A year ago to this day, a tree fell on my house. It also smashed up my life pretty thoroughly, too. The developer to the north cut its north-facing “anchor” roots. Trees grow southwardly. Lots of rain softens the soil. Lots of wind loosens the roots. It almost fell directly on me and some arborists as we were assessing how best to remove it before it fell.
What constitutes a “large claim” for you probably differs from me. Insurance companies handle multi-million dollar claims. Mine came in well-under half-a-grand. It was still the largest single lump sum or concentrated stream of money I’ve ever handled in my life. I’ve never written checks that big before, whereas I know that others (the 1%) deal with similarly-sized sums on a daily basis, like it’s candy. Although this experience focuses on house insurance, many (if not all) the lessons probably apply in some form to other (e.g., car, health, etc) insurance.
I’m actually still in the middle of my claim. I am naively posting this advice now in hopes that by doing so it will confirm that don’t have any more mistakes to make or lessons to learn. Sadly, that’s probably not true.
Here is what I learned from the insurance part of the experience, consisting of mistakes I made as well as things I actually maybe did right (you guess which is which):
1. Don’t go with a low bid. That doesn’t mean “don’t go with a low bidder” — go with whomever appears most appropriate for your situation. But bump the bid up to somewhere near the highest bidder. Expect and budget for contingencies and extra expenses that occur or get discovered along the way. This will drastically reduce the number and severity of fights in request for additional money you will need to make. Insurance companies use two metrics: first is an absolute maximum reasonable figure, and then an “estimate creep” percentage. They then use the adjuster and line-item assessments to determine whether to hand out more money. They always try to hand out less money, whenever possible. So by submitting a low estimate, you are setting yourself up for a fight later when you inevitably need more money. Get at least three estimates, and then bump the estimate of whomever you go with up to something close to the highest estimate.
2. Figure out your priorities. Do you want the place “back to normal” ASAP? Or do you want a bit more involvement and control over a more personal and slower process? This will determine whether to go with the big insurance-based contractors or a smaller (e.g., one or two person) remodeling outfit. The big “ambulance chaser” contractors primarily only do insurance work. They fly in, get the job done, and fly out. It’s a short, intensive, well-coordinated process. Insurance companies can’t legally admit it, but they prefer such companies, because these companies pamper them, and do their work for them and show them everything they want to see and nothing more (even to the point of using the same software), drastically allowing them to cut their own labor expenses for each claim. They are often much higher in their estimates. Expect to do more work to coordinate between insurance and a smaller contractor for the benefit of more control over the project. You can cut down on that work drastically by asking the contractor to make their initial estimate more in line with a higher estimate.
3. More transparency is not always better. Insurance companies operate heavy caseloads. Keep communications simple, to four items: how much we think it will cost, how much it actually cost, new expenses encountered, and a new total summary estimate. Document everything on your end, but don’t show them any additional paperwork unless the situation requires it, because your claim rep is already handling a few dozen other cases and is buried in paperwork. Show them what they want to see: figures matching up. They get suspicious when things turn out “too high” (why wasn’t the money we gave you sufficient?) or “too low” (what did you do with that extra money we gave you?). The Big Contractor software does this automatically. You and a small contractor will have to do this sort of thing by hand. If you are doing extra non-insurance work or repairs at the same time, there’s no need to send that documentation to insurance. That might just confuse them and raise questions that no one really wants to ask in the first place.
4. Adjusters have a lot of discretionary power. The claim reps in the office do not. The adjuster is the “eyes and ears” verifying that you are being honest and that the money you need for repairs really is reasonable and appropriate to the situation. The people in the office have to use simple formulas and can only approve small adjustments. Be nice to everyone. They all play important roles in getting you money to get your life back in order. Being mean or taking frustrations on on them will only hurt that process. Regardless, if your claim, for whatever reasons, falls outside their internal calculations, rules and discretionary power, you might have to lawyer up to get it resolved. Just like the “insurance chasing” contractors, there’s an entire industry of “insurance chasing lawyers” who do that sort of work, because it’s such an unfortunately-common need.
