Insurance claims are major business for lawyers, builders, salvage companies, Insurers, brokers, bank managers, Revenue, the Gardaí and loss assessors and loss adjusters alike.
Even though the vast majority of property and injury claims settle perfectly fairly, there is major fraud happening on both sides of the claims process.
This has been going on forever and will continue. The honest claimant is therefore at a major disadvantage in the claim process.
This is for a number of reasons – Insurers write the policy and they dictate what is insured but more importantly what is not insured. Insurers define the claim management process, they use experts and are experts in managing that process and their expertise is supporting their position. It is not in the interest of the Insurers to make it too easy. Insurers adopted the position for many years that the claim process was under their total control and that the loss adjusters acted purely for the Insurer and in fact that the insured was not entitled to independent professional advice.
The game has changed to some extent but there is further to go.
The Consumer Protection Code went some way towards rectifying this position. It has not solved the problem fully. It does require Insurers to notify the claimant that they are entitled to professional advice but at their own expense, i.e. it is not an insured fee. Ironically, this is an area that insurers can, and in some cases do, actually cover in the policy – but they are few and far between. The Insurers that do cover the fees generally try to control who they pay for, and at what price so it may not be a decision for the claimant to make in their own interest.
In my view, it is grossly unfair particularly in larger claims where the costs of processing the claim are driven up in many cases by the Insurers’ investigations. It is wrong that the claimant who has suffered loss and damage to their property or business should have to bear this cost (loss assessors fees), when it is in consequence of the insured event and therefore should be insured.
It is absolutely clear that the claims process is extremely complicated. Even a chimney fire today could involve a broker, an lnsurer, a loss adjuster, the fire brigade, and various builders who quote for repairs. CCTV reports to clarify the extent of damage to the chimney flue possibly even forensic investigations in some instances. The only party who can co-ordinate this with the Insured’s interest in mind is the Loss Assessor.
It is most unreasonable for anyone to expect a person who works in a factory or the owner of a hotel business to understand all the complexities of an insurance policy.
It is a fact now that insurers are reviewing claims history, disclosure at inception of the policy, the cause of the damage, the likely cost of the claim, forensic investigations and many more aspects of the claim before accepting liability and offering to pay any money.
These processes can take many weeks at least and many months at worst.
In the past 10 years in Ireland even though many many claims are settled and paid by insurers and people are generally satisfied, there are equally many claims that end up in the in the Courts or Arbitrations.
Insurers have not, in the recent past, covered themselves in glory, the issues that FBD had in relation to the rebuilding of many of their clients chimneys in private houses hit the headlines a number of years ago. The work was grossly unsatisfactory and it was identified by Engineers that some of the repairs were actually dangerous. This clearly was an exercise by Insurer in saving money that backfired.
We have also recently heard about the RSA issue with claims processing and reserves and how that impacted on the revenues for the company throughout Europe. It is also less known that this approach to processing claims actually filtered down through to the loss adjusters and claims handlers and the whole claim process in RSA slowed down dramatically and became grossly unsatisfactory. The Chief Executive lost his job in consequence but that didn’t help the unfortunate whose house burnt down or flooded.
We are also all well aware of the Quinn Insurance methods and approach to their client’s claims and how the public view of the claim process in Quinn insurance was far from acceptable in the context of the requirements of the Consumer Protection Code and the needs of somebody whose house just burned down – had a mortgage – in negative equity – and there no access to alternate funds.
This is when you need your insurers to be on side and honouring the contract fairly and fully. The doctrine of “utmost good faith” applies to insurers as well as insured but if you are on the wrong side of that issue, it is virtually impossible for a person making a claim to even consider trying to argue that point legally.
Cleary’s have found in the recent past that if your Insurer is causing problems in the claim process, where slow decisions of acceptance of liability or investigations going on for months and months – it is extremely stressful & highly technical. This brings a financial pressure on the claimant that may force decisions one would otherwise not take.
We have a case in process at the moment where Insurers instructed loss adjusters to visit the site on day 2 after the incident. Loss adjusters reported within 2 weeks to Insurers. On day 16 a forensic investigator was appointed who visited the site, interviewed witnesses and also reported to Insurers and this took a further 4 weeks. Four weeks after that, we heard from the Insurer’s lawyers asking further questions and looking for further detail about the site and the circumstances of the fire. We believed complete detail had been presented already to the previous two parties. A letter then arrives from that the lawyers looking for further detail giving us another six weeks to reply. While all of this is going on, liability had not been accepted and the six figure loss is impacting on the client’s business. The client cannot make decisions because the Insurers have neither accepted liability nor repudiated liability. It is now week 16! The owner does not know where he stands. He may actually prejudice his own position if he pays for the repairs himself.
