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Swink

I understand what you say it means, and that's what I thought it meant too.

The problem I'm having is that it doesn't say "a loss as described in Section I- coverages"

it just says "a loss under Section I". And there are a whole bunch of different parts that are "Section I" Something.

so we may all think we know what they INTENDED it to say but that's not actually what it says.

and the $500 debris removal is actually under "SECTION -I PROPERTY COVERAGES".

So it would be reasonable to say that the tree removal is "under Section I", and it could trigger ALE.

So back to the deductible- shouldn't we apply the deductible to the tree removal and make it zero?

And not to beat a dead horse, but if there's a $600 ALE claim made by a handicapped lady, and experienced adjusters can't agree if it really is covered or not, wouldn't it make sense to join the "let 'em have it school" for just one claim?

I have been in some depositions before and I would not want to be on the other side of a table from an attorney asking me to explain my detailed logic about why I didn't pay $600 to a handicapped lady who never made a previous claim in 20 years.

just sayin'.

If a loss covered under Section I makes that part of the "residence premises" where you reside not fit to live in

Read my post. Ray has more years in this business than both of us put together probably, and he thinks ALE should be paid.

It's not about the "home".

It's about the residence premises.

Re-read the policy. It doesn't say "home" unfit to live in.

If a loss under Section I makes that part of the "residence premises" where you reside not fit to live in, we cover any necessary increase in living expense incurred by you so that your household can maintain its normal standard of living.

"residence premises" includes the grounds- that means even lawns.

If a covered peril did something to the lawn that made the place unlivable for the insured, that could trigger ALE.

For example, if the debris blown off the house tore up the lawn and the blind insured could no longer safely walk to his outhouse, that might trigger ALE.

We all use shorthand in this business- we say house when the policy says dwelling. We say "holdback" when we should say "recoverable depreciation.

But if were going to discuss claims scenarios we have to be spot on accurate otherwise its a waste of time.

We have to be able to defend decisions we make if it goes to court.

Imagine when (not if) an adjuster gets deposed:

Attorney: Why did you deny ALE?

Adjuster: Her house wasn't unfit to live in.

Attorney: Where exactly did the lady live?

Adjuster: In the house.

Attorney: Did you notice there was a garden?

Adjuster: Yes, I saw that.

Attorney: When you arrived at the house was the insured working in the garden.

Adjuster: Yes, actually she was. She was picking tomatoes.

Attorney: Was she alive while she was picking tomatoes?

Adjuster: What a stupid question. Why are you asking me that?

Attorney: This is my deposition. I will ask the questions. Was she alive while working in the garden?

Adjuster: Yes, she was.

Attorney: Would it be accurate to say that she is alive not only in the garden but that she is alive when she walks to the mailbox and she is alive when she goes into the garage?

Adjuster: Yes, she probably is.

Attorney: Would it be fair to say that she actually uses the entire property for living?

Adjuster: Yes, I guess you could say so.

Attorney: I need to hear a yes or a no.

Adjuster: Yes.

Attorney: Are you familiar with the HO3 policy?

Adjuster: Oh yes, I am an expert.

Attorney: So then it would be fair of me to assume that you have read it?

Adjuster: Of course. I read it all the time. I have had classes on it.

Attorney: Are you familiar with all of its terms and definitions?

Adjuster: Yes, I think so.

Attorney: So in your opinion, if the house is unfit to live in, that would trigger ALE payment?

Adjuster: Yes, it probably would.

Attorney: Can you please give me the definition of "residence premises"?

Adjuster: Well that's easy. It's where the insured lives.

Attorney: Does residence premises include the garden?

Adjuster: No. It's not a building.

Attorney: Would you please refer to the policy and read the definition of residence premises?

Adjuster:"Residence Premises" means:

a) The one family dwelling where you reside
b) the two, three, or four family dwelling where you reside in at least one of the family units;
or
C) that part of any other building where you reside;
and which is shown as the "residence premises" in the declarations.

"residence premises" also includes other structures and grounds at that location.

Attorney: Would you mind reading that last part again?

Adjuster: "residence premises" also includes other structures and grounds at that location.

Attorney: Could you explain to me what "grounds" means?

Adjuster: It means the land around the house, the dirt and lawns and stuff.

Attorney: Would that include the garden?

Adjuster: Yes it would.

Attorney: Have you ever studied this section of the policy before?

