Did the contactor have a duty (as insurance repair industry professionals) to:

a) check with the adjuster first on coverage/valuation question?  No.

b) advise the insured that the cost to clean might exceed coverage?  No.

c) look at the clothes and consider the potential problem?  Yes.

DOES THE INSURED OWE THE COST OF DRY CLEANING EVEN IF IT EXCEEDS THE VALUE OF THE STUFF CONSIDERING THAT HE TRUSTED THE WORD OF SOMEONE MARKETING THEMSELVES AS EXPERTS IN INSURANCE WORK INCLUDING EXPERTISE IN WHAT INSURANCE WILL PAY?  Desk adjuster will negotiate settlement price with the contractor.

I will play around with scenario 2 later.

 

I think water suckers think we eat a large bowel of stupid for breakfast. , but they are all brothers of plumbers. I will pay some of this fraud if OUR agent sent them out. But if they chased the fire trucks, beware Blue & white, lime green or any other franchise.

Posted By Leland on 02 Mar 2010 11:26 AM

What do you fellow adjusters think about contractors that advertise that they specialize in insurance but don't seem to know the basics of how it works and do economic harm to the insureds?

My understanding of liability is that a professional has a "standard duty of care" so for example, a professional who's supposed to know something about the business he is in can't get away with saying "Not my fault, I didn't know any better" when things go wrong.

Two examples:

90 year old man has a fire. Emergency insurance remediation contractor tells him they will take care of everything, and the insurance will pay the bill. $8000 of drycleaning later, it is determined that the clothes are probably worth $2000 ACV. The initial remediation service should do nothing more than cleanup and/or setup any essential eqpt to reduce effects of the loss. THEY SHOULD PHOTO ANY DAMAGED ITEMS REMOVED AND DISPOSED OF PRIOR ADJUSTER INSPECTION, BUT REALLY SHOULD LEAVE ALL DEBRIS ON SITE FOR ADJUSTER TO DOCUMENT, TAKE SAMPLES FOR ITEL ETC. Any dry cleaning of contents, clothes whatever should be left for the Aduster to determine covg. on, and left be until said adjuster arrives.

Did the contactor have a duty (as insurance repair industry professionals) to:

a) check with the adjuster first on coverage/valuation question? No, leave contents be for the adjuster to document and determine covg.

b) advise the insured that the cost to clean might exceed coverage? No.

c) look at the clothes and consider the potential problem? No

DOES THE INSURED OWE THE COST OF DRY CLEANING EVEN IF IT EXCEEDS THE VALUE OF THE STUFF CONSIDERING THAT HE TRUSTED THE WORD OF SOMEONE MARKETING THEMSELVES AS EXPERTS IN INSURANCE WORK INCLUDING EXPERTISE IN WHAT INSURANCE WILL PAY? The insured and/or Contractor, should get approval from the adjuster on what can  and cannot be done prior to inspection by adjuster. The insured should check with the adjuster or examiner regarding policy limits. If the insured enters into agreement with the Contractor before hand, then yes, any price difference should be between the insured and contractor if the actual cost exceeds the amount the carrier will pay. However, all final payment decisons will be at the discretion of the carrier.

 

Scenario #2

 

Insured calls emergency insurance repair contractor. Emergency repair contractor tells the insured that do insurance work, they are experts, they tell the insured to make a claim, and then THE CONTRACTOR COMES TO THE HOME AND CLEANS ALL THE DAMAGE BEFORE THE ADJUSTER SHOWS UP THE NEXT DAY.  Bear in mind that this was not an emergency clean up. All the "damage" was repaired before the adjuster showed up. Now if the insurance company denies the claim, the contractor might sue the insured for not paying the bill. All damages should be documented prior to any repairs by the contractor and/or insured (proof of loss). It would be preferred for debris to be left onsite for the adjuster to observe, note quality if possible and collect samples for ITEL if needed. The desk adjuster or examiner should advise the insured what initially can or cannot be done, and provide a contact number asap for the adjuster. The adjuster should be contacted for any questions the insured has. If the insured blindly enters into an agreement with the contractor, well then any difference not paid by the carrier is between the two of them.

