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Bananarocks23
USA
2 Posts |
 Posted - 02/28/2004 : 12:51:29
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Dear all my mentors,
I received an assignment for residential oil spill. Apparently the fuel company dumped/sprayed 100 gal of oil on the rear side of this beautiful house and now I will need to write an estimate for those damages.
I know we need to replace all porous items, including siding and insulation that was touched by the oil, however, homeowners were concerned about the concrete wall in basement.
The soil will be to be removed and refilled..but the oil most likely seeped through the soil and affected the basement foundation wall..(smells bad in there)...
What can I do with this type of damage???
Tear it all out or just put some fire and burn the concrete till it's dry?[}:)]
Thank you all for the input |
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JimF
USA
1014 Posts |
Posted - 02/28/2004 : 14:33:28
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My first question is, with the quantity of oil you say was spilled or dumped, was a HazMat team not dispatched to remove the oil at the time and do a thorough clean-up?
Given the quantity again that you mention, to have not reported this type and quantity of oil spilled to the proper local and state authorities mandated with EPA oversight and compliance, would be a violation of State and Federal EPA guidelines and regulations. Such failure of environmental notification compliance would seem to have the potentially disasterous effect of creating and certainly enhancing the rather ominous minefields of future litigation over future health effects to this homeowner or any future purchaser of this damaged property. A diminuation of overall property value could well enter into such a scenario as you have described, even after a proper cleanup.
If a Hazmat team was dispatched, then some of the answers you are seeking, no doubt would best be answered by them. And in the absence of a Hazmat clean-up, then a petroleum remediation expert should be called in, again because of the size of the spill. As well, if a Hazmat team was not called in, it begs the question of why not?
I stand to be corrected, but I think the rule is that an environmental notice of spillage required by EPA must be given to the proper authorities within a jurisdiction whenever and wherever the spill is in excess of 5 gallons.
I would add, that I am assuming that you are handling this claim as a third party property claim for the insurance carrier for the oil company?
I would suggest that this claim is a liability claim every bit as much as it is a property claim. Determination of fault, negligence, and potential subrogation all are matters of importance for an adjuster to keep in mind.
If you are handling this claim as a first party loss for the insured's carrier, it behooves you to get the insurance company and adjuster for the oil company's carrier involved and quickly, as they likely have more experience in dealing with the issues of clean-up, compliance with environmental regulations, and specialized costs of remediation.
Clean-up and removal of the contaminated soil involves much more than simply calling an excavation contractor unskillled and untrained in contaminant removal, as well as stringent requirements mandated for packaging and treating contaminated soil at specialized facilities. Simply removing soil according to the EPA guidelines beneath where 100 gallons of oil or contaminant spilled could start with a cost of $25,000.00 and go up from there. And that's just for the soil removal.
If the homeowner relies on well water for potable drinking supplies, then it may well be required that ongoing water testing and monitoring wells be required as well, and you are not likely to be informed well enough to estimate those types of costs without expert guidance.
While I have handled several dozen similar contamination cases in the past, I am currently handling three similar claims and the nature of such claims is that they are ongoing, not simple to estimate, and require the guidance of outside experts in determing cost as well as environmental regulation compliance. One claim which I handled a few years ago involving a 500 gallon oil spill took four years to conclude and at a total cleanup cost of $250,000.00.
Clearly, the local or state authorities who oversee state environmental regulations and EPA compliance, will be involved in not only supervising the entire cleanup (including cleanup of exterior foundation walls, etc.), but will also be one of the responsible parties if not THE integral party who will ordain exactly what remediation processes are required, and which contaminated items must be removed and then replaced instead of merely being cleaned.
This is not a simple claim nor should it be treated as a simple matter of making a simple appraisal or estimate of damage.
If you're assigned this claim on an appraisal only basis, it would be prudent to return the file to the claims company or carrier rather than wade into a quaqmire of unlimited liability for yourself.
This is not the claim for an amateur nor an appraiser. Further, this is not the claim with which to learn environmental adjusting without having a strong education and training background in liability insurance, the Hazmat process, and environmental regulatory compliance.
Without a certificate that the loss is free of contaminants from the proper jurisdiction, there is no proper legal way to close your file and more especially from a liability standpoint.
Elsewhere on this site, you will note discussion involving the "3 C's" required of all adjusters for 'adjusting'.
In the most serious somber way I may suggest, an environmental claim such as you have presented requires adjusting and the adjuster to adjust the claim based on a 4 C's Approach: Cause, Coverage, Cost and COMPLIANCE.
If the adjuster misses any one of those 4 C's, they better make sure their E&O is paid up, and have lots of it!
