Property Casualty 360 posted a story by the Associated Press, describing the continuing saga of Louisiana Citizens Property Insurance Corporations’ Hurricane Rita and Katrina claims.
Continue Reading...When Hurricane Ike hit Texas in September of 2008, many individuals and business were devastated by the destruction. What they were truly in need of was a swift response from their insurance companies to provide benefits so that they could repair and rebuild. Unfortunately for some like Blum’s Furniture Company, the claim process was anything but quick and efficient.
Continue Reading...February 22, 2012, will mark the one-year anniversary of the 6.3 magnitude earthquake that destroyed thousands of homes and businesses in Canterbury, New Zealand. The one-year anniversary mark is important because most business interruption policies have a 12-month period of coverage. New Zealand’s trade with Asia and Australia is three times larger (thus healthier) than its trade with Europe and the U.S. However, the country’s private lending and monetary fiscal policies are dependent on international markets, and according to the New Zealand Herald, the country will likely experience a spillover recession as Asian markets slow down in 2012 in reaction to last year’s European and U.S. political spectacles.
Continue Reading...For the past 20 months, each Saturday, I have posted on an issue that impacts public insurance adjusters. Many of my past posts have featured great success stories and interesting details of the claims public adjusters are handling nationwide, but so many more public adjuster stories need to be told. One of the best events where public adjusters can share their stories with others and learn how to better handle their claims is the Windstorm Insurance Conference®. This year is no exception.
Continue Reading...Many insurance policies include a section titled "Definitions," which defines certain terms used throughout the policy. The meanings of those terms are frequently the subject of litigation. A perfect example is the case I write about this week. Despite the fact that Actual Cash Value ("ACV") is usually a term that is defined or explained in some way in an insurance policy, this provision is frequently the subject of dispute between homeowners and insurance companies. On occasion, insurance companies do not properly calculate the ACV. The case addressed below reflects a resolution in a jurisdiction where the rulings were not uniform with regard to calculating ACV.
Continue Reading...In my last post, Understanding the Importance of “Replacement Cost Value” Coverage, I explained that insurers are not permitted to withhold any depreciation under replacement cost value coverage for personal property claims. This post highlights a recent change to Florida Statute § 627.7011, which took effect May 17, 2011, and alters the payment of dwelling claims.
Continue Reading...Someone recently asked me if bad faith tort claims originated in California. Although I cannot say that California is the jurisdiction in which bad faith claims were founded, I can safely say that the development of what we consider the current insurance bad faith tort cause of action is heavily influenced by two landmark California Supreme Court decisions: Comunale v. Traders & General Ins. Co., 50 Cal. 2d 654 (1958), and Gruenberg v. Aetna Ins. Co., 9 Cal. 3d 566 (1973).
Continue Reading...Countless angry and distressed homeowners and business owners contact our firm because they’ve just experienced a property loss and found out they are severely underinsured. Nearly every underinsured policyholder tells a familiar story: “My agent told me I was fully insured and I relied on my agent to tell me if I needed more insurance coverage.” Nearly all underinsured policyholders also ask if they can file claims against their agent for failure to inform them about certain coverages or failure to inform them that their coverage limits are insufficient to rebuild their business property or home. Unfortunately, public perception regarding what services insurance agents perform for customers is often vastly different from what the law actually holds agents responsible for.
Continue Reading...In H&H Hospitality L.L.C. v. Discover Specialty Ins. Co., No. 10-1886 (S.D. Tex. Dec. 20, 2011), the U.S. District Court for the Southern District of Texas granted summary judgment in favor of a commercial property insurer in an action brought by an insured motel owner for wrongful denial of a business interruption claim arising from property damage caused by Hurricane Ike. The Court held that the policy did not provide coverage for the reduced business operations experienced by the policyholder.
Continue Reading...On January 19th, the Florida Supreme Court issued its opinion in Petty v. Florida Insurance Guaranty Association, which decided whether an insured is entitled to recover attorney’s fees from the Florida Insurance Guaranty Association (FIGA). I wrote about the case in October 2010, when it was at the lower appellate level, in The Definition of a "Covered" Claim by the FIGA Act Leads Florida Second and Third District Court of Appeals to Different Results.
Continue Reading...In Elkins v. QBE Insurance Corporation, No. C11-5150, US District Court (W.D. Washington), Mr. and Mrs. Elkins filed suit against their condominium association’s insurance carriers for loss of rental income after a fire damaged common areas and individual units. The Elkins alleged that their individual loss of rent was part of the “community income” as defined in the property and casualty policy in question.
Continue Reading...Sometimes we have experiences that give us a better perspective on reality. In this busy world with constant deadlines, stress, and email, it is important to take a step back and remember that life is short and we should be sure to consider our safety and well being as we travel through our busy days.
Continue Reading...In a federal case from Washington, a company providing general contracting services found itself facing lawsuits for construction defects and its insurance company would not respond to its requests for coverage or indemnification.
Continue Reading...The legislative session is moving at breakneck speed this year. At this point, we already have 31 bills on our “watch list.” Go to PolicyholdersofFlorida.com for a full list of these bills and their current status in the legislature.
