Iconoclast continued from p. 54
depreciates at a rate of 10,000 to 12,500
miles ( 10-12. 5 percent) per year, then
somewhere around 100,000 to 125,000 or
less miles the car is shot. At that point, it
is a piece of transportation and little else;
probably something that will break down
on a hot day in the middle of the freeway
in rush hour and clog the road for a good
10 miles. However, taking the traditional
definition of ACV, my car with less than
50,000 miles, despite being 16 years old,
should be worth somewhere around half
the value of a new model comparable to a
Ford Contour, perhaps less a bit for obsolescence as it lacks power windows.
Of course, there is always the issue
of like kind and quality. I told the class
about how I had once caught the famous
news broadcaster, the late Paul Harvey, in
a conflict of interest. He had two sponsors
one day for his radio show: Allstate and
General Motors (GM) Genuine Parts.
Allstate, I knew, was an active participant in the I-CAR program, which had
much to say about using after-market
parts in body repairs to save money, arguing that these parts, usually foreign-manufactured as opposed to used parts
from a junk yard, were of “like kind and
quality.” I am sure the folks at GM Genuine Parts, however, would have strongly
Under Section 1 of the ISO homeowners’ form 00 03 10 00, a subsection is devoted to the types
of personal property that are not covered. Aside from water and steam, a countless number of
items are excluded from coverage. Major items include:
E Animals, birds, and fish.
E Motor vehicles and all parts. However, items within the vehicle at the time of a disaster that
would otherwise be covered are in the clear.
E Aircraft and all associated parts, whether or not they are attached.
E Hovercraft and all parts.
E Property of roomers, boarders, and other tenants unrelated to the insured.
E “Business” data, including written records, computers, and credit cards.
Though many items in any given household could go one way or another—a situation where
it would be difficult to tell if an item really belonged to an unrelated renter or the person who
filed the claim—these specifics should be considered.
It may be difficult for a claimant to come to terms with the fact some of their belongings are
not covered, but the fact that some are not can be a lesson for both the claimant and the
adjuster each time an incident occurs.
the legislature may change what that
wording means. It therefore behooves
every claims adjuster, whether employed
by an insurance company directly or
working independently, to know both
the policy language and the law.
The class was told that there are four
types of law that have a major impact on
insurance. The first, of course, is contract
law, with the policy itself being the primary contract. Also keep in mind that
other contracts, such as hold harmless
A claim requires investigation and evaluation of
coverage followed by liability, and then the damages.
disagreed. Just what does “like kind and
quality” mean? More than one court has
had its say, and in a few, the conclusion
was “diminished value,” now claimable in
Coverage is Key
Regardless of the type of claim, be it
property, casualty, life, health, or surety,
no adjustment can proceed without a
complete understanding of the appli-
cable coverage issues and how those is-
sues have been addressed by the courts
or legislatures in the applicable jurisdic-
tion. That cannot be stressed enough.
The policy is meant to be read in one
particular way, but often the courts or
agreements, indemnity clauses, and ex-
culpatory notices affect claims. Adjusters
must seek out such contractual agree-
ments and determine how they impact
any particular claim. Undoubtedly mil-
lions of dollars are incorrectly paid an-
nually by adjusters who failed to find a
contractual agreement that would either
limit the payment, provide a basis for
subrogation or contribution, or would
have required payment to someone else
who was equally ignorant of the contract.