May 17, 2010

FAQ

Frequently Asked Questions (FAQ)

Peak Claims has over ten years of experience providing assistance to property owners, insurance companies, attorneys, and others regarding damages and losses related to insurance claims, and claims for damages in general.  We hope that our experience can help you determine the best route of action related to your claim.

Table of Contents

Residential Property & Casualty Claims for Property Owners.

  1. What can I do about contractor and roofing sales people who approach me after my home was damaged?
  2. My contractor says they need more money (supplement claim) even though my insurance company already settled the claim.  What can I do?
  3. My home has been severely damaged and is exposed to the elements (weather, nature, etc.), and it doesn’t seem safe to live in.  What are my obligations?
  4. What is the difference between Replacement Cash Value (“RCV”) and Actual Cash Value (“ACV”)?
  5. What’s the difference between a first and third party claim?
  6. What is the appraisal clause and how does it work?

Inland Marine, Cargo, and Freight.

  1. What can I do if cargo shipment arrived damaged, but I have no inland marine (“floater”) insurance to pay (indemnify) for the damages?
  2. What are the Hague Conventions and Sundry Liability Provisions?

Premises & General Liability.

  1. What is premises liability?
  2. What’s the difference between a licensee, trespasser, and invitee?

Commercial General Liability (“CGL”)

  1. What is a CGL policy?

*Peak Claims is not a law firm, and our agents or employees are not licensed legal professionals.   Please refer to the Terms of Service on this website for additional information concerning use and interpretation of the foregoing information.

Property & Casualty Claims for Property Owners

What can I do about contractor and roofing sales people who approach me after my home was damaged? [Top] 

Depending on the severity of a storm or another peril (such as a fire), you may be approached by people knocking on doors or telephoning you to help repair the damages.  Common sense rules apply.  First, don’t allow sales people to pressure you into signing anything.  Conduct due diligence to make sure the person and company you’re considering working with is licensed in your local area (if they are required to be licensed) and make sure they have up to date references that you can contact to determine their reliability.  Next, make sure you get everything in writing before giving any money or signing any documents.  Take the time to reach each document, and beware of suspicious clauses.  Ask an attorney for advice if you’re unsure about the legal ramifications of signing an agreement for services.  You should never pay up front.

My contractor says they need more money to finish the job (supplement claim) even though my insurance company already settled the claim.  What can I do?  [Top]

This scenario is one that we’ve seen slowly come to life in the last few years.  Here, the contractor promises to complete the job for a certain amount of money, but claims they need to submit a “supplement” claim, often long after the job was completed.  You should ask for a detailed explanation in writing about what (specifically) the money is needed for and what services were performed, then forward it to your insurance claim representative immediately for further review.  There are certain laws which prohibit the length of time in which a claim can be compensated for under a mitigation or construction contract.

My home has been severely damaged and is exposed to the elements (weather, nature, etc.), and it doesn’t seem safe to live in.  What are my obligations?  [Top]

The laws in most any state require you to mitigate (remedy) damages before they become worse.  For example, if a tree falls onto your roof and severely damages the roof and structure, the property owner is required to take immediate action to have the tree removed and any areas covered to prevent further leaking.  Many insurance companies have agreements with tree removal specialists to conduct tree removal on an emergency basis.  You should notify your insurer immediately if you have a desperate and/or emergency situation, and should take all precautions to mitigate damages as soon as possible.  Your insurance company may hold you responsible for additional damages that occur past the incident date if it seems reasonable that you could have provided a remedy to the situation.

What is the difference between Replacement Cash Value (“RCV”) and Actual Cost Value (“ACV”)? [Top]

Replacement Cash Value, often referred to as “RCV”, is the amount it costs to replace something in today’s dollars.  Actual Cost Value (“ACV”) is the amount something is valued at after a deduction for depreciation.  Depreciation deductions are a percentage of the overall lifespan of a certain component to your home, auto, boat, or other property.  For example, a typical roof may have a lifespan of 20 to 30 years, depending on the type of material.  Some roofs last longer than others depending on their exposure to harmful elements, such as sun, wind, hail, etc.  A roof that’s fifteen years old might incur depreciation of 50% or more, depending on it’s condition.  If the cost to replace the roof today is $15,000.00, and it has depreciation of 50%, then it’s current ACV amount is approximately $7,500.00.

What is the difference between a First and Third Party Claim? [Top]

A first party claim means an insurance claim that involves you as a policy-holder (otherwise an “insured”) under the policy.  This is the type of situation where you paid a premium directly to an insurance company and are a “named insured’ under the policy.  Typically, all home-owner’s a first party claimants.  If you are rear-ended and have only liability insurance, you may be a third-party claimant to the driver at fault.  Another example is that when a person is injured on your property and sues you, or files a claim with your insurance company, they would be a third-party claimant because they are not a party to the insurance policy.  It’s important to realize that in many cases, third-party claimants are subject to the law governing civil damages, which essentially states that “A person is entitled to damages for both the cost (actual) of repairs and the difference in market value (if any) after the repairs”.

