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Cheryl Joyce
USA
45 Posts |
 Posted - 02/15/2003 : 12:28:11
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This is something I thought I would see what your thoughts and opinions regarding coverage issues would be relating to the multiple sonic booms which were created by the space shuttle explosion. This is legitimate concern for very near claims handling.
When the space shuttle exploded a couple of weeks ago, there were multiple sonic booms which shook the earth violently and made walls of buildings shake, windows rattle and other similar vibrating motions to occur. It is described that the entry of the shuttle and pieces of the aircraft entering displaced the air in the same manner of an atomic bomb pattern in a "wave like manner". Is this explosion damage?
This pattern of disturbance was like the force of an explosion displacing structures and items.
I think of this because I have worked only a couple of explosion claims from an ordinance bunker exploding causing severe damage and not so severe, but yet damage to buildings as far away as one and one quarter mile away, caused by the air displacement. Another case comes to mind of a tanker trailer which exploded causing instant disenagration of a human body and the air displacement also causing property damage to crop fields, buildings, silos and other structures over an area within reasonable distance (until the pattern displacement dissipated to nothing).
There is documented property damage from this event. There will be future claims resulting from interior damages, slab movement or vibration resulting damages, a great deal of damage will be seen from this but it will not always be related back to this "proximate cause" or event. Claim expense should expect to increase and a lot more attorneys and engineers will be getting involved.
The average type of policy for insurance policies in the states where most of the sonic boom occurred will vary from HO-B, HOA, TDP3, HO3, CP10.
So now what about your opinion of coverage in the general area of cause of loss especially for a broad written policy.
It is my prediction that this is your next roller coaster of claims. So you better suit up and do your homework.
I have not done all my homework yet, just want to see the variety of response. |
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CCarr
Canada
1200 Posts |
Posted - 02/15/2003 : 14:16:50
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Cheryl, this is an interesting situation you have brought on board. 'Sonic booms' are not an uncommon event, but the few times a year I have heard or read of them happening, I have never heard or read of many claims associated with it.
However, I'll look at it from my trusty old HO3 (0491) wording. The event is an 'occurrence' that could cause 'property damage', as per the definitions.
Under Section I - Perils Insured Against, Coverage A & B, I can see it being a 'direct loss', and I see no excluded losses that would be relevant. For Coverage C, I would want to review a broader defintion of 'explosion' than is found in Rupp's Insurance Glossary, which states "a violent bursting .... with a great disruptive force". Maybe that is enough of a definition, or maybe the NFPA 921 would be more worthy of a definitive view (I don't have one handy). However, the 'direct physical loss' is not the "Aircraft / Spacecraft" peril.
Considering Section I - Exclusions, I note 'explosion' brings back coverage into the "Earth Movement" exclusion only, but the preamble to the exclusions attempts to clearly disassociate the noted exclusions, ".... such loss is excluded regardless of any other cause ....".
So, a quick review of the HO3, suggests to me that there would be coverage under Coverage A & B, and that coverage for Coverage C would depend on the scope of the defintion of 'explosion'.
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Newt
USA
657 Posts |
Posted - 02/15/2003 : 16:42:40
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I looked in the ISO HO 3 03 10 00 and didn't find any thing I thought would exclude coverage.
Propane explosions create violent wind storms. The "Dazy Cutters" are an example.The wind will flatten a palm tree a mile from the initial blast site. They resemble an atomic blast from the air.
I wonder how may claims will come in for falling objects, there seemed to be a lot of debris spread over several states when the shuttle broke up. I think it was a miracle no one on the ground were injured. |
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Newt
USA
657 Posts |
Posted - 02/15/2003 : 16:56:12
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| I see a problem with some fraud, people will claim damage from falling objects and there will be no object. The objects will be at Canaveral. The object may have been in the the hand of the insured in the shape of a hammer or wrecking bar. |
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Cheryl Joyce
USA
45 Posts |
Posted - 02/15/2003 : 18:29:00
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We learn so much as an adjuster. It is like we are the knowledge keepers and seekers of all problems and cures. I can see many homeowners experiencing cosmetic damage from these vibrations which will look like earthquake resulting damages and foundation movement and settlement. All the normal investigations to take place, water meter leak detector-usage history, drain pipe leak detection, then engineering investigations regarding floor elevations heaves or sink spots, soil sample determination. Most of these are costly events to perform in order to diagnose "cause of loss" for the physical damages.
Our initial learning when we see cosmetic finish damage is to immediately presume there is something wrong from the ground up. First move is to reserve the rights of the company. Then if no foundation differential is found and no drain leak and no water line in the slab there is not going to be a positive determination of the cause of the loss, but there will be physical damage to walls and ceilings which have sparked the claim to begin with. So without a valid cause of loss, there are no proceeds for the cosmetics! The property owner then receives a denial letter??? There is still physical damage.
