| Author |
 Topic  |
|
Medulus
USA
6 Posts |
 Posted - 12/05/2003 : 10:30:44
|
There is a very good reason why admin chose this subject for a poll. Power surge claims are frequently at issue. Especially during a CAT event, and whether it is covered or not usually depends on which policy form is purchased, which endorsements are purchased and whether the power surge results from an on-premises or off premises event. The poll results on this question are indicative of the confusion that many claim adjusters have when dealing with power surge claims. Most carriers have elite or upgraded policies that provide contents coverage for off-premises power surge. Additionally, many carriers have an endorsement that will add coverage for this cause of loss for contents.
That having been said, there is a basic tenet of adjusting that has to be reiterated here: "When in doubt, read the policy". Although there are plenty of policies that we may not carry around with us or have ready access to, the HO3 policy should be at every adjuster's fingertips. And every adjuster should be able to read it. That 31 adjusters out of 67 thought there was coverage for this air conditioner should be an object lesson to us all. I have never had a claim manager insist that I memorize the policy, only that I be able to read it and know where to look in the policy to find the coverage information I need. This question told us what policy to look in, that it was the basic policy, and gave us a clear cause of loss. There is no reason why 46% should give the wrong answer to this question.
Folks, if we expect to get regular employment, we need to be more knowledgeable, more diligent, and more industrious than the average adjuster. The incentive is certainly there as we also expect to make more money when we're working and more time off than the average adjuster. |
Steve Ebner |
 |
|
|
sherkk
USA
10 Posts |
Posted - 12/05/2003 : 10:37:32
|
quote:
Originally posted by Medulus
There is a very good reason why admin chose this subject for a poll. Power surge claims are frequently at issue. Especially during a CAT event, and whether it is covered or not usually depends on which policy form is purchased, which endorsements are purchased and whether the power surge results from an on-premises or off premises event. The poll results on this question are indicative of the confusion that many claim adjusters have when dealing with power surge claims. Most carriers have elite or upgraded policies that provide contents coverage for off-premises power surge. Additionally, many carriers have an endorsement that will add coverage for this cause of loss for contents.
That having been said, there is a basic tenet of adjusting that has to be reiterated here: "When in doubt, read the policy". Although there are plenty of policies that we may not carry around with us or have ready access to, the HO3 policy should be at every adjuster's fingertips. And every adjuster should be able to read it. That 31 adjusters out of 67 thought there was coverage for this air conditioner should be an object lesson to us all. I have never had a claim manager insist that I memorize the policy, only that I be able to read it and know where to look in the policy to find the coverage information I need. This question told us what policy to look in, that it was the basic policy, and gave us a clear cause of loss. There is no reason why 46% should give the wrong answer to this question.
Folks, if we expect to get regular employment, we need to be more knowledgeable, more diligent, and more industrious than the average adjuster. The incentive is certainly there as we also expect to make more money when we're working and more time off than the average adjuster.
I second that!!!! |
|
|
|
C Bond
32 Posts |
Posted - 12/21/2003 : 10:47:40
|
A number of my recent claims have delt with the "wear and tear" exclusion in the standard HO-3. A severely aged roof has resulted in water damage to the interior. In every case I denied the claims based on the fact that interior damage was a result of deterioration of the comp roof above. These files were sent back to me stating that the interior water damage was covered but the roof was not. Am I incorrectly interpreting this exclusion or is this another situation where the carrier would just as soon pay a little rather than fight with the insured?
Chuck Bond |
|
|
|
TomS
USA
32 Posts |
Posted - 12/21/2003 : 11:26:21
|
Most HO-3 policies cover interior damages if there is an "opening", I assume thats is where the carrier is going when advising you to pay. They say that "something" created an opening. Also, something as in red flag comes up in that the interior is "all risk" rather than named peril, etc which would cover interior damages. Maybe reading the coverages rather than exclusion for wear and tear would bring the answer, I think!!
|
|
|
|
jlombardo
USA
212 Posts |
Posted - 12/21/2003 : 13:15:57
|
C_Bond
Yes, if these are standard H0-3 forms than you are incorrectly denying the interior damage to the risk. The wear and tear refers to the item that has sustained the deterioration--the roof--but the resulting water damage to the interior drywall, insulation , etc. is covered.....No coverage for the UPP in this scenario.... |
|
|
|
C Bond
32 Posts |
Posted - 12/21/2003 : 14:52:38
|
| Thank you gentlemen for the clarification on these types of claims. Your right TomS in that my concentration on the exclusion preventing me from seeing the coverage as a whole. Jlombardo,the exclusion does not distinguish which item must have suffered deterioration, so I was a bit confussed, I'm sure your correct as these keep reopening. It seems that under this type of policy an insured can neglect roof maintainence to the point of sustaining interior damage and the carrier has to pay. This just did seem to me to be the intent of the policy. Home owners do have a responsibility to maintain their homes don't they? Let's here it for more underwriting inspections. |
|
|
|
KileAnderson
USA
875 Posts |
Posted - 12/21/2003 : 17:57:01
|
| C Bond, You may find this job to be a little more rewarding and have alot fewer insureds to argue with if you look for coverage rather than look for reasons to deny coverage. It is frustrting to continuously have to pay for damages that could have and should have been prevented by homeower maintenance, but that's just part of the job. All you can do is alert the underwriters and move on to the next claim. This job does make you wonder how some people can have no pride at all in the homes in which they live and let them deteriorate around them. |
|
|
|
C Bond
32 Posts |
Posted - 12/21/2003 : 20:31:53
|
| That is almost word for word what the adjuster training me said. I guess I need to open my ears a little wider and actually listen. Thanks for the reminder. |
|
|
|
khromas
USA
103 Posts |
Posted - 12/21/2003 : 21:47:26
|
Kile makes an extremely good (and LEGALLY REQUIRED!) point in his suggestion that we, as adjusters, must look FOR COVERAGE instead of for an EXCLUSION. The benefit of the doubt and all 50-50 splits will always go to the side of the policyholder - as it really should be. The carriers write the policys, set the rates and adjust the claims, the policyholder has to get something for their dollar!
