Our client’s home was totally destroyed in the 2017 Tubbs Fire. After his carrier, Liberty, engaged in unfair claims practices, he filed multiple complaints with the California Department of Insurance (“CDI”). The CDI ignored his complaints for months but pretended it was investigating. Eventually, our client filed suit against Liberty—and the CDI.
Continue Reading Insureds May Be Able to Sue the California Department of Insurance For Not Meaningfully Reviewing Consumer Complaints

For anyone following the daily flood of developments regarding business interruption and COVID-19, insurance commentator Bill Wilson is a good source to read and follow. Astutely, his website is www.insurancecommentary.com. Mr. Wilson’s newest post, It’s Not Just About ‘Direct Physical Damage’,1 raises interesting new arguments about Civil Authority claims – a sub-coverage within business interruption. He breaks down some factors that lean both for and against civil authority coverage for COVID-19 claims based on some interesting historical research.
Continue Reading Bill Wilson’s New Commentary on ISO Civil Authority policies and Covid-19 Provides Great Fodder for Debate

On March 31, 2020, six Northern California Bay Area counties significantly limited construction activity. These orders will result in thousands of construction projects shutting down until at least May 3, 2020. What impact does this have on existing property insurance claims? The answer: a lot, and they will probably result in significant legal disputes.
Continue Reading California Bay Area Shuts Down Construction – How Does This Affect an Ongoing Business Claim?

California has an insurer of last resort for fire coverage, the FAIR Plan, which I explained in detail in a previous post, What Is The California FAIR Plan? In late 2019 in the wake of hundreds of thousands of non-renewals, California Insurance Commissioner Ricardo Lara ordered the FAIR Plan to start selling more comprehensive policies that cover more perils than just fire. The order was set to take effect in 2020. However, in December 2019, the insurance industry filed a lawsuit to bar its enforcement.
Continue Reading California Court Blocks Insurance Commissioner’s Order That FAIR Plan Expand Coverage Options

However careful you are, unforeseen costs occur during the course of construction. In a recent case, a prominent carrier refused to cover them, citing this common policy provision:

Loss will be payable after 60 days after we receive your proof of loss and;

a. reach an agreement with you; or
b. there is an entry of a final judgment; or
c. there is a filing of an appraisal award with us.


Continue Reading Claim Expenses Denied as Unforeseen Costs?

Perhaps the most universally misunderstood aspect of insurance litigation in California is what the potential outcomes look like for the insured. Some policyholders fear the insurance company will tie them up in litigation for years and drain them emotionally, while others think a jury will swiftly award them tens of millions in punitive damages. The truth is somewhere in between. Insureds need their attorneys to help them understand the realistic outcomes. Insureds who misunderstand this early on will find themselves in trouble down the road when comes time to make the hard decisions.
Continue Reading What Are the Risks and Rewards of a Bad Faith Lawsuit in California?

Our client owns a large food market. Last summer, it burned down. The client submitted a claim under his business insurance policy from Farmers. The insurance policy included several different types of coverage, such as Business Property, Business Income, Extra Expense, and more. The insured had insufficient insurance limits under his Business Property to replace everything needed to reopen the market. Thus, he sought coverage for those items under Extra Expense coverage. By the plain and clear terms of the policy, these items were also covered under Extra Expense. But Farmers found an excuse to wrongfully deny the claim in a textbook example of how not to interpret and apply insurance policies in California.
Continue Reading Can Business Losses Be Covered Under Multiple Parts of Your Policy?

In 2019, Merlin Law Group’s California offices received calls almost daily from insureds who were “dropped” by their homeowners insurance company (i.e., non-renewed). The reason insurers are providing? Unsurprisingly: increasing risks of wildfires. In November 2019, Ricardo Lara, the California Insurance Commissioner, exercised his powers to place a one-year moratorium on cancelling insurance policies related to wildfire risk. Earlier in the month, Lara ordered the FAIR Plan—a quasi-governmental insurer-of-last-resort for people who can’t get insurance elsewhere—to sell the same kind of policies for which Californians once had no problem qualifying.1
Continue Reading Has Your Homeowners Insurance Been Cancelled? What California’s One-Year Moratorium on Homeowners Policy Non-Renewals Means for You