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Last Post 01/30/2013 3:59 PM by  Jud G.
NFIP as the underlying
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HuskerCat
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01/09/2013 11:36 PM

    This question is for you that handle flood losses.  I'm now in the boat of handling a couple of "excess flood" coverage claims.  Having never handled an NFIP loss, I'm not 100% on what may or not be covered.  To explain further, this is a commercial loss.  I've been able to find the personal lines flood coverage form, but not the commercial. And, as an indy inside examiner, you come here or there for the expert answers (um, C Deaton, maybe? (see if he's still up, no it's not 430am...Roy hasn't fixed the time clock...must be Hawaii time zone)

    And so far, the underlying/primary carrier hasn't provided me with the coverage details.  All my policy tells me is... to paraphrase, "we pay up to the limits specified, after the primary flood carrier has exhausted their limit...but only for loss as covered by the primary".

    So, my query to the underlying/primary has been...what are your covered items & what are your non-covered items (whether these be Bldg or BPP)?; and are you writing your estimate to include everything?  Or, are you stopping when you hit your limit and leaving me in limbo as far as what are covered loss items according to your primary policy?

    It would be great if the primary field adjuster would respond to me; it would be greater if the primary carrier/broker would provide me with the underlying coverage form; and it would be even finer, if someone here on CADO might be able to chime in.  

    It's clear that "what it is, is going to be what it is". But, does the underlying carrier/adjuster have an obligation to go beyond their coverage limit and line-item each and every piece of damaged property as to whether it would or could be covered...despite the limits in place?

    If they got lazy, and stopped when they hit the limit...what would you suggest?  My field adjuster did an inspection, but of course a lot of things had taken place prior and evidence was only partial.  

    Helpful hints will be appreciated.  Even if it's only Chuck.  

     

     

     

     

    Jud G.
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    01/10/2013 9:08 AM
    Some of your excess policies will be written in the same vein as the NFIP policy; very restrictive and lacking in common sense with regard to what should reasonably be covered.

    Some excess flood policies will use the NFIP policy only as a deductible. Once the damages exceed the base limit ($500K for example), then you have the doors opened to a whole new arena of coverage possibilities with regard to damages that can be considered for payment.

    The tricky part for some of these excess or DIC forms is to determine in the case where you have $300K in damages written by the NFIP adjuster. What happens if you could write up $600K in damages by the increased provisions of the excess policy even though the flood policy limits were not exceeded? Some forms may be very explicit in this regard.  Obviously, this is not known until you get the form(s).


    Based on what is usually at stake in regard to coverage interpretation, you need to push for a copy of the forms for your policy. I would suggest very loose concerns (possible coverage issues) in your report as you do so.

    Once you receive the policy, place your thoughts regarding the policy's application and suggest expert coverage counsel. You will be surprised and may discover that the form will even include wind coverage along with flood.

    I know you won't get a specific answer from me, but at least you will know what general issues you need to address. Good luck!
    ChuckDeaton
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    01/11/2013 10:57 PM
    I make a living handling large excess claims and sharing my knowledge, stock in trade, in a public forum, ain't likely.

    Should you be interested in hiring a competent national general adjuster I am available.

    "Prattling on and on about being an ass with experience doesn't make someone experienced. It just makes you an ass." Rod Buvens, Pilot grunt
    HuskerCat
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    01/12/2013 1:26 AM
    Posted By ChuckDeaton on 11 Jan 2013 10:57 PM
    I make a living handling large excess claims and sharing my knowledge, stock in trade, in a public forum, ain't likely.

    Should you be interested in hiring a competent national general adjuster I am available.

     

    OK, Chuck... I don't think I was asking anybody to re-adjust the loss; just a little advice or info on the commercial flood coverage form language.  You've never had a problem "sharing your knowledge in a public forum" before, so I thought I'd I reach out...particularly to you; and as a favor to me and all your fans.  I guess that didn't work out for you.

     

    But in the meantime, I have been reached back to by the party I needed the information from.  So, all is good.  And, I do thank Jud for his remarks.  At least that was a positive. This thread can be put to bed.  



