A successful subrogation recovery starts with a thorough, well-documented scene investigation. This is often complicated with the competing interest of placing the insured in the pre-loss position as soon as possible. This has recently become apparent with a number of sump pump failures Keis George has handled. Whether in litigation or intercompany arbitration, taking time to document the scene through photographs, measurements, and the collection of data is essential to preparing the case for maximum recovery.
Water losses are extremely time-sensitive. The damage is done, but nothing can happen until the flow of water has been stopped. It is common for an insured to hire a plumber to fix the problem. Documentation of the loss can begin before the adjuster arrives on scene. Since manufacturers frequently point to improper installation as the cause of the loss, it is critical to instruct the insured to photograph or video the sump pump in place before a new one is installed. This critical instruction can provide clear pictures of the pump in place and will demonstrate that it was properly installed. In doing so, you can eliminate a number of defenses raised by the manufacturer, such as:
- an obstruction to the float valve by the pit wall;
- power cord or some other debris;
- the presence of other sources of water to the pit.
If an expert cannot be present at the loss location, the photos or video will aide in his review of the material and preparation of opinions. Most importantly, properly documenting the pump in place will help in fighting claims of spoliation of evidence [that may be raised by the opposing side] due to the repair being made to stop the flow of water.
Another defense raised is that the sump pump was not properly sized for the application per the manufacturer specifications. Once the sump pump has been repaired or replaced, measurements of the depth and width of the sump pump pit should be made and photographed. When possible, the sump discharge pipe should be measured, photographed, and documented as well. The photos should show the presence of any check valve or vent hole. Taking pictures of the electrical outlet can be helpful and it is not a bad idea to document and verify whether or not a backup pump is in place and that it was functioning. These actions will help fight the defenses raised and will assist your expert in formulating opinions.
Beyond photographing the scene, collecting relevant documentation is important. Any paperwork regarding the purchase and installation of the sump pump should be documented and retained. This would include any material accompanying the product as well as any invoicing from a plumber installing the pump. The plumber could be a potential subrogation target if the pump was not properly sized for the application, but could also be a potential witness in any future litigation or arbitration. The name of any plumber called in to repair or replace the pump after the loss should be obtained, as should any documentation for any services provided. The observations of the plumber can be critical evidence as to the failure and could be used as expert opinion in the right case.
A statement of the insured, whether written or recorded, can provide a great deal of helpful information. Beyond the basics of when the pump was installed and who installed it, as much detail on the maintenance and the operation of the pump should be addressed. Depending on the water table, the pump may cycle constantly or hardly ever. It is important to address how frequently the pump cycles, which may provide information on whether the pump was properly sized for the application, but will certainly assist the expert in formulating opinions. The specifics of the date of loss, including any significant rainfall, is extremely important. If the insured is unable to provide specifics, documenting the amounts via newspaper or other media works just as well. Whether the pump was subjected to a significant strain due to a big rain can affect its performance. Believe it or not, we have successfully argued that geographic location made a difference – but that certainly is claim dependent.
A picture truly is worth a thousand words. A thoroughly documented sump pump file can also be the difference in thousands of dollars in recovery. When in doubt, more is better. These suggestions will provide the subrogation professional, expert, and counsel with tools to prepare the file and maximize your recovery.