February 14, 2013 WOLFEBORO — The Jan. 29 fire in one of the garages at the Public Works yard on Pine Hill Road involved damage not only to the building but to equipment and supplies stored inside. Rather than come up with its own estimate of damages and submitting an insurance claim Town Manager Dave Owen invited Michael Ryan of Robert A. Lucas and Associates, a public insurance adjuster in Portsmouth, to make a presentation to selectmen at their Feb. 6 meeting.
Ryan said he had inspected the garage and its contents on Friday, Feb. 1 and felt his company would do a good job representing the town with its insurer, Primex.
He then reviewed the claims process which, under the terms of the town's policy, is for the cost of replacing items or bringing them back to their pre-loss condition.
The first step is to come to an agreement on the extent of damages, which involves both the adjust and insurance company doing detailed estimate of the loss and then comparing notes and pricing assumptions. Once the scope of the loss and replacement cost has been established, he explained, the insurance company calculates a depreciation or wear-and-tear factor. Deducting the depreciation from the replacement cost determines the first payment check from the insurance company. The depreciation amount is considered a "holdback."
Ryan said his company's goal is to achieve 100 percent of replacement costs and the lowest possible depreciation.
He pointed out that the town's policy covers not only replacement cost but code compliance. He said he was aware there were code issues with the roof of the garage, meaning that the roof structure did not meet current building code. The code coverage makes sure that any repairs do meet current code requirements.
Selectman Dave Senecal, who is Building Inspector and Code Enforcement Officer for the Town of Ossipee, said he assumed today's cost of materials would be used, and it is that cost that is depreciation.
Ryan confirmed that current costs would be used and noted that the cost of code compliance is in addition to basic cost of repair or replaement. He also emphasized that the town has no obligation to rebuild the garage exactly as it was before the fire.
The next step in the settlement process is to draw up an inventory of property that was in the garage at the time of the fire and assess the degree of damage to each item on the list.
Selectman Sarah Silk asked what the fee for service would be. Ryan answered six percent, adding that an adjuster can't charge more than 10 percent.
Selectman Chair Linda Murray asked how long it takes to prepare a claim, when will it be paid, and what is the success rate on claims.
Ryan responded that preparation can take two to four months – sooner if the initial insurance estimate is close to that of the adjuster. First payment comes after the two parties agree on an estimate. As for the success rate, going to court is rare and only five our of 100 claims go to mediation.
When asked when he could start, Ryan responded that Adjuster Tanner Royce could start the next day at 10 a.m. He emphasized that prompt action is important.
The board voted unanimous to contract with Robert A. Lucas and Associate as claims adjuster for the Public Works fire loss.
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