6 Items Prone to Claims Leakage You Should Watch Out For
After receiving a policyholder’s estimate, thousands of adjusters turned to StrikeCheck’s objective service last year for our assessment of what it would take to return electronics to pre-loss condition. StrikeCheck evaluated nearly 450 different types of electronic and specialty items from more than 2,100 brands in 2019. In some circumstances, our recommendations may have avoided thousands of dollars in potential claims leakage.
After analyzing the 2019 data from many thousands of claims, we’ve noticed six items prone to claim leakage.
- Electrical Service Panels: Electrical service panels proved to be an item of high indemnity leakage potential. More than half — 63% — of the service panels assessed by StrikeCheck in 2019 were found to be non-damaged after our thorough assessment, though other electrical equipment was likely the true culprit in many cases. The fact that a service panel was in proper working order may have avoided a claim settlement for the average replacement cost of $2,643. For those that did have damage, the average cost to repair a panel was $499.
- Hot Tubs: The price difference between repairing and replacing a hot tub was significant in 2019. The average cost of a new hot tub was $10,709, while the average expense to repair one was $1,272. More than 27% of the hot tubs that were assessed either weren’t damaged or failed because of wear and tear, which may have eliminated the need for a claim settlement, depending on the policy.
- Ovens and Ranges: Nearly 70% of ovens and ranges evaluated in 2019 were damaged from a high voltage surge, but another 17% were in proper working order at the time of assessment. That means carriers were at risk of paying an average $1,798 to replace something that wasn’t damaged. It is important to determine if repairing an oven or range is an option instead of automatically replacing it. The average repair cost was $546 — leading to more than $1,200 in potential claim leakage.
- Solar Power Systems: Solar power equipment was another group where disparities existed between what was claimed and what was damaged — and to what degree. Non-damaged and repairable systems accounted for 40% of solar-related assessments. Though the cost to purchase solar power equipment has decreased in recent years, replacement expenses still averaged $12,233 — a stark contrast to the average $4,773 cost for repairs.
- Well Pumps: Data shows nearly 50% of well pumps were in proper working order at the time of our assessment or were damaged due to age-related wear and tear. This item also emphasizes the importance of checking to see if a repair option exists. The average well pump replacement cost was $2,728 in 2019, compared to the average $752 repair cost.
- Standby Generators: It was a near even split of replacement versus repair frequency for standby generators, at 48% vs. 43%, respectively. But that’s where the parallels end. The difference between the average cost to replace a standby generator or to repair one in 2019 was almost $7,000.
These are just a few of the items and their trends highlighted in the StrikeCheck 2020 Annual Report. Check out the data-driven analyses related to thousands of residential and commercial electronic claims assigned to StrikeCheck in 2019 and see how the results compare to your data.