Often in the Insurance claims world, we see unnecessary leakage occur, something which is mainly due to inaction, an overload of open files, and sometimes even a lack of training and experience.
It is the Insurer that relies upon the assigned assessor, loss adjuster or external claims management provider to complete claims investigations in a timely and reasonable manner with a fair outcome for all as far as the contract of insurance is concerned. For this reason the claims officers may be the ones making the final decision but they rely heavily on the reports and recommendations of the above experts in order to make the right decision.
In a recent example LKA Loss Adjusting had been assigned what seemed to be a standard liability claim where the Claimant’s property was damaged by fire a few weeks prior. The Insured in this case was a tradesperson who had completed a small amount of grinding works in the morning on an extremely warm day where the previous five or so days were over 30 degrees with no rain.
The Claimant asserted that due to the grinding works in the morning, the bark on the side of the driveway had smouldered for some hours before hitting the dividing fence posts thus catching alight and causing the fence and some outdoor furniture to burn out. Furthermore the heat that came off this fire had caused the fibreglass on a Personal Water Craft (PWC) to bubble and become unsafe for use.
Our Loss Adjuster attended the site to view the situation, damage and interview the Claimant. The Claimant was extremely cooperative and had photos taken after the fire was extinguished. The site had somewhat been cleaned up prior to our attendance but the burnt bark and fence was still there along with the heat affected PWC which was put back in situ. The quantum of the claim was relatively minor (under $30,000.00) with the majority of it being the PWC at $18,000.00 as it was beyond economical and safe repair.
Our Loss Adjuster spoke to the Insured who confirmed that he had completed some grinding works on the driveway where the PWC was shown to us to be immediately post fire.
We also obtained a copy of the Fire Report which confirmed the early afternoon call out and a minor fence fire with no suspicious circumstances. From experience we know that it is possible that certain materials (like insulation, moist wood chips, compost etc.) can smoulder for some time before a fire actually erupts.
At this point we could have quite fairly closed off any further investigations into liability and accepted the same moving towards adjusting the loss. It would have been a nice quick and easy claim where everything seems above board and reasonable. Everyone gets paid, the Insurer is happy and another file is closed.
Has the Loss Adjuster shown due diligence in this case? Most may say yes as they feel that on face value, all information points to liability being accepted.
Our Loss Adjuster also knows from experience that the CFA and MFB are under constant extreme pressures with resources and quite often do not spend the time in investigating fires to the degree the Insurers would like them to (and this OK as their main duty is to quickly and safely put out fires to prevent damage and injury, not to investigate every single one. Unless of course if there are certain circumstances like fatalities, arson or the like). In this instance it was reported as a fence fire which was quite small, the fire officers were in and out and it was an ordinary attendance.
As a matter of due diligence our Loss Adjuster contacted the relevant fire authority and spoke to the officer in charge on the day just to confirm events and to see if there was anything else they found that was not reported. The officer in charge advised that there was nothing out of the ordinary, the occupants seemed rightly upset at the time of their attendance and tried to put out the fire as any concerned homeowner would.
In further probing and advising the officer of what was being claimed however, he did not recall seeing the PWC when they attended and advised that as a matter of procedure they asked the home owner (Claimant) what was damaged and were not told about the PWC. Our Loss Adjuster then forwarded photos depicting the PWC in situ during the progress of the fire which was forwarded to all of the attending officers for comment. None of the officers remember the PWC and commented that they would have had to physically work around it or move it to put the fire out.
We then spoke to a Forensic Fire Investigator who also confirmed that it was highly unlikely and almost impossible that the bark in question would smoulder for an amount of more than an hour and given the conditions the bark would have been dry and would have caught alight itself. We calculated from the time the grinding was done to the time the Fire Brigade attended was six hours. We also noted that the Insured was still on the worksite for two and a half hours after the grinding was done, but did not notice or smell any smoke. On further investigation of the photos of the PWC it was noted that the heat damage was inconsistent with a low bearing fire and furthermore no damage was sighted to the trailer rubbers (which would have also been heat damaged if the fibreglass had in fact bubbled in the fire as claimed).
Acting on the above information which would in many cases not have ever been obtained, we were able to report back to the Insurer to deny the entire claim based on our Insured not possibly being responsible for the fire which occurred on or around two in the afternoon. There was also a potentially serious question about whether the PWC was even damaged by the fire; indications were it had been damaged in some other way and certainly was not there when the fire brigade arrived, nor did the Claimant report it to the attending brigade as damaged. This all resulted in a saving to the client Insurer of $30,000.00.
At LKA Group we pride ourselves on due diligence and not taking everything at face value. Details matter in many cases and the claim involving this PWC was a classic example. Something that seems so true may not be actual fact (that is a whole other discussion). LKA continuously train, mentor and develop their staff with a view to continuous improvement. Unlike some firms, all LKA Group reports are also checked through a stringent quality assurance program before being sent to clients. These reports provide our clients with all of the relevant facts available and therefore allow our clients to make well informed decisions whilst either minimising or eliminating claims leakage.
Senior Loss Adjuster, LKA Group
[Nish Chandra recently joined LKA as Senior Loss Adjuster and has quickly settled into his new role, becoming a very key player in our expanding Loss Adjusting team. Nish has a substantial background in general insurance and property claims including major losses, has worked for some of the largest insurers in Australia and is a very active member of AICLA Victorian Division Committee.]