Fire Loss Claims in North Carolina

Every year in North Carolina, people sustain significant losses due to fire damage. In the wake of these losses, people must determine their legal rights, and possibly their legal responsibilities.

Hopefully the person sustaining the loss will have insurance to cover the loss. In the context of a house and its contents, this is most frequently a "homeowner's" policy of insurance. In North Carolina, fire policies are governed, in part, by General Statute 58-44-16. This statue sets forth several obligations of the insurer and the insured, including the notice which the insured must give to the insurer, the rights of mortgagees, and the appraisal process.

Other types of property might also be covered by insurance. A car is often comprehensive coverage, which is not mandatory in North Carolina. A commercial structure might be covered by a commercial or business policy. The terms of the policy must be closely reviewed. The policy will be enforced as written, but any ambiguities will be construed against the insurance company, and in favor of coverage. There is often a "deductible," which the insured bears before the insurance company is liable. In addition, the policy typically states whether the policy benefits are based on the cost of repair, or on actual cash value. The policy also has "limits" for the structure and also for the contents. (Such policies might have other coverages, such as additional living expenses (e.g. a hotel).) Where the insurance company pays for the loss, then it typically is "subrogated" to the insured's claim against any persons responsible for causing the fire. Some insurance policies also cover "business interruption coverage," which helps businesses that are closed down due to a fire (or other covered cause).

Where there is no insurance (or where the insurer pursues a subrogation claim), the parties will have to determine the cause of the fire. Most fires are investigated initially by the local authorities, which in North Carolina is often a fire marshal, and they will ultimately issue a report. Often the parties will hire a private fire investigator, who typically first determines the "cause and origin" of the fire. Typical causes of fire are faulty wiring, space heaters, improperly disposed cigarettes (or other hot items).

Under North Carolina law, in order to assert a claim against the person who caused the fire, the person sustaining the loss must show that the other person was "negligent." The general rule in this state (subject to some ambiguity in the case law), is that a person who starts a fire that damages another person's property (whether started intentionally or not) is not strictly liable for the losses. Thus, a person burning trash is not liable to an adjoining landowner damaged by the fire if the person took adequate measures to contain the fire. (Burning trash often also raises an issue of whether the person starting the fire had a permit, which is often required in North Carolina.) Contractors and electricians in North Carolina are generally subject to the terms of the North Carolina Building Code and the N.C. Electrical Code. A construction defect which violates these Codes is generally evidence of negligence by the contractor or subcontractor in North Carolina.

Persons damaged by fire who have a claim against the person causing the fire (e.g. electrician who negligently performed wiring, or manufacturer of defective product) can recover the lost value to their house, the loss of the contents, the additional living expenses and other increased costs (e.g. cost of eating at restaurants). Persons sustaining burn injuries can also recover for those bodily injuries.

It can be critical in these cases to promptly hire a reputable fire investigator, before the physical evidence is destroyed (by e.g. rain or other weather conditions). In North Carolina, these investigators are typically licensed by the N.C. Private Protective Services Board. One often needs an attorney to deal with the insurance companies and other parties involved.

Other complex issues that can arise in fire losses include the following: The presence of a lender with a mortgage (or deed of trust); The insurer's duty of "good faith" toward the insured; and appraisals of the property involved.

John Kirby has handled several fire loss cases in North Carolina. Raleigh litigation attorney John Kirby represents people injured in automobile and other accidents. He has practiced law in North Carolina since 1993. He can be reached at 919-861-9050. Initial consultations are free.

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