Pursuing A Claim
How you pursue a legitimate vibration damage claim can be among the most important decisions you will make regarding it. Just about any fair resolution outside the legal system will be cheaper and faster than filing suit. Legal action should be your last resort. If your damage claims are large (e.g. over $100,000), you may be forced to file suit. Below we will discuss some of your options in dealing with a claim.
Should I Pursue a Damage Claim?
It has long been recognized that vibration damage can inflict an unreasonable burden on homeowners.3 You (and your attorney, if one is involved) should not let statements on the Internet, representations by contractors, their employees (including vibration monitoring sub-contractors), their insurers, their sponsors or even those here in the CVDG, decide whether you pursue a claim. Instead, that decision should include, at a minimum, considerations of:
You may feel that you can have an attorney send a damage claim letter to the contractor and get a fairly quick settlement payment. That may happen in some instances involving relatively minor damage, but the biases of many of those connected with the construction industry, as well as their personal financial interests (e.g. future insurability and cost thereof), work against that outcome. It is much more likely that you will have to pursue the claim at some length to have any chance at getting reimbursement for your damage.
Vibration Damage Claims and You
Your probability of success in resolving a vibration damage claim favorably, either by settlement or litigation, depends as much upon your attitudes and behavior as it depends on the facts of the damage and your ability to link it to construction operations (see Damage Causation in the CVDG Pro). You may be understandably angry and frustrated at the people that you feel have damaged your home and subjected you to everything that goes with that, through no fault whatsoever on your part. However, you must not allow yourself to make bad decisions motivated mostly by that anger, especially before you are represented by an attorney. Tips about how to handle your interactions with the opposing side are available in the CVDG Professional Edition chapter, Handling A Claim. If you get an attorney, seek counsel from him/her. Say only what it necessary to report damage to the contractor, the project sponsor and their representatives. If you are represented by an attorney, the attorney should handle all those interactions.
It is virtually a given that opponents whose relative strength in negotiations is, or appears to be, far apart will be unlikely to reach a fair settlement. Since contractors have lawyers, money and experience on their side, a homeowner must do everything possible to reduce this disparity in perceived, or real, power to achieve a settlement. The stronger the homeowner appears, both in personal strength and detailed knowledge of the scientific and case facts, the better and more likely a resolution will be prior to a trial.
The homeowner should have some real knowledge of the contents of the CVDG, preferably the Professional Edition for any claim in litigation, as this will provide the scientific basis for his arguments, help in documenting the claim, and the information to dispute questionable or outright false conclusions based on vibration monitoring done on behalf of the contractor. Of course, there are other ways to gain some of that information (e.g. USBM RI 8507 shown at right), but the CVDG is probably the most concentrated source of information about construction-related vibration damage and claims available. The CVDG Professional Edition section, Settlement, has detailed information to help the homeowner prepare for settlement talks and mediation.
Your Homeowner's Policy - Ground Movement Exclusions
The first thing that most people think to do when they have an issue with some kind of damage to their home is to call their homeowner's policy insurer. Of course, anyone who has dealt with an insurance company on any substantial claim knows that principle rarely enters into the company's thinking. Insurance companies make the decision to pay or deny large claims mostly on the monetary issues and their estimate of whether you will be able to fight them or not.
Before you report damage or meet with any insurance company, yours or theirs, it's a good idea to know exactly what your policy says. "What you don't know can hurt you" when it comes to insurance coverage, to quote a particularly apt home insurer ad which has run in the U.S. recently. What counts is not what one-of-a-kind losses the insurer may have covered in the past, but whether it will cover far more common construction vibration damage under your policy.
Many homeowner's policies will have "earth movement" or similar exclusions. These exclusions were originally intended to eliminate coverage for earthquake damage1, but are often s-t--r---e----t-----c-----h-----e-------d by insurance companies to exclude vibration damage coverage, pretty much irrespective of the actual exclusion language in the policy. You will want to check your policy for this kind of exclusion before you contact the insurance company. Read the language of your homeowner's policy carefully, perhaps with an attorney, to make sure of what any such exclusion really covers. If it does not mention human-caused vibration damage explicitly, you can fight the use of the exclusion. There are many insurance litigation attorneys in the U.S. who specialize in insurance litigation who may be able to help you understand ground movement exclusions, and, if necessary, fight them. If you need help understanding the language of your policy and its structure, the United Policyholders site (http://uphelp.org) has many valuable documents, including a FAQ, that answers many of the most common questions.
