Last week I wrote about the smog, smoke, vapor, or gas exclusion and gave an example of how some courts hold that invisible vapors are not included in the common definition of “smoke.” As promised, this week’s post illustrates that other courts feel invisible vapors are included in the definition of “smoke.”
Continue Reading...In nearly every bad faith case filed against an insurance company, the policyholder serves the insurer with discovery requests demanding a copy of the claims adjustment file. Often, the insurer’s lawyers produce some of the claims file, but object to disclosure of any documents, emails, etc., that were sent to or from an attorney. In many cases, insurers hire attorneys to perform portions of the investigation and adjustment, so they can argue that they do not have to disclose these claims file documents. However, Colorado courts have held that no work product or attorney client privilege applies where a lawyer performs adjustment activities related to the policyholder’s claim.
Continue Reading...The East Coast has been hit hard over the last week. Within the one week, Virginia was hit with a 5.8 magnitude quake and Hurricane Irene. Although the Virginia-based earthquake may seem small to those who reside on the West Coast, its mere occurrence should be a reminder to those living on the West Coast that unexpected earthquakes can happen at any time and that earthquake preparedness is a necessity. The East Coast earthquake has and should raise awareness for home and business owners alike. It’s time to assess our needs and make sure there’s adequate insurance.
Continue Reading...Earlier I wrote a post about the Texas Windstorm Insurance Association (“TWIA”) considering raising rates by 5%. Well, TWIA made it official: rates will go up 5% next year for thousands of homeowners covered by the state’s storm insurer of last resort.
Continue Reading...Hurricane Irene caused significant infrastructure damage. Here is a picture of the damage caused to a road in Puerto Rico. There are still many roads that are unserviceable as thousands of people and businesses grow increasingly anxious to resume normal business activities.
Many mortgage contracts include provisions that permit the lender to purchase insurance to cover the mortgaged property at the borrower’s expense if the borrower fails to obtain their own insurance on the property. This lender-placed insurance is often colloquially referred to as “force place” or “force placed” insurance. Aside from common questions regarding the usually high cost of lender-placed insurance, a question that often arises under these policies is who is entitled to receive policy benefits if there is a covered loss? In Barrios v. Great American Assurance Co., No. H–10–3511, 2011 WL 3608510 (S.D. Tex. Aug. 16, 2011), the property owners found out the hard way that they were not entitled to policy benefits.
Continue Reading...Hurricane Irene has caused a considerable amount of structural and infrastructure damage as it pummeled the Caribbean and the Eastern seaboard of the United States. Sadly, Hurricane Irene also took some lives along its way and has left millions of people under water and without power.
Continue Reading...Hurricane Irene insurance claims will be the talk of the insurance adjusting community for awhile. Ruck Deminico, the Merlin Law Group Knowledge Manager has put together our first Merlin Guide for public adjusters in North Carolina which is available here.
We will have more information regarding insurance claims handling along the eastern seaboard and specific information regarding National Flood Insurance claims.
By the time you read this post, policyholders along the East Coast will likely be suffering damages caused by Hurricane Irene. As so often noted on this blog, being prepared for major catastrophes means making sure your family is safe, your property is secure, and that you have good insurance coverage.
Continue Reading...Many policyholders are surprised to find out they are without coverage after a loss because of a condition that existed at the time the insurance contract was formed. Insurance companies have many claims personnel that may overlook a pertinent issue during the application process and others take the premiums knowing a claim can be denied based on that condition. The doctrines of waiver and estoppel may be able to afford coverage in those circumstances and rectify a truly inequitable result.
Continue Reading...I always find it fascinating when the business interests in this state complain about increased taxes and fees and then turn around and attempt to impose the same on their customers. Though I understand why trade groups like the Florida Chamber of Commerce and the Associated Industries of Florida put the interests of businesses above those of consumers, I do not understand how they can, in good faith, offer arguments so rife with hypocrisy.
Continue Reading...Continuing my breakdown of common all-risk insurance policy exclusions, I turn this week, to the smog, smoke, vapor or gas exclusion. While one might think that this type of exclusion would apply only to industrial or commercial properties, it can apply to homeowners’ claims as well, and it is important for all policyholders to understand.
Continue Reading...Damage to or loss of a home is a devastating experience for policyholders. The stress, time and expense in preparing the insurance claim and attempting to negotiate with an insurance adjuster can be overwhelming. Homeowners who have suffered a large loss spend significant time away from work, family and other commitments—dedicating that time instead to attempting to provide the insurer with the extensive documentation it requires before payment of policy benefits. This is especially true when the insurance company is disputing some aspect of coverage, disputing the value of lost personal property, or denying payment of additional living expenses.
