Digital Video Record of Premises

Program Purpose

The insurance of home premises and their contents has always been subject to a certain level of homeowner fraud. Even when destruction of a dwelling is legitimately the result of a fire or a natural gas explosion, insured homeowners are tempted to overvalue their buildings and grossly inflate the value of such “high-ticket contents” as computers, high-end TV sets, and stereo equipment when filing a claim.

That temptation has increased exponentially in a period of severe economic downturn. Unable to meet their mortgage payments and other bills, homeowners are turning to fake natural gas explosions and other frauds that enable them to claim insurance settlements that cover their mortgage with perhaps something left over. About 25 percent of Americans recently surveyed said that it was okay to defraud insurance companies since they believe they are only recouping their premiums.

Today, conservative estimates place the cost of property/casualty insurance fraud at approximately $20 billion a year.

 

C & M Construction’s Digital Video Record Program

 

One of the ongoing questions in insurance claims — whether the loss results from legitimate causes or criminal acts such as arson — is what is the true replacement value of the building and its contents?

 

Agents writing policies may not have the construction expertise to evaluate the value of a residence correctly and may have to use an appraisal number that is often inflated for city tax purposes. Similarly, agents are likely to accept a listing of contents and their assigned values since the homeowner will pay a higher premium if those values are inflated.

The best way to obtain an objective and accurate evaluation of a home and its contents is through a detailed digital video record of a policyholder’s dwelling and contents by a third-party firm such as C & M Construction. A digital video record made prior to any loss protects both the insurance company and its policyholders.

The insurance company is provided with a valuable tool for rejecting fraudulent claims. If a policyholder knows that a detailed pre-loss visual record of the structure exists they are also less likely to engage in arson or attempts to defraud an insurance carrier with exaggerated claims.

On the other hand, policyholders may support the validity of their claims by citing visual evidence of the building’s condition and substantiating the actual replacement value of their household contents.

With more than 25 years of residential construction experience and 15 years of providing premises inspections and expert witness testimony, the principals of C & M Construction are uniquely qualified to provide digital video records. Over the years, we have provided our clients with in-depth investigative reports that have included construction details ranging from the number of nails in a sheet of plywood to a list of daily temperatures during a week when roof shingles were being installed. Those reports have been instrumental in achieving positive results in court cases and insurance settlements.

 

Program Methodology

C & M Construction’s experience in identifying faulty workmanship or the absence of it forms the foundation for our digital video record program.

A C & M inspector walks through a house on a predetermined course as he photographs the premises and contents with a high-definition digital camera and records his verbal comments on the video soundtrack by speaking into a microphone.

As the inspector enters each room, he states the dimensions of the room, from wall to wall and from floor to ceiling. He also comments on various features of the room, such as the condition of the walls and flooring, and notes the need for repair or replacement. Before he leaves a room, he conducts an inventory of its contents, such as furniture, stereo equipment, or a computer workstation. In addition, he fills in a related written checklist. The digital recordings are stored and archived at C & M Construction’s facilities with crossreferences to insurance policy numbers.

They are available on an as-needed basis with a chain of custody procedure in place to insure their accuracy and admissibility in trial proceedings.

 

An Important Program Application

A house fire usually guts the premises, making it difficult for arson investigators to determine a building’s original appearance.

The room dimensions and other details in the video can be used to prepare a computer simulation that reflects the condition of the building and its contents prior to the fi re. This helps investigators determine the location of the fi re’s origin, an important indicator of possible arson.

For example, if the video shows living room wood flooring in good condition but there is deep charring of the flooring in the burned-out structure, that spot may be the fire’s origin point. Similarly, the color of various materials is affected by high temperatures. By comparing the color of a room’s wall board in the burned structure with the color of the same area in the video, experienced investigators may be able to estimate the intensity of the fire and the possible presence of an “accelerant” such as gasoline. Similarly, reviewing appliances such as stoves shown in the video can help determine if they were the ignition point that accidentally caused the fire and help investigators rule out the possibility of arson.

 

Program Checklist

The checklist is used by a C & M Construction inspector to supplement the digital video’s sound track that records the inspector’s observations. This provides a ready reference and avoids the necessity of reviewing the entire video to identify a problem. The checklist is only a sample and can be expanded or shortened as necessary. It can be tailored to meet the specific needs and concerns of insurance company clients.