The losses caused by the recent fire are tragic. The number of families affected by the loss of loved ones continues to grow. Countless people have lost friends, co-workers, and been impacted by the lives claimed. The loss of human life carries grief and brings an emotional pain that is impossible to articulate. The fire in Oakland spread quickly and fully engulfed the structure in minutes according to news article accounts. It truly is a horrible event and one that will not be soon forgotten.
By some accounts, the building was not much. The structure was described as “rickety” by one witness who managed to escape the fire. He reported the stairs felt soft as he headed towards the bathroom that was situated between the first and second floors of the building. Other reports suggest the neighbors had complained about the building being dangerous and the activities in the building as violating local codes.
Just before midnight on Friday, a three-alarm fire consumed the warehouse during a party at the Ghost Ship, which served as a living and working space for an art collective. The building, which was not zoned as a residential space, was divided into separate rooms by makeshift walls and full of wooden furniture. There were no sprinklers. Just last month it was cited for “illegal structures.” A rickety staircase made of wooden pallets led to the second floor, where fire chief Theresa Deloach Reed said Saturday that most of the initial victims were found. The number is now approaching 40 lost lives.
The structure is undoubtedly a total loss. The fire damage was extensive.
Fire officials are sorting through the debris for signs of the cause for the fire. Cause and origin is always a concern in fire losses. The foremost reason is prevention. The fire marshall and firemen want to look for ways to prevent a similar event ever happening again. The fire investigation’s determination as to the cause of the fire also affects others. The business of the post fire work is just beginning. The families will all want to know what caused the fire.
Insurance companies will also be waiting to learn the cause for the fire. With the process of indemnification for the fire losses comes a myriad of decisions about who to pay, coverage, exclusions, subrogation, and assessment of liability for the damages. While insurers are not necessarily bound by the ultimate determination by the investigating officials, it is important to know and understand what the officials decide was the reason the fire started.
The business of insurance for fire claims is involved. The first question every insurer is always the same. Is there coverage for the damage the fire caused? If not, then the insured customer needs to be timely notified there is not coverage. Assuming coverage is available, the insurer has two objectives related to the ultimate cause of the fire. If the cause of the fire is a covered event, then payment of the claim is triggered. In addition to payment for the loss, the insurer simultaneously is looking for recovery for the amounts paid.
An insurance company is a business, therefore attributing the final financial responsibility upon the accountable party is a business issue. All insurers use subrogation and recovery tools to keep losses to a minimum. Payment for the damages is one task, but recovering what has been paid out is another. Sound fiscal policy requires shifting the liability to the wrongful party to avoid business losses to the insurance company and its other policy holders.
The business of insurance deals with all kinds of human losses and placing responsibility for damages to those that caused the damage. It is a process that sometimes last for years following the event. The damage occurs quickly, but the evaluation of the loss and the associated liabilities takes time and often involves lawyers. Disputes over the issues wind up in legal battles and appeals. The Oakland fire will take a long time for the insurers to sort out the details and resolve and settle the issues.
Those who lost loved ones will endure grief and the misery for far longer as the emotional pain will continue. It is truly a sad time for all of those who lost family and friends in this horrible incident.