What Every Property Adjuster Should Know About …

Fire Investigations:

  1. Fire investigations are governed by NFPA 921, published by the National Fire Protection Association.  NFPA 921 is a guide for use by investigators and is not a legal document.
  2. Fire Investigators are certified as Certified Fire Investigators (CFI) or Certified Fire and Explosion Investigators (CFEI).
  3. In the state of Tennessee, fire investigators are also required to be licensed by the state as private investigators.  If necessary, check your state to see if additional licenses are required.
  4. Fire investigation of a structure (or vehicle) is the responsibility of the law enforcement authorities.  Only after the authorities have released “the scene” can a civil investigation proceed.
  5.  Acceptable conclusions for the cause of a fire include intentional, accidental, and undetermined.
  6. There are times when the cause and origin of a fire are not as important as determining if your insured can be implicated in the cause.  Situations do arise where several parties are affected by a massive fire.  Although the cause and origin might not be determinable, it is prudent to determine if the insured can be held culpable.  Sometimes it’s about whether a product is under warranty or who did the work.  These scenarios assume that a fire cannot be attributed to arson or vandalism.
  7. Evidence must be handled carefully.  All parties identified in connection with a fire investigation have to be given notice and allowed to participate in any examination of evidence taken from a fire scene.

The pictures below serve to illustrate some of the investigations that we have been involved with.

Fire Damaged marina, several boats involved, cause and origin undetermined, insured boat owner eliminated as potentially culpable party

Paper Shredder thought to have been the cause and origin of a residential fire due to poor maintenance

Dryer Fire due to accumulation of lint

Fire in senior living center due to electrical short in room A/C unit

Residential structure explosion due to broken gas line

Residential structure fire due to misuse of stove

Defective Products

  1. A defective product is one which is unreasonably dangerous and cannot be used for its intended purpose.
  2. The test for a defective product is that it had to have had the defect at the time it left the possession of the manufacturer.
  3. Not only can be manufacturer be held liable for manufacturing a defective product but, anyone in the distribution/handling chain can also be held liable.
  4. Many times, a recall search can identify a recalled product. The Consumer Product Safety Commission maintains a website and database that lists products that have been identified as hazardous to consumers and recalled. The CPSC website address is http://www.cpsc.gov.
  5. The National Highway Traffic Safety Administration also maintains a website and database that has identified defective cars and trucks. Their website is located at http://www.nhtsa.gov. The NHTSA is searchable by vehicle make and year model as well as vehicle identification number.
  6. When products have been recalled, investigation of defective products cases becomes a much simpler matter because most of the work has already been done. However, when a product has not been recalled, then the investigator must determine if the product meets the criteria given in #1 and 2 above.

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It’s Not Always the Contractor’s Fault.

Although the time has come when warmer weather is upon us, the effects of this past winter are still being felt.  Recently, we were involved in an investigation that focused on the cause of damage to a water cooling coil located inside of a cooling tower (see photo below).  This might seem strange to some but, it is possible to require the cooling of a building during the winter.  In the investigation we were performing, the system was comprised of a water cooled water chiller.  This might not mean anything to most people but to those familiar with chiller operation, water was the fluid used to both cool the air and remove the heat absorbed by the refrigerant.  On the condenser side, water was circulated through a shell and tube heat exchanger and then pumped to another coil type heat exchanger located inside the cooling tower.  The problem arose when the local air temperature began to drop below freezing.  As the water temperature dropped below 40 F, water flow between the condenser and water coil was stopped (as part of the automatic control sequence).  As the air temperature continued to drop, the water temperature also dropped until the water froze inside the coil and caused it to burst in several places.  Since this was new construction, it was the engineer’s position that the mechanical contractor had erred and was negligent in their responsibility to protect the equipment.  However, it was later determined that the building had been turned over to the building owner under the substantial completion part of the contract.  As a result, the building owner was responsible for the protection of the building as well as the building’s mechanical systems.  Regardless of the positions taken by the various parties, the design of the HVAC system including the incorporation of freeze protection, was the responsibility of the mechanical engineer.  This responsibility is not an arbitrary assignment.  It has been long recognized by engineers and specifically, those engineers that are involved in HVAC design.  Although freeze protection had been designed into other parts of the system, no provision for freeze protection was made for the cooling coil located inside the cooling tower.  When all was said and done, the engineer failed to incorporate an adequate way to protect the coil and blamed the contractor in order to avoid the appearance of failure on their part.

