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collection issues / reporting a loss or claim July 31, 2017

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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collection issues / reporting a loss or claim
July 31,  2017
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collection issues
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Ken
Can you explain with details the a contracts value and procedures for a collection on default as well as any attempts to transfer the agreement to a new owner by the old owner.  
SG
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Response
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    Collecting what you bargained for, installation and RMR for the term of the agreement, becomes important when you are particularly annoyed with a subscriber, when you want to show your subscribers that you intend to enforce your rights and when you have enough collection matters to generate significant revenue by pursuing your rights.
    The Standard Form Agreements have plenty of provisions to aid in the collection process.  Upon default all amounts due to that date as well as the RMR for the balance of the contract become due.  Rather than full acceleration there is a liquidated damage provision calling for 80% of the balance of RMR.  We have found that the liquidated damages works better than full acceleration.
    We also include an arbitration provision which we believe will enable you to pursue the collection matter quickly and economically.
   My introduction to the alarm industry was handling a handful of collection cases for one company.  That part of my practice quickly grew for a number of reasons, but the most notable were that alarm companies had two choices when their subscriber defaulted:  throw the contract in the trash and forget about the customer, or send it to me for collection.  I was [still am] good at what I do and our alarm collection department is currently staffed by 5 attorneys and 5 paralegals, all dedicated to alarm collection matters.  
If you use our Standard Form Agreements we are willing to handle your collection matters.  Contact our head paralegal Kathleen Lampert to get started:  KLampert@KirschenbaumEsq.com or 516 747 6700 x 319.
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reporting a loss or claim
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Ken
    You and all your insurance company buddies like Bart never provided detailed or any instructions on what has to be done document wise as well as the required notice to your insurance company when there is an event with or without a loss due to a real action whether a burglary or fire.   The system could have worked exactly as it should have, notified the police or fire departments, prevented a loss or limited the fire damage etc. but you still have to notify your insurance company of the event, provided information and have them create a possible claim case and number.   Failure to do so can jeopardize your coverage.   Why do this if everything worked correctly?   As you know the insurance company covering the claim will always try to reduce their exposure and pay out at the cost of others.   They will always name anyone that was associated with the loss good or bad.   Most firms just do nothing under the believe that everything worked correctly and therefore their customer is happy so there is no reason for concern not taking their insurance company in consideration and their possible actions to include them.
SG
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Response
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    I have addressed this issue in a number of articles, but it's an important issue and bears repeating.  If you know of a claim or even a potential claim you should notify your insurance carrier.  Every policy of insurance has a claims provision that specifies how you should notify the insurer, as well as when.
    If you fail to promptly notify your carrier you may violate your policy and give the carrier the opportunity to disclaim coverage for the claim.  If the claim is big and ugly enough the carrier may be looking any which way to get out from coverage so don't give it a reason.
    Be sure the insurance company is notified; notifying your broker isn't enough unless the broker is the general agent of the insurer.  If you do rely on your broker make sure you get confirmation that the broker sent in your claim.
   Preserve all records.  Ask the central station and any subcontracts to preserve their records.
   Ask your carrier to appoint counsel to guide you if you get inquiries for records from potential claimants.  You can ask your carrier to appoint me or engage me as consultant so you don't have to train the insurance company counsel.  
    You may be reluctant to report a claim because it may affect your rating for premium or coverage.  That is a real concern and does require a balancing act.  First distinguish between a loss and a claim.  If you know of a loss but no claim has been made you may not be required to report the loss.  Check your specific policy language to ascertain your obligation to report.  If the loss has the potential of being significant then don't take a chance, report it at once even if no claim has been made.  If you get a claim notice you need to report it immediately.
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
516 747 6700
www.KirschenbaumEsq.com
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