“Plausible deniability” is a strategy used by some insurance companies to escape their contractual duties to their policyholders that leave 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, and how might an engineer’s report play a part in it?
Let’s say that wind or hail has damaged your roof and you have consulted with a trusted and experienced roofing contractor or other roofing professional before filing your insurance claim who has confirmed the presence of storm 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 like 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 or similar to yours … but your insurance company decides to bring in their “expert” to look at your roof, instead.
The hired gun …
Your insurance company’s “expert” will probably 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 self-proclaimed “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 in general or roofing, in particular. A 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 his “roofing experience” may have come to him on-the-job as he wrote other reports for insurance companies. Additionally, the engineer hired to write reports for insurance companies might have seen fewer storm-damaged roofs in a year of writing these reports than many highly experienced contractors have seen in a month or less and can have absolutely zero first-hand knowledge of processes associated with the installation and maintenance of roofing material.
Unwittingly, some policyholders will unwisely request on their own that the insurance company call in an engineer to provide what the policyholder mistakenly believes to be an unbiased inspection when an insurance adjuster has denied a claim. The requested engineer is then selected, hired, and paid by the adjuster’s insurance company to provide them with the report that the policyholder is trusting to be independent and unbiased. Whether requested by the insurance company on their own or at the request of the policyholder, the selected engineer is being directed and paid by the insurance company for his opinion and, like any paid contractor, serves the party who contracts with him. Consider, as an example, how your own lawyer would be just as enthusiastically representing the interests of your adversary if your adversary had hired him before you did.
Accordingly, the insurance company’s “expert” provides an “engineering report” to the insurance company 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 was caused by something other than hail and that is not covered by your policy — 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 type of engineering service. Writing these reports for insurance companies is their major (or, in many cases, only) source of business 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 “help” the insurance company to determine that your hail damage is not covered by the policy, that structural damage is not covered by the policy, and so on.
As most public adjusters know from the numerous “engineering reports” that we read and discuss with insurance companies, many of them are simple boilerplates with only the beginning and ending pages unique to the applicable home, and many of them lack merit or fact that would actually support a denial of an insurance claim. Unfortunately, policyholders do not have the advantage of reading enough of these “engineering reports” to recognize the numerous errors, omissions, and duplications contained within them and, accordingly, will mistakenly believe that the report cannot be successfully disputed.
My recent experiences …
Because they don’t know better, many policyholders who have been stung by a fraudulent engineer’s report (or simply one they do not agree with) will insist that their insurance company “send out another engineer”. Understanding that the engineer was hired to write the controversial report in the first place, and at a considerable sum, the insurance carrier has no incentive at all to argue with itself. A second engineer’s report that differs at all with the first simply puts the disputed question in a “tie” – one for you and one against you. The second report is not definitive simply because it disagrees with the first. Requests from policyholders for the insurer to send out a second engineer for a second opinion go nowhere and – even if the carrier should decide to pay for a second report, it is highly unlikely to result in the policyholder’s favor, even if the second engineer disagrees with the insurance company.
An engineer’s report that I received from one of these companies specified how the engineer 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 he 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, of course, but the insurance company’s “expert” engineer 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’s 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 a 100 mph 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. When the errors that I found in the report were brought to the insurer’s attention, they promptly paid the claim to replace the steeple.
In another recent case, a different engineer from the same company went as far as to attempt interpret the insurance policy’s coverage for the insurance company and presented in his presumably “objective” report that, while copper roofing material had clearly been dented by a recent hail storm, the damage “could not be seen from the ground” and was not, in his professional opinion, “damage”. The insurance company conveniently and improperly allowed this errant interpretation of coverage by the engineer to stand … knowing fully that the policy had no such exclusion for hail damage that “could not be seen from the ground”. The insurer denied payment to the policyholder, an elderly widow, for more than two years and I was hired to intercede on her behalf. I immediately challenged their action and reopened the claim. The insurance company finally … and reluctantly … agreed to pay the policyholder over $232,000.00 to restore the roof to its pre-damaged condition and the engineer has reportedly returned to his full-time of job of selling real estate.
As you can see from just these three recent examples … it has been my professional experience and personal observation that not all engineer reports reflect accuracy, competency or non-bias — and insurance companies that use these reports to deny claims are not always acting in good faith.
Worthy of note are the instances in which the engineer report is, by design or negligence, written in an ambiguous manner that allows facts about the damage that could benefit the policyholder’s claim to be manipulated in favor of the insurance company paying for the report. Most policyholders are not trained or able to fully comprehend detailed engineering reports. In one recent claim in 2019, for example, an engineer report that accurately described and reported damage to a commercial building was wrongfully interpreted by the insurance company to deny a claim that, after I reopened it and challenged their interpretation, resulted in a check to my client for over $682,000.00. Prudent policyholders will arrange to have their insurance denial letters and accompanying engineer reports reviewed by a public adjuster before walking away from their claim.
Sometimes, an insurance company will misrepresent what an engineer actually said. In one case, the insurance company denied coverage to a church for interior damage caused by water entering from a roof damaged by hail. The adjuster told the church that the engineer concluded that the interior damage was from “wear and tear” and not subsequent to the hail damage. The people at the church hired me to assist them.
Several weeks after demanding a copy of the report so that I could review it myself, the insurance carrier reluctantly complied with my request. The report did NOT say what they told the policyholder it said. Though the engineer did his best to present the facts in such a way to support the insurance company’s denial, (after all, it is what they paid him to do), his ambiguity and double-talk did not fully discount the hail damage as a source of water to the interior. The insurance company finally agreed to pay the church $59,000.00 to cover the water damage to the interior of their building.
What can you do if you are working the claim on your own…?
First, feel free to email a link to this page to your insurance company’s adjuster and let the adjuster know that you are on to the game. Perhaps he will be more prudent and less inclined to automatically assume that you will be fooled into accepting the report as an unbiased representation of facts.
While some state Departments of Insurance may not find biased, ambiguous, or erroneous engineer reports to be something they wish to handle or spend political capital, there are often 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 for their acts of bias and/or negligence to the state that issue their licenses. Accordingly, home insurance policyholders that believe they are victims of an improper relationship between their insurance company and an “engineering company” may 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 for insurance companies to use to deny claims 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 state-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.]