    HuskerCat
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    01/12/2013 1:30 AM
    I must be not be paying enough at my hotel...sometimes, everything I type in on the wireless comes out very "stylish" once it posts, particularly when it's a "reply".  Maybe it's operator error, or still living in the dark ages like OKC Larry with the bag phone.
    Medulus
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    01/12/2013 7:41 AM
    From your original post, Huskerguy, I can't tell what type of policy you are dealing with. But, like Jud, I am assuming that an excess flood policy is written as a DIC policy. These are actually inland marine forms, and quite a different animal. I've spent the last five years working with DIC policies, and even had a hand in contributing (in some small way) to writing DIC earthquake and flood policies. But until you get a copy of the policy you cannot begin to know the terms of the policy. If it is a DIC form, I can give you a pointer or two before you start wading through the umpteen types of excluded property followed by the umpteen excluded causes of loss. So, I guess the question is: Is this a DIC policy with which you are dealing?
    Steve Ebner CPCU AIC AMIM

    "With great power comes great responsibility." (Stanley Martin Lieber, Amazing Fantasy # 15 August 1962)
    ChuckDeaton
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    01/12/2013 5:54 PM
    Just from reading the posts, my guess is that both Medulus and Jud G. are short on Excess Flood experience.

    The commercial flood policy is available on the NFIP website. Be sure you read and understand before making reccomendations.
    "Prattling on and on about being an ass with experience doesn't make someone experienced. It just makes you an ass." Rod Buvens, Pilot grunt
    Leland
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    01/12/2013 10:32 PM
    Chuck is so crabby but he is right about 81% of the time. I got so pissed at him the other day I didn't ask him any questions for about 5 days. He has a point that DIC and excess are two different things.

    Anyway, just forget about Chuck. Detachment is an important emotional trait for the successful CAT adjuster. Just put Chuck out of your mind and be glad he is not your file examiner.

    Here is a video of Mr. John Lee Hooker of Mississippi explaining what flood is really about:

    http://www.youtube.com/watch?v=77pm...C50552790A
    ChuckDeaton
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    01/13/2013 10:05 AM
    Thanks for the vote of confidence, Leland, I think that was a vote or maybe 81% of a vote.

    It would be best to remember that this is the real world and while we are friends I ain't yo momma.

    My considered opinion is that discussing the ins and outs of handling large excess claims on a public forum is, well, ill advised.

    As you well know, Leland, I have a telephone and I answer my calls.

    "Keep on truckin' mama, truckin' my blues away"

    As it is a rainy, dreary Sunday morning may I suggest some Mississippi John Hurt...............................
    "Prattling on and on about being an ass with experience doesn't make someone experienced. It just makes you an ass." Rod Buvens, Pilot grunt
    Leland
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    01/13/2013 12:04 PM
    Dear Mr. Deaton

    As you are aware I am the adjuster handling your complaint. We have reviewed the additional evidence you provided on an internet chat forum as well as considered your comments in a telephone call of January 1, 2012. After careful consideration of all the evidence we have determined that a grade of 91% is reasonable, reflecting only a 9% discount for errors.

    Based on our conversation it is our understanding that you are in agreement with this revised grade. If our understanding is in any way incorrect, please advise the undersigned immediately.

    In regards to your comments regarding the propriety of discussing the intricacies of flood claims handling on a public forum we draw your attention to the fact that we never advocated for such a discussion nor actually participated in it in any substantive way. We were merely attempting to lighten the mood in what appeared to be a mutual firing squad of well meaning but potentially disastrous advice. We can assure you that we will never again attempt such reckless humor without carefully weighing the possible consequences.

    We value our relationship and look forward to its continuation.

    Sincerely,

    Leland
    pondman
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    01/13/2013 2:01 PM
    Now that's DAMN funny.

    Signed

    Muddy Waters
    Give them what they want, when they want it, and how they want it !
    pondman
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    01/13/2013 6:57 PM
    Now THAT'S what I call a Professional DENIAL letter........

    But I will have to say one thing....If we are talking about flood and NFIP...then I must go with the one and only Blues artist.....