Continue Reading...In Florida, except under certain circumstances, in an “actual cash value” policy, the carrier withholds depreciation through the indemnification process. For an additional premium amount, policyholders can purchase “replacement cost value” coverage which requires insurance companies to replace the damaged property with the full value of replacement. For example, a television valued at $1,000 is damaged in a windstorm; the life of the television is 10 years, so a five year old television is valued at $500. If the policyholder purchased “replacement cost value” coverage, she would be entitled to $1,000 to purchase a new television, compared to $500 under an “actual cash value” policy.
Continue Reading...“Do I have to answer that?” Occasionally, one of my clients will turn to me during an examination under oath and aks that very question. Almost every time, I answer, “Yes,” or at least have the questioner clarify a poorly-worded question. The reason I usually counsel clients to answer has several elements, but most importantly: if a fight may be easily avoided and there is no benefit to fighting, why fight? If a policyholder refuses to answer a question at EUO, defense counsel immediately suspect fraud, thinking, “Why else would someone refuse to answer questions unless they were hiding something?” But more importantly, I know defense counsel’s eyes will start rolling around like a slot machine until they land on DENIAL because they believe they have right to ask anything and the insured has to answer, otherwise the policyholder is violating the policy’s duty to cooperate. Is this true? May defense counsel ask the policyholder literally anything at an examination? Must the insured answer or risk violating the cooperation clause?
Continue Reading...On January 5, 2012, the Ninth Circuit asked the California Supreme Court to decide two insurance law issues that arose in a flood coverage dispute. In the matter of Sierra Pacific Power Company v. Hartford Steam Boiler Inspection and Insurance Company, the Ninth Circuit reached conflicting conclusions on two distinct issues.
Continue Reading...It was about a year ago when I reported that Texas led the nation for highest insurance premiums in 2010. Well, the results are in for 2011 and Texas has once again topped the nation as the state with the highest insurance premiums in the land. Roger Mares of KTXS News reports that Texas homeowners pay an average of $1,511 annually for their home insurance. That’s $50 more than Florida, the state that came in second place.
Continue Reading...Florida Statute § 626.9744(1) requires a Florida homeowner’s property insurance to cover repair or replacement of undamaged property when it is damaged during repair. Specifically, subsection (1) of this statute (2011) states:
Continue Reading...When a loss requires repair or replacement of an item or part, any physical damage incurred in making such repair or replacement which is covered and not otherwise excluded by the policy shall be included in the loss to the extent of any applicable limits. The insured may not be required to pay for betterment required by ordinance or code except for the applicable deductible, unless specifically excluded or limited by the policy.
Many insurance company adjusters deny, disclaim or reduce the amount of a business interruption claim, stating that amount of the loss is speculative or has not been “adequately” supported. A conjured or baseless claim should never be covered, and policyholders should always provide competent proof of an actual loss of income as a result of a slow down or suspension of operations. However, sometimes losses are based on real circumstances which were not necessarily documented for bookkeeping purposes and the proof cannot always be found in a spreadsheet. Rather than impulsively denying a claim for lack of "adequate" support, insurance companies should explore the nature of the circumstances and give the benefit of the doubt to the policyholder when warranted.
Continue Reading...Next month, the Alabama legislature will reconvene and has the chance to license public insurance adjusters. Currently, Alabama is one of the few states that does not recognize public adjusters. But after the devastation last year, the value of public insurance adjusters is coming to light.
Continue Reading...This week, I am writing about a Memorandum Opinion and Order entered by a federal judge on a bad faith issue. Although I usually blog about a court's reported opinion on a case as a whole, I thought I would take this opportunity to zoom in on a particular ruling in a bad faith case. This focus on a single step in the progression of a lawsuit allows for a more concentrated view of how individual rulings on certain issues throughout the course of litigation come together to create a case that is ready for trial.
Failure by appraisers or umpires to include newly discovered damages during the appraisal process prevents policyholders from obtaining fair payment for a covered loss. Almost every property policy includes an appraisal provision which states that if the insurer and the insured disagree as to “the amount of loss” then either may invoke appraisal and each appoint a disinterested appraiser to determine “the amount of loss.”
Continue Reading...In my November 4, 2011, post titled “Trying to Change the Past: Are the New Sinkhole Laws Retroactive?” I mentioned the sinkhole insurance changes that took affect on May 17, 2011. One of the most detrimental changes made by the Legislature was changing the definition of “structural damage.”
Continue Reading...“The insurance company is demanding that I sit for an EUO! Can they do that?” This is a question I hear often from Public Adjusters and others who would otherwise not be involved in the insurance dispute. To find the answer, we need to look no further than the policy itself….
Continue Reading...On December 13, 2011, The Huffington Post published an article all policyholders should read and heed. It is important to know how the insurance industry is making money by delaying claims and how it has shifted from a service industry to an industry that is driven by profit. It's time for each state’s Department of Insurance to enforce their unfair business practice statutes on insurance carriers that profit by stalling and delaying the claims process to the detriment of the insured. The article is entitled, Insurance Claim Delays Deliver Massive Profits To Industry By Shorting Customers, and reports that since the mid-1990s, "a new profit-hungry model, combined with weak regulation, has upended that ancient social contract" between insurers and their customers.
