While giving a speech last week on the new Florida legislation, one of the frequent and important questions posed to me by the audience concerned the dates various parts of the law become effective.
Continue Reading...There have been many discussions recently regarding Governor Scott’s signing of SB 408 into law on May 17, 2011. The bill changed many important aspects of Florida’s property insurance laws. This post will focus on how SB 408 affects hurricane claims in Florida.
Continue Reading...Time is often the most important and controversial element in evaluating a business income claim. Determining an adequate Period of Restoration is sometimes as counterintuitive as solving a quantum mechanics formula. In the book, Business Interruption – Coverage, Claims and Recovery, 2nd Ed. (2011), the authors illustrated a real world challenge in determining an adequate Period of Restoration and a savvy business owner that made the most of his time.
Continue Reading...When assisting policyholders with a claim, a thorough review of the policy or policies of insurance that cover the property is absolutely necessary. Having as much information as possible about the insurance company’s coverage and evaluation will aid in determining the future of a claim.
Continue Reading...Odds are that if you forget to pay a premium and your insurance lapses, that is the exact time catastrophe strikes. I have a theory that the more one insures against a catastrophic event, the less likely the event will occur.
Continue Reading...The Supreme Court of Alabama addressed a number of bad faith issues in its decision on Jones v. Alfa Mutual Ins. Co., 1 So.3d 23 (2008). The decision is too lengthy to evaluate in a single post, so this week I will begin with the factual background of the case. The legal issues will be addressed individually over the course of the next few weeks.
Continue Reading...The most significant legislation involving Florida public adjusters is the limitation of fee compensation in Citizens claims. As quoted from Florida Legislative Update for Public Adjusters,
Continue Reading...For any claim filed under any policy of Citizens, a public adjuster may not charge, agree to, or accept any compensation, payment, commission, fee, or other thing of value greater than 10% of the additional amount actually paid over the amount that was originally offered by the corporation for any one claim.
Last week, I wrote about how advertisements can help prove the necessary relationship in an agent negligence case. While establishing the relationship is very important, successful agent negligence cases must go one step further and establish that the agent failed to perform one of the duties required. Collins v. State Farm Ins. Co., 2007 WL 1296240 (E.D. La. Apr. 30, 2007) highlights this issue.
Continue Reading...On May 11, 2011, SB 408 was presented to Governor Scott, who signed the legislation into law on May 17, 2011 (Chapter Law 2011-39). The legislation became effective upon signing, with the exception of sections which specifically stated a later effective date. SB 408 is a sweeping piece of legislation that proposes various changes to Florida’s property insurance laws. The purpose of this analysis is to discuss the important changes relating to public insurance adjusters, claims handling, and sinkhole laws. This analysis will not discuss every change contained in SB 408.The page numbers in parentheses refer to the page numbers in Chapter Law 2011-39.
Continue Reading...The first chapter of my Insurance Law textbook from law school was about the history of insurance. It set the stage for the next chapter on the insurable interest, one of the fundamental principles in insurance law. The term “insurable interest” is actually quite self-explanatory. In order to obtain insurance on something, one must have some interest in that thing that could be covered by insurance. Requiring an insurable interest is one way of negating moral hazard. Wikipedia currently defines “moral hazard” as occurring when, “a party insulated from risk behaves differently than it would behave if it were fully exposed to the risk.” To use a cliché, moral hazard could be phrased as having everything to gain and nothing to lose.
Continue Reading...Most children don't grow up dreaming they will be insurance agents or involved in the insurance business. I have read many insurance industry materials that have tried to teach bright and talented collegians that the insurance business is an important, fulfilling and financially rewarding career. Corey Harris forwarded me an article indicating that there are some other perks for those in the insurance industry that are not mentioned in the recruitment materials.
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:
This week, Claims Journal reported on the 53rd Weather Reconnaissance Squadron. They told the story of the 1944 bet that changed the way we receive severe weather data and warnings.
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Some things just hit emotionally, leaving me wishing they weren't true. I felt this way after learning of Judge Senter's death. I recently wrote about his retirement in ATribute to Hurricane Katrina Judge Senter. It doesn't seem fair that he could not have more fully enjoyed his retirement.