Such uses of ground movement exclusions are seemingly self-serving on the part of the insurance company, but they ignore one fundamental fact about vibration damage. Vibration usually causes little or no permanent change in the position of the ground or its constituent particles and structures (see Vibration 101 for more). Thus, in most vibration damage cases, there is no evidence whatsoever of permanent "ground movement" of the sort caused by earthquakes (e.g. cracks in the ground) that could provide supporting evidence for use of such an exclusion. Insurers might, in principle, use vibration monitoring data to support such a conclusion, but in most cases of construction vibration damage, monitoring is only started after the damage is reported, if it is done at all.
If the policy includes such a specific and broad vibration exclusion, find a new insurer. A broad vibration exclusion makes the policy essentially worthless. Since all houses experience slight vibration at some base level from passing traffic, occasional sonic booms, or even your movement within the home, such an exclusion could be used to deny coverage for virtually all forms of damage, possibly excepting a fire.
A legal analysis of vibration damage exclusions in insurance policies,1 indicates that the applicability of general vibration exclusions in construction vibration damage cases depends on both the specificity of the exclusion and the jurisdiction. The majority view is that general earth movement exclusions apply only to natural, not man-made, vibration events, but this view is not universal. Additional legal analysis is available for some older cases.2 Read your policy and examine the cited articles for more information.
Some insurance companies in some locales will sell you a policy endorsement that covers earth movement damage explicitly for an additional fee. Such endorsements are not always useful. Of course, you must also have some reason, in advance of any damage, to pay extra for such coverage. For more on such endorsements, see Pre-Construction.
Insurance Experience in a Vibration Damage Case
We are aware of two examples in a road reconstruction project where the insurance companies involved denied construction vibration damage claims, based on "earth movement" exclusions. There was no objective evidence of actual earth movement (e.g. cracking of soil), nor were the adjusters qualified scientifically, in any way, to make such judgments. One of those companies completely rewrote its policy at the next renewal to include so many vibration and movement exclusions that the policy, in effect, insured against virtually nothing, save, perhaps, fire. That same company also denied coverage under an umbrella policy.
A third home insurer in that vibration damage incident paid the claim for vibration damage involving water pipe rupture in a third home, but dropped the homeowner as an insured. Two other homes around the same intersection also had water damage claims, in addition to clear vibration damage, which were paid by insurance.4 Your insurance company may well cancel your coverage, even if they don't pay your damage claim. The mere fact of your having made a claim, whether or not it is paid, also means that most other insurers will not insure your home for at least a period of years. It doesn't make any difference whether you have ever filed a claim of any sort or amount prior to your vibration damage claim.
Worse yet, the shared claims databases used by insurers often carry incorrect or duplicate information about claims. In our experience, it is virtually impossible to get errors in the databases corrected, short of suing the insurance company. Thus, you may get a "quadruple whammy" - the damage done to your home, the cost of repairing it yourself, being forced by your insurance company to take responsibility for someone else's irresponsible actions, and having to fight to correct errors in the claims databases shared by most insurers.
While the examples given here relate to the construction vibration damage example with which I'm most familiar, several others from different states in the U.S. have written me with similar stories of their own coverage denials. If you can get your insurance company to cover your construction-related vibration damage, it will be faster and easier to handle it that way, but that's a big "if".
Dealing With Your Insurance Company
Many people will immediately call their local insurance representative when they have a loss for advice on how to handle the claim. You may know that person well, but, in the end, he works for the insurance company, not for you. You should call the local representative only after you have reviewed the policy provisions and even then, you should be careful in what you tell the insurance agent, especially with respect to what you think the cause of the damage might be.
It takes scientific knowledge and considerable documentation to support adequately a valid vibration damage claim (or, for that matter, for the insurance company to support a coverage denial under an "earth movement" exclusion in the policy). You will probably not have such information assembled when you first talk to your insurer after the damage occurs, even if you can do it at some later time. It is probably wisest for you to offer no suggestions to the insurance company representatives regarding what you believe may have caused the damage, either on the phone or when they visit your home.
This approach allows you to be completely truthful and open about the damage, without unintentionally biasing the insurance company's judgment in any direction. You may believe that construction was responsible for the damage. But, your belief is not proof, nor are you obligated to share that, as yet, unproven belief with the insurance company. Be helpful and thorough in showing the damage, but let the insurance company draw its own conclusions and provide its own verifiable support for those conclusions. If you are asked what caused the damage, simply say that you don't know. Such a statement is probably fully accurate in the overwhelming majority of initial damage report situations.
