In Coupled Products, LLC v. Harleysville Ins. Co., No. 1:09-CV-349, 2011 WL 3101357 (N.D. Ind. July 25, 2011), the court said, “unfortunately, no.”
Continue Reading...Next Friday, the California Association of Public Adjusters will celebrate with founder Stan Kaufman, at their bi-monthly luncheon in Simi Valley. But it is Robin Kaufman, Stan’s daughter, who is making headlines. On July 7, the California Insurance Commisioner held a press conference. In the press conference, Insurance Commissioner Dave Jones advised California insureds to be prepared with evacuation plans and an inventory of personal belongings in case a wildfire should erupt. Jones warned that homeowners needed to be extra vigilant and make sure there is defensible space around their homes and property.
Continue Reading...In October 2009, a post on the Property Insurance Coverage Law Blog titled Florida's Third District Rules When a Bad Faith Claim Can be Filed Following Appraisal evaluated the case of State Farm Florida Ins. Co. v. Seville Place Condo. Ass’n, Inc., No. 3D08-3528, 2009 WL 3271300 (Fla. 3d DCA October 14, 2009). After a rehearing, the en banc Court withdrew its original opinion and issued a new opinion on July 20, 2011, dismissing State Farm’s writ of certiorari.
Continue Reading...It appears that insurance consumers are about to feel the first results of Senate Bill 408. News outlets are reporting that sinkhole insurance rates will skyrocket if Citizens Property Insurance Corporation rate hikes are approved.
Continue Reading...In many states that have addressed the issue, an insurance company is obligated to pay contractor overhead and profit as part of replacement cost coverage, regardless of whether the insured hires a contractor or pays overhead and profit to a contractor. In Mee v. Safeco Ins. Co. of America, 908 A.2d 344 (Pa. Super. 2006), policyholders brought an action against their insurer for bad faith breach of the insurance contract because the insurer failed to pay overhead and profit related to the insureds’ repair to their house. The insurer refused to issue payment for contractor overhead and profit without proof that the insured had actually hired a contractor. The Superior Court of Pennsylvania held, as a matter of law, that repair and replacement costs include overhead and profit where use of a contractor would be reasonably likely, and that the insured is entitled to payment for those items even if no contractor is used.
Continue Reading...Last week’s post introduced the mold exclusion commonly found in many all-risk policies. While last weeks post focused on a situation where mold damage was excluded, this week I am writing about a case where mold damage was covered, even though the policy at issue had a mold exclusion.
Continue Reading...Insurance contractors who write estimates for insurance companies with which they have close relationships have a conflict of interest. When contractors are not in league with insurers and they are making truly independent estimates they expect to complete without change orders, I find that the estimates are much higher and more liberal than when a contractor does not expect to do the repair job or knows he can write change orders at a later date.
Continue Reading...The statute of limitations issue arises in property insurance disputes from time to time, and was a particularly common issue resulting from the 2004 and 2005 hurricanes in South Florida. If parties disagree on the date the statute of limitations runs under a policy, policyholders may file an action seeking a declaration from a court. The Florida statute of limitations applicable to the 2004 and 2005 hurricanes is sometimes difficult to determine since it begins to run five years from the date of breach of contract by the insurer.
Continue Reading...The issue of whether a total cessation or a mere slowdown in productivity is required to trigger Business Income coverage is one of those questions that will most likely be defined in the policy. If not defined, courts will decide if the requisite elements are met for business income coverage. In my earlier post, The Shortcomings of a Total Cessation Requirements—Understanding Business Interruption Claims, Part 55, I highlighted how many courts follow the “total cessation” approach, but that many others will allow recovery under a “slow down” theory and discussed the limitations and implications of following a “total cessation approach.”
Continue Reading...California is a beautiful state. Unfortunately, it is plagued with many natural disasters. As a result, property insurance is an important and often used product.
Continue Reading...Last week, Julie Patel, of the Sun-Sentinel, continued her investigative reporting into insurance adjuster complaints in Florida. In the article, State seldom cracks down on insurance companies and their adjusters, Patel gives readers an inside look on the discrepancies between complaints against insurance companies and their adjusters and complaints against public insurance adjusters. The complaints discussed in the article were filed online with the Florida Department of Financial Services, which investigates the complaints.
