Recently, there have been millions of recalls at General Motors and Toyota involving millions of automobiles. If you’re an insurance claim professional there should be a list of questions running through your mind about what this means should you end up handling a claim involving one of these vehicles. This article reviews basic information on how to handle conditions from a first-party loss documentation perspective. The vehicles affected are:
- 2010 Toyota Prius – Brakes
- 2007-2010 Pontiac G5 – Steering
- 2005-2010 Chevrolet Cobalt – Steering
- 2005-2006 Pontiac Pursuit (Canada) – Steering
- 2005-2006 Pontiac G4 (Mexico) – Steering
If you are assigned or end up with an auto liability file that involves one of these vehicle there are a few factors involved you might want to consider before proceeding. First, make sure you have taken the time to protect your liability after acceptance of the file.
The most important factor to remember when dealing with an auto recall, or any claim, is to remain impartial. Prevent you or your adjusting staff from jumping to conclusions about a brake, steering or other mechanical failure by emphasizing the amount of money or damages are not an issue – only the preservation of fact is important. Insurance liability claims involving auto recalls should be regarded as a very thin sheet of ice because often times claim professionals jump to conclusions about a particular part failing and contributing that as the primary cause of the accident. Part failure from auto-recall be the primary origin but that is not always the case. Even if it was the contributing factor, it’s important to documents other circumstances you would normally document in an auto collision such as road conditions, weather conditions and other physically identifiably characteristics surrounding the loss such as tire tread depth.
The truth is that many loss investigators don’t know what their client does behind closed doors. Insurers are becoming keen to indemnifying their insured then going back to recover their loss silently. This means that they are relying on all of the little elements you may have come across at an accident scene involving one of these automobiles.
From an insurer’s standpoint, these manufacturers are already eating dirt with the massive expense of a recall. A self-insured entity such as an auto manufacturer is going to spend some serious dollars denying claims because each claim is evidence against them in a class action – the last thing they want and the first thing every hot dog attorney in America has their mind on. Protect your liability by documenting all of the facts in an auto recall case, not just the ones that seem obvious or evident.
Another viewpoint are the claims that may spawn as a result of a failed part. For example, a recalled vehicle driven by Mary is traveling on a highway at or near the speed limit and loses control because the expected resistance in a power steering mechanism became greater in the midst of a lane change, according to that driver. A nearby driver, Joe, anticipates the recalled vehicle traveling into his lane and makes a fair judgment to move out of the way, thereby causing another accident. A witness, Kim, has an account of the entire event. It’s true that the Joe caused the accident but his insurer has a right to attempt recovery of their loss (subrogate) because the Mary essentially created a tort in negligence when failing to control her vehicle. The recovery odds are slim given these circumstances but they are possible – particularly if the drivers were carrying super-loads of cargo and caused damages exceeding $100,000.00. Since there was no collision between the Mary and Joe, however, Joe’s insurance would likely subrogate the manufacturer directly – providing all the details were in place.
You can help your client by providing these important details that are relevant to both the accident and the recall – not just some of them. The sum of dealing with auto-recalls is that the evidence often require a specialized and elevated level of care that most adjusting firms overlook. Don’t let you or your subrogation department be stuck in the office late because your independent adjuster failed to give you all of the details. Peak Claims thrives on reporting pertinent details that our competition fails to document – help your subrogation or legal team of attorneys achieve their maximum potential by contacting Peak for your investigative needs today.
- Wind Mill Field
Wind farms produce “green” energy by using nature’s natural resources to produce what would otherwise be caused by a high form of pollution in a coal fired power source. Peak Claims’ inland marine cargo surveyor, Phillip Crimaldi, has a range of experience in dealing with green energy insurance claims and inland marine damage surveys. Here is Mr. Crimaldi’s take on this loss:
Way up in north central Colorado near the Town of Grover, close to where the southern Wyoming and Nebraska state lines meet and near the Pawnee National Grassland, there is a growing wind farm known as The Northern Colorado Wind Facility. A wind farm is a large group of wind mills that produce electricity.
This particular wind farm has consistent winds of 20+mph throughout the day with frequent gusts up to around 40+mph. Clearly an easy choice for X-Cel energy to partner up with NextEra for a 152-Megawatt wind farm costing nearly $300 million and producing enough electricity to light up 38,000 homes.
