Author |
Topic |
Newt
USA
657 Posts |
Posted - 12/23/2002 : 07:34:05
|
I have a question or two:
Was this the only unit that failed in the area?
Was this the only appliance that failed on the premisis?
Did any of the neighbors have any appliance failure, radios, TVs etc.?
I think the spikes on line are a thing of the past with the varible reactance devices, unless there is a lightning strike. A spike is possible internally if a bleeder resistor has failed. If this happens on a capicitor type motor, you stand a fifty percent chance of a spike every time you turn the unit on. Now since many motors don't have bleeder resistors, that means these units can take up to a 300v surge for a short period. The capicitor will store a charge and when the power comes back on, in phase, no problem, if it out of phase with the capicitors, the voltage will almost double.
I had a power surge here, of my own making. I forgot to throw one breaker when the power came back up and my emergency generator was on. I lost two VCRs, microwave,TV, radio and three or four light bulbs. Lucky most of this stuff had protective diodes and for about .50 each I got them all working. My ref. and freezer took the shock no problem.
I would have to question the qualifications or motives of the technician unless this was a wide spread problem and the more sensitive equipment failed first.
|
|
|
KileAnderson
USA
875 Posts |
Posted - 12/23/2002 : 09:04:23
|
OK, lets get serious about this. If this was your claim and you are dictating the denial letter, please quote the policy language you would use to deny this claim. I worked Hurricane Lili and the carrier I worked for paid many claims similar to this. I'm curious how you would go about denying this claim. |
|
|
whitstorm
USA
9 Posts |
Posted - 12/23/2002 : 09:32:03
|
CCarr- thanks for the information sent. I don't take much as harassment (just a figure of speech to open up the discussion more). You are right in that it is an interesting discussion, and it does explain (at least to some degree) how claims are handled.
JimF says it is a "DISGRACE!", but come on . . . if humans are used in any scenario in the world, there is going to be error - not everyone has the same opinion. I worked with a supervisor at one time who said, "we have an 'little old lady clause' in our policy. What that exactly means, in lay terms, is "use your good jusgement." Anyone who has worked enough types of claims, and enough of them, can attest to the fact that not everyone agrees to what is, and what is not, covered in the policy. But, if you "interpret" the policy correctly, you can learn a lot about how things are covered, and how they are not.
The fact that everyone knows (or should know) that if pushed enough, claims do get paid. This is not right (coverages should remain consistent, but they just quite simply do not.
I agree, and as per the wording of the policy, and the PLRB, this should not be covered - this is all true. Has anyone out there ever had an insured "remember differently" (change his/her story) when told something was going to be denied?? What if this was denied by the adjuster, and then the Insured said, "Well, we had lightning during the thunderstorms, too. Isn't that covered?" What do you do then?? Tell him/her NO?
There is a lot to consider in this scenario, and the simple answer to the original question is "this is not covered." The points I am just raising, are trying to give the adjuster working the claim some things to think about when posed with additional questions, comments, etc. from the Insured and/or manager. Start with the "correct decision" based on the policy, and then let it go from there. Your job as an adjuster is to "make the call."
Good comments, everyone. Let's get another one like this going - anyone got any ideas?
|
Jeff S. Whittington |
|
|
Newt
USA
657 Posts |
Posted - 12/23/2002 : 10:46:21
|
First I would find out if there was a breaker failure, this is a double breaker and one breaker could have failed, on site.
Then check for other more sensitive equipment for failure on premisis, then neighbors.
Look at the fan motor for overheating or burned wires.
No sign of breaker failure, or any problems with other equipment. Its an overload situation,or low power off premisis. Compressors overload on low power and very seldom on surges, unless a lightning strikes, then other equipment will go out also. Under HO3 this would have been off premisis.
If they had lots of these problems there, you could bank on it being compressors going out or equipment designed for 220, 440 etc. You got your answer in that many claims were paid, that means it was off premisis and not covered. This should be a wake up to every one with anything on 220, like motors, disconnect till the power is on both circuits and system is grounded. This does not effect heating elements only motors and compressors. Electrical properties of equipment is theory for the most part and a person with a line could convence people he was right in either direction. But until I could see the equipment I would have to say the problem was off premisis a power failure of one circuit, trying to run on 160 volts or 120. The HO3 policy is pretty clear on power failures off or on premisis, and if the circuit is ok on premisis that is, line and breaker then the choice is clear.
You would have to include in your letter that the circuit was ok on site. Be warned don,t speculate, you would have to check or have an electrician check.
I don't like flaps, I would give the benifit of doubt to the insured, if I could convence the boss. I think this is pretty well a cut and dried situation though.