Continue Reading...The Florida Insurance Consumer Advocate represents the public in a wide range of public forums that include health care panels, public hearings, rate filings, National Association of Insurance Commissioners (NAIC) Working Groups, and statutorily appointed boards or task forces. A long term government attorney, Robin Westcott, has been named as Florida's new Insurance Consumer Advocate. The Florida Department of Financial Services noted Ms. Wescott’s experience in a press release when she was named as Executive Director of the Medicaid and Public Assistance Fraud Strike Force:
Continue Reading...Ms. Westcott began her legal career in 1993 with the Florida Department of Insurance, Division of Rehabilitation and Liquidation. Robin served with the department until 2001 when she entered private practice. Robin returned to the public sector in 2002 with the Florida Agency for Workforce Innovation where she served as Assistant General Counsel and Counsel to the Florida Partnership for School Readiness. In 2004, Robin returned to the Office of Insurance Regulation where she is currently serving as the Acting Deputy Commissioner of Property and Casualty.
For this installment of Tallahassee Spotlight, we focus on a Senate member at the center of all property insurance discussions in the Florida Legislature. Senator Richter is the Chairman of the Senate Banking and Insurance Committee. All property insurance legislation must come through his committee at some point. In addition to serving as Chairman, Senator Richter has personally sponsored the most significant property insurance bills over the last few years:
Following the string of recent rulings I noted in Sinkhole Neutral Evaluation Unconstitutional and 2006 Sinkhole Statute Unconstitutional, yet another Florida trial court judge has found the neutral evaluation statute unconstitutional, this time Circuit Judge Martha Cook.
Continue Reading...Late last year, Colorado’s appeals court determined that insurers have a good faith duty to communicate-- not only with the insured, but also with anyone it was reasonably aware legitimately needed information pertaining to the handling of an insured’s claim.
Continue Reading...On Friday, July 15, 2011, the Texas Department of Insurance Commissioner issued a ruling stating that the Texas Windstorm Insurance Association (TWIA) had “violated the insurance laws of the State of Texas….” Specifically, the Texas Department of Insurance Commissioner found that TWIA violated state law by deceiving and taking advantage of TWIA policyholders after thousands of legitimate claims were denied or underpaid. The Commissioner concluded that “such conduct constitutes grounds for disciplinary action.”
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Beginning July 29, 2010, the Crown Fire near Palmdale, California, raged for more than five days, burning brush of approximately 14,000 square acres. Although approximately 2,300 structures were threatened, luckily, only four homes and five outbuildings were completely destroyed by the fire.
Continue Reading...When Lamar Advertising Company suffered damage from Hurricanes Ike and Gustav, it did what any business would do and filed a claim with its insurance company, Liberty Mutual. A significant part of Lamar’s claimed damages were to outdoor advertising signs, or billboards, that were scattered throughout the country. While Liberty Mutual admitted that losses from Hurricanes Ike and Gustav were covered under the policy, Liberty Mutual denied Lamar’s claim for billboard damage on the basis that the billboards were located at “unscheduled locations” that had not been properly reported to the insurance company. Just this month a federal court in Louisiana agreed with Liberty Mutual in Lamar Adver. Co. v. Liberty Mut. Fire Ins. Co., No. 10-620, 2011 WL 2648483 (M.D. La. July 6, 2011).
Continue Reading...Ownership of business personal property is required to trigger coverage and payment after a loss under most business income loss provisions. Notwithstanding this general rule, an insured may recover for a loss without necessarily having title to business personal property, so long as the insured can establish that it had an insurable interest in the non-owned property. The “insurable interest” doctrine, however, has its limits and it is usually a fact specific issue.
Continue Reading...Next month, Stan Kaufman will be honored for his hard work and dedication as the founding public insurance adjuster of CAPIA, the California Association of Public Adjusters.
