When it comes to commercial losses, taking the time to view the policy and figure out the applicable laws of the controlling state are necessary. However, sometimes, the basics are forgotten by even the insurance carrier. In an ideal world, losses are cut and dry but the reality is that almost every detail is up for interpretation of some sort. In a commercial loss, often more than one insurance policy kicks in when there is a landlord and tenant situation. The basic rule of thumb is that the landlord’s policy usually covers the real property loss while the tenant’s business personal property is covered under the tenant’s own business policy. However, often these lines are blurred and not definite. In order to determine coverage, both insurers will often request a copy of the lease to decipher whose policy covers what items destroyed.

Continue Reading Denial of Recovery of Tenant Improvements Leads to Breach of Good Faith and Fair Dealing

When reading insurance policies it can be confusing to a policyholder regarding the differences in valuation of real property and personal property when terms like “fair market value”, “actual cost value”, and “replacement cost value” are referenced without explanation. Insurance companies use these terms as if everyone should understand their meaning and sometimes, these terms are used in a context that almost seem like they are interchangeable. However, these terms are not interchangeable because these terms may affect the valuation and actually will dictate what is to be paid under the insurance policy.

Continue Reading Does Actual Cost Value Equal Fair Market Value When it Comes to Property Damage?

Insurance is a heavily regulated industry and everyone who reads our daily blog knows that insurance rules and regulations vary by state and fall under each individual state’s jurisdiction. Hawai’i is no different and in a state whose insurance laws are still evolving, it is interesting to see that when it comes to appraisal in the property insurance sector, Hawai’i does not have its own set of rules on appraisal. Although appraisal is definitely not an arbitration process, in Hawai’i, the rules of arbitration apply.

Continue Reading Insurance Appraisal takes on the rules of Arbitration but Preserves Bad Faith in Hawai’i

In past blogs I’ve talked about rulings and the trend across the country where courts are deeming work product privilege in bad faith litigation for the claims attorney to be incorrect and so their work product is discoverable. Courts are ruling that just because an attorney for the insurance company is on a file and advising on a claim does not always mean that their work product is in anticipation of litigation and therefore is not privileged or confidential under the Attorney Work Product Doctrine.

Continue Reading If the Claims Attorney is Also the Adjuster, the Work Product Doctrine May Not Apply when Seeking Discovery

In California, when it comes to insurance bad faith litigation we usually think of first party bad faith where an insurer owes a duty to its own insured. In fact, third party bad faith is barely recognized except where the third party insurer refuses to accept reasonable settlements within liability policy limits. What this means is where a demand was made of a third party insurer (in instances like car collisions or falling trees from a neighbor’s yard) the insurer does not have the same duty to the person issuing the demand as it would to its own insured. In rare instances if a reasonable demand for policy limits is made to a third party insurer, the insurer may open up liability to its own insured above and beyond policy limits if it does not accept a policy limits demand within a reasonable time period if it knows the damage for the third party is above policy limits.

Continue Reading Is California Law Bad Faith Law Changing Due to Jury Instructions?

In the insurance industry, the words “post-claims underwriting” are considered words of bad faith. “Post claims underwriting” is the term used when an insurance company refuses to pay a covered claim because the insured is not within the category of a risk where a policy would have been issued in the first place. An insurer cannot go back into your file after a loss and then try to re-write the underwriting process and use that as the grounds to cancel or rescind the insurance policy. After all, the insurance company took on the risk of insuring in the event of a loss, and trying to find a way out of their obligation isn’t appropriate.

Continue Reading Can an Insurer Rescind My Policy After a Loss?

For the past few months, attorneys here at Merlin Law Group have blogged about the anticipation of the El Niño storms and the expected impact that such a deluge of water may have on California property owners. Along with the volatile weather being experienced, some neighborhoods are experiencing micro-bursts of rain at the foothill of the mountains that are directly responsible for mudslides and mudflows into various neighborhood pockets. Already, many homeowners are experiencing mud losses and finding that unless they have flood insurance, their losses are not covered.

Continue Reading California Reports Increase in Purchase of Flood Insurance Policies

In past blogs, I’ve discussed the difference between landslides known as mudslides and mudflows, and how these types of losses are usually excluded from the average homeowner policy. In many instances to have coverage for mudslides or mudflows, a separate earth movement or flood policy must be purchased. However, in the wake of the El Niño storms and anticipated mudslides and mudflows, I think it’s important to revisit the topic because every homeowner who receives a blanket denial should not take that denial to be set in stone as the denial may not be proper. Every denial on the basis that the loss is excluded under an average homeowner policy as an exclusion should be looked at with a fresh pair of eyes in the event the loss suffered has a separate reason for “causation”

Continue Reading Anticipated California Mudslides and Mudflows in the Wake of El Niño

Over a course of the last few years I’ve written about California Insurance Code 2071.1 and an insured’s rights, which includes the right to review their claim file before an examination under oath (EUO) is conducted. As the year draws to a close and the number of EUOs I witness only go up, I think the topic of EUOs should be revisited. Protecting the insured has become more difficult. Usually, examinations under oath only occur after the insurer has sent the insured’s claim to a special investigation unit and from that point on, the reality for the insured is that the investigation conducted is to find inconsistencies in the insured’s recount of the loss to deny the claim. Although there are many reputable attorneys on behalf of the insurer conducting the requested examinations under oath reasonably and respectfully, there are also a handful out there with the distinct reputation among the insurance community well known for going out of the way to put the insured through a series of events that mimic a criminal inquiry that is both stressful and unnecessary.

Continue Reading California Examinations Under Oath: Protecting the Insured through a Reasonable Examination Under Oath

As a property insurance attorney I am often asked whether bad faith damages are recoverable in California. Over the course of many years, California case law has changed and the recovery of bad faith damages, versus attorney fees and punitive damages, has evolved. Bad faith damages are tort damages while punitive damages are recoverable only upon the finding of bad faith and that the conduct of the insurer was malicious, oppressive or fraudulent.

Continue Reading California Bad Faith Revisited