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CCarr
Canada
1200 Posts |
 Posted - 12/23/2002 : 22:18:36
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The following is a real and live claim that happened last Thursday. I am assisting a colleague, who is the control adjuster. The following is pretty straightforward - with no cause, coverage, or limit issues. The HO policy is written on a "Broad Form" (but that is irrelevant) with guaranteed RC on the building and RC on contents.
An accidental fire, caused by the insured neglecting ignited candles, destroyed the insured home and all its contents. Mr. & Mrs. Insured, their 2 children and 1 dog 'lost everything'.
This is the 2nd of these 'situations' I have ever encountered, the first I was only an interested observer and not involved, and never found out the outcome. The 'situation' is, like most claims like this it made the daily newspaper with a blurb and photo and the 'all lost' emphasis but with mention that 'they were fully insured'. By the next day, picked up by the newspaper again, a trust fund had been established by caring neighbours and advertised. By early afternoon today, there is already about $5,000 collected. The intent of the trust fund is to solely aid the fire victims (the insureds) to purchase replacement contents. The funds are available 'at their will', and bank officials suggest that from their experience; the collection will likely peak at about $10,000.
We have all seen or regularly read about similar claims, but with the statement, 'they had no insurance'; and a trust fund established to help them out. That I can understand, and it is great.
This 'situation' however does not sit well with my grasp of the principal of indemnity, given the what should be considered as 'full coverage' policy, based on our review to date.
It doesn't matter what policy you refer to - in essence I think the thought process should be limited to the 'Conditions' of the policy, which in our HO policies are referred to as 'Statutory Conditions' - the only item slightly relative is the 'Other Insurance' condition. But I fail to see it applying.
This policy will respond to all of the insured's needs for indemnity for the loss. In addition, due to the loss, which they will have no share in other than their $500 deductible, they will 'pocket' about $10,000. As a result, they will have derived a benefit from the loss, of about $10,000. I just can not come to terms with that.
Can the carrier take into account the trust fund benefit to the insured of about $10,000?
If so, why and how?
If not, why not? |
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JimF
USA
1014 Posts |
Posted - 12/23/2002 : 22:45:00
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Clayton, in my opinion, the answer to your question is NO.
Here are my reasons why:
First of all, were it made public that the carrier was trying to reduce it's legal payment to the insured, it would be a public relations nightmare for the carrier not to mention the adjuster. More especially at this Holiday time of year with it's central theme of giving.
You do celebrate Christmas even in Canada?
Secondly, suppose a sympathetic neighbor across the street invites the family over for Christmas dinner. Would that dinner constitute an off-set for some daily ALE meal allowance?
Suppose in the spirit of Christmas, that neighbors, friends or family give this family second hand clothes to be worn and used by the family as temporary clothing until they can get over the shock of losing their home by fire, and then more carefully replace their clothing with more suitable 'permanent' clothing after the Holiday sales rush. Or a second hand mattress to be used until a permanent set can be purchased. Should the adjuster and carrier monitor these as well for offsets against Coverage B - Personal Property?
Most families accummulate personal items, accessories, knick-knacks, bric-a-brac, art, and 'content' items over a lifetime of searching and through their travels. While the carrier indeed will pay the replacement costs, we both know there is no compensation for the time, trouble, travel, and energy required in finding replacement items, purchasing them, transporting them, and resetting them back into a familiar locale. Should these invisible 'costs' to the insured not also be allowed by way of the created trust, rather than seeing this trust as an insured profiteering in this instance?
Suppose as well, that the husband's employer provides him with 3 months of paid time off to work through the details of rebuilding the home and purachasing contents. Would you envision offsetting that as a 'benefit' to the insured?
There is nothing in the policy which excludes 'gifts' per se nor even mentions 'gifts' as opposed to 'other insurance'.
The distinction between a gift and other insurance is that one is unexpected and not guaranteed while the other is more readily expected, measurable and guaranteed.
The distinction also is different in that other insurance is measurable in dollars (cash) whereas gifts might take the form of goods and services, with a less measurable value (used versus new).
We all know as well, that the 'damages' and 'costs' to a family suffering through an innocent total loss fire to their home is not merely measured in dollars; but in the psychic pain of losing items which can never be replaced by any sum of money: wedding albums, family photos and heirlooms, children's artwork, or a baby's favorite 'blankie.' Not to mention the angst, heartaches, worry, and fear which insurance money alone can never really compensate for.
In the spirit of this season of giving, I can't even begin to imagine an adjuster or carrier would even begin to think of such an extreme tactic as offsetting an indemnity payment by whatever measurable offerings are brought to this family from wiser men from afar.