Adjuster: Well yes I'm sure I did at some time.

Attorney: But you didn't remember it.

Adjuster: No, I didn't.

Attorney: Now you told me earlier that "residence premises" was just the house. Do you want to change your testimony now? Remember, if you change your testimony it might make you look bad or confused. Do you still say that the residence premises is the house only?

Adjuster: No, its the whole place.

Attorney: OK. Now earlier we agreed that the insured was alive in the garden. Is that right?

Adjuster: Yes.

Attorney: Would it be accurate to say that she is alive all over the property, she's alive in the house, she's alive in the garden, she's alive in the garage?

Adjuster: Yes.

Attorney: So you would say that she LIVES part of the time in the garden, part of the time in the house, and part of the time in the garage?

Adjuster: Yes.

Attorney: Would you say that she RESIDES part of the time in the house, part of the time in the garden, and part of the time in the garage?

Adjuster: Yes.

Attorney: So she LIVES and RESIDES in all of these places on the property?

Adjuster: YES

Attorney: Would you please read the sentence right here after the words "Additional Living Expense"?

Adjuster: If a loss under Section I makes that part of the "residence premises" where you reside not fit to live in, we cover any necessary increase in living expense incurred by you so that your household can maintain its normal standard of living.

Attorney: Based on your new understanding of the definition of "residence premises" would you say that the garage was part of the residence premises?

Adjuster: Yes, I would.


Attorney: So when you first worked on Mrs. Smith's claim you were wrong about the policy, is that correct?

Adjuster: Yes, I was wrong.

Attorney: Did you ever think to consult the company claims manual, or ask for guidance on this issue?

Adjuster: No, I didn't think I needed to.

Attorney: Did you notice Mrs. Smith was in a wheelchair?

Adjuster: Yes, I did.

Attorney: Did you know that she needs daily therapy and she does it in the garage?

Adjuster: Yes, I knew that.

Attorney: Did you think maybe the decision you made about the coverage would have a serious effect on Mrs. Smiths health, and that the decision you made might even cause her to skip her therapy and harm her health?

Adjuster: Yes, I thought about that.

Attorney: So even after realizing that your decision might affect Mrs. Smith's health, you decided not to read the definitions in the policy; you decided not to ask a supervisor for guidance; you decided not read the claims manual; you just decided you could do it yourself? Is that correct?

Adjuster: That's not fair. I'm a good adjuster. I try to be fair. It wasn't covered in the policy!

Attorney: How can you say that?

Adjuster: Because it's not a Section I loss!

Attorney: Can you describe to me what a Section I loss is?

Adjuster: It's the property part. Section II is liability. Section I is anything to do with property. The tree fell on the lawn and the lawn is not property so it's not Section I!

Attorney: Is there a definition of Section I in the policy?

Adjuster: Yes, it's in there.

Attorney: Can you find it for me?

Adjuster [after several minutes] Well, I guess it's not there.

Attorney: So how do you know the definition of "Section I"?

Adjuster: My Supervisor told me.

Attorney: So your supervisor knows a lot about the policy?

Adjuster: Yes, she is the expert and I always ask her.

Attorney: But you didn't ask her what the definition of residence premises" was, and you didn't even ask her if Mrs. Smith's ALE claim should be paid, even though you knew Mrs. Smith's health was at risk.

Adjuster: You're being unfair.

Attorney: Could you please find the heading "SECTION I - PROPERTY COVERAGES " on page three?

Adjuster: Here it is.

Attorney: Would you mind putting your finger on it?

Adjuster: OK.

Attorney: Would you please run your finger down the page until you get to the part about removing a tree for a handicapped person and when you do would you let me know?

Adjuster: It's here.

Attorney: Now did you notice that the part about tree removal for handicapped people is under "SECTION I - PROPERTY COVERAGES "? Did you notice that?

Adjuster: Yes, I did.

Attorney: Now we agree that the tree removal for handicapped people is under "SECTION I - PROPERTY COVERAGES". Do you think that means that the tree removal is under "Section I"?

Adjuster: Well no. "Section I" is not the same thing as "Section I - PROPERTY COVERAGES"

Attorney: So we need to find the heading of the policy that says "Section I", is that right?

Adjuster: Yes.

Attorney: Would you please do so.

Adjuster [after several minutes] I can't find it.