5. Get the house stabilized, then decompress and take your time before jumping into the repair process. It might sound wrong to let the momentum subside. It might make sense to “do it all in one fell swoop.” By rushing, you risk picking a bad contractor, or a good contractor who’s not a good fit for you or the project. Assess their honesty. A mistake in choosing a contractor will set you up for a lot more hurt down the road. Get estimates from only well-established, highly-recommended contractors. If anything “feels off,” then trust your feeling and keep looking. Choose between three solid options (ideally, a high, low and mid). Decompressing also gives you time to do a thorough job discovering and thus ensuring that all the damage gets repaired. Yes, technically, you can open reopen a claim within two years for additional discoveries, but it’s a lot easier for them and you if you can cover everything in a single process.
6. Ask the insurance rep or adjuster to keep emergency funds separate from the repair estimate. Otherwise the insurance company will fold them into the estimate, effectively eating into the startup money that your contractor actually gets, unless your contractor also factors them in. Likewise, emergency funds can go to you directly, and don’t need to be co-signed by your mortgage company, making it easier to get the repairs done and paid off so you can focus on the bigger project with a calm, clear mind. Less work for everyone.
7. Work out cash flow expectations with your contractor on the front end. It can take several months for the next insurance check to arrive. Several weeks to process it, then send it out to you, then you have to send it to your mortgage company for endorsement, then you have to get it back, deposit it, and wait for the hold on funds to release. An initial high estimate gives you some additional leeway, but make sure your contractor is prepared to stretch initial funds or work on a delayed payment. The worst case scenario involves your contractor needing funds to continue work, whereas the insurance company needs work to complete before they hand out more money! It’s like insurance gridlock. Break down the project into phases. You should have enough startup money for the first two or three phases, and should update the insurance company on actual and additional expenses before your startup money runs out, so you can get the next check before the last bunch ran out. The higher your initial estimate, the fewer times you will need to go through this process.
8. Be proactive. Keep your own records in order. Insurance companies design their record keeping to err on the conservative side. If you don’t keep your own records in order, you might be leaving money on the table and paying much more out of pocket for repairs. Track emergency funds separately from repair funds. Tally all money coming in and going out. Your contractor should account for all money spent. Claim early, claim often. This doesn’t mean submit multiple reports per claim event (e.g., windstorm or falling tree). Instead, take your time and submit everything all at once per event. Open the claim and document the damage fairly quickly. You need to keep proof. Then submit an addendum after a thorough search for other damage. Maybe the fence mortally wounded a sapling you planted. Expect at least two addendums to the initial claim. Don’t wait for an incident to happen if you can prevent or mitigate it. $4,000 might sound like a lot to take down a tree that’s leaning, but it’s nothing compared to the emotional and logistical (and often financial) disruption of the tree falling on your house. Alas, in spite of our most proactive efforts, trees still fall on houses. That, ostensibly, is why we have insurance.
Lastly, since I’m a tree-huggin’ earth muffin, proactivity means also leaving things on good terms. I feel thankful that I had a chance to say goodbye to the tree the moment I noticed it leaning.
Why the Salem Food Co-op failedFebruary 24, 2017
Ten Lessons from a founding member (steering committee and founding board member 2010 – 2014)
This piece results from reflection on several factors that ultimately contributed to the demise of the Salem Food Co-op (SFC) project. I wrote it first and foremost for myself, to help articulate and clarify my pathway forward. I share it in hopes that it will help others in their community development work, by aiding in the identification and avoidance of red flags to fight self-sabotaging project failure and individuals’ unwitting participation in such self-sabotaging processes, ultimately to better respect and render effective time and energy spent toward building a better community.
10 RED FLAGS
1) First, the food co-op started with limited outreach to white godless middle class liberals. Note that I don’t use the phrase “white godless middle class liberals” as a pejorative. Rather, it is only a very limited demographic group (one that includes me). We might more accurately substitute “secular” for “godless,” as, the initial outreach did not include churches, nor did it include minority or marginalized populations and related local organizations (SKCE, NAACP, SLF, etc).