Stop being a 'Scrooge' and take another look at the forest. You're nearsighted from looking too closely at the trees. |
Edited by - JimF on 12/23/2002 23:12:09 |
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CCarr
Canada
1200 Posts |
Posted - 12/23/2002 : 23:03:02
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Thank you sir. The time you took to 'lay it out' in the manner you did; gives me a better viewpoint, one I'm now comfortable with and could easily support using.
It was a good example of a person loosing 'their vision' of the issue, and needing some 'clear rinse' to see the whole picture again.
I get frustrated on or with this site sometimes, but it is examples of this kind of help, sometimes tangible and sometimes intangible; that renews my faith and value of it and of the people who participate in it.
Thanks again, I feel a bit foolish now for sidetracking my mindset, but alls well that ends well; and I'll be over it by the morning. |
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JimF
USA
1014 Posts |
Posted - 12/23/2002 : 23:07:49
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Clayton, no problem, we won't start calling you the Scrooge of the Great North yet.
You might also note that I did edit my earlier post to include additional considerations, while you were responding to my post. |
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JimF
USA
1014 Posts |
Posted - 01/07/2003 : 21:35:47
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I have been thinking about the question which Clayton raised, and wanted to add a couple of extra thoughts.
First of all, in further support for the position which I took in the scenario which Clayton outlined, it seems to me that insurance carriers are already inclined to the position which I outlined, and here's why. Remember the collateral source rule which basically says under casualty practice, that other sources of indemnity for medical, hospitalization, loss of income, etc. cannot be off-set by an insurance carrier in determining or paying a liablity loss/claim under the primary or third party coverage.
Further, I then started wondering if any insured could truly provide an accurate accounting or value for such things in a home as books, CD's, women's cosmetics, spices and flavorings, lingerie, and other items where there may be small values per item but cumulatively great values from loss.
How many adjusters here on this board could tomorrow morning or next month, provide any honest and/or reliable account of the books in your home or the number of lipsticks and sundry cosmetic paraphernalia which your wife owns, should your home be totally destroyed by fire? Very few I suggest, as we don't tend to keep records of such nor have a specific awareness in recollecting such small single items under the stress of a severe partial or total loss event.
It might be worthwhile as well, to set up another topic thread, to deal with how adjusters estimate, enumerate, and value these specific kinds of personal items during severe partial and total loss events.
Anyone have any thoughts one way or the other? |
Edited by - JimF on 01/07/2003 21:44:14 |
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CCarr
Canada
1200 Posts |
Posted - 01/07/2003 : 22:06:28
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Regarding your last two paragraphs, I do.
If there was a thread established along the lines of the essence of your 2nd last paragraph, and if 3 or 5 others - at least - started off with their thoughts, I might be able to add some interesting observations from my work in this area.
Aside from whatever else I have done considered in the normal realm of a claim involving contents as a carrier claims person, and as an independent contractor doing claims, I helped a start up company by doing some manuals and training for them here and in the UK in 2000, field audits, carrier seminars, and more field training in 2001; and some defense litigation preparation work for the contents aspect of claims in 2002. All this for a specialty vendor for only contents losses. I got quite a focus on the 'what & why' that goes on regarding establishing the loss inventory and then the quantum exercise, as seen by a carrier and from day to day IAs.
It is a carved in stone belief by carriers, that the greatest leakage in claims - in general - is with the contents portion of any loss. That is partially why you now see more and more carriers establishing 'contents specialist' units within their claims departments.
Anyway, it is a good topic, and if it gets established and running, if nothing else the stories I can add will give you an ache from shaking your head in possible disbelief of what I could relate.
I'm assuming this won't get off the ground much before the end of the week. I'm out most of Thursday, pretty busy Friday; then will be out of town until the 19th. Look forward to some interesting input by then. |
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JimF
USA
1014 Posts |
Posted - 01/07/2003 : 22:25:32
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Ok Clayton, you have tickled my interest, so the least you can do is tell us a story or two now instead of making us wait until the weekend.
And you get extra points if you can bring Delois the Pizza Gal into your examples, at least according to Ghostbuster.
And Puhleeze (for Tom's sake).....no 'Gloom and Doom' stories! |
Edited by - JimF on 01/07/2003 22:29:38 |
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CCarr
Canada
1200 Posts |
Posted - 01/07/2003 : 23:07:04
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| It's not Delois, it's Deloris, okay? I know she would be upset if I let her name get twisted. She says the boys on campus have a rhyme, that's set to time, that sounds just fine, when they have some wine - and think of Deloris. She hasn't told me what it is yet, can anyone guess? |
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Charitable donations offset indemnity owed?
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