Continue Reading...Gene Veno forwarded two videos made by roofing contractors and asked us to comment on them. The roofing contractors are advertising their services for insurance claims. Here they are:
Continue Reading...We live in a very interdependent world. Even manmade or natural disasters which happen far away from us geographically can cause economic disasters at home. In both business and social settings, the world is a much smaller place than it was ten years ago. We must now take this into account when preparing for disasters so that the impact is mitigated.
Continue Reading...Andy Rooney once said that “nothing in fine print is ever good news.” At times we are held accountable to what is stated within fine print, and we cannot claim that we did not read it as a defense. Citizens Property Insurance Corp. v. European Woodcraft & Mica Design, Inc., a recent Florida case involving a limitation on an insurance agent’s authority to bind coverage for the insurer, demonstrates this harsh reality.
Continue Reading...The standard Commercial Property Form (CP 00 10) typically excludes coverage for damages to business owned vehicles. The form states, in pertinent part:
Continue Reading...Vehicles, Aircraft, and Watercraft—We do not cover vehicles or self-propelled machines (including aircraft or watercraft and their motors, equipment, and accessories) that are:
a. required to be licensed for use on public roads; or
b. operated principally away from the described premises.We do cover vehicles or self-propelled machines you manufacture, process, warehouse, or hold for sale. However, this does not include autos you hold for sale. We also cover rowboats or canoes out of water at the described premises.
Last week, I posted the case of White v. State Farm fire & Casualty Company. In this Michigan case, the appellate court ruled that a public adjuster can be an independent appraiser pursuant to the Michigan Insurance Code.
Continue Reading...In last week’s post titled Does an Insured Have to Wait to Pursue Bad Faith? I explained the facts of Brethorst v. Allstate Property and Casualty Insurance Company. This week I will begin a discussion of the legal issues in this case.
Continue Reading...The mark of any good legislator is that he or she understands the problems facing their constituents and has the inclination to do something about it. Our latest installment of Tallahassee Spotlight led us to Representative Frank Artiles (R – Miami), who comes from a district where few issues are more salient than those involving the complicated property insurance market. Given his intimate knowledge of public adjusting, Representative Artiles lends a refreshing perspective on these issues in a legislature filled with folks who have had little interaction with policyholders in their hour of need. This unique background has served him well in his short time in Tallahassee.
Continue Reading...Ferocious hurricanes most often strike the United States in late August and September. Tropical waves and weather disturbances are commonplace this time of the year. Each could potentially become dangerous and threaten the United States. People should check their hurricane preparedness plans for last minute preparation. The way I look at the weather map, there could be hurricanes on the way in the next eight days, if not sooner.
Continue Reading...Courts are often confronted with the question of what constitutes a “vacant” or “unoccupied” building within the meaning of an exclusionary provision in an insurance policy. To answer this question, courts compare the term “vacant” with the terms “occupied” or “unoccupied” as they are used in the exclusionary provision.
Continue Reading...The third annual First Party Claims Conference is coming soon. Its website notes:
Continue Reading...FPCC is a dynamic two-day educational event for professionals from all aspects of the first party property insurance claims community. Offering 40 nationally recognized speakers, sponsors and exhibitors, and a minimum of 12 continuing education credits, FPCC provides high-quality education sessions and valuable networking opportunities for a reasonable cost to the first party claims community. Nearly 250 insurance professionals attended FPCC 2010, and attendance at FPCC 2011 is expected to be even greater!
Tuesday afternoon, I joined 250 fellow Floridians in the bright sunshine protesting against extraordinary rate hikes allowed by Florida’s most recent insurance legislation. Here is a picture of me with Florida Representative Richard Corcoran at the protest:
Recently, I wrapped up the discourse of mold exclusions commonly found in all-risk policies. This week I am writing about another extremely common exclusion: the “wear and tear” exclusion.
Continue Reading...Scott Johnson, Executive Director of the Florida Association of Insurance Agents, has called me out for allegedly being on the wrong side of an insurance issue. In his post, CITIZENS SINKHOLES…Yet Another Look!, he stated in part:
Continue Reading...And so I’ve made overtures to my friend Chip Merlin, the founder of the Florida Association of Public Insurance Adjusters (FAPIA). He also employs Sean Shaw, who has gone from advocating for consumers to advocating for public adjusters.
I know this is a challenge; after all, public adjusters are the only real winners in this deal. But, my prayer is that Chip will do as he’s done when we’ve worked together in the past; simply examine the evidence a little more closely to see if there’s room for a different conclusion. Maybe ask a few questions. Seek a few clarifications. Try to find out, as I have, what’s best for the majority of consumers.
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While we wait to see if Chip Merlin’s mind is made up or not, and thus whether Sean Shaw may rethink his stance as well here, again, is the exchange between myself and Ms. Stevak.