I’m not so sure about is how much of that $300 million went to insurance premiums, but based on this file it’s a safe bet to have been a high figure as these units are worth quite a bit of money. The wind speed and risk of accidents is pretty high. When I attended this survey there were warning signs about high winds at the entry and it was so windy that my truck door was nearly torn off and at least 3 documents went flying so far, so fast, that it was impossible to get them. I only carry documents in digital form now.
Mitsubishi Power of Tokyo, Japan manufactured the nacelles for most of this farm and this one was no exception. This unit had traveled nearly half way around the world from the Port of Tokyo to the Port of San Diego and made it all but two miles from the drop site.
- Wind Mill Nacelle damaged cargo load
For this file we only acted as cargo surveyors and not in any capacity for the tractor- trailer outfit or ground carrier insurance. The primary reason for our involvement was to assess the extent of the damages to the freight, determine the cause and origin of those damages, and address any potential right to subrogation under the terms of this inland marine floater. We interviewed and obtained statements from the driver of the truck and workers who arrived at the scene. Police reports and the bill of lading indicated the drop site was only two miles straight down the road so it became evident that minimal time passed between the accident and arrival of workers and Colorado State Patrol.
The driver of this cargo stated that another truck was approaching from the opposite direction and his story matched those of workers and the other truck driver. When you’re out this far in the country the roads are dirt and become narrow; barely one and a half lanes with a width of about 15′. The opposing truck was a 53′ van and as the smaller load, he should have yielded but failed to do so. As a result, this inland marine cargo hauler pulled over on the berm and the driver supposedly hadn’t realized that his load dipped into the culvert, until it was too late. The driver attempted to pull out of the culvert which is when the weight of the cargo load became excess for the 5th wheel hitch, shown here:
- Split 5th Wheel on Semi Truck
Since the load originated at the Port of San Diego we can trust that it was well secured because of the several hundred miles elapsed between the destination and origin cities. Additionally it was noted in photos that the load itself did not break free from the trailer but rather the trailer hitch broke away from the truck (shown right), thus resulting in damages to this inland cargo risk. The unit was moved to the drop site approximately a day later as shown here:
Crane picking up nacelle for transfer
We consulted with engineers from the installing mechanical contractor and the manufacturer’s engineer. The installing mechanical contractor’s engineer couldn’t make any determination about the unit specifically, except that it was (obviously) not fit for installation and the Mitsubishi’s engineer was overseas for the initial review (via photos and contact). At this point there’s obviously a minimal question as to the likelihood of coverage although that is not for us to decide and a job for the Underwriters. The damages were clearly so excessive that salvage was our only interest, but ultimately one for Mitsubishi to decide. The decisions were left with our third party agent as to the disposition of salvage because a substantial amount of time passed before a qualified engineer could make a physical survey, and because parts would have to be removed completely and disassembled to make that determination.
Details about the opposing truck drivers insurance carrier, USDOT records and other pertinent information was obtained and forwarded in our report so that a subrogation investigation might address further recovery potential. Peak Claims also has the ability to review these conditions ,however the Underwriters didn’t anticipate much of a recovery since their own driver was ultimately at fault and no comparative negligence could be derived from the evidence gathered on the scene. The opposing truck didn’t come within 300 yards of this load which wouldn’t have made for a great comparative negligence case. Overall our assistance in the matter was helpful because we identified all of the black and white evidence to that a determination for coverage could be made.
Phillip Crimaldi is the Director of Operations and inland marine cargo surveyor for Peak Claims in Colorado and the Mountain Time Zone. Phillip has been an active cargo surveyor since 2002 and authors articles on the web about insurance claim surveys, adjusting and investigation.
Flight Simulator prior to load out survey in Denver, CO
which was made on behalf of Underwriters and our third party client. Other posts will outline our clients (and our) liability, in additon to the road freight transport liability.
The cargo in question were three separate flight simulators with surveys spread out over several months. A single team of four men (partially familiar with the equipment – as we found out) disassembled the units, prepared them for shipment, then re-assembled them at a different location, with one unit going to local storage where we surveyed the unloading. The simulators are valued at several million dollars each and have a costly 6 point free floating hydraulic system which simulates the physical movement of an aircraft; the units weigh ~28,000 pounds total.
