Am I Crazy?

[floridamarketing]

I am having an argument with a claims adjuster regarding the application of the deductible on the CR0001 10-90 fEmployee Dishonesty Coverage Form. Here are the specifics. The Insured has a $100,000 limit with a $1000 deductible. The recent claim resulted in a total loss of $150,000, however the adjuster has only paid $99000. When I questioned why, he advised that in crime coverage the deductible is not "absorbed". Huh? When I read the form, it clearly states "We will then pay the amount of loss in excess of the Deductible Amount, up to the Limit of Insurance".
To me this says we will be the amount of loss in excess of the deductible which would be $149,000. Since this is over the limit of coverage, I expect them to pay the full $100,000. So, am I crazy or what?

[goredsox]

$99,000 is correct.

[Insurance4YourBiz]

I agree that $99,000 is correct. The maximum covered loss is $100,000 of which the insured pays the first $1,000.

[martyl]

You are correct, not crazy. In all cases that I am familiar with, the deductible comes off the loss, not the limit. If that were not the case, would't the coverage be maximim $99,999.?

[rhare]

As per Silverplume: "The Underwriter does not start payment until the amount of the loss exceeds the deductible that is shown on the Declarations as applicable to a single loss."

And another section referred to the coverage as "excess of the deductible." I don't handle the crime lines directly, but it certainly sounds like your adjuster may have settled correctly.

At first, I agreed whole heartedly that the loss of $150,000 less $1,000 is a net loss of $149,000, so you would receive the limit of $100,000. BUT, after reading the terminology it appears the deductible is not "absorbed" like we are accustomed in regular Property lines.
hmm.