The Importance of Investigating Fire Losses
By Jeff Blevins, Manager of Property Loss Consulting
WRC strongly encourages client mutuals to weigh the needs and benefits of origin and cause investigation for all fire losses.
Although every fire won’t require hiring an outside investigation, good management of the claim requires asking the question about every fire. The person in charge of managing the mutual’s claims should have a team of professionals to consult on these evaluations. The most effective lineup of resources usually includes the adjuster, your fire investigator and an experienced attorney.
WRC’s Property Loss Consulting team also is available to support our client managers and adjusters on a 24/7 basis. We provide strategic assistance for communication, investigation and coverage analysis. We also can assist with referrals to regional experts with specialties in forensic investigation, insurance defense and subrogation.
When should you use an origin and cause investigator? This is an often-asked question. Some clients investigate every fire claim, no matter the size. Others investigate every claim over $100,000 or each claim that exceeds their retention. The best approach is to consider the merits of investigation based on the facts and circumstances of each claim.
These types of claims frequently require a mutual to hire independent experts for investigation:
- Losses with potential subrogation
Common situations involve product failures, improper installations or maintenance by third parties, negligent action or behavior of tenants or third parties.
- Fire scenes of an unknown or suspicious nature
Suspicion may arise due to physical or circumstantial evidence, indicators of financial motive, strained relationships involving the insured, peculiar behavior or lack of cooperation during the first contact.
- Fire scenes where a third party suffers injury, death or property damage
In such cases, there is a potential liability exposure for the insured property owner that must be addressed. A fire scene should not be released without providing third parties (such as tenants) an opportunity to have their items retrieved or have their own fire scene investigations completed. Public safety and health concerns are always of the utmost importance, yet the company and insured may be held legally liable to make a reasonable effort to protect the rights of and provide notice to third parties before evidence at the scene is disturbed or excavation begins.
- Fire scenes where an insured suffers injury, death or uninsured property damage
As the insurance company for the property owner, you have to keep the potential interests and rights of your policyholders in mind when they may not have the presence of mind to do so. They may have a legal right to pursue recovery for their losses beyond the insured property loss. If the fire scene and evidence is not preserved, the insurance company can be held liable if your actions or directions obstructed future recovery rights of the policyholder.
Having key members of your investigation team in place before a loss will enable the mutual to respond efficiently and confidently in meeting obligations to the policyholder while simultaneously protecting the interests of the mutual.
If you would like to discuss how we can assist your mutual in these matters, reach out to Jeff Blevins, Manager of Property Loss Consulting, or Steve Carroll, Property Loss Consultant.