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Great scenario!!
Briefly, a little respect empathy/sympathy to neighbor but suggest that he file a claim for property damages to his agent first. I may suggest to the neighbor to call his agent while i was at the porperty where there loss originated. I would call my claims manager and suggest that since i was near the property that i was able to adjust all properties at once. You need to document the damages to the adjoining properties anyway. Lastly, in regards to the neighbor, it will be presumed that the neighbors attorney will present you with a liability claim. I'll mention that later.

Adjust claim for the insured whom reported the loss. Attempt to establish a C&O. Expect to hire a C&O expert. Document, scope, photos, estimates, etc....etc....

Liability-(i worked for 2 carriers in over 5 years and had many subro cases in which the insured and claimant were both insured by the same company...it happens)

Two possibilities determined by the cause of loss. 1)If the cause of loss is determined as accidental, there is no negligence from the homeowner. Aint paying for the damages to either adjoining properties nor for the neighbors injuries. Insured havent breached any duties.2)that the loss was intentional-possibly it can be denied but better get the carriers attorneys prepared.

I hope this briefly sums up my position. Great educational tool here racko!! I have handled many similair claims and they can be fun to adjust.

Ohhhh....anybody want to give some claims(daily) to a starving Cat/Multi-Line adjuster in Virginia? Lol, this is getting bad, eating oatmeal for lunch and dinner every day and night is getting old (LOL)

(forum transfer posted by Angus99)

It is a fine scenario, a very typical type of dwelling fire loss; that is, packed full of unknowns with many stones to be turned and explored and many dusty trails to lead you in different directions during the adjustment.

My horses have long since gone to pasture, and this is not a critique, but, how is a "newbie" - as characterized in CADO - supposed to write about the adventures of adjusting this scenario?

A basic principal as you progress in any career, and claims is a good of an example as any, is that you do not accept assignments that you are not trained and experienced to handle.

With the scenario presented, what your Claims Manager - for the one assigned claim you have - does not want to hear, is you calling him/her to ask for the two other claims. You have absolutely no idea, at that time in the scenario that it is suggested you go looking for more related claims; as to what the cause is, nor have you done any investigation to consider and determine negligence either by the insured or a third party.

(forum transfer posted by CCarr)

Oh great experienced adjusters...please explain in FULL DISCLOSURE, NEGLIGENCE. Many homes today are in fact DIY projects and are done quite well. Many products are replacing older ones which are of higher quality or standard than the original. Thank you.

(forum transfer posted by kittycat)

Initial contact/first inspection- assuming scene has been cleared by authorities.  Walk around and "hold insured's hand" letting him tell you what happened while looking at the scene.  The insured just had a fire and may have lost everything he owned. 

Recorded/signed statement from insured at first meeting.  Insured may not want to give the statement at first meeting, but it is important to stress to them that facts of the loss can be forgotten and lost forever even in a day or two.  Cover dates, times, the new electric stove top, who lives in the house, who else might have access to the house, smoking, any problems in the neighborhood, etc. 

Once facts are gained from insured discuss ALE, as this is usually a big question from the insured.

While at the scene, call the carrier to give an initial reserve and recommend a C&O.  If you suspect that the insured started the fire, inform the carrier and let them make the call for an advance against their contents claim.  If it appears accidental, then recommend advance.

Then obtain photos, starting with the area of origin and working out.  Try to take photos in order and not jump back and forth from room to room.  Let the insured know that you need to document the loss with photos and that you will answer any and all questions that he has when you are complete.  Please don't touch anything. Spoliage.  Take photos of any big ticket or strange item that can be recognized. Open closets to verify amount of clothing, unless it is around the area of the origin, then once again don't touch it.

Contents- Making sure first with the carrier that there is contents coverage, supply the insured with content inventory sheets. Explain how to fill them out.  Also sympathize with them and let them know that it will take a while to complete and to go room by room and try to remember what they had in each room. 

Then you deal with the neighbors.  If Mr. Redhand is there when you arrive.  Kindly tell him that you will address his issues when you are finished with the policyholder.  Give them your information and obtain theirs.  Let them know that you need to complete your investigation and if they need immediate action that they should contact their carrier.  Let them know that no commitments can be made until your investigation is complete.  During your discussion with the carrier, see if they want a statement from the neighbor and obtain if he is willing.