    Muddy Waters !!

    http://www.youtube.com/watch?v=XIbFJETrScI
    Give them what they want, when they want it, and how they want it !
    Jud G.
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    01/14/2013 1:16 PM
    Wow, I did not know that an adjuster who has experience in both authoring DIC forms and adjusting their losses is short on experience. On that note, I don't see much need to justify my earlier post or ability for that matter. That form of criticism doesn't make you a better adjuster, it just exposes insecurity.

    Granted, while NFIP forms are public information, excess forms are not. In light of the diverse array of language and interpretation from form to form (excess/DIC), it is indeed capricious to assume that the NFIP will dictate what excess forms will pay for. I have not yet seen this, but I would surmise that it is possible for excess forms to acknowledge strict adaptation of the NFIP's provisions and limiting clauses. So far, any of my time spent reviewing information beyond confirming the limits of the NFIP policy has been a complete waste.

    I'm not about to declare myself an expert in these forms. Yet, with my current experience and the handful of large exposures I currently have open, I'm happy to provide a few generic pointers with loose comments. I always suggest expert coverage counsel when coverage becomes questionable.

    Good day.
    HuskerCat
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    01/14/2013 9:10 PM

    I didn't realize that such a simple question would evoke all of entertaining responses!  Then, again looking back...maybe so.

     

    I tried to end this conversation (ie. "put this thread to bed"").  Must go back to the old sayings of "input = output", or "what comes in one ear or the eyeballs & gets all scrambled up in between before it exits the mouth or keyboard prior to leaving".

     

    The references to recognizing and appreciating a little bit of humor, I guess....sometimes get lost among a certain percentage of  some.

    ChuckDeaton
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    01/15/2013 2:45 AM
    I will freely admit not having access to the excess flood forms that govern the claims handled by Mr. HuskerCat, however I handle and am handling excess flood claims occasioned by Super Storm Sandy and have decades of experience both in commercial flood and in handling multi million dollar excess claims, commercial, residential and RCBAP.

    A piece of advice, it's not a pursuit for the faint hearted or the inexperienced.

    DIC? No, No, NO!

    "Prattling on and on about being an ass with experience doesn't make someone experienced. It just makes you an ass." Rod Buvens, Pilot grunt
    Jud G.
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    01/15/2013 2:43 PM
    Posted By ChuckDeaton on 15 Jan 2013 02:45 AM

    DIC? No, No, NO!

    Chuck, what do you mean by the question and subsequent exclamation?


    Leland
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    01/15/2013 4:50 PM
    definitions from insurance company point of view:

    DIC- we cover things the the other guys don't cover

    Excess - we cover the same things the other guys cover. Call us when you go over policy limits.
    Jud G.
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    01/16/2013 11:37 AM

    Correct Leland. Additionally, DIC can also double as excess by using the limits of the underlying NFIP policy as the deductible, 'whether the insured has a policy or not'.


    This last paraphrase basically infers that the Difference in Conditions policy provisions are indifferent with regard to the underlying NFIP policy.

    ChuckDeaton
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    01/17/2013 6:54 AM
    My suggestion would be that any adjuster, before handing an Excess Flood claim, especially on London paper, go through the process, get properly NFIP licensed to handle large commercial flood then actually handle flood claims, with large commercial as part of the claims mix, this process will take several years, then sort out the E&O issue, Once this steps are complete the adjuster could be qualified to throw his/her hat into the ring.

    I would suggest an expense budget along with an escrow account for the E & O deductible amount. My E & O deductible is $10,000.00 and the policy has requirements.

    "Prattling on and on about being an ass with experience doesn't make someone experienced. It just makes you an ass." Rod Buvens, Pilot grunt
    HuskerCat
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    01/17/2013 11:00 PM
    Posted By ChuckDeaton on 17 Jan 2013 06:54 AM
    My suggestion would be that any adjuster, before handing an Excess Flood claim, especially on London paper, go through the process, get properly NFIP licensed to handle large commercial flood then actually handle flood claims, with large commercial as part of the claims mix, this process will take several years, then sort out the E&O issue, Once this steps are complete the adjuster could be qualified to throw his/her hat into the ring.

