When a significant homeowner property loss occurs, the adjusteris keenly aware of the insureds' desire to return to their homequickly after the reconstruction. It is also in the best interestof the carrier for the claim to move along in an expeditious mannerin order to provide high levels of customer service and controlcosts such as additional living expenses.

Losses involving large commercial properties are often verycomplex, and the adjuster must be well versed in a variety ofperils including building fires, explosions, collapses, waterdamage, mold, and equipment and machinery malfunction. Often,commercial properties involve tenant issues and exposures inaddition to the insured's real property loss. Again, the adjusteris trained to handle the claim in a professional and expeditiousmanner to satisfy the policyholder and minimize the claim forbusiness interruption.

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Most subrogation professionals will agree property losses canpose unique challenges for a successful recovery. Very often,expeditious claims handling can have a negative impact on asubrogation opportunity if the adjuster is moving quickly to bringthe loss to a conclusion and forgetting about potential recoveryopportunities.

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A good practice would be for the property adjuster to place asubrogation indicator on any file having even the remotestsubrogation potential. The adjuster should alert the subrogationdepartment to jump into the claim from a recovery perspective as itis best to get involved early in the claims process to gather andprotect critical information and evidence.

Related: Subrogation solutions for insurers

Best case scenario would be for both the claim adjuster and thesubrogation adjuster to develop a strategic relationship which willnot only keep the customer happy but will preserve the carrier'sright to a successful recovery, should one exist.

These five basic practices can assist an insurer in capturingmore of their paid claims dollars.

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1. Keep an eye out for recovery – While everycompany looks to mitigate their exposure to be sure only what isowed is paid, mitigating exposure can also mean conducting ordirecting field scene investigations with an eye towardssubrogation — whether the company is utilizing staff adjustersor has engaged an independent adjusting company to do so. The fieldadjuster has the best opportunity to ask questions and documentthird-party potential.

Consider the situation where the damages were caused by a unitowner above the insured property. How easy would it be for thefield adjuster to obtain the name of that potential third party andpossibly knock on the door to ask afew questions like,

• “What happened?”
• “How old was the toilet?”
• “Who was the contractor hired to do your renovation?”
• “What was the name of the service you hired to winterize yourunit while you were in Florida?”
• “Has your insurance carrier been by to inspect yourdamages?”
• “By the way, who might your carrier be?”

While they can certainly refuse to answer any questions, it isunlikely much information will be obtained by not asking anyquestions at all. The “good neighbor policy” occurs when a fire orwater loss occurs in a neighboring unit or home, and it is key tocommence contact immediately with the carrier for the other home.All too often there is no communication and the other party'srepresentative may be un-cooperative or unaware of any damage whenpresented with a subrogation claim, which may jeopardize asuccessful recovery.

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2. Preserve theevidence – The old expression “save the toaster” should betaken seriously! Too many times, recovery efforts are thwarted by apolicyholder who can't wait to dispose of all those old parts, orabsolutely needs to have that hot water heater removed as soon aspossible. We cannot expect policyholders to fully understandsubrogation or the value of preserving evidence.

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It is clearly up to the insurance professional to educate thepolicyholders and provide them with a reason for cooperating andletting them know that if there is any hope of recovering theirdeductible, the company needs to retain the evidence and have ittested to prove negligent installation or manufacturing.

It may be beneficial for the field adjuster or independentadjuster to pick up the evidence (if possible) while at the scene.Having the evidence in one's possession is usually better thantrusting the insured to preserve it, since so many homeowners aremore apt to toss it out. Evidence retention is especially criticalin losses which occurred from a faulty product. Avoid spoliation(the destruction of evidence)!

All adjusters investigating fire and explosion losses should befamiliar with the NFPA 921: Guide for Fire & ExplosionInvestigations, which offers information on using thescientific method in origin and cause investigations, handlingevidence and documenting the investigation.

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3. Hire the right expert: Hiring the right company/person to conduct the examination orinvestigation of the faulty product and to make sure themanufacturer's right to examine the product is preserved, is oftenas important as the retention itself. Meticulous attention must bepaid to the chain of custody to avoid allegations of evidencedestruction or tampering. This includes a record of how theevidence is stored, preserved and given to the expert to conducttheir investigation.

The best scenario may be one where the evidence is examinedsimultaneously by the expert for the insurer and the manufacturer.Joint inspections save time and money, and can usually get the casesettled quickly.

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4. Cause & origin: Too manytimes a theory of liability is just that — a hunch. A causeand origin expert can help explore that hunch in cases that warrantfurther investigation.

In order to establish a solid subrogation case, it will benecessary to have an expert who has multidisciplinary capabilitiesand can utilize fire science, engineering and chemistry todetermine cause and origin. Strong consideration for this type ofreferral should be given to electrical fires, appliance fires andspontaneous ignition incidents to establish and confirm third-partynegligence and/or product failure.

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5. Early intervention: First noticeof loss (FNOL) outsourcing? Develop an in-house program or considerFNOL services with a reputable subrogation services provider toidentify potential subrogation on cases even before any payment hasbeen made. Determining cause and origin and being able to prove atheory of negligence must start as early as possible.

Related: 5 subrogation opportunities insurers shouldn'tmiss

Look for subrogation vendors that use sophisticated methods ofdata extraction and OCR (optical character recognition), enablingthem to commence subrogation activities before the claim isactually paid by the carrier.

Too often subrogation is relegated to later on in the claimsprocess, after the scene has been compromised and important cluesas to cause and origin have been removed. On complex claims, smartproperty adjusters recognize the value of identifying subrogationpossibilities early, so everyone wins.

Donna Geraghty is the business development manager forSpartan Recoveries LLC. For more information visit spartanrecoveries.com.