Then scope the house with the neighbors letting them give their input. 

If a C&O is warranted, do not complete your scope until they have investigated.  Learned this one the hard way.  If a second trip is needed, so be it.

The rest is smooth sailing until you get into code upgrades, supplemental damage, and a contractor dragging his feet on the job.

Get fire report once prepared. 

As far as an outcome...

Handle insured's claim to its conclusion once cause/coverage is confirmed/investigation complete.  expect multiple calls every few days from the insured.  More hand holding.

Assuming neighbors did not go through their own carrier, handle their losses.  I have seen neighbor's damage paid on every fire I have had.  If they went through their own carrier, wait on the subro package. As far as the 2 year old and 12 year old vinyl siding... doesn't really matter... sort of.  Carrier owes for the damages.  If the neighbors won't agree to only one side of their house then it is up to the carrier to extend more authority if they want to get it resolved.

As for the Redhand's injuries.  Med pay should cover his medical expenses but not his wife's.  If the fire was started intentionally by the insured, then the insured would be negligent for the wife's injures and most likely Mr. Redhands, maybe.  Mr. Redhand although was trying to do the neighborly thing, he assumed a risk when he attempted to go near the insured's house.  He knew of the hazard and it was most likely open and obvious.  At worst case, a reasonable person would or should know that if a house is on fire that a metal door would or could be hot.  If the fire was intentionally started however, this would be a tough one to defend and would most likely get settled.

(forum transfer posted Czar)

Thanks for re-kindling this scenario. Nice job on most accounts, but you didn't tell us how/why the fire started and why you did what you did or how it all came to conclusion. I know, I follow your story, and understand where you started and ended..........but there could be other intervening substories, events, and so on. Those were all a part of my initial set up, but got lost along the way. Where are all the teacher's pets?

(forum transfer posted by racko)

ORIGINAL: Czar
" If a C&O is warranted, do not complete your scope until they have investigated. Learned this one the hard way. If a second trip is needed, so be it."


At the point of which the adjuster sees something that convinces him a C&O is needed, should not the adjuster take a few pictures of that which alerted him? How extensive should these pictures be, and how quickly should he abandon his scope?

If arson is suspected that is one thing. If the suspicion is more in the area of civil subrogation, should the scope continue or should it all be immediately referred to more specialized forensic investigators?

Thanks,
RandyC

Arson for profit are very tricky losses to handle. The fire department would be your best tip off, and then proceed by watching each footstep, do not try to close with one scope trip etc. Get the pro,s involved quick and look out for your principals interest first.

(forum transfer posted by trader)

I was taught many years ago to treat all fires as suspicious. I worked a claim many, many years ago on a kitchen fire, which is considered a typical fire loss. The wife had been talking to a friend of hers that she wanted a re-modeled kitchen but could not afford it. She did, however, know of a way to get the kitchen remodeled. As I worked the claim, some statements just did not seem to be right. I was fortunate enough to visit with the neighbor one day while scoping and was told this story. I immediately called my claims manager who immediately put FIU on it. Come to find out, she had deliberately left a skillet of grease on to catch fire and called the fire department just after it caught fire. Her claim was denied and she and her husband never did contest the denial.

As I have learned it is important to Scope all of the Loss issues including any and all potential Liability and potential subrogation issues. As time goes on things seem to get worse, I ALWAYS obtain an agreed upon Scope, but do not commit to anything until the investigation is over. Remeber KISS!

I, likely as others, am having a little trouble navigating this new scene.   But I was pleasantly surprised to see this topic revived.  Just as I was ready to give "The Rest of the Story" (that's Paul Harvey for you young'ns), interruptions and the new web site threw me off course.

Due to the lack of activity and/or threads, I think I'll let this one simmer a bit & see what you all come up with as far as possible C&O's, resolutions, etc.

Signing off & hopefully able to find my way back to this thread......the artist formerly known as Racko. 

