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ckleisch
USA
46 Posts |
 Posted - 02/10/2003 : 01:33:50
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Thought I would throw this one into the mix and see what reaction I get from it. You are handling a Homeowners fire, wind or say a Flood claim. Building damages are severe. Mortgage company has sent letter to insurance company of their desire for payment under the policy contract. Your investigation and scope indicates fraud, partial fraud, or claim inhancement. Would you continue to handle the claim or recommend that Company adjuster have company attorney open a file so you can report to him as Attorney work product? Would you consider or have you ever used a ProTanto Assignment on the Deed to conclude the mortgagee companies claim while denying the insured's.
I have done both just curious to see who else has used the procedures |
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JimF
USA
1014 Posts |
Posted - 02/10/2003 : 08:30:43
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William, a thread on how to handle the suspicious or fraudulent claim is timely and of educational benefit to adjusters everywhere.
Having said that, I think your post instantly moved from not building a foundation of knowledge with a fraud-suspicious claims course such as 'Suspicious Claims 101' over to a graduate level course with your two questions.
I am unclear as to whether that was your intent, or whether you were trying to determine the skill level here relating to handling such claims.
I am curious as to how you, as the adjuster, would use a Pro Tanto assignment in handling a fraud or suspicious claim? Most especially I do not understand using a Pro Tanto while the claim is still under investigation. Perhaps a discussion of when and how to use a Non Waiver Agreement and/or Reservation of Rights Letter should precede moving into what is obviously more of a carrier's legal solution than an adjuster's claims solution.
Please explain your role in using the Pro Tanto Assignment, and under what authority of the carrier you were operating. Was defense counsel involved in this decision? How much time had elapsed since the Date of Loss? Were you reporting to and receiving your directions from the carrier defense counsel or carrier claims department?
As far as your second question, I would not (generally) be involved in making the decision as to when to bring in defense counsel. Until such time as the carrier decided to engage counsel, I would continue to report only to the carrier claims department, and would continue to do so, until such time as the carrier or their defense counsel advised me otherwise.
Plaintiff's access to the adjuster's work product through discovery is generally protected material, but could be handled differently in different states based on case law in those states. Where state laws might not be as protective, it would be incumbent on the carrier to protect the adjuster's work product as well as their own (the adjuster's) work product by early notice.
I rather suspect that as a local independent, you encounter claims which many cat adjusters rarely see, and as you have long term relationships with your carriers, you may also have lines of authority and control which again, cat adjusters would rarely possess.
Perhaps it would be of greater value for you to educate us on how you have used the two techniques which you have mentioned, and define the circumstances wherein you used them.
I am curious as to one thing you said though: How can any party other than the insured legally assign the deed, pro tanto or otherwise?
Thanks for sharing so others may learn. |
Edited by - JimF on 02/10/2003 08:38:18 |
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CCarr
Canada
1200 Posts |
Posted - 02/10/2003 : 09:02:06
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Bill, your questions are dependent on a lot of "IF's". I am a bit confused by your two questions, but I think I understand what you are trying to ask. However, I have to breakdown your scenario information and questions, into pieces and parts; to be able to chew on them better.
The 1st question has a number of parts;
(1a) would you continue to handle the claim
(1b) or, recommend that a company adjuster
(1c) have, company attorney open a file
(1d) so you, can report to him as attorney work product
The above is considered at the following 'stage' of the claim (the information scenario);
(i) apparent covered peril
(ii) building damages are severe
(iii) mortgage company has given notice or demand to carrier
(iv) "investigation" indicates, fraud, partial fraud, or claim enhancement
(v) and, "Scope" indicates fraud, partial fraud, or claim enhancement
The 'stage' of the claim, will determine your options.
From a carrier perspective, the mortgage company notice or demand, is of little consequence. When the policy was issued, they received a certified copy for their file. They, plus the carrier, plus you as the handling IA - at this 'stage' - are all aware of the "Loss Settlement" provisions, particularly the following that are relevant to this issue;
"Loss Payment" - 'we will adjust all losses with you (the insured)'.
"Mortgage Clause" - '.... if a mortgagee is named .... any loss payable .... will be paid to the mortgagee and you, AIA .... if we deny your claim (the insured), that denial will not apply to a valid claim of the mortgagee ....'.
Plus, the interesting situation, '.... if we pay the mortgagee for any loss and deny payment to you ....'.
So, the carrier will have no problem telling the mortgage company to 'back off', nor can the carrier pay the mortgage company until they have denied the claim to the insured.
