877-395-6200

Duties To Preserve Property – Part 1


Most insurance policies contain specific references to a duty to protect property from further harm. It may be called a Neglect provision or Preservation of Property; regardless, insurance companies rely on their policyholders to comply with the obligation. A policyholder’s duty can be categorized broadly in two areas. First, we’ll discuss aggravating a loss:

Loss Aggravation

Here’s an example. After closing time, a small fire breaks out in Jenny’s restaurant. The fire started in the kitchen’s storage area. First Jenny orders her entire staff out of the building. Then, she arranges a roll call to be certain that everyone is safely accounted for. Finally, she makes a call to the Fire Department. All the while, she stops anyone from reentering the restaurant to attempt to extinguish the fire. As it turns out, the fire spreads from the storage area and into the kitchen, severely damaging the heart of her restaurant. After investigating the loss, Jenny’s insurer reduces her claim payment by $10,000. The lower payment is justified by their finding that the loss would not have been nearly as severe if Jenny had allowed her staff to use the available fire extinguishers and had made the emergency call more quickly.

Policy wording with regard to the duty to protect property typically notifies the policyholder that he or she is expected to take any and all available measures to save or preserve property in the midst of a loss. This does leave room for interpretation, but the obligation does fall comfortably in between the extremes of using heroic measures and failing to make any effort to protect property. A failure to meet the obligation can result in either a partial or, in extreme instances, a total denial of coverage for a given loss.

Here’s another example. The Laggleson family goes outside to check for any damage to their home after a violent windstorm. Besides a lot of scattered debris and an overturned patio set, they notice that a large limb from their Chinese Elm was blown onto their roof, creating a large gash. Several hours later a rainstorm comes through the area. The rain that pours through the hole damages expensive furniture stored in the attic as well as ruins the drywall belonging to the bedroom located beneath the compromised attic.

Scenario One – the initial damage occurred early on a Thursday morning with the storm occurring in the afternoon. The Lagglesons decided to go on to work and school and to handle things after returning home.

Scenario Two – the initial damage occurred on a Sunday morning, around 3 a.m. with the storm occurring around 6 a.m. The Lagglesons made several frantic calls but could not find anyone willing to come out to their home to deal with the open roof until Monday morning.

In both scenarios a failure to preserve the property after the initial loss created additional damage. However, it is only in the first scenario that the policyholder may suffer a consequence.

See part two of this article for another aspect of this duty, Spoliation of Evidence.


COPYRIGHT: Insurance Publishing Plus, Inc. 2016

All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.

 

 

Duties To Preserve Property – Part 2


Part one of this discussion focused on actions that policyholders might take during a loss that could aggravate a loss and possible consequences. There is another, related obligation regarding the handling of property and that’s spoliation of evidence

A policyholder’s duty to protect property extends beyond the occurrence of a loss. The duty may become more important for property involved in a liability claim. Insurers may take adverse action if their rights are significantly harmed (prejudiced) by policy holder decisions.

Example: a theft occurs and valuable property belonging to guests is among the items lost. The policyholders lose documents given to them by their guests that would’ve assisted in establishing the lost property’s value

Example: A home and its contents are severely damaged during a windstorm. The policyholders, in a hurry to set things to order, have a salvage company clean the area and haul away damaged property before the insurer can inspect it.

Actions such as the above may seriously affect an insurer’s ability to adjust losses or defend claims. How? It is because their handling spoiled the ability of the property to serve in either establishing a proper loss amount and/or in the ability to establish liability for a loss. Taking the proper post-loss steps in handling property is an important duty.

If you need more help in understanding your responsibility after a loss, be sure to discuss your concern with an insurance professional.


COPYRIGHT: Insurance Publishing Plus, Inc. 2016

All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.

 

 

Gun Liability – It’s Complicated


In 2010, during a party that involved minors drinking alcohol, one guest was shot and killed when a gun, being played with by its owner (another party attendee) went off. The parents of the deceased sued the parents of the gun handler. The latter requested coverage from their homeowner insurance company. The company denied coverage and, eventually, a court ruled that no obligation existed under the insurance policy. The company was released from the lawsuit.

Homeowners coverage, like other insurance policies, is intended to protect against losses that are accidental. Often, accidental losses can be readily determined, but incidents involving firearms are complicated.

When one person injures another, both the act and the intent are considerations of whether an incident is an accident. In the shooting incident mentioned above, it was determined that the gun handler was guilty of negligently handling the gun and was jailed. Since a court determined the incident was a crime, it did not qualify as an accident. A loss caused by a crime is ineligible for coverage.