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Edited by - JimF on 02/28/2004 17:48:56 |
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KileAnderson
USA
875 Posts |
Posted - 02/28/2004 : 16:56:17
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| Jim did a very thorough job of covering this topic, but just for some annectdotal evidence I thought I'd chime in. When I was on National Guard duty several years ago we had some mechanical trouble with our Bradley fighting vehicle and during maintenance of the vehicle a small quantity of hydraulic fluid (cherry juice) was spilled on the ground. It was less than a gallon but you would have thought we had breached the reactor core at 3 Mile Island. I thought the motorpool officer's head was going to explode. we thought we could just throw some dirt over it and drive away. They had to call the post environmental command and they sent out an officer and half a platoon of engineers and they cordoned off the spill (about 2 square feet) for 50 feet in every direction and brought in a backhoe to dig a hole 3 feet deeper than the deepest contaminated soil and 3 feet in every direction. You'd think they were sinking a septic tank with the hole they dug. They bagged all the soil in thick plastic bags and carted it all off and brought in a dumptruck load of dirt and a grader to level it off. All this took an entire day and I had to fill out 3 seperate incident reports as did my driver and the mechanic who was working on the vehicle with us and then we all had to be interviewed seperately to make sure our stories jived and then we were given an after actions revue to make sure we all knew what had happened and how bad it was. That was for less than a gallon of hydraulic fluid. |
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Johnd
USA
110 Posts |
Posted - 02/28/2004 : 17:50:04
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| Jim Gave you excellent information. In addition you may want to check with the fuel oil dealer or the bulk dealer in the spil area and see if they are required to file and maintain an "Oil Spill Contingency Plan" with the local EPA or the state agency in charge. These plans are normally promulgated by the state or federal government for the particular area of the country and updated every year. They outline the EXACT steps to be taken to remediate the spill. Good Luck ! |
John Durham
sui cuique fingunt fortunam |
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Ghostbuster
476 Posts |
Posted - 02/28/2004 : 18:03:38
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| So...if our Bananarock23 is not qualified to perform this sort of REAL adjusting, why would the carrier assign it to him? Does this not reflect on the ever increasing incompetence levels found at the carrier level? Does this not shed some light on why the incompetent carrier bigwigs seem to prefer hiring birds of the same feather? (No offence intended in your direction Bananarock23.) Is the presence of us ol' mossback dinosaurs seen as an embarrassment to the honchos who have never hoisted a Stapleton ladder or tromped thru a sewage backup filled Risk? Insurance ain't just about Acturarial tables or quarterly financial statements to shareholders, it's really about the sanctity of delivering the promise sold by the agent, to the Insured, by the adjuster. The bigwigs interference in and neglect of this basic function is at the heart of our collective woes. |
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CCarr
Canada
1200 Posts |
Posted - 02/28/2004 : 20:32:47
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Reviewing the Banana opening post, it was my guess from the way the post was written that the fella had been assigned a first party claim; it is just too much of a horror story to picture to suggest he has a T/P claim.
It is all a sad situation, or as weird as a Twin Peaks rerun. Banana has the claim of his life to this point in his career, he doesn't realize the good or the bad of that; and is looking here for how to get the basics of handling the claim.
I have to also guess that Banana is an independent. I can not allow myself to think he is carrier staff, for a number of reasons. But for those same and other reasons, I can not imagine the vendor's office that got the assignment, giving it to someone not qualified to deal with the basic direction of it; as Jim has clearly guided.
We have had a couple of things pass by our claims industry mirror today. First there was Karen's perception of an adjuster's SOP, followed by Banana in need of basic help with a problem - that based on his presentation of it - he should not be at all involved with. The downward spiral continues. |
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gloverb
USA
54 Posts |
Posted - 02/28/2004 : 20:39:27
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CCarr,
How bout something constructive for Bananarocks23. Maybe YOU can put it on an upward spiral! |
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CCarr
Canada
1200 Posts |
Posted - 02/28/2004 : 21:52:49
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Ben, I'm not sure if you are being generally cynical with your comment / question, or that it is being directed specifically to me. Or, are you looking for the silk hairs in the sow's ear.
First Ben, let me say that I do seriously have empathy for Banana; and I hope it is for the right reasons that I envision. When I was a road adjuster with a carrier, I went out of my way to try and get the juiciest or darkest property or pure casualty claim file assignments. If you could get 2 or 3 of those real bad ones a month on top of the 'usual', it just kept your mind spinning. I got in over my head many times, fortunately recognizing it myself or having it recognized by a trusted mentor or boss; before I bobbed for air the 3rd time. If there is a good carrier claims infastructure and a trusted claim team, the resultant risk (in over your head) is much less in a carrier environment than I think in a I/A claim vendor environment. But, that reflection is coming from the 70's and 80's.
