Insurers would be well advised to have experts and claims handling protocols on hand to identify unique claim situations such as the two sulfuric acid spills in Trail, BC several years ago. , say two forensic engineers.
On April 10 and May 23, 2018, sulfuric acid spilled onto a highway while being transported by Westcan Bulk Transport for mining company Teck Resources. The spills gave rise to more than 4,800 claims with the Insurance Corporation of British Columbia (ICBC), most of which were found to be false. The insurer determined that 520 claims were total losses, but refused to cover the remaining 4,321 claims after determining that these vehicles were not damaged.
More recently, highly corrosive hydrochloric acid leaked from a truck on a 400-series highway in St. Catharines, Ontario. earlier this month. The Ontario Provincial Police closed the highway in both directions to unload the 9,000 kilograms of hydrochloric acid.
These types of spills show that insurers should have Cat loss-like inspection programs and protocols in place to manage these complex claims, says Ben Desclouds, director of claims solutions at Mitigateway, a Toronto-based company that helps carriers reduce claims costs and prevent losses. .
“How highly corrosive acids interact with various types of metals and plastics on the underside of the vehicle is not something within the usual skill of adjusters,” says Desclouds, who was in the field inspecting the vehicles. in Trail.
These complex claims are different from standard home or vehicle damage claims, he says. “It is a chemical reaction between a corrosive liquid and the materials of a vehicle resulting in a public safety concern. Having a consistent protocol and an expert who has the expertise to delineate what is general corrosion on the underside of the vehicle and what is new corrosion from the spill will help [insurers] to detect what new damage is, which is just regular daily corrosion, and provide coverage. »
The number of claims at Trail grew rapidly, complicated by the fact that two spills occurred in six weeks. In the incident in Ontario, the acid was hydrochloric, which is very harmful at the concentrations at which it is typically transported.
“That’s why an expert following an established protocol should review this type of claim,” Desclouds says. “This claim should not fall under the typical process of having multiple adjusters deal with claims and come to potentially different conclusions.”
Paul Okrutny, Founder and President of Mitigateway, says many claims are “one-off”, so adjusters are often given free rein to use the best tools they have to make a call, for example, if a vehicle is a write-off or not. “But because adjusters don’t have the tools to handle acid spill claims, they handle the claim as best they can and can lead to inconsistencies, with policyholders talking to each other in saying, “I got a write-off”, “I got nothing.
Why might an engineer be needed? “The adjuster is there to adjust the financial aspect of the claim,” says Okrutny. “The insurer doesn’t necessarily give them the tools to make complicated calls about acid spills on pavement and corrosion damage.”
In the Trail incidents, claims didn’t start coming in until two or three months later, so the evidence regarding the timing and details of potential vehicle losses was gone. “Insurers started getting statements from policyholders and they hadn’t locked in the timing of the spills,” Desclouds says, noting that a policyholder might think they crossed Trail on a particular day but don’t remember. because that was three months ago. .
So a more detailed plan of attack is needed. This could include when the spill happened, where it happened and on what side of the road (eastbound or westbound lanes, for example). An engineer can also help identify hot spots on the vehicle, such as directly behind the wheels, in wheel arches and areas of the suspension.
“The key is to make sure you identify potentially affected cars as quickly as possible, so dangerous cars don’t get left on the road. The next step is to figure out what you’re going to do with the vehicles next” Desclouds says, “Do your homework beforehand, but also have a plan if the claims start coming in and have an expert identified for this type of work.”
Featured image by iStock.com/Alex Potemkin