Richard Dietz, a former claims supervisor with Farmer's Insurance Group, has taken to the airwaves to confess the sins of his former employer, co-workers and himself. His video is being broadcast in the state of Washington in support of a consumer protection referendum which would provide financial penalties for insurers that wrongly delay or deny claims.
Continue Reading...I wrote about surplus lines insurance companies in an earlier post, Surplus Lines Insurers, Sinkholes, and the Law of Mars. I explained how an attorney in our firm, Donna DeVaney, was able to get a favorable ruling in a sinkhole case involving a surplus lines policy due to a recent Florida Supreme Court case, Essex Ins. Co. v. Zota, 985 So. 2d 1036 (Fla. 2008).
Continue Reading...I am certain some insurance Texas adjusters are going to be surprised to learn that Texas case law has held that when a partial loss happens, depreciation SHOULD NOT be deducted from the loss. I mention this due to the hundreds of loss statements prepared by insurance company representatives where depreciation is routinely deducted.
Continue Reading...Texas insurance law has its quirks which are different than the majority. My experience is that every state has its nuances of insurance coverage law. Not necessarily wrong, just different. Sometimes, incorrect judicial decisions are made and then remain the law for generations. Often, adjusters in the field simply ignore statutes or common law rules and adjust claims the way they are taught.
Continue Reading...Comments are important in the Blogoshpere. What I may or may not write is relevant only if it is important to others. If some wish to comment with views from which we can all learn, progress is made. Sometimes, we do not read the comments to blogs which may be insightful and provide some food for thought. For this reason, I am posting some of those comments which in my opinion provide more provocative thoughts for your review and comment:
Continue Reading...This week I noted the recurrent problem of outcome oriented insurance company claims conduct in Adjusters Cannot in Good Faith Rely Upon Biased or Outcome Oriented Opinions. In Does It Stay or Does It Go? State Farm's Assault on Florida, I then noted a finding regarding State Farm's fitness to conduct insurance which stated:
"State Farm’s actions raise serious questions regarding the fitness and trustworthiness of its officers and directors to engage in the business of insurance."
State Farm is challenging that finding by asking for an administrative review.
Continue Reading...I saw a number of property managers of former Community Association clients yesterday at the Community Associations Institute National Conference in New Orleans. We recalled the trials and tribulations of catastrophes long past. We consult with a number of them regarding their insurance programs and will sometimes have a conference with their insurance brokers and agents trying to anticipate coverage which would be needed in the event of another disaster.
Continue Reading...Most insurance opponents find it amusing when I explain how many places I have been in a week. If they only knew how many matters I have "touched" in a day they would fully appreciate how hard I work to protect policyholders. This morning at breakfast, a Zurich attorney asked about my daily schedule and I responded as I normally do, that I am "busy." The truth is that I was up at 5:45 am, in Tampa, flew to Destin, Florida, and picked up a client which lead to strategy on her case, then on to New Orleans where I met with new potential clients, met with the Zurich counsel, went to a Condominium Conference, worked on the paperwork of a seven figure hotel settlement, etc.,---- I am in the "muck" of insurance disagreements and want to help, which is why you should listen to the following suggestions.
Continue Reading...As noted in Sunday's post, the Risk and Insurance Managers Conference was held in Orlando this week. In a reflection of the economy (and most of our stock portfolios), the attendance was down 40% over last year. Corporate risk managers are facing budget cuts just like everybody else. Even the large insurance broker, Willis, reflected the austere mood by having no booth and greeting people in an open area.
Continue Reading...Most of the time, I battle large corporate insurers in David vs. Goliath like battles. I find it amusing that State Farm's attorneys are struggling in this fight, given State Farm’s enormous size and power. Today, State Farm's lawyers, lead by the very able Mark Delegal, are lobbying Florida's leaders on a very anti-consumer bill. This bill would allow State Farm to charge whatever rate it wants. Florida Governor Charlie Crist is reportedly prepared to veto such legislation.
