The Independent Insurance Claim Adjuster Resource

Hey all you independent adjusters, claim reps, public adjusters and insurance attorneys!  Here’s a serious situation for you to ponder and comment on.  We would be delighted to receive your input on this situation:

A mess of tree limbs located within the lines of an insured-rental property falls and lands almost exclusively onto a parked vehicle in the public right of way.  The roof of the vehicle has been crushed in and the windows are broken with damages estimated at $13,000, therefore the vehicle is non-operable.  You are assigned the claim and learn the following:

The property is one of many rental units owned by an insured with a large policy covering several million dollars worth of property in the city.  It is a residence that was converted into two units and the tree which caused the damages is the only tree on the property.  It’s also the only tree that could have caused the damages.

The weather report indicates an average 25 mph wind with 35 mph gusts around the time of the incident, but this is not an adverse weather condition for the area.  The weather pattern, when compared throughout years is common and happens several dozen times per year.  Also, there is no damage in other areas throughout the neighborhood.

The local forester reveals there were no other reported incidents in the days following this one, and that they also forced removal of the tree immediately upon notice of the incident.  The tree type is common throughout the region for poor sustainability.

You briefly interview the property owner and he claims to know nothing of the tree’s poor condition.  He states that since he did not know the condition of the tree before it happened and was given no notice, he is not negligent and therefore not responsible.  There are some green leaves toward the bottom of the tree but the top is obviously dead or deteriorating and it’s evident that if anyone had looked up, the condition would have been obvious.  Your field surveyor decided to photograph only the green leaf portion of the tree.

The vehicle owner is livid and feels that the property owner knew about the condition of the tree prior to the incident.  A lawsuit is imminent if the claim is not resolved.  So far, the vehicle owner just wants his vehicle replaced, not repaired.  The odds are good that if you offer him diminshed value plus repairs, he would consider accepting the offer.

The vehicle owner then provides you with two affidavits.  The first affidavit is from the neighbor directly across the street and in plain view of the tree.  This neighbor is a property owner and his affidavit clearly states the tree was in poor condition prior to the incident.  The other affidavit states that there is a black plastic liner beneath mulch surrounding the entire postage stamp sized front yard, and the liner is preventing the tree from receiving proper moisture.  You learn that your insured isn’t too fond of mowing grass or maintaining any other landscaping on the property and that he most likely put the liner there to prevent any grass from growing.

The vehicle owner has no insurance and therefore he makes his only claim against your insured.  You learn that his business is suffering from the loss of use on his vehicle and that he likely has no money to repair the vehicle.

Do you pay the claim?  Do you deny it?  If so, why or why not?  We would love to hear your comments on this!

December 28th, 2010

It was widely report that a Maine ski lift failed causing injury to three or more riders this morning, at the SugerLoaf Mountain resort near Carrabassett Valley, Maine.  According to eye witness reports, the chairs were approximately 20 to 40 feet above the ground.  The extent of injuries is not known at this time but is suspected broken bones are involved.  Over 80 other riders were stranded on the lift awaiting rescue.  Rumors have circulated the that only method for rescuing the stranded riders is to provide a rope for them to escape with.  It is highly unlikely that any type of ladder equipped vehicle would be able to navigate the steep snowy mountain side.

SugarLoaf Ski Lift Incident

From an insurance claim perspective there is little doubt that the resort will be able to object to Read more…

Monday, December 27th, 2010

There aren’t too many other things that go hand in hand so well as blizzards and insurance claims, except for maybe holiday food and weight gain. Today marked the pinnacle for one of the worst winter storms in the Eastern United States.  The storm has left tens of thousands stranded in vehicles and subways alike from the Carolinas up to Maine, causing the bulk of problems in New York City where there isn’t much of a place to put the 16 some odd inches of heavy white frozen precipitation.  It was recently reported that the Big Apple’s 5 boroughs are entrenched in a backlog of over 1,200 emergency calls caused by the immobility of police, fire and emergency worker personnel.  We could ramble on for pages about the length of the storm and the problems it has caused, but we’re here to ramble about insurance claims related to these storms.

A quick listen and look at the NYC police and fire radio frequency scanners hosted by the great folks at Radio Reference, will find that NYC fire and police are undoubtedly a busy group – of course, we had a feeling that was already the case.  The radio transmissions haven’t slowed down for weather.

