Why is the Carrier so Quick to Argue the Wear and Tear Exclusion?

Chip Merlin posted about the Wear and Tear Exclusion just last month in Wear and Tear Exclusions Versus Depreciation For Resulting Damage To Worn and Torn Older Parts of a Structure. Explaining about wear and tear, Chip gave this example:

The judge made up his own example of ten old bolts giving way and then the rest of what the bolts failed to hold up, crashed and broke the rest of the old structure. The worn-out bolts may not be covered, but if you have the right ensuing loss provisions after the “wear and tear” clause, the rest of the loss is covered—even if the rest is old.

The older parts of the structure are the ensuing loss. They did not suffer a loss because they were worn out and broke. They suffered a loss because other parts of the structure broke from “wear and tear.” Those ensuing parts of the loss are depreciated on an actual cash value basis. If replaced, they are then valued at Replacement Cost.

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When Does Pre-Award Interest Begin to Run on an Appraisal Award?

I recently had a public adjuster reach out to me asking me how pre-award interest on an appraisal award was calculated. Coincidently, in Creekview of Hugo Association v. Owners Insurance Company,1 the United States District Court for the District of Minnesota recently addressed the application of pre-award or pre-judgment interest under Minnesota Law. Continue Reading

Contractors Beware Taking AOB Contracts For Restoration Work: New Policy Forms Restricting AOB Contacts Discussed By Recent Insurance Bulletin

Florida Insurance Commissioner David Altmaier

Assignment of benefits contracts for property damage claims may be going the way of the dinosaur in Florida. A recent Florida Insurance Bulletin notes that the new statute allows insurance companies to issue policies preventing an assignment of benefits if insurers offer a premium discount. Continue Reading

Pending California Property Insurance Legislation – A Continued Expansion of Insured’s Rights

The string of natural disasters that struck California in 2017 and 2018 resulted in new legislation expanding the rights of California policyholders. The California legislature has drafted and introduced new legislation that would continue to expand policyholders’ rights. Continue Reading

No Waving of Deductibles Bill: Texas HB 2102

The Problem: Waiving insurance policy deductibles (“you scratch my back and I’ll scratch yours”) has been common place in Texas since 1989 and came about as the result of a poorly worded statute passed that same year that contractors have basically ignored. Contractors who have broken the 1989 law by waving deductibles (primarily roofing contractors) are known as “deductible eaters.” Homeowners were lured into signing contracts with the deductible eaters based on promises, for example, of a “free roof.” And then, homeowners/policyholders were duped into committing insurance fraud when in submitting a request pursuant to their policy for replacement cost (RCV) hold-back, they failed to tell their insurance company that the deductible part of the claim had not been incurred. What this means, again for example, before the new law, is that the roof job a homeowner got where the $2000 deductible was waived or “forgiven” and buried in other ways in the contractor’s paperwork, will now be required as payment out-of-pocket and proof that it was paid before the insurer will pay the RCV hold-back. Continue Reading

The Best Insurance Lawyers Study Insurance Practices and Not Just Insurance Law

The best insurance lawyers are students of the insurance industry rather than just students of insurance law. I learned this truth from insurance claims expert Gary Fye and the late Eugene Anderson. Let me paraphrase what Anderson used to tell me, ‘for the same reason doctors don’t learn medicine by reading medical malpractice case law, judges and lawyers wanting to understand insurance should not expect to learn insurance by reading insurance case law.’ Amen. Continue Reading

Watch Carefully For Differing Terms and Statute of Limitation Clauses in Excess Insurance Contracts

Excess insurance policies are often written to follow form, but then an excess carrier may issue a policy that does not follow the bid upon form. Insurance agents and excess lines brokers can certainly do a much better job at the point of sale by reading the policies they sell and broker so the insurance coverage for which they are arranging is actually sold. Continue Reading

How To File A Complaint With The Puerto Rico Insurance Commissioner Office About Your Delaying, Denying And Bad Treating Insurance Company

It is important for policyholders to know and understand the steps they must complete before filing a complaint when an insurance claim has been delayed, denied and bad treated by an insurance company. As mentioned in a previous post, (please see my blog on this topic published on December 5, 2018: Puerto Rico Approves Amendments to the Insurance Code to Protect Policyholders and Improve Claim Handling Procedures), Puerto Rico’s Insurance Commissioner has established new requirements for the process of filing a complaint against an insurance company when it has delayed, denied, and treated their insured badly. Continue Reading

Puerto Rico: Guide To Unfair Settlement Acts By Insurers During The Adjustment Of Claims

Hurricane season 2019 is officially underway, and so now is the time to take action and prepare before a possible hurricane threat. It’s imperative that policyholders understand the coverage and rights provided under their insurance policy. Therefore, one of the first things a policyholder should do is request a copy of their insurance policy now and confirm that they have the coverages provided are correct and appropriate for the type of property or interest being insured. Additionally, the policyholders should have a good understanding of the exclusions provided under their insurance policy, in other words, what is not covered under their policy if they suffer a hurricane loss. Continue Reading

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