Similar to other states, Arizona has adopted unfair claims settlement practices statutes and regulations. While one cannot a bring a private cause of action under the Unfair Claim Settlement Practices Act1 and its companion regulations, they lay out specific standards for insurers to promptly investigate and process claims.
Continue Reading Arizona Claims Handling Guidelines at a Glance

Once an insurance carrier has paid its insured for a covered loss, the insurance carrier is “subrogated” to the insureds claim against the third party primarily liable for loss. The insurance carrier is then entitled to bring an action against the third party whose tortious or wrongful conduct caused the loss.1 Essentially, the insurance carrier “stands in the shoes of the insured” taking on the insured rights and remedies against the third party liable for the loss, but subjects itself to the defenses the third party could assert against the insured.2
Continue Reading Applicability of the Made Whole Doctrine in Arizona Property Insurance Subrogation Suits

The Arizona Court of Appeals in a recent opinion said, Yes to both. In Farmers Insurance Exchange v. Udall,1 four homeowners insured by Farmers Insurance Exchange (“Farmers”) sustained separate losses, which required water damage mitigation and restoration services. The homeowners hired a vendor to perform the mitigation and restoration services. In each case, the insureds assigned to the vendor their “rights, benefits, proceeds and causes of action” under their respective insurance policies.
Continue Reading Can Post-Loss Benefits be Assigned to a Mitigation/Restoration Vendor if the Policy Contains an Anti-Assignment Provision? Can the Vendor then Sue the Insurance Company?

In 2017, the Arizona Supreme Court changed the scope and limits of discovery to “any non-privileged matter that is relevant to any party’ claim or defense and proportional to the needs of the case.”1 Starting in July 2018, Arizona Rule of Civil Procedure 26.2, will take effect. Rule 26.2 has been significantly changed, adopting a “Three-Tiered” system of civil case management to make discovery occur in a manner consistent with Rule 26.1(b)(1)—proportional discovery.
Continue Reading Changes in the Arizona Rules of Civil Procedure Will Impact Your Case

In Arizona, the statute of limitations for a cause of action for insurance benefits will begin to run from the date the insurer committed a breach, unless the policy states otherwise (i.e., from the “inception of” or “date of” loss). Typically, this means from the date the insurer denies claim benefits to its insured.1
Continue Reading Are You at Odds with Your Insurer in Arizona? An Outline on Initiating Litigation in the Grand Canyon State

In prior blog posts on assignment of contingent benefits, I discussed the distinction between assignments of contingent benefits and assignments of noncontingent benefits under a property insurance policy. For the purpose of this post, a contingent benefit is a benefit or payment that is either not yet fixed in amount or regarding which the carrier is not yet obligated to provide because additional, specific conditions of the policy have not yet been fulfilled or excused. Noncontingent benefits are those for which all conditions have been fulfilled or excused and the carrier’s obligation to provide the benefits (such as a payment) has accrued.
Continue Reading Assignment of Contingent Benefits in Arizona

It is well established in Arizona that an insurance “carrier has an obligation to immediately conduct an adequate investigation, act reasonably in evaluating the claim, and act promptly in paying a legitimate claim.”1 The Arizona Unfair Claims Settlement Practices Act likewise provides that a carrier shall not “[r]efuse to pay claims without conducting a reasonable investigation based upon all available information.2 In all aspects of investigating or evaluating a claim, an insurance carrier is required to give as much consideration to the policyholder’s interests as it does to its own interests.3 So much so, that “Indifference to facts or failure to investigate [by a carrier is] sufficient to establish the tort of bad faith” against the carrier.4
Continue Reading Be Sure to Tell Your Carrier the Reason Why Your Witness is Significant to Their Investigation