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JimF
USA
1014 Posts |
 Posted - 02/03/2004 : 12:48:46
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(Since Jim Lakes is at an insurance conference and classes during the day this week, he has asked me to assist him in furthering along a discussion of his claims scenario)
Ok. You have been assigned this claim (cat damages to rental risk under an HO-3 policy), and you're at the claim scoping the damages, and the insured is there asking you to explain coverage on this loss.
You are backed up in a corner trying to figure out what to tell this insured. You don't have time to go research this claim (after all it's simple right?), and you're out of cell phone range to call your supervisor for help.
So what do you tell this insured?
What thinking process would you use to either afford/extend coverage or to eliminate coverage for this insured's cat damages to the floor.
You remember reading the HO-3 policy, and it seemed clear then.
Hmmmmm. Scratching our heads. Now let me think.....
Vandalism?
Malcious mischief?
Ok let's ask ourself a question.
Can a cat be responsible for vandalism?
Can a cat be responsible for malicious mischief?
What does the HO-3 policy language say about damages caused by owned or kept animals?
What other possible perils could covered damages fall under?
So, what are you going to tell your insured? |
Edited by - JimF on 02/03/2004 14:05:10 |
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Catmandale
USA
67 Posts |
Posted - 02/03/2004 : 12:49:00
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Mr. Lakes,
In response to your question below,
"This really doesn’t have a bearing on the question asked though. I was asking more for coverage why or why not. If so, under what peril, if not, under what exclusion. There is also one other big common sense answer. What is it?
Thanks for you response.
Jim Lakes, RPA"
I believe that the urine soaked carpet and subfloor are excluded. Assuming an all-risk policy ("its covered unless it ain't".) The only loss here is the damage caused directly by the cat...no ensuing water loss...damage caused by domestic animals is excluded. If you were to consider the carpet contents (depending on the circumstances), there is no peril for this.
Dale Strain |
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trader
USA
236 Posts |
Posted - 02/03/2004 : 12:58:16
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| A three family dwelling. Like Boston, Mass has thousands. But something strange the owner never lives on the 2nd floor. Usally 1st as the furnace is in the basement. |
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JimF
USA
1014 Posts |
Posted - 02/03/2004 : 12:59:44
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Dale, I think you are on to something.
But in the policy language about exclusions for damage by owned and kept animals, isn't there a provision for "water damages" which ensue, despite the exclusion for animal damages?
Does this exclusion apply to the animal exclusion? Why or why not?
Do we agree then Dale, that we can rule out VMM as a cause of loss? Why or why not? |
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trader
USA
236 Posts |
Posted - 02/03/2004 : 13:02:43
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| Now we know why storm adjusters can not find work doing local claims. |
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JimF
USA
1014 Posts |
Posted - 02/03/2004 : 13:19:19
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Trader, I am not sure what you mean by your statement. Please explain. I know many cat adjusters who work local daily claims when not on storm, myself included.
By the way, why don't you share how you would handle this claim and what your recommendation to the carrier would be and why? |
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william s cook
53 Posts |
Posted - 02/03/2004 : 13:53:55
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Once an insurer waives the terms of the contract by extending Homeowner coverage to a tenant, the laws of contracts may impact coverage issues that are more favorable to the insured such as intentional acts of an insured (at time of loss the tenant, a resident of the household) vs the named insured (not a resident of the household) now the victim of intentional act of vandalism by a tenant (no longer an insured resident of the household). Since it is a contact of adhesion and the coverage issues are ambiguious to the average man on the street, then the insured should be afforded coverage for her damage.
Some adjusters may require the insured to report the tenant to the local code enforcement officer (too many animals in a home) prior to agreeing to pay the claim. I am not sure if that part is clearly spelled out in the contract terms though and if the claim can be denied for not doing so.
William S Cook
From the dark side |
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JimF
USA
1014 Posts |
Posted - 02/03/2004 : 14:00:23
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Bill, I agree with you, especially that a waiver might exist where a carrier allows an insured to rent to a tenant under the HO-3 policy.
For the purposes of Jim Lake's scenario, let's assume there is no waiver and treat this as the renter's cat being the cause of loss.
If you would like to discuss the differences in how the loss would be properly handled, given two separate scenarios of homeowner's versus tenant's cat or other animal, then I am comfortable with that discussion as well, and know that Jim Lakes would be too.
In fact, adjusters wanting to learn policy more effectively, would glean a lot from thinking about and pursuing their thinking along both paths in consideration of this type claim. Cat and animal damages from an insured's pet versus cat and animal damages from a tenant's pet. (Hope I'm not giving away too much with these "hints") |
Edited by - JimF on 02/03/2004 14:23:50 |
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CCarr
Canada
1200 Posts |
Posted - 02/03/2004 : 14:23:17
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Why, in the loss site preamble scenario you established (2/3 @12.48, edited @ 14.05) are you noting that the adjuster is in the process of scoping damages - when it is apparent in the balance of the scenario that he has no clue as to the ultimate resolution of coverage for the presented claim?
Seems to be closing the bag, before the marbles are secure?
I personally would not proceed in that manner, nor instruct anyone else to proceed that way.