Continue Reading...Regardless of its source, the insurance industry has become keenly aware of the impact climate change is having on natural disasters. Janet Retloff, of ScienceNews.org, reports that worldwide, “[n]atural disasters in 2011 exerted the costliest toll in history — a whopping $380 billion worth of losses from earthquakes, floods, tornadoes, hurricanes, wildfires, tsunamis and more.” Reloff adds that the most costly event last year was the earthquake/tsunami disaster that hit Japan.
Continue Reading...Recently, a great deal has been written regarding Citizens Property Insurance Corporation’s replacement cost value (RCV) calculation methodology. It seems that, in some cases, Citizens is grossly overestimating the cost to replace a home following a disaster. Consumer advocates decry this practice as nothing more than a backdoor rate increase following the denial of Citizens’ proposed 2000% rate increase a few short months ago. Predictably, insurance industry backers have called these increases necessary and appropriate.
Continue Reading...Recently, the Florida Southern District Court updated its order in Garden-Aire Village South Condo. Assoc., Inc. v. QBE Insurance Corp., No. 10-cv-61985 (S.D. Fla. January 4, 2012). I discussed the Garden-Aire case on April 5, 2011, in Importance Of An Actual Controversy Demonstrated As Southern District Court Of Florida Dismisses And Stays Action Against QBE As Speculative. In March 2011, the Court concluded that the Complaint filed by the association against QBE did not state a claim in which relief could be granted. In its recent opinion from just a few days ago, the same Court granted the condominium association’s request to amend the Complaint, and will presumably allow the case to proceed.
Continue Reading...It takes many good deeds to build a good reputation, and only one bad one to lose it
-Benjamin Franklin
A good reputation is more valuable than money. A broken reputation may possibly be repaired, but the world will always keep their eyes on the spot where the crack was. One scandal can destroy an empire and short of inventing a time travel machine, there’s not much that can be done to change the public’s perception. Take for example, the recent Penn State child sexual abuse allegations. The entire nation spent weeks, judging the institution’s incident reporting practices and procedures. The damage? A decrease in student recruitment, alumni donations and, perhaps, federal funding.
Continue Reading...The Florida Department of Financial Services, Division of Agent and Agency Services, announced several important changes regarding appointments in Florida and its eAppoint system. The changes are expected to take place the evening of January 18, 2012.
Continue Reading...There are many defenses an insurer can assert when faced with a bad faith lawsuit. In the case I write about today, an insurance company claimed it was immune from a bad faith lawsuit because the homeowner obtained her insurance coverage through a non-profit organization established to assist high-risk homeowners.
Continue Reading...Examinations Under Oath (EUOs) are often requested by an insurance company during the investigation of disputed insurance claims. While an EUO is similar to a deposition in many ways, defense attorneys are quick to point out that EUOs are not subject to the rules that govern depositions because they are created by contractual agreement. Because EUOs are not governed by the rules of civil procedure, disputes often arise over simple matters like where an EUO is to take place.
Continue Reading...On December 29, 2011, many policyholders in Allentown, Pennsylvania, were required to evacuate their homes due to a large sinkhole that suddenly opened up in front of their street. This sinkhole is also a risk to a nearby cemetery, threatening hundreds of graves.
Continue Reading...My September 23, 2011 post, Is Scope of Damage or Scope of Repair Subject to Appraisal? examined several recent opinions from around the country which discussed whether insurers may deny policyholders their right to appraisal by simply claiming that scope of damage is not subject to appraisal. Since September, two different Colorado district courts have ruled that scope of damage is indeed subject to appraisal. Hopefully, the holdings discussed below will go up on appeal and become binding law in 2012.
Continue Reading...As California enters the New Year, both Northern and Southern California have experienced problems with wildfires. Of the six fires in the Northern California Region which occurred over the last month, one still remains active and is only 40% contained in Calaveras County.
Continue Reading...It probably won’t surprise you to learn that 2011 was a record year for natural disasters in the U.S. According to the Insurance Information Institute (the “I.I.I.”), insurance companies will pay more than $32 billion in claims to help people rebuild homes and businesses damaged or destroyed by natural disasters in 2011, a record year for federal disaster declarations. Dr. Robert Hartwig, president of the I.I.I., said that “[t]he $32.6 billion figure doesn't even include the significant insured losses which arose after the pre-Halloween snowstorm, which caused enormous damage to multiple states along the Atlantic seaboard. Coupled with other events in 2011’s fourth quarter, direct insured losses could exceed $35 billion this year.”
Continue Reading...How often do insurance companies get it right the first time? If they don’t, whose responsibility is it to correct them and give them a second chance? As demonstrated through litigation on many hurricane claims, the insurance companies may tell you it is the policyholder’s responsibility to notify them of newfound damage after a claim has already been resolved. Recently, Judge Robert N. Scola, Jr., of the United States District Court for the Southern District of Florida, disagreed with that logic, holding that a policyholder did not have to give the insurance company a second chance before suing it.
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