Applying principal and logic from what we learn about wind displacement in an explosion like exposure then you have an argument for the cosmetic damages. The softer tissues and finishes are the items which will show the stress from the pressure of the explosion i.e. sheetrock cracking, molding trim warp and buckle, wallpaper tearing and cracking with the sheetrock, stress, cabinets drop from the ceiling (minor but yet still physical damage).
What is the risk of doing nothing to these cosmetic damages - would they worsen? I would not think so, but you still have physical damage. You would have a weakened structure and then susceptible to other forces to continue deterioration. The repairs or damages do not always have to jeopardize the structural integrity to be claimed under the policy. The words "physical damage" and in Texas, the word "tangible" (i think it still says that - I'm pretty sure it does) damages are recoverable.
Maybe there is an engineer within our site that could possibly educate us about the "explosion factor" and the cause and effect. I realize there will be different magnitudes of damages, but these damages will also depend on the pre-existing integrity of the structure before the cause.
We all know that the insurance companies do not do their homework before they accept the insurance premium which puts them on the risk "as is" and if replacement cost applies then as long as the insured replaces and or makes the repairs then they are to be paid for a covered loss. We also know that a company can have the same insured for 20 years and never pay a claim, not knowing the risk condition, as long as the premium is paid on time.
So now you have a multi-state exposure to every structure in the state that now has physical damages and they want to make a claim because they see an advertisement or news segment on the high profile news channel that Mr. & Mrs Big Buck sued their insurance carrier because they didn't pay for the physical damages which were caused by the air pressure of the sonic boom which the world knew about and documented that it actually happened. Now they want a "bad faith" settlement because their insurance company did not fulfill their part of the contract. See what I'm saying here?
You have the same exact ingredient for hundreds of thousands of claims as already experienced with the latest mold frenzy. This is why I say "suit up ladies and gentlemen, it is just a matter of time".
There is a lot to be discovered in all this claim business for this type of claim. A mound of pre-existing conditions and damages which already point towards the normal damages as we know, but each claim will have to be investigated according to fair claims practice and each one will have to be paid or denied. It could be our next paycheck as well.
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CCarr
Canada
1200 Posts |
Posted - 02/17/2003 : 07:26:23
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My gosh Cheryl, I think you are being pretty overzealous in your expectations of many claims from the 'sonic boom'.
Is there not going to be any more opinions from people regarding the main question in your thread - coverage issues of the policies you noted? |
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Newt
USA
657 Posts |
Posted - 02/17/2003 : 09:47:31
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Low altitude sonic booms can cause some minor damage, air density has an effect. If that boom was at an altitude thirty five miles I doubt the damage would be severe.
The falling objects,however may cause a few widesspread damages. The chances of hitting anything would be rare. If there was an explosion it takes a mighty powerful one to have a effect at a distance of thirtyfive miles even at ground level. Who knows, there may be a run on claims if the press plays it up. |
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CCarr
Canada
1200 Posts |
Posted - 02/17/2003 : 10:15:02
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| Newt, the question posed in the opening post of this topic was, what are the thoughts and opinions regarding coverage relative to a 'sonic boom'? |
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JimF
USA
1014 Posts |
Posted - 02/17/2003 : 10:32:24
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Ok. Just to get things started in the right direction back to the original question of coverage or no coverage for such an event, I will take the position that there is no coverage for this *event* which occurred 40 miles away.
Those who disagree please do so by arguing the nuances of the policy language and interpretations.
Note: As an *event* I do not think this meets the definition for a sonic boom (which would generally be covered under most policies) nor do I think it meets the definition of an "explosion" under policies. |
Edited by - JimF on 02/17/2003 10:54:36 |
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CCarr
Canada
1200 Posts |
Posted - 02/17/2003 : 11:04:55
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Jim, I'll stick to my post of 2/13 @ 14.16, and the conclusions made in its last paragraph.
The crux is rooted in "occurrence", of which I believe the 'event' was.
I do not think that the 'event' happening 40 miles away, from a dwelling claiming such damage, erodes coverage (to the extent I suggested) anymore than if the event was on the same municipal block of where a claim was reported for said "occurrence".
More common 'explosion' type claims to dwellings are found where say a gas line explosion occurs a block away, causing decreasing degrees of exposure damage from that occurrence to finally the 'subject dwelling' a block away. These claims are considered within the same context of occurrence and direct loss, as I feel this scenario could cause.
However, other than being an interesting chat on coverage applicability, I don't foresee this scenario as a claims producer.
