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Real Estate Agent Podcast Episode 91: Understanding Insurance Companies Shortcomings with Insurance Attorney Galen Hair

Episode 91: Understanding Insurance Companies Shortcomings with Insurance Attorney Galen Hair
May 24, 2022

Galen Hair is the owner of Insurance Claim HQ, a property-casualty insurance attorney that operates throughout the South. Galen and his team have helped over 800 families rebuild their homes and businesses.  

Their mission is to fight for the rights of policyholders when they experience a loss due to fires, floods, hurricanes, and insurance companies that do not keep their promise.

 
Our mission statement is rebuilding communities, one home and one business at a time. But I think generally what we're trying to do is more specific than that. And bigger than that, the typical way law firms handle insurance claims when they get involved

Galen Hair

About This Episode

Galen Hair is the owner of Insurance Claim HQ, a property-casualty insurance attorney that operates throughout the South. Galen and his team have helped over 800 families rebuild their homes and businesses.  

Their mission is to fight for the rights of policyholders when they experience a loss due to fires, floods, hurricanes, and insurance companies that do not keep their promise. 

Galen has received a Super Lawyers Rising Start award and voted as one of National Trial Lawyers Top 100. 

Learn more about Insurance Claim HQ and their partners at their website. Download their free ebook “Ultimate Guide to Maximizing Your Insurance Claim” here.  

To download our sponsor Chime’s free ebook “"How to Leverage Technology to Recruit Top Agents" follow the link here.

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Episode Transcript

Brett: Hey there and welcome to Shoptalk, the real estate show. I’m Brett Van Alstine and in today’s episode, we’re joined by Galen Hair, owner of Insurance Claim HQ, a property-casualty insurance attorney that operates throughout the South and East Coast.

Today we discuss Galen’s journey to becoming a lawyer, working as a defense lawyer, and eventually starting his own firm, Insurance Claim HQ. A true David versus Goliath story, Insurance Claim HQ has helped hundreds of policy holders rebuild their homes and businesses when their insurance companies weren’t keeping their word. Galen has worked hard to grow his firm and be recognized as a Super Lawyers Rising Start award recipient and voted as one of National Trial Lawyers Top 100.

Brett:

Galen, thank you so much for taking the time and hopping on the podcast with me today.

Galen:

Thanks for having me, Brett.

Brett:

No problem. So to start us off, can you give us a quick overview of your background, you know, and how you got started as an attorney in this insurance space?

Galen:

Yeah. So I'm what you call a non-traditional path attorney. They also called me that in law school. So basically what non-traditional means is you did major in Political Science, you didn't grow up with a bunch of lawyers and think that you were one day gonna grow up and be a lawyer. I came from like an immigrant family when I graduated high school that made me officially the most educated person in my family. So the nice thing is like expectations were super low. Right? and so I, I cashed in on those low expectations. I went to school for music because I already hadn't let anyone down, I guess. And, and then hurricane Katrina happened in 2005 and I just kind of felt this massive calling and I had to leave Boston where I was going to school and studying and working for that matter. And I just had to kind of come down to new Orleans and be part of that process. So I came down to new Orleans and became part of the hurricane Katrina recovery process. And that is probably what caused me to become a lawyer.

Brett:

Sure. Yeah. Well, and I'm sure, you know, one, it's amazing that you had that deep calling and then two that you actually, you know, reacted to it and acted on it and, you know, made the move and I'm sure once you got down there and you saw the devastation, that was you know, the impact of that hurricane, you couldn't turn back, which is amazing that, you know, you ultimately acted on that.

Galen:

Well, thank you. It's look, I think each one of us at some point in our life and, and it doesn't have to be this noble thing, right. It just is what it is. I think we're organic as people and we're both a product of our environment, but we're also just a product of our personality types. Sure. So I think most of us at some point get some kind of calling, even if it's as rote as like, I really love money, so I'll be a CPA because I like looking at numbers all day it, it doesn't have to be this profound thing, but I think most of us end up kind of haphazardly coming across what our career is. Right. And it's funny because when you meet a doctor or a lawyer, I think the assumption is, oh, they groomed themselves for this or their family groomed themselves for this or that, but that wasn't the case for me at all. And I think that's even true for a lot of professionals that I know they just kind of stumble into it situationally.

Brett:

Right, right. Yeah. yeah. And then it, especially for lawyers, there's, I wouldn't say a stereotype, but people just have assumptions of, you know, why people got into it or, you know, it was easier for them to get into it because they had the connections or the family background. What, what have you and then for doctors, it's this idea of, you know, wanting to help people, but a lot of that's the same thing as coming down to who, you know but in your case it sounds like you just worked your butt off to get to where you are.

