6^th Case Report of California Certified PA (Public Insurance Adjuster) Jae Park

In August 2012, there was flood damage in Mr. A’s mansion (with floor space of approximately 5,200 sq. ft.) located near the Silver lake in Victorville. This mansion is a place that Mr. A, who lives near Los Angeles, visits for rest and relaxation on the weekends. In early August, Mr. A arrived at the villa late on a Friday night and witnessed the flooding. Mr. A was surprised to see the great extent of the damage, so he called the fire station and plumber for emergency help. The plumber stopped the water supply to the building immediately as an emergency measure, and the firefighters determined that the house would temporarily be uninhabitable due to water leakage and the possibility of short-circuiting. Therefore, Mr. A couldn’t stay at the mansion any longer. Also, that night Mr. A filed a claim with the help of an insurance broker.

The damages that Mr. A identified with the help of the plumber are as follows:

The water leak occurred due to the rupture of piping connected to the tank less water heater installed in the closet of the master bedroom located on the second floor. The flooding did a great deal of damage to the closet, bathroom cabinets, shoe closet on the second floor and the library, kitchen, wet bar cabinet and the kitchen ceiling on the first floor.

A few days later, a staff claim adjuster from the insurance company visited the site, in the company of a contractor, in order to detect the water leak. The staff adjuster collected the damaged pipe connected to the heater, which had appeared to be the cause of the water leak. Soon after, the insurance company notified Mr. A that they couldn’t provide coverage for the damage due to the following reasons:

1) As a result of a detailed investigation of the damaged pipe collected from the flood site, it was found that the pipe was iron material, which is inappropriate for use in the heater; consequently, the heater that used these components seemed to be of improper and faulty construction.

2) With the long-term use of the heater, structural wear and tear occurred in the pipe.

3) The degree of corrosion of the damaged pipe was severe and mold was found on the surface of the pipe, so it is likely the water leakage had occurred over a long period of time; thus the payment of damage was denied.

In other words, the insurance company completely denied the payment of the claim, for which they gave the punctured pipe segment as a reason for the denial. Does that mean Mr. A has to check the inside of the heater every day for any problems, even after buying the insurance?

Mr. A was hardly convinced of the rejection of the compensation payment by the insurance company. Now, Mr. A realized the seriousness of the situation and looked for the PA, thinking he couldn’t solve this problem without professional help. The PA reviewed the related insurance policy immediately, and the PA found the special clause that covered the Sudden Accidental Discharge of Water.

In other words, the insurance company had to compensate regardless of any structural defect, including the pipe in question. Of course, these clauses are not included in all insurance policies. This PA pointed out to the insurance company that there was a problem right away. The insurance company also acknowledged the problem but, in order to reduce the size of compensation payment, the insurance company picked a fight with this PA. After constant negotiations between the insurance company and this PA, finally the compensation negotiation ended at the end of December, five months after the flooding.

The final compensation amount was approximately $70,000. Looking at the amount of compensation, the extent of the damage was never a small thing. Finally, when the compensation was decided, Mr. A, who had experienced a great deal of distress, thanked this PA deeply. This PA also expressed sincere appreciation to the client, who had shown deep trust to this PA, enduring the long negotiation process between the PA and the insurance company.

Additional columns available in English, Korean, Chinese, and Vietnamese at www.JPadjusters.com.

Jae Park, AIC

Public Insurance Adjuster, License # 2H67374

Ex-Insurance Carrier’s large & complex property loss claim adjuster

IICRC/Clean Trust- WRT, AMRT, FSRT

Member of CAPIA/ California Association of Public Insurance Adjuster

Jae Park & Associates, Inc.

3255 Wilshire Blvd Suite # 1414

Los Angeles, CA 90010

Business Cell # 213-572-7379

Fax# 877-277-9752

E-mail: [email protected]