Having stated my thoughts on the 'yea' side, with some further comments on this post, all regarding an HO3; I would be pleased to hear the details of your 'nay' position, as detailed in the fashion proposed in your last paragraph. |
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Newt
USA
657 Posts |
Posted - 02/17/2003 : 14:51:21
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I would say no for the sonic boom and yea for the falling objects for HO3. The distance from where the boom occured is the reason. If sonic booms caused wide spread damage the SST's would be in big trouble.
Now the only reason for my position of no to the sonic boom, was the distance. If a jury believed the sonic boom caused the damage there would be coverage just as there would be for a falling aircraft, and as it did it broke the sound barrier. It would have to be proved by some scientific body that beyond a doubt the shuttle breaking the barrier at that distance could possibley have caused damage. I have experienced being directly below when fighters came over and broke the sound barrier and the shock was significant but not enough at thirty five miles to make it a hair raising event. I was in a building that fighters came over frequently and broke the sound barrier under five hundred feet altitude and it rattled windows but to my knowlege it never broke one. That was in the Sahara Desert so no claims. These were fighters rotated out of Korea.
Now for the coverage it could be found in HO3 Falling Objects, it caused the shock waves. Personal property would not be covered unless the object makes an entry or penetrates the walls or roof.
however>>>>>>>>>>>
Sec I B.Personal Property would be covered under C par 5. Aircraft (this peril includes self propelled missles and space craft) no peril like this listed for A that I can find.
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Newt
USA
657 Posts |
Posted - 02/17/2003 : 15:01:16
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The question is, was it flying or falling when it broke the sound barrier?
If the commander had control or it was on auto pilot there would be no coverage, it wasn't falling.
We may never know... |
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Cheryl Joyce
USA
45 Posts |
Posted - 02/18/2003 : 23:19:13
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Newt to answer your question At the time of the booms it was falling. And there were multiple booms. That means that several waves of displaced air and a continuous shake rattle and roll. 3 of 3 houses I looked at yesterday in two different city which are in the area of the Occurrence all three have same exact damages which appear to be caused by this event. Can explain more later.
I was working on another post but want to read it and make sure it is understandable. God knows I can talk, so I will try to cut it down. Newt to answer your question At the time of the booms it was falling. And there were multiple booms. That means that several waves of displaced air and a continuous shake rattle and roll. 3 of 3 houses I looked at yesterday in two different city which are in the area of the Occurrence all three have same exact damages which appear to be caused by this event. Can explain more later.
I was working on another post but want to read it and make sure it is understandable. God knows I can talk, so I will try to cut it down.
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KileAnderson
USA
875 Posts |
Posted - 02/18/2003 : 23:35:19
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| Cheryl, can I ask where these houses are? I was in Dallas on Feb. 1st. The booms sounded like normal sonic booms to me. I live in Baton Rouge which is on the same flight path that columbia was on and every time the Shuttle flies over on it's way to KSC we see it flash across the sky and hear 2 sonic booms, one for the leading edge of the wing and one for the leading edge of the tail. They sound just like any other sonic boom I've ever heard. I realize that the shuttle came down pretty fast but it seems that it would actually have to hit something to do damage. What kind of damage are you seeing? |
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CCarr
Canada
1200 Posts |
Posted - 02/18/2003 : 23:48:45
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Cheryl, was it NASA or some other agency that stated the 'booms' occured after the craft started to fall? I have been watching and reading what is normally available to see if that was mentioned, in view of this thread; but missed it.
When you speak of 'damage' do you mean 'exact damage' or exact 'type' of damage in the three dwellings; cosmetic cracks or structural cracks?
Reminds me of years ago, when we would get the odd 'gravy assignment' to do preblast surveys, in advance of the blasting contractors working near structures. An old structural engineer showed us how to 'identify cracks' or distinguish them from new or old; and how to measure their horizontal and vertical spread, and the uniqueness of their starting and finishing points. Best part was using a flashlight to see the cobwebs in the cracks or built up dust, to label the 'old' ones.
What methods have you used to determine the damage you say is caused by the 'booms', in the absence of any 'preboom' survey? |
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Newt
USA
657 Posts |
Posted - 02/19/2003 : 06:50:36
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If it was Dallas and the problem was cracked sheet rock, I can understand. I built a few buildings around Dallas and the shift in the soil is pretty bad.
I built a truck terninal there and had to go twenty feet deep with a bell at the bottom, these piers had to be three feet in dia. That was a new code at that time. So the area Dallas and East has some shifty dirt. I was told by another builder that every house in that area had cracks in the brick and dry wall.
Every piece of that craft, of any size, that broke the barrier would have made a sonic boom much like bullets of different caliber. I doubt all could have been heard, only the major pieces. |
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Sonic Boom -- Explosion??
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