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Comment on service people not leaving damaged equipment behind when insurance claim is made

June 4, 2024
Comment on service people not leaving damaged equipment behind when insurance claim is made from article on May 14, 2024
          Last thing anyone should ever depend on is that your insurance company is going to send someone to evaluate your loss and it is going to be in your favor. They want to give you as little as they can get away with. Your insurance company is only your friend while you are paying the premiums and have no claims.
          I keep a list of Public Adjusters that I give to my customers and recommend that they also go on line and look for some local Public Adjusters to intercept whomever their insurance company is going to send out. Unfortunately most people do not even know that there are such people and services.
          Put off the insurance company adjuster inspection until the Public Adjuster has submitted your claim. The claims result in MUCH larger payouts than any company assigned estimator is EVER going to provide. This has worked in favor of my customers for years.
          If the customer wants you to replace the equipment before it is inspected, get written permission and / or get the Public Adjuster in there before you replace it or leave the equipment behind. Although, with regard to that:
          Leave the equipment behind for WHAT?
          I'm pretty sure the insurance company is not going to send out an alarm company to inspect the alarm equipment and I don't know what the "average" electrician would know about any "left behind" alarm system that was damaged or even one that was still hooked up and still appeared to be in working condition, to determine if it was damaged or not. There are 100's of different alarm panels out there and I cannot imagine any one, aside from and only possibly an alarm company, that would be able to make a determination about disconnected alarm equipment without setting it up to see if it could transmit a signal, etc. They only want it left behind because if it isn't they can deny the claim.
          With regard to electrical surge damage, I have found that insurance company provided inspectors will never include circuit breakers, home automation switches, devices and outlets, TV's, refrigerators, freezers, stoves, microwaves, washers, dryers, and any electrical appliance of any expense, as long as it appears to be working at the time of inspection. This list also includes alarm equipment. Unfortunately, when the appliance stops working 6 months after the insured has signed off on the payout, the insured don't consider that the power surge 6 months ago was the cause. Substantial loss of life expectancy to electrical appliances due to a sustained electrical surge is something insurance companies NEVER consider. So the end user winds up paying for new appliances, exactly what he has paid his insurance company to cover.
          REMEMBER your insurance company is NOT your friend.
Certified Alarm
          I not only write the contracts relied on by alarm companies and the E&O carriers that insure alarm companies, but I also handle defense claims when alarm companies are sued.  Jim is correct in many ways because insurance companies usually rely on their house counsel or approved select panel counsel.  They do not specialize in the alarm industry; they do not specialize in contract law, alarm or any other.  They accept the defense assignment under very tight and strict policies that limit time that can be devoted.  But that’s not always the case; not all carriers and claims represents are the same and some have much more experience than others in the alarm industry. 
          When I am brought in for a claim my first call is always to the alarm company.  It’s the alarm company I rely on as my expert, first and foremost.  I’ll ask the company to obtain and secure the contract, the service reports, central station records and their inspection report if they have one. 
          The legal term for failing to preserve evidence is called Spoliation.  Spoliation of evidence occurs when someone with an obligation to preserve evidence with regard to a legal claim neglects to do so or intentionally fails to do so. Such a failure to preserve evidence can take place by destruction of the evidence, damage to the evidence, or losing the evidence.  Obviously neither you nor the claimant should permit destruction of evidence.  Sometimes it can’t be helped, but intentional failure to preserve evidence is going to have consequences one side of the claim isn’t going to like.
          When you have a claim your carrier should be your “friend”.  Certainly the claimant’s carrier who may be suing in subrogation is not your friend, but it has legal rights, including preservation of evidence.  For your carrier, your contractual duty per the insurance contract is to cooperate with the defense of the claim.  Therefore the relationship should start and remain as friendly and cooperative.  The only time that may change is when the carrier crosses the line to “bad faith” by failing to uphold its insurance contract duties of providing a defense and protecting the insured against the claim.  That happens when the claim should be settled and can be settled within policy limits and the carrier refuses, leaving the insured with potential exposure in excess of the policy coverage and limits.  I’ve been involved in those disputes too, and if you’re in that situation your strategy needs to be carefully mapped out and executed; also not a job for inexperienced counsel.  As we lawyers like to end letters on occasion, be guided accordingly.

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301