I ran across an article in the National Underwriter publication, FC&S Bulletin, regarding a situation where the insured experienced a “slow down” in its debt collection operations after a lightning strike. The problem was discussed as follows:
Continue Reading...Many policies provide a route to the potential resolution of a claim via the appraisal process. Recently, I spoke with Umpires who handle appraisal cases for residential and commercial losses, and I learned more about what can go wrong during the process and suggestions on ways to prevent the common missteps that can delay or damage the appraisal process. The best practice tips below were kindly provided by well respected Umpires.
Continue Reading...When filing a bad faith lawsuit against a carrier, there are many defenses that a policyholder’s attorney can expect the insurer to assert. Those defenses that are asserted by insurers are assumedly those which are specific to the allegations asserted in the Complaint. Those defenses, however, do not affect the obligations of the insurer to promptly and fairly evaluate an insured’s claim. The Supreme Court of Kentucky in Farmland Mutual Ins. Co. v. Johnson, et al., 36 S.W.3d 368 (KY 2000) was faced with the insurer’s defense that the loss at issue was fairly debatable. The foregoing defense, however, does not absolve the insurance company of its duty to comply with the mandates of Kentucky’s Unfair Claims Settlement Practices Act (“KUCSPA”).
Continue Reading...Texas and Florida insurance companies wanting to preserve coverage disagreements and dispute appraisal awards have one thing in common--requests for itemized appraisal awards. Insurance policies have no provision for such itemizations. In construction practice, nobody accepts or places bids with the lowest line by line bid. Only the bottom line counts. Even in jury trials, the itemization of jury verdicts is far shorter than what the insurance companies are having their attorneys ask for in front of judges.
Continue Reading...Insurance defense attorney Janet Brown founded a valuable organization and conference for the windstorm insurance industry where ideas and lessons are shared every year. The 12th Annual Windstorm Insurance Conference will be held in Houston on January 24-27, 2011. For claims adjusters and those involved with hurricane or tornado losses, this is a "can't miss" event.
Continue Reading...Should Florida create a fourth state-run Insurance entity to cover sinkhole losses? This question was recently reported on by Julie Patel of the Sun-Sentinel. The question was raised during an Office of Insurance Regulation symposium held in Orlando. The attendees were primarily those in the insurance industry---insurance consumers are usually at work during the day.
Continue Reading...Let’s assume that your home suffered damage caused by a windstorm and the insurer initially denied coverage. You invoke the appraisal provision and the parties move forward with appraisal. In the end, the appraisal results in an award for damage caused by the windstorm. Some of you might think that the appraisal award is sufficient evidence to prove the insurer initially wrongfully denied coverage and violated its obligations to act in good faith. However, the Fifth Circuit dealt with this very issue, and ruled otherwise.
Continue Reading...With the five-year anniversary of Hurricane Wilma’s visit to Florida passing yesterday, our offices have been fielding a lot of questions. One frequent question has been, “what happens if a statute of limitations expires on a Saturday, Sunday, or legal holiday?” To answer that question, let’s first turn to the statute.
Continue Reading...The standard Business Income (And Extra Expense) Coverage Form CP 00 30 04 02 says, "We will pay for the actual loss of Business Income you sustain due to the necessary 'suspension' of your 'operations' during the 'period of restoration.'" Business Income is defined as:
Last week, Chip Merlin posted “Insurance Company Declares War on Public Adjusters.” In this post, you can see a letter sent to one policyholder of Sawgrass Mutual, a mutual insurance company owned by its members. The letter invited insureds to a special meeting where a vote would be held to determine whether policyholders would be precluded from hiring public insurance adjusters.
Continue Reading...I dedicated my posts these last few weeks to discussing how to obtain information on an insured’s prior claims or other insureds’ similar claims. There are a few other things that policyholders’ attorneys should keep in mind when seeking this kind of information through discovery in a bad faith case.
Continue Reading...Tom Guhl of Pictometry showed me some fascinating and useful photographic technology at the First Party Claims conference. His firm has a large photo image library which can show virtually any structure in the United States. We used to charter helicopters or planes to make aerial reproductions. This is a lot easier and much less expensive.
Nicole Vinson files a post every Saturday regarding stories about public adjusters. A number of public adjusters have asked me how Nicole determines who and what she is writing about. Since I was curious about the answer as well, I interviewed her and learned quite a bit about her methodology.
