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When Merrymaking Goes Awry

Posted By Administration, Wednesday, November 28, 2018


The following questions about potential holiday mishaps and the subsequent insurance implications are hypothetical. They were written with insurance agents in mind, with hopes of arming these disaster-ready professionals with language and insight to smoothly guide clients into 2019. The answers were provided by our colleagues at FC&S Online, trusted policy analysis experts and the recognized authority on insurance coverage interpretation for the P&C industry. To find out more — or to have YOUR coverage question answered — visit the National Underwriter website, or contact the editors via Twitter: @FCSbulletins.

Question: My client’s neighbor was attempting to fry a turkey on Thanksgiving Day. Unfortunately, the neighbor left his fryer unattended to watch football and a fire started that spread to my client’s backyard landscaping. Should the insured file a claim for these destroyed trees and plants as well as the expense of re-landscaping?

Answer: With most homeowners’ policies, trees, shrubs, plants or lawns require standard additional coverage, but fire is a covered peril. No more than $500 is paid for any one tree, shrub or plant, and the coverage limit is 5% of coverage A.

But you asked IF the insured should file a claim, and that’s a different question. Unlike auto policies, there is no fault component. So in most cases, each claim counts against the insured. The insured needs to weigh the amount of damage against the deductible and his claims history. If the damage isn’t too bad, he may not want to file a claim. Underwriting will reject policies for claims frequency, even if the claims are small. Frequency is as important as severity when you’re talking to underwriting.

Question: A ‘friend of the family’ claims that my client’s Thanksgiving meal made her so sick that she needed to go to the emergency room. We’re dubious, since none of the other guests became ill after the meal. Should my client be worried about any financial repercussions?

Answer: In short, no. The homeowners’ policy provides coverage for medical payments due to an accident causing bodily injury to a person on the premises with the insured’s permission. Unless the insured deliberately poisoned the guest, the insured has nothing to worry about.

Question: My client has a seasonal job at a Christmas tree lot. While carrying a customer’s tree to her car, he fell and broke his toe. Should my client file a workers’ compensation claim or pay for treatment using his own health insurance?

Answer: Employees, even seasonal employees, should always notify their employer of any work-related injury. This injury happened during the course of employment and therefore meets the qualification to apply for workers’ compensation benefits. The lot may or may not be required to provide coverage depending on the state and the number of employees. You can check with the state to verify whether an employer is required to carry workers’ compensation.

If an employer is not required to provide workers’ compensation, your client should turn to his own health insurance plan.

Question: A client has a part-time seasonal job dressing up as Santa Claus and visiting office parties. Some of these parties can get a rowdy. Who’s responsible if he’s injured while doing this job?

Answer: In this situation, if your client is injured at a company’s holiday party, he will need to file a general liability claim with the company’s insurance carrier. The company should carry Medical Payments (Coverage C) which provides a limited amount of medical payments coverage regardless of fault. If the company is negligent, the general liability coverage (Coverage A) will pay for any bodily injury sustained by your client while he was at the company’s holiday party.

Question: A holiday caroler slipped and fell on the snow outside the insured’s home. What conversations should my client and I have about potential liability?

Answer: The medical payments section of the policy will provide coverage for any medical expenses incurred by the caroler. As long as the caroler was on the insured’s property with permission, coverage for injuries is available.

Question: Roughly $800 worth of holiday gifts were stolen from my client’s car while she ran into the grocery store. Does her car insurance cover the loss?

Answer: Auto policies are designed to provide coverage for damage to the auto whether from an accident or act of nature such as hail, falling trees, etc. While other than collision provides coverage for theft of the vehicle, theft of personal property from a car is different, because the property is not automobile equipment attached to the auto.

If the vehicle was broken into and the radio was stolen, the auto policy would provide coverage for that.

For personal property such as gifts, however, the insured needs to look to the homeowners’ policy for coverage. Theft of personal property is covered anywhere in the world, including in the insured’s vehicle. However the insured should weigh the cost of the items against the deductible on the homeowners’ policy to determine whether it is worth filing a claim.