Attorney: Do you think it would be reasonable for someone to think that the tree removal for handicapped people would be under Section I?

Adjuster: I could see how someone could think that.

Attorney: So you agree that reasonable people could have different opinions about whether Mrs. Smith's claim for ALE should have been paid?

Adjuster: Yes, that's true.

Attorney: So did you ask your supervisor for guidance?

Adjuster: No.

Attorney: Are you aware that Mrs. Smith has now suffered permanent health problems since she skipped so many therapy treatments?

Adjuster: No, I wasn't aware of that.

Attorney: How much ALE would she have gotten if she had been paid?

Adjuster: $600.00

Attorney: Would you please read the Additional Living Expense section again?

Adjuster: Additional Living Expense

If a loss covered under Section I makes that part of the "residence premises" where you reside not fit to live in, we cover any necessary increase in living expenses incurred by you so that your household can maintain its normal standard of living.

Attorney: Are you aware that Mrs. Smith has incurred over $175,000.00 in medical bills since the hurricane?

Adjuster: No, I didn't know that.

Attorney: Are you aware that bad faith statutes in this state mean that an insured can collect three times her damages?

Adjuster: No, I was not aware of that.

Attorney: Are you aware that the insurance company you worked for paid several other ALE claims very similar to Mrs. Smith's?

Adjuster: No, I was not aware of that.

Attorney: Knowing what you know now, would you have handled Mrs. Smith's claim any differently if you had to do it over?

Adjuster: Yes, I would.

Attorney: No further questions.

---------------------------------------------
I'm not trying to say 100% that the policy says you have to pay the ALE in Ray's scenario. I'm just saying it would not be an unreasonable interpretation of the policy and it might even be the correct one. I also have no doubt that many company staff adjusters would pay the ALE even if they weren't 100% sure if it was a correct reading of the policy. And I have my disagreements sometimes with Ray, but he has been in court probably more that anybody on this site and he thinks it should be paid so that's something to think about.









Her attorney could and would make a compelling argument that

Leland,

I stand corrected. Your first reply made me realize that the tree down was a Section I, paragraph E - Additional Coverages loss. I was was thinking in terms of a structural loss being required.

Therefore ALE is triggered IF the premises are unfit to live in. I would agree that the inability to get to a regularly used part of the premises makes it unliveable - kind of like not being able to get to the kitchen for instance. Unliveable is, of course, subject to interpretation. I've never worked for a carrier that considered no electricity (air conditioning, etc) to be cause for ALE. I've had folks with medical problems that require electricity ask me to pay for a generator. Nope. If you need electricity to live, you should have already bought the generator. I recently had a guy with a computer-controlled hydraulic prosthetic leg. He bought a generator so he could charge it's batteries and walk. Not covered, but he took it well.

Per the HO3 policy the entire loss under Section I (including ALE) is subject to the deductible. Otherwise, under the ALE section the policy would say, "No deductible applies to this protection."

Good exercise!

Not being able to park your car in the garage doesn't make the residence premises unfit to live in, so no, that wouldn't be my position at all.

The policy is very clear if you take the time to carefully read it.

Swink: tell me straight out that I'm wrong when I posted this:

"For example, if the debris blown off the house tore up the lawn and the blind insured could no longer safely walk to his outhouse, that might trigger ALE."

If you say I'm wrong on that opinion, then I must respectfully say you don't know how to interpret a policy correctly

Let me spell it out for you:

If there's one bathroom and the insured is blind and he can't safely walk to it BECAUSE of a section I loss like wind blown debris from the roof tearing up the lawn- that insured deserves ALE.

That's what the policy says if you know how to read it.

If you disagree you don't know what you are doing.

Posted By Leland on 06 Aug 2010 01:02 PM
Not being able to park your car in the garage doesn't make the residence premises unfit to live in, so no, that wouldn't be my position at all.

The policy is very clear if you take the time to carefully read it.

Swink: tell me straight out that I'm wrong when I posted this:

"For example, if the debris blown off the house tore up the lawn and the blind insured could no longer safely walk to his outhouse, that might trigger ALE."

If you say I'm wrong on that opinion, then I must respectfully say you don't know how to interpret a policy correctly

Let me spell it out for you:

If there's one bathroom and the insured is blind and he can't safely walk to it BECAUSE of a section I loss like wind blown debris from the roof tearing up the lawn- that insured deserves ALE.