Continue Reading...One strategy insurance companies use to avoid bad faith liability is claiming that they reasonably relied on their experts’ reports to deny a claim. Texas law on bad faith states that an insurer breaches its duty of good faith when: (1) denies or delays payment of a claim for which liability is reasonably clear, and (2) the insurer knew or should have known that liability was reasonably clear. Therefore, insurance companies often argue that because their retained experts concluded that there was no valid insurance claim, liability was not reasonably clear and they should not be found liable for bad faith. Courts typically side with insurance companies on this issue, but sometimes the facts of a case require courts to doubt this argument, just as the Texas Supreme Court did in State Farm Lloyds v. Nicolau, 951 S.W.2d 444 (Tex. 1997).
Continue Reading...Ray Kirby of Childress Engineering spoke at the First Party Claims Conference regarding the practical and technical issues building ordinances and laws have on insurance claims. He provided me with an excellent paper, Insurance and Building Codes, which touches on some of the topics he spoke about in his presentation.
Continue Reading...I am at the First Party Claims Conference in Providence, Rhode Island. One of the beneficial aspects of going to conferences is meeting, discussing and debating the meaningful issues of insurance coverage and claims law with a variety of knowledgeable and experienced colleagues.
Continue Reading...Another interesting turn of events has taken place with Florida’s legislative-created insurer, Citizens Property Insurance Corporation, and the issue of whether it is immune from bad faith claims handling lawsuits. Recently, the First District Court of Appeals rejected Citizens’ request to stop a bad faith action against it from proceeding in the trial court. Citizens Property Insurance Corporation v. San Perdido Association, Inc., 2010 WL 3894497 (Fla. 1st DCA October 6, 2010).
Continue Reading...A recent IRMI article titled “Limiting the Interruption in Business Interruption” discussed the importance of considering payroll during the risk assessment phase of obtaining business insurance coverage. The forms regarding business income and ordinary payroll are hyperlinked for ease of use and understanding.
Continue Reading...On November 24, 1910, The New York Times ran an article titled “Committee Learns Insurance Secrets”. Curiously, I wondered what insurance secrets were being shared nearly 100 years ago.
Continue Reading...When pursuing a bad faith claim against an insurance company, a policyholder’s attorney will seek information that helps establish how the insurer failed to properly handle and/or pay the claim. Last week, I wrote about How to Discover Information about Unfair Practices in Other Insureds' Similar Claims and how that type of information can be helpful. This week, I would like to address the importance of requesting information about prior similar claims filed by other insureds. When faced with these requests, insurers usually object, claiming the requests are overly broad and burdensome. In this day and age, however, it becomes increasingly difficult for a carrier to assert such objections when taking into consideration the advances in technology and software that enable businesses, to maintain and organize a tremendous amount of information and pull it up with a push of a button.
Continue Reading...Could you imagine the outcry if the government forced you to waive legal rights to obtain needed services? Sawgrass Mutual is essentially doing that with its own customers---and the Office of Insurance Regulation and the new Consumer Advocate are doing nothing about it.
Continue Reading...During a recent mediation, my client was adamant that he was entitled to sufficient insurance money to repair his home. I informed him that his policy was an Actual Cash Value policy, rather than a Replace Cost Value policy, but my explanation was met with a blank stare. It then occurred to me that perhaps lots of people do not know the difference between the two. Therefore, I thought it might be helpful to explain how Texas courts have defined Actual Cash Value.
Continue Reading...When Kenneth Feinberg set up the protocol for distributing the funds to oil spill victims, he wrongly included geographic proximity as a consideration. This consideration directly conflicted with the Oil Protection Act, and many claims submitted by Florida businesses impacted by the oil spill were wrongfully denied. Thanks to Alex Sink, Charlie Crist, and Bill McCollum, geographic proximity is no longer a determining factor.
Continue Reading...Rule 69B-220.201 of the Florida Administrative Code sets forth the ethical requirements for Florida insurance adjusters. According to subsection (3), “The work of adjusting insurance claims engages the public trust. An adjuster shall put the duty for fair and honest treatment of the claimant above the adjuster's own interests in every instance.”
Continue Reading...Summer is officially over, but many folks around the country will glow year round with the help of some indoor rays and good Extra Expense Coverage.