Don't get use to that nice cool weather Kile. I was down on the Gulf the other day and it was so nice it would make you want to puke. |
|
|
JimF
USA
1014 Posts |
Posted - 12/23/2002 : 10:53:58
|
Kile, which insurance carrier were you working Hurricane Lili for and was their homeowner's policy an ISO HO-3 or a 'modified version' of the HO-3 with additional carrier added enhancements?
Let's not confuse carrier added enhanced policies with the standard ISO HO-3.
I am hoping that CCARR will post his version of a denial letter, but if not, I will later this evening (after I get some of the last minute Christmas shopping done).
It is a good question worthy of a serious response and we will see that it is posted. Perhaps by comparing that with your carrier's policy, you will see you were not working with an unmodified ISO HO-3. |
|
|
Newt
USA
657 Posts |
Posted - 12/23/2002 : 12:29:45
|
Jim, Kile, CC, et al, could or would the carrier in some cases go the subrogation route where there was doubt or some threat of litigation involved. I know this does not pertain to the letter of denial, but it does tweak my interest. If there was wide spread damage over an area it would seem a plauseable solution to a stickey situation. With most law, the proof of burden as to whether there was coverage lies with the carrier and his version of the policy. The on site /off site power outages could in some cases be hard to prove. I checked the ISO Home owners,SF and Farmers and couldn't come up with an answer. The insurance carrier can deny it based on the supposition that the failure was not on premisis, period, you are left to your own devices to get it subrogated or get indemified from the all to powerful power company. Jim if you or Clayton come up with the answers and how to word that letter, I am all ears.
|
|
|
JimF
USA
1014 Posts |
Posted - 12/23/2002 : 14:53:58
|
Newt, out of curiousity, just who in the heck would you or the carrier subrogate against?
My opinion remains the same, damages from off site power loss are excluded. That similar damages are 'widespread' lends even greater credence to causation. Determing on-site power loss is generally pretty easy, a matter of looking for a tree or some structural component on top of, over or against a downed power line between the residence and the street.
The fact that you have sympathy for the insured is admirable Newt, but sympathy does not allow an adjuster to extend coverage where none exists.
The fact remains, damages resulting from off site power loss are never extended coverage by an unmodified ISO HO-3 policy.
If you or anyone else ever take an AIC, CPCU, IIA or CIC exam and have this question and then answer otherwise, your answer will be incorrect and scored as incorrect. Trust me on that! |
Edited by - JimF on 12/23/2002 15:07:32 |
|
|
Justin
USA
137 Posts |
Posted - 12/23/2002 : 16:49:20
|
FYI .. This is a standard Farmers (FIG) denial letter format issued by Farmers Insurance for just this type of claim. Postulating about breakers being good or bad on one side or the other is just so much of an exercise in futility. Simply deny the claim as the policy dictates and move on...
ooooooooooOOOOOOOOOOoooooooooo Date John Doe 11 Doe Street Denton, TX 78111
RE: POLICY NUMBER : DATE OF LOSS : CLAIM NUMBER : FORM TYPE :SHO3
Dear Mr. Doe:
Under the above referenced policy issued by TEXAS FARMERS INSURANCE COMPANY, you have reported a loss occurring on or about _________________________.
Your Homeowners Form B Policy provides coverage for your structure on an all risk basis and on your unscheduled personal property on a named peril basis. This coverage is subject to certain exclusions. One such exclusion reads as follows:
We do not cover loss to electrical devices or wiring caused by electricity other than lightning.
Our investigation has established that your loss was due to a power surge. As a loss to electrical devices or wiring caused by electricity other than lightning is specifically excluded, we must regretfully inform you that your claim is hereby denied.
If you have any questions regarding this matter, please feel free to call _____________________ at (___)___-____.
Very truly yours, TEXAS FARMERS INSURANCE COMPANY
Adjuster Name
PS I am, as is JimF, absolutely flabergasted and shocked at the poll results on this question as of the writing of this post. While good intentioned, some of the arguments leave a lot to be desired, and the argument; "it's a good thing to do or the right thing to do" just wont get it. More adjusters E&O suffers each and every year because they are adjusting losses with their heart and not their head. Come on folks, having compassion for the insured IS THE THING TO DO, but improper adjusting of a claim such as this HURTS US ALL when we pay our E&O premiums. If a storm manager told me to adjust this claim otherwise, I would demand and receive a written memo from him to this effect before I would even give it a second thought.
|
Edited by - Justin on 12/23/2002 17:02:12 |
|
|
JimF
USA
1014 Posts |
Posted - 12/23/2002 : 17:44:13
|
Brilliant post Justin and many thanks for the real life carrier denial letter as well.
I agree with you 100% in all that you said and hope every adjuster takes heed to your important and timely message.
