Search results for: Insurance Policy Conditions Land Mines

Property insurance policies typically contain a “Mortgage Clause” condition that reads along these lines (bear with me, the condition is a bit wordy):

The word ‘mortgagee’ includes trustee.

If a mortgagee is named in this policy, any loss [under the structural damage aspects of this policy] shall be paid to the mortgagee and you, as interests appear. If more than one mortgagee is named, the order of payment shall be the same as the order of precedence of the mortgagees.

If we deny your claim, that denial shall not apply to a valid claim of the mortgagee, if the mortgagee: a. Notifies us of any change in ownership, occupancy or substantial change in risk of which the mortgagee is aware; b. Pays any premium due under this policy on demand if you have neglected to pay the premium; c. Submits a signed, sworn statement of loss within sixty (60) days after receiving notice from of us of your failure to do so. Policy conditions relating to Appraisal, Suit Against Us and Loss Payment apply to the mortgagee.

If we decide to cancel or not to renew this policy, the mortgagee will be notified at least ten (10) days before the date cancellation or nonrenewal takes effect.

If we pay the mortgagee for any loss and deny payment to you: a. We are subrogated to all the rights of the mortgagee granted under the mortgage on the property; or b. At our option, we may pay the mortgagee the whole principal on the mortgage plus any accrued interest. In this event, we shall receive a full assignment and transfer of the mortgage and all securities held as collateral to the mortgage debt.

Subrogation shall not impair the right of the mortgagee to recover the full amount of the mortgagee’s claim.

Continue Reading Insurance Policy Conditions (a/k/a/ Land Mines): Part 32 – Mortgage Clause

Some insurance policies contain a “Report Increased Value” condition that reads along these lines:

You must notify us within 90 days of the start of any new building structure costing $5,000 or more; or any additions to or remodeling of building structures which increase their values by $5,000 or more. You must pay any additional premium due for the increased value. We will not pay more than the applicable limit of liability shown in the Declarations, if you fail to notify us of the increased value within 90 days.
 

Continue Reading Insurance Policy Conditions (a/k/a/ Land Mines): Part 31 – Obligation to Report Certain Property Improvements

I footnoted in last week’s post that this week’s post would address an insurer’s subrogation rights against an individual or entity listed as an additional insured in an insurance policy. An additional insured is a

person or organization not automatically included as an insured under an insurance policy of another but for whom the named insured desires or is required to provide a certain degree of protection under its insurance policy.1

Additional insureds often come about by

an endorsement added to the policy[,] which either identifies the additional party by name or by a general description contained in a ‘blanket additional insured endorsement.’2

Continue Reading Insurance Policy Conditions (a/k/a/ Land Mines): Part 30 – Subrogation and Additional Insureds

Most insurance policies contain a subrogation condition. Subrogation is “[t]he principle under which an insurer that has paid a loss under an insurance policy is entitled to all the rights and remedies belonging to the insured against a third party with respect to any loss covered by the policy.”1

Continue Reading Insurance Policy Conditions (a/k/a/ Land Mines): Part 29 – Subrogation

I recently encountered something rather bizarre – an insurance company trying to conduct Examinations Under Oath (“EUO”) despite there being no pending claim. The carrier denied the claim several months ago. A few months after the first claim denial, and after supposedly entertaining more information from the insured, the insurer ratified the denial. A few months after the second denial, and seemingly for the heck of it, the carrier decided to send another letter to the insured ratifying its second denial. A few months after that, a carrier-retained attorney emerged from out of the blue demanding EUOs. EUOs? For what?

Continue Reading Insurance Policy Conditions (a/k/a/ Land Mines): Part 28 – An Insurer’s Exercising Conditions When There Is No Claim??? Huh??

Most policies contain a “venue” or “statutory provision” condition. Usually, a “venue” condition reads along these lines:

This policy and any performance thereunder shall be construed with and governed by the laws of the State of Florida.