Our surveys were near Denver International Airport at CAE, a flight simulator company that specializes in training pilots for nationally recognized airlines on several models of aircraft. We met with the moving team, fleet trucking operators (extremely professional – doesn’t happen everytime!) and crane operator Joey Lutz of Duffy Crane.
Immediately we noted that load out team appeared fatigued and found they had been working 21+ days in row, over 10 hours a day, far away from home. Their work ethic was less than moderately productive and news came quickly that two of the four workers had no experience moving large cargo, or disassembling / reassembling flight simulators. This gave a solid clue that we were in for a long day – 14 hours to be exact. Much of that time was spent waiting on a truck re-order as the wrong height measurements were given when ordering the service, which caused the wrong height trailer to show without an over-height permit.
The first thing to remember on a cargo survey is that you’re responsible for making sure the load is secure and that the permits are issued. You might want to review our basic theories on a cargo survey to get a better idea of some other conditions to be met.
The load required two double drop freight trailers: a single 12′ wide load and a 14′ wide load. Step decks on each truck were used for the pump unit and a separate lower section. Additionally there were two 53′ vans for each unit to house the computer, hardware, and hydraulic arms array. All units were already disassembled and packaged but as Murphy’s law would have it things didn’t go so smoothly.
The first error
Section 1 Flight Sim Cargo Survey Tow Motor Pulling unit
The crew tried pulling the upper section 1 with a tow motor to get it outside of the warehouse.
Common sense tells you there are no brakes on the transport wheels and if the tow motor driver slipped, the unit could get some speed and there would be no way to stop it. Instead, we recommended the tow motor line up from the rear, facing the opposite direction for a “pull in opposite direction format”, while one man pulled the unit out with a come-a-long. Slow and steady, the man could get out of the way if the unit came loose, rather than crash into a tow motor possibly injuring the driver. The unit was then hoisted using a load yield bar (split) and hoisting straps rated well in excess of the 10-12 ton load weight, this was done as an “A frame” setup on both sides of the unit as above.
Both the previous section and the pump-house were eventually loaded on the truck – but not before we documented the improper handling of the pump and ensured the unit was wrapped properly for transit as shown here:
Improper handling of pump house
The load out team didn’t have a strong enough tow motor to pick up the pump house, and against our recommendation they rigged some straps around potentially fragile hydraulic motor plumbing to assist in the weight transfer. We disagreed strongly but the team refused to cooperate. We closely documented the conditions of this move and noted several photos in our report to Underwriters, which is about all you can do in a situation like this one.
Pump House being set on Truck
The crew also intended only to cover the top 80% with a tarp, which would have exposed the entire unit to elements from the road (rain water), possibly causing the unit’s electrical areas to retain moisture, causing rust in elements that might fail. The crew was very angry in our requiring them to fully shrink wrap the unit, but the truck driver thanked us as they hadn’t ordered enough tarps to cover the full load. Surely he didn’t want to get on their bad side either (shown below being set on truck).
The upper sim section and pump house were tethered to the truck using Grade 70 1/2″ cargo tie down chains, rated to 11,300 W.L.L with 30,000 lb test chain ratchet binders. They were tethered to the flat-bed resting four corners on the flight sim in an “x” format, which helped strenghen the load by giving a maximum of 45.2k lbs in strength. The entire load was less than 10 tons (20k lbs) on this truck. The top was then covered with a tarp and over 100 bungee cords to keep in it place. The pump house was also stabilized in a similar fashion.
This was only the first quarter in loading the first simulator and it was already 2pm. We all took a short break for lunch while the crew put the lid on the second oversize load of the first simulator. Finally, after several attempts on a very windy spring afternoon, this load was finished, secured and ready to roll down to Phoenix as shown here:
Freight / Cargo on Board - Flight Simulator
A surveyor has much to remember and look out for when handling a load out of this size. The days can become long and mistakes happen without warning. Remember to stay alert and try to take good notes – they’ll come in handy when working on your report. We’ll be posting the second section of this load out soon…so check back soon.