A case in point from practical experience here in Texas with the old HOB policy.
A very heavy rainstorm in Central Texas (San Antonio area and north) caused substantial flooding along the Guadalupe River. In the town of Seguin, an entire sub-division was basically washed away. I am talking brick homes that all that was left was the bare slab. I set up shop in an agent's office to help people with their claims and such. The agent had scewed up on one young couple and only written $5000 worth of contents coverage on their contents under their NFIP. Well, they had water get all the way to the ceiling (8') but did not wash the house away. The river current did take out the back wall of the garage and allowed the roof to sag down into the water. A LIVE COW that was getting washed down the river, used the roof like a ramp and got up on top of their house! The water went down and the cow was still on the roof! (You may have seen this on CNBC and NBC in 1998.) Before they had evacuated the house, they had put a lot of the personal possessions up in the attic. Because the cow had poked holes all over the roof and that allowed water into the attic, I was able to pay them about $30,000 under their HOB policy for the damage to the contents. (It also saved the agent's butt because he had screwed up on the flood policy contents amount.)
I never found out who got the cow after they sedated it and got it off the roof! I know that no rancher came forward to claim it or I would have SUBRO'D against him!!!!! |
Kevin Hromas |
|
|
|
KileAnderson
USA
875 Posts |
Posted - 12/21/2003 : 22:41:38
|
| Kevin, that is a story. Kind of like the cow on the cotton house roof in O'Brother Where Art Thou. Thanks for sharing. I don't have anything close to that...yet. |
|
|
|
CCarr
Canada
1200 Posts |
Posted - 12/21/2003 : 22:42:18
|
Chuck, the comments of Kile and Kevin are worthy to remember.
However, in the pursuit of coverage for a loss, when dealing with "all risk" coverage, as it applies in your example to Coverage A on a HO3, you can't go wrong by reviewing and considering the "exclusions" (".... we do not insure....") part of the wording.
Otherwise, it is all covered, if you did not consider the ".... we do not insure ...." elements of the wording. Conversely, with a named perils coverage, as is found with Coverage C in a HO3, you are trying to match the cause you determined with one of the named perils of coverage.
In your example, you 'hung your hat' on the "wear and tear" exclusion, which is technically correct to that point of the wording, except, you should have read on to the end of the Section I - Perils Insured Against, for Coverage A and B.
It is the last paragraph of that section, that provides coverage for the resultant water damage to the interior of the structure in your scenario.
Yes, Section I - Perils Insured Against (Coverage A) says, ".... we do not insure, however, for loss: .... (2.) caused by: .... (e)(1) wear and tear ....". However, the last paragraph of that section says, "Under item 1 and 2, any ensuing loss to the property described .... is covered ....".
That is the paragraph that provides coverage for the loss scenario you provided.
The issue of poor maintenance being an aggravating and costly cause of loss, is well known to insurers and adjusters.
Perhaps, to reinforce the essence of "ensuing loss", especially as it relates to maintenance (and the resultant deterioration when there is a lack of maintenance), is further addressed by referral in Section I - Perils Insured Against, ".... we do not insure for loss .... (3) excluded under Section I - Exclusions.
Going to Section I - Exclusions, #2, "we do not insure for loss .... caused by any of the following. However, any ensuing loss .... is covered ....(c) Faulty, Inadequate or Defective: (4) Maintenance ....".
Insurers have achieved over the years (for the most part) in preventing the policies from becoming a "renovation" wording. The above is another clear example where maintenance as a cause of loss is excluded. Unfortunately however, the policies will pick up ensuing (resultant) damage. |
|
|
|
ChuckDeaton
USA
373 Posts |
Posted - 12/21/2003 : 23:17:31
|
| Subrogation, as it relates to the cow and her owner, is unlikely. |
|
|
|
MRichardson1952
USA
24 Posts |
Posted - 12/22/2003 : 02:16:18
|
| It's covered, pay it , move on, all risk, what else has to be said! I don't understand all the long diaturb of conversation? |
|
|
|
olderthendirt
USA
370 Posts |
Posted - 12/22/2003 : 08:30:47
|
| You suggest a denial of a severely aged roof (we have all slipped and slid around a few of those) is the reason for the loss. Was there wind or hail? Why did the roof suddenly start leaking. And if it wasn't sudden then should the interior damage be paid. If you have a replacement cost policy and there is wind and or hail damage, at what point can you deny the roof? If it not leaking before the storm, and is now leaking is the insured entitled to compensation for his roof? |
|
|
|
KileAnderson
USA
875 Posts |
Posted - 12/22/2003 : 09:41:16
|
| Three words Mark, WIND DRIVEN RAIN. |
|
|
|
Topic |
|
|
|
Is it Covered?
Forum Locked
