Does a Partial Denial and Jury Demand Prohibit the Insurer From Proceeding with Appraisal?

It happens frequently: The insurance company admits the policy covered part of the loss but refuses payment at the time because the amount of the loss falls below the deductible. The insurer then admits the insured also suffered other damages to the property, but denies coverage for this damage for a variety of exclusions or limitations. The insured then files suit. But what happens when the insurer, after it has answered the suit and made a jury demand, invokes the appraisal provision? Continue Reading

Proof of Loss: Can an Insurer Deny Coverage and Later Argue the Claim is Barred Because the Insured Did Not Comply with the Proof of Loss Condition?

Insurers on occasion deny coverage or make claim decisions based on one ground, and then later, during litigation, seek to avoid liability based upon an entirely new defense theory. Although coverage decision letters regularly throw in boilerplate language seeking to avoid waiving coverage defenses, I was recently asked whether an insurer can deny coverage or refuse to pay additional policy benefits during the claim stage based on one ground, and then later, after litigation has commenced, seek to avoid coverage based on the insured’s alleged failure to fulfill the proof of loss condition. To answer this question, we need to first review some general principles concerning proof of loss. Continue Reading

Is a Dispute Over General Contractor Overhead and Profit Appropriate for Appraisal?

In Windridge of Naperville Condominium Association v. Philadelphia Indemnity Insurance Company,1 a federal district court in Illinois recently addressed the issue whether appraisal is appropriate to resolve a dispute over the need for a general contractor to perform repairs following a covered loss. There, hail damaged townhome buildings, requiring repairs. Philadelphia paid for losses it conceded were within the scope of the insurance policy’s coverage for hail damage. Philadelphia though declined to reimburse the Association for the overhead and profit charged by its general contractor in making the repairs. Philadelphia then refused to participate in an appraisal to resolve this dispute, prompting the Association to sue. The Association subsequently moved to compel appraisal, which the district court granted. Continue Reading

Brandee.New.Mexico

Brandee Bower Expands Her Practice into New Mexico

I have entered the land of enchantment and now have a license to practice law in New Mexico! I have been handling cases there for a few years through local counsel, so I decided to obtain my license. New Mexico has some good laws for policyholders, including the ability to sue both the insurance company and the adjusters that worked on the claim. Continue Reading

Be Sure to Tell Your Carrier the Reason Why Your Witness is Significant to Their Investigation

It is well established in Arizona that an insurance “carrier has an obligation to immediately conduct an adequate investigation, act reasonably in evaluating the claim, and act promptly in paying a legitimate claim.”1 The Arizona Unfair Claims Settlement Practices Act likewise provides that a carrier shall not “[r]efuse to pay claims without conducting a reasonable investigation based upon all available information.2 In all aspects of investigating or evaluating a claim, an insurance carrier is required to give as much consideration to the policyholder’s interests as it does to its own interests.3 So much so, that “Indifference to facts or failure to investigate [by a carrier is] sufficient to establish the tort of bad faith” against the carrier.4 Continue Reading

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