    I would suggest an expense budget along with an escrow account for the E & O deductible amount. My E & O deductible is $10,000.00 and the policy has requirements.

     

    Could this be the second coming of Trader? C.D. has deviated off into the world of E&O, and one wonders why.  I've seen some of your files, and I might see more...you just don't know it.  I have great respect for your knowledge and input, so forgive me for poking a finger at you now and then.

    This wasn't a complicated question...and I don't need to be flood certified.  I have handled, am handling, large commercial losses. I'm just not flood certified by NFIP.  This is not an NFIP policy.

    The excess form is simply worded.  It covers, limit-wise, what the primary does not cover up to the next limit, but only above their limit to what our limit is.  But, it will not cover what the primary does not cover (for instance non-covered property or ACV only).

    So, that was my original question.  And while, yes...there is a commercial NFIP coverage form on the website; I could not be certain of what my primary coverage was (the standard form, or something else?).  The crux of my question was....is the primary adjuster obligated to write up "the whole deal" whether covered or not, in order for the excess policy (me) to determine the amount owed.  

    As afore posted, the primary carrier (not the individual adjuster, mind you) verbally assured me that the rule is to write up the entire loss item-by-item whether covered or not, and to what degree (RC or ACV, or a combination thereof), regardless of whether they reach their limit. I'm crossing my fingers, for the benefit of our insured.




    Leland
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    01/18/2013 2:37 AM
    If you are the adjuster with an excess claim should you:

    1) accept the adjustment of the primary claim as being accurate, since it was paid by the carrier already?

    or

    2) carefully review the adjustment of the primary claim, verifying its accuracy, using your NFIP "specialized knowledge".

    or

    3) adjust the primary claim all over again, writing your own estimate from scratch

    pondman
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    01/18/2013 9:10 AM
    WOW !!!!

    Reading this thread sure will make the Newbies eyes get REAL WIDE OPEN. I'm gonna put this thread away and bring it back in October to show on the big screen with "Halloween" and "The Shining" .

    That triple treat should scare the He11 outta them !
    Give them what they want, when they want it, and how they want it !
    ChuckDeaton
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    01/18/2013 10:28 PM
    Mr. HuskerCat you and I travel in different circles and without going into detail it is virtually impossible for anyone to have seen one of my "files". So I am calling BS on that last statement.
    "Prattling on and on about being an ass with experience doesn't make someone experienced. It just makes you an ass." Rod Buvens, Pilot grunt
    HuskerCat
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    01/18/2013 11:54 PM
    Posted By Pondman on 18 Jan 2013 09:10 AM
    WOW !!!!

    Reading this thread sure will make the Newbies eyes get REAL WIDE OPEN. I'm gonna put this thread away and bring it back in October to show on the big screen with "Halloween" and "The Shining" .

    That triple treat should scare the He11 outta them !

     

    Pondman...this has just been tame exchanges amongst long-time posters (some of them a bit crabby).  If you really want to entertain or scare the jeegeebies (is there really a way to spell that word...might have to check with Larry in OKC) out of newbies, then you need to go back to the archived forums of '04-'06.  There's some dandies out there & it was non-stop.  Just ask our current moderator, Medulus.  REDRUM REDRUM



    HuskerCat
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    01/19/2013 12:06 AM
    Posted By Leland on 18 Jan 2013 02:37 AM
    If you are the adjuster with an excess claim should you:

    1) accept the adjustment of the primary claim as being accurate, since it was paid by the carrier already?

    or

    2) carefully review the adjustment of the primary claim, verifying its accuracy, using your NFIP "specialized knowledge".

    or

    3) adjust the primary claim all over again, writing your own estimate from scratch

     

    OK, you pose very good questions...and, I think they were questions.. there wasn't a "?" mark after each; so...

    There are other facts of the loss that I have not disclosed, such as a separate independent inspection of the loss.  So, yes...the scope is known.  It was the specific underlying coverage that was at question.  

    No longer an issue...and there's no crying allowed on this subject any longer.  But, whiners please feel free.  Let's see who's first.

     




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