Galen:

Yeah. I mean, look, I partied as well. You know, and I think that's important. I, I, it's been a lot of work. The harder work came after law school, not during sure. I, I studied hard, I got good grades. If you're gonna go to a school like that, you have to it's really important, but that wasn't really the work for me. You know, a lot of that was like kind of a discovery phase. I was probably more of that like prototypical law student, like would binge watch law and order know, watch Boston legal back in the day as well. Like, so there were like those legacy kids who came up from families of lawyers and were gonna go work in the firm or had like this career path laid out for them. I mean, there was one kid that I went to school with who was from a whole family of lawyers. His plan was to be a clerk at the Louis at the U.S. Supreme Court. And he kind of had a path laid out. Right. I just, like, I don't know. I kind of was into social justice, post Katrina, so I wanted to do something with that and I loved watching law and order. So at some point I thought it'd be really cool to be in court. None of that really connected for me until I got out of law school.

Brett:

Okay. Okay. And once you got into it was it what you thought it was going to be, or was your perspective on it changed quite a bit, you know, post law school?

Galen:

Yeah. So I think like a lot of people money was like a driving factor for me. So initially when I got out, I went to the defense side and, and what I mean by that is I just spent a long time being a musician coming from a poor family being really, really broke. So there was something very attractive about going and getting that high paying job in Manhattan. And sure. You know, at the time that was like the top of the market. So I took that job and really liked. The people really liked the pay really liked going to my office really hated the work I was doing, which was helping one of the largest insurance companies in the world find ways not to pay claims big claims. Oh, okay. Claims like, you know, a lady is now a widow because of something that happened and has to figure out how to raise her three or four kids alone.

Galen:

And my job is to figure out how not to pay her anything. So she has to try to do that herself. So that was emotionally taxing and, you know, kind of led to in my mind, my wake up call. So then I switched to the plaintiff's side to helping people that were victims of insurance companies and the way that they adjust claims. And that for me was finally like the fulfilling moment where it was, what I wanted it to be. It was what I needed it to be and probably was better frankly than I thought it would be.

Brett:

Sure, sure. That's awesome. So as silly as a question as this might sound you know, what does, once you made that switch, what did that really mean to you, you know, fighting for the policy owner, the homeowner, and kind of going against these insurance companies that weren't always willing to, you know, pay up on their end.

Galen:

Yeah. So this theme comes up all the time and vendors that work with law firms use it, especially on the plaintiff side, they talk about kind of the David versus Goliath, right. Story. Right. And in some ways that's an overplayed story, but in some ways it's incredibly apropos for what occurs. And what I mean by that is when I was doing defense work, I was at one of the largest firms in the world. I took a town car home at night, you know, paid for by the client. They, I don't know if they knew they for, but they were, you received dinner delivered to your desk every night, paid for by the client. You did not edit your own documents. There was a department at the firm that edited your letters for you and would proofread things for you. Right. All these things existed.

Galen:

And it, it really was a machine. And that was just one and I was just one cog in the wheel. Right. so, so making that transition for me really was kind of this realization that going forward until I got to a point where I saw some success, I would be under resourced. I would be outmanned, I would be out powered and the only, and I couldn't even outwork them necessarily because there were more of them. I could one on one, I could outwork 'em I, I used to say three on one. I could outwork 'em, but at some point there were just more people. Right. So I think coping with that concept of David trying to take down Goliath was a really important part of my professional career. And in fact, the turning point for kind of my firm now insurance claim HQ was trying to change that a little bit. So it's a little more like Goliath versus Goliath.

Brett:

Sure. Yeah. So when did you, you know, have the idea to create insurance claim HQ?

Galen:

Probably during COVID. So I, I had built this over the next 10 years. Plus I had taken this small firm that I had started and built it into a decent size regional firm, but they did everything. I had partners. I had business partners who did a lot of different things. I had grown, what I wanted to do, which is help policy holders kind of as large as I could within the confines of that. But I wanted, as I said, I wanted to be this Goliath. When the insurance companies saw my name, saw my firm's name, I wanted them to know that they were gonna be in for a fight and that it wasn't gonna be an isolated case. Right. And I think COVID, again was just a turning point for a lot of people. So while I'm sitting in my house with nothing to do, I start thinking about what does the ideal law firm look like?

Galen:

That is ideally suited to take on these insurance companies, that's going to match them in terms of resources. That's gonna have institutional knowledge as to how these claims work. And I basically spent my lockdown figuring out what this would look like, kind of sketching it out, drawing it up with no real plans. Right. Because cause then the next question is like, okay, cool. So money and how do you build that? But one thing we noticed is we had a fantastic COVID in terms of business insurance companies wanted to settle cases, they needed to get them off their books. And we were still signing cases at breakneck speed at my prior firm. So I was able to my whole team, I kept them all employed and we were able to do really, really well. So kind of as we're coming out of that, COVID lockdown in June, July I'm like, all right, it's time. Let's do it. Like, let's just take the risk. So I left my firm and I started insurance claim HQ, and I think we officially opened on August 1st of 2020.

Brett:

Wow. Okay. So you guys are fairly young company

Brett:

That's awesome.

Galen:

Fairly young started with seven people now have a couple hundred employees and are processing insurance claims faster than some insurance companies are.

Brett:

Wow. And it's not just within, you know, your region anymore. You guys have expanded quite a bit, correct?