Texas has good consumer protection statutes. The problem is that Texas case law makes it difficult to enforce many of them or delays the protections they offer. A recent case, In Re Loya Insurance Company, No. 01-10-1054 (Tex. App. - Houston [1st Dist.] August 11, 2011), provides an example.
Continue Reading...Most property insurance policies include provisions that void coverage if the policyholder commits fraud or some form of misrepresentation regarding the insurance. In each jurisdiction, there is typically a body of case law that further defines when misrepresentations or fraud will void coverage. For example, some states require an intentional misrepresentation, while others consider an innocent mistake sufficient.
Continue Reading...Contingent business coverage is a type of business interruption coverage intended to protect the “dependent business” from an external business income exposure. There are four (4) types of dependent business ISO endorsements:
In June of 2008, Steven and Gail White’s Farmington Hills, Michigan, home was severely damaged by fire. The White’s insurance company, State Farm, performed a valuation of the fire damages, but there was a disagreement between State Farm and the Whites regarding the amount of the loss. The policyholders hired Jeffery Moss, of Associated Adjusters Inc., as their public insurance adjuster. When the parties could not agree on the amount of loss, the claim was put into appraisal. Each party was to name an appraiser to work on the panel with an umpire to determine the amount of the claim. Jeffery Moss was named as the homeowners’ appraiser, but State Farm objected to Moss and refused to go through the process with him. According to the court opinion, the Insurance Code details the appraisal process in Michigan, but the portion of State Farm’s policy which outlined the appraisal process was not inline with the insurance code.
Continue Reading...A recent decision from the Supreme Court of Wisconsin addresses an issue that has come up frequently in bad faith litigation across the country: does an insured have to wait for a resolution of the breach of contract case against the insurance company before pursuing a bad faith action? Because the Court’s ruling is a bit lengthy, I will evaluate the Court’s ruling in more than one post. Let’s start at the beginning…
Continue Reading...Who needs an insurance agent when a car manufacturer will give you auto insurance for free? Washington and Oregon insurance regulators have approved General Motors’ sales promotion which offers "free auto insurance." General Motors is hoping to lure buyers by offering a free one-year policy to customers who purchase or lease new cars before September 6, 2011. Purchasers who decide not to accept the "free auto insurance" and find their own policy get no discount for doing so.
Continue Reading...On April 19, 2011, I wrote a blog asking Chief Financial Officer Jeff Atwater to take a stand on Senate Bill 408. Unfortunately, we didn’t hear much from CFO Atwater’s office during the debate on 408. In fact, the little we did hear appeared to be regurgitation of industry talking points about “fraud” and “cost drivers.” When SB 408 was finally signed into law in May 2011, the CFO remained silent as to the potential impacts on consumers and industry. In June, we heard nothing – in July, still nothing. However, on August 2, 2011, we finally heard from the CFO’s office. During a cabinet meeting, CFO Atwater asked the following question, "There is the reality [that] there are mortgage players who want sinkhole coverage…How does a Floridian go from paying $350, $450 a year to $3,000, $4,000 a year?"
Continue Reading...Before August 2008, property policyholders in Colorado who were wrongfully denied insurance benefits largely relied on lawsuits alleging claims for breach of contract, breach of the covenant of good faith and fair dealing (the common law tort of bad faith), and requests for exemplary damages as a means of redress against their insurance companies. In August 2008, Colorado House Bill 08-1407 became effective. The Prompt Payment statutes are codified at CRS §§ 10-3-1115 and -1116 and provide remedies to certain first-party insurance claimants, including recovery of two times the covered benefit, attorney fees, and court costs.
Continue Reading...Insurance carriers issue countless policies ranging from car insurance for an individual all the way to insurance for business interruption for large corporations. When policyholders purchase their policies, they typically go through an insurance broker, who may shop for a policy amongst different carriers, or through an insurance agent, who works for a specific carrier. Typically, policyholders find that brokers can be beneficial, as a broker may "shop for the best price" amongst a sea of varied policies. Ultimately, when shopping for a policy, many clients rely on a broker’s expertise and opinion not only to find the best price, but for advice as to the appropriate policy to cover their needs.
Continue Reading...For many commercial policyholders, a binder is issued by the insurance carrier before the actual policy is sent. This binder typically includes information such as the policy number, coverage limits, deductible amounts, and some of the applicable endorsements and exclusions. But what legal weight do these binders carry, if any? The Court of Appeals for the First District of Texas issued a ruling on August 4, 2011, that shed some light on this question.