Continue Reading...The National Flood Insurance Program (NFIP) is facing a September 30th deadline. That is the date the temporary extension runs out on the Flood Program. Unless a bill that reauthorizes the program passes, the NFIP could expire. But this week, the House of Representatives passed H.R. 1309 (The Flood Insurance Reform Act) by an overwhelming majority.
Continue Reading...Ed Rust, Jr., State Farm's Chief Executive Officer, must not have liked reading the headlines following a defamation verdict in favor of an Indianapolis restoration contractor that State Farm accused of fraud.
Continue Reading...The past few weeks, I wrote about the evolution of the all-risk policy from some of the earliest fire insurance policies and explained that “all-risk” does not mean all loss. This week I want to focus on one of the common exclusions found within all-risk policies – the mold exclusion.
Continue Reading...When policyholders suffer a property loss and their insurance adjuster confirms coverage for some or all of the loss, many policyholders will hear the following from their adjuster: “We [the insurer] have a Preferred Service Providers list of recommended contractors you can choose from, all of which have been vetted for quality and reliability. You can also choose your own contractor to perform the repair work, however, if you choose a contractor from our Preferred Service Providers list, we [the insurer] will guarantee the work and arrange repairs if it’s not completed properly.”
Continue Reading...Many different people read this blog for many different reasons. I was in Dallas for a deposition involving a Hurricane Ike claim, where my client's public adjuster was being deposed. The opposing attorney, Robert Radcliff, of Langley Weinstein, is a very skilled, well prepared and creative counsel for the insurance company.
Continue Reading...Before the end of the last Texas legislative session, the Texas legislature ended their Texas Windstorm Insurance Association (TWIA) reform stalemate and passed a comprehensive reform bill it hopes will better prepare TWIA for future catastrophes. The bill was sent to the governor, but he has yet to sign it.
Continue Reading...Most people never think about their insurance policy until they are forced to make a claim. Once a claim is filed, insureds may find it is difficult to agree with the insurance company on the scope of and valuation of damages. In many cases, insureds find themselves in a dispute with the insurance company and are unsure how to proceed because of the large disparity between the damages claimed and the depreciation calculations provided by the insurer.
Continue Reading...At last week’s FAPIA conference, the torch passed from President David Beasley to newly elected President Pat Cuccaro. The audience leapt from their chairs to give David Beasley a standing ovation and to salute his work over the past year.
Continue Reading...Almost twelve years ago, Florida’s Third District Court of Appeal published its opinion in U.S. Fid. & Guar. Co. v. Romay, 744 So. 2d 467 (Fla. 3d DCA 1999). As of the writing of this post, Romay has been cited in no less than 44 published court opinions. Most of these cases, like the recent Citizens Prop. Ins. Corp. v. Gutierrez, 59 So. 3d 177 (Fla. 3d DCA 2011), cite the language from Romay which requires that “[t]he insured must comply with all of the policy's post-loss obligations before the appraisal clause is triggered.” Unfortunately, this statement is only half of Romay. This is the half that focuses on the insured’s obligations. There is another side of Romay that focuses on the insurer’s obligations, and although this other side is not often discussed, it recently found its way into a published opinion from the United States District Court for the Southern District of Florida in 200 Leslie Condo. Ass’n, Inc. v. QBE Ins. Corp., No. 10-61984-CIV, 2011 WL 2470344 (S.D. Fla. June 21, 2011).
Continue Reading...Contingent Business Interruption coverage is usually an extension of the business interruption coverage available in most commercial property policies. It provides the insured with benefits to cover lost profits and extra expenses resulting from damage to a third party’s property. In today's integrated business world, most businesses are highly dependant upon others for product, sales, and even customers. As businesses globalize, they become vulnerable to disasters across the globe. Even now, many businesses are waiting to realize the extent of the contingent business loss that will result from the tsunami and nuclear disasters in Japan.
Continue Reading...Insurance companies spend millions of dollars training and supervising their adjusters. Insurance claims management calls for this type of technical oversight to create "best practices" in claims handling so that "optimal" outcomes are obtained. While I have been critical of many insurer claims handling techniques which promote the "optimal" result -- to unfairly pay less than what is owed under the policy, the public adjusting industry writes little about its "best practices."