Galen:

Yeah. We're handling claims largely all over the country. We have jurisdictional boundaries for individual attorneys. So for instance, I'm not personally gonna handle a case outside of Louisiana, Florida, New York or Massachusetts, because that's what my license says, but I get involved in other things and we make sure that we have coverage pretty much nationwide.

Brett:

Okay, cool. You, we is insurance claim HQ overall mission.

Galen:

So we're a law firm. Our, our mission statement is rebuilding communities, one home and one business at a time. But I think generally what we're trying to do is more specific than that. And bigger than that, the typical way law firms handle insurance claims when they get involved in them. Well, the first thing is most law firms don't specialize in property insurance claims. They will take them kind of as an add-on to what they already do, right? A personal injury lawyer after a big hurricane will suddenly advertise for hurricane damage, a divorce lawyer who hears that their friend's house burned down says, oh, I'll help you with your claim for a percentage of your money. And this very toxic relationships gets created between the lawyer, the client, and even the insurance company. Because the business model doesn't work and the business model doesn't work partially because the lawyer doesn't know exactly what they're doing.

Galen:

And partially because the client doesn't see the value proposition to what's going on, but they've entered into the agreement anyway. Okay. So our goal was to kind of break that model. Our goal was to take a very heavy educational based model, teach people what they need to know about insurance and if they need help. Great. If they don't know worries we do believe that they typically need help. And then to kind of take that expertise and take that time that we've invested in figuring out how an insurance company's process works to design our own process, some of which is automated and some of which is hands on to kind of defeat that process. So the, the way I explain it is I'm constantly playing chess with all the different insurance companies, right? I'm making a move designed to make them do something else.

Galen:

And then I'm building an entire process behind it, waiting for them to adapt their strategy so I can build a whole new process. So our goal was to be able to handle volume, but still give people independent boutique level service. And I think we've done that pretty well by hiring really, really good talent while combining that with technology, you can't have one without the other and in insurance claim HQ and its ideal iteration. And I think we're, we're there combines those two things to get policy holders. Our clients brought to what we call full indemnity, which is when they are paid for every single dollar that they are out of pocket minus their deductible. And that doesn't happen often. It should, it should happen a hundred percent of the time. So what we do is take all those times. It doesn't happen and help those people get there.

Brett:

Wow. It sounds like you guys are kind of always working on that one step ahead. And I mean, it's just such a great strategy as far as trying to take on, like you had said earlier, taking on that Goliath by becoming the Goliath and being able to fight for people that are often not educated in what's going on in the process and to usually are, have their backs up against the wall going into it in the first place. So, but during what you had just said is that essentially from what I got is that there's that lack of, you know, personality and being for the people. Can you touch on, you know, where you think that lack of being there for the people kind of started or like how that even happens or is it just because the system like you had said is kind of broken?

Galen:

Yeah. I, I think there is, it it's controversial, but I think there is kind of a moment in time where that changed in the late nineties, a very large insurance company realized that they weren't making as much money as they should and had identified it financially as being tied to the payment of flames.

Brett:

Gotcha.

Galen:

They didn't particularly know whether they were paying too much or not, and I don't. And in all fairness to them to give them credit where credit's due, I don't think that was the exercise. I think the exercise was to figure out if they were paying fairly or not, they didn't set out to not pay claims. Right,

Brett:

Right,

Galen:

Right.

Brett:

Bless you.

Galen:

So yeah, I think I'm allergic to what happened here.

Galen:

So, so what happens is they hire the largest consultant company in the world and this consultant company looks at two things. They look at auto claims and they look at property claims auto claims are in a different category together because there's this massive personal injury bar attorneys all over the country with millions and millions of dollars who kind of push those claims. Right? So they're doing the same thing we're doing, but keep in mind, property damage has never been that way. There's never been a powerhouse, so to speak in the industry. So what this consultant company does is comes out with certain themes and certain mottos. There's a really, I, I, I won't name the insurance company or the consultant company out of fairness, but you could probably figure it out. Sure. There's a book written about this called from good hands to boxing gloves.

Galen:

So if you can figure out who that's about, you know, you can do the math at home. So the book is called from good hands to boxing gloves. And what it talks about is how this consultant company produced these PowerPoint slides and these PowerPoint slides would later be litigated over forever because the carrier, the unnamed carrier did not want to provide copies of these PowerPoint slides to anyone. And they did things like they said, really atrocious things. And this is in the late nineties when claims handling was not this way. Like, you know, if one of the slides said, if your customer accepts your first offer, they're in good hands. If they don't put on the boxing gloves. Geez. And talked about how more insurance companies should be like alligators, they sit very, very patiently and wait for their prey to, you know, have trouble swimming and then they snap up.