Question: My clients recently called feeling embarrassed. The couple were so busy during the holidays that they forgot to make a monthly car insurance payment. Then, the day after Christmas, they had a fender-bender. If they catch up with payments, will their insurer still cover the cost of car repairs?

Answer: The laws of cancellation notification vary by state. Most states require that the insured be given a certain number of days of notice before cancellation takes effect. If you make your payment within that time frame, your policy can be reinstated. If your payment is made beyond that date, your policy cannot be reinstated to cover the loss. Carriers are particular about such things.


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Risky Rides

Posted By Karen Sorrell, Wednesday, June 20, 2018

Unique Exposures for Amusement Park Rides


Nothing quite matches the exhilarating thrills of amusement rides for young and old alike. There are more than 400 amusement parks and attractions in the U.S., and attendance at the top 10 U.S. theme parks was just under 113 million in 2016.

For the average amusement park junkie it is well worth standing in line for an hour or longer for a ride on the newest, tallest, most dangerous and exciting ride in the park. However, what happens when the ride keeps you hanging in mid-air requiring ladders to retrieve you, or worse still, when the ride malfunctions and causes injury or even death, such as when the Fire Ball ride malfunctioned at the Ohio State Fair last July. A statement released on August 2, 2017 by the manufacturer of the Fire Ball, KMG International BV, reveals that excessive corrosion on the interior of the gondola support beam dangerously reduced the beam’s wall thickness over the years, leading to the catastrophic failure of the 18-year-old ride during operation.

Safety vs. thrills

The fact is that many rides are decidedly unsafe, and many have disastrous track records. Back in 2014, the following theme parks and carnivals in the U.S. made the list of having the most deadly accidents:

Waterslide at Waterworld USA in California — Water slides have consistently been a top cause of injuries, often geared with poor safety precautions and short walls. In 1997, 33 high school seniors crowded the slide, causing it to collapse under the weight, resulting in one death and 32 injured.

In August 2016, a 168-foot tall water slide in Kansas City, Kansas, decapitated a state lawmaker’s 10-year-old son. It was the world’s tallest water slide at the time, and Kansas was generally known for its light regulation of amusement rides. Settlement has been reached by the family against SVV 1 and KC Water Park, two companies associated with the Texas-based water park operator Schlitterbahn, the general contractor, the raft manufacturer and a company that consulted on the 17-story “Verruckt” waterslide.

Haunted Castle at Six Flags Great Adventure in Jackson Township, New Jersey — While not a ride, this castle became deadly on May 11, 1984, when it burst into flames and eight teenagers died when trapped inside. While arson was the likely cause of the fire, the park was charged with lack of safety precautions such as sprinklers and smoke detectors. However, Six Flags was not held responsible because the castle was considered a “temporary structure.”

In addition to deaths, there have been many serious injuries arising from amusement rides, such as when a 10-year-old girl became unconscious after riding a roller coaster at Six Flags Magic Mountain in southern California. In addition, a park employee suffered traumatic injuries after being struck by a train returning to the station of the Flight Deck coaster at the Great America amusement park in Santa Clara, California. Both of these accidents occurred in June 2015. In the same month, there was a carnival ride accident in Waterville, Maine, when a roller coaster ride became unhitched and injured three children.

Tracking injuries but not deaths

The Amusement Safety Organization tracks significant injuries, but not deaths, for rides at 42 theme parks in the U.S. For the five-year period of 2013-2017, the number of significant injuries totaled 3,003. Of these, only 16.8% of injuries occurred at the top 10 theme parks in the U.S. Many injuries occur from amusement park accidents.

The most prominent injuries include head, neck and back injuries; death as a result of falling or being thrown from a ride; stroke from trauma to ligaments in the neck; traumatic brain injury from G-forces; stresses by extremely rapid speeds or from detached objects hitting the rider’s head; brain aneurysms from fast rides; lacerations, broken bones and torn ligaments; and drowning on water slides, “lazy river” rides or other water rides.