Before an adjuster starts to scope and quantify any damages on any claim, he / she best have the issues of cause and coverage resolved, or have obtained a non-waiver. |
Edited by - CCarr on 02/03/2004 14:28:46 |
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JimF
USA
1014 Posts |
Posted - 02/03/2004 : 14:27:33
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Clayton you are precisely correct. Your words of caution in a situation such as I painted in that scoping scenario, are squarely on the money.
The reason I painted the picture of being at the loss and scoping, is that I was trying to get adjusters to imagine themselves there in that situation, when and where an insured often if not usually puts pressure on the adjuster to advise that there is coverage. That is when an adjuster's policy knowledge is tested under fire, and all too often, perhaps the only time that many adjusters think through these kinds of coverage questions.
Your comments are invaluable especially, in that an adjuster needs to be aware and careful not to establish coverage by estoppel.
I would add by edit, that the adjuster may at times in fact be started in the scope process when information comes to the attention of an adjuster about a portion of a loss element, which would/should serve to terminate the scoping process until a non-waiver or reservation of rights is obtained.
Clayton, please share more of your thinking in guiding us how not to make these kinds of mistakes in the claims handling process. |
Edited by - JimF on 02/03/2004 14:35:55 |
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JimF
USA
1014 Posts |
Posted - 02/03/2004 : 15:09:19
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Clayton, I would add as an afterthought, a concern which you have voiced here before. That being the trend of carriers and vendors to send out "estimators" to scope losses without authority to discuss or determine coverages, rather than sending real adjusters to adjust the entire claim including cause of loss and a coverage determination.
Can you not imagine the pitfalls of sending an estimator to a loss such as this, with instructions to only scope the damages and photograph the loss. I can't imagine that an estimator would be trained or encouraged in when and how to use non-waiver agreements, in order to protect a carrier from an estoppel situation.
And without asking the right questions of the insured and/or tenant, and perhaps not taking specific photographs of elements of this damage, an erroneous conclusion could easily be made regarding coverage. This is not a claim which lends itself well to adjusting from back in the claims office alone. |
Edited by - JimF on 02/03/2004 15:37:32 |
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william s cook
53 Posts |
Posted - 02/03/2004 : 15:36:25
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What a welcome discourse and exchange of information this thread has provided between professionals. It meets the hoped for standard that CADO continues to strive for. This thread has served to educate the newbees and allowed opinions of the more experienced adjusters to be presented absent the animosity that has been the common fare in the past.
Thanks to all participants and readers, lets have more like this one.
William S Cook |
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CCarr
Canada
1200 Posts |
Posted - 02/03/2004 : 16:53:08
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Well William, the goal you mention, does seem so easy to attain. I do hope that the path you welcome, is long and uninterrupted.
My comments earlier, relative to the apparent scoping of a loss prior to the cause and coverage issues being settled in the adjuster's mind, was a cautionary comment.
However, quickly I realized (and not without undue notice of Trader's comment) that most cat only adjusters may not realize the extent of the difference in handling techniques of a 'day to day' non-weather related claim versus a typical cat claim resulting from a peril of nature.
This is not the thread - or maybe even the forum - to bounce that around. It would be a discussion that would have wide ranging views and opinions, and perhaps some misunderstanding of the intent of any explanations.
As much a part of the distinction between the handling of a cat assigned claim resulting from a peril of nature and the typical 'day to day' claim resulting from a peril caused by a person; is the unfortunate trend regarding the type of handling assignment. One group requires an adjuster and adjusting technique to be applied, while the other group of assignment types does not require an adjuster, or certainly not the skills that an adjuster could bring to the assignment.
In the particular scenario at hand - the tenant's feline pet with the apparent propensity to soak down the carpet - the type of claim assignment will dictate the approach that should be used to handle the loss within the assigned parameters. |
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trader
USA
236 Posts |
Posted - 02/03/2004 : 17:07:03
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| If the question is; does the HO 3 cover cat urine damage to floors. The answer is NO. If some mean unknown person breaks into your house and throws in a stray cat for several days-hours while you are away, and the stray cat does the deeds. Yes... But if the cat lives in the house and is loved by the insured or tenant the answer is NO. Same carpet has several colors of kool aid spilled by small children who live in the house, seperate rooms, seperate times, answer is NO. If small grandchild spills kool aid one time in grandmas carpet that looks new (or good condition) the answer is Yes. See the diff. It has to be unforseen, uninspected. "If its inevitable, its not a risk" If its not a "risk" no coverage. Always ask-determine how? Why? sudden? unexpected? Remember bad consequences are not always covered by broad insurance policys. Hope this helps. |
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JimF
USA
1014 Posts |
Posted - 02/03/2004 : 17:18:07
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Trader, I don't disagree with what you have posted.
But I do want to explore one comment you made a little further:
You said: "If some mean unknown person breaks into your house and throws in a stray cat for several days-hours while you are away, and the stray cat does the deeds. Yes...
Just to be clear, is the reason you argue (and properly I might add) for coverage under that scenario because the cat damaged the carpet with coverage coming from the exclusion to the animal exclusion or because of malicious mischief/vandalism as the peril? |
Edited by - JimF on 02/03/2004 17:22:30 |
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Renters abuse of a Mobile Home
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