Large property losses can be complicated, but this one was more complicated than most. Specifically, this loss involved a “Condotel” in South Carolina severely damaged by Hurricane Matthew. In a Condotel, there are multiple ownership interests with different insurable interests and coverages. Our Insured, the homeowners association, owns the building, common areas, and some of the condo units. There are also hundreds of individual unit owners as well as a Property Manager, who owns the front desk area, some office space and the restaurant/bar. The restoration hit several unanticipated setbacks, which affected the claim, delayed completion of repairs and hindered the reopening of business operations. After being cleaned, the furniture from the damaged units was stored in a makeshift storage facility in the parking garage. When it was time to return the furniture to the units, mold had reappeared and ultimately new furniture had to be ordered and installed. During restoration, a fire occurred which destroyed a key component of the electrical system, shutting down all power and most repair work. Due to the age of the component, there was no readily available replacements. Therefore, a new unit had to be manufactured overseas, shipped and installed. Finally, there were numerous building code changes that required certain upgrades before a certificate of occupancy could be issued.

For almost a year, the retail agent actively engaged the carriers on behalf of the insured. The relationship between the agent and carrier became very contentious as the parties disagreed over the length of time the insured’s business was interrupted by the hurricane damage. They started out approximately $1M apart; asserting that the insured had failed to exercise “due diligence and dispatch” in the restoration process, therefore the carrier cut off the business interruption coverage six months before the Condotel was up and running.

The CFO of the insured had been negotiating directly with the adjuster but they had reached a stalemate, and the adjuster gave the insured a two-week deadline to accept his last offer or it would be withdrawn. At that point, CRC Group’s Chief Claims Officer was informed that the insured had retained legal counsel and they were prepared to proceed with filing a lawsuit.

CRC Group’s CCO was able to step in as a neutral third party to reestablish dialogue. His first course of action was to secure an extension of the settlement offer by the carrier. He was then able to establish communications with the adjuster directly. As both professionals were able to appreciate the complicated nature of the claim, they were able to work toward a resolution by acknowledging their positions and suggesting some areas of compromise. During that conversation CRC’s CCO learned where the insured’s CFO and adjuster had a breakdown in communication during the course of their negotiation. CRC Group’s CCO – a certified mediator, with extensive experience in negotiating multimillion-dollar shareholder class action settlements – understands how common it is for parties, even in very large dollar settlement negotiations, to have different recollections of how negotiations falter. He conveyed that the parties were very close to a resolution and advised the negotiations should continue.

CRC’s Chief Claims Officer arranged a final settlement call with the insured’s CFO, the retail agent, and the adjuster, making it clear everyone involved wanted to move towards a settlement. This call gave the adjuster an opportunity to give a new settlement offer of $645K, which was accepted by the insured. By having CRC Group’s Chief Claims Officer step in and assist in getting the negotiations back on track, an expensive bad faith lawsuit was avoided. The collapsing relationship was mended and the retail agent later said they learned a great deal from the whole process.

A dedicated claims advocacy team is just another way CRC Group is Placing You First.

For more on claims advocacy, visit our claims advocacy page.