A Loss that should be settled ASAP
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A Loss that should be settled ASAP - 7/30/2006 6:16:56 PM
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trader
Posts: 1200
Joined: 4/19/2004
Home base: Houston, TX
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This is a hypo: The insured is a General Adjuster for his Homeowners Carrier who is also his employer.
Coverage A 200,000. B 20% C. 160,000. D. 20%. Deductible both 5%. The HO-3 1999 has the GRC for the State of Georgia. Inception 09/01/05 to 06 No Mortgage.
On October 1, 2005 the house has a kitchen fire that resulted in $8,000 damage from direct damage. The insured estimated the damage @ 8,000 and decided to not turn in a claim and do the work himself, as it would not exceed his $10,000 Ded. He was called out on October 3, 2005 on a long storm assignment. On April, 2006 his house was destroyed from a F5 tornado, and he inspected his lot on April 2, 2006 and his 1/3 acre lot was bare soil as the sod had been lifted away. Everything gone a 3 rail fence, electric gate red brick crushed driveway, garage, pump house, pony barn.He has to return to work and expects to be finished by labor day. he will mail you his inventory list and the blueprints for his house and some photos. Please handle with kid gloves as he requested an experienced independent adjuster only. You get the loss on April 3, 2006.
**corrected to read-he did not turn in a claim*
< Message edited by trader -- 7/31/2006 12:11:44 AM >
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RE: A Loss that should be settled ASAP - 7/30/2006 11:51:59 PM
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swink_d
Posts: 259
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Home base: Lexington, NC
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Trader
Is post correct when you are saying that he did file a claim for the fre loss?
what exactly are you asking? I am confused about the question.
< Message edited by swink_d -- 7/31/2006 12:03:17 AM >
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RE: A Loss that should be settled ASAP - 7/31/2006 2:06:19 AM
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TomS
Posts: 116
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Home base: Texarkana, TX
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Trader what is the question. Sounds like policy limits for dwelling and ALE and "if" he proves up contents that also. "IF" home was destroyed by F-5 Tornado what is left to do but take proof. kidding but confused also.
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RE: A Loss that should be settled ASAP - 7/31/2006 2:18:07 AM
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Czar
Posts: 65
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Home base: Columbus, Ohio
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Why would policy limits apply for ALE. He is not at the house as he is on assignment. What addtional living expenses does he have since he is not going to be there. Is he married/kids? Was he up front with his adjuster/carrier that he had 8K in damages to his kitchen when he turned in the loss for the tornado? If so, then you would assume that a carrier level decision would be made as to the subtraction of that amount from any dwelling payment.
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RE: A Loss that should be settled ASAP - 7/31/2006 7:56:11 AM
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DAVIDR
Posts: 60
Joined: 12/2/2004
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Trader, This is what I would do. Since the insured advised he had $8K in fire damage in the kitchen that had not
been repaired. I would first inspect the loss. Of coarse , I would measure building slabs ect. I would then write a
complete estimate based on my inspection, interview and with the insured's blue prints. I would then put a write in
kitchen section of the estimate. The write in would be a -8K adjustement with a drop down box that would explain
that the insured had this fire which according to him has not been repaired. I would also involve the carrier, their position may be to forgo the $8K adjustment.
_____________________________
DAVID C. ROLLINS
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RE: A Loss that should be settled ASAP - 7/31/2006 10:02:05 AM
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CATdawg
Posts: 149
Joined: 2/26/2006
Home base: Keller TX
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I think deducting the full 8K from a loss settlement could be tricky. Since the HO never turned in a claim for the damage resulting from the kitchen fire, is there a prior loss from the point of view of the policy? I realize that the fire loss is a separate "occurence" under the Definitions. Someone please quote any other language that applies.
Assuming that policy language requires the HO to report the previous damage (from the fire) in order for it to be deducted from the wind claim, how much of the fire estimate should be applied? In order to be made whole after the tornado loss, the HO would need a kitchen to repair. If, resulting from the fire, the walls and/or ceiling needed replacing, that would be one thing. But what if they only needed washing and repainting? RC on the wind loss would include replacing walls and ceilings and applying a finish. And suppose the 8K of repairs included refinishing (not replacing) the cabinets? Now that the cabinets are gone completely, should the carrier allow only for unfinished cabinetry? Refinishing cabinets costs a lot more than the original finishing in a shop or on-site. The same thinking could apply to appliances. Suppose they sustained cosmetic damage from the fire, rather than total loss?.
What part of the fire claim would have been for cleaning (remember, the fire started in the kitchen, but Trader didn't say that the damage was confined to the kitchen) and debris removal? Cleaning alone might have made up the bulk of 8K. Why should these expenses be deducted from the wind claim? Then again, the scenario posited direct damage, so Trader may not have wanted us to include smoke or soot damage. What is the definition of "direct damage" for the purpose of this exercise?