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What’s Going On?

Just completed an investigation into why the mast of a rock drilling machine came crashing down on the machine with no warning.  If you’ve ever seen a rock drilling machine, they are equipped with a mast that rests in a horizontal position and can be raised into a vertical position for drilling.  In this particular case, the mast was in the process of being lowered when four bolts failed at the pivot points where the mast rotates from the vertical to horizontal.  Looks like it was just one of those unfortunate things that happens.  Currently conducting an investigation into why the electrical system in a cement mixing truck appears to have short circuited and burned some of the wiring.

A Word About Fraud…

Every once in awhile a case comes along that has a little bit more intrigue than the run-of-the mill investigation. A few years ago, we were asked to look into why a man was injured while working on a scissor lift that had apparently gotten away from him. In order to understand what happened, it is important that one realizes that a scissor lift can be raised and lowered while in place or moved forward and backward. The controls for this particular lift were located on the side of the platform railing and were raised and lowered as the platform was raised and lowered. This particular lift had been rented from an equipment rental company by a construction company and as stated earlier, was in use at the time of the accident. Specifically, a construction employee was standing on the platform in a raised position while attempting to move the lift to his left. Upon releasing the control to stop the machine, the machine did not respond and eventually crashed into a forklift. As a result of this incident, the rental company, by its contractual agreement with the construction company, was expecting to be indemnified because the employee had filed suit against the rental company for his injuries.

After receiving this assignment, a trip was made to the rental company’s location in order to conduct an examination of the machine. At first, no restrictions had been placed on the examination. Upon arrival, it was learned from rental company representatives that the lift could not be operated, disassembled, or tested in any way. The examination was to be limited to taking photographs and making notes of observations. One of the photographs that was taken is shown below. The photograph shows the condition of the control panel as it was found during the first examination. Note the dirty appearance and the type of joystick used.

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Approximately four months later, a joint examination was organized wherein various parties that had used or worked on the machine gathered to witness the testing and examination of the lift. The examination was begun with allowing all of the parties to photograph the machine. Although the machine had been photographed four months previous, the lift was again photographed. When the photographs were later reviewed and compared with the photographs taken at the first examination, it was then discovered that the control in place during the second examination was different form the control initially found on the machine. The appearance of the control shown below is the control that was on the lift during the second examination. Clearly, this control is different from the one shown in the photograph above. It then became obvious that not only had the control been replaced but, the only reason to replace the control was to hide the problem in the first control that most likely caused the accident. Once the lawyers were made aware of the switch, the claim for indemnification by the rental company soon disappeared. Presumably, the lawsuit filed by the employee against the rental company was settled.

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Although fraud exists, even in civil cases, it is fairly hard to prove. This aforementioned case was more the exception than the rule. Over the past 30 years, I have had several cases where I thought that something was missing or there was more to the situation than “meets the eye”. In all cases, at the end of the day, it’s what you can prove not what you can feel. If you can develop proof for what you can feel, then great! If not, then all you do is conclude based on your evidence. If you are going to commit fraud, be prepared to cover even the smallest detail. As illustrated above, no one thought that the control replacement would be noticed, but it was!

 

“They Can’t Do Anything But Say No”