Galen:

Right. Right. Things that, things that, to hear that your insurance company thinks about you that way are patently offensive. It's, immoral, it's unethical and it's just plain wrong. And then you say to yourself, if you figured out the carrier I'm talking about, well, I don't have that carrier fair point. So this is the late nineties. So it took kind of the early two thousands for this carrier to implement these strategies. Well then what happened? Right? And then anyone at home can do the math 2008. We had a financial crisis. So everyone moved people, lost jobs, especially in insurance and finance. So people lost jobs and they moved from company to company. And suddenly we had this major leadership shift across all of the insurance companies around the country and even the world. And now these people that had implemented these very aggressive, what we call delay, deny, defend, meaning delay, the claim, deny the claim, defend the claim, right?

Galen:

And it's designed to slow down the process. These leaders that had implemented these strategies were suddenly at all of these other companies. And they were saying, well, here's how we're gonna save money. So it's cyclical. I think it will open back up. But as we sit here in 2021, some of these strategies are still persistent across many companies now, and they've kind of infected the way claims handling is. And you know, this is true if you're listening, because if you watched TV today or any time in the last few weeks, you are almost guaranteed to see a commercial from a large insurance company convincing you that they'll take good care of you, which begs the question. Why do they need to convince you that they'll take good care of you? Right? and the answer is because they're, they're doing what we call premium, replacing.

Galen:

They're losing customers as a result of underpaying claims and they don't lose as many as you would think. They can underpay a huge chunk of claims and lose a very small portion of customers because you've been conditioned to accept whatever they give you. Which is wild to think about. And what they're doing is spending massive advertising budgets to get premiums back, to make up for the lost market sector, from the people they underpaid. Wow. So that's, what's going on and that's, you know, it it's wild when you think about it, that you should even see so many insurance commercials. Everyone knows they need insurance. They're getting insurance so why is insurance? It's a heavily advertised thing. It, there's no reason for it to be, except for the fact that on the back end with the claims they're being severely mishandled.

Brett:

Interesting. You know, I had never thought about it like that. I just, I never even thought why I see someone in the insurance commercials in the first place, but that's, that's pretty eye opening. So what would you, what would your advice be to anyone listening? Because I'm sure many people when they listen to that and hear what you had just said is gonna have a light go off in their head and think, gosh, you're right. Why, why is that? And what am I doing wrong on my end? What can I be doing better? What would your advice be? You know, for our listeners.

Galen:

Yeah. So I think the best advice is get help. Right? But a lot of people aren't comfortable with that and, and to kind of expound on that insurance is fascinating. It's the only thing we buy in the United States where we pay for it first and then they give it to us later and we see it for the first time, which is the policy. If you think about it, you don't see the policy when you buy it, you see the policy when they mail it to you after you bought it. Right. Nowhere else would you ever agree to this? Right. But, you know, if I told you I'm gonna sell you a car, but you can't see what it is until you give me the money you would tell me. Absolutely not. Unless I was an insane deal, like a dollar, right? Yeah.

Galen:

So, but what we do and, and by the way, we also don't similar to cars. We don't shop on quality. We shop on price. How many people can you think of that did not say. And, and you're thinking, oh no, I paid for the more expensive insurance because the higher premium or the higher limit. Right? Sure. What you did not do is say, let me see the policy, let me see. What's covered. Let me see. What's not covered. Let me look up this company and see what reputation they have for fighting claims. Right? So, because that system's broken, what you need to do is kind of approach a claim from more of an analytical or an inquisitive approach. If you're going to handle it yourself. I have a book that you can read about that. I really don't recommend people do it. However I don't recommend people handle claims of self. You should definitely read the book. I

Brett:

Was gonna say, that's an interesting marketing ploy. yeah.

Galen:

I wrote a book. I'll read it. OK. But I thought about naming it, something like insurance companies don't want you to read this, you know, but it seemed a little hokey. But what I think, what I think you have to do is ask questions because if I were to kind of pigeonhole most of the mistakes, I see the vast majority of them fall into people. Just assuming what the insurance company told them was true. And frankly, the insurance company doesn't tell the truth a lot and that's not a conspiracy theorist thing. I'm not accusing them of being liars. Sometimes it's as simple as they hired someone new, they don't know what the rules are. People are guilty. Right. Of trying to sound like they know what they're talking about. Even when they don't know what they're talking about. Awesome. And people that work for insurance companies are no different.

Galen:

I hear them spout off because they want to sound like they know what they're doing. And you know, come to find out the guy's been on the job for like a week, but he doesn't want to tell the person that just lost their house. Well, I don't really know what we're gonna do for you. So let me go find out and talk to my supervisor, you know, so again, they say, well your policy says, blah, blah, blah. It doesn't say that. But people accept it at face value. They don't even read their policy. They don't compare it to the damage. And they assume that part of the process is getting discouraged just a little bit. So if they get underpaid but not offensively underpaid, they're good to go. Like that is absolutely wrong. At the end of the day, what you're doing is setting a really bad example and you're actually hurting your community.