Continue Reading...The Associated Press reported that the National Association of Insurance Commissioners (NAIC) has come out strongly against the proposed Federal Charter for property and casualty insurance companies. As I have now stated in two recent posts, (read them here and here), this federal legislation is not in the interests of policyholders and is an attempt by some insurance carriers to escape accountability and increase their individual profitability.
Continue Reading...Recently, Allstate has accused other insurers of investing in credit default swaps. Does Allstate have knowledge of insurers engaging in this illegal activity? Or are these allegations a facade for the new federal oversight that would place Allstate under control of the federal government. My view on this topic is pointed:
Allstate and other major insurers are seeking federal charter to avoid state consumer protection laws and to gain an economic advantage over other property and casualty insurers. The federal legislation offers no specified safeguards for consumers, and provides for the same inept federal regulation that allowed the collapse of our financial system.
Continue Reading...Would you expect Americans to get a fair trial in Iran? Probably not, because most would believe that the judge and jury would rule against Americans no matter what the evidence showed. Many policyholders first call our office while waiting for a conclusion from the insurance company's expert. Usually, the expert becomes involved after the policyholder complains about the insurance adjuster’s first conclusion. The policyholder, now worried about cementing an already bad situation with a bad finding from an alleged expert, calls to see how we can help.
Continue Reading...The Risk and Insurance Management Society (RIMS), kicks off its annual convention in Orlando today. One of the basic principals of risk management is the avoidance of loss. A second principal is to mitigate the effect of losses. These are win/win situations for the policyholder and the insurance company because financial and time resources are not used on replacement of otherwise unnecessary losses. Indeed, if practiced widely, insurance premium rates should be reduced. It has been my position that loss prevention and mitigation must be part of public policy and should be reflected in building codes, life safety codes, and taxation policy. The benefit would be far greater than just reduced insurance premiums. Just as insurance is a societal product, risk management and loss prevention are socially significant. This should be reflected in our laws.
Continue Reading...Thursday’s Hurricane Ike policyholder attorney meeting in Houston, which our law firm organized, was a great success. More than 30 attorneys from the Galveston and Houston areas registered. We coordinated litigation and shared ideas and information to help our individual clients. This will eventually help all insureds involved in litigation receive the benefits owed by their insurance companies. I am certain the judges assigned to the cases will be happy to hear we are working on methods to streamline the litigation process so the cases can move quickly and cost efficiently.
After the meeting, I reread an appellate decision involving Texas Windstorm Insurance Association (TWIA), Tex. Windstorm Ins. Ass'n v. Poole, 255 S.W.3d 775 (Tex. App. Amarillo 2008), from a new perspective. The Court determined what kind of an entity TWIA is. The opinion starts with an amusing story:
(*Chip Merlin's Note--Rocco Calaci has been a noted meteorology expert witness in the Katrina Legal Wars. After meeting him at a recent FAPIA Convention, I invited him to write a series of guest blogs. Click here to read his previous guest blogs)
Whenever a hurricane strikes a community, we obsess over the maximum wind speed and storm surge depth. In my last blog, I mentioned many other weather elements within a hurricane that can cause damages. Now I want to speak my mind on how we need to look at hurricane damage from another perspective.
Continue Reading...Modern insurance is a financial product that was historically developed overseas rather than in the United States. Many insurance contract legal principals were also first developed by English Courts. Accordingly, reading how the theory of insurance law has developed outside of the United States can be enlightening and helpful to American insurance attorneys, adjusters and consumers interested in this topic.
Malcolm Clarke, a professor of Commercial Contract Law at Cambridge has written a splendid insurance law book, Policies and Perceptions of Insurance Law in the Twenty-First Century (Oxford Univ. Press 2007). His work should be in the library of and cited by all policyholder attorneys because his explanations of insurance are very helpful to consumers of insurance.
Continue Reading...I was recently retained by a hotel management company regarding problems associated with their Hurricane Ike insurance claim. Yesterday, during an Examination Under Oath taken in that matter by Liberty Mutual Insurance Company, the CEO of the management company handed me an article indicating that the property and casualty insurance company had a profitable year, despite the economy and catastrophes such as Hurricane Ike. He had previously thought the insurer’s slow and low payments might be the result of economic difficulties. Even large corporate clients like the hotel wonder why they must hire an attorney just to get what the insurance company owes them.