Such a narrow initial frame for the project compounded later problems. Project leaders assumed that whoever showed up as a result was “the community” and thus (yet again) erased people of color, ESL speakers, and others from the possibility of engagement and participation unless it was completely on the terms of the narrow white, middle class godless liberal frame. I fit that same narrow demographic group (which is probably why I became a founding member), and even I found the space to be unnecessarily conservative and restrictive — to the point of being claustrophobic, with constant subtle and passive-aggressive social norming to separate outliers from the “in-group.”
See Julie Guthman’s “Unbearable Whiteness of the Alternative Food Movement” for more on this topic. De facto discrimination and segregation can look more like passivity than active prejudice. For example, by putting all outreach materials in English only, by reaching out to primarily-white institutions and groups, this projects a coded message to community members who don’t fit that demographic that, “this is another white people project.” It also projects a coded message to white supremacist community members and institutions that the status quo supports their prejudice, which intensifies racism, etc in the community as a result.
2) Second, the core founding group (which later became part of the steering committee and the founding board) started and stuck with a very narrow, naive and inflexible idea of what a food co-op was. They were stuck in the romanticization of the food cooperative movement of the 70s, and wanted to transplant that through time and space into the contemporary Salem economy. They did not do research into the full breadth of cooperative possibilities, and thus could not imagine — let alone communicate — anything beyond, “I want a member-owned version of LifeSource” [the local privately-owned friendly, well-staffed and well-managed “natural foods” store] to the community, which sounded redundant to most folks. LifeSource already effectively fills that economic niche, and does a solid job at it.
In contrast, the founding group did not care to learn what other problems, needs and thus opportunities existed in the community around food issues. They did group work to move the project forward, but their participation in part served to retain control of this narrow vision and prevent broadening of possibilities. Some even said they would leave if the group even considered other possibilities than what they wanted (a brick and mortar granola store). The presence of such manipulative and threatening behavior in the early group formation itself is a huge red flag that I ignored — especially because many of these people stayed on-board!
3) Third, the board did not listen to or follow the advice of experts — such as the Food Cooperative Development Initiative and the NW Cooperative Development Center and local seasoned business owners and the local SBDC. The few cooperative projects that withstand the test of time treat the strategic planning, research and outreach process seriously, whereas key members of the SFC board just dismissed the process as redundant or even threatening to their vision. They payed lip-service to these fantastic (and freely-available) expert resources, but did not actually want to follow through with the planning process, for example, treating the business planning process as a mere “formality.” As a steering committee and board, we did not take the time to understand what the actual community (and all its participants) really wanted or needed, and where, when and how a co-op project might meet those needs, let alone whether it could at all. Other participants did not seem able to see through their narrow blinders in interpreting the information offered (so everything became about building a “brick and mortar” store).
Starting a co-op is a lot like building an intentional community, and it takes a lot of time and energy building and solidifying the (often-invisible) foundations for success. Most successful co-ops (and intentional communities) don’t start operations until several (often 5-7) years of intensive development and planning work, which includes lots of research and evolution and even complete reboots and changes in direction.
4) Fourth, we prematurely started and expanded operations (vs intensive planning and development, which the above factors short-circuited). Unwilling to give the development process the time, energy and respect it deserved, the founding members jumped at the opportunity to just “start doing it,” nevermind that we did not yet have a clear vision of what “it” meant, and that most of Salem did not share the specific implementation of the larger vision that certain members of the board insisted on. This lead to SFC naively taking over a private bulk food buying club (a very different operation than — albeit potentially part of — a cooperative effort), whose founding leaders wanted to step back. Seeing this only as an opportunity (rather than a more complex situation that included significant threats to the project), we just “started doing it” without having a clear understanding of what it is we were doing, or how we were doing it, or what the risks were. The project soon found itself in a vicious operational cycle of paying off its increasing liabilities via operations that reaffirmed the existence of those liabilities. Planning and development work all but stalled.
