When a borrower fails to obtain or maintain proper hazard, flood, or wind/hail insurance on property that secures a loan, the lender remains authorized to “force place insurance” on the property in order to protect the lender’s interest in the property. Sounds reasonable… right? On its face, it makes sense that lending institutions should have the right to make sure property securing a loan maintain adequate insurance in the event of a natural disaster or other hazard that property owners encounter.

Like so many issues with both high finance and insurance carriers, though, one can’t necessarily take force placed insurance at face value. In this initial installment of the Force Placed Insurance Series, I’ll take a closer look at issues surrounding force placed insurance.

Continue Reading Are Lenders Properly Protecting Themselves and Property Owners When Property Insurance Lapses? – Force Placed Insurance Series

In a recent conference on Class Actions and Aggregate Litigation,1 a recent trend in Class Actions was discussed that could have a significant affect on the property damage insurance claims handling industry:

(i) “Private regulatory actions” – i.e., mass lawsuits based on a private right of action that challenge conduct not widely recognized as being wrong. This category would include many current class actions in the United States, such as those involving alleged deceptive trade practices.2

Continue Reading Paths to Mass Justice: “Private Regulatory Actions” to Enforce Policyholder Rights – Aggregate Litigation Series

Let’s consider the following scenarios. For purposes of this discussion, we assume you handle hail claims all over Texas:

  1. For all claims statewide in which the carrier pays for full roof replacement, the carrier still denies payment for particular roofing system components.
  2. The carrier pays Overhead & Profit for Dallas claims, but denies Overhead & Profit in Amarillo.

My previous post in this Aggregate Litigation series generated interest and discussion regarding potential Class Actions. In this post, we will discuss requirements for Class Certification. In addition, how those requirements influence whether a Class Action is the best option for recovery under different circumstances.

Continue Reading Is there a class for that? Requirements For “Class Certification” – Aggregate Litigation Series

Let’s consider the following:

  • How many public adjusters and lawyers do you know who routinely represent policyholders on claims that total less than $500?
  • How many public adjusters and policyholder lawyers do you know who refuse to resolve any claim unless the carrier pays for every lower-value damaged component in the roofing system?
  • What if a means existed to efficiently prosecute smaller claims that are not typically prosecuted because the costs are likely to exceed the benefits?

Continue Reading Smaller claims? Claims too small to pursue? Class Action might be the answer – Aggregate Litigation Series

I recently deposed corporate representatives from American Family, Auto Owners, State Farm and Allstate Insurance Companies and received the following admissions from some of those corporate representatives:

  1. the independent adjuster (often catastrophe adjusters) failed to follow key aspects of the insurers’ own claims handling guidelines;
  2. the independent adjuster failed to properly document the claims file, including failure to enter log notes regarding investigation of the claim;
  3. refusal by the independent adjuster to consider additional evidence submitted by the homeowner regarding the property damage claim;
  4. there was zero oversight the by insurer’s claim file manager, including no supervision of the independent adjuster;
  5. the claims manager failed to have any meaningful participation in the claim and failed to ensure the claims file was properly documented.
  6. the independent adjuster made an on site coverage determination and informed the homeowner in-person of the denial of coverage– without prior review of the claim or any supervision by the insurer’s claims manager.

Continue Reading Insurers’ Pattern And Practice Of Hiring Independent Adjusters Known To Have Previously Disregarded Insurers’ Claims Handling Guidelines

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 With $100 Million on the Line, Louisiana’s State Run Insurer of Last Resort is Turning to the U.S. Supreme Court

Louisiana Citizens Property Insurance Company has settled a state class action case, Press v. Louisiana Citizens Fair Plan Property Insurance Corp., for failing to fully pay overhead and profit to insureds. The proposed settlement, for $23 million, covers claims from Hurricanes Katrina and Rita.

Continue Reading Louisiana Citizens Property Insurance Loses Overhead & Profit Case

The Galveston Island and Bolivar Peninsula slab cases are settling. There was an agreement between the Texas attorneys that nothing would come out in the press until the clients signed the agreements. Since even the Texas Windstorm Insurance Association (TWIA) participated with a press release, I assume that the gentlemen’s confidentiality agreement to wait on telling everybody publicly that a settlement has been reached, even before clients have signed the releases, no longer applies. The vast majority of my clients have only received letters from our firm, and I am awaiting final figures from TWIA so that we can consummate the deal. I hope everybody is not optimistically jumping the gun.

Continue Reading Texas Windstorm Insurer Settles 2,400 Hurricane Ike Slab Claims

The oil spill attorneys advertising for a mass of clients and recent advertisements in Texas regarding Hurricane Ike claims, seem to indicate that all my colleagues always win, and win big. Nothing could be further from the truth. The truth is that if you are going to trial or push for what should fully be paid, at least one party to the litigation will lose and, sometimes, lose after a lot of money is offered to settle. Everybody loves to talk about their wins. Losses happen, and I am reminded of that bitterness and horrible feeling of injustice every now and then.

Continue Reading Policyholders Do Not Always Win or Settle for Big Bucks