Continue Reading...The April 6 Edition of BestWeek ran a story, Insurers Have Faith in 'Bad Faith' Victories, which indicates insurance companies are winning the legislative battle against consumer protection statutes. The story notes that the insurance industry's lobbying propaganda claims that consumer protection statutes make insurance more costly at a time when people can least afford it.
But how affordable is "cheap insurance" that does not pay or pay on time?
Insurers are using the premiums paid by their customers to sponsor pro-insurance industry laws that do not hold insurers accountable when they wrongly delay or deny payments. The same premiums pay for lobbyists to do everything they can to defeat proposed legislation that provides meaningful remedies to customers who have been harmed by an insurer's shoddy claims practices.
Last year, Washington passed laws that made it unlawful for insurers to "unreasonably" deny insurance claims, and allows treble damages when an insurer does so. The Washington Insurance Commissioner stated "the law is encouraging insurers to be more responsible."
What those insurers want are consumer protection laws with no teeth. They want illusory laws that mandate "good faith" claims handling without meaningful accountability. That type of law would be akin to prohibiting murder, but not giving the police the power to make an arrest.
Honest insurers and those that act in good faith should have no problem with strong consumer protection laws. Those companies already play by the rules. The only reason insurers would lobby against strong consumer protection laws is because they want to cheat their customers. This forces otherwise good and honest carriers into dishonest practices so they can compete. A legal system that fails to hold entities and people accountable for breaking rules is tantamount to a society without rules.
Our law firm is helping to sponsor a seminar and meeting with Hurricane Ike policyholder attorneys this Thursday, April 16, in Houston. We held a similar meeting following Hurricane Katrina and felt it was beneficial for attorneys and clients to meet, learn, and share ideas regarding the common problems and issues arising out of Hurricane Katrina claims, denials, and delay.
The Ike meeting will start promptly at 8 am with a nationally recognized claims practice expert providing an in depth seminar. Other attorneys are scheduled to speak on common discovery issues. We hope to discuss methods to decrease costs of experts and other common costs as well as best practices to avoid losing arguments we expect the insurance companies to raise. We intend to share ideas about how to speed up the litigation, so that the Hurricane Ike lawsuits move along as quickly as possible.
If you are an attorney who does not represent any insurance companies and you are actively helping Hurricane Ike policyholders, you are invited. I encourage you to attend since there is everything to gain and nothing to lose.
Currently, about twenty attorneys are attending this one day conference.
There is no charge. Lunch and cocktails are provided in return for your attendance and ideas.
Please contact Javier Delgado at (713) 626-8880, in our Houston office to get more details and clearance to attend.
If you love dealing with your group health insurance bills and claims, you will be overjoyed with the new legislation proposed in Congress allowing property insurance companies to apply for a Federal Charter. This proposed legislation is the most unfair and anti-consumer federal legislation filed in recent years.
Continue Reading...One of the most fascinating parts of my job is learning of the extraordinary events that happen to people. Just when I think I have heard it all, I catch myself saying, "you've got to be kidding!" The client's typical response usually is, "I know, I wouldn't have believed it either, but…," and the remaining details are explained. Sometimes, I notice that I am smiling at the story and thinking hard about how the catastrophe can be covered under an insurance policy. Then, I end up apologizing for not seemingly being more empathetic to their predicament, but the mental exercise of applying a theory of financial insurance recovery to the facts is fun for me. This is how I use my limited talents; it has become my life’s work.
Continue Reading...This is a Blog and not a book. So, I will try to give everybody the Readers Digest version of some thoughts I have on the very complex and important coverage topic.
The Texas Windstorm Insurance Association covers "windstorms." One of the most classical types of windstorms are the hurricanes that menace those of us living along our country's Southern waters in the summer and early fall.
Some modern policies exclude, charge higher deductibles, or cover certain aspects of "Named Windstorms," which are hurricanes or tropical storms named by the National Weather Service. Those policies even limit how long windstorm coverage lasts or is effected after the "Named Windstorm" diminishes.