Continue Reading...Most bad faith cases deal with an insurance company’s duty to the insured after a loss occurs and a claim is filed. Although a case out of the Appellate Court of Illinois, Second District, is not a bad faith case, it addresses an allegation that the carrier breached its duty to the insured by selling insufficient insurance to the homeowners. Did the Illinois Appellate Court determine that an insurance company owes an insured a duty of good faith before the policy is issued? Can a subsequent bad faith case arise from such an allegation?
Continue Reading...Many insurance companies are doing everything they can to not pay claims. One obvious method is convincing the Florida Legislature to enact laws that limit circumstances under which they must pay a loss.
Continue Reading...There are few issues that resonate with voters in the state of Florida like property insurance. If you’re one of Florida’s eight million policyholders, you know that it is expensive to live in our state – that feeling is reinforced every time you open your property insurance bill. Unfortunately, many of the legislators in Tallahassee don’t understand that feeling – Many spend more time talking to the powerful insurance lobby than they do real Floridians. There are several, however, who consistently refuse to bow to the special interests.
Continue Reading...The past two weeks, I wrote about how all-risk policies developed from the original fire insurance policies. Though I plan to write about the most common exclusions that consumers encounter in all-risk policies, I want to clarify exactly what one can expect from an all risk policy in more general terms.
Continue Reading...In Colorado, actions for common law bad faith require the insured to prove unreasonable denial or delay in payment of a claim and that the insurer knew or recklessly disregarded the unreasonableness of its actions. Colorado’s 2008 prompt payment statute, C.R.S. § 10-3-1115, carves out a standard different from common law bad faith, based only on reasonableness:
Continue Reading...[A]n insurer’s delay or denial was unreasonable if the insurer delayed or denied authorizing payment of a covered benefit without a reasonable basis for that action.
As many of you know, most homeowners insurance policies provide coverage for more than just damage to your home. For example, most policies provide coverage for injuries sustained by guests or strangers as a result of your actions. But let’s say you are injured at your neighbor’s house. Can you sue your neighbor’s insurer? The Texas District Court of Appeals in Corpus Christi recently delivered an informative opinion which detailed when an injured person can sue his neighbor’s insurance carrier.
Continue Reading...On Friday of last week, Florida’s Second District Court of Appeal followed the lead of Florida’s Third District in requiring an evidentiary hearing before an appraisal can be compelled if the insurer alleges failure to comply with post-loss conditions.
Continue Reading...Business Income policies have multiple coverages, all of which may be all triggered after a single occurrence or event. In these cases, insurers often argue that the coverages run concurrently. Depending on the language of the provisions at issue, however, a policyholder may be entitled to “stack” coverages and recover the full amount owed under each, capped at the amount of the loss.
Continue Reading...The Florida Office of Insurance Regulation “OIR” is required by Florida Statute §624.313 to publish statistics and ratios on the complaints consumers submit against insurance companies. Its primary responsibility is regulation, compliance and enforcement of statutes relating to the business of insurance and the monitoring of industry markets. Florida Statute requires the OIR to annually publish several categories of information about the insurance companies doing business in Florida. When the 2010 report was released in February 2011, the report tabulated data on Consumer Complaints against insurance companies from complaints lodged in 2009 only.
Continue Reading...Over the course of the last few weeks in a series of posts titled “’Bama Bad Faith – An Alabama Case Evaluates a Number of Bad Faith Issues,” I evaluated the factual and legal issues analyzed by the Alabama Supreme Court in Jones v. Alfa Mutual Ins. Co., 1 So.3d 23 (2008). The Alabama Supreme Court explained that the allegations against Alfa included both a “normal” bad-faith claim and an “abnormal” bad-faith claim. Last week I discussed the “normal” bad faith claim; this week I am writing about the “abnormal” bad faith claim.
Continue Reading...Another Florida Circuit Court has ruled that the neutral evaluation section of the Florida Sinkhole Statute is unconstitutional. Similar to the Order noted in Sinkhole Neutral Evaluation Unconstitutional, Hillsborough County Circuit Court Judge James Arnold's Opinion found:
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