Saferparks is a non-profit public service organization founded to help prevent amusement ride accidents through research, information sharing and effective public safety policy. Their website intends to educate consumers about known safety issues related to the use of amusement rides, and to centralize data describing amusement ride injuries and regulatory requirements from a variety of jurisdictions.

The organization provides support for the Council for Amusement and Recreational Equipment Safety (CARES), which is the organization of government officials responsible for enforcing amusement ride and recreational equipment regulations. CARES maintains a list of rides that are required or recommended to have non-destructive testing (NDT) and/or other maintenance actions completed prior to their continued operation, with such NDT performed and signed by an individual certified to conduct the specific NDT in accordance with the American Society of Non-Destructive Testing’s recommended practice SNT-TC-IA.

Amusement park claims

There are a number of claims available to those injured on amusement park rides, but the two most common are negligence and product liability.

Negligence — This type of claim is generally the result of carelessness, recklessness or inattention of a park or ride employee. For example, the ride operator may abruptly stop the ride or incorrectly latch a seat belt. One of the leading contributors to park injuries and fatalities is improper operation of the ride. In a standard negligence claim, the plaintiff must prove that the law required the defendant to be reasonably careful, that the defendant was not careful, and that this carelessness caused the plaintiff to be injured.

An amusement park is responsible for the actions of its employees, whether it is from the employees doing something or their failure to act. Some examples include failure to maintain the equipment in a safe condition (rust and corrosion), failure to post warning signs (health risks and size/weight requirements), improper training of operators, failure to inspect the ride, worker inattention (using cell phones or eating while operating), and failure to properly check restraints or instruct riders.

Product Liability — This type of claim results when an accident is caused by a defect in the ride or its components, or due to improper maintenance, lack of or inadequate repair, improper operation, inspection or use. For example, the faulty design of a lap bar may cause it to unlatch, leading to the rider falling to the ground.

Mechanical failure of the ride is one of the leading contributors to amusement park injuries and fatalities. If there are structural or design defects in the ride, this could give rise to claims against the manufacturer of the ride or a component part for defective product or workmanship. In such cases, the plaintiff(s) would need to prove that the structure, equipment or component part was defective and that the defect was the direct cause of the injury or death to the victim. The Fire Ball incident in Ohio would fall into this category.

Assumption of risk

However, there are some states holding to an assumption of risk rule. If the park or employee can show that the victim assumed the risks of a certain ride, the park will not be held liable. This assumption of risk would not be a defense for unknown risks, such as those described under product liability. However, if someone knows that participating in an act or event is inherently dangerous, but chooses to participate anyway, then that person is said to have ‘assumed the risk’ associated with that activity. The key here is that the victim must have been aware of the risks involved in order to assume them.

If a victim is injured as a result of not complying with posted requirements for the ride, this non-compliance may be used as a defense by the amusement park. Examples include a rider not complying with the posted age, weight or height requirements, when a rider unlatches the seatbelt on a fast-moving ride and falls or is thrown from the ride, or they voluntarily jump the ride, then there would be no justification for a negligence or product liability claim.

While a carrier cannot prevent individuals from not adhering to the rules of a ride, it can do solid underwriting and loss control in order to avoid exposing themselves to possible catastrophic claims. While loss control surveyors are not expert ride inspectors, having loss control ensure proper completion of ride inspections according to state requirements by a properly certified inspector, verification of properly trained employees to operate the ride and know emergency and safety procedures, and completing a visual inspection can help ensure the safety of the ride. Applications are extensive and underwriters need to review them carefully and be familiar with the risks involved. Amusement rides are a unique exposure, and insuring them requires careful review and analysis of risk.

Tags:  amusement parks  claims  risks 

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6 Insurance Claims So Crazy They Must Be True

Posted By Patricia Harman, Shawn Moynihan, Thursday, December 28, 2017

by Patricia Harman and Shawn Moynihan,, December 22, 2017

Members of the NAIIA Share Some of Their More Memorable Claims

Property & Casualty adjusters encounter plenty of mundane claims: flooded basements, trees falling in attics, and cars backing into one another at the grocery store. But every adjuster has at least one unusual claims story. You know — the ones that are shared over drinks at a conference or during lunch at an industry event.

