(NOTE: This guest post is by Barry Zalma, Esq., CFE.1 Barry Zelma is a prolific writer and scholar in the field of insurance. I have purchased numerous publications from Barry. I am currently reading a book on legal ethics he wrote, The Little Book on Ethics For The American Lawyer, which may be his finest work and that is saying a lot after reading his treatises on insurance law and adjustment. I encourage you to read this very thorough post and consider purchasing Zalma’s publications for your reference library. – Chip Merlin.)

A Policyholders Lawyer’s Take on the Obligation to Read

In its blog the Merlin Law Group cites a small portion of a lengthy Hastings Law Journal article written by Professor Chuck Knapp.2 Dr. Knapp did not like the use, by appellate courts, of the concept that there is a duty to read (DTR) an insurance policy.

The blog post by Chip Merlin proposed that Dr. Knapp’s proposals would allow the court to rewrite the terms and conditions of the policy. Dr. Knapp did not do that but spent many pages explaining why the word “duty” should not be used and the exceptions available to the courts when interpreting an insurance contract as well as other contracts.
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Barry Zalma recently wrote an excellent article, Claims in a Catastrophe, in the The CPA Journal. Zalma is a very experienced property insurance attorney. He is a prolific writer of articles and books involving property insurance claims. To all policyholders having felt the impact of 2017 catastrophe claims, one important point in Zalma’s article is that a second opinion is often needed.

Many insureds believe that insurers make a practice of making inadequate (sometimes called “lowball”) offers of settlement. They are wary of what they think are estimates from insurance-company-friendly contractors. Whether true or not, it is a good practice to get a second, or even a third, written estimate to repair and replace damaged property from reputable, independent professionals. . . .


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Virtue is to be admired and praised, even in one’s enemies
–Niccoló Machiavelli,
The Discourses

Slabbed is a blog that grates on those in the insurance industry, its legal counsel and proponents. My impression is that because those from the insurance industry do not like the criticism, positions and strong rhetoric, they stop reading Slabbed and read only those that criticize policyholder advocates, policyholders, and others who pander to the insurance industry. Nobody likes to be criticized or cast in the role of the villain. That is human nature. Yet, I agree with comedian Chris Rock, who stated that "anyone who makes up their mind before hearing the issue is a … fool."


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My post, Appraiser Disinterest and Impartiality California Style, lead to a number of comments and opinions about the topic. Yesterday morning Terry Butler, Senior Legal Counsel to the Florida Insurance Consumer Advocate, reported on the various views concerning appraisal at the final session of the Windstorm Conference. Butler sat next to me at the January 6 Alternative Dispute Resolution Roundtable. I previously posted on that meeting in Impressions Following the Alternative Dispute Resolution Roundtable.


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Imagine a situation where a butcher sliced some meat you ordered, weighed your cut, and then told you that you owed $43.79—but refused to tell you how he calculated the price. Would you simply agree and pay the butcher? Of course not. But this is what happens all the time when insurers refuse to turn over engineering reports or honestly explain how evaluations of damage were arrived.


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Fire was the major peril insured by the insurance industry over a hundred years ago. In the tradition that is still commonplace today, insurers wrote specific exclusions into the insurance contracts which limited when they had to pay for loss caused by fire. I guess my friends along the coasts of Mississippi and Texas could relate when they found their all-risk insurance policies which cover hurricanes excluded damage from the waters that came with the hurricane.


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