State Farm is suing the manufacturer of a product for causing damage which they insured.

Now, why should this catch our attention?

http://www.wvrecord.com/news/newsview.asp?c=188982

Mark1... a couple of points:

1. State Farm will invariably be dealing with Ecowater's insurer (product liability coverage). If Ecowater is not covered, they will be bullied into settlement by State Farm. Ecowater won't risk the legal expense and the bad PR from State Farm (SF insures too many homes).

2. As to your original point, why shoud we be concerned; there are serious ramifications for the aftermarket parts manufacturers (non-OEM) products in the event they fail to perform like OEM parts.

Without the benefit of a third cup of coffee on a Saturday AM, my psychic abilites are limited with regard to further speculation as to why.

Again, another good topic of discussion.

the link Mark1 referred to:

State Farm sues company for water damage to home

Friday, January 12, 2007

By Cara Bailey - Berkeley Bureau
MARTINSBURG - State Farm Fire and Casualty Company is suing Ecowater Systems, because a problem caused by Ecowater caused a house to be flooded.

The home of Ronald E. Detrow is located in Falling Waters. Detrow is covered against damage to his home through a policy with State Farm.

Ecowater manufactures and assembled water softener systems for use in residential dwellings, such as the one owned by Detrow. During the spring of 1997, the builder of the Detrow residence purchased and installed a unit for use.

On Aug. 6, 2005, "without warning and without any act of the part of Mr. or Mrs. Ronald E. Detrow, a valve body in the unit failed sending water throughout their first floor, crawl space causing damage to these areas."

The water leak caused damage to personal property and required cleanup and remediation services.

The amount of damage sustained was $33,989.85. A total of $30,860.85 was paid by State Farm.

State Farm believes the water softener manufactured by Ecowater caused the damages and that constitutes negligence in the manufacturing or assembly process.

State Farm is seeking $33,989.85 from Ecowater for compensation on behalf of the company's negligence.

The case was filed by Paul A. Burns and has been assigned to David Sanders.

Berkeley Circuit Court case number: 06-C-972

what am i not understanding, state farm paid 30,000 for damages that cost 33,000,,,,,,,and yet they are suing for 33,000. how can you short pay a claim, and then turn around and sue for the total damage? wouldn't it seem like they would pay at least one person the full amount of damage? i could understand if they paid 1,000 short for the deductible but 3,000? don't they ever pay for the full damage? if true, that frustrates me to no end, especially when i have read articles where adjusters are paid bonuses based on how short they can pay the insured.

does that seem a little odd?

number b......state farm does not pay for water damage haha,,,,learned that from katrina haha,,oh and from now on they don't pay for wind either. haha.

State Farm might be trying to get the extra 3000 and change for the insured. The 3000 sounds like their deductible plus a short pay of 2500 or so.

This just involves a little too much thinking, what I think happened is the adjuster that came to the house might have been proccessing the claim from his cell phone claims software and hit a wrong key ;) who knows. I try not to have an opinion when it comes to insurance... it never fails no matter what i think will somehow be used to berate me :)

I would say that IF I was state farm i would sue also, why the heck would they not, are you saying if you used brand &**** urethane and it failed and caused a leak that ruined a $6000 computer in a car that you would not try to get re-imbursment from the urethane manufature, if not then you got more money than sense..

& also so you know, I you can bet if you filed the $6000 computer under your insurance policy for your shop that YOUR insurance company would go after *#### to get there money back...

When you have a water softener you have "A reasonable expectation that your water softener will not explode"

I am curious to know, and to busy to read the entire article, but was this equipment purchased or leased? I would think if the equipment was leased and under a service agreement by Ecowater then StateFarm would have a firm leg to stand on.

Mark1- I think what you may be leaning to in this post in reference to our industry is, if we render services or parts that fail or cause "damages" (i.e. rust from plunge cuts, device failures such as rain sensor gel packs improperly installed, etc), then perhaps we could be facing similiar lawsuits.

So once again the insurance industry will make the money and we will assume all the risk and liability. If you actually stop and think about it, it is a brilliant stategy by the insurance industry.