1. Controlling Personal Lines Large Loss Contents Claims Bill Stickler, VP Field Claims<, Enservio Rob May, Director-Business Development, NARD Scoping, Managing and Valuation Techniques in a World Fraught with Potential Fraud

2. 2 Organize and control large and complex personal lines contents claims Establish and verify accurate replacement cost values Describe fraud indicators and appropriate response strategies…is it live or is it Memorex Avoid “TRAPS” during your contents investigation and evaluation Learning Objectives

3. 3 Importance

4. 4 Statistics

5. 5 Insured submits inventory list Insured’s PA submits inventory Carrier field adjuster conducts scope Carrier adjuster outsources to scoping specialist Suggested Scoping Practices *Original Insurers World Photo

6. 6 Carrier field adjuster handles Carrier Large Loss Contents Specialist may assist Carrier outsources to evaluation company Suggested Evaluating Practices *Photo from Shutterstock.com

7. 7 Loss Documentation

8. 8 Types of Loss Documentation PA Submissions Insured’s Ad Hoc Submissions Carrier Inventory Forms *Including electronic submissions of the above *Actual IW Submissions

9. 9 Organizing & Scoping Large Contents Losses Residential

10. 10 Initial contact with insured Verify coverage Establish empathy Explain process- Burned from Site items? Confirm cause and origin Site visit Assign mitigation resources Pre-Scoping Steps *Photo from Shutterstock.com

11. 11 Restoration/Dry Cleaning

12. 12 ≈23% of the homeowner large loss RCV Cleaning costs ≤ 20% of replacement (estimate) Example: $100k RCV loss, $70k ACV –$20,000 RCV in textiles, $14,000 ACV –Let us assume that all is cleanable –We have reduced our RCV loss $20k –We have reduced our ACV loss $14k –In exchange for a cost of cleaning $4k –At ACV the Leakage Recovery to Expense Ratio is 3.5 to 1 Textile Restoration/Dry Clean

13. 13 Restoration Dry Cleaning/Wash Dry & Fold A Dry Cleaner should be dedicated to working with Insurance Carriers and Policyholders after a Loss Companies should be familiar with & understand the claim process Companies should understand an occurrence, cause of loss, affected and unaffected items, scope of loss, setting reserves

14. 14 Most Common Restorable Losses Water Damage- Burst Pipe Fire- Smoke Storm Damage- Water- Wind Driven Rain

15. 15 © 2014 NARD. All rights reserved. Used with permission.

16. 16 © 2014 NARD. All rights reserved. Used with permission.

17. 17 © 2014 NARD. All rights reserved. Used with permission.

18. 18 © 2014 NARD. All rights reserved. Used with permission.

19. 19 Before - After © 2014 NARD. All rights reserved. Used with permission.

20. 20 Try Not To Leave It To The Insured * They’re already in distress * Will use retail dry cleaner- More expensive- Takes much longer * They have to pack out, take to retail dry cleaner, pick up, put away * Public Adjuster

21. 21 * They are great with structures, NOT Contents * Not the focus on cost controls- affected & unaffected items- the way an adjuster is Try Not To Leave It To The Property Mitigation/Restoration Company

22. 22 * Take The Loss Information & Document Any Special Instructions appropriate size crew to handle * Based on the size of the loss, assign the * Contact the Home Owner to- immediately- inspect, inventory and collect affected items *Communicate with Adjuster, as directed What a Restoration Dry Cleaner will Do After getting the assignment

23. 23 Room by Room picture Inventory EVERY Item barcoded EVERY package and item time-stamped at delivery © 2014 NARD. All rights reserved. Used with permission.

24. 24 You should receive the following: Signed Work Authorization Labeled Photos © 2014 NARD. All rights reserved. Used with permission.

25. 25 Itemized Inventory of Items that could not be cleaned/restored MBR- Master Bedroom This File over 550 Pieces Inventory By Room 57 Pieces Not Restorable © 2014 NARD. All rights reserved. Used with permission.

26. 26 Result 1. Satisfied Insured- Items should be restored to pre loss condition 3. Cost Savings- Insurance Company & Restoration Dry Cleaner working directly together 2. Clear Concise Report- with photos to support your file

27. 27 ≈14% of the homeowner large loss RCV (exclusive of bedding and kitchen cabinetry) Cleaning costs ≤ 50% of replacement (estimate) Example: $100k RCV loss, $70k ACV –$14,000 RCV in furniture, $9,800 ACV –Let us assume that half is restorable –We have reduced our RCV loss $7k –We have reduced our ACV loss $4,900 –In exchange for a cost of restoration $2,800 –At ACV the ROI is 1.75 to 1 Furniture Restoration

28. 28 Mitigation and restoration services Is it? Appraisal Associations –American Society of Appraisers –Appraisers National Association –International Society of Appraisers Fine Art & Collectibles *Photos from Shutterstock.com

29. 29 Initiate casual conversation Determine what each room is Take photos of significant items Discuss and take notes on items Mark ‘special’ items Initial Walk Through *Original Insurers World Photo