This highlights the inadequacy of our current Consumer Protection Code and indeed the claim processes. The only message is to get your representation early and hope that all goes well.
Clearys Claims ManaWhgers
Follow these tips to help prepare for high winds and freezing temperatures this winter.
When strong winds are forecast:
What you should do after a storm:
A burst pipe in your attic, if unaddressed, can be as devastating as a flood through the front door. It probably represents the greatest risk posed to your home by freezing conditions. Freeze thaw action can also cause structural damage.
How to prepare for the freeze:
In the event of a burst pipe:
In the event of a leak:
Here in Ireland, there is often a tendency to overlook such possibilities as storm damage due to our usually temperate climate.
However, with the stormiest winter on record occurring just last year in 2013, many people are now realising that coping with extreme weather conditions is becoming more and more of a necessity. This is particularly true of businesses and properties along the coastline, but those inland are not exempt either. If your property suffers from storm damage, here are a few key points to remember.
Luckily, these days we have at least 24 hours warning if a significant storm is imminent, which gives property owners an opportunity to prepare for any potential damage. Remove any important documents, electrical devices like computers and hard drives, or other valuable items from your property and keep them somewhere safe, preferably away from the area the storm will hit. Stack sandbags at the entrances to the building and turn off any electrical, heating or water supplies. Consider reinforcing windows with wooden boards if necessary.
Once the storm has hit, briefly assess the building for any immediate damage but only if it is safe to enter. Check for damage to the roof – particularly the roof tiles with can lead to leaks if removed – windows, floors, cables and electrical components, and look carefully for any cracks, leaks and structural damage. Remember the most important element, however, is that the building must be safe to occupy before anyone enters it.
Once the building has been deemed safe to enter by the relevant authorities (the fire brigade, for example), carefully document the damage with photos, videos, and written notes before beginning to clear away debris. At this point in the process, you should make contact with your insurance providers to begin your claim. The services of Clearys Loss Assessors will be invaluable at this stage, so it is of utmost importance to contact an assessor. The assessor will survey the property and create an extensive inventory of all damage and resulting losses which will help in your claim.
If the damage to the property is truly devastating, there are often disaster recovery services and government aid available. If the job of cleaning up the property is too big for a small number of people, contact Emergency Services and they will be able to send help.
A lightning strike can be a very powerful noisy and frightening event.
The wipe out of power to the property may affect all electrical items connected to the house, all copper pipe work and even structural issues. It is therefore impossible to know the extent of damage until power is back, everything is made safe and all electrical items are re-powered one by one.
Our client’s house lost power completely and all local supply was cut off for two days. The house was heated both electrically (under floor) and with an electric air to air heat pump system with heat exchanger.
All the contents of the freezer were thawed out and had to be used immediately or dumped. The house had no heat or other services for the following week. The alarm system was destroyed along with the telephone land-lines and computers which were plugged in at the time.
The violence of the strike broke the joints of the concrete ridged tiles on the roof and dislodged a number if the concrete roof tiles. Water found its way into the house in a number of places following the heavy rainfall during storms in the following days.
This required replacement of plaster board ceilings and redecoration in the areas affected. Before this work could be done the roof had to be stripped and repaired in a number of areas. It took time to source the 20 year old roof tiles and colour and match them.
The weather was too bad to get on the roof for nearly eight weeks after the strike and then the builder was busy on other work.
When the builder was on the roof we discovered that the solar panels were also destroyed and leaking into the roof and down into the insulation in the external timber frame walls.
The Loss Adjusters had made offers to settle the claim which were completely inadequate not only for the cost of work but also because the extent of damage was very difficult to establish and prove without detailed investigations.
The electricians carried out resistance testing on all systems in the house. It was then discovered that 3 circuits in the under floor heating system were shorting and therefore destroyed.
To repair these circuits would mean stripping out the rooms affected, taking up the 150mm screed, replacing the system and putting it all back again. This was extensive work and very costly.
Over time we also discovered that the storm had caused the failure of external LED lightning it had destroyed circuitry in an electrical Robot Lawnmower. The pumps and power supply to two water pumps on the site were also destroyed. Specialist technicians had to replace control panels in the heating system and the alarm system.
The whole event is a major disruption. The insurers were not in a position to assist with any of the repairs. In all our client had nine different Trades and Specialists involved for Quotations and Repairs. Insurers also sought their own competitive quotations. The whole process took six months to complete.
The final hurdle came when the bank would not cash the insurance company’s cheque because the bank account was in the name of husband and wife but the Insurance Policy is in the name of one person and this ridiculous position took another three weeks to sort out.
The total cost of repair was in excess of €30,000.
A few lessons from this case: