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CCarr
Canada
1200 Posts |
 Posted - 12/19/2002 : 18:36:57
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Strike two, with another attempt at a fast ball!
You do not see "fire" as an excluded peril.
Again to the preamble; "SUCH LOSS is excluded ....".
That is, THE power failure.
Why isn't there more than one ump commenting on 'home plate'? |
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bryan newell
USA
45 Posts |
Posted - 12/19/2002 : 20:36:03
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I have read the preamble as was suggested; however, the exclusion reads POWER FAILURE, not power surge. The preamble does say directly or indirectly, but again the exclusion specifically states POWER FAILURE not power surge. I have worked for numerous carriers and some have elected to cover it and some have declined. The carrier I worked Lili for in Louisiana, covered the loss. I believe that this coverage is open to interpretation and should be discussed with the carrier liason upon arrival at the storm site.
By the way PLRB says that it is covered. |
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CCarr
Canada
1200 Posts |
Posted - 12/20/2002 : 00:36:24
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I see our associate from the Carolinas is peeking in every now and then, I thought he would have been back to this thread by now.
Anyway, welcome to CADO Bryan, I personally hope you will bring many more of your thoughts to us on a variety of issues, via CADO.
Lets go back and look at the claim that hit our desk.
(1) there was a power outage in the area
(2) then, the power came back on
(3) then, the AC unit no longer worked
(4) then, a technician examined the AC unit
(5) then, the tech said a surge damaged the unit
(6) then, the tech said the unit needed replacing
That is the order of sequence of the facts put before us.
We have a location specific policy.
Section I - Perils Insured Against - "we insure against risk of DIRECT LOSS to the property described ...."
Rupss Insurance & Risk management Glossary defines "Direct Loss" as, "property loss caused directly by an insured peril, as opposed to indirect or consequential damage".
Now consider the above in addition to the Section I - Exclusions, and its preamble, and measure that against the facts of the claim.
What happened in this claim is that the power went out. Is it not correct to state that if the normal flow of electrical power in the area stops, i.e. goes out; that the result is a "power failure"?
Look at the sequence of the claims events, the only material facts are #1, 2, & 3.
There was a power failure (look at the wording for the "Power Failure" exclusion - "meaning the failure of power or other utility service ....), after the failure ceased, i.e. the flow of power resumed, the AC unit no longer worked. Thats it, thats all!
It is totally irrelevant what happened after steps #1, 2, & 3.
There was a "power failure", unfortunately it seems to have caused the AC unit to no longer work. The issue of power surge does not belong in the story.
As an addendum to the "insider's" strike two call, relative to his question of fire, the answer is still the same, of course if a fire resulted from the scenario we are flogging; the fire damage would be covered.
The wording of the "Power Failure" exclusion is clear on that, as noted in its last sentence; "But, if a Peril Insured Against (i.e. fire) ENSUES on the residence premises, we will pay only for that ensuing loss". |
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JimF
USA
1014 Posts |
Posted - 12/20/2002 : 01:00:27
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Clayton, your 'Carolina's Associate' agrees with you 100% on this one. (And for all the same reasons and policy interpretational logic)
You're doing doing fine without me. Sammy Sosa eat your heart out!
I'll join Ghostbuster on your cheerleading squad. Never mind, we'll sell the peanuts and beer!
Out of curiousity, where specifically are the references to PLRB being found?
Has anyone checked to see what PF&M and FC&S had to say about this topic? |
Edited by - JimF on 12/20/2002 01:07:07 |
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CCarr
Canada
1200 Posts |
Posted - 12/20/2002 : 11:24:49
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Well, just picking up some pieces left on this issue that have nothing to do with the technical aspect of it, but to me is the more troubling and too often heard refrain of; ".... some carriers do and some do not .... some storm vendors do and some do not ....".
Bryan brought that theme to the thread, and his thought that, ".... this coverage is open to interpretation ....". Personally, I don't think this specific scenario with the specific wording is open to interpretation leading to any other conclusion. But, very unfortunately that lack of consistent industry interpretation will continue; and I have been and likely will again in some other situation, be pecking at it from the wrong side of the fence.
Generally, I have found over the years, that when we have a table full of information and facts (i.e. the Cause), we try to use all of that material to support our conclusion on the "2nd C" - Coverage - whether the resultant conclusion is yes or no. Often there is more information on the table than is required to make the right coverage decision. Often a lot of the tail end consequential facts muddy the pool to get the proper vision on whether there is coverage or not. I find that if the information is sorted on the table in sequential order, it often allows for a clearer vision. The scenario we flogged here is perhaps a good example of that.
This PLRB quote by 'inside' and the declaration by Bryan that ".... says that it is covered", should be explored to bring this to a conclusion.