Continue Reading...The chicken or the egg causality dilemma is commonly stated as “which came first, the chicken or the egg?” To ancient philosophers, the question about the first chicken or egg also evoked questions of how life and the universe began. Similarly, yet minus the philosophical dilemma, in first party property insurance policy interpretation, parties are often confronted with a causality question of which came first, the windstorm event or some other cause?
Continue Reading...Research conducted by the Gartner Group found that approximately 40% of companies that experience a disaster will be out of business within five years. With these dire predictions, business should spare no expense in having a business continuity plan and risk planning strategies to soften the blow of a catastrophic loss, pending the outcome of any insurance claims. Businesses planning to expand their operations or venture into new oppoutunities should be even more aggressive with their risk planning.
Continue Reading...Public, independent, and company adjusters in Florida must all follow the Adjuster Code of Ethics. The Code is the rules adjusters must follow when adjusting claims. The Code includes additional, specific rules that that apply to public insurance adjusters in Florida.
Continue Reading...In the case of R.D. Offutt Co. v. Lexington Ins. Co., 494 F.3d 668 (8th Cir. 2007), the Eighth Circuit Court of Appeals affirmed the award of an insured attorney fees, even though the insured was unsuccessful in its bad faith claim against the insurance company. The decision arose from the insured’s breach of contract and bad faith denial of coverage action against Lexington Insurance Company. The insured made a claim against the insurance company for payment of expenses incurred due to switchgear failure at a water pumping station used to irrigate the insured's land that was leased to tenant farmers.
Continue Reading...The title to this blog post was the question asked of me yesterday by a Houston insurance defense attorney. The path of Tropical Strom Emily may give you an idea of my answer to that question.
For this installment of Tallahassee Spotlight, we focus on a House member at the center of all property insurance discussions in the Florida Legislature -- Bryan Nelson, a Republican insurance agent from Fort Myers. Like Senator Garrett Richter, who was profiled last week, Representative Nelson chairs his chamber’s committee on insurance – the Insurance & Banking subcommittee. That committee is charged with reviewing all insurance legislation passing through the state House.
Continue Reading...September 2011 will mark one year following the devastating Boulder County Fourmile Canyon Fire, and Colorado policyholders must be aware of insurance policy deadlines and their rights. The scope of repair, cost of replacement, and amount of coverage for additional living expenses are often the subject of property insurance litigation against insurance companies. Homeowner replacement cost policies usually contain coverage for all of these, and insurers have a duty to work with the insured when building conditions, availability of contractors or materials, weather, or the insurer’s delays prevent the insured from completing repairs or replacement within one year or within the additional living expense time limit in the policy.
Continue Reading...After writing about mold exclusions the past two weeks, I intended to move on to a different topic. However, a discussion I had this past week with an insurance defense attorney convinced me that the mold exclusion deserved one last post.
Continue Reading...Long ago, when you filled out your property insurance application, you probably included some personal information you normally do not share with others: criminal records, social security numbers, past experiences with other insurance companies, etc. Insurance companies routinely ask for this type of information to assess whether or not they want to provide insurance for you. You may think that concealing some information may improve your chances to obtain insurance, and you may be right. But doing so might place you in a bad position if and when you file a claim. And the recent decision in Texas Farm Bureau v. Rogers explains why.
Continue Reading...In Chubb Calls Competitors Cheap And Unfair, I congratulated Chubb for pointing out claims handling problems within the insurance industry. Anybody can advertise in a certain way to make profits. Who knows the truth?
Continue Reading...A few weeks back in Insurer Post-Loss Obligations and Appraisal - The Other Side of Romay, I wrote about compliance with post-loss obligations as preconditions to a demand for appraisal under a property insurance policy in Florida. In 200 Leslie Condo. Ass’n, Inc. v. QBE Ins. Corp., No. 10-61984, 2011 WL 2470344 (S.D. Fla. June 21, 2011), a Florida federal court held that under Florida law, an insurer must investigate to determine whether it disagrees with the insured’s valuation before appraisal can be triggered. Just a few weeks later, in EDM Office Services, Inc. v. Hartford Lloyds Ins. Co., No. 10-3754, 2011 WL 2619069 (S.D. Tex. July 1, 2011), a Texas federal court held that under Texas law an insurer does not have this same requirement.
Continue Reading...The Bradenton Times recently reported that skyrocketing insurance rates may be the result of a cozy relationship between Florida's legislators, governing officials and the insurance industry. In Which Citizens Are They Working For?, the article concluded:
Continue Reading...Frustrated consumers are baffled by skyrocketing costs across so-called regulated industries that continue to grossly outpace flat wages and wonder how regulators can justify such massive increases for hugely profitable corporations.
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Judging from the campaign disclosures, it is clear that these industries have been supportive of government. It might be time for taxpayers to ask whether government is being too considerate of them, while forgetting who they truly work for.
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