5) Fifth, we imposed ourselves on the community. Unwilling and unable to research and understand the full scope and potential of this project, we tried to shoehorn a narrow and exclusive vision into the Salem economy, ignoring available economic niches while trying to establish ourselves in highly competitive, well-developed ones. When we took over the buying club, we destroyed it. The buying club emerged to fill a need. Rather than letting it continue or fade on its own terms, we tried to co-opt its membership for our purposes. The SFC board forced the change from a buying club to a co-op, raised the prices, made the process more complicated, and then said it was all “for the best” without even first developing a relationship with the club’s members. It resembled a hostile takeover. Lo and behold, member participation dropped off sharply in a few buying cycles, leaving SFC with a bad public reputation (from people who might otherwise have been our core supporters and membership, no less!) and an operational burden. Such tactics only work with virtual monopolies — and besides, is that really what SFC was going for?
6) Sixth, we exploited participants. By prematurely jumping into operations, we struggled to perform even basic operational tasks. Management each order cycle was a frantic, stressful mess. There weren’t enough volunteers to help, in part because of an over-reliance on volunteers. Board members vetoed any serious consideration of hiring paid staff (at any level), even when we finally had the budget for it. Similarly, board members mired in endless operational obligations every order cycle began questioning the motives and commitment of the few board members trying to stay focused on overall project management, planning, research and development in order to pressure them to “help out more,” as if the development even of operational policies and procedures and critical path planning wasn’t “helping out.” This created more internal board tension. We misused the resources available to us, then ironically wondered why we didn’t have “enough.” The project started to become a black hole for time and energy. Overwhelmed board members began co-opting the time of friends and family. Cue the burnout!
7) Seventh, we got sucked into pettiness. Rather than fostering partnerships and mutual development with other local and artisan food projects, we saw other local markets and producers as competitors for the same small demographic group of people who buy their food from local producers and markets (or even a small subsection of that demographic group). The local and artisan food movements compete mostly against the industrial food system. Through our passive contribution to and participation in petty infighting instead of active leadership, we undermined our ability to compete and intensified the competition over a small sliver of the overall potential market. This is another reason why SFC struggled financially, and the stress and desperation of the volunteers began to show. In the end, the food co-op even placed blame on the community with a backhanded comment about them not “embracing this opportunity.”
8) Eighth, the board participated in chauvinistic magical thinking. We believed for the most part that if we just started offering a few local products from local farmers and mostly bulk options (creating a market penetration redundant to LifeSource and existing farmer’s markets) that people would just “flock” to the co-op and ask to become members. We thought that the co-op would boom without years of careful planning and outreach and niche research and strategy. Without a carefully-crafted vision that was well-communicated to — let alone shared by — the community. We just assumed that the vision was shared, the need for it “obvious,” and ultimately that the community wanted or needed whatever SFC felt they wanted or needed. We did not even listen to ourselves when “the brick and mortar board members” said they really just wanted “a community space” — something very different than a food co-op (although some overlap can exist). We had no concern for developing management and operating policies and practices and procedures, expecting those to “just arise” out of the process. We also thought that a new software system or website would solve many of these problems and more.
9) Ninth, the project evolved from being passively classist and racist into being actively-discriminatory. Several people who became central founding members of the board even openly expressed insecure animosity toward religion and churches at board meetings, as if open animosity toward and exclusion of religious participation was necessary to maintain the co-op project as a secular space. They even did this when new potential board members showed up, as if to “vet” such potential members. The fundamental fear and insecurity behind such practices also led toward a patronizing and negative attitude toward the Salem community they ostensibly sought to serve. I believe that much of this happened because those of us who disagreed nonetheless chose to remain silent while others publicly spouted strong negative opinions.