 

I had a fire claim a few weeks ago. Mobile home with $50K coverage A and $25K coverage B apparently caught fire about 1/2 hour after the insured turned her outdoor grill off and came inside. Damage exceeded policy limits for A&B. Carrier wanted an independent C&O because the property was in foreclosure that made things a little suspicious. As it turns out, the grill was being recalled by the manufacturer and Home Depot and the carrier might be able to subrogate. Every once in a while the good guys win one.

Since 'Czar', posted the most thorough answer to the scenario, I post this:

Most of the way he would have handled the claim is similar to how I'd do the same. In my experience though, if the fire has suspicious origins, someone besides me, the claims investigator, has noticed, and there has already been an investigation, by better trained individuals and specialists.

As far as scoping the loss with the neighbors and obtaining their input, absolutely Not! Why would you even give the right to any neighbor to step foot on the property, much less discuss the scope of damage with them?

Mr. Redhand may be a reasonable person, but if he's burned his hand trying to alert or save his neighbor, he still may very well sue for damages, even due to his own unreasonable behavior at banging on a hot metal door. Be prepared for the liability suit, especially if it's found the fire was intentionally set.

Tom, your intentionally set grease fire reminds me of one also. The housewife stated that she'd left a pot of boiling eggs on the stove (making deviled eggs) when she 'forgot' and left the house to do some shopping. Problem is, the eggs didn't catch the house on fire...just the eggs caught fire. You talk about a smelly mess. She wasn't charged with any intentional wrong doing. She should have bought one of those recalled grills from Home Depot! I heard later that she'd managed to set the house on fire a few years later. She was charged in that case. Still didn't do a good job of arson.

The mortgagee has to be paid the balance, even if the insured is involved for profit. Always check this very early as it will be very helpful to the C & O expert.

I'm keying in on this part of the post(s):

"supply the insured with content inventory sheets. Explain how to fill them out.  Also sympathize with them and let them know that it will take a while to complete and to go room by room and try to remember what they had in each room.  "

On the one hand, there is nothing basically wrong with this procedure.

On the other hand, I am reminded of the rule with certain carriers that you never leave an inventory sheet with the insured to fill out (for obvious reasons).

It all comes down I think to aggressive v. relatively passive/reactive claims handling. Again, the latter is not necessarily a bad idea--at least not if you are representing a high-priced carrier with an emphasis on service.

But if your goal is to bring the claim payment as closely in line with the actual loss as possible, you don't want to use the "leave an inventory sheet with the insured" approach. It is like a blank check.

I will give a real-life example:

I handled a less-than-total fire loss in rural Northern California involving a small residence in which the owner (a retired widow) died in the fire. She died of heat and/or smoke inhalation, perhaps coupled with an independent medical problem (heart attack?).

I met with one of her male adult children a week or so after the fire/death.

I inventoried the loss by walking through the rooms with a tape recorder, opening bureau/closet doors, and dictating a description of the contents. I had the tape transcribed at the office. I sent a copy to the insured survivor/agent.

Subsequently, I got a number of calls from either the agent or the heirs, complaining about the tight inventory I had created. It became clear that they would have liked to go much further into the contents limits than they were able to go after I had done the taped inventory.

But they were stuck with the actual eyeball inventory and contemporaneous tape documentatation. The loss settled on the basis of my inventory.

Complaints I heard were that the adult son that accompanied me on the walk-through was still in a state of grief when he met me (suggesting that this somehow reduced his claim).

But of course his state of grief had nothing to do with, need I repeat, the actual eyeball inventory. They just couldn't overcome it.

So the insured's heirs were left to complain about the cruel unfeeling carrier adjuster, but when you thought about it, their complaint boiled down to "we weren't allowed to inflate the inventory."

E Brooks

Excellent post, E Brooks!

I really like your tape recorder idea.

More than a decade ago I was part of a pilot program at State Farm Auto where they created a special unit in their Fox Hills (serving western Los Angeles County) office and dedicated myself and two other adjusters to handle only total auto thefts and auto fires. The intention was that, since these were the only claims we would receive, we would be able to fully investigate each claim. There was an estimation that more than fifty percent, and possibly up to eighty percent, of all thefts and fires of vehicles in Los Angeles County had owner involvement. After working that assignment for more than a year, I believe the numbers were somewhat inflated, but that owner involvement was a real problem. One case that stands out is one where I did a little research and determined that a vehicle had been stolen a year earlier from another person at the same address. When I questioned the insured if he knew the person (what I thought was a routine question) he suddenly got very nervous. He told me that was his girlfriend. He then asked me why I asked him about her. I explained that according to my information she had her car stolen from his address a year ago. He continued to be nervous. The next day he called to drop his claim, stating he had just been out driving around and had discovered his car parked on the street a couple miles away. I had no reason to suspect he might have made arrangements to have his car stolen until he gave himself away.