IS THE CONTRACTOR LIABLE FOR STEERING THE INSURED THE WRONG WAY ON SOMETHING THE CONTRACTOR SUPPOSEDLY IS AN

 "EXPERT" IN??? Probably not, it should be that the insured has enough sense to MAKE CERTAIN all of his/her damages or covered, and that the carrier will pay the amount the contractor is asking. If the insured signs a contract without making certain  then it would be a civil issue between him/her and contractor IMO.

 

My way of looking at it is like this: if you promote yourself in a certain line of business you better know what the heck you are doing in the line of work or accept the consequences. It's not right for the customers to suffer when the contractor doesn't follow basic principles of the industry he suppesedly specializes in. The BBB and State Contractor licensing authority where said contractor resides and/or works should be advised of contractors lack of knowledge of his proclaimed expertise.

 

What do my fellow adjusters think?

in both cases sole responsibility is on the insured, period. Don't be stupid is my motto.

Olergred is often wrong, but seldem in doubt. When an agent sends out a contractor to extract water it,s very hard to say when it turn bad that the insured selected the contractor. Many of the water suckers will tell the housewife the claim is now in thier hands. This means leave all  concerns to "us" we were sent by your insurance company and we are experts in water and smoke restoration.

I have seen this snake oil pitch for the last 40 years. The whole pitch is rush rush 24 hours if very critical to save the damaged floors, walls. Kinda like sewing a finger back on with microsurgery or putting a front tooth back in. I HAVE never seen ONE loss when this was a fact. I have seen probably a thousand losses were sums up into the thousands were spent to try, but never worked. I would like some one to post if  if the decision was not made on the spot the same day of the event the cost of the final loss was increased by thousands. It,s like a tree on the house claim.  I don,t think I have even seen one gather new energy and crush the house.

Posted By Ray Hall on 21 Mar 2010 04:21 PM

Olergred is often wrong, but seldem in doubt. When an agent sends out a contractor to extract water it,s very hard to say when it turn bad that the insured selected the contractor. Many of the water suckers will tell the housewife the claim is now in thier hands. This means leave all  concerns to "us" we were sent by your insurance company and we are experts in water and smoke restoration.

I have seen this snake oil pitch for the last 40 years. The whole pitch is rush rush 24 hours is very critical to save the damaged floors, walls. Kinda like sewing a finger back on with microsurgery. Thousands were spent to try, but never worked. I would like some one to post if  if the decision was not made on the spourgery or putting a front tooth back in. I HAVE never seen ONE loss when this was a fact. I have seen probably a thousand losses were st the same day of the event the cost of the final loss was increased by thousands. It,s like a tree on the house claim.  I don,t think I have even seen one gather new energy and crush the house.

Sending out a water sucker is causing real problems in this area of layoffs. I have had some 2% deductible losses when the water suckers ran carpet removel and dry out up the flag pole and it did not exceed the 2% but was real close and we had a house without any carpet and base and a male insured screaming "all they did was take out the carpet and leave 4 fans in the house overnight". Now work this little claim out. I have found people who have had their 2nd claim want to deal with the adjuster only.

Posted By Ray Hall on 21 Mar 2010 04:34 PM

Posted By Ray Hall on 21 Mar 2010 04:21 PM

Olergred is often wrong, but seldem in doubt. When an agent sends out a contractor to extract water it,s very hard to say when it turn bad that the insured selected the contractor. Many of the water suckers will tell the housewife the claim is now in their hands. This means leave all  concerns to "us" we were sent by your insurance company and we are experts in water and smoke restoration.