Continue Reading...As I mentioned last week in Bad Faith Asserted by Excess Insurer, there are certain circumstances in which an individual or entity other than the policyholder can assert a bad faith claim against an insurance company. This situation recently arose before the Washington Court of Appeals in Unigard Ins. Co. v. Mutual of Enumclaw Ins. Co., 250 P.3d 121 (April 4, 2011) in an appeal regarding prejudgment interest, jury instructions and clean up costs.
Continue Reading...I spent yesterday in beautiful Des Moines, Iowa, watching and aiding Chip Merlin in a deposition of an insurance agent in an agent negligence case. On a cloudless day that had highs in the low 70’s, I was stuck in a third floor office suite for a nine or ten hour deposition marathon. But the lesson I learned more than made up for missing out on the great weather. Chip has mentioned before that establishing duty is the key to agent negligence cases, and he showed that gathering and using advertisements distributed by an agent or agency can go a long way to do just that.
Continue Reading...Tucked into many of your insurance policies, you will find an appraisal provision which likely provides that if the insured and the insurer cannot agree to the amount of damage, either party can submit the dispute to appraisal. As discussed in my previous posts, appraisal is supposed to provide an inexpensive and efficient manner of resolving insurance disputes. However, even after an appraisal award has been rendered, the underlying dispute is not necessarily extinguished. After an appraisal award has been rendered, either party can attempt to overturn it in court. But what does it take to overturn the appraisal award?
Continue Reading...I saw the most beautiful and most tragic sights from the air yesterday. The space shuttle was clearly visible, like a flying yellow fire torch, above the clouds in the bright morning blue sky. As it came through the cloud cover, Endeavor was an inspiring sight.
Continue Reading...On May 11, 2011, the Florida Fourth District Court of Appeal released an opinion addressing a policyholder’s claim for prejudgment interest following an appraisal award. Green v. Citizens Property Insurance Corp., 2011 WL 1775731 (Fla. 4th DCA 2011). This blog continues the discussion from my March 2011 post, Recent Third District Court of Appeal Ruling Regarding Entitlement To Prejudgment Interest Following An Appraisal Award In Florida, as well as Chip Merlin’s post from a couple weeks ago, Prejudgment Interest Following A Wrongful Denial.
Continue Reading...The recent tornadoes in Mississippi, Alabama, Georgia and Tennessee caused an unprecedented swath of destruction, and left hundreds of people dead or injured. The tornados completely demolished thousands of homes and damaged thousands of others. In the city of Tuscaloosa alone, there are reports of 200-mph winds which swept homes off their foundations.
Continue Reading...Insurance carriers are quick to deny payment for services rendered by accountants or consultants in connection with the presentation of a business income claim. The number one reason given not to pay is that there is no specific language in the policy obligating an insurer to pay for such expenses. In a previous post, Passing the Accounting Bill - Understanding Business Interruption Claims, Part 19, I explained that a careful reading of the applicable coverage forms may support payment for these expenses.
Continue Reading...Typically, when I think of a bad faith claim against an insurance company, I think of a lawsuit filed by a policyholder. Bad faith, however, can also be asserted against an insurance company by someone other than a policyholder, in certain circumstances. The Appellate Division of the Supreme Court of New York recently evaluated such a circumstance in the unreported decision in Federal Ins. Co., etc. v. North American Specialty Ins. Co., et al., 2011 NY Slip Op 02724, 2011 WL 1236131 (N.Y.A.D. 1 Dept. April 5, 2011).
Continue Reading...Over the last few weeks, I have written about agent negligence cases. This week, I will continue, looking at a New York decision, Lewiarz v. Travco Ins. Co., 2011 NY Slip OP 002094, N.Y. Sup., App. Div., 3rd Dept.; 2011 N.Y. App. Div. LEXIS 2069 ( March 24, 2011). Lewiarz tells the story of insureds who nearly ran into a statute of limitations problem.
Continue Reading...Senate Bill 408 was presented to Governor Rick Scott on May 11, 2011. Governor Scott has 15 days to act on the legislation. Therefore, now is the time to contact his office to express your opinion on the bill. The bill is large and makes a lot of changes to current law.
