A Continued Sluggish Economy has Resulted in a Copper Theft Epidemic and it is Costing the Insurance Industry Millions

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Copper theft cost the insurance industry a fortune in the past few years and they are not equipped to handle the HVAC portion of these losses. As a result, millions of dollars over indemnification occurs. CIS Commercial Insurance Services has identified this problem and implemented a comprehensive solution.

Typical Copper Theft

CIS, an experienced claim consulting company is reducing the severity of HVAC claims by an average of 30% per claim. At times these savings have exceeded $250,000 on a single claim.

The insurance industry has had to face many challenges in recent years. The high demand of copper combined with desperation created by so many Americans without employment has resulted in an epidemic the industry was little prepared for. The copper coils from air conditioners are being stolen at an alarming rate. The HVAC and recycling industries have seen the light and are making the most of this epidemic. The cost to the insurance industry has sky rocketed into hundreds of millions of dollars with little end in sight.

Copper prices have hit their highest level in recent history, nearing the key $8,000 a ton barrier. Prices are being driven by high demand from Asian markets and decreased production from older mines in Latin America. Analysts believe that copper prices will rise above the all-time high of $8,940 a ton set in mid-2008 in the next 12-24 months. The theft of A/C coils for their copper value will continue to rise.

Using Indianapolis as an example; the IMPD had 678 metal thefts reported in a three month time period. That’s 226 thefts per month or approximately 7 each and every day. At the time these crimes were reported, 25% of the victims already had estimates and the average value was $4300. If you were to extrapolate those numbers to 100% of the thefts it would be an astonishing $1 million dollars a month for the city of Indianapolis alone.

It is nearly impossible for the insurance industry to know how the handle these claims. The HVAC industry spins a web of confusion telling adjusters stories to benefit their own pocket books. Adjusters are told the systems have to be upgraded to a newer refrigerant and the entire system must be replaced. They are told that units have been damaged and can not be repaired. When a system actually needs to be replaced they quote an enormous amount for replacement without even considering that, with changes in technology, there may be a better and less expensive way to replace the system.

It would seem that the HVAC industry holds all the cards; they know the true price of goods, they tell you what is needed and as a result they are setting the price. Often we are told the whole system needs to be replaced but just simply don’t have the knowledge or expertise to dispute this claim. Estimating software in used in an effort to reduce loss expense but with no real idea if we are paying a good price. To add to this, the insurance industry is loosing more and more of its experienced staff.

Most HVAC contractors often use a flat rate pricing book to establish their estimates. These books are created with the knowledge of local pricing and are sold to the contractor as a way to maximize profit.    Combine this with a market with a high demand for their service and you no longer have a contractor that needs to compete for business.

CIS, an experienced claim consulting company is reducing the severity of HVAC claims by an average of 30% per claim. At times these savings have exceeded $250,000 on a single claim. Armed with this data the industry needs to evaluate how they adjust these claims. These losses are real and there is help available. The key to adjusting these claims is keeping your cool.

CIS is a company that supports the insurance industry with objective data, inspections and accurate pricing on HVAC equipment. This company allows the insurance adjuster to pay the amount actually owed. Don Marx CIS Commercial Insurance Services 708-560-1980 cisclaims.com

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