“Plausible deniability” is a strategy used by some insurance companies to escape their contractual duties to their policyholders that leaves little or no evidence of wrongdoing or abuse. It allows them to hide behind the wrongful acts of someone else that determines, on their behalf, that your claim should not be paid if and when, in fact, it should be paid.
How might this be done?
Let’s say that wind or hail has damaged your roof and you have consulted with a trusted roofing contractor or other roofing professional before filing your insurance claim who has confirmed the damage to your roof. Your professional might have decades of practical experience and training working for a century-old roofing company, spending thousands of hours per year inspecting and repairing damaged roofs exactly like yours. He may have worked with identical materials as those on your roof hundreds of times with countless numbers of expert repairs or replacements provided to hundreds of satisfied homeowners who had hail or wind damage identical to yours … but your insurance company decides to bring in their “expert” to look at your roof, instead.
Your insurance company’s “expert” might be a licensed engineer who has never installed or supervised the installation or repair of a single roof. His specialty before becoming employed by the “engineering company” he now works for may have been geotechnical, water resources, electronics, or any other of the numerous variety of engineering specialties that have nothing at all to do with building materials. His brief training program provided by his company may be the only credential he has earned to be an “expert” in the area that he has been called upon to inspect for your claim — and is likely to have seen fewer storm damaged roofs in a year than your contractor has seen in a month or less.
In this example, the “expert” provides an “engineering report” that contradicts the finding of your experienced roofing contractor and your insurance company concludes … based upon the opinion of their hired gun … that the hail damage reported to you by your experienced contractor is not really hail damage and your claim is denied.
Many of these “engineering” companies that employ licensed engineers to provide these types of reports to insurance companies do not provide any other service. Writing these reports for insurance companies is their major (or, in many cases, only) source of income. Sometimes, as reported by the television news program “60 Minutes” (click here), the company’s managers may even change the language in the engineer’s original report to benefit an insurance company at the expense of the homeowner. The financial incentive (usually $1,500 to $2,500 per report) for future repeated business is what will often drive some of them to find creative ways to determine that your hail damage is not really hail damage, that structural damage is not really structural damage, and so on.
As most public adjusters know from the numerous “engineering reports” that we read and discuss with insurance companies, many are simple boilerplates with only the beginning and ending pages unique to the applicable home and lack merit or fact that would actually support a denial of an insurance claim. Unfortunately, most policyholders do not have the advantage of reading enough of these “engineering reports” to recognize the errors, omissions, and duplications contained within them and, accordingly, will mistakenly believe that the report cannot be refuted.
A report that I received from one of these companies today specified how the insurance company’s expert closely examined the “clay tiles” that were chipped and found the damage to be attributed to something other than hail. He then provided a lengthy and generic boilerplate description of how “clay tiles” are made and the scientific studies of the effects of hail that strikes them. What the expert that wrote the report failed to observe was the fact that the roof was covered with eighty year old concrete tiles, and not clay tiles. The homeowner’s experienced contractor knew the difference but the insurance company’s expert obviously didn’t. (If you are not familiar with the difference between the properties of clay and concrete tile, more information is available by clicking here. Now, you know more than a certain insurance company’s expert.)
One “engineer” report for a client that was used to deny an insurance claim for a church with a wind damaged roof incorrectly described a tongue-in-groove roof covering as plywood sheathing, identified the wrong date (and the wrong windstorm) when he incorrectly reported low wind speeds, and failed to identify and record the fact that the steeple had been lifted and moved by the wind. This report was written by an engineer from a company commonly used by insurance companies in several states to support their claim denials. Whether his errors and omissions were caused by his negligence or bias is not important since his licensing board prohibits both.
While some state departments of insurance may not find such activities to be within their jurisdiction, there are sometimes other departments within state government that are able to act to preserve the integrity of the engineering profession and, in turn, protect the public from licensed engineers who are acting in an incompetent or biased manner.
Licensed professional engineers are accountable to the state departments that issue their licenses. Accordingly, policyholders that believe they are victims of an improper relationship between their insurance company and an “engineering company” have recourse through the state department that licenses the engineer that wrote the incorrect and/or biased report.
Formal complaints from homeowners that have merit will be investigated by the licensing board, and the competency and integrity of the licensed engineer that wrote the report will be evaluated by the board that issued his or her license. Engineers who write reports that contain incorrect, partial, or biased information will have to justify their actions (if they can) to their respective licensing boards that monitor and enforce competency and impartiality. Their actions, if found to be due to incompetence or partiality, could result in sanctions up to and including fines and forfeiture of their licenses and these findings can be used by homeowners to address their denial or underpayment through the proper channels available to them … through their policies or judicial means.
Enough enforcement actions taken against licensed engineers that participate in the practice of routinely providing insurance companies with undue “plausible deniability” used in their refusal to pay legitimate claims could effectively reduce this threat to policyholders seeking to be indemnified for their losses.
[Note: Policyholders should also take care to ensure that the “engineer report” was actually written by a licensed engineer. In some cases, these damage inspections are conducted by “consultants” and/or “home inspectors” who are not licensed engineers. The reports that they compose are subsequently sent to engineers to sign and affix their seal before forwarding them to an insurance company for their use. When you find the inevitable errors or omissions in these reports resulting from the unprofessional inspection or observation, and report them to the insurance company, be certain that the insurance company is not responding to you regarding these errors with advice from the same unlicensed consultant instead of a licensed engineer. I have communicated with some insurance adjusters who are not aware of the difference.]