Managing Claims in Mexico

Hijacking

Not Like This

Possibly Like This

High value shipment of consumer electronics

Armed guards (1 car in front, 1 behind)

2 drivers

No rest stops

GPS Tracking

2-way radio on at all times

Shipment hijacked near origin

Sent surveyor/investigator

Obtained police report, interviews with all parties etc.

Police report vague re interaction between hijackers and drivers/guards, not clear re exact location

Interviews with drivers/guards inconsistent with police report, also vague re location

Hmm…

Surveyor/investigator does some digging, has local contacts

Cargo hijacked 2 km from origin

GPS data requested/received, alas incomplete

Look at map

Highway is 3 km from origin…

More digging…

Armed guards were waiting on the highway

Insuring conditions in effect from the moment the shipment left origin

“The policy is unable to respond to this claim”

* Ensure the insuring conditions have been met. Don’t presume that the local authorities will be on your side. If it looks like it is going to be expensive, obtain the services of an experienced professional with local connections.

** This happens elsewhere.

Corruption

cor·rup·tionkəˈrəpSH(ə)n/nounnoun: corruption; plural noun:

corruptionsdishonest or fraudulent conduct by those

in power, typically involving bribery.

Corruption Perceptions Index

10/175 103/175

Source: Transparency International 2014

GDP Per Capita

$43,935 $9,592(63/186)(15/186)

Source: IMF 2015

Basic Cargo Claim

Appoint surveyor

Request documents and claim statement

Dry goods (clothing), so no worries re preservation of cargo

Set reserve at estimated loss (25%)

Survey report received

Claim statement = 100% of cargo “Gone”

Further investigation reveals that the local authorities managing the accident scene removed the cargo

They have no record of it

Paid as claimed

* Don’t presume that mitigation/salvage is possible, set reserve accordingly.

** I have had insureds in Canada/USA “lose track” of salvaged cargo.

Used Machinery Claim

Through B/L, Ontario to Mexico

3 months after delivery, claim filed

“Extensive damages”, detailed list thereof

Blurry photos of scratches/dents

Much angst, many parties involved

Sales invoice < Insured value

For “Customs Purposes”

Claim statement for $120K

No repair invoice – “paid cash”

This is going to get awkward

Appoint surveyor in Mexico

A month later, no progress

Claimant doing their best to be n/a

Claimant’s lawyer very available, as apparently am I

Surveyor indicates claimant is familiar with the process of filing an insurance claim

Appoint surveyor in Ontario to meet with shipper, determine pre-shipment condition

Send report along with list of damages and blurry photos to engineering firm

Most of the claim = cost of overhauling machine

Send engineering report to claimant’s lawyer

Waited a month, paid $5K

* Sometimes the gold is at the front of the rainbow.

** I have had this happen in the GTA.

Stolen Yacht

Recovered in Mexico 2 weeks later, abandoned, still floating

Sold by local authorities to salvor for $5K

Salvor contacts insurer (via insured)

Appoint surveyor to inspect and negotiate return of yacht (interior stripped)

Make reasonable offer to salvor, accepted

Yaay we’re done!

Oh wait…

Salvor goes silent

Surveyor contacted by another party

Additional payment required

Contact local authorities, but they are n/a

Additional payment amount increases

Paid claim in full to owner of yacht ☺

* Don’t assume that stolen property will be recovered once found. If the person you’re dealing with won’t give you their name, it’s probably not a good sign.

** I handled a similar situation in Michigan.

Another Hijacking

Truck detained in urban area without driver’s consent

Some cargo prematurely delivered to the other truck that pulled up beside our truck

Appoint surveyor, request usual documents and a police report

Survey report received, no police report

Revert to surveyor, politely reiterate request for police report

Surveyor: “You’re new at this, aren’t you?”

Nice…

Paid in full, as claimed.

* Don’t assume there will be a police report for relatively minor hijacking/theft claims.

** Just try to obtain a police report from some parts of Ontario or Quebec…not to mention the places where you don’t even ask for one.

New Machinery

Insured to Calexico, CA

Shipped to Mexicali, Mexico

Claim reported 2 months after delivery

“Extensive damages”

Surveyor appointed

Claimant ducking and weaving

Surveyor retires their file

Appoint another surveyor

Shipper does not want us to contact consignee

Consignee not awfully happy with the concept either

Many emails, conference calls with all parties

Clever surveyor calls contacts in Mexico

Shipment was insured with Mexican Insurer

They paid the claim months ago

Provided that info to the shipper, so they could get their invoice paid

* If it even looks like it’s going to get weird, appoint an experienced professional with local knowledge and connections.

** It is not unknown for claimants to file claims with multiple insurers.

Personal Effects

High net-worth individual with corresponding expectation$

Considerable damage to furniture, but most of it appears repairable

Surveyor declines appointment when they find out where it is

Find restorer 600 km away who is willing to travel

This is not going to work out well….

3 weeks later, restorer sends before and after pics, and his invoice – as quoted

Claimant contacts policy holder to express their appreciation

The broker writes to say thank you

* There are good people in Mexico, just like everywhere else.

Don’t Let This Happen To You