| Author |
Message |
Bob Mitchell
Registered User
Username: Adjusterman2002
Post Number: 2
Registered: 1-2002
| | Posted on Thursday, January 31, 2002 - 5:39 am: | |
What a great question |
Tom Strickland
Registered User
Username: Toms
Post Number: 13
Registered: 12-2001
| | Posted on Saturday, January 26, 2002 - 9:09 pm: | |
}AS YOU CAN SEE, WE ALL HAVE THE OPINIONS! GREAT QUESTION. i FOUND THAT WE HAD 3 A's, 3 B's, 1 C.
What a configuration!!!
I stabbed based on the "old" HO-3 and got lucky I guess, but again, Nice thread. Good Job, Jim. |
JimLakes
Registered User
Username: Jimlakes
Post Number: 57
Registered: 12-2000
| | Posted on Saturday, January 26, 2002 - 6:02 pm: | |
TO ALL,
Lets first start by stating that we must know the amount of coverage or the limit of liability for this policy.
As stated in the question, we informed you that the original amount of the policy limit was $222,285.00. We then stated that, by endorsement, the limit of liability increased by 125% or to $277,856.25, with the Inflation Guard protection for coverage A.
Under “Additional Coverages,” Debris Removal: the HO-3 policy states:
“This expense is included in the limit of liability that applies to the damaged property. If the amount to be paid for actual damage to the property plus the debris removal expense is more than the limit of liability for the damaged property an additional 5% of that limit of liability is available for debris removal expense."
There are two key words in that sentence. It is “plus and more.” The word plus, means: if you add the amount of the repairs and the debris removal together and it is “more” than the limit of liability there is the additional 5% for debris removal available. What was the "intent" of the policy? It was to afford an additional 5% coverage for those people who "exceeded" their limit.
Therefore, since the limit of liability for this loss is $277,785.25 the insured has not reached the limit of liability and therefore the full cost of the debris removal should be included in the Replacement Cost of the dwelling. The additional coverage of 5% would only apply if the insured had exceeded the limit of liability, which they did not. In other words, if the total replacement cost of the dwelling, with the debris removal would have exceed the $277,785.25, then the carrier would owe up to an additional 5% for debris removal or the actual cost up to that additional limit.
In this case, the amount for “Trees, plants and other shrubs,” just happened to be the 5% of the un-endorsed limit or $11,114.25.
Therefore the answer is “B” $271,511.75.
For those of you that did not have the right answer, don’t feel bad. The claims manager and all of their people did to. They only wanted to pay the insured $11,114.25 of the $18,000.00 in debris removal or 5% of the original limit.
Anyone with any further questions feel free to give me a call.
Thanks for all the responses.
Jim Lakes, RPA
National Catastrophe Director
RAC Adjustments, Inc.
866.241.6574
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Jim Lakes
Unregistered guest
| | Posted on Saturday, January 26, 2002 - 12:48 am: | |
To All,
OK, all of you that have not responded for fear of being wrong, get your response in now. On this question and tread we don't care who's name you use.
I will answer the question on Monday when I am at the office so that I can quote coverage from the policy.
Thanks to those that have responded.
Jim Lakes, RPA
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billr
Unregistered guest
| | Posted on Saturday, January 26, 2002 - 12:47 am: | |
Hi Jim,
Very thought provoking. I believe that you gave a clue in your question. Setting the amount of damage from the trees and shrub coverage to 5% of the original amount of dwelling coverage would lead me to believe that the additional amount of debris removal would be limited to 5% of the original amount as well. My vote would be answer (A).
Best Regards
Bill Richard
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Davey
Unregistered guest
| | Posted on Saturday, January 26, 2002 - 12:46 am: | |
Ok Jim
It's been 24 hrs since the last post on your question. How about your "final answer", so we can all argue about it.
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Roy Cupps
Moderator
Username: Admin
Post Number: 76
Registered: 1-2002
| | Posted on Saturday, January 26, 2002 - 7:49 pm: | |
Forum transfer, posted by jLombardo
Jim ---the answer is "B"
it consists of the loss ammount plus the debris removal plus the damage to the trees,etc.
