INSURANCE
Touchstone has earned numerous awards as an industrial problem-solver,
new product developer, and applied research laboratory for hundreds
of manufacturers in a wide range of business sectors. Our unique
capability as an industrial problem-solver is based on the diversity
of our highly experienced technical staff, supported by over $10
million worth of in-house laboratory equipment and testing facilities.
Work performed for insurance companies falls into several categories.
Some requests involve losses where the cause of the damage is not
clear and no claim settlement can be made until a cause can be established.
At the very least, a claim cannot be paid or denied unless the cause
is understood. Other cases concern the question of either fraud
or vandalism and whether a claim is valid. In some cases the service
involves a second party opinion or a third party arbitration to
settle the matter. Insurance companies are required to evaluate
claims for various forms of attempted fraud. Two forms of fraud
are involved: 1) soft fraud, where an actual loss has occurred and
the cause is attributed to something that is covered in the policy,
rather than the true cause, and 2) fraud, where the claim and the
damage are entirely fabricated. Typically, only the latter are prosecuted,
while insurance companies must repeatedly investigate the former
soft-fraud type in the interest of keeping costs low.
Some examples include the following:
- A request was made to examine cracking in basement walls where
it was obvious that collapse was possible if not imminent. The
house had been purchased approximately two years prior to the
claim under an FHA loan program. Visual examination found that
all four basement walls had been pushed inward as indicated by
horizontal cracks in the mortar joints. Examination of the exterior
landscape found that the ground on two sides sloped directly toward
the foundation with no provision for water drainage around the
house. This was the cause of the settling and the wall movement.
The inspection also found, however, that prior to the purchase,
major horizontal cracks had been filled and painted to hide the
problem that already existed. Because the FHA requires pre-purchase
inspection by a bonded engineer, the expense of the repair was
recovered through subrogation from the engineering firm that inspected
the house prior to purchase, but did not detect the problem.
- Another question from the insurance industry concerned the presence
of dark stains on the exterior walls of a residence. Visual examination
found that the stains followed a pattern, which reflected the
location of studs in the walls. Evaluation of some of the stain
material found that the stains were actually spores produced by
molds growing on the exterior walls. During the examination and
interview with the homeowner it was discovered that the problem
developed after recent painting and remodeling about two years
prior to the inspection. The remodeling had included installation
of whole house air conditioning, but not insulation of the exterior
walls. The problem was attributed to cooler exterior wall temperature
and excessively wet weather that allowed the mold to grow over
the surface.
- One unit in a condominium experienced flooding and water damage
when the safety valve on the water heater opened. Examination
found that the heater had not been installed according to code;
in particular, the outlet from the safety valve did not empty
into a drain. The installer paid the total damage cost.
- A request for inspection involved sagging flooring in a single-unit
house. It was suggested that a recent water pipe leak had caused
the settling. Inspection of the structure crawl space found that
virtually all of the floor joists were completely rotten and falling
from the structure. Further examination found that the crawl space
vents had been plugged to minimize infiltration by cold winter
air and had not been opened to allow ventilation. The lack of
ventilation had caused the wood to rot. The damage was so extensive
that the house had to be razed.
- A complaint of hail damage to shingles resulted in a claim against
the contractor. The damage did not appear typical of hail impact
but, rather, looked like some of the shingles had been mishandled.
Further examination found that the damaged shingles were clearly
from a different manufacturing lot as indicated by the color difference
as compared to undamaged shingles. In fact, only the shingles
from the darker colored lot were damaged. It was concluded that
the contractor had used some older shingles remaining from one
construction combined with newer shingles to complete this construction,
and that the older shingles were damaged during storage.
- An insured homeowner claimed hail damage and leakage on a recently
shingled roof. Normally, hail damage does not cause leakage unless
it is very severe, but rather shortens the life of the roof. In
this case no typical hail damage could be seen. However, at least
nine instances of sub-standard or non-standard workmanship that
could cause leakage were identified on the roof. The claim was
denied.
- A question of brake failure was traced to contamination of the
hydraulic fluid by non-compatible petroleum products. A sample
of the fluid was analyzed using the GC/MS and was found to contain
compounds that were very similar to power steering fluid. The
likely cause was accidental addition of the wrong fluid to the
brake reservoir. Because only the dealer had ever worked on the
vehicle, the claim was paid through the dealer's insurance company,
not the insured's.
- An investigation following the collision of a new truck with
a utility pole found that the loss of steering ability resulted
when the steering connecting rod separated from the steering gear
box. Further examination found that the rod had not been properly
connected when the truck was manufactured. The driver had complained
about steering problems previously, and the original rod had been
replaced, but also not properly connected. The dealer and the
truck manufacturer agreed to pay all costs involved.
- A request was made concerning liability in an automobile wreck
where one car struck another from behind. There was a need to
know whether the first car's taillights were illuminated and visible
priori to impact. Examination of one broken lamp using a stereomicroscope
and the SEM found small shards of glass fused to the lamp filament.
This proved that, at the time of impact, the lamp filament was
hot and the lamp was lit.
- A complaint was made about premature deterioration of face brick
on a residence. Examination found that about 50% of the brick
veneer had a 1/2" to 1" thick layer split from the surface.
A test of several pieces for water absorption resistance found
that the brick absorbed more water than allowed by ASTM specifications.
The damage was due to water absorption and subsequent damage during
freeze-thaw cycles when the water within the brick expanded. The
cause of the damage was sub-standard brick.
- Damage to brick at another residence was incorrectly blamed
on ice damage. The lintels on the weather side of the house had
never been painted or otherwise maintained, and the volume expansion
from rust formation on the steel had lifted the courses of brick
above the lintels and forced them outward. The claim was denied.
