Investigating a property damage claim under an insurance policy oftentimes can turn into a complicated process. This is true especially when the physical attributes of the property present unique challenges that may or may not be within the capabilities of the inspecting party.
At issue is the physical process of performing a comprehensive investigation and obtaining the proper information necessary to make a coverage determination as it applies to the particular insurance policy in play. After all, even in the presence of an “all-risk” policy, there are often aspects of damages that may be excluded. This makes it vitally important that the investigating party has a thorough knowledge of the interplay between damages and causation, as a determination of causation becomes a de facto determination of coverage under the policy.
As construction and design factors change, the ability to fully inspect a property also has needed to adapt. The Leave It to Beaver neighborhoods of the 1950s, with their simple gable roofs and 5/12 pitched roofs, were the norm for many residences. Two-story residences often indicated affluence. Today, however, many “starter homes” have two stories, multiple hips, and 10/12 (or greater) pitches. Simple things, such as knowing where and how to walk on these types of roofs, are often outside of the normal expertise of a typical property adjuster. Not to mention that these types of roofs are just plain scary and/or dangerous to walk on if you don’t have the experience or equipment to do so. In those circumstances, assistance in conducting an inspection may be the prudent thing to do.
But what is involved in the actual responsibilities of a third party brought into the claims process strictly to provide access assistance? Many staff adjusters have working relationships with local roofing companies that they can call to help provide a two-story ladder or even climb onto the roof to take photos of the conditions found. These services often are provided without cost as a courtesy for receiving a large number of referrals in the past. Localized, independent adjusters working daily claims also develop these kinds of relationships.
However, it becomes a different ballgame when considering the dynamics of a catastrophe situation in which adjusters are brought in from all around the country. Over the past few years, services have developed that market themselves to meet this specific need in whatever locale may be necessary.
But is it as simple as handing someone a camera who just happens to be comfortable walking on a steep roof and telling them to take pictures of what they see and bringing the camera back down to the adjuster?
Inspection assistance can have very good results and a positive place in the claims process if there are clearly delineated instructions provided for the scope of assignment.
The credentials and expertise of the service provider may become a factor in any future dispute or litigation that arises. One also has to ask, “Who is paying for the cost of the service?” and “Is it within the parameters of the investigation expense factored into the adjustment of the loss?” For instance, a staff adjuster may have the authority to retain a service to provide this kind of assistance but does an independent adjuster? After all, isn’t the ability to inspect the loss as it stands an inherent assumption when an assignment is received and accepted by the independent firm/adjuster?
Some carriers believe that any additional cost of investigation outside of specialized expertise (engineers and CPAs, for example) should be wrapped into the established fee structure negotiated beforehand. Others consider this cost on a case-by-case basis, allowing for the inclusion of this cost as an additional expense of the file.
Another important factor to consider when using this kind of inspection assistance is the presence of clear and legally binding hold-harmless agreements, which would come into play in cases of injury or other accidents that occur during the inspection. Considering that the property owner was not the person requesting the service, it is a best practice to obtain prior permission for this additional party to be a part of the inspection process, especially since the service being provided is not technical in nature. While the right to inspect the loss is found within the policy contract, theoretically, that right exists between the carrier and the policyholder as parties to the insurance contract. Extending that access to additional third parties moves it into a gray area of policy interpretation. That’s why it is important to keep the property owner in the loop regarding the need for this service and the limitations as to what their scope of responsibility will be.
Unless there has been an ongoing relationship with the service provider, there is the distinct possibility that the adjuster on scene may never have met the individual who shows up to provide assistance. Handing someone a camera and telling them to take pictures of what they see on the roof can open up a can of worms when the information they bring back is going to be used in making a coverage determination under an insurance policy.
If the expertise that the service provider brings is solely that of a roofer, the areas that are photographed may be exclusively of conditions indicating the roof needs to be replaced. But those conditions may not be the result of a sudden and accidental event, which generally is a condition precedent for potential coverage under the policy. Granular loss may be an indication that the roof has reached the end of its useful life, but that condition alone does not establish the causation factor that started the chain of events leading up to that determination. Heat blisters may have visual characteristics that appear similar to hail hits if you have not been trained to differentiate the distinct differences between the two conditions. How this information will be used by the adjuster in making coverage recommendations becomes crucial to a proper determination of coverage.
The Sometimes-Ugly Consequences
In the increasingly litigious atmosphere that we see surrounding insurance claims today, these services may be brought in as additional co-defendants solely for the potential reservoir of liability dollars. They also may be brought in as a potential hostile witness to testify that they provided information that indicated damages, which were subsequently ignored by the adjuster and carrier. Are you prepared and comfortable with potentially having this party as a co-defendant in a litigated dispute?
There are multiple factors to consider when using one of these services. Just a few are:
- Make sure that the scope of assignment is clear and concise.
- Verify that there is a valid hold-harmless agreement in place.
- Check that the provider has the basic credentials and expertise to provide the service that they are retained to perform.
- Make sure to keep the carrier and property owner apprised of what is being done and the limitations applied to the service provider.
As with most decisions we make in life, there are good, bad, and sometimes ugly consequences in using a service provider for inspection assistance. Cover your bases by addressing the suggestions above, and you will have a better chance at having a “good” experience.
Globe Roof Inspection Program’s Nick Loiacono offers five tips on what to look for in a ladder-assist company to ensure a positive experience.
- Many adjusters use local contractors who may be roofers by trade, which doesn’t necessarily mean they know how to inspect a roof thoroughly. Be sure to utilize licensed and insured contractors who are trained in all areas of roof inspection and ladder-assist services for insurance claims.
- A ladder-assist company must be able to provide an unbiased opinion on the condition of the roof without being influenced by the insured, the contractor who the insured utilizes, and the adjuster on the claim.
- The ladder-assist company should be in contact with the adjuster prior to any inspection to find out as much detail about the roof as possible. They also should confirm the date and address of the roof being inspected.
- Certain obstacles, such as weather, height, or condition, can hinder access to a roof. A ladder-assist professional should be prepared to perform a full, unbiased roof inspection by accessing the roof by himself.
- Communication is essential. A good inspector should not only be on time and courteous but should provide you with a direct line of communication.