I have seen this snake oil pitch for the last 40 years. The whole pitch is rush rush 24 hours is very critical to save the damaged floors, walls. Kinda like sewing a finger back on with microsurgery. Thousands were spent to try, but never worked. I would like some one to post if  if the decision was not made on the spourgery or putting a front tooth back in. I HAVE never seen ONE loss when this was a fact. I have seen probably a thousand losses were st the same day of the event the cost of the final loss was increased by thousands. It,s like a tree on the house claim.  I don,t think I have even seen one gather new energy and crush the house.

Sending out a water sucker is causing real problems in this area of layoffs. I have had some 2% deductible losses when the water suckers ran carpet removel and dry out up the flag pole and it did not exceed the 2% but was real close and we had a house without any carpet and base and a male insured screaming "all they did was take out the carpet and leave 4 fans in the house overnight". Now work this little claim out. I have found people who have had their 2nd claim want to deal with the adjuster only.

 

Leland-

About the plumber / shower... regardless of the actual facts, I think many would have responded that the water damage had already caused the tile to separate from the durock, and there was no need to damage the drywall on the other side of the wall since the tile was already loose and bubbling, the wall already had to be replaced, etc. Point is most will say that what they did was required by x,y or z facts.

But assuming that the plumber did admit that he had not given this other approach much thought per your scenario, I think duty to pay is based on a question or standard of reasonableness. Most plumbers would know better than this plumber, and therefore the plumber in this case was negligent / less than professional in his services when compared to the actions of his peers. Therefore the property owner is the damaged party. and the plumber is responsible for curing the damages due to his neglect. This is probably a case for small claims court even if the plumber files a mechanic's lien. I'd guess the net damages would be based on the cost to cure the negligence less the cost of the basic service performed (as if fixing the shower through the drywall).

About adjusting the wrong structure... I'd like to hear how the carriers would view this. The interesting fact here is that the insureds fence encircles the neighbor's building, and that poses a question of adverse possession. Assuming the fence is a non-factor and that both the neighbor and insured agreed that the improvements are in fact owned by the neighbor, then a few questions are raised - why did the insured file a claim on a property he knowingly does not own. Next, assuming the carrier pays, then is the adjuster liable for the $50K? He/she certainly does not get to keep the $800 fee since the property adjusted was not on the dec sheet, but is he/she liable for the $50K? I would say the carrier would probably pursue the insured first for false reporting / insurance fraud, and the adjuster would get off w/ a slap on the wrist. But he could be liable for a shortfall since he/she did not verify the property address / legal description.   I'm curious to see how this would actually play out from a carrier's standpoint.   

And Olegred - you may want to watch for your ongoing use of absolutes.  When I hear the words "only", "any", "every", etc., I cringe because it unnecessarily opens up potential for conflict... maybe you want that, but I would shudder if I heard that on a regular basis, because some of us have sufficient life experience to know that rarely is anything 100% one thing or another, and tempering judgment and facts helps reduce potential conflict.  Anyway, that's my absolutely valuable $.02. 

I think the insurors have found over the years a recommended contractor for any repair on a auto or building by the carrier has more bad ponts than good. Just pay a fair amount and move to the next loss. The higher  deductible amounts have changed many Homeowners into doing more clean up task themselves.

If you look at the NFIP program you will see it,s designed for "do it yourselfers".T he exactimate  data base has enough cleaning codes for a person to take his family on vacation for a week on a good smoke claim.

Shoot, man, I came 7 years ago with 24 dollars in my pocket, no papers, no friends, no family... Had to survive for a couple of years, so I did what I could ... namely, putting roofs on, siding, drywall.... :)  Then, started estimating and selling for my own little company, then moved to hailstorms chasing, then to adjusting...  I was studying Linguistics, I can still go back to the field, maybe I will... but it's  much less money.... I'd rather be CAT for a while... then, I am working on my own little business to fall back on, if times are slow... and maybe will go back to get my PhD but really not as a job but rather as self development project  :)

Scope of work should be at issue since actual work completed should reflect reasonableness. If there is a weak scope, there is greater potential for contractor to abuse situation. A better scope limits the ability to abuse situation. For example, say contract is signed and the contractor is going to repair x and says after the fact that 10x normal hours were required to fix x. Contractor can say all he wants about the bill, but prudent insured should / will balk at paying due to excessiveness, especially if there is a tight scope. If not, this becomes a negotiation issue, a BBB issue and a litigation issue. Carrier is not going to pay for massive over billing, and insured should be somewhat educated going in at least by getting multiple bids, reviewing scope, etc.