When a loss involves firearms, it is often treated far differently than other circumstances. Consider the following:

Jim is hosting a party at his house for a bunch of high school friends and Fran is one of the persons attending it. Jim, well known to his friends as the group’s clown, is fooling around with an item. Fran, who is nearby, is seriously injured. Later, Fran’s family sues Jim’s parents and they file the lawsuit with their insurance company.

Scenario one – Jim recently became interested in tennis. He brings out a very expensive tennis racket he just received. He brags about how light and powerful it is and he demonstrates strokes. When he demonstrates a backhand, Fran is passing behind him and she is hit, suffering a broken nose and several shattered teeth!

Scenario two – Jim recently became interested in firearms. He brings out a very expensive pistol he just received. He brags about how light and powerful it is and he demonstrates how it is supposed to be handled. When he demonstrates how to aim it, the gun fires and Fran is struck. The bullet hits and fractures her shoulder.

In both scenarios, the injuries are a result of Jim’s immature and careless action. In both situations, no harm was intended. In both instances, Fran is seriously injured. In all likelihood, the losses will not be handled similarly. A tennis racket is a piece of equipment that is intended to be used for a particular sport. It is used for hitting tennis balls and other uses are considered unusual and, for the most part, not dangerous. This loss has a very high chance of being treated as an accident.

A gun is a weapon. It is used for both defensive and offensive purposes and, by nature, is capable of extremely serious, often deadly harm. It is considered to be a dangerous instrument. Therefore, the stakes are far higher whenever a gun or other firearm causes a loss. In many instances, even when harming another party is completely unintended, acts involving firearms also involve far more accountability and may not be classified as accidental. In the shooting scenario, the chance is very high that the loss would be denied.

Because of the danger inherent in guns, it’s important to be aware that losses involving them are often ineligible for insurance protection. That makes it critical that their ownership be treated seriously and every possible precaution against unintended injury be taken.


COPYRIGHT: Insurance Publishing Plus, Inc., 2016

All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.

Amboy - Main Office

111 S. Main St.

P.O. Box 157 Amboy, IN 46911

Main office: 765-395-7761
Toll free: 877-395-6200
Fax: 765-395-7763

Office Hours:

Mon: 8:00 AM - 5:00 PM
Tues: 8:00 AM - 5:00 PM
Wed: 8:00 AM - 5:00 PM
Thurs: 8:00 AM - 5:00 PM
Fri: 8:00 AM - 5:00 PM
Sat: By Appointment
Sun: Closed

Bunker Hill Office

132 East Broadway

P.O. Box 356 Bunker Hill, IN 46914

Main office: 765-689-8432
Toll free: 800-688-8432
Fax: 765-689-0725

Office Hours:

Mon: 8:30 AM - 5:00 PM
Tues: 8:30 AM - 5:00 PM
Wed: 8:30 AM - 5:00 PM
Thurs: 8:30 AM - 5:00 PM
Fri: 8:30 AM - 5:00 PM
Sat: By Appointment
Sun: Closed

Converse Office

105 South Jefferson Street

P.O. Box 620 Converse, IN 46919

Main office: 765-395-7811
Fax: 765-395-6216

Office Hours:

Mon: 9:00 AM - 5:00 PM
Tues: 9:00 AM - 5:00 PM
Wed: 9:00 AM - 5:00 PM
Thurs: 9:00 AM - 5:00 PM
Fri: 9:00 AM - 5:00 PM
Sat: By Appointment
Sun: Closed

Fairmount Office

210 South Main Street

P.O. Box 67 Fairmount, IN 46928

Main office: 765-948-4129
Fax: 765-948-4120

Office Hours:

Mon: 8:30 AM - 5:00 PM
Tues: 8:30 AM - 5:00 PM
Wed: 8:30 AM - 5:00 PM
Thurs: 8:30 AM - 5:00 PM
Fri: 8:30 AM - 5:00 PM
Sat: By Appointment
Sun: Closed

Flora Office

15 East Columbia Street

Flora, IN 46929

Main office: 574-967-3110
Toll free: 800-242-0466
Fax: 574-967-3569

Office Hours:

Mon: 8:30 AM - 5:00 PM
Tues: 8:30 AM - 5:00 PM
Wed: 8:30 AM - 5:00 PM
Thurs: 8:30 AM - 5:00 PM
Fri: 8:30 AM - 5:00 PM
Sat: By Appointment
Sun: Closed