The stories are probably embellished a little over the years, but they’re memorable because of the situation or the policyholders involved.

1. Slip-sliding away

Everyone knows about floater policies, but this tale takes it to a whole new level. David LeNorman, senior investigator and adjuster for Alaska Adjusters in Anchorage, recalls one homeowner’s claim that literally went off the rails.

The family who owned the property in question were longtime residents of the village of Aniak in Western Alaska. Some 60 years prior, the claimant’s father had built a 1,000-square-foot store and the family lived above it. Not too far from the structure, a river flows.

In Alaska, a “break-up” is what happens when ice breaks up, typically in the spring, and travels down river. Several immense blocks of ice had created a dam that blocked the water behind it, causing the water level to rise in the river by the store.

“The family was watching TV and said they felt like the house was floating,” LeNorman recalls. The structure was indeed moving, as it had been built atop a series of logs; the sediment at the location was too sandy to build on without having a solid foundation to hold it in place.

A corner of the store was damaged, and the entire building shifted about 3 feet. Luckily, the store had been placed it on the riverbank near a rock outcropping; a corner of the platform got caught on the rocks, which protected the store from floating away down river.

“How many people can say they were sitting there watching TV, and an iceberg floats by the window?” LeNorman quips.

2. The 300-pound stripper

When Mark Nixon, president of St. Louis-based Nixon and Company, was a new adjuster, he experienced one of his more memorable claims. “It was a sewer backup,” he recalled. “I called and made the appointment with the policyholder.”

When he arrived, the woman took him downstairs to the basement to see the damage. “It was a legitimate claim. She had some evening gowns and other items that were in a basement and had been damaged.”

As he was reviewing the claim, the policyholder mentioned that she needed her wedding dress for Saturday. Nixon thought, “Oh no — she’s getting married on Saturday.” When he asked for more details, she told him she had an event and handed him a business card that read, “The 300-lb. Stripper.”

It turned out that all of her dresses were costumes for her act. She gave him a brief demonstration and said, “Usually I do adult-only parties, but for you and your friends, I’ll do it all.”

Needless to say, her offer left him speechless. He took her card and said thank you.

3. Mountaintop retrieval

Northern Adjusters Inc. serves all of Alaska with claims handling and administration; one of the tag lines on its website reads, “For over six decades, we’ve traveled to remote villages and crossed glaciers to get the job done.”

On one such mission, agency principal J.D. Daniels had to retrieve a wrecked four-wheeler (ATV) off Crown Pointe Peak, located near Moose Pass, Alaska. It was a task that involved Daniels and a colleague transporting their own ATVs 100 miles, unloading them, and then riding them up to about 4,000 feet, the elevation of Crown Pointe.

During the ascent they had to pass through a miners’ site at the base of the mountain, and the miners didn’t exactly feel the intruders belonged there. They purposely made their sidearms visible, and in a very gruff manner let the interlopers know they didn’t want Daniels to take the ATV off “their” mountain.

The miners knew where the vehicle was and had put together their own plan to retrieve it, Daniels explains: “This didn’t include us, and there was a very awkward and antagonistic conversation that took place. They made it very clear that they would challenge anyone for the ATV.”

The insurance carrier needed to retrieve the ATV before it faced an environmental claim from the government, as it was on federal land. But the miners were less than impressed with the adjusters’ predicament.

Seeing that the conversation was going nowhere, Daniels finally put his boot down and stated that they were going to get back on their ATVs, pass through the miners’ site and retrieve the wrecked ATV from the top of the peak, like it or not. Things were getting tense.

Whether the miners were unprepared or impressed by such boldness, they let the “insurance guys” pass through the site, unharmed. “Later that day as we were retrieving the ATV, a group of the miners had made their way to the site and were watching our every move,” Daniels relates. “But honestly, I think I was more scared of encountering a moose or a bear along the way so I was relieved that neither of those crossed our path!”

