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Author: Mark Ainely | Partner GC Realty & Development & Co-Host Straight Up Chicago Investor Podcast
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Navigating a major insurance claim after a disaster can be one of the most stressful situations a housing provider will ever face. Whether it’s a fire, flood, or even a small leak gone wrong, the gap between what you’re entitled to and what you actually receive can be staggering. On this episode of the Straight Up Chicago Investor Podcast, Mitch Schoeneman of Schoeneman & Co. joins Mark Ainley and Tom Shallcross to deliver a masterclass in public adjusting, insurance claim strategies, and some shocking stories that every property manager and investor in Chicago needs to hear.
Why Every Chicago Property Manager Needs a Public Adjuster in Their Corner
When disaster strikes, the natural response is to call your insurance company immediately. But according to Mitch, that could be a costly mistake if you're not strategic. Insurance companies aim to settle claims for as little as possible. Their goal is not aligned with yours.
"You use a lawyer to buy a building, you use a public adjuster when you have an insurance claim."
That one-liner from Mitch says it all. His team regularly takes offers from insurers that start at $50,000 and negotiates them up to $400,000 or more. The difference? Knowing how to investigate, document, and legally pressure for the rightful claim amount.
Mitch's Top Strategies for Maximizing Your Claim
Get a Cause and Origin Report Immediately
This is critical, especially if there’s potential for subrogation. If a manufacturer is responsible for faulty equipment, your insurance provider might recover from them – and be more likely to pay you faster.Ask for an Advance
Most people don’t know you can ask for an advance on your claim. If you’re dealing with a $600K fire loss, you can request $100K upfront to get repairs started. But if you don’t ask, you won’t get it.Don't Let the City Demo Your Building (If You Can Help It)
If the city tears down your building after a disaster, those demo costs come out of your policy. Work to delay or do your own demo to preserve more of your payout.Understand Replacement Cost vs. ACV
If your policy is based on Actual Cash Value (ACV), you could receive half or less of what you actually need to rebuild. Mitch urges everyone to opt for Replacement Cost policies, especially in Chicago where rebuild costs can far exceed market value.Watch Out for Co-Insurance Clauses
If you’re underinsured by the insurer’s valuation, you may get penalized even in a small loss. Know your rebuilding cost and coverage limits to avoid major reductions.
Real Claims, Real Outcomes
Pipe Burst in Royal Melbourne: Initial offer $60K, settled for mid $400Ks
Condensation Leak: Offer $10K, settled for $90K+
Manufacturing Facility Fire: Offer $800K, settled for $4M
These numbers are not typos. They’re the difference between letting your insurer call the shots and hiring a professional public adjuster.
Q&A: Common Property Management Insurance Questions
Q: What should a landlord do immediately after a fire or major loss?
A: After calling emergency services, your next step should be contacting a public adjuster – not your insurer. This ensures you don’t say something that can hurt your claim later. The adjuster can also start the documentation process correctly.
Q: What’s the average timeline for getting an insurance claim settled?
A: A typical multifamily fire claim in Chicago takes 4–6 months from start to full settlement. But you can request an advance while the process is ongoing.
Q: Can landlords ask for advance money from their claim?
A: Yes, and they should. If your claim is projected at $500K, you can often get $50K–$100K early. Most landlords never ask – and that’s a costly oversight.
Q: What are co-insurance penalties and why do they matter?
A: If your policy has an 80% co-insurance clause and your rebuild value is $2M, but you’re only insured for $1M, you may only receive 50% of your claim. These penalties hit hardest when you least expect them.
Q: Should I file under Replacement Cost or Actual Cash Value (ACV)?
A: Always aim for Replacement Cost. ACV pays out the depreciated value of your building, which can be far less than what you need to rebuild, especially in Chicago’s older housing stock.
Q: What changes if someone dies during the event?
A: Liability becomes a massive issue. While the property claim continues as normal, a fatality requires ironclad cause and origin documentation to avoid lawsuits or further financial loss.
Q: What if the City of Chicago demolishes my building after a fire?
A: That cost comes out of your insurance limit. Avoid this if possible. Work with building court to do the demo yourself, preserve your claim value, and avoid extra penalties.
Q: Do you have to pay a public adjuster even if they don’t increase your payout?
A: Most work on contingency. If they don’t add value, they often waive fees. Schoeneman & Co. in particular prides itself on parting ways as friends if no value is delivered.
Q: Can property managers be proactive about coverage before disaster hits?
A: Yes. Review your policy annually with someone who understands building costs and insurance language. Avoid ACV, beware of co-insurance, and don’t blindly trust that your broker covered all your bases.
Q: How do poor insurance decisions affect Section 8 housing or subsidized rentals?
A: If your building goes down and your claim is denied or reduced, your ability to house vulnerable tenants disappears. Strong coverage protects long-term housing goals.
Show Notes & Timestamps
00:00 - Intro and background on Mitch Schoeneman
02:00 - What is a public adjuster and how are they paid?
07:45 - Real case study: from $60K to $400K on a pipe burst
12:00 - The problem with Actual Cash Value policies
15:30 - City demolition risks and policy limits
20:00 - How subrogation works and why cause/origin matters
25:00 - Asking for an advance on a claim
30:00 - Co-insurance penalties explained
35:00 - Deep fryers, lover spats, and other crazy insurance claims
40:00 - Final takeaways: coverage tips and avoiding major loss
Takeaways for Chicago Property Managers & Landlords
Always review insurance policies for ACV vs. Replacement Cost
Avoid co-insurance clauses or under-insuring buildings
Partner with a public adjuster before disaster strikes
Don’t let your insurance company dictate the claim
A small mistake or oversight can cost six figures or more
Guest Name: Sebastian Mitch Levitz
Guest Company Website: aschoeneman.com
Email: mitchell@aschoeneman.com
Because finding good tenants and property management shouldn’t feel like online dating.
Dear Investor,
If you are an investor in either the city or suburbs of Chicago, I would love to speak with you about how we can help you on your real estate journey. At GC Realty & Development LLC, we help hundreds of Chicagoland real estate owners and brokers each year manage their assets with both full service property management and tenant placement services.
We understand that every investor’s goals are unique, and we love learning about each client’s individual needs. If there is an opportunity to help you buy back your time by managing your rental property or finding quality tenants, please check us out.
Best Investing,
Founder, Partner, Podcast Co-Host, and Investor