Continue Reading...My posts which discussed the roof damage claims denied by TWIA (See Internal Texas Windstorm Roofing Claims Memo Explains Damage is Not Covered, The TWIA Roof Damage Memo: Checking Basic References to Resolve Adjustment Questions, Roof Repair Methods Prove TWIA is Wrongly Denying Roof Claims, and "Physical Direct Loss" Caselaw and TWIA's Roofing Memo) resulted in a number of comments. The author of the internal TWIA memo is Reggie Warren. He is in TWIA’s claims management of TWIA and gave powerpoint presentations to Hurricane Ike catastrophe adjusters. We are in the process of collecting as much information as possible about Mr. Warren, since he appears to set TWIA’s claims policy.
Continue Reading...The deadline for filing a federal flood proof of loss for a Hurricane Gustav or Ike claim has been extended twice by the National Flood Program Administrator for a total of 270 days from the date of loss. That deadline is fast approaching, and if you have not yet filed a proof of loss, you should calculate your deadline and calendar the date now so that you do not miss it. Failing to timely and properly file a flood proof of loss is a bar to recovery of the claim.
To calculate your proof of loss filing deadline, count 270 days from your date of loss. For example:
Policyholders should also keep in mind that:
You can read the February 20, 2009, extension letter here.
The Windstorm Insurance Network held a symposium last week in Houston. Tina Nicholson of our firm and Shannon O'Malley from the Dallas office of the insurance defense firm Zelle Hofman made a presentation regarding Texas Bad Faith Law. I met Shannon when Zelle Hofman was defending Factory Mutual in the Port of New Orleans litigation following Hurricane Katrina.
Continue Reading...I have received three questions regarding proofs of loss in the last two days. This post will provide a general and basic understanding of a topic about which I could write a small book.
Continue Reading...I was honored to be given the Policyholder Attorney Honorable Mention Award from the Insurance Law Center. It was meaningful because I am a policyholder attorney in every case. However, some who read the comment posted by the Insurance Law Center with the award might have the wrong impression about the success that our firm, not just me, had in the Katrina Cases we litigated. This is what was said:
Continue Reading...I am back from my epic 50th Birthday Celebration. I will have plenty to write from the experience. There is a lot to learn about life from a trip to Italy. If you have not visited, you must, and do not wait to put it on a "bucket list."
Do you ever take time to think about how another views your thoughts and philosophies? When you have two nine hour flights, you have some time to ponder these ideas.
In the insurance claims environment, there is a picture I have used in a presentation, Why Can't We All Just Get Along? to show how opposing individuals often react to each other:
(Note: This Guest Blog is by Ruck DeMinico, Knowledge Manager at Merlin Law Group).
My wife and I were reviewing our homeowner’s policy this weekend, and she was unaware of a few things that all homeowners must know. I am sure there are many more people in her situation. While this blog may be elementary to those who work in insurance, on the off chance that a novice reads this blog, I would like to mention three of the most important things every homeowner should know when updating their insurance for the hurricane season.
Continue Reading...The Texas Supreme Court issued two opinions March 27th, clarifying when a delay by the insured in submitting a notice of loss in a claims-made policy can bar recovery.
In the first case, Financial Industries Corp. v. XL Specialty Ins., ___ S.W. 3d ___, 2009 Tex. LEXIS 109 (March 27, 2009), the Texas Supreme Court was faced with the issue of whether, under a claims-made policy which required, as a condition precedent to recovery, written notice to the insurer of any claim "as soon as practicable after it is first made," an insurer could deny coverage because the insured waited seven months after the suit was filed to give notice, although notice was given within the policy period.
The Court distinguished between the prompt-notice language, ("as soon as practicable"), and the requirement that a claim be made during the policy period.
The insurer (XL) and insured (FIC) stipulated that FIC violated the policy's prompt notice provision and that XL was not prejudiced. Noting that claims-made policies benefit an insurer by allowing it to "close the book" on a policy at its expiration, giving the insurer a certainty unattainable with other types of policies, the Texas Supreme Court sided with the insured. FIC gave notice within the policy period, so that XL could "close the book" on the policy at the end of the policy period. Because XL was not denied the benefit of the claims-made policy, it could not deny coverage based on FIC's immaterial breach of the prompt notice provision, as they could not prove prejudice from the delay in notice.
