Introduction

A magnitude 6.8 earthquake, called Nisqually in seismic circles, rocked Seattle, Washington, in 2001 and severely damaged the Starbucks corporate headquarters building.

Case Description

The 1,850,000-square-foot facility is a vintage 1910–1926 building, constructed by poured-in-place concrete with URM (unreinforced masonry) filler walls, which are known, in this day and age, to be prone to failure when faced with an earthquake or high wind pressure. Fortunately, about a year before the earthquake, the building had been seismically retrofitted.

Adjusters International was hired by the building owners, Nitze-Stagen & Co., Inc., to address, among the many issues, the position taken by the insurance carriers that the building was old and the damage pre-existed the magnitude 6.8 earthquake.

List of Issues

• The insurance carriers’ consultants took the position that most of the cracks had occurred before the earthquake.
• The insurance carriers’ consultants prepared a repair proposal that was based upon the installation of Heli pins into the URM in-filled walls.
• The carriers argued that although the slabs were cracked as a result of the earthquake, the cracks did not affect the performance of the slabs.
• The carriers refused to pay out for the projected cost of repairs before the repairs were effectuated.

Solutions Applied

Adjusters International assembled a team of engineers to prepare a dynamic analysis and presentation that cited petrographic analyses demonstrating that Nisqually had indeed caused the cracks.

Adjusters International’s team of engineers proved that the carriers’ proposal to use Heli pins to repair damaged walls would result in additional and more severe damage to the URM walls in the event of another magnitude 6.8 earthquake. Such a repair, Adjusters International’s experts additionally pointed out, was not in compliance with FEMA guidelines.

Our team researched the legality of the insurance carriers’ position that coverage applied only to actual repairs, and Adjusters International was able to prove that the carriers’ position would not stand up and would be impossible to defend in a court of law. Ultimately, the insurers agreed.

Outcome

Adjusters International’s team of professionals created a body of legal and technical evidence that clearly demonstrated the effects of the large earthquake on the building. The evidence also shed light onto the scope of damage another earthquake could cause if the course of repairs was not properly directed. With the help of Adjusters International, the building owners were able to make repairs in the manner they felt would best protect their assets for  the future.

Case 2:

Fire Damages Vermont Ski Resort

Introduction

The Mountain Green Ski & Golf Resort in Killington, Vermont, suffered a devastating fire loss at the end of ski season. The fire began in an underground parking garage, burning so hot that it melted a portion of the structural steel supporting the seven–story condo resort.

Case Description

As a result of the high–intensity fire, the first floor collapsed two feet and the threat of a total collapse loomed. Damage was in the millions of dollars, and business for the following ski season was threatened if the property could not be repaired in time.

List of Issues

• Could Mountain Green repair the partially collapsed building and be back in business for the next season, or was demolition the only option?
• How would Mountain Green handle the interests of the 116 condo owners?
• What cleanup and mitigation efforts were covered in the policy?
• The elevator system was damaged, but according to the insurance carrier, replacing the elevators was not covered by the policy.
• The insurance carrier attempted to classify major damage to the property as pre–existing.

Solutions Applied

Determined to save the building from demolition, Adjusters International located an engineering firm specializing in structural repair to lift and suspend the building, repair the structural steel and the ground floor, and then reattach the building to the foundation. This approach saved money and time–critical for the resort´s reopening. 

Adjusters International set up a hotline for the individual condo owners, and also handled the associations involvement in each owner claim. This streamlined the tenants´ claims processes with their various insurance carriers. 

The insurance company was reluctant to pay to clean metal surfaces. Adjusters International argued that, without the cleaning, the stage would be set for the insurance company to later deny coverage for the rusting metal surfaces using the logic that damage was not mitigated as required.  

State officials agreed with Adjusters Internationals experts that the elevators would not be safe if repaired. Since the state would not certify the repairs, the insurance company stated this was a codes and ordinance upgrade issue, and thus, not covered by the insurance policy. Adjusters International argued that since no upgraded standard was required, it was not a codes mandate.  

Adjusters International proved that cracked tiles throughout the resort were not pre–existing. Since smoke covered all surfaces, and many cracks in the tile were clean and white, and not covered with soot, the cracks had to have occurred at the time of collapse.

Outcome

In a classic case of point/counter-point, Adjusters International executed a well-coordinated plan to resolve disparities throughout the insurance claim process. The resort was successfully re-opened–just nine months later–in time for the next ski season.