I fought to keep every claim I could get my hands on that was interesting or new to me in some way. I kept most of them and did a lot of homework and study to identify what issues were relevant on "x" or "y" type claims, and to learn how to define the issues once identified; and pulled a lot of shirt-tails of those who had walked the trails many times ahead of me. I was very fortunate to have a supportive environment to grow in, although my chain was yanked often enough. Perhaps that type of supportive environment is not available to the adjuster any longer.
As I think of your question, a lot of memories and experiences can still come almost to life.
Anyway, something constructive for Banana?
Monday morning, go directly to his boss with what he has on this claim to date and that is detailed in a solid set of file notes, list the issues he has identified to be dealt with, formulate dollars as reserves that represents potential exposure for each issue addressed and recommend an overall figure based on the foregoing. Make it clear that he is not qualified to discern if the list of issues is complete, and that at the present moment he is in over his head; and that for the benefit of all concerned someone with prior experience and / or training in environmental losses should lead the file in the field. In addition, in returning the file, make it very clear to the boss that he wants to remain as a participant on the file acting as a capable assistant to the qualified adjuster (qualified for this particular type of claim) that will be assigned. |
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JimF
USA
1014 Posts |
Posted - 02/28/2004 : 22:05:36
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Clayton, that was an outstanding response.
I am in awe that our paths were so similar in that I too always begged for, requested, screamed and pitched hissy fits in order to get my hands on the most difficult, complex, and juiciest files. I still do that to this day. As you said, it is the only way in which to learn. You are correct as well, that having the support of experienced knowledgable adjusters with the heavy hitting experience in these types of complex claims, allows for confidence and trust both for the adjuster as well as the carrier or vendor. Unfortunately, you are correct that very few vendors or independents have the support staff in the background who can provide the safety net needed to protect the adjuster from himself and others, should he trip and fall, which we all do, sooner or later.
I do know that if Clayton, or John Durham, or many others of us were nearby to this loss, that we would willingly ride along with Banana and let him try his hand at this claim, as long as there was an understanding that we would step in from time to time, when his sense of direction was misguided, which would surely happen not only with Banana, but with any of us at an early stage in our career.
I agree with Clayton's suggestions regarding how to proceed with this file on Monday, and stand ready as I am sure Clayton does, to offer whatever advice and counsel we can provide on the understood basis that distance prevents the full measure of protection in helping this adjuster with the claim of his life.
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Edited by - JimF on 02/28/2004 22:07:06 |
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gloverb
USA
54 Posts |
Posted - 02/28/2004 : 22:15:46
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These are great constructive postings! The bottom line is " If you are over your head go to somone who can get you to the correct answer!!!"
Why didn't you say this in your original posting.
Thanks! |
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JimF
USA
1014 Posts |
Posted - 02/28/2004 : 22:38:57
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Ben, thanks for your kind comments.
I do think it is important if we are to help Banana, that he come back and post more information regarding this claim situation.
I would especially be interested to know whether proper notice was given to the environmental authorities, and at what stage of compliance the property is in now.
Further, I would like to know specifically why this claim is not being handled as a third party action by the carrier for the oil company rather than as a first party claim. It is my belief based on extremely limited information plus an intuitive feel for the situation as described, that the task of appraising damages and handling the claim really belongs to the third party carrier and not to the first party carrier.
There is really little if any coverage for the loss as described under the first party (insured's carrier) while there likely is under the third party coverage for the oil company. My concern in the instant situation, is that even appraising damages with an estimate could or can be construed as creating an estoppel of coverage where none exists by policy.
How would you or our friend Banana feel about having to pay out of his own pocket for the damages he outlines in his estimate. The first question an attorney will be asking him after he derives that Banana is a licensed adjuster, will be something to the effect of didn't you read the policy?
Isn't that a rather large load to bear for any adjuster, even more so for the newer one, and all the more so when an environmental claim of this nature could easily reach $250,000.00 or more in damages?
And in this situation, I would argue the adjuster is at fault just as much for the estimate which is too low as too high (due to the environmental requirements of cleanup which are mandatory).
Last but certainly not least, as I earlier suggested this is a liability claim every bit as much as it is a property claim. Without much doubt, it is even more of a liability claim.
Given a choice between choosing either the singularly qualified property adjuster or the singularly qualified casualty adjuster to handle such a claim, the decision would be a no brainer: hand this claim to the liability professional. I did not gather from the intial post that Banana sees the liability aspects involved in environmental claim handling nor did I conclude his expertise in such.