A “statutory provision” condition usually reads along these lines:

Any terms of this policy which are in conflict with the statutes of the State wherein the property is located are amended to conform to such statutes, except that in cases of conflict with applicable Federal law or regulation, such Federal law or regulation shall control the terms of the policy.

Continue Reading Insurance Policy Conditions (a/k/a/ Land Mines): Part 27 – “Venue” and “Statutory Provisions”

It is not uncommon these days to see an Examination Under Oath (“EUO”) provision (usually by way of endorsement) that reads along these lines:

You, an ‘insured’ seeking coverage, must submit to recorded statements and examinations under oath, while not in the presence of any other ‘insured’, and sign the same. Also, your representative, including any public adjuster engaged on your behalf, must each submit to recorded statements and examinations under oath, while not in the presence of any other ‘insured’, and sign the same. The legal representative of the insured may always be present under the circumstances described in this condition.

And then “insured” is usually defined like this: “‘Insured’ means you and residents of your household who are: a. Your relatives; or b. Other persons under the age of 21 and in the care of any person named above.”

Continue Reading Insurance Policy Conditions (a/k/a/ Land Mines): Part 26 – EUOs Continued …Who Can Be Present At Which EUO?

Most insurance policies contain an “abandonment of property” condition that usually reads along these lines: “We need not accept any property abandoned by you.” With policy language like that, it is not surprising abandonments are uncommon in the residential and commercial property insurance world. Abandonment is more common, for example, in the marine insurance world. This blog series does not discriminate between common and uncommon policy conditions, however, so I will say a bit more about abandonment.

Continue Reading Insurance Policy Conditions (a/k/a/ Land Mines): Part 25 – Abandonment of Property

This blog series has addressed several typical policy conditions, how such conditions can or cannot be exercised by an insurer during claim adjustment, and what conditions require an insured to do or not do. It is not uncommon for insurers to employ attorneys to exercise policy conditions (e.g., conduct EUOs, obtain recorded statements, obtain documents), and this post addresses the legal consequences on an insurer’s doing same. In short, if an attorney acts as a de facto claim adjuster on behalf of the insurer, a policyholder immersed in litigation is entitled to discover various (if not all) documents generated by or involving the attorney. Now I expound, starting with a factual illustration from the Pacific Northwest and ending with a string cite of Florida authority that Florida policyholder attorneys might find useful.

Continue Reading Insurance Policy Conditions (a/k/a/ Land Mines): Part 24 – The Discovery Ramifications of An Insurer’s Attorney’s De Facto Claim Adjustment

Section 627.70131(5)(a) of the Florida Statutes reads:

Within 90 days after an insurer receives notice of an initial, reopened, or supplemental property insurance claim from a policyholder, the insurer shall pay or deny such claim or a portion of the claim unless the failure to pay is caused by factors beyond the control of the insurer which reasonably prevent such payment. Any payment of an initial or supplemental claim or portion of such claim made 90 days after the insurer receives notice of the claim, or made more than 15 days after there are no longer factors beyond the control of the insurer which reasonably prevented such payment, whichever is later, bears interest at the rate set forth in s. 55.03. Interest begins to accrue from the date the insurer receives notice of the claim. The provisions of this subsection may not be waived, voided, or nullified by the terms of the insurance policy. If there is a right to prejudgment interest, the insured shall select whether to receive prejudgment interest or interest under this subsection. Interest is payable when the claim or portion of the claim is paid. Failure to comply with this subsection constitutes a violation of this code. However, failure to comply with this subsection does not form the sole basis for a private cause of action.

Does this statute bear on an insured’s compliance with policy conditions? There is a dearth of published decisions regarding the application of Section 627.70131(5)(a), but that will not keep me from offering my thoughts.

Continue Reading Insurance Policy Conditions (a/k/a/ Land Mines): Part 23 – Section 627.70131(5)(a) of the Florida Statutes and Policy Condition Compliance