Have a Merry Christmas! |
Edited by - JimF on 12/23/2002 17:47:04 |
|
|
Newt
USA
657 Posts |
Posted - 12/23/2002 : 17:45:50
|
Jim, I agree with you and have all along, the comment was made that some were covered during Huricain Lili, and I couldn't find any policy language to support that and I wondered if the Carriers were taking on the power companies with subrogation. And where I stated you were left to your own devices to get indemified, I should have said the insured. I have gone through the policys and can find no coverage for losses caused off the covered property. Adjusters cannot add to nor subtract from the policy. If directed to do so should enter this in the claim as a part of the record. This is what I have gathered on the forum,not much is said about this in the manuals. As always Jim, I appreciate your mentoring, your judgement is always welcome.
Justin that is Farmers Policy and it reads some what different from others and the ISO. Lightning can cause a breaker to fail and this would cause the entire system to overload if only one failed. If we deny a claim with out investigating the cause then we could be open for problems. Farmers is pretty clear in their wording, "only" for lightning. Lightning can occur off premisis, if the 5/8 gap arrestor doesn't discharge the static charge it could run in on the line, another delima. You may not be aware that the line was hit, another delima. Scratch the cause with Farmers and deny the claim unless you see signs of a direct hit. Does that cover it Justin? Thanks for the form, I can add it to my Farmers manual and policies.
|
|
|
Justin
USA
137 Posts |
Posted - 12/23/2002 : 19:00:35
|
Removed to keep the conversation "on thread." |
Edited by - Justin on 12/23/2002 21:07:31 |
|
|
CCarr
Canada
1200 Posts |
Posted - 12/23/2002 : 20:56:57
|
There are still some outstanding issues with this thread, that are certainly of interest to me to learn from.
1. from page 1, the issue of the PLRB quote offered by 'inside', suggesting the 'power failure' exclusion does not apply
2. Bryan's "by the way the PLRB says it is covered'
3. then page 2, Jim's 12/20 request for where the above was found. Being new to plrb.org, I couldn't find anything relative after a first search
4. finally, Jim said he would bring in references to FC&S, when the above was at hand
Newt, regarding your first two posts in this thread today (12/23), if we are still 'working' within the confines of the 'claim file' put to 'us' with this thread / poll; those comments are not relevant to the adjustment of 'the claim'. The kind of issues you raise, although interesting to read, are issues that do not belong with this claim that is a straightforward CWP. If I interpret the application of your comments correctly within the context of any discussion you may have with an insured, you won't end the day having made many stops / visiits with regards to your claims count. Your exploration of the issues you raise, if they are with an insured, will be of no benefit to the insured, the carrier or yourself. If, your comments are just a technical chatter to 'us', outside the context of 'handling the file', then fine, it's interesting; however I just felt I should explain that in 'real time', your time incurred and the issues raised could bring you more grief than satisfaction.
Kile, please when you get home and get a chance, pick the HO3 you worked with relative to your belief, that the claim before us is covered, and please quote to us - like I did with the HO3 I identified I was using - the Section I - Exclusions preamble and any 'Power Failure' exclusion wording. I will be a good and useful exercise to see how enhanced wordings can change a coverage issue while still faced with the same claim that is before us.
Newt, the fundamental basis of subrogation is that a carrier must pay a covered loss before they acquire the right of subrogation. Again, with the 'claim file' before us noted at the start of this thread and with the policy noted, there is no coverage; there is no 'sticky situation'. Off site power outages are not hard to prove, if the need arises. Municipal, county, or whatever relative public authority that is accountable for the power supply in the specific area, has clear knowledge of outage periods and scope from their grid records. In regards to the sympathy you strongly feel towards the policyholders, it was explained to me many times in my early years in claims that 'sympathy' is found only in the dictionary between 'swine' and syphilis'.
Again Newt, please take these comments constructively, your 17.45 post, regarding 'some were covered'. Some may have been paid, not necessarily covered or interpreted correctly; dependent on whether whatever adjuster may have been working from an enhanced HO3. Do not consider the foregoing as a 'comparison', it may well be a 'contrast' in coverage. Again, respectfully, you are trying to apply too much 'technology' where it is not warranted. Again, refer to the 'claim file' we are presented with and the coverage available. You must come to terms with the wording of the exclusion preamble and the 'power failure' exclusion. Once you have done that, then you will realize there is no need to ask Justin if one of your technology scenarios would cover the loss.
With regards to the denial letter, Justin's opening remarks regarding the denial letter and valid and sound; keep it clear and concise. I don't have a template as such, but would offer the following for consideration. Again, bear in mind, the 'claim file' we are working from is that as indicated in Roy's opening post for this thread on 12/15.
December 15, 2002
Mr. & Mrs. Wannabe Covered 100 Policyholder Avenue Carriertown, LA
Re: Policy #: Claim#: Date of loss:
Dear Mr. & Mrs. Wannabe Covered,
We received the report from the adjuster who attended to your home, to respond to the claim you had reported for your AC Unit.