We’ve al been in situations where we have to ask for something but at the same time, doubting whether we’ll get what we want. And the only way to justify asking is to rationalize the request by thinking that we’ll never get what we want without asking. So, we inevitably conclude that “they can’t do anything but say no”. The same thing happens when people submit claims to their insurance carrier. You have to put your claim in someone else’s hands and wait for them to decide whether you have a valid claim. Usually, it boils down to a settlement between the carrier and insured. However, there are those instances that arise when damage occurs and the insured feels that it should be covered but, it likely is not. A case in point recently arose when an insured driver hit a plastic five gallon container with his car and filed a claim alleging damage to the transmission oil cooler. Upon investigation, it was also learned that the drainage of transmission fluid, which the driver claimed never to have noticed, resulted in the complete destruction of the transmission. For those that are not aware of the location of a transmission oil cooler, it is usually located in the radiator/condenser area, in the front of the vehicle, where air can come in contact. Knowing that the plastic container would have had to enter the air opening in order to contact the cooler, the bumper and grille areas were examined for damage and none was found. In addition, the air opening was much too small to allow even a part of the container to enter and make contact with the cooler. Furthermore, none of the cooling fins or tubes that were part of the cooler were damaged by anything external to the vehicle. Needless to say, the claim was denied much to the disappointment of the insured.

The message here is if you, as the insured, know that there is element of uncertainty in your explanation, then don’t be surprised if your claim is denied. That is not to say that all claims have to have a reasonable explanation. There are times when only an expert can explain the circumstances that are not obvious to a layman. But, when the explanation is bordering on the absurd, it’s time to reconsider your claim. Remember, you can submit your claim because they can’t do anything but say no.

Buick Lacrosse Fires Caused by Faulty HDM Module?

During a recent investigation, it was learned that there have a number of complaints (posted on–line) concerning the inadvertent failure of headlights in Buick Lacrosse vehicles. The vehicle that we were working on was a 2009 year model but, the problem is apparently in 2007 year models as well. Basically, the complaint centers on drivers noticing that their headlights are going out for no reason while driving at night. Sometimes the headlights will come back on. The problem is not as noticeable during the day if the headlights are also used as day running lights. In the case that was investigated, a small fire erupted in the fuse block and specifically the HDM (Headlight Drivers Module) module. As a result, the wiring harness that is connected to the HDM module was also damaged and had to be replaced. It was later learned that headlight failure was also a symptom that had occurred at an earlier time. Although the National Highway Traffic Safety Administration (NHTSA) has recorded 13 complaints regarding 2009 Buick Lacrosse Vehicles, four complaints are directly related. As of the date of this blog entry, no recall for the HDM modules has been issued by NHTSA or General Motors.

Getting Bad Gas?

We’ve been working on an assignment where two vehicles equipped with diesel engines were allegedly damaged by bad diesel fuel. We were asked to determine if the gas station where the fuel was purchased was acutally selling contaminated diesel fuel. Unfortunately, the vehicles were already repaired and any diesel fuel had already been discarded by the time we began our investigation. We have been able to determine that at the time the purchases were made, the water level in the diesel tank was above the state mandated maximum level of 2 inches. As a result, there was a possibility that a combination of diesel and water could have been pumped into each customer’s vehicle when the purchases were made. Once the purchases were completed, the water level could have dropped enough so that the next customers would not have purchased water contaminated fuel. It is also possible that while the diesel tank monitoring instrumentation measure water depth inside the tank, the diesel might be contaminated with something else. Something that would ignite in a diesel engine but at the same time, could cause damage to the engine – like gasoline. Diesel samples were obtained and sent to a lab for analysis. The result of that analysis revealed that the samples did not contain any water but instead contained traces of gasoline. Specifically, levels of toluene and xylene were higher than normal.

If you find yourself in a similar situation, regardless of having purchased diesel or gasoline, it is imperative that you don’t lose your purchase receipt. Your receipt will become invaluable regardless of whether you paid cash or used a credit card. Next, get your vehicle to a mechanic as soon as possible after you suspect engine trouble. Second, advise you mechanic that if the fuel tank or lines have to be drained, not to discard anything that comes out of the lines or tank. Third, collect all contents in a clean, dry, container and label the container with the cutomer’s name and date that the contents were taken. Also save all parts. If possible, photograph the contents and all parts that have to be replaced. If the engine has to be replaced, photograph the engine and record the engine identification number. The mechanic should be able to assist in obtaining the number if necessary. Fourth, if the fuel appears to be contaminated, advise your insurance carrier and then the station owner where the fuel was purchased. Once the initial notifications have begun, each party should begin it’s investigation. The more information is obtained when the discovery is made, the easier it will be to prove the claim or discredit the fraud.

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