Based on my interpretation of the policy we used for this presentation, these are my answers to the questions. It's definitely possible for you to have come up with something else. I encourage you to post your questions and interpretations over at www.facebook.com/groups/adjustertv Let's talk about it!
Question One Answers:
The garage is NOT covered because on Page 3 under B. Coverage B - Other Structures it says:
2. We do not cover:
c. Other structures from which any "business" is conducted;
The kid’s bikes ARE covered because on Page 3 under Coverage C - Personal Property it says:
1. Covered Property
We cover personal property owned or used by an "insured" while it is anywhere in the world.
The auto repair tools ARE covered, but only up to $2500 because on Page 4 under Special Limits of Liability it says:
h. $2,500 on property, on the "residence premises”, used primarily for "business" purposes.
Question Two Answers:
The ceiling is covered because there is no language in the policy which excludes water damage of this type - water that leaks from a roof is covered because it's not excluded. (this is an open-peril policy)
The table would be covered under this policy, even though there is language on Page 8 under Landlord’s Furnishings, which states:
b. This peril does not include loss to the property contained in a building caused by rain, snow, sleet, sand or dust unless the direct force of wind or hail damages the building causing an opening in a roof or wall and the rain, snow, sleet, sand or dust enters through this opening.
The Landlord’s Furnishings section is a specific, named-peril coverage with a limit of $2500 to cover your property in rooms that you regularly rent out.
A question like this would likely be addressed during orientation or could be found in the carrier Estimating Guidelines doc. If there is any ambiguity, contact your site manager for clarification and be sure to document in the diary how you came to your coverage decision and that you discussed it with your manager.
Question Three Answer:
$1050. Even though there is a section of the policy that states that claims under $2500 can be settled at Replacement Cost up front (Page 14, 2d), any items that are settled at solely Actual Cash Value will always be depreciated from dollar-one. Fences are ACV because of Page 14, 1c says:
Covered property losses are settled as follows:
1. Property of the following types:
a. Personal property;
b. Awnings, carpeting, household appliances, outdoor antennas and outdoor equipment, whether or not attached to buildings;
c. Structures that are not buildings; and
d. Grave markers, including mausoleums;
at actual cash value at the time of loss but not more than the amount required to repair or replace.
Note that personal property is also Actual Cash Value. But most carriers will add a Personal Property Replacement Cost endorsement, which grants RC for contents. But always check your FNOL/Loss Report for that Endorsement! More than one adjuster has been burned for committing to paying RC for contents when the policy did not have it.
Question Four Answers:
The trees and other landscaping are covered because Aircraft is one of the named perils for Trees, Shrubs, and Other Plants (grass is a plant). This is in the Additional Coverages section on Page 6:
We cover trees, shrubs, plants or lawns, on the "residence premises", for loss caused by the following Perils Insured Against:
a. Fire or Lightning;
c. Riot or Civil Commotion;
e. Vehicles not owned or operated by a resident
of the "residence premises";
f. Vandalism or Malicious Mischief; or
We will pay up to 5% of the limit of liability that applies to the dwelling for all trees, shrubs, plants or lawns. No more than $500 of this limit will be paid for any one tree, shrub or plant. We do not cover property grown for "business" purposes.
Question Five Answers:
This is the big one that you’ll be denying most frequently. Get started with your denial letter on Page 12:
2. Earth MovementEarth Movement means:
a. Earthquake, including land shock waves or tremors before, during or after a volcanic eruption;
b. Landslide, mudslide or mudflow;
c. Subsidence or sinkhole; or
d. Any other earth movement including earth sinking, rising or shifting;
caused by or resulting from human or animal forces or any act of nature unless direct loss by fire or explosion ensues and then we will pay only for the ensuing loss.
3. Water Damage
Water Damage means:
a. Flood, surface water, waves, tidal water, overflow of a body of water, or spray from any of these, whether or not driven by wind; b. Water or water-borne material which backs up through sewers or drains or which overflows or is discharged from a sump, sump pump or related equipment; or
c. Water or water-borne material below the surface of the ground, including water which exerts pressure on or seeps or leaks through a building, sidewalk, driveway, foundation, swimming pool or other structure;
caused by or resulting from human or animal forces or any act of nature.
Long story short, as soon as water touches the ground, it’s explicitly excluded. And movement of the earth in this case would be subsidence, mudflow, or any other earth movement or shifting. Any ensuing damage - except from fire and explosion - caused by any of these things is not covered. (In other words, if the earth movement caused an electrical fire somehow, the fire damage would be covered, but not anything else associated with the earth movement).
The most common thing you’ll see is that water from the downspout ran into the home and caused water damage to the flooring, walls, and personal property. This is still not covered because the water ended up seeping through the walls - it doesn’t matter what the source is.
On the other hand, if the gutter backed up and water ran down the inside of the wall and caused damage, that’s a different story.
Always look hard for the real source of water and be prepared to give the insured the benefit of the doubt where possible.
Stay Tuned for Part Two of this Free Mini-Training Series! In the meantime, new content is added to the Blog/Videos section all the time.