Once again, I've managed to completely confuse myself LOL.
< Message edited by CATdawg -- 7/31/2006 10:44:24 AM >
_____________________________
Lee Norwood
"Many a time have skillful workmen tried to contrive a wheel that shall turn of itself..." -Archimedes
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RE: A Loss that should be settled ASAP - 7/31/2006 11:16:23 AM
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trader
Posts: 1200
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Home base: Houston, TX
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The purpose was get you all thinking and it has. A kitchen fire will always have some smoke/odor throught out the house. $8,000 is not a lot of kitchen damage.Think like an adjuster should betterment/depreciation the $8,000 damage from the fire would be one or the other and was present when the tornado hit. Lets assume in this case the insured had wife, 2 school age children and an inside and outside dog and a Tenn. walking house. No one injured.
Also assume the RCC on the contents exceed the limit by $25,000. and the average depreciation on the inventory was 18.7%
The house was a one story, brick veneer, comp roof, 10 year old house with 4 bedroom 2 1/2 baths, den, dining, utility, halls and large kitchen/ BR opening into the large 26x29 den with a fire place with double French doors leading to a patio 3416 SF living area.
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RE: A Loss that should be settled ASAP - 7/31/2006 12:00:26 PM
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CATdawg
Posts: 149
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Home base: Keller TX
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quote:
ORIGINAL: trader
Lets assume in this case the insured had wife, 2 school age children and an inside and outside dog and a Tenn. walking house. No one injured.
Also assume the RCC on the contents exceed the limit by $25,000. and the average depreciation on the inventory was 18.7%
The house was a one story, brick veneer, comp roof, 10 year old house with 4 bedroom 2 1/2 baths, den, dining, utility, halls and large kitchen/ BR opening into the large 26x29 den with a fire place with double French doors leading to a patio 3416 SF living area.
Sounds like the risk is underinsured from the carrier's point of view, but since it's a GRC policy the insured has coverage for the complete loss to coverage A (since my understanding of GRC is that it precludes a co-insurance requirement), and up to 20% of A for coverage B (assuming GRC doesn't apply to B). Further assuming that RC, rather than GRC, applies to C, then the insured has 160K of coverage C (which is more than the depreciated amount of 185K x 81.3% = 150.405K).
ALE would cover the wife and kids, but not the dogs; and the husband's expenses on the road while deployed do not come into play. However, I agree with Swink_d that his expenses incurred to travel to the risk, and then back to work, would be covered under ALE, since these would be above and beyond what he would need to spend while working.
I have no idea what a "Tenn. walking house" is.
< Message edited by CATdawg -- 7/31/2006 12:08:28 PM >
_____________________________
Lee Norwood
"Many a time have skillful workmen tried to contrive a wheel that shall turn of itself..." -Archimedes
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RE: A Loss that should be settled ASAP - 7/31/2006 1:11:58 PM
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trader
Posts: 1200
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Home base: Houston, TX
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A horse popular in Tennessee. Dwelling do not have a co-insurance requirement. The broad HO contracts have replacement cost provisions, similar to to under insurance on a commercial policy.
< Message edited by trader -- 7/31/2006 1:17:10 PM >
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RE: A Loss that should be settled ASAP - 7/31/2006 1:17:50 PM
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swink_d
Posts: 259
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I don't have a copy of the policy but pretty sure the horse is a non issue and the pony shed is excluded
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RE: A Loss that should be settled ASAP - 7/31/2006 1:25:32 PM
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trader
Posts: 1200
Joined: 4/19/2004
Home base: Houston, TX
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Well with the facts given, if you do not have the answers to the questions that you need and no policy. How would you settle the loss if you could not guess ?
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RE: A Loss that should be settled ASAP - 7/31/2006 2:48:31 PM
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trader
Posts: 1200
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Home base: Houston, TX
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What would you do if your punt was blocked back in your face ? To another poster if its insured for 200K the RC can be $250,000. and 3416 = $73.19 per sf less the foundation, does that sound too low on your evaluator ?
< Message edited by trader -- 7/31/2006 2:53:36 PM >
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RE: A Loss that should be settled ASAP - 7/31/2006 3:06:41 PM
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trader
Posts: 1200
Joined: 4/19/2004
Home base: Houston, TX
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Incredible, a person who would make coverage decisions with out a HO-3 1999 policy to refer to. Talk about hip pocket shooting this is from the exact center of the body on normal folks.
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RE: A Loss that should be settled ASAP - 7/31/2006 3:35:28 PM
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swink_d
Posts: 259
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Home base: Lexington, NC
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I was picking... and just playing along with you?
58.54 or 70ish a sq foot seems awful low for an ITV. so just by SQ foot pricing can probaly absord the deductible.
