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Toronto
Home Explosion Claim
Aired on Market
Place: December 3, 1996
Summary
A
devastating natural gas explosion in a
Toronto suburb serves as a rude awakening
for a group of homeowners. The amount of
insurance they think they have is not what
they're offered by their insurance
companies. Rather than settle for less, the
homeowners form a self-help group to fight
their case. And they enlist the help of
public insurance adjusters, independent
agents who will do their own damage
estimates and then take on the insurance
companies.
More Information
We all buy home insurance hoping we never
have to use it but if disaster strikes, we
expect to be looked after. That's what a
group of Ontario home owners thought after a
gas explosion rocked their neighborhood.
Instead, they ended up in a bitter dispute
with their insurance company.
On July 31, 1996, the quiet neighborhood
in Thornhill, north of Toronto, was
shattered by a natural gas explosion in a
basement. One house was blown apart. No one
was killed but six people were injured. Two
of them, seriously. Roofs were lifted,
windows were shattered. Walls bulged.
In all,
11 houses have been condemned and unfit to
live in.
Natural gas explosions can be devastating.
The Calgary fire department conducted this
controlled blast as part of a training
exercise. It gives you some idea of what
happened in Thornhill, where the explosion
was blamed on the newly-installed gas water
heater.
The homeowners in Thornhill had home
insurance. One house was insured for
one-hundred-eighty-two-thousand dollars to
cover the cost of replacing the house. But
after checking out the damage, the insurance
company wasn't willing to replace the house.
It said it could be repaired and offered
$136-thousand dollars. Many of the
neighbours have similar problems.
Once a week, they get together to share
the pain of their loss. And to exchange
notes on their fight with their insurance
companies. Some companies have even stopped
paying temporary living expenses. As far as
they are concerned, there are two tragedies.
One is the house exploded and the other is
dealing with the insurance company.
At least eight different insurance
companies are involved and the complaints
are the same. Low appraisals on the amount
of damage. Adjusters pressuring homeowners
to settle. Letters from insurance companies
threatening to cut off living expenses. It's
already been a four-month ordeal for the
Thornhill home owners. And many of them
still don't know when or how it will all
end.
The Reverend Ray Cross knows everything
about fighting for every single cent. Three
years ago, the Baptist minister lost his
home when his neighbour's house blew up.
Cross and his wife survived the explosion,
only to be end up in a battle with their
insurance company.
The Cross' got help in that battle from an
unusual source. They hired a public
adjuster. Public adjusters are a rarity in
the insurance industry. Most adjusters work
for insurance companies. Public adjusters
work exclusively for policy holders. There
are fewer than ten public adjusters in
Ontario. Bob Watson and Steve Kay work for
the same company. The National Fire
Adjustment, N.F.A. They're paid a percentage
of the final settlement, anywhere from eight
to 15 percent.
Watson has been an adjuster for 37 years.
Most of that time he worked for insurance
companies. Eight years ago, he decided to
become a public adjuster. In his experience,
insurance companies don't like public
adjusters because the public adjuster, puts
the insured on the same playing field as the
insurance company in terms of knowledge of
what to do with the claim and how to go
about getting the maximum dollar you're
entitled to.
Cross hired N.F.A.'s Bob Watson, when his
insurance company offered only $95-thousand.
He knew the language, he knew the law, he
knew the techniques. He could back them up
if need be. He could present valid claims.
He did the proof of loss. He brought in
appraisers who appraised the value of the
damage. The insurance company thought that
the house could be repaired, but in Cross'
opinion it could never be returned to what
it was when he originally owned it. And that
was what the policy said. They would return
it to where it was when...before the
explosion.
The next step in the dispute between Ray
Cross and his insurance company, was
something called an appraisal hearing. Both
sides agree upon an umpire. Whose decision
is binding on both sides. In Ray Cross'
case, the umpire gave him $26-thousand more
than the insurance company first offered.
Few people that know they can use that
process, although it's right in their
insurance policies. But unless you live in
British Columbia, your insurance company
doesn't even have to tell you about it.
After his experience, Cross says he knows
what to do. And he's written a book about
how to get all the protection you purchased
from your insurance company called Fire
Insurance and You. He says home
owners should get a certified copy of their
insurance policy. Your insurance company
sometimes gives you a generic policy, not
one that applies to you. And read it
carefully. Most people never read their
policies. And if you must file a claim, get
everything in writing. Don't make verbal
agreements.
If you want to look for public adjusters
in your area, you should check the yellow
pages under insurance: claims adjusters.
Public adjusters usually specify in their
ads that they work for policy holders only.
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