What is the appraisal clause and how does it work?  The appraisal clause is a provision embedded into virtually all property owner policies (homeowner, commercial building, etc.) which seeks to resolve disputes concerning the “amount of the loss”.  As one might imagine, it would be difficult and a poor use of time to present such issues to a jury, so the policy hopes to amicably resolve this type of dispute outside of the courtroom.  Most any attorney will tell you the appraisal clause is required before (or consistently with) a lawsuit to determine a dispute over the value of the damages.  The appraisal clause is subject to interpretation as to whether something “is or is not damaged”, but always seeks to resolve the dollar dispute on an item which is the parties agree is damaged.  The appraisal works by allowing each party (the insurer and in the insured) to retain an independent (“disinterested” or “impartial” and “competent”) appraiser.  Each party bears the expense of their appraiser, and the appraisers then select an unassociated (also impartial) umpire.  If the two appraisers cannot come to an agreement on the amount of the loss, they submit their differences to the appraiser.  When an appraiser agrees with the umpire, the amount of the loss is set.

Inland Marine, Cargo & Freight

What should I do if my cargo shipment arrived damaged, but I have no inland marine insurance?

This particular scenario can be an arduous position for any business owner or importer to be situated in.  By all means, you should notify the shipper (consignor) and logistics (freight forwarder) who arranged the shipment immediately.  Shipments are often subject to a substantial amount of laws and limitations which may not become clear until several days after an incident is discovered.  We always recommend hiring an inland marine surveyor to conduct a survey of the loss and document the conditions of the damage immediately, or as soon as possible.  The most important factor to any inland marine freight loss is to retain all of the packing material for examination and documentation until the underlying conditions of the shipment can be analyzed and reviewed.

What are the Hague Conventions and Sundry Liability Provisions?

Nearly all imported shipments from overseas or neighboring countries are governed by the “Terms”, which are issued under an Ocean Bill of Lading; sometimes referred to as a Sea-Way Bill or Straight Bill).  These terms almost always exclusively incorporate the Hague Convention and Sundry Liability Provisions.  The Hague Conventions are International Treaties adapted in the late 1800’s and early 1900’s in an effort to set guidelines for International disputes.  Since nearly all major ocean shipping (steamship) companies are based overseas, nearly all of the jurisdictions are bound to foreign countries for legal disputes concerning oceans transit.  For example, let’s suppose you hire a freight forwarder (logistics business) to import an ocean container of car parts into the U.S. to Denver, Colorado.  Except for less than 200 ocean vessels, the majority of ship owners are located in other countries.  The ocean carrier (the owners or management of the ship it arrives on) often have internal agreements with railroads and trucking companies to transport the shipment to it’s final destination.  This transport occurs under one bill and will be subject to jurisdiction (for disputes) in a foreign land.  If, in the event you were to convince the U.S. courts that jurisdiction here is appropriate, the next hurdle of proving damages requires surpassing the Sundry Liability Provisions, which state that all containers or portions of a shipment are limited to a recovery of $500.00.  Therefore, it is generally not possible to recover more than $500.00 from any shipment imported from overseas that is damaged and without insurance.

Premises Liability

What is premises liability?

Premises liability means to imply whether someone is liable for (owes money for) an incident that occurs on another person’s property.

What’s the difference between a licensee, trespasser, and invitee?

Generally speaking, there are three classifications for persons who sustain damages or injury on another person’s property within the United States.  These classifications are “licensee, trespasser, and invitee”, and they are categories of laws which seek to limit or expand the amount of recovery a person may be entitled to if they are damaged.  As insurance claim professionals, we gather evidence which supports a classification of the premises liability categories.  Generally, if you have a store front, you are inviting someone into the premises.  An invitee is a person who you invite onto your property.  If you live behind a tall locked fence and someone is injured who intruded or had no right to be on the property, they are a trespasser, except in distinct circumstances.  A licensee is someone who enters a premises such as a store front, for example, but has no business to attend.  A person who uses a public restroom in a restaurant (and doesn’t spend any money) would likely be classified as a licensee.

How do insurance companies determine whether they will pay for someone who is injured on another person’s premises?

This question encompasses many difficult answers, and is often different for each incident.  Most liability policies have coverage for the majority of slip and fall incidents, but we’re yet to see one that’s the same as another in over eight years of business.  You should consult your insurer or attorney to determine what coverage (payment) might be available in a premises liability incident.

Commercial General Liability

What is a CGL policy?

A CGL is a commercial general liability policy, which is deployed in commercial (business) environments.  The CGL is a policy which starts simple but can become very complex for varying types of business.  The basic form protects business against liability claims for damages caused by their work, or for those who are injured as a result of something the business does or produces.  Much like other insurance policies, a CGL form expands or retracts based on the application of certain policy endorsements.  For example, a roofing contractor may have a CGL policy that grants liability for negligence, but an endorsement could limit that contractor’s ability to recover damages if the roof was left exposed (uncovered) during a storm.

A person that I did business with wants a copy of my CGL certificate.  Should I give it to them?

A CGL certificate is often certified on an ACORD certificate, which is a brand of forms (paper products) that an agency or Underwriter distributes with pertinent insurance information about a company.  The certificate is often required to obtain certain contracts for business, and outlines the limits of liability for each type of policy applicable.  You should always notify your insurer (or allow another party to do so) right away when an incident that you purchased insurance for occurs.

 

 

 

 

 

 

 

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