The information presented to us indicates there was a power outage in your area, and that when the power was restored; your AC Unit no longer worked.
Unfortunately, we are unable to indemnify you for any loss you have reported occuring to your AC Unit.
Power failure is a standard exclusion and is found in Section I - Exclusions of your policy. That section of your policy states that, "this policy does not insure for loss caused directly or indirectly by power failure, meaning the failure of power or other utility service if the failure takes place off the residence premises. This loss would be excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss".
If you have any questions regarding the matter, please call Mr. White Shirt at 1-800-WIL-LPAY.
Your truly,
The Insurance Company
Mr. Blue Shirt Adjuster
Basically, I think you have to relate to the adjuster being there, what the issue was, what the decision was, and why with contract language.
Justin, your 'lightning claim' scenario should be a separate thread, maybe, or it will surely further muddy what should be clear water, with the claim scenario that was originally presented.
|
Edited by - CCarr on 12/23/2002 22:25:01 |
|
|
Newt
USA
657 Posts |
Posted - 12/24/2002 : 09:52:49
|
My posts are more on the technical side CC, just information to give the adjuster a footing for what goes on with power failures. Seldom would an adjuster need this except when there is doubt. This in no way should be used to create conversation with the insured, the denial letter is all that is required. It has the reason for the denial and the authority. I do have sympathy for the insured, at the same time I sympathize with the carrier, because they have to inform through the adjuster the denial. The power company can do no wrong, and most subrogation efforts would be fruitless. I thought Justin did a good job with his version of Farmers denial. They don't mince words, and have the policy language anyone should understand. I can see and understand the carriers point, none of us could afford insurance it were otherwise. The enhanced policies by some carriers are a new thing to my study and I will have to try locating one or two.
In any field the real proffessional should have information that one needs to know, and things that are nice to know. Since I don't have all the need to know yet, I add things that are nice to know if any one wants it. But one thing I would like to stress, never define the problem as a low power or surge, only use failure or malfunction, otherwise proving a specific would be difficult.
I hope this clears up any misconception that I would try to alter the policy or the way I would handle the claim, I agree with every thing said, if its not covered, issue the denial using the policy contents as the reason.(try not to use specifics)
Any one ever needs technical help or has questions on power problems, email me and I'll try to get some answers. I spent my earlier years in electronics, spending four years in EE and majoring in Broad Cast Engineering. I have also been a Ham operator and examiner for over fourty years. I retired from Eng. 1 July 71.(Has Been)
|
|
|
JimF
USA
1014 Posts |
Posted - 12/24/2002 : 10:54:38
|
Newt, just remember the adjuster is calling on the insured to discuss insurance and not the nuances of electricity or electrical engineering. Either wear the hat of adjuster or electrician, but not both. That, I guarantee you, will result in a quick trip home and a visa for permanent exit from the adjusting profession.
Insurance policies can be enhanced by carriers seeking larger market share, and may be known variously as the Blue Ribbon or Platinum or Executive Version or whatever other slick catchy title or name the carrier marketing people can dream up.
Almost all of these enhanced policies start with the basic ISO HO policy and then increase sub-limits, or removing exclusions, or adding additional coverage provisions.
Insurance policies can also be enhanced by the insurance agent or Insured by the addition of policy endorsements, which generally require additional premium for each separate endorsement. (However, endorsements do exist which can 'laser out' or limit coverage resulting in a lowering of premium).
Finally Newt, I think you need to read up on or refresh your concept of subrogation. You clearly misunderstand when subrogation is available.
A party cannot be subrogated against unless that party has attributable negligence, and a power company most likely encounters off site power loss to their grids through acts of God rather than intentional negligent acts; thus another party would be barred from a recovery based on negligence against the utility.
Newt, remember this simple rule: No Negligence=No Subrogation.
Hope this helps and have a Merry Christmas! |
Edited by - JimF on 12/24/2002 11:12:13 |
|
|
Newt
USA
657 Posts |
Posted - 12/24/2002 : 19:02:48
|
In my last thread I wanted understood that this info I passed on was not for engaging in conversation with the insured. The question of subrogation is not normally one I think would come up in homeowners claims. And the power company does have God on their side, they can always claim an act of God and seldom loose. The most frequent loss for a power outage would be frozen food products, This was a subject I was studying last week. I wasn't sure about it so I read everything I could on that coverage.
I will remember that simple rule too Jim, thanks for the feedback, Have a merry Christmas and may your New Year be one to remember. I have to run to town and get a case of oil and change oil in everything, always something. |
Edited by - Newt on 12/24/2002 19:56:25 |
|
|
Topic |
|
|
|