If another adjuster should find himself or herself in the same position, what advice would Daniels give them? “My advice would be that it is best to communicate openly and firmly,” he adds. “If you find yourself at an impasse, take the action you have openly communicated.”

4. Madame Butterfly

A young woman had been in a car accident that involved her T-boning a truck that was making a left turn in front of her. Nixon received the claim and the insured gave him the address where they should meet.

It turned out to be a biker bar in rougher part of town. Dressed in khakis, Nixon felt as awkward as he looked. Fortunately, the bar was relatively empty when he entered.

“It looked like a set out of the movies,” he described. “The jukebox was playing ‘Bad to the Bone’ pretty loudly, and there was a woman in the back of the bar in a completely see-through negligée.”

Nixon noticed that she had a giant butterfly below the waist, but the more immediate problem was, how would he get a recorded statement from a scantily clad woman?

As he was asking her about the accident and getting the details, Nixon thought he was being careful to just look at her eyes. “In reality, I was looking at her butterfly.” She noticed where he was looking and casually said, “It’s a butterfly.”

5. Mice in the house

Usually, a mouse or two in the house isn’t a big deal. But one couple had an experience that’s worthy of a horror movie.

The couple were married and left for a month-long trip to Greece. While they were away, the power went out and their upright freezer defrosted. The food coagulated and spilled out onto the garage floor.

Nixon received the claim and learned that the couple’s house was infested with mice from the freezer melting. “When I arrived, the house smelled like it was infested by mice. I told them I didn’t think they had coverage because it was damage from rodents.”

The claims manager confirmed that the couple did not have coverage for the loss, but the claim was escalated to someone else at the insurance company who said the company would pay for the loss.

Nixon went back to the house and assessed the damages. An exterminator was hired, and he stopped by daily to remove literally dozens of mice. When Nixon was talking to the exterminator, he learned that mice don’t usually eat meat. “Are you sure the house wasn’t infested before?” asked the exterminator as he pointed out the field behind the house.

Nixon held up the claim again, but it was reinstated. The damage to the house was substantial. “Mice were eating the bait and going into the walls and dying,” explained Nixon. The ceilings, walls and carpets had to be pulled out because the entire house was infested. By the time the job was completed, the exterminator had pulled hundreds and hundreds of mice out of the house.

But that’s not even the end of the story …

6. Fluffy is missing!

While their home was being exterminated and rebuilt, the owners stayed at a motel in St. Louis. Their little dog, Fluffy, got loose and was kidnapped. The owners told Nixon, “We want to put up a reward. Will the insurer pay for it?”

Again, Nixon told them he didn’t think there was coverage, but the insurer agreed to pay for the reward.

The following night, Mr. & Mrs. Insured were on the local news saying, “Our dog, Fluffy, was kidnapped because the insurance company put us up at this hotel. We’re offering a $500 reward to get our dog back, and the insurance company has agreed to pay it.”

When they didn’t get a response to the $500 reward, the president of the insurance company authorized an increase in the reward to $2,000. When no one responded, the insureds asked if they could keep the money and use it to purchase a new dog. The insurer agreed. The owners went on the news again and shared that the insurer had let them keep the reward money to get a new dog.

When the policyholders returned home, Mr. Insured said that some contents were missing from the inventory. Nixon told the policyholder to put it on the list, and he would contact the restoration contractor about the missing contents. Mr. Insured said he wanted a meeting with everyone involved in his claim because some very personal items were missing.

Nixon gathered representatives from every vendor involved in the claim — the cleaners, restoration company, electrician and exterminator — for a meeting. The homeowner said, “We are missing some very personal videos that my wife and I made in the bedroom.”

Someone said they were probably already on the internet. This was not good news. The wife was a professor at a local university and was concerned about who might see the videos; however, they were never returned.

Tags:  claims  crazy but true 

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