30. 30 Gather matching sets Scope room-by-room Group like items Document large items first Work from one site of the room to the other Organize Inventory *Photo from Shutterstock.com

31. 31 Note quantity, quality, and description Paper forms Digital recorder Digital photos Voice to print Obtain ages on balance of items Capture Contents Scope *

32. 32 Marketplace Factors

33. 33 List Price MSRP MAP Retail Wholesale sheet cost Types of Prices SONY 60 Inch 1080p 3D LED HDTV

34. 34 Top 10 retailers 2013*: RankCompany 1Wal-Mart 2Target 3Costco 4Home Depot 5Walgreen 6CVS 7Lowes 8Amazon 9Best Buy 10Sears Retail Supply Sources *Excludes grocery and fast food only retailers

35. 35 Internet Usage

36. 36 Consumer Behaviors

37. 37 Valuation Types Review

38. 38 Broad evidence approach Replacement cost Actual cash value Fair market value Valuation Types *Photo from Shutterstock.com

39. 39 LKQ Research Residential

40. 40 Product category Key Value Factors™ Internet resources –Comparison search engines –Specialty retailers Contents adjusting and estimating software Assistance: –Contents specialist –Specialty appraiser –Market expert Residential LKQ Research *Photo from Shutterstock.com

41. 41 Beware of eBay Pricing Auction Buy it Now Completed Listings Completed Listings: Sold Bach Stradivarius Trumpet

42. 42 Contents Evaluation Outsource Vendor Services

43. 43 Inventory transcription LKQ/RCV research Replacement assistance Contents adjustment software Recoverable depreciation Outsource Vendor Services

44. 44 Suspicious Claim Indicators

45. 45 Loss inflation? Purchase date before that product was available? Technology doesn’t match stated age? False documentation? Suspicious Claim Indicators *Photo from Shutterstock.com

46. 46 Key Questions –Place of purchase –Amount paid –Copy of the receipt Properly approaching the conversation –Show respect –Both parties want a fair price Ask the Insured *Photo from Shutterstock.com

47. 47 Without a receipt – Discuss obtaining a copy from the retailer – Ask to take the purse If the item is authentic – Get a replacement price/repair quote – Contact the insured Otherwise, price as a replica and advise insured Ask the Insured (Cont.) *Photo from Shutterstock.com

48. 48 Leather/Fabric Stitching Seams Patterns Visually Inspect *Photo from Shutterstock.com

49. 49 The "C" pattern will be off on replicas - except for some patterns, like the "optic" or "scarf print.” On real COACH bags the tip of the "C" facing the other "C" should touch. For example, the notch at the top of the capital letter "C" should touch the notch of the backwards-facing "C" - so that it looks like a broken infinity sign. Also, the C pattern should start in the center and go out. The seams should go straight through the middle of the C, and the pattern should be aligned horizontally and vertically. Coach Bags - Fakes

50. 50 If it says "Made in China" does that mean it's fake? Some real COACH bags have a "Made in China" patch or tag on the inside. Not all COACH bags are made there, but some are. Coach Bags - Authentic

51. 51 Bloomberg interviewed watch dealer David Duggan, who has been selling watches since 1975, to find out the best way to determine if a Rolex is fake or not. Here are some of his top tips: The cheapest fakes are easy to spot because of their quartz dial movements. The second hand stutters along inside the counterfeit watch, whereas a real Rolex has a smooth second hand movement. The second way to spot a fake is by the heft of the watch. Fake Rolex watches are generally lighter, whereas a real Rolex is made of high-quality metals, and will weigh significantly more. Next, take a look at the winder on the side. Usually, fake Rolex watches have rather basic winders to move the minute and hour hands. But a true Rolex will have a finely-crafted winder with engravings and grooves that are "quite a work of art," according to Duggan. Last but not least, the Cyclops lens on the face of the true Rolex will magnify the date. It's hard to replicate, so most counterfeit timepieces will skip this step and the date will appear the same size. Rolex Watches

52. 52 Chanel wallets have serial numbers, but they are in the front of the wallet, and not the back. The serial numbers are never visible, always hidden away. The serial number 9395451 is used on the majority of fake items. Chanel Bags and Wallets Chanel bags should also come with black dust bags with only the word Chanel on it written in white. No symbols and any other writing. The boxes are also black, with just Chanel written on it in white, nothing else. Chanel costume jewelry, Chanel sunglasses, Chanel scarves, Chanel shoes, Chanel clothes...none of these come with authenticity cards!

53. 53 Total seizures:24,361 MSRP:$1.74 billion Top source:China (68%) Top product:Handbags/Wallets(24%) Counterfeit bearings and safety concerns 2013 Statistics

54. 54 Past IPR Seizures

55. 55 Terrorist groups Organized crime families Counterfeit Manufacturers *Photo from Shutterstock.com

56. 56 TRAPS And how to avoid them

57. 57 They may be upset as well Don’t assume deception Make sure you have respect and a mutual goal Suggested Script *Photo from Shutterstock.com

58. 58 Joe Friday *Image courtesy of Time Life Remember, when documenting the loss, follow the wisdom of Joe Friday: Just the Facts, Ma'am!