Can an Insured Recover from Their Insurance Broker If the Broker Fails to Obtain the Coverage Requested, or Misrepresents Coverage?

If an insurance broker fails to obtain the insurance coverage requested or misrepresents the scope or extent of coverage, does an insured have a claim against the broker when the insurance they expected to cover their loss does not as a result of the broker’s negligence? Continue Reading

California Supreme Court Affirms California Fair Plan Ass’n v. Garnes, and Preserves Homeowners’ Interests

The California Department of Insurance recently issued a press release announcing that the California Supreme Court affirmed the homeowner reimbursement protections recently decided in California Fair Plan Association v. Garnes.1 Back in June, my colleague Kevin Pollack wrote about the recent decision and whether actual cash value means fair market value or replacement cost minus depreciation in, Does Actual Cash Value Mean Fair Market Value or Replacement Cost Minus Depreciation.

Last week, the California Supreme Court refused to consider the insurance industry’s petition to overturn a lower court’s decision that insurers must pay to repair a home even if the repair costs exceed the home’s market value. There, a house fire occurred and the homeowner submitted a claim for $320,549 to her insurer, California Fair Plan Association. This amount represented the cost to repair the damaged home, less depreciation. Garne’s FAIR fire insurance policy had a limit of $425,000, yet Fair Plan denied the claim and only paid $75,000, which was determined to be the fair market of the property in 2011 (in large part due to the mortgage-driven recession).

The supreme court’s refusal to consider the proposal ended an ongoing battle and cemented an important decision that protects homeowners’ interests. Insurance Commissioner Dave Jones stated: “This is an important win for homeowners who should have confidence their insurer will deliver on its promises regardless of housing value fluctuations.”2 Jones filed an amicus brief in support of Garnes, arguing the Insurance Code entitled Garnes to be reimbursed. The lower court agreed and relied on Jone’s interpretation of the Insurance Code when ruling in Ms. Garne’s favor.

The Insurance Commissioner appeared as an amicus curiae, or friend of the court. Jones’ interest was in protecting consumers and ensuring the Insurance Code is properly interpreted and enforced. Our friends over at United Policyholders also filed an amicus brief supporting Garnes and advocating for homeowners’ rights.
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1 California Fair Plan Ass’n v. Garnes, No. A143190, 2017 WL 2303165 (Cal. Ct. App. May 26, 2017).
2 http://www.insurance.ca.gov/0400-news/0100-press-releases/2017/release082-17.cfm

Few Judges and Insurance Regulators Worked in Property Claims: Understanding New Depreciation Rulings

Most judges and insurance regulators have never worked in property insurance claims departments. For that matter, few insurance attorneys have either (Merlin Law Group’s Javier Delgado worked his way through school as an independent adjuster). But, when I was starting out, an older and experienced GAB adjuster told me they never depreciated labor and the deprecation of repairs rarely occurred. Continue Reading

New Jersey Denied Property Damage Claims

If your home or business is affected by a disaster and you have purchased property damage insurance, you may immediately feel a sign of relief. That relief could be fleeting, upon a discovery that the promptly submitted insurance claim has been denied. Immediately you realize there are statutes and regulations that protect consumers from wrongful denials. Unfortunately, the level of protection will depend on the which of the fifty states your property is located. The insurance industry is regulated by each state, so the protections afforded by law can vary distinctly from state to state. Continue Reading

New Arkansas Insurance Department Bulletin on Depreciation of Labor

On August 1, 2017, The Arkansas Insurance Department issued Bulletin 10-2017 that rescinds Bulletin 13-B-2013.1 Specifically, Bulletin 10-2017 states “any prior communications or notices from the Arkansas Insurance Department. . . that prohibited depreciation of labor, are hereby rescinded.” Continue Reading

The Massachusetts Standard Fire Policy and the Innocent Co-Insured Doctrine

I wrote about Streit v. Metropolitan Casualty Insurance Company1 in a recent blogpost. In Streit, the Seventh Circuit Court of Appeals concluded that an insurance policy “intentional loss” exclusion which precluded innocent co-insureds from recovering for a fire loss was unenforceable because it violated the minimum level of protection afforded by the Illinois Standard Fire Policy. Continue Reading

Insurance Commentary with Bill Wilson is a Good Insurance Coverage Read

Bill Wilson writes an excellent commentary about insurance. While Wilson’s discussion generally concerns what insurance product is sold and how it is sold, insurance coverage is always discussed. Wilson’s commentary reminds us that the heart of insurance sales and disputes is the depth and service of coverage afforded which transfers the financial risk of loss from the buyer to the seller insurance company. Continue Reading

Eighth Circuit Agrees: Pre-Award Interest on Appraisal Award is Appropriate

I recently wrote about the case of Poehler v. Cincinnait Insurance Company,1 in which the Minnesota Supreme Court recently held that Minnesota Statute section 549.09 provides for pre-interest on insurance appraisal awards. Following this decision, the Eighth Circuit Court of Appeals in Housing and Redevelopment Authority of Redwood Falls v. Housing Authority Property Insurance,2 similarly held that the insured was entitled to recover pre-award interest from its insurer. Continue Reading

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