With regard to residential fires, one must go into the initial investigation with two minds. We need to remember that a residential fire can be one of the most frightening and devastating experiences anyone faces, even if no death results. Therefore, we need to be ever mindful that the insured is looking to us to help return his/her life to normalcy. We need to also remember that arson is always a possibility. A recorded statement is warranted on all fires and should be obtained as soon as possible. This should not be a perfunctory exercise. Let it take as long as it needs to be and be as detailed as it needs to be. The questions should be asked with respect and professional courtesy, but should not skirt around the issues. Was the insured current on the mortgage? Had the home been for sale, and if so, for how long? Was there any problem with anyone not living in the house? Does the insured have anyone who might wish to do them harm? How many children are in the family and what are their ages? Who else lived in the house? What was the relationship with the neighbors?
I would never want to also be handling the neighbor's claim. If it were assigned to me, I would have it reassigned due to the potential for conflict of interest. A neighbor might be an arsonist. A neighbor's third party claim, whether through subrogation or directly, is clearly at odds with the insured's interests. When I worked for State Farm these types of claims would be assigned to different adjusters in different units with different supervisors. If the findings of the two adjusters were at variance with each other we would have a mini-arbitration with the two adjusters, two supervisors, and a neutral third supervisor. When we are assigned a claim we represent that insured and not those who have a claim against the insured. You cannot serve two masters.

I have one more thought right now, and that is about contents handling. Most policies say something about having to replace the contents within 180 days of the date of loss. Many insureds are psychologically ill equipped to do this. Let me explain with an example: One of my best friends had their home totally destroyed by fire. After about four months they had not yet supplied their carrier with an inventory of items. They talked to me about it. I explained the 180 day limit to them and encouraged them to put the list together. The claim adjuster had been handling the claim excellently and had encouraged them to do the same. The 180 day point came and went. The carrier offered an extension of time for another 180 days. At the end of two years and after three such extensions, the inventory still hadn't been done. There was just a psychological block to actually sitting down and listing all the lost contents. I have seen this time and time again. I always explain the 180 day limit up front and explain to people that this may be very difficult for them to do. I explain to them that it is both tedious and emotional. Time and time again insureds have not believed me and assured me they would do it right away and get it over with. Then month after month goes by and they are unable to do it. They keep promising to sit down and do it, but there seems to be a natural tendency to avoidance. Anything the adjuster can do to take control of this and at least get the process underway and some payment made will be beneficial.
Another consideration is personal property inflation. I almost always have a discussion with the insured that goes like this: "Ms. Insured, I need to make something clear to you. On some of the claims I handle people put together an honest and accurate list of property, its price, and age. On other claims, people try to deceive me about the cost and age of items. Handling long lists of personal property is not fun, and anything you can do to be honest with me will make the whole process go much more smoothly and get money into your hand much more quickly so you can get on with your life. Since I handle these kinds of things regularly I have a general idea of what things cost. I also have a general idea of what was in your home. If there had been a big screen television I would have seen some evidence of the remains of it. If I get an inventory that includes a big screen television, I will have to question it. Very few microwave ovens cost $600.00 any more. If I get a claim for a six month old microwave oven that cost $600.00, I will have to question it. If you say that everything in your house was less than a year old and it totals $80,000.00. I will have to ask you to provide some documentation that you made more than $80,000.00 in the last year. I just want us to be perfectly straight with each other. I do not want to deprive you of a single penny you are entitled to. It is not my money and you are not taking a single cent out of my pocket. I also have a reputation to uphold for handling claims fairly and honestly. That is why insurance companies continue to hire me. So, Mr. Insured, I have a duty to myself and the people I work for to see that they pay exactly what they owe. If I question the pricing of most of the items on your list, I will be going on a window shopping trip with your list in hand and pricing items actually for sale. And I hate to go shopping, so it will not be the first thing I want to do when I get up in the morning. So, you understand, I appreciate without measure honesty in the people wiht whom I deal.  I will deal fairly with you. Please deal fairly with me."