When people think about blizzards it should be no surprise the most common type of insurance claim is automobile related.  Taking a moment to realize the extended depths of personal injuries and civil liability though brings us to produce this list of common insurance claims related to blizzards:

• Delay & Canceled Travel Insurance Claims – caused by canceled flights due to weather
• Vehicle Immobility (Towing) Insurance Claims – caused by vehicles stuck in roadside snow drifts and slick areas
• Health Insurance Claims – related to persons injured by their own fault
• Premises Liability Claims – although they aren’t too common Read more…

The appraisal clause is designed to be a simple and low cost form of mediation in the event of a disagreement on the value of damages; generally limited to property claims.  Much like mediation, there are few written rules governing the appraisal clause.  In the appraisal process each individual party (the insurer and the insured) select a competent appraiser and then the appraisers come together and select and umpire who, in the event the appraisers cannot reach an agreement, hears each appraiser’s findings and then makes a ruling on the matter.  When the appraisers cannot decide on an umpire they can petition a local court or judge to assign one at random

In most states an appraiser can be anyone including an engineer, an independent adjuster, a public adjuster, an attorney, or your best friend.  The appraiser should be independent and impartial from the claim process that preceded invocation of the appraisal clause.   It’s important that the appraiser understands the rules and processes through which Appraisal is completed, and have some background on how insurance polices work.  If an appraiser doesn’t properly understand the boundaries of appraisal Read more…

If you have worked with more than ten claims resulting from any kind of hail storm you’ve probably been exposed to what is commonly known as “neighboritis”.  Neighboritis is practically like a bad case of the flu; it spreads easily. The only logical cure is awareness of this costly and time consuming problem.

Neighboritis is a serious condition that needs to be addressed because it is damaging to independent adjusting companies and independent adjusters. The effects of neighboritis in relation to independent adjusting companies are discussed in this separate post.

Neighboritis happens in following stages:

1. A roofing sales person claims to be a hail expert and finds a neighborhood that was never really exposed to hail damage, or was exposed to hail that did not caused damages.  The sales person knocks on a door and claims to be a roofing expert, explaining to the homeowner / insured that they were exposed to hail and that they have damages on their roof.  The roofing sales person then offers the homeowner a new roof at NO COST, but only if he can inspect their roof right away and usually before the insurer is even notified of any potential claim.
2. The roofing sales person then works to smooth out any skepticism the property owner has by explaining the various values of a new roof in relation to property value.  Homeowners catch on to the concept that they could end up with a new roof at no cost and it takes little convincing that hail may have fallen and damaged their roof when they weren’t aware.
3. The salesman convinces the homeowner that they need to conduct a brief roof inspection to see the hail damages.
4. The salesman pushes the homeowner to sign a “contingency agreement”, although usually unenforceable by law.
5. The roofing sales person gives the property owner incentives to “spread the word” (neighboritis) by offering $500.00, $1,000.00 and larger referrals if neighbors sign on for their roof at no cost.
6. In the worst case scenario, the roofing salesman tells a story of his or her working with neighbor John Doe on his roof for hail related damages; all of which are a result of only having a contingency agreement.
7. One or two inexperienced property insurers pay for roof replacement when it was completely not necessary or by having mistaken mechanical damages for those caused by hail, thereby initiating one roofing salesman to claim that other roofs were replaced because of hail damage.  In extreme circumstances, a roofing company may have been hired outside of an insurance settlement to replace an aged roof and the same company comes back several months later, after hail occurred in a remote area, advertising that a nearby neighbor had their roof replaced (not indicating why) and thereby starting a frenzy in the area.

As you can imagine, the question has and continues to remain about what happens when said roofing salesperson is up on the that roof with no supervision? What is the viewpoint of a profitable insurance adjusting company on neighboritis?

Eight years ago I was on a roof with a roofing salesman named Mike who would bend down towards the shingles every time I turned around to take a photo or put my eye up to the viewfinder.  I couldn’t help but notice the little yellow lighter Mike was clutching from the corner of my eye.  Just as I suspected he was making his own damages hoping I would mistake them as those caused by hail.  Mike wasn’t the first nor the last but these salesman have wised up to creating false damages in front on insurance claim professionals.  Since then I’ve personally witnessed and documents familiar conditions on 8 other occasions; most of which occurred prior to the times we were expected to meet for a survey.

So, to answer the question of what could happen when a roofing sales person is on a roof with no supervision or oversight – let’s just say the potential for mechanical damages not caused by hail exists.  Neighboritis is a deceiving tactic used by roofing sales persons and companies to extract money for claims that do not legitimately exist.

Neighboritis can be prevented with awareness.  One way to help prevent this condition is for insurers to notify their clients in high-hail areas that roofing salesmen are out and to be aware of their sales-roof inspection tactics.  The general population in hail and storm chasing contractor areas can get used to the idea of joint roofing surveys prior to allowing a financially motivated roofing salesman on a roof.

What do you think about changing the ways that insurers and property owners work with roofing companies?  We’d love to hear your input – leave a comment!