The 2nd piece of the 'stage' of the claim, that must be considered, before the questions raised can be tackled; is what 'literally' you meant when you said that "both", ' .... investigation and scope indicates fraud ....'? From a 'literal' sense, I can not envision how a 'scope' can indicate fraud, let alone claim enhancement - it is the insured who perpetrates fraud or enhancement; based on the presumption that the 'scope' is your exercise alone to set out the 'extent of damages' and no quantum is associated with that 'scope'.
I'll proceed with my thoughts based on, your 'investigation' has revealed fraud, plus you have done a 'scope' of damage. Presumably, you obtained, or caused to be issued - at the relevant point - a Non Waiver or ROR, prior to the 'scope' work; plus provided the insured with a blank Proof of Loss.
Therefore, when your investigation revealed 'red flags' that indicated or suggested or gave concern that fraud may be a component of this claim (and there is a useful chapter in another thread on 'red flags' - see "Fire Scene Investigations - Tips & Techniques" thread), and you got your NW or ROR and reported to the carrier; that is when (at the latest) the issue of the future reporting format should be determined.
The issue of 'privilege', and its current 'judicial strength' in the courts of the State involved, will likely be the basic determining factor, regarding future reporting to the carrier defense counsel. Here, when this issue is relevant, reporting is split cleanly and totally into two distinct formats. First, an 'investigation report' (that contains absolutely zero entries related to quantum), and a 'quantum report' (that contains absolutely zero entries related to investigation).
So, dependent on the issue of 'privilege' in the State where the claim is, I would certainly try and reap the benefits (that seem fewer each year) of 'privileged reporting' to defense counsel with the 'investigation report', while continuing any necessary or when necessary 'quantum report' to the carrier. I caution, that specific procedures in this regard may differ in your jurisdiction; but the intent is likely similar.
Your last question, concerning assignment on the deed and concluding the mortgagee claim, can only be done after a denial to the insured. I have never seen or heard of this being done until two things were in place after that denial to the insured. First, the insured has properly complied with the Loss Settlement clause - "Suit Against Us", by which point the carrier and their defense counsel are 'satisfied' this is a claim to defend. Second, the mortgage company has done everything required regarding their requirements in the Mortgage Clause.
However, based on that, yes, I have been involved and gone through a few of those quite interesting scenarios, but again; it is more of a result or consequence, than it is a direction taken.
I hope Bill, that I have inderstood your scenario well enough, that my approach to your questions is relevant. |
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ckleisch
USA
46 Posts |
Posted - 02/10/2003 : 09:32:30
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Noted, your thoughts and i was just trying to iniate thoughtful conversation and it worked. Besides among the posting partys i have noted that everyone seems to be expert at their craft. The ones that dont post read and learn and are hesitant to wade in for whatever reason. As to your question loss took place in Harrisburg, NC. Carrier from Massachusetts. Fire involved with multiple points of origin. Obvious case of arson and insured had no alibi and did have motive as he was late making house payments. Reporting to VP of claims on this one.Within, 30 days a blank proof of loss was sent to insured through mail with request for completion and return. Bank eager to receive restitution on its loan sent letter requesting payment.company setup file through in house council and we reported to it as Attorney work product. Company decided to pay Mortgagee and take ProTanto assignment of the deed. Soon after a letter was received from the local fire department addressing issue of fire safety for remaining portions of building. Company hired demolition company to clear off lot and clean same. We contacted state and local municipalities and discovered outstanding taxes owed on property. These were payed with result structural limit was exhausted. Further, investigation while all this was going on determined that insured had bought gas and a can shortly before the fire and was seen wondering around house shortly before the fire. Insured was arrested found guilty in cabarrus county and i beleive he is still at Mecklenburg correctional center. Claim on contents ALE denied. No challenge presented.
That brings up an important point on large property losses check Municipal records to see if there are outstanding taxes owed. In some states the tax official has a specified number of days in which to notify the insurer that there are outstanding taxes due on the property.If there are, the tax claim and lein have priority over all other claims and leins except that of a mortgagee of record named in the policy. If no word received from Tax officer in the specified number of days the company may proceed with payment and is relieved of any responsability to pay loan.
Regarding the last question the insurer became the deed holder and mortgagee and still hold the deed unsigned by the insured. Property remains vacant to this date and wht plans company has for it I dont know. i did the estimation, record search and grunt work on the ground and simply followed clients instructions.
As to Attorney for company. the Attorney took claim file and made it his file and gave specific directions for on ground investigation we reported to him direct. Hence, we were the Attorneys investigators and all work was Attorney privelige at least in North Carolina.
As to my own thoughts i felt the company skillfully used smoke and mirrors to avoid paying insured while trying to have him arrested for mail fraud and arson |
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CCarr
Canada
1200 Posts |
Posted - 02/10/2003 : 09:40:13
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Bill, with considerable frustration, I must ask you why you didn't present more 'known data' when you posed your two open questions?