Most policyholders appreciate this little speech and take it to heart. Those who are dishonest at heart soon show their true colors when they cannot resist claiming $80,000.00 in personal property bought in the last six months, even after I have told them this will cause a problem and when their income per annum is $30,000.00. DUH! Then I know on whom to concentrate my investigative efforts.

This is a new topic on a small Homeowners Loss HO3 last addition.

Coverage A  60,000.00 Bld.

                  C 36,000.00 Contents

                  D 12,000.00 Ale

Ded 1,000.00

Mortgagee Bld Ist National Bank $59,300.00 balance

Lein   Contents       GFC finance Company $25,000. balance

Family of 5, father, mother, 3 school age children, inside cat outside/inside dog. A double wide house on blocks only 4 months old. 4 bedrooms, 2 baths, laundry, kitchen, DR and Den combo. A night time fire, propane heat, the propane company serviced the furnace at noon on the day before the fire.

When you arrive the selling agent is there with his restoration company and wants to pack out all the contents, rent a furnished unit to the family on the same lot for $2500. per month. Start replacing the roof structure ASAP and thinks it will take 90 days to rebuild. A one time movein-move out charge of $1200.00 will apply to the temp living quarters.

After you have seen the losses you think both may be a total to insurance. You tell all concerned not to do any thing for 24 hours and you will be back with your recommendations.

What are your recommendations and how did you arrive at this point. ?

24 hours with out any answers. It was trickey but these things happen. Just approach  this claim in whats best for the insured and the insuror.

Assume the insured owns the lot, septic, water etc. and loves the location. You have a handle on the cause & origin and know the insured is not involved.

Take each coverage one at a time, but tell the restoration contractor thanks but their services will not be needed as you have worked out a plan with the insured. Go to a MH dealer and see the General Manager and deal for a replacement with all the normal furnishings for a move in price/setup of $60,000. which includes removal of the old unit. This must be done within five working days. Have the dealer complete and file the substitute of collateral with the mortgagee and pay the dealer direct with a 2 party check.

After you determine with the inventory that the UPP is a total loss in excess of the $36,000, write a check to the insured for $10,000.00 per make necessary purchases such as food, clothing, toys, TV,s dishes etc.. Call the finance company and get the payoff. Send a direct check for this amount.

Give the Insured $250.00 per days for room board for 5 days $$1,250.00. and the return interest amount on the paid off upp.

Now lets see how good a job you have done.

The restoration contractor way.

Temp Repairs $3,500.00 roof structure. Mortgagee payoff $59,300. Pack out $10,000. Clean attempts$10,000.

Rental unit 3 x 2500= $7500 move in $1200.  total of  $91,500.00

Adjusters way $60,000. 35,000, 1,250.00 $86,250.00 spent plus insured does not have a $25,000 lein on the UPP and the return finance charge of $ 8,000. + was also returned to supplement the first $10,000 payment and the $1,000.00 ded was subtracted from the $36,000.00 upp limit.

 

 

 Hmmm....I must be misssing something here...

Contractor way: Where did you get the figures for "Pack-out" ($10K) and "Clean attempts" ($10K)? Are you being humorous again? LOL

Adjuster way:   $60,000 + 35,000 + 1,250 = $96,250, not $86,250. Are you checking to see if anyone is paying attention, or did I lose too many brain cells in my distant youth?

 

 

 

Sorry Lee: The total is $96,250.00 the adjusters way and $91,500.00 the contractors way.

The $10,000 pack out is the usual number for a house and family this size, and the $10,000.00 cleaning of household hold goods that can not be reused is an usual number also. In other words $20,000.00 was spent on upp leaving only $16,000, still no furniture and a $25,000. lein still in place. Why do $3500.00 of temp roof repairs to protect something that is already destroyed. Why spend $8700 on ALE when it can better settled for $1250.00.

Most double wides come with the furniture in the rooms, which is UPP but come with the house.

This way the insurance is used properly and the insured is much better off .