Greentown Office

109 North Meridian Street

Greentown, IN 46936

Main office: 765-628-7572
Fax: 765-507-9144

Office Hours:

Mon: 9:00 AM - 5:00 PM
Tues: 9:00 AM - 5:00 PM
Wed: 9:00 AM - 5:00 PM
Thurs: 9:00 AM - 5:00 PM
Fri: 9:00 AM - 5:00 PM
Sat: By Appointment
Sun: Closed

Hartford City Office

209 West Washington Street

Hartford City, IN 47348

Main office: 765-348-1448
Fax: 765-348-1512

Office Hours:

Mon: 1:00 PM - 5:00 PM
Tues: 1:00 PM - 5:00 PM
Wed: 1:00 PM - 5:00 PM
Thurs: 1:00 PM - 5:00 PM
Fri: 1:00 PM - 5:00 PM
Sat: By Appointment
Sun: Closed

Kokomo Office

3833 South LaFountain Street

P.O. Box 6339 Kokomo, IN 46904

Main office: 765-455-2700
Fax: 765-453-5635

Office Hours:

Mon: 9:00 AM - 4:30 PM
Tues: 9:00 AM - 4:30 PM
Wed: 9:00 AM - 4:30 PM
Thurs: 9:00 AM - 4:30 PM
Fri: 9:00 AM - 4:30 PM
Sat: By Appointment
Sun: Closed

Lafayette Office

3904 Regal Valley Dr

Lafayette, IN 47909

Main office: 765-838-8244
Toll free: 877-395-6200
Fax: 765-838-8244

Office Hours:

Mon: By Appointment
Tues: By Appointment
Wed: By Appointment
Thurs: By Appointment
Fri: By Appointment
Sat: By Appointment
Sun: By Appointment

Marion Office

153 East 3rd Street

Marion, IN 46952

Main office: 765-662-2010
Toll free: 800-688-3548
Fax: 765-662-2072

Office Hours:

Mon: 9:00 AM - 5:00 PM
Tues: 9:00 AM - 5:00 PM
Wed: 9:00 AM - 5:00 PM
Thurs: 9:00 AM - 5:00 PM
Fri: 9:00 AM - 5:00 PM
Sat: By Appointment
Sun: Closed

Peru Office

26 West Main Street

Peru, IN 46970

Main office: 765-473-4519
Fax: 765-473-4510

Office Hours:

Mon: 9:00 AM - 4:30 PM
Tues: 9:00 AM - 4:30 PM
Wed: 9:00 AM - 4:30 PM
Thurs: 9:00 AM - 4:30 PM
Fri: 9:00 AM - 4:30 PM
Sat: By Appointment
Sun: Closed

Somerset Office

1 Main Street

P.O. Box 176 Somerset, IN 46984

Main office: 765-981-4944
Fax: 765-981-4116

Office Hours:

Mon: 9:00 AM - 5:00 PM
Tues: 9:00 AM - 5:00 PM
Wed: 9:00 AM - 5:00 PM
Thurs: 9:00 AM - 5:00 PM
Fri: 9:00 AM - 5:00 PM
Sat: By Appointment
Sun: Closed

Swayzee Office

106 South Washington Street

P.O. Box 130 Swayzee, IN 46986

Main office: 765-922-4449
Fax: 765-922-4449

Office Hours:

Mon: 8:30 AM - 4:30 PM
Tues: 8:30 AM - 4:30 PM
Wed: 8:30 AM - 4:30 PM
Thurs: 8:30 AM - 4:30 PM
Fri: 8:30 AM - 4:30 PM
Sat: By Appointment
Sun: Closed

Upland Office

50 East Berry Avenue

P.O. Box 537 Upland, IN 46989

Main office: 765-998-6053
Fax: 765-998-7083

Office Hours:

Mon: 8:30 AM - 4:30 PM
Tues: 8:30 AM - 4:30 PM
Wed: 8:30 AM - 4:30 PM
Thurs: 8:30 AM - 4:30 PM
Fri: 8:30 AM - 4:30 PM
Sat: By Appointment
Sun: Closed

Walton Office

112 North Depot Street

Walton, IN 46994

Main office: 574-626-2621
Fax: 574-626-2609

Office Hours:

Mon: 8:30 AM - 4:30 PM
Tues: 8:30 AM - 4:30 PM
Wed: 8:30 AM - 4:30 PM
Thurs: 8:30 AM - 4:30 PM
Fri: 8:30 AM - 4:30 PM
Sat: By Appointment
Sun: Closed

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