Galen:

And the way I explain that is an isolated fire. Maybe you're only hurting yourself if you don't get your house fixed, but a massive look at the, I mean, tornadoes just tore across the Midwest. As we're sitting here talking and it is terrible. And you know, I'll, I'll use, you know, a random carrier, state farm. I don't know what state farm's gonna do out there. They might pay all these things fairly. But if they don't and most people walk away from them, they're gonna learn that they don't have to pay any claims in this community fairly at all. Right. If on the other hand, the majority of the people in this community fight to the death to get what they're entitled to state farm will have to make a tough decision to pay the majority of these claims fairly and promptly because they know, or they will know that they will be in massive trouble if they don't.

Galen:

So, you know, I think that's the other side of it is like I, I heard this last night, I was at a town hall for hurricane victims from some of the hurricanes that recently hit the Gulf south. And one of the things this nonprofit said is don't commit fraud, collect your documents and then fight to the death. And I thought that was so fascinating. Hear a nonprofit versus say that fight to the death. Right? and you know, he meant it obviously a bit hyperbolically but what he was saying is go get help, get this done, do not back away. It took that guy seven years to get back into his house after hurricane Sandy. Geez. But he said, I wouldn't. He said I had to do that to get back into my house. Do not take a quick check. That's not gonna get you to where you are because the insurance company is playing that game, hold them accountable.

Galen:

And history tells us that when we hold insurance companies accountable, they do the right thing. So Sandy's a great example. You know, Congress actually reopened all of those claims and ordered the carriers to revisit the claims and pay millions and millions of dollars. Why? Because a couple of people didn't take no for an answer. And they found out that engineering reports had arguably been forged in those claims and it forced the carriers to go back and take a look at what was going on. Right. But a couple of people had said, oh, I won't fight to the death. And there would be an entire region still ravaged by hurricane Sandy with, with the absolute inability to rebuild

Brett:

That's wild. Wow. And it, like you had said earlier, it that people almost become conditioned to, you know, not accept what they're given and then just be like, well, I'm gonna get screwed a little bit. But if, as long as it's only a little bit, that's totally acceptable. It's almost like, yeah. It's almost like your, it's a social responsibility for community to fight for it.

Galen:

Wow. Yeah. And you know, I think it's really hard because we don't, we shouldn't be conditioned that way. Right. You know, the world's about compromised, but the world's also about adhering to your word. Sure. And when you have an insurance contract, what you have is your word that you will pay them and you will do certain things and their word that they will pay you in the event of a covered loss. So you want to make sure they adhere to their word otherwise, you know, if you're gonna go around and, and, and that's the thing. So, so the standard should be really simple. Would you go enter into a business agreement with someone else to let them not keep their word? If the answer's yes. Then whatever. I mean, that's just, that's just who you are as a person you're super easy going. But like, I always like come up to me and go, well, you know, I didn't get paid, but I don't want to Sue my insurance company because I like my insurance company and I don't like people that Sue and I said, okay, I don't want to represent you. What, why don't you want to represent you? I said, because you don't want to hold your insurance company accountable. What I do want to do is sell you insurance you know, and they're like, right.

Brett:

So,

Galen:

But, but generally speaking, we should not be conditioning our children and we should not be conditioning ourselves to not hold people to their word ever.

Brett:

Yeah. And it seems like, you know, holding your word or holding a people accountable to their word is something that to me has kind of gotten lost over time. You know, I don't even know, I would say back in the day, but there's not even a time to put that at, at that sticking to your word meant a lot. And people did that to, you know, uphold their integrity, uphold their honor. And for, for whatever reason, that seems to have gotten lost over time. And I'm not really sure why, but it would be great to return to that and have people, you know, feel that they should, you know, stick true to their word.

Galen:

It would. And, and that's something that's achievable and I don't think it's dead, but you know, I love the movie, Jerry McGuire. Like, I feel like I can always find something in it. And you know, the saddest part of Jerry McGuire in my mind was actually when the football player's dad, you know, went to go shake Jerry's hand and said, oh, don't do contracts, but you know, I'll shake your hand. And my words are, and you have my word, my words are strong as Oak. And what does he do later? He goes and screws them and signs with the other agent. Right, right. And I was like, man, because I'm from east, Texas originally. And then, and then Dallas and like our word, our word is all we have, you know, I think people know this in the office. If I shake their hand and tell 'em yeah, this is what we're gonna do.

Galen:

We're gonna do it. I, I find I've even given clients deals. Like I didn't mean to give them because later they're like, oh, you said this. And I'm like, I have no recollection of that, but I'm not willing to have you say I lied to you. Right. You know? So it, it is just not where it's gonna go, but PE it's amazing. And you know, I think where it starts kind of getting back to honoring our word where it starts is holding the people that you have relationships with business relationships to their word.

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Brett:

Definitely. So, you know why would, you know, insurance companies not take care of their clients? I'm assuming it comes down to money, but is there any sort of other motivation for that?

Galen:

Yeah. Money. I mean, it's all financial, I don't think there's a political or, you know, kind of conspiracy reason that an insurance company would not want to pay a claim and in fact, I think they would tell you, and they have told me in depositions, oh, we want to pay all the reasonable claims. The problem is they've set up a system to kind of minimize and delay that claim. Okay. And, and that system is largely economic. Right. And sometimes it starts with like the nicest but focused of motivations, like, oh, we got defrauded by a few people last year. So we need to set up the system that will underpay thousands of people. So five people can't take advantage of us, you know, and right.