I would ask someone to write that chapter, so I can learn from it.
I am ignorant with regards to what a PLRB is, let alone a PF&M or an FC&S.
Just thinking 'insurance', I'll guess at the titles; but that is the best I can do.
PLRB - policy language reference book?
PF&M - policy form(s) & manual (maybe manuscripts)?
FC&S - ??? I'm thinking surety type coverages, but that doesn't make sense relative to the property issue.
How are these three items used, and with their correct usage, what is their value to the claims process? |
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bryan newell
USA
45 Posts |
Posted - 12/20/2002 : 15:31:51
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PLRB - Property Loss Research Bureau.
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bryan newell
USA
45 Posts |
Posted - 12/20/2002 : 15:37:10
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PLRB is the resource that carriers use to identify and resolve coverage issues, as well as interpretation of existing policy content. They identify trends in the industry and monitor past and current litigation that affects the insurance industry. They are highly regarded by the carriers as the definitive answer when it comes to coverage issues. Might I suggest their website..... PLRB.Net
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CCarr
Canada
1200 Posts |
Posted - 12/20/2002 : 15:41:33
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Thanks Bryan, I'll get to the website and add it as a favorite.
Looking forward to a similar summary on the other two items from anyone. |
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whitstorm
USA
9 Posts |
Posted - 12/20/2002 : 17:26:15
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Here's a question that no one really knows the answer to:
(1)Was the unit damaged by the Power Failure?
or the Power Surge? (yeah, I know, there would have been no Power Surge had there not been a Power Failure, right?)
However, artificially-generated power (regardless of the sequence) opens up coverage for damage to electrical appliances. You are all right that the "best way" to "cover", or should I say "not cover" this loss, is to say that it is not covered.
This part does not pertain to "coverage" per se, but here's the "real-world" interpretation (and that is the key word - "interpretation") as to how this loss would be handled. That is, what this loss would fall into if this were presented before a judge. I only present this situation as hypothetical, but I have seen claims as small as this go this far:
I have sat in, and been involved in, several mediations involving similar-types of situations, and there is no way a judge would rule in favor of "Mr. Big Insurer" over "Mr. Poor Homeowner," who in this particular case, lives in South Louisiana (probably Houma or Thibodaux) and more-than-likely, if not "kin" to the judge, knows the judge. The typical language you hear in situations like this, is that "the policy language is too ambiguous." This $1500 a/c unit would wind up costing several thousands of dollars. That's just one scenario.
Here's another (then I'll shut up). This is very similar to the awning situation in snow/ice claims. They are not covered if they are "collapsed" by snow/ice, However, they are covered if they are "damaged" by snow/ice. But, aren't they damaged the instant before they collapse. Hell, I've seen the same manager give different answers to different (or for that matter, the same) adjuster in the same storm regarding the same situation.
Bryan is right in that it is "open to interpretation" and that some cover it and some don't. You all can go to a storm and handle it the way you think is right - that's the right thing to do. But, if anyone gets involved in a dispute, you also better ask and inform the team manager and/or supervisor as to what is going on, because I'll bet (at some point in time), this guy will have a new a/c, paid for by the provider, by someone working cleanup.
You can all harrass me now.
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Jeff S. Whittington |
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CCarr
Canada
1200 Posts |
Posted - 12/20/2002 : 20:00:14
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This thread has been a good draw to get some new members posting. We now have Jeff joining us, who has raised some interesting issues.
Who cares (figuratively) if the unit was damaged by power failure, power surge, or repetitive dog leg lifting? Steps #1, 2, & 3 happened, and applying that to the wording available, there is no coverage.
Damaged electrical appliances never entered into the claim details you were presented with. Unless you want to create a new claims scenario to be discussed, that element is redundant to this file.
It is so wrong for a field adjuster to worry about, dwell on, or otherwise concern themselves with how a judge may ultimately interpret the same claim and coverage that is before you at this time. You are working the claim in real time. You must work that claim within your knowledge of the specific wording and accepted industry interpretitve principals of the coverage at hand. I believe it is quite wrong for a field adjuster to feel shackled by the fear of 'real world' interpretations. 'White Shirts' at the vendor management level in concert with their carrier claims department counterparts are responsible for considering these issues, pre and post claim dispositions. I am not denying that what you illustrate does not occur, but that is not the field adjuster's 'job' to worry or be swayed how some judge may rule on your fundamental interpretation at some distant time in the future. I have to add, that this particular claims scenario with the specific wording applicable, has no ambiguity to it.
Your awning situation is another sad example of poor claims management. That person, accountable for creating consistency in the handling of claims, is a direct cause of many of the situations we have seen here on CADO relative to the unnecessary ebb and flow of coverage or denial.