I worked one claim in Florida after Wilma when a roofing contractor charged a homeowner $7,000 for a roof repair. When I went up to look at the damage, I found a can of the white elastomer paint still on the roof, and an area about 5x5 or so painted over concrete tiles with replacement of about 2 broken concrete tiles (which were still on the roof). That was it! I did an estimate for roof repair based on Xmate, showed the insured pictures of the "repair", and told them that they should contact the contractor now that they had seen photos of the small scope of the repairs for the first time. Without seeing the pictures, the insured really could not judge how bad she was taken advantage of. Invoice said "roof repair - $7,000". No prior contract, no scope, etc. Just a big fat bill, with the shortfall absorbed by Insured.

Yes - Carrier pays and could subrogate IMHO.

Many contractors work insurance losses. It is a niche biz, and twice as many contractors will not deal with insurance claims. Any time any person connected with the claim process makes a recomendation of how to repair a structure or or any object in the house the carrier has to live with good and bad results. Its always best to work with the contractor if the insured has one in mind. A lot of smoke and water remediation contractors giggle with gleewhen the adjusters "leave it to them".

Agree about the DP-1. The GC would be responsible for the subs since the GC engaged the subs. Stuff flows downhill. 

About the property adjuster working an auto claim... we all have a duty to disclose honestly in advance our level of skills, expertise and competencies to a client.  Having given a client a summary of limitations, and if the client still desires to retain us, then the burden / risk shifts to the client.

For example, if someone works in a distant city which has few adjusters, the client may take the position that the risk related to retaining a warm body with limited skills is better than potential dis-service to the Insured by taking forever to get an experienced adjuster in the loop. Client/carrier is then responsible for screw ups, but adjuster is responsible for increasing his/her ongoing education and experience in this sub-specialty so that he/she is increasingly competent.

Now where does a contractor purchase care custody and control insurance to cover property they are working on. I have read turn in to your carrier and have them pay then subrogate against the sub-contractor twice in this topic. The boadest liability policy excludes care, custody and control and "your work" as long as you are on this job. Please stick to roof claims and don,t give advise on tort or contract liability claoms. please help the new people, do not spread this Pelosi around.

Posted By Ray Hall on 28 Mar 2010 06:48 PM

Now where does a contractor purchase care custody and control insurance to cover property they are working on. I have read turn in to your carrier and have them pay them subrogate against the sub-contractor twice in this topic. The boadest liability policy excludes care, custody and control and "your work" as long as you are on this job. Please stick to roof claims and don,t give bad advise on tort or contract liability claims. please help the new people, do not spread this Pelosi around.

Just have a casualty underwriter give you a weeks course on CGL coverage, before you mention subrogation again.

Bad brakes = no coverage

Result of bad brakes accident = coverage

The garage liability policy is specific for auto repair shops and all the covered claims are completed operations or product liability. The contractors policy that is required is a Commercial General Liability policy that has the above 2 coverage's and possibly liquor liability along with premises and operations. Many of the claims fall under the operations of a contractor and are excluded by very specific language.... any thing in the possesion of a worker in excluded and only when the final work is completed does completed operations come into play.

Most of the bad things that happen while constrction is going on may be covered under an inland marine builders risk for first party and some 3rd party claims.

An insurance company has no right to subrogate unless the insured gives them the permission. The right to subrogate can be waived by the insured if its done in writing before the accident. If an insuror pays a loss that is not covered by its contract of insurance, its assigment of subrogation rights from the insured is worthless paper.