Galen:

And maybe they're right. I don't know. They're probably not, you know, but, but you know, insurance fraud is real on both sides. Insurance companies commit fraud and people commit fraud. So I do think that there are some non-financial reasons, which is, oh, we have to stop fraud. We have to do this. We have to do that. But largely it's financial. These companies are usually in it to make a profit. Even the ones that aren't that tell you, oh, we're a mutual company. And our O our policy holders are owners go look at how much the officers made that year.

Brett:

Yeah.

Galen:

You know, they need to make money so they can pay these people.

Brett:

But I'm glad that you just brought up this, the, you know, the idea of insurance fraud on our, on our end, we cover a lot of different, you know, fraud cases and, you know, historical fraud cases, but one C of fraud that we haven't talked about much is insurance fraud. Can you, you know, shed some light on insurance fraud and maybe even some examples from your career that you know of.

Galen:

Yeah. So insurance fraud comes in two flavors, but we think it comes in one. The first flavor is the one you're familiar with, which is an insured lies and connection with the claim. Easy example, unfortunately have run into it arson. Right? I've had clients where I realized halfway through the claim, they burned down their house. So at that point, you just got to get out. Like, there's nothing you can do. Your client's going to jail. You don't want to go to jail. You don't help 'em anymore. Sure. The next, and I don't want to use it as more, I don't want to say more innocent, but certainly my clients think it's more innocent is, oh, you know, I also had a 60 inch TV in there. Oh, you didn't have a 60 inch TV in there. Right. jewelry shows up that you don't have receipts for.

Galen:

And, and I do think this is all real. And I do think it happens. And I think that insurance do sometimes commit fraud because people in their own nature sometimes will try to take more than they should get. Right. Most of my clients are good people, even my clients that maybe lie about what's on their contents list. And, you know, again, when I find out I have to get out, I just can't help 'em anymore, but right. I, I don't, I'm not mad at them. Usually I understand the human nature behind it. The other SI you know, and there was this there was this meme running right before hurricane Ida, like, you know, getting, you know, getting photos of all my stuff for insurance in case the storm is bad. And I wish I could find it, but it basically is like a bedroom.

Galen:

It's got all this clip art, you know, the old clip art from the nineties of like diamond rings and TVs and radios like paste it all over this real picture of a room. And I'm like, look crazy. Right? So that is very typical, very common and does happen. The other type of insurance fraud that I would posit is just as common but not talked about is insurer fraud. And that is when the insurance company intentionally makes a misrepresentation or lies or falsifies something with the goal of affecting the insurance claim, right. Insurance fraud by the I insured same thing. They have to make that lie or misrepresentation to try to get money from the insurance plan. But the carriers do the same thing. And Sandy is the best example because an engineer like got walked out in handcuffs, a CEO of an engineering company these engineer reports were essentially being copied and pasted whether or not an engineer had actually gone out to the property.

Galen:

Huge. Most recently I think it was hurricane Michael down in Florida. There was a hurricane a couple of years ago, and we saw a report, a denial letter that said the wind wasn't strong enough in your location to have negatively affected your building. Right. That's probably not true. And then it went on in this letter to say, you can, you can copy and paste this into all of your hurricane claims. Well, you weren't even looking at what the wind was gonna be at other house. Then you just told them to deny. 'em All. That's crazy. Right. I had one, a lady in Louisiana who told me two things. She, the client had sent in an estimate, we call it a proof of loss, showing what they were gonna be owed. And she responded within like 17 seconds or something and said, we reject this.

Brett:

Geez.

Galen:

And we're sending an engineer to your house. And I called her and said, Hey, I'm a little confused lady. Like, did you even have time to read it? She goes, oh, we, and, and the letter basically said, we reviewed this and we rejected it. And she said, no, no, we don't review them. We just reject them. And I'm like, why? And she goes, because if we don't reject them, we'd have to pay them. And I'm like, the system is so broken right now. Just fraud. Cause you said you reviewed it. Right? Like you were, it, it was such a great call with her, honestly, because it confirmed that I'm not wasting my time and my chosen profession because the system is so broken that this conversation can happen. But then I said, what about the engineer? What's the point of the engineer?

Galen:

And she goes, oh, because it freezes everything. It slows down all the timelines I thought to myself. So you don't have any concerns about structural damage. You're sending someone to harm my client and delay. So all of those are examples, both on the insured side and the insurer side of misrepresentations, a carrier can make, now you can get into like the salacious and the sexy stuff, you know, like I've seen engineers or adjusters get on roofs and manually tear shingles and say, oh, it looks like mechanical damage. Yeah, of course it does. You just did it. Right. Right. I, I once saw a fist fight erupt between an engineer and a, a roofer because someone stepped on tiles and broke them and they were arguing about whether it was intentional or not. And it probably was. Yeah. There's bad apples there on all sides, but fraud is insurance.

