Educating the public…

In the course of conducting forensic engineering investigations over many years, there is one thing that keeps coming up. That is, people will ask me why their carrier would send an engineer to investigate. It immediately became obvious (early in my forensic career) that policy holders were poorly educated about subrogation. Questions like “do they suspect me of doing something wrong?” and “are they trying to get out of paying the claim?” frequently arise. First let me say that we are engaged because of the way we have been educated and trained to think. In short, we are problem solvers which makes us ideal for figuring out how property damage and personal injuries might have occurred. Second and more importantly, engineers are looking for evidence of a defect in a product, regardless of whether that product is mechanical, electrical, or structural. The reason is because most policies have a clause in the contract that allows the insurance carrier to take possession of whatever evidence is available and litigate against a manufacturer in the name of the insured policy holder. The purpose of doing so is to recover whatever damages have been paid to the insured party. In most homeowners as well as auto and business policies, the carrier’s rights are “subrogated” to the insured’s rights meaning that if the carrier accepts a claim and pays for damages, their rights to recovery are behind the insured’s if the insured recovers anything. For example, let’s say that an insured property owner sues another party for damaging his home and the property owner’s carrier pays to have the house fixed. If the property owner sues and is awarded a judgment for a specified amount, his insurance carrier has a right to that judgment amount as stated in the subrogation clause of the insurance contact. However, defective products are not the only things that can trigger subrogation suits. Faulty work can also cause property damage and personal injury. If a mechanic performing an oil change on someone’s vehicle leaves the oil plug loose causing the new oil to drain and subsequently ruin the engine, he and the company he works for can be sued and held liable for the engine damage. Again, suit would be filed in the name of the auto policy holder and if awarded a judgment, the carrier would be entitled to the award if they spent money to have the engine repaired or replaced.

Having said all of the above, these are the reasons that the public needs to be educated on what prompts insurance carriers to engage engineers and why. The public needs to understand that part of the insurance business is holding those responsible for producing the faulty products and services that they sell.