LAS VEGAS–Quick action after a water loss can reduce the cost of a claim and at the same time keep the policyholder happy, which is the primary job for insurers, adjusters and contractors, an instructor from the restorative drying industry said.
Addressing adjusters here yesterday, Kevin Fisher, master restorer and technical training instructor with Burlington, Wash.-based Dri-Eaz Products Inc., said that when done improperly, remediation of a commercial or personal property after a water loss can come back to haunt those handling the claim because the policyholder will believe they acted in bad faith.
When done properly, treatment of water damage mitigates future damages and prevents contamination, he said.
Mr. Fisher's remarks came during a session on "How to improve processes for managing water damage claims: types, mitigation and insurance," held during the National Underwriter Company's 11th annual ACE (America's Claims Event) conference.
He said the primary objective is to act fast and begin the cleaning-up process immediately. The majority of water claims are from uncontaminated water. Cleaning this up quickly keeps contamination to a minimum. However, when left, it produces contamination and mold that makes the remediation process only more difficult, Mr. Fisher explained.
One thing an insurer should look for in the repair process is that the remediation company spends a lot of time making sure the water is extracted from the area and the proper equipment is brought in to properly dry the affected premises. He said there is no hard and fast rule to how long it could take; it depends upon the extent of the water damage.
"When it is done right, it saves money for the insurers," said Mr. Fisher, adding it also saves time.
He advised adjusters to think of the acronym DICE: document, inspect, communicate and expectations.
Documentation must show steady progress in drying out the property through measurements. There should be daily inspections by the contractor to ensure everything is being done properly.
Communication and expectations go hand in hand, he suggested, because insurers and adjusters want to make certain with the contractor that everything is done correctly and what the outcome should be. Ultimately, he said, the bottom line is to keep the focus on the customer, the insured.
When it comes to interpretation of how the language in the insurance policy affects the claim, there can be questions over coverage and responsibility, noted Diana B. Reitz, editorial director, and David Thamann, managing editor, both with FC&S Bulletins and FC&S Online, a part of National Underwriter Companies.
In a number of scenarios they pointed out how an insurer and insured come into dispute. One incident they discussed was a frozen pipe that burst in a commercial building. The pipes were part of a sprinkler system that should have been dry, but water entered them, which allowed for the freezing.
In this case, the insurer denied the claim, saying the pipes were not properly maintained. The policyholder disagreed, noting that it was not the maintenance that caused the break but the freezing of the pipes.
In another case, water damaged a tenant's shop. The landlord took responsibility and the insurer paid the property claim. The tenant filed a claim arguing that the water damage caused the tenant loss of space.
Mr. Thamann said the determination was that the tenant had no right to file a claim simply because he or she lost space. However, the insured could file a claim based on proof of the amount of money lost while closed.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.