Galen:

Fraud is rampant. And, and it's unfortunate because it's not rampant in the way that insurance companies would have you believe. So I get very frustrated after every big disaster. When I see all these contractor fraud task force is created and all these warnings going out from the various local and state governments, if you commit fraud in conjunction with an insurance claim, you will go to jail and no one says, oh, by the way, we're also watching what the carriers are gonna do. And if they commit fraud, we'll arrest them. So it's, it's a little frustrating, but carriers have done a really, really good job at winning kind of the PR war as it relates to insurance fraud.

Brett:

Sure. So just based off those examples, have you found it, you know, prudent on your end when you know that an engineer is gonna be going out to a property to be there physically to, you know, almost kind of watch this happen?

Galen:

Yeah. This advice doesn't apply to all states because states have their own rules. Okay. But I typically will not speak to an adjuster without recording them. Okay. I will not let someone attend one of my clients' homes for an inspection or something without recording them. Engineers, especially I will video them and some engineering companies, by the way, that work for insurance companies have policies against being filmed while they're doing their inspection. Well, that's weird. I'm not recording your internal thoughts. I don't think we have that technology yet. What I'm doing is recording what you're looking at because later when you tell me you looked at something that you didn't look at, I would like proof that you didn't look at it. Right? The other thing that happens in these reports all the time, by the way, adjusters and engineers will say, oh, the homeowner admitted to us that this was preexisting damage.

Galen:

And you know, when I first got into this and was not as well trained, I would call my client and be like, why did you tell them that you told me? And they're like, I didn't tell them that. I'm like, okay, well, this person got it wrong. So I think I'm gonna go to my deposition and say, that was a mistake. Right. They will look you in the eye and lie for you. And it's amazing. Right? So, so, you know, I always tell my clients, record calls, record visits, we record visits, but you do have to check with your state. Typically, if you tell them you're recording them, you can get away with it in most states. But some states you don't have to tell them that. And of course, as you know, behavior changes when you know, you're being watched. So you definitely need to talk to a lawyer in your specific state before you like, act on that. But I do not recommend having unrecorded inspections if you can avoid it.

Brett:

Okay. Yeah. I mean, that's great advice and I'm sure that's something that most people don't know. Again, this is such great education for people that just assume that they're gonna have their back and assume that they're looking out for them when in reality, that's not always the case. And again, like you had said, there's bad apples on both ends. But you know, it's just a good idea to be thorough when going through a process like this, when it is kind of, I mean, it always, it seems like it's always such a big deal one financially, but also if it's damaged to your home and in, in a case of hurricane Sandy or Katrina or Ida, it's like, that's your whole life.

Galen:

Exactly. It's your whole life.

Brett:

So, you know, the subject of the system being broken kind of, you know, seems to come back into the conversation. So from your perspective, how does that fix over time? Or, you know, what are some of the solutions to fixing that broken system?

Galen:

Oh man, you want the crazy answer or like the real answer? So, so, so the CRA and I'm not in any way, shape or form a socialist, but the crazy socialist answer, right. Is at some point you let the government kind of take over insurance and be the insurer for a little while. Okay. And it kind of forces a little more honesty in the process if you can take private business out of it. Sure. with that said, I'm obviously super free enterprise. Look at what I do for a living. I am a lawyer, right. And a private practice lawyer at that. So I'm not, I'm not saying I, I, I'm just saying sometimes it feels like the is so broken that you need to press a reset button. Right. But the best way to do it now, I think is more education letting people know what their rights are and stricter penalty statutes, either federally or state by state.

Galen:

There are a lot of states where insurance companies can basically do whatever they want because there's no real teeth on a private enforcement standpoint. And the insurance commissioner worked for an insurance company and doesn't really care, right? There's a lot of states where that exists. So one of the ways you counter that is either having a federal or have all 50 states past statutes that will make it so UN palatable for insurance companies to delay, deny, or defend meritorious claims that meritorious claims are getting paid and getting paid quickly. I understand there's gonna be a reasonable dispute, but you can get 90% of the dispute out of there. If you would just have a real disincentive for carriers. The problem is even the states that have really, really good disincentives. Now there's not enough education to let the people know about that. So it still doesn't have teeth. So it has to be a two-pronged approach. That's the rational, let's not burn the whole system down and start over approach. It's got to be education and it's got to be legislative.

Brett:

OK. OK. Yeah. And that, and that makes sense. You know, obviously tearing something down, just cause there's something wrong with it. Isn't always the right approach, but education always seems to be a good solution. And then on top of that, if there's a little more federal oversight or even just regulations that are passed down on that in, in turn also, you know, consequences for those actions obviously is a big part of it. Because like you had just said, if you're not, if it's just gonna be a slap on the hand, then why wouldn't, why wouldn't they do it?

