we averaged like 580 % increase on our claims. whatever the insurance company paid versus where we landed was like a 580%. And I actually, I had to pull some of the outliers. Like there was one that was like a 15,000 % increase. And I kind of pulled that one out because it just, I think it skewed the numbers, obviously in a positive direction. But so that one was just the number that I got of close to about 600 % increase was just over your everyday regular claims.
Dylan Silver (20:59)
or six minutes more.David Melzer (21:20)
And then I pull, like I said, I pulled out some of these outliers because they were so crazy that, you know, if we’re going to, let’s say, for instance, we have a 10 % commission on a claim and we’re going to increase your claim by 600%. Like, I would take those odds any day.Dylan Silver (21:37)
Yeah, who wouldn’t?David Melzer (21:39)
Yeah, I mean, if you look at it from a straight kind of cost benefit and you remove any kind of emotional attachment to it’s my home, it’s my primary residence, know, I grew, I, you know, raised a family in this house is that in the other, if you look at it from just like really a financial perspective, there’s no loss there. I mean, we’re, we’re, really incentivized equally with these homeowners, but some people want to, go at it on their own and it’s.It’s sad because then they often call us and it’s six months, a year into the game and they’re like, hey, I hate to say it, but you were right. And then it might be, hey, it’s too late for us and we might have to push them more towards more legal options.
Dylan Silver (22:20)
I do want to touch on that because I think for myself and folks who are listening again is when we typically think of like damage, we think of, you might reach out to an injury attorney if you’re involved in some type of, you know, wreck or, you know, car accident, something like this. Public adjusting is separate from that because you’re not attorneys, right? So ⁓ when people are thinking of who to reach out to and when,Is there a time where you would say, hey, this is actually beyond the scope of what we do and you would have to go talk with an attorney?
David Melzer (22:55)
Yeah, there’s a specific insurance company in California that denies a vast majority of their water damage claims. And that is an instance where this specific insurance company, where we usually direct people towards illegal action because they just don’t even care about the homeowners anymore. ⁓ But so, yeah, sometimes it’s that, where their claim is so far denied or all the work has been completed and it’s still denied.more often than not, there’s a value for a public adjuster to take a stab at it because there’s, we really have no upfront costs. We have no, it almost seems too good to be true sometimes. Cause I’m telling these people this, I’m like, we have no upfront costs. We literally have a commission against the claim itself. Let’s just say for instance, it’s a denied claim where we might work it for six months and if we don’t get it overturned, like you’re at zero loss. If anything, we have this file to give you to hand over to whatever attorney you want to fight with anyways.
And sometimes their thing is, well, I want to get the ball rolling with the attorneys. And I’m like, well, these insurance companies are really good at defending lawsuits. So you go, if you have to actually go a legal route where they actually have to file suit, I mean, that’s, it’s not going to get wrapped up in one year. It’s going to be two, three, four years. I’ve seen them. I’ve had clients that I’ve been working with for five years and have been in legal battles since very early on and they’re still going.
Dylan Silver (24:21)
Yeah.mean, drag it out. That’s another approach that the insurance companies can take. You know, and when as I’m talking to you, I’m realizing, you know, that of course, there’s a lot of, you know, myths that people may may have or preconceived notions, hey, I can do it myself, hey, why pay somebody else. when you’re seeing a 500 % increase, of course, it not only pays for itself, but saves you all the time and effort and hassle of trying to figure it out on your own when it’s not.
your expertise, you’re doing whatever you’re doing, something happens to your property. ⁓ We are coming up on time here though, David. Where can folks go? Where can our audience go to reach out to you and your team or learn more about what you have going on over there at Property Claims Consult?
David Melzer (24:52)
Yeah.Yeah, I
I mean, our website or even social media property claims consultant. Big thing is, is that it’s claims plural, consultant singular. So we’ve got an Instagram, Facebook, Yelp, Google pages, everything like that. And our website too is usually the best way to kind of reach out to us directly.
Dylan Silver (25:20)
David, thank you so much for your time today. Thanks for coming on.David Melzer (25:22)
Absolutely, I appreciate it. Thanks, Dylan