You should ask the adjuster or other representative of the insurance company about his educational background and note the answer, along with the name of the insurance company representative, in your timeline narrative. Be sure to get a business card from the adjuster. Usually, the adjuster will have little or no scientific or engineering background that would allow him to make knowledgeable judgments regarding "damage causation" (see the CVDG Pro chapter of the same name for information on this topic). Knowing the background of the adjuster and anyone else involved at the insurance company can help you, if you are denied coverage without a proper scientific or legal basis.
The adjuster will usually take an extensive set of photos of damage to your home. Make sure that the adjuster takes as thorough and complete a set of damage photos as possible. Escort him through the home and point out damage sites to help him. Note in your timeline narrative whether or not the adjuster takes a reasonably complete series of photos of the damage. You should ask the adjuster for copies of the photos or even make provision of copies a condition of access to the home (for some model conditions documents, see the CVDG Pro edition). The insurance company photos can be particularly valuable as documentation, since nobody could believably argue that the insurer has any reason to overstate or fabricate the amount and type of the damage.
Most large construction jobs are insured, both by practice and by contract requirement. The contractor likely will refer you to their insurance company for your claim. Thus, the insurance company for the contractor will handle the claim.5 However, you will almost certainly be denied if your damage is significant. Then, the negotiation process will start. Your weapons are your damage, documentation and determination. If you are substantially lacking in any of these, you will probably have little success.
Construction insurers are not used to paying any large claims and will fight doing so in your case, if you have more than minimal damage. Be honest with the insurer and those people it sends to review the damage, but don't assume that they are on your side or care anything about your problem. Remember, they work for the contractor and insurer, not for you. The contractor insurer's representatives will only help you if they believe that is the cheapest course of action for the insurer.
Paying for it Yourself
If you cannot get the contractor or insurance (yours or theirs) to pay the repair cost, amounts less than $10,000 are probably best addressed by proceeding with fixing the damage yourself and getting on with enjoying your life. Pursuing a claim can take years, hundreds of thousands of dollars, and immense amounts of your time, if you have to litigate. There is no guarantee that you will win at trial, no matter how strong your case or skilled your attorney might be.
If you choose to pay for the damage yourself, you should still inform the contractor of the damage (see Reporting Damage in the CVDG PDF and Pro versions) immediately. Taking such an action may help avoid minor damage turning into major damage, whose repair you might not be able to finance. Of course, you will be doing all your neighbors a favor too, by helping to prevent (additional) damage to their homes, assuming the contractor is willing to listen to you and act accordingly.
Once you have notified the responsible parties of the damage in as timely a manner as possible, your next course of action should be to attempt a resolution directly with the contractor and/or its sponsor for the work. This is one reason why you need to notify the contractor as soon as you detect damage and can make a reasoned argument that it is construction-related. You should be open about the damage and allow inspection of it by any party with a legitimate connection to the contractor or sponsor. It may be wise to set some ground rules for those inspections (see the Conditions Documents page in the CVDG Pro).
It is not in your interest either to maximize or minimize the extent of the damage. Many houses and properties have a few hairline cracks or other slight damage existing before the construction start. Where those exist, admit them freely. Your goal is to arrive at a fair settlement (see CVDG Pro) which allows you to repair existing damage and stop further damage, not to create irrelevant arguments and defenses where none need exist.
Avoid threatening lawsuit, unless you are willing to carry through on the threat in a meaningful way. Threats will likely cause the contractor and insurer to involve their own attorney and will cause you to lose the moral "high ground". Once that happens, the chances of resolution without legal action decrease and your costs will go up accordingly. Instead, make reasonable requests that accurately reflect the nature of your damage. Keep in mind that it will cost the contractor or its insurance company at least as much to litigate the claim as it will for you, so both parties have an interest in avoiding litigation (see below).
If the contractor or its insurer retains an attorney or has an attorney write you a letter discounting your legitimate claims or even threatening you, you are well-advised to begin conversations with an attorney (see Involving an Attorney in the CVDG Pro) of your own choosing, even though you may not retain that attorney immediately. Do not talk with the opposing attorney and do not participate in any meetings or conversations with that attorney, unless you are also represented by an attorney. See the CVDG Pro page, Involving An Attorney, for more information on choosing and using an attorney to represent your interests.
Many states use administrative courts to resolve claims against state agencies, much like the similar kind of courts used by the Federal government to resolve disputes on Social Security disability eligibility. If your claim involves damages done by a state agency in the performance of its work, you may want or be forced to file a claim in an administrative court, rather than in state or Federal court. You should be represented by an attorney in any action brought before such a court. Although you should consult an attorney for more information on this topic, keep in mind that work done by a contractor for the state is usually not subject to action in the administrative courts. In those cases, you will have to seek damages from the contractor in a civil case.