Galen:

Yeah. Yeah. There's too much financial incentive to continue with business as usual, regardless of the current statutory framework. And that's really where the problem is, you know, private enforcement has proven to us over the decades, not just in insurance, but across a number of legal sub-disciplines I would say that when you allow for private enforcement, which is a person suing for something that was done to them versus waiting on the government or waiting on the EGS office or waiting on the police to step in, we find that it typically modifies behavior faster and cheaper to taxpayers. So private enforcement is really where it's at. And there are states that basically solely rely on the government to tell insurance companies, Hey, you need to behave. I just don't think that's efficient.

Brett:

Okay. Okay. So what would be an example of you know, private enforcement?

Galen:

Yeah. What we do.

Brett:

Gotcha. Okay.

Galen:

So, so we're in the business of private enforcement. When an insurance company behaves badly, the victim calls me and we Sue the insurance company. Right? But there are some states where that's not really done much because there's not much of an upside for the victim. Meaning attorneys are terrible and take too much money and charge a lot of money. And you know this because you see all the car accident things and you think, well, this isn't a car accident. This is my house. Like I understand that how much I get from my pain and suffering as a result of a hurt shoulder in my car is a flexible thing. And if the lawyer's gonna take 40% of it so I can get the 60, maybe it's worth it. But you're dealing with a hard number when you lose your home, I need a hundred thousand dollars to rebuild my home.

Galen:

That's not cute to me that that lawyer wants to take $40,000. I don't, I don't admire that. I don't appreciate that. And frankly, now I'm in between a rock and a hard place because the carrier won't give me the hundred and the lawyer wants to take 40. If he can get me the hundred. Right. Right. And the rational part of me says, well, you're still ahead, but you're still ahead. Doesn't build houses. You're still ahead if you feel better, I guess. So, you know, what, what we utilize in a, in these different states is the bad faith penalty statutes, where if the carrier behaved a certain way, they can be hit with private penalties and they can be hit with attorney fees, et cetera. And that can allow us to maybe leave you with your hundred in our hypothetical. Sure. So, but you have to have those in place and that's what allows private enforcement to really thrive.

Brett:

Okay. Okay. So this is one question that we ask every guest. But what is, you know, looking back at your career, what is one thing that you would go back and change and do differently and why?

Galen:

Yeah, I think I would have stayed candidly and this sounds really weird. I would've stayed in defense longer. Okay. I learned a lot. I learned a lot of good things. I obviously am happy with where I'm at and what I'm doing, but I now every once in a while, there's something that happens and I just can't figure out what's going on and I have to pay a lot of money and spend a lot of time finding people that know the answers to those things. Right? Yeah. I, I think the best thing you can ever do in your career as a lawyer or anything else is focus on who your natural adversary is. And it doesn't have to be that way. Right. Like if you were in, if you were in marketing and sales, your natural adversary is the consumer. Yeah. You know, figure out who that person is, study them as much as possible and figure out what makes them tick so you can succeed. It doesn't have to be this nasty thing. The other, and, and if I, one more thing is I think I spent too long when I first started running my first firm focused on the competition. I don't focus on the competition. I focus on being the now I don't, I focus on being the best I can be. And that widens the gap between me and the competition. I regret every minute I wasted thinking about what my competition was doing.

Brett:

Okay. That's kind of a, the, between those two answers, it seems like in maybe competition and adversary, isn't the same. And as far as that answer goes, but to me, that's what

Galen:

Sounded like. So, so that's why I made the point. Right. So if you're in marketing, you could say, my adversary is the other marketing company. That's not your adversary, that's your competition. Right? Your adversary is whoever you're trying to convince or change from a position. Okay. And in that case, it's probably a consumer, if you're doing B2C marketing. Right, right. You're trying to get that consumer who didn't want your product to suddenly decide they need your product. Right. So adversary, maybe people, I, I like saying that word because it upsets people, but, but you know, the reason we do that, the reason we say adversary is because that's who you want to change. Right. Right. Your competition. You're never gonna change. You're trying to out.

Brett:

Sure. Yeah. Okay. That makes, that makes total sense. Yeah. When I hear adversary, I think, you know, the natural enemy or your competition would have you. But I like that answer. That's great. So now that we're kind of, you know, ending getting to the end of the conversation, is there anywhere you would like our listeners to you know, go, to get more information, if they would like to get more information about insurance claims to HQ or, you know, even get in contact with you? Where would you point them?

Galen:

Yeah. So our website has a ton of content on it. You can also get our book from there and stuff like that. That's insurance claim, hq.com. Okay. And then we have all of the social medias, so you can find us on pretty much any platform and you can talk to us directly if you need anything.

Brett:

Awesome. Okay. Well, I'll make sure to link out to all of those when this page is published. And you know, thank you so much for taking the time to hop on the podcast. Again. I think that that was a lot of great information and overall it just seems like you have a very strong moral compass.

Galen:

Well, thank you so much. That was great to be here. Thanks.

Brett: That’s it for this episode, thanks for listening! If you enjoyed the podcast, you can subscribe to us and leave a review on your podcast player of choice. Shop Talk is a production of The CE Shop.