- It has become rather commonplace for some heating/air conditioning
contractors to replace older or questionable heat pumps and/or
air conditioners and tell the homeowners to claim lightning or
power surge damage. In many cases the cause of the failure is
either age, freon leakage, or some other mechanical problem. One
such claim involved a compressor that locked up mechanically.
The contractor claimed that lightning struck the unit and caused
the oil to leak from the compressor. Clearly, there was an oil
leak, but examination of the unit found that a small pinhole at
the bottom of the dryer cartridge had formed from rusting. The
oil leaked from this hole and, subsequently, the compressor locked
up. The claim was denied.
- A similar claim involved an older air conditioner unit with
a water circulation system. Again, a lightning strike was claimed,
and in fact, there was lightning damage to other items in the
house. However, examination by a qualified service person found
that the unit had an excessive charge of Freon and a bad flow
switch on the water circulation pump. The unit was repaired. No
claim was paid.
- In another instance of supposed lightning damage, the exterior
compressor/condenser unit was replaced. The unit was tested at
Touchstone by an electrical engineer and found to be free of damage
and fully operable. The probable cause of the complaint appeared
to be Freon leakage from a loose fitting.
- Another A/C claim evaluation found that a compressor had locked
up and been replaced as lightning-damaged. No short circuit or
burnt wiring, however, was present. The problem was simply a worn
compressor. No claim was paid.
- A complaint involving moisture damage to interior and exterior
walls near a chimney was investigated. The contractor had tried
roof replacement and repair of a chimney in the attempt to stop
the leakage. Examination of the recently installed, high-efficiency
gas furnace found that the contractor had not installed the unit
according to manufacturer's instruction. In either case the furnace
had been vented in the same manner as older, low efficiency units.
This was not acceptable with a newer furnace, and the moisture
from the cooler exhaust condensed on the chimney and seeped through
to the interior, causing the damage. The contractor paid all claims.
- Water damage on an unusually large residence was traced to undersized
gutters and downspouts. The house had a very steeply-pitched roof.
The combination of the roof slope and the gutter arrangement allowed
rain to overflow the gutters and to flow over the outside of the
house. The result was mildew, moss growth, water damage to the
basement, and water damage to exterior brick. The contractor paid
for the damages.
- An interesting complaint involved an above ground swimming pool,
which had developed large tears in the plastic liner. The pool
was of the type that uses a steel or aluminum liner on a light
support frame with the bottom resting on sand. The damage was
isolated to the uphill end of the pool. Site examination found
that the damaged end faced south, and the liner in this area had
become brittle from exposure to the sun. Because of settling from
water runoff, the sand bottom on the uphill end had eroded, causing
the one end to drop and to tear the brittle liner.
- The collapse of a concrete front porch had been incorrectly
blamed on mine subsidence. No evidence of subsidence was found
by either surface evaluation or core drilling. Examination found
that the edge of the porch against the house had simply rested
on wood and was not tied securely to the foundation. In addition,
two steel angles had been incorporated into the original structure
in an attempt to provide reinforcement. The angles had actually
provided a stress point where the concrete broke when the wood
under the concrete floor rotted. The claim was denied.
- A second claim of supposed mine subsidence was denied because
no mine was located in the vicinity. The cause was traced to water
runoff from the steep street in front of the house and the failure
to provide a safe channel for the water. Continual saturation
of the land caused a large corner section to slip and give the
appearance of subsidence. The claim was denied and referred to
civil court.
- An interesting claim involving settling concerned a house located
atop a high hill with no obvious source of runoff. The damage
included severe inward collapse of three basement walls and separation
of the brick facing because of loss of support from the foundation.
Examination found that small gardens were located on three sides
of the house against the foundation walls. The continual watering
of these gardens had provided the water needed to cause settling.
The claim was denied.
- An insured had an automatic dishwasher installed immediately
before leaving for a vacation. Upon return he discovered that
the water supply line had leaked and had allowed the water to
run. Damage totaled more than $20,000. The fault was traced to
the use of a non-standard connection by an unqualified installer.
The claim was paid by the installer's insurance company.
- A complaint of foundation cracking involved an unusual cause
of damage. The back garage wall and patio of a house were pushed
outward approximately one inch, causing damage to exterior brick
and ceramic tile in the basement. Initial examination did not
detect an obvious cause, such as settling or impact by a vehicle.
Further examination of the property found that the extremely long
driveway (150+ feet) had been installed without expansion joints.
The damage occurred during a long period of heat when evening
temperatures remained above 75 degrees and daytime temperatures
were above 100 degrees for several weeks. Calculations of total
expansion based on temperature and the coefficient of expansion
of concrete confirmed that driveway expansion had pushed the garage
floor horizontally and had caused the back wall to move an equal
amount.
- A complaint concerning structural damage was investigated to
determine the cause. What was claimed as damage from weight of
snow was found to be a structural defect from construction. A
kitchen addition to a home was constructed over a patio with the
outer end of the room resting on three wooden posts. Cracks developed
on the interior walls near the point of attachment to the floor
system. Structural examination was limited because of soffit which
covered the underside of the structure and ceiling tile in the
house basement obscured the framing. It was possible, however
to ascertain that the sill plate for the addition was probably
only nailed to the house and that no other support had been provided
for the additional framing. The conclusion was that the addition
was pulling away from the house under its own weight.
The above examples are only a sample of our work in this area.
We would be pleased to provide any additional information you may
require. We also invite you to review examples on our website of
work that we have performed in support of other business sectors.
Please contact one of our Project
Managers to discuss your manufacturing problem. We would welcome
an opportunity to add you to our rapidly growing list of satisfied
customers.
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