In Prodigy Communications Corp. v. Agricultural Excess & Surplus Ins. Co., ___ S.W. 3d ___, 2009 Tex. LEXIS 111 (March 27, 2009), the policy required the insured give written notice of any claim "as soon as practicable," "but in no event later than ninety (90) days after the expiration of the Policy Period or the Discovery Period." Prodigy gave notice almost one year after it was named in a lawsuit, but within 90 days of the end of the discovery period. The insurer denied coverage, alleging the notice was not "as soon as practicable," but admitted it was not prejudiced by the late notice.
After a lengthy discussion regarding claims-made policies, the Texas Supreme Court distinguished between the two notice requirements, stating:
"[The requirement that the claim be made during the policy period...is not simply part of the insured's duty to cooperate, but defines the limits of the insurer's obligation, and if there is no timely notice, there is no coverage.... [A] notice provision requiring that a claim be reported to the insurer during the policy period or within a specific number of days thereafter 'define[s] the scope of coverage by providing a certain date after which and insurer knows it is no longer liable under the policy'"
While the prompt notice provision of the policy could benefit an insurer by giving it more time to investigate and participate in negotiations, the Court held that the provision was not a material part of the bargained for exchange in the policy contract so long as notice was given within the policy period. Because the insurer was not prejudiced by the delay in notice, it could not use the immaterial prompt notice provision to deny coverage.
(*Note: This Guest Blog is written by Javier Delgado, an attorney with Merlin Law Group in the Houston, Texas office).
Texas Windstorm Insurance Association says you only have 30 days to appeal its determination of damage to your property! DO NOT RUSH TO APPEAL before you learn what TWIA is not telling you; you will give up valuable legal rights and remedies.
Continue Reading...(Note: This Guest Blog is by Deborah Trotter, an attorney with Merlin Law Group in the Gulfport, Mississippi office).
As homeowners, business owners, adjusters, and government and relief agencies begin to sort through the devastation left in the wake of the dangerous storms and tornadoes that tore through the southeast last week, the stark and solemn reality of the loss of life and property is overwhelming. So many families and communities are grieving tremendous losses.
Continue Reading...(Note: This Guest Blog is by Deborah Trotter, an attorney with Merlin Law Group in the Gulfport, Mississippi office).
The spring storms and tornadoes that ripped through Mississippi, Alabama and Louisiana recently could be a preview of a devastating hurricane season. Policyholders should take the opportunity now to review their policy coverage.
One of the many things we learned from Hurricane Katrina, is that people often do not know the various insurance benefits available to them under their homeowners and/or business policies. And sadly, many insurance company adjusters do not feel obligated to inform policyholders of all of the policy benefits available to them.
Continue Reading...A reminder that the Windstorm Insurance Network is sponsoring a special Texas Windstorm Insurance Symposium. It will be a one day event on April 2, 2009, at the Hilton Hobby.
Follow these links for the Program Agenda and a listing of the Breakout Sessions.
Online registration for the event is closed, but walk-in registration onsite will be accepted on a space-available basis.
(*Note: This Guest Blog is by Jean Niven, an attorney in the Tampa office of Merlin Law Group).
Hurricane season is fast approaching, leaving coastal residences and businesses vulnerable to the whims of Mother Nature. Surviving natural disasters should not be just a warm up to the difficulties encountered in filing an insurance claim. The purpose of insurance is to provide peace of mind. When disaster strikes the insurer is tasked, pursuant to Florida law, with providing prompt assistance in the form of a competent adjuster who has the best interest of the insured as its first priority. Sadly, that scenario has become a fairy tale for many insureds. Instead of providing the friendly professional assistance advertised in TV commercials and on bill boards, the insured is frequently faced with obstructionist tactics designed to wear down even the most stalwart of personalities. This at a time when a person is most vulnerable and frequently has limited financial capability.
Continue Reading...1-877-449-4700
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