Most Oil & Gas operators purchase insurance on a well in the international market. It may cover all the cost to indemnify the operator for the $$ spent until the well is lost downhole from a blow out. Also the cost to contain and control the wild well. Also tthe redrill cost. The pollution. The tort liability.The burned up rig, platform etc. I had 4 years of world wide experience in this niche biz, because of my 10 years oil patch and 20 years of liability work.

Ray:

According to an insurance lawyer I spoke with recently about this issue, a wrap CGL policy has no "your work" exclusion. This type of policy reduces subrogation actions as it puts liability risk squarely in the lap of the carrier as opposed to between the GC and the subs.

Over the past 20 years, wraps have reportedly become the predominant method of liability insurance for construction projects. While they began as being more commercial in nature, they are now used for many smaller mixed use and residential projects. I have seen several large cases where project liability has been covered by the GC's carrier due to "his" and "his" sub's work. I'd appreciate any comments from the lawyers here to see if this information differs from others.

Please see below:

http://www.gglt.com/CM/Newsletters/...urance.pdf

http://www.claimsjournal.com/news/n...105162.htm

http://www.constructionweblinks.com.../wrap.html


 

I will have to check this out. If the coverage attorney is refering to on going normal mishaps during contruction passed on to the builders risk{wrap) I would agree. Liability coverage is for 3rd party claimants or liabilitys one of the parties contracted for. I will be back.... sometime in the future.

I carry GL when doing construction. If I was not working on the 2nd floor and the cabinet fell over, it was not in my care, custody, or control and should be covered by my ins.  However, if part of the job was to move it to another room to paint, and I dropped it, that would be questionable but probably covered because I was not working on the cabinet.  I have had only one occurrance of this.  I installed a new bathroom then my tile sub proceeded to tile around the shower walls without protecting the tub, walking on the broken tile.  I had to replace the tub.  I had installed it so it was in my care, custody and control.

There have been a few significant court decisions recently, covering the gc when the sub did damage and also when a defective construction claim is made against the gc for bad work done by a sub.  If the sub has insurance they will probably subrogate, but otherwise, the gc's carrier picks up the cost of the claim.  This may be the "wrap around" mentioned earlier, but did not quite follow what was said about it.

Please give me the language in your policy that gives you coverage on the cabinet on the 2nd floor that falls when you are downstairs working on another cabinet, as long as you are in this house working it does not sound like completed operations to me by your description, whose care, custody and control was the cabinet intrusted to. Also read the completed operation clause, you will learn something. Also get a good CPCU broker to explain the perils of contracting. Buy builders risk it covers some of the bad things that happen. Some.... not all. sorry Rick, I have to look out for the worms, sometime.

Ray, the bathtub scenerio I was referring to would not have been a completed operations claim if that is what you are referring to, so I am a little unclear on what you said.  In your example above, why did the owner file on their dwelling policy instead of filing a claim against the plumbers liability insurance?  Was he denying fault in the damage?

My liability for general contracting would cover me for accidental damage caused by me or my workers so long as the damaged item was not in my CC&C, although I have never investigated to the depth of determining if a roof was in my CC&C if I had a worker re-building a chimney and a load of bricks fell and slid down the roof, tearing up the shingles.  If they fell on the car below, I am certain my liability would cover it.  What is your opinion of coverage for the roof damage?

A house would not be in your care custody and control if your workers were not in the ccc of a project like a complete remodel. If the painter spills paint on the new floor the project is not complete etc.A two party builders risk is the only way to cover these "bad things that happens. If a contractor rents a cherry picker etc. he must have an equipment floater on his owned and leased equipt.

The CGL coverage is to pay damages to third party,s for negligence (torts) not first partys to a contract for  "bad thinks". The garage liability policy is much broader(and not in this discussion) A very trouble some claim is the roofer strips off the old roof and the inside is wetted down big time by a thunder shower. The HO carrier pays for damage to the structure,{ but not the contents} under the A peril "risk of loss" but turns down the C (upp) not a named peril. Then submits to AF (arbitrration forms). Af hears the case and rules for respondent as no coverage exit , absent specific insurance or contract.