It is hard enough to try and give a relevant opinion or thought when little data is known. But in this case, you could have either given more data and asked your questions. Or, given the whole complete scenario, as a 'how it was done' situation, for review and reflection. |
Edited by - CCarr on 02/10/2003 09:41:18 |
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JimF
USA
1014 Posts |
Posted - 02/10/2003 : 09:45:45
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Ok, I'll bite. I'll be the dumb one here.
Under your scenario, what interest in the property does your carrier have 'now'?
How can or could the bank assign anything other than their mortgagee's interest to the carrier?
Why did the bank not first go through a foreclosure proceeding to clear title, and then deed to the carrier with clear title, in exchange for pay-off of the mortgage interest?
It seems to me, that short of the insured deeding his interest voluntarily to the lender or carrier, your carrier now 'owns' 'some interest' in a property without clear title?
Was the insured married, and what happened to the spousal interest in the risk?
I am sure others must have some of the same questions. |
Edited by - JimF on 02/10/2003 09:46:43 |
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ckleisch
USA
46 Posts |
Posted - 02/10/2003 : 10:14:54
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I apologize for not giving more information at outset as im new to this posting procedure i was trying to get a handle on level of expertise and experiance for those in the forum. As previously stated it appears the experts do the posting and everyone else reads and learns with occasional comment. Give me time ill do better.
1.) Carrier takes position that they are now possesor of a piece of land they cant sell unless deed signed by insured. Quasi Mortgagee themselves. I havent been involved in this portion of the case.
2.) Mortgagees interest was paid. We picked up the paperwork from the bank and forwarded same to the carrier. right or wrong it was done.
3.) As to foreclosure it was decision at bank to proceed in manner they deemed best to collect their funds
4.) no spouse involved
CCarr your response hit it right on the head. In future I will be more detailed in presenting questions or a scenario and i apologize again.
Basically, I was just trying to find out if anyone else had used the tool of a ProTanto assignment or having an Attorneys file created at first sign of a fraudalent issue.
On subject of inhancements to claim I have another case where the insured built a kitchen with fireplace brick chimney. No wiring in walls or liners in chimney then burned house and made. He claimed that wiring and liners plus other items were there but they were not. This one serving twenty. |
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CCarr
Canada
1200 Posts |
Posted - 02/10/2003 : 10:30:16
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| That's okay Bill, no big deal, continue with your enthusiasm to post. However, I caution you on one thing. As I am a frequent poster to the forums, I suggest you may have created an incorrect inference to me regarding your 'expert' comment; if it was directed in that manner. While I have been quite fortunate to have acquired a lot of experience in claims, I am by no means an 'expert'; I'm just an enthusiastic 'student' of insurance and claims. |
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JimF
USA
1014 Posts |
Posted - 02/10/2003 : 11:32:17
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Ok. I still think there is a major question here, so let me ask the unanswered question another way:
Bill, please define what YOU mean by the term "Pro Tanto deed assignment"?
And secondly, "what" is being "assigned"?
Thanks.
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Edited by - JimF on 02/10/2003 11:34:58 |
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ckleisch
USA
46 Posts |
Posted - 02/10/2003 : 12:20:08
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| In this instance an agreement was made between insurer and mortgagee that the mortgagees interest would be satisfied with a partial payment upon the claim without prejudice of the insurers right to accept or refute the insured's claim. insured's claim to be decided at later date. In exchange all of the deed/mortgagee papers were marked as lein satisfied and turned over to the insurance company |
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CCarr
Canada
1200 Posts |
Posted - 02/10/2003 : 12:34:56
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Wow, somewhat unorthodox, very risky; and seems to have been a 'procedure' taken by the carrier that falls outside policy conditions.
Truly amazing, sometimes you think you've 'heard it all', but this just proves, there is always another chapter to be written.
Fascinating. |
Edited by - CCarr on 02/10/2003 12:39:30 |
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Dadx9
USA
143 Posts |
Posted - 02/10/2003 : 13:11:37
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While a staff adjuster at Encompass, I had a suspicous fire.
Insured risk, had fire ($100,00 structure). The policy was set to lapse in four hours after Insured received non-renewel for previous $50,000 fire. I immediately turned over to SIU. I put Insured and family in corporate housing and a $2,500 advance. (All necessary to continue 'good faith'. After seven months, the claim was denied and the mortagagee was paid their $45,000.
No proof of arson was made, but Insured is in Federal Pen. for 'other' crimes.
Oh yeah, I requested a local 'preferred' vendor "board up" the property. They went ahead with repairs and said I gave approval (they lied). They didn't get their money either. Be careful and document, document, document. |
Don
"To be held in the heart of a friend is to be a king."
Bruce Cockburn |
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What do you do in the event of a suspicious claim?
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