Does Banana or the average cat adjuster truly have an understanding and awareness to recognize and identify other potential tortfeasors which a careful investigation might reveal? What actually caused this loss? Was there a malfunction of a component on an oil pump on the oil company's tanker truck or did a supply line rupture due to an inherent vice? Does Banana or the average cat adjuster understand the importance of identifying lesser tort feasors and the reasons for why that is important? Does the adjuster know what to do with that information if it comes to light? These are important questions which defy categorizing into a simple list of questions to ask.
I do think you miss the point in suggesting knowing where to come or go when you need an answer to a question when you're in over your head. Under the instant scenario, there are likely hundreds of questions that an adjuster may need to ask, and at the point of hearing the answer, knowing what to do with that information. Were an adjuster in over their head from the start, it is impossible to stop the claims investigation process any time or each time, that one searches for a direction which should well be known beforehand. We cannot here give the kind of guidance that is needed more or less rather instantly out in a field environment in this type of claims handling process.
As I said earlier, an adjuster handling this claim is walking across a potential minefield fraught with personal liability perils unimagineable for that adjuster, and the utmost of care must be exercised in the handling of such, to prevent irreparable damages to many parties at interest.
I did not suggest the ideas which were in my last post earlier, as I thought in my first response the same as I do now. This is not a claim for a beginner or amateur. And without close personal over the shoulder supervision, this adjuster would be wise to forgo handling this claim. It simply is much too dangerous for him as it would have been at a similar point in our our career paths, under the same set of circumstances for Clayton, or John or I given a similar background as Banana has at this time.
I hope this helps in your understanding and that you can appreciate our concern for this adjuster's welfare. |
Edited by - JimF on 02/28/2004 23:31:27 |
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gloverb
USA
54 Posts |
Posted - 02/28/2004 : 23:16:50
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Thanks for this response! The new guy doesn't know that he doesn't know! The new adjuster simply does not know that he does not have the experience or the knowledge to handle a loss of this complexity.
I could not handle this claim. But, I do have the knowledge & experience to know that I cannot handle it! What is the next step? |
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JimF
USA
1014 Posts |
Posted - 02/28/2004 : 23:35:48
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My first suggestion would be for Banana to read the homeowners policy to see whether there is any coverage for this loss (there isn't trust me).
And once he determines that there is no coverage under a homeowners policy for this loss, then he needs to proceed from there in deciding whether or not and why he may not want to write a damage estimate.
My best and final suggestion would be for Banana to turn this hot potato claim back over to the assigning party with the request to be allowed to tag along as an assistant with the handling adjuster in order to learn something new. |
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katadj
USA
315 Posts |
Posted - 02/29/2004 : 01:04:30
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The foregoing posts are more than adequate, and reflect the decades of knowledge of these fine contributors.
In a nutshell, when you are in over your head, you WILL drown.
Listen to these wise sages and PAY ATTENTION. |
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Bananarocks23
USA
2 Posts |
Posted - 02/29/2004 : 10:36:36
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Thank you all for the response.
First of all..Banana's background is in something that was never meant to be covered..(u know what that is)....and yes..I did get a bit frustrated regarding the assignment of this oil spill b/c I was never trained in this type of loss. I have been getting lots of claims which I have never seen and learning at the same time, however, after my research and your comments, the handling of this claim is out of my hands-on learning curve at this moment...I would like to experience the process of this claim but I think I have done my best.
The initial clean-up was already performed..however..the inside of the house was smelling bad...I called the clean-up contractor while I was with the homeowners asking why there was no containment inside the house to block the smell and why there was no carbon filters running...contractor simply replied..well...I don't have authorization to do that.
I was kinda confused with my position as I do not have authority..however...looking at the 2 small children in the house whole day with all the smell in the basement and gameroom..I told them to proceed with the filter and containment...well..maybe I did not do the right thing of calling around and look for the right person with authority...hopefully my e&o will kick in if this gets ugly.
Well..in conclusion..i am sending this file back to my boss and apologize for my deficiency..hopefully one day..i will be able to handle this file....I guess I should just concentrate on my frozen pipes..wind..hail...fire...mold...just not oil spill and asbestos..
THANK YOU ALL FOR THE COMMENTS. |
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Catmandale
USA
67 Posts |
Posted - 03/01/2004 : 11:40:28
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Banana,
Please, do yourself a favor and take the advice set set forth in the previous posts.
In addition, you need to be careful directing repairs...especially repairs for which there is no coverage.
You may soon find out how good your E&O is.
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"When we thought that we had all the answers,
suddenly all the questions changed."
Mario Benedetti (1920); Uruguayan writer.
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Residential Oil Spill
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