My quick answer is recommend payment for the ACV amount of the loss , absorb the deductible. Utilize a POL and RC statement. Include all his accrued ALE and pay his contents minus depreciation . .
To me the previous fire has no bearing whether he had started repairs or completed repairs or just left the kitchen/house as is.
THEN close file and let the inside folks handle the RC portion ( Punt) ( handoff) ( pass) ( play hot potato)
why do I feel like i just got caught in a bear trap ? maybe because I didn't feel like waiting for several hours to move the topic along
< Message edited by swink_d -- 7/31/2006 3:38:34 PM >
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RE: A Loss that should be settled ASAP - 7/31/2006 4:39:56 PM
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trader
Posts: 1200
Joined: 4/19/2004
Home base: Houston, TX
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I will try to answer all the post and we will start a new hypo topic if you folks want to for many years all the property adjusters in Houston would play this game on the phone. Some time they were not hypo but the insureds were never known.
The APS includes pony barns/sheds, even storage barn types , if the definition of the main premises is not a farm or ranch.
The $8,000. unrepared loss reduced the second claim by that amount. The dogs & horse board are excluded, but many carriers wink at this one. The lawn, trees shrubs and plants, never cover; however the crushed brick drive way is treated like a concrete or asphalt driveway
< Message edited by trader -- 7/31/2006 4:40:31 PM >
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RE: A Loss that should be settled ASAP - 7/31/2006 7:27:52 PM
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CATdawg
Posts: 149
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Home base: Keller TX
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Sorry, folks; please be patient with me. I know I won't always be correct answering these scenarios; but I want to be, when all is said and done, sure about why I was wrong!
1) I'm getting the feeling that I am confusing "co-insurance" with "insured-to-value". What is the name of the clauses in the HO3 under Conditions, C.Loss Settlement, 2.a. and 2.b.? The ITV clauses? co-insurance clauses? the RC clauses? or something else? [Trader writes in post #21, "Forget ever thing else and curse the instructor who told you RCC is co-insurance.", so I'm going with calling them the "RCC clauses"].
2) Trader writes: "To another poster if its insured for 200K the RC can be $250,000" (post #14). Yet, Aporco wrote in another thread (Loss to a "mow-down", #10), "Remember the old GRC (Guaranteed Replacement Cost) HO policies that disappeared in the mid-90's?... Insurers found themselves paying 2, 3, even 4 times the policy limit ... The GRC has since been replaced with the Extended Replacement Cost policies which limits the additional coverage to 25% of the policy limit. The old GRC was unlimited." So, for the purpose of this exercise, what is the definition of a GRC policy? If RC can be 250K (125% of coverage A), then it sounds like Aporco's example of an Extended RC policy. But the standard HO3 1999 also allows 250K, because 200K is 80% of 250K. So why does the scenario mention "GRC" at all?
And does the 250K settlement include the 5% of A additional coverage for debris removal?
3) Since trader writes, "The $8,000. unrepared loss reduced the second claim by that amount" (post #17), and "...betterment/depreciation the $8,000 damage from the fire would be one or the other and was present when the tornado hit."(post #8)
am I to assume that my hairsplitting (post #6), about the nature of the damage resulting from the fire, is irrelevant? If so, why?
I apologize if I'm being anal-retentive, but I really wanna know. After all, I need to settle this ASAP LOL.
< Message edited by CATdawg -- 7/31/2006 11:14:55 PM >
_____________________________
Lee Norwood
"Many a time have skillful workmen tried to contrive a wheel that shall turn of itself..." -Archimedes
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RE: A Loss that should be settled ASAP - 7/31/2006 10:04:35 PM
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trader
Posts: 1200
Joined: 4/19/2004
Home base: Houston, TX
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Think of it this way. Your auto is insured for its ACV. The undisputed book price is xxxxx. You agree to settle for five xxxxx and the police who arrested you put in his report that the reason he arrested you follows.
1. You sold the factory mag wheels and top of the line tires, and reinstalled 3 tires on donuts plus your donut and drove away as fast as you could, and he became very suspicious and pulled you over, gave you a test and left your car on the street as he took you to jail. Before the impound wrecker could get to your BMW it was stolen
Question: does the insurance company owe you xxxxx or the diminished value to. Now you have the answer.
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RE: A Loss that should be settled ASAP - 7/31/2006 10:09:26 PM
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CATdawg
Posts: 149
Joined: 2/26/2006
Home base: Keller TX
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Thanks, Ray! That addresses my question 3). Anybody else have (homeowner) policy language that might add to Ray's answer?
Any responses to my questions in 1) or 2)? LOL
< Message edited by CATdawg -- 7/31/2006 10:14:56 PM >
_____________________________
Lee Norwood
"Many a time have skillful workmen tried to contrive a wheel that shall turn of itself..." -Archimedes
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