Administrative courts work much like regular courts. The judge is an employee of the agency or of the state. The administrative judge hears the case and makes the decision; there is no jury. You offer your evidence in much the same way. Judges in such courts are more educated than the average juror, so your case can be presented on a somewhat higher technical level, with less educational material, than might be appropriate for the typical non-technically-trained jury. Cases in administrative courts are often allocated less time than would be allocated in a civil case, so conciseness and focus are critical.
Newspapers and TV stations can bring a great deal of public pressure on contractors and government agencies, since those involved in construction projects often prefer that their activities and treatment of homeowners remain out of the public spotlight. The media can be particularly powerful when they report the story while the construction is still occurring, as they can often show both the construction work and the vibrations caused by it in the home. Sometimes, media reporting can help you arrive at a settlement without the need for a lawsuit, if the story is sufficiently graphic to be effectively indisputable.
Like most other powerful tools, the media can be a "two-edged sword". While they can sometimes force action from reluctant contractors and project sponsors, the media can also cause them to become entrenched in their positions, especially in cases where the damage and its source are hard to argue. If you use the media to bring some light on your plight, reporters will probably talk to your neighbors to determine if others have damage. Those neighbors, even if they have damage of their own, may dispute everything you say as a means of protecting their own property values. Anything you say publicly could be used against you, if you are forced to file suit over the damage. Certainly, you will be making much information about your potential claim available to the opposing parties.
I'm not a "media consultant". However, anyone who has dealt with the media multiple times, as I have in discussing scientific and technical discoveries, will tell you to be careful and measured in your comments. Any off-hand, "off-the-record", angry or trivial comments you make will be the ones that are reported. The media can't be faulted much for this; such comments often make the best copy. If you decide that the news media can be helpful to you:
I have seen construction vibration damage claims displayed very effectively in the news media by homeowners. The best such examples are the ones where the homeowner is open and forthright, but controlled in what he says. Don't contact the media unless you're reasonably sure you can make it work to your advantage. Don't contact them until you are ready to have the story told properly. Only bring in the media after you have made a sustained and good faith effort to address the matter with the contractor and sponsor. You may have to make an exception to that rule if damage is ongoing in a current project. In that event, be certain that you can display your case effectively with construction occurring. Make sure you document every occasion on which you attempt to arrive at an understanding with the contractor and sponsor.
Litigation is your last option if you cannot come to a fair understanding with the contractor or their insurer - especially if you have a lot of damage. Litigation is something that should not be undertaken lightly or in the absence of a good deal of supporting evidence. A decision to litigate should include considerations of the dollar amount of the damage, the quality and quantity of the causation evidence, your ability to finance litigation and your own willingness to commit the time and put up with the hassle of pursuing, or defending against, a legitimate claim.
Just as the homeowner should try to avoid litigation for many good financial and personal reasons, contractors and insurers have at least as much motivation to avoid litigating as do homeowners. They face the same uncertainties in litigation as homeowners. Litigating a case to verdict can easily cost $250,000 or more for the contractor and/or his insurer, especially if multiple plaintiffs and defendants are involved, as is typical. Few individual damage cases involve more money for repair costs than the litigation costs. Whether or not the contractor prevails in court, his insurance costs will likely increase dramatically. Questions will be raised in future jobs about the record of the contractor.
The pre-litigation process itself (e.g. home inspections, discussions between neighbors, rounding up witnesses) is certain to alert others in the neighborhood of the plaintiff who might not otherwise have realized the potential for damage to their own homes, even if the plaintiff doesn't tell them about the damage. These litigation-related activities can have the effect of bringing forth a flurry of suits, which can interact synergistically to the disadvantage of the contractor. Of course, the contractor will have manpower tied up producing documents, attending meetings, and preparing for and appearing in depositions and trial - another cost to the contractor. If the homeowner has a well-documented case, the contractor is likely to have a representative of his insurer present during discovery and trial. Nothing can be more damaging to contractor insurability than having the insurer see in court that the contractor almost certainly did the damage, or, worse yet, is clearly lying about it under oath.
While there are some cases that are ultimately litigated, it isn't something for which either the homeowner or the contractor should strive. The homeowner is risking a great deal of time and money; the contractor may be putting his business on the line! For guidance on choosing an attorney and navigating the litigation process in vibration damage cases, take a look at the chapters, Involving an Attorney and Litigating, among many other litigation-related sections in the CVDG Pro.
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