That's what the policy says if you know how to read it.

If you disagree you don't know what you are doing.

1.             Additional Living Expense

If a loss covered under Section I makes that part of the "residence premises" where you reside not fit to live in, we cover any necessary increase in living expenses incurred by you so that your household can maintain its normal standard of living.

 

Well it looks like we are ready for the Jezabel Brown loss that was a very complex coverage hypo that I put up over a year ago. I did make it more concise and easy to read in Word, a good topic for a dull weekend huh?

Also I would like to point out the made up deposition is not silly- if you've ever been in one that's pretty much how they go.

If you were the adjuster that denied the ALE you better be on your toes ready to define every single word and explain the coverage about as well as an attorney would. You better be able to explain exactly how you arrived at your conclusion, and you should be able to explain how you considered the other side of the question. If your employer has a claims manual or bulletin about the issue you better be able to say you've read it and know what's in it.

I wish I had that advice before my first deposition, there's nothing silly about that.

I had an attorney ask me what the difference between Vandalism and malicious mischief is.

Even though VM&M is one peril, they ask that question to make you look ignorant or uninformed.

If you were asked right now, without looking it up, could you give the correct legal definition of Vandalism as opposed to malicious mischief?

That's how depositions go, and if you read between the lines the attorney makes it very clear that the policy covers Mrs. Smith's ALE.

A staff supervisor could easily make the same analysis.

I don't see what's silly about that.

Ray you started all this so put up your SOL, it's not fair to let me an Swink fight it out.

And Swink, if i ever meet you, we can both go to the bar and I will buy you a drink.

I would suggest that if there was a storm large enough to cause damage to the house and the ensuing debris from the house caused damage to the lawn severe enough to make it unsafe for a blind insured to walk to his outhouse then the house would probably be unsafe to live in and therefore ALE would apply. However since we do not owe (Under an HO3 or HOA) for damage to the lawn then we do not owe ALE otherwise.

Claims-ray - please read my scenario carefully

wind tearing debris off the roof is Section I

lawn and outhouse are "residence premises"

not having a bathroom is unfit to live at the "residence premises"

The insurance company has to take the insured as they find him- he's blind and residence premises are unfit for him

If the dwelling was still OK they company would still have to pay ALE based on a careful reading of the policy

I do daily claims and I am expected to make coverage decisions all the time.

Tell you what, Willis, I know my post was long, an "epistle" as you say.

In my view it was good information for somebody who has never been deposed before. I wish I had that kind of info when I needed it. I think it also showed how coverage decisions are made, and not everybody on this website is out of the coverage decision loop.

But you're right it took me a long time to write it up and I probably spend too much time here anyway.

Let's hear it from some of the people lurking on this site-

If there aren't any people reading this site or those that do think my post is a waste of time, that's fine with me- I'll take it as a sign to stop wasting my time.

But if there's anybody out there that thinks my posting is helpful or matches what they know, say so.

I really don't want to waste my time or anybody else's.

I am still wanting to know

why are we in Texas?

Wouldn't we be referring to the HOC  instead of the HO 3 10

LOL 

All I have to say is that when you go to the storm site, the company has always instructed us what to pay on tree and debris removal. Pay the ALE. And Leland, you deposition makes a good point. Never claiim to be an expert on anything! It will bite you every time.

I agree Willis, storm adjusters are never required to know anything , except when do I get paid. I was in the London market claims business for 4 years. THE FIRST thing my employer told me was to write good precise reports and NEVER make a statement in the file about coverage, and then the reasons why. As you well know the investigated losses ran into hundreds of thousands or millions. We did write up the spead sheets and recap ( Statement of Loss) The policy was a manuscript of more than 40-50 pages or more, and the lead underwriter did not know "if it was or was not" and it was always sent to the coverage attorneys to decide. Best gig I ever had.

Leland,



SECTION I – PROPERTY COVERAGES
A. Coverage A – Dwelling
1. We cover:
a. The dwelling on the "residence premises"
shown in the Declarations, including structures
attached to the dwelling; and
b. Materials and supplies located on or next to
the "residence premises" used to construct,
alter or repair the dwelling or other structures
on the "residence premises".
2. We do not cover land, including land on which
the dwelling is located.

Under your senario you are talking about damage to the lawn/land which is not covered and is stated as not covered.  You never stated any damage to the outhouse itself.