The 5% for the debris removal is a limit set only if all of coverage A is already accounted for, THEN, an additional 5% for debris removal. The cost of the trees etc, fall within the internal L/L and are also reimbursed 100% in this example
(Message edited by admin on January 26, 2002) |
Kile Anderson
Unregistered guest
| | Posted on Saturday, January 26, 2002 - 12:44 am: | |
If you set the new policy limit with inflation guard as the RC of the dwelling then the claim should be $265,632.10. That is the replacement cost of the house plus the 5% for shrubbery plus the additional 5% of the new limit for debris removal. You did state however that the new limit of liability due to inflation was 125% of the original limit so I will stick to my original answer of $271,511.25 because of the policy language. My reasoning has to do with the way the inflation coverage section is written in the policy that I have in front of me. This policy was put into effect 12/90 so may be outdated but it says under Inflation coverage "The limits of liability shown in the Declarations for Coverages A and B will be increased at the same rate as the increase in the Inflation Coverage Index shown in the Declarations page." What this is saying is the real limit is the Dec page limit plus the correction factor found in the index. Since the additional coverages are based on the limit applied to the damaged property then the limit adjusted for inflation is the proper limit to apply the 5% to. |
Russ Doe
Unregistered guest
| | Posted on Saturday, January 26, 2002 - 12:43 am: | |
I Agree with Pat Marx. Inflation Guard would be actual construction costs over and above policy limits. If the policy limits were exceeded
the extra 5% for debris removal should be added in. Trees and shrubs would be included in the total loss. Owed is reconstruction costs (242,397.00)+ 5% of the policy limits for debris removal (11,114.25)+
trees and shrubs ($11,114.25) no deductible taken for a total of (A)
$264,625.50.
REDoe
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pat marx
Unregistered guest
| | Posted on Saturday, January 26, 2002 - 12:43 am: | |
it appears from the policy that debris removal would be under
additional coverage and would not be covered by the inflation
guard.Inflation would cover coverages A B C and D not additional ins.coverages.
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pat marx
Unregistered guest
| | Posted on Saturday, January 26, 2002 - 12:42 am: | |
Jim i believe the answer should be {a} as the inflation does not apply to debris removal.
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Kile Anderson
Unregistered guest
| | Posted on Saturday, January 26, 2002 - 12:41 am: | |
Let me see if I can interpret this correctly. The policy that I have says the limit for trees shrubs and other plants is 5% of the "limit applying to the dwelling" so I take that to mean the increased limit because it doesn't say the limit on the dec page. It is the limit that actually applies to the dwelling which is the increased limit. It goes on to state that "this coverage may increase the limit otherwise applicable" so the insured is always entitled to 5% for TSOP coverage. If everything else reaches the limit there is still an additional 5% available for debris removal for the structure, once again it says "the limit for the damaged property" so that means not the limit on the dec page but the actual limit being applied. These are my interpretations, I'm sure there are people around who will read it differently.
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Jim Lakes
Unregistered guest
| | Posted on Saturday, January 26, 2002 - 12:40 am: | |
Dave and All,
Valued Policy has no bearing on this loss.
This is not a trick question. I am just looking for the answer to the question as to what you think the insured has coming for RCV considering these facts apply and why.
Further questions.
Does the 5% additonal coverage for Debris removal and Trees, Shrubs and other plants, apply to the limit of liability stated on the declaration page or the increased limit by endorsement and when does it take effect?
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Davey
Unregistered guest
| | Posted on Saturday, January 26, 2002 - 12:39 am: | |
My vote is for C. Assuming that the $500 per unit is not exceeded on PTSL. And this is the amount before deductible. But until the work is done, only the original limits are owed.
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TomS
Unregistered guest
| | Posted on Saturday, January 26, 2002 - 12:38 am: | |
The answer should be "B" unless there is something in the equation we are not privy to.
Tom Strickland
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Dave
Unregistered guest
| | Posted on Saturday, January 26, 2002 - 12:38 am: | |
Are we working in a valued policy state? |
Kile Anderson
Unregistered guest
| | Posted on Saturday, January 26, 2002 - 12:37 am: | |
Unless I'm missing something it should be b) 271,511.25. But that depends on the costs of some of the individual plants which would be limited to $500 per plant. The cost for trees/shrubbery and their related debris removal that you stated was exactly 5% of the original dwelling limit which is the coverage limit for trees and shrubbery. I didn't have an inflation endorsement, but I'm assuming that since it increased the dwelling limit it would also increase the 5% related to the trees and shrubbery, but that really isn't an issue here. Had the claim exceeded the limit, an additional 5% would have been available for debris removal expense for the building debris but that wasn't an issue either. I hate this kind of question, because I have a nagging feeling that I'm missing something. Whenever you add up all the numbers and they don't exceed the limit and that answer is available I feel like there is a twist that I'm not getting.
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Jim Lakes
Unregistered guest
| | Posted on Saturday, January 26, 2002 - 12:36 am: | |
TO ALL,
The insured carries $222,285.00 HO3 on the dwelling. They also have an endorsement for Inflation Guard, which increases the limit of liability by 125% or $277,856.00.
The insured has total fire loss.
Replacement cost on house is $242,397.00 not counting Debris removal, trees, plants and other shrubs.
Question: If Debris Removal is $18,000.00 and Trees, Shrubs, and Other Plants are $11,114.25, what is the total amount owed to the insured for RCV for the dwelling, debris removal, and trees, shrubs, and other plants?
A) $264,625.50
B) $271.511.25
C) $265,631.10
D) $270,182.63
Jim Lakes, RPA
National Catastrophe Director
RAC Adjustments, Inc.
866.241.6574
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