Continue Reading...The Windstorm Insurance Network® held its regional symposium in Atlanta yesterday. I was the moderator of a panel on layered insurance programs. My panel included Harvey Goodman, of Adjusters International and Goodman, Gable and Gould, John Intondi of AXIS and Matt Litsky from Phelps Dunbar. These are some very prominent and experienced professionals. After going over a working breakfast review with them, I felt confident about our presentation despite the dryness of a very complex insurance coverage topic.
Continue Reading...The Texas Supreme Court displayed its strong preference for appraisal this past Friday, May 6, 2011. In In re Universal Underwriters of Texas Ins. Co., No. 10-0238 (Tex. May 6, 2011), the Court stated what a party must show to successfully argue that another has waived its right to appraisal.
Continue Reading...Last week, in Florida District Court of Appeal Says “Gamesmanship” By Insurance Counsel Warrants a New Trial, Shaun Marker wrote about insurance counsel who found themselves in hot water after making improper legal arguments in court during a hurricane insurance claim trial. This week I continue in that vein with another recent case in which State Farm counsel faced a strong rebuke from a Louisiana federal court after making misleading legal arguments to the court in a separate hurricane insurance case.
Continue Reading...Fulcrum Inquiry, an accounting firm in Los Angeles, California, prepared a very helpful list of practice pointers that is worth sharing in order to make the business income claims process more effective and less frustrating for all. I frequently employ most of these methods with great success and strongly advocate for a transparent and thoughtful claims process that helps all interested parties achieve their claim goals.
Continue Reading...New York policyholders, Thomas Woodhams and Charlene Connors, filed a claim for replacement cost damages arising out of a fire loss, but Allstate refused to pay the replacement figures. The policyholders brought suit, but the case was dismissed. Now on appeal, United Policyholders filed an amicus curiae brief on behalf of the insureds.
Continue Reading...An important aspect of trial is the preparation of jury instructions. In Bertelsen v. Allstate Insurance Company, No. 25647, 2011 WL 1320525 (S.D. April 6, 2011), the Supreme Court of South Dakota evaluated how an improper jury instruction can affect an insured’s bad faith case against an insurance company.
Continue Reading...Last week, a very able insurance defense attorney from Florida's panhandle, Robert Palmer, brought Citizens Prop. Ins. Corp. v. Mallett, 7 So3d 552 (Fla. 3d DCA 2009), which involved prejudgment interest, to my attention. This case is not favorable to policyholders, especially in Northern Florida, and challenges a longstanding case, Independent Fire Ins. Co. v. Lugassy, which provides for prejudgment interest following denial.
Continue Reading...Over the past several weeks, I have written about agent negligence cases in various jurisdictions. Chip Merlin touched on the subject as well in his recent post, Establishing Duty is the Key to Agent Negligence Case. Because establishing the duty is so important, I want to take a look at another case that illustrates an insured’s failure to meet their burden.
Continue Reading...Most – if not all -- insurance policies contain a cooperation provision stating that a policyholder must cooperate when making an insurance claim. I have often found that insurance companies like to argue that they cannot properly evaluate the damages because a policyholder has violated the policy by not cooperating during the investigation. In fact, I am currently responding to that very claim in a case where the policyholder has allowed the carrier access to its property more than 50 times! So that got me thinking, under Texas law, what does it mean to cooperate with respect to insurance claim investigations?
Continue Reading...Law in its basic definition is a system of rules and ethical guidelines, usually enforced through a set of institutions. It shapes various facets of society in numerous ways and serves as a social mediator of relations between people and corporate entities. So what happens when one party to a transaction does not uphold their end of the bargain? What happens when the party seeking to pull the rug out from the other is counsel for an insurance company during litigation involving a hurricane claim? You get a scathing opinion like the one last week in Central Square Tarragon, LLC v. Great Divide Ins. Co., No. 4D09-4795, 2011 WL 1563136 (Fla. 4th DCA April 27, 2011).
Continue Reading...It is often said that the law is like a jealous mistress; it requires a long and constant courtship. In Evans v. LaFayette Ins.Co., No. 06-6783, 2007 WL 4545883 (E.D. La. Dec. 18, 2007), an insurance company refused to extend business income coverage to lawyers that knew not to disappoint their jealous legal practice. A law office in Louisiana sustained property damages during Hurricane Katrina, causing the office to completely shut down for several weeks. The insured law firm also had offices in Colorado, Texas, and North Carolina, which were also listed as insured premises of the policy in question.
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