I again disagree with your repeating of Bryan's comment that this claim (with the specific wording) is open to interpretation - it is not. However, as per the previous paragraph, I don't doubt that it is being improperly interpreted by some and correctly by others - creating the ebb and flow of some covering it and some not.
The 'job' of a storm boss with a vendor is a challenging position. The succession to that 'job' is often the result of hard work and proven reliability to the vendor. However, regardless of all that person's other good qualities, if they are not a strong 'student' of policy wordings they will create the confusion that we are seeing; and that just manifests itself as those misinformed people move on to the next job and apply the same error or spread it to others.
Jeff, please do not take this as harrassment, that is not its intent. You have raised a number of important issues that regularly affect the transient adjuster. I feel strongly about what I have said, but by no means is it a harrassment of you or your comments. |
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JimF
USA
1014 Posts |
Posted - 12/20/2002 : 21:44:07
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Memo to 'Inside Man':
Since you seem to be quoting a PLRB source for the coverage position which you suggest PLRB has taken on the particular claims situation under discussion, can you be so gracious as to provide the following, so we all can compare apples with apples and also to review the 'context' of their comments:
(1) The PLRB 'media' you are quoting from (i.e., publication, article, newsletter, website (if applicable, please provide a weblink to the source material).
(2) The date of the article or media as published.
(3) The edition number (if applicable).
For the life of me I cannot find a PLRB resource or source which provides the quote you are using.
I'll have some other comments once you provide the requested information, but I still concur with the position that Clayton has taken for all the reasons he has ennumerated as well as others. I'll hold those thoughts until you can allow me to see any PLRB comments and the context within which they were used.
In the meantime, does anyone know what FC&S (Fire, Casualty & Surety Service) says about this issue? They are the more widely used authority for reference on policy coverage interpretation for the insurance industry.
I hold that when the information is provided which I have requested, that we will discover that the PLRB position on this claims situation is consistent with that of Clayton and I. |
Edited by - JimF on 12/20/2002 22:19:29 |
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tomgriffin56
USA
88 Posts |
Posted - 12/20/2002 : 22:51:02
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I must say that this has been a very genteel and leisurely stroll down a very interesting road.
We need much more of the same. By the way, I agree with Clayton that a sequential approach is necessary in the investigation. If you use a problem solving method or flowchart type approach many times it will clear the air. And in this case I agree that the AC unit would not be covered. |
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CCarr
Canada
1200 Posts |
Posted - 12/21/2002 : 08:22:56
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Someone asked me a question last night concerning this thread, and I gave my thoughts; thinking about that and the - as yet - unanswered question posed to me in another forum about the 'inner workings' of a carrier, I think you might find some comfort in the question posed outside this web site.
The type of discussion going on in this thread - both its technical nature and as Tom as pointed out its 'genteel' nature - is a very common, every day occurrence inside a carrier claims office. These types of healthy and fruitful discussions do occur at all levels in a carrier claims operation, with the new people, juniors, and as often right up the scale of staff to the most senior. These types of discussions will cross over the full gambit of policy topics, from the basic variety as the one we are having here at this time, to what are real complex coverage issues. These types of discussions are the 'life blood' flowing in a carrier claims operation; any good claims management will not only lead in them, but will encourage them at any time, and encourage the discussion to cross over all levels of the ranks so the juniors can benefit from the seniors, and often enough the reverse. This type of thing is a key component of learning and training around all corners of a carrier claims office.
The only difference here, is that the world hears and sees our discussion - I don't think that is a bad thing. |
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KileAnderson
USA
875 Posts |
Posted - 12/22/2002 : 23:04:01
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| Jim, isn't that a covered loss in North Carolina under the HO-3? |
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JimF
USA
1014 Posts |
Posted - 12/23/2002 : 07:07:36
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Kile, I am going to answer your question by repeating what I posted earlier:
"It's not a covered loss under the ISO HO-3.
But that 5 adjusters answered YES to the poll (so far), only shows how far we have yet to go in providing a basic claims education for adjusters, and even more so, improving the image of the profession as knowledgeable.
And in the real world, more than one out of three cat adjusters would have provided the insured the wrong coverage information and incorrectly reported the loss and estimate to the carrier; thus embarassing themselves, the vendor and carrier, and likely triggering an E&O event.
And we wonder why the carriers are quickly moving to other methods of claims resolution instead of utlilizing cat adjusters.
Think about it folks: More than one out of every three cat adjusters got the wrong answer to a simple basic coverage question.
It's not a shame it's A DISGRACE!
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Edited by - JimF on 12/23/2002 07:10:09 |
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Is it Covered?
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