Property insurance claimants are entitled to fair claim payments for the costs to restore their property to pre-loss condition, including the cost of appropriate contractor supervision of sub-contractors and other managerial duties.
Continue Reading California’s New Responsible Managing Employees Law Explained
Agents and carriers don’t tell their customers that they’ll inspect to see if they ever wanted to insure them in the first place after issuing a policy. In California, the law gives this right to residential and commercial carriers. In residential claims, we often see carriers lure insureds away from a competitor with cheaper premium pricing, fail to fully investigate the adequacy of the risk during the application process, proceed to issue a policy, and then cancel after issuance and an underwriting inspection. By this time, the insured has typically already cancelled their policy with their prior insurer.
Continue Reading Your Insurer Can Issue You a Policy While Planning to Underwrite it Later
California statutory law known as the Unfair Competition Law (“UCL”) bars “any unlawful, unfair or fraudulent business act or practice” and gives courts the powers to fashion relief where money alone won’t be sufficient. Of course, this begs the question: Can an insured sue their insurer for violating the UCL? A recent federal district court ruling says no, at least when the case is a straightforward breach of contract and bad faith case.
Continue Reading Can I Sue My Insurer under the California Unfair Competition Law?
Like many states, California law makes it difficult to sue for being “underinsured.” The law places the primary responsibility for securing enough coverage and the right kinds on the insured. An insurance company, agent or broker has no duty at law to recommend any particular coverages or limits. However, they are liable if they fail to procure the agreed upon coverage, make a misrepresentation about how the coverage works, or fail to fulfill some other “special duty” they voluntarily undertook.
Continue Reading California Court Rejects Another Half-Baked Underinsurance Case
Insurance companies are hardly easy to work with, but one sure-fire way to make it harder is to hinder your own credibility and try to take advantage of technicalities in an insurance policy to enrich yourself. Janney v. CSAA1 is a prime example.
Continue Reading Do Not Lose Credibility With Your Insurance Company After a Loss Occurs
With wildfire season in full swing, it is worth revisiting the laws surrounding the deadlines to file suit and ensuring that coverage counsel properly writes the lawsuit to avoid dismissal. Last week, a federal court ruled that an insured’s lawsuit was filed too late based on the allegations the insured herself set forth. The court ruled, consistent with California law, that the deadline is firm and missing the deadline bars the lawsuit. The case is Rosenberg-Wohl v. State Farm Fire & Casualty Company.1
Continue Reading Not Following California’s Intricate Suit Limitations Rules Dooms Yet Another Unsophisticated Insured
If you lose your home or business, or you simply cannot use the premises until repairs are done, your property insurance policy likely pays a benefit to cover the cost of temporary placement. These “Loss of Use” benefits typically come in two forms, Fair Rental Value and Loss of Use. The former generally pays the fair market rental value based on similar comparisons in your area, while the latter pays only the actual amounts expended to maintain a homeowner’s or renter’s standard of living. Loss of Use benefits are usually paid subject to time and monetary limits – in other words, the carrier pays on a rolling basis until it hits the maximum dollar amount (if there is one) or the maximum time limit, whichever is first.
Continue Reading Is Your Insurance Company Threatening to Prematurely Terminate Loss of Use Benefits?
It is a myth that big-name insurance companies are leaving the California homeowners market due to wildfires. They have not, but they are selling their usual homeowners policies with a twist – exclusions for fire losses. Carriers can and will do this so long as the customer also gets a fire policy from the California Fair Plan – a quasi-public insurer of last resort that provides fire coverage if no one else will. Such a sale does not violate the California minimum-standards for fire insurance policies and allows carriers to stay in the game and collect premiums.
Continue Reading Negligence by Captive Agents Is on the Rise Because They Don’t Understand the California Fair Plan But Are Now Brokering Them By the Truckload
A federal judge in California handed down an entertaining read of an opinion last week. Although it addresses liability insurance the principles apply to property insurance all the same. The case is Northfield Insurance Company v. Tilted Turtle.1 It presents a cautionary tale for what happens when an insured makes a misrepresentation to their insurer, and what happens when a judge slams the gavel on absurd legal defenses.
Continue Reading A Series of Unfortunate Events for Tilted Turtle Bar & Grill Leads to Rescission of Policy
The California Court of Appeal recently issued an opinion confirming the standard for determining an insurer’s bad faith conduct is whether the insurer acted unreasonably, not whether the insurer refused to pay a reasonable claim. I recently blogged about the California standards for proving bad faith.1 About a week after that blog post, lawyers for Pacific Specialty Insurance Company asked a Los Angeles judge to enter summary judgment against a Merlin client’s bad faith claims because bad faith was supposedly an intentional tort (i.e., the insured needed to prove intent to harm). Not surprisingly, the judge ruled in our client’s favor and rejected this argument. As noted in the blog post, bad faith only requires proof the insurer acted “unreasonably.” About a week later, California’s Second Appellate District Court confirmed in a separate case that bad faith only requires evidence of “unreasonable” conduct.2 Sorry, Pacific Specialty.
Continue Reading California Appellate Court Confirms the Standard for Bad Faith is Whether the Insurer Acted “Reasonably”