10) Tenth, we did not accept accountability or feedback. We failed to recognize all the myriad red flags and question whether we were doing anything wrong, or whether we had gotten our priorities mixed up. Desperate and disorganized operational concerns for current order cycles pervaded and co-opted board planning and retreat spaces, increasing internal tension. When the project inevitably shattered and broke, the remaining members were so burnt out that we could not even consider a reboot or a change in strategy or direction. We lacked flexibility and adaptability in pursing the vision and mission we claimed to represent. Whatever we did was “right” and “correct” and if it didn’t work, then it wasn’t because we did things wrong or poorly, but because “Salem didn’t step up to this opportunity.” We blamed others for our mistakes — even, ironically, the very people we claimed to be “serving,” e.g., for not “buying enough.”
This isn’t to say that the board did everything wrong, or that there weren’t other external mitigating factors. There were. But those factors always exist — the difference between success and failure falls with whether and how people acknowledge and address those factors, or whether they ignore or dismiss them. Although we can never guarantee success, we can guarantee failure by sabotaging ourselves (regardless of the reason or motives for doing so). While the above list is not exhaustive, it does unfortunately comprise a solid recipe for failure.
I had a lot of hope for this project, which is why I began participation early in the steering committee and became a founding board member. Participation in this project ultimate became very stressful and time consuming, which I shrugged off as an inherent aspect of project work. But I refused to ignore many red flags, perhaps due to the sunk cost fallacy (I’ve already committed countless hours, I can’t back out now!). The other red flags I only addressed as isolated issues rather than seeing them as part of a larger pattern of attitudes and behaviors sabotaging the integrity of the project. It’s always difficult to evaluate such circumstances when you are immersed in them, especially when you really want things to go well and you’ve already invested hundreds and hundreds of hours.
Ultimately, I learned a lot from my participation. In addition to the lessons above, I conducted a lot of research, and developed considerable expertise on cooperative structures (even compiling a resource used by NWCDC). Still, I wish I had the clarity of mind to step back earlier than I did. My sin was not in failing to see red flags, but failing to connect them together. My own wishful thinking kept me captive to the belief that I could make a difference if I just tried harder, put in a few more hours, etc. Instead, my continued participation only further enabled the pathological process and delayed the inevitable demise of the project.
Cooperatives are interesting structures. They aim for the best, but can ironically bring out the worst. I still believe they have a lot of potential for community building and economic empowerment, but only in recognizing and addressing two large challenges of our society:
If the participants can’t acknowledge and deal with that baggage, then it sabotages the project, which can even provide a platform for and amplify the impact of pathological process and behavior. This baggage looks like both structural and internalized oppression: classism, racism, sexism, dogma (including secular dogma!), etc. In the very least, such baggage, left unaddressed, impedes our ability to overcome or navigate the first challenge (lack of support from a hostile establishment). If this becomes people’s experience with cooperatives, then they might actually start seeing cooperatives as a “bad thing,” which is unfair both to the cooperative movement and to them inasmuch as cooperatives, when well-executed, can be fantastic forces of community building and economic empowerment.
I’m not the only one soured on cooperatives. Austrian agroforestry expert Sepp Holzer wonders out loud of farmers emprisoned in cooperative contracts that hold the market hostage, force financial losses, and prevent both farm and market innovation and evolution in his book, Sepp Holzer’s Permaculture:
Cooperatives are not inherently good or revolutionary, but are socioeconomic tools. Like any tool they can be used to exploit others. Or, ideally, we can use them to create the beautiful human economy of the sort that luminaries such as EF Schumacher envisioned.
I still think there’s room (even need and demand) for an entire network of cooperatives in the Salem economy that truly help people meet currently-unmet or poorly-met needs: childcare, urban food production, affordable housing, food distribution (esp. to food deserts), time banking. But such projects need to start with a fundamentally-different ethic than the status quo: open-minded, inclusive, exploratory, responsive, accountable. Until then I have promised myself the integrity to abstain from participation in projects that exhibit any (especially several) of the above red flags, because doing so ultimately wastes time and energy, enables more oppressive pathology, and harms the participants and the larger community.
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