A subcontractor for a state Department of Transportation (DOT) failed to properly apply the chip seal for a highway resurfacing. This resulted in the roadway delaminating, leaving an excessive amount of crushed gravel on the roadway surface. There were over 300 claims filed with DOT for rock chip damage.
The majority of these claims included prior damage, unrelated damage, vehicles already in need of complete refinish, vehicles that had not been registered in decades yet suddenly on the road again, and logging trucks with 1,500,000 miles that had never been driven in gravel. Norcross set up a 2‐3 day inspection site once every several weeks at a local motel near the resurfaced highway. Inspections were arranged in advance, and appointments were set to expedite the matter as best possible given the volume of claims received.
After the adjusting process was completed, there was an average claim expenditure reduction of 25% on the claims that were legitimate, 50% reduction on the claims that were questionable, and complete denial of the ones that were unsubstantiated. The average claim filed was in the $5,000.00 range, and the overall cost of the event was reduced by at least $250,000.