Continue Reading...WDSU.com, News Channel 6 from New Orleans, recently reported the story of one policyholder in Louisiana who was assisted by a public insurance adjuster. The article, “Public Adjuster Can Help Insured Get Payments,” relayed the story of Mr. Henry Quintanila. Three rental units he owned were badly damaged by fire. The insurance company, which was not named in the article, paid less than $30,000.00 on the claim. Quintanila wasn’t happy, so hired Anthony Odeh’s public adjusting firm for a better resolution.
Continue Reading...Information regarding an insured’s prior claims or how a carrier handled other insureds’ similar claims is discoverable. Colonial Life & Accident Ins. Co. v. The Superior Court of Los Angeles County, et al., 647 P.2d 86 (Cal. 1982). I will post on both of these types of discovery in detail over the next few weeks. First, discovery to learn whether a carrier used unfair practices in similar claims by other insureds.
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The Florida Constitution provides for a Right to Privacy. An article by Julie Patel, of the Sun Sentinel, "What Does Your Insurance Company Know About You?" begs the question whether Citizens Property Insurance Corporation is violating the Florida Constitution. The article could have been entitled, "What Private Secrets is the Florida Government Telling About You if You Buy Insurance From It?"
Continue Reading...Merlin Law Group®, a firm focused on property insurance law and advocating for the policyholder both in and outside of the courtroom, is pleased to announce the addition of attorney Douglas L. Grose to its Tampa, Florida, office.
Continue Reading...In the case of Garcia v. State Farm Lloyds, 287 S.W.3d 809 (Tex. App.—Corpus Christi 2009, pet filed.), the Texas Court of Appeals reversed the lower trial court’s summary judgment ruling in favor of State Farm with respect to certain water damage. In Garcia, State Farm argued that the insureds’ failed to raise a fact issue because they did not demonstrate the amount they actually spent on repairs, and they failed to show that they spent more than the amount already paid by State Farm. The appellate court noted that although State Farm’s arguments were good, State Farm bore the initial burden to prove that no genuine issue of material fact existed with respect to the Garcia’s breach of contract claim.
Continue Reading...In Florida, the Florida Insurance Guaranty Association (FIGA), was created by statute to pay claims to policyholders if their insurers become insolvent. The FIGA Act, §631.54(3) defines a covered claim as:
Continue Reading...[A]n unpaid claim, including one of unearned premiums, which arises out of, and is within the coverage, and not in excess of, the applicable limits of an insurance policy to which this part applies, issued by an insurer, if such insurer becomes an insolvent insurer and the claimant or insured is a resident of this state at the time of the insured event or the property from which the claim arises is permanently located in this state.
Many of our clients come to our doors with perplexed looks on their faces and denial letters in their hands. Dizzied after a long battle with their carriers, which our clients seemed to have lost to purported words in their policies that they are presumed to have bargained for, they come to us for understanding and hoping that the policy they purchased is not a pamphlet full of meaningless words.
Continue Reading...United Policyholders recently published portions of Masood Khan’s interview with Amy Bach in its summer newsletter. Chip Merlin wrote about this interview in his post, “Greenspan Public Adjuster Interviewed About Unauthorized Public Adjusting”. Many of the readers posted comments in response to the information provided by Khan about non-public insurance adjusters adjusting losses for the policyholder. In addition to this insightful information, Khan answered a series of several questions about public insurance adjusting.
Continue Reading...Insurance policies often provide an insurance company with the right to repair the damaged property. The general rule is that when an insurer elects to repair the damaged property, the insurance contract is changed to a repair contract with no limit of liability. Accordingly, insurance companies rarely invoke this provision directly. Instead, many property field adjusters obtain bids from favored contractors, who promise to do the job for an estimated price, and then the adjusters subtly "steer" policyholders to the favored contractors. Whether the insurer's suggestion to repair using a favored contractor is more akin to electing the right to repair can be a source of dispute.
Continue Reading...In Plaintiffs are Entitled to the Claims File in a Bad Faith Lawsuit, I explained that an insurer’s claims file is discoverable in a bad faith lawsuit. I also wrote about how reserve information can reveal bad faith claims handling in Reserves Are Important in Insurance Coverage and Bad Faith Claim Disputes. While these are two important sources of information about an insurer’s claims handling conduct, there are many less obvious sources that should not be overlooked.
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