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Many of us appreciate misdirection, deception, and technical play on words in brainteasers and riddles. The same is not usually the case when an insurer is explaining your legal rights following a devastating loss. While this blog showcases California claims, laws, and regulations, the principle for policyholders and policyholder advocates applies across the country – it pays to know your insurance claim rights.…
Continue Reading Don’t Believe Everything You Read on the Internet – or Even in Your Claim Letter

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?

This updates new California legislation in anticipation of another season of devastating wildfires. California is in drought once again. Summer has just begun and there has already been record-setting heat. Although California has been spared so far, wildfires are expected to continue to run rampant through California as it continues to heat up and dry out. The anticipated wildfires are expected to bring an influx of for out-of-state insurance adjusters into California to handle the insurance claim volume. It is safe to assume that out of state adjusters will not be up to speed with 2021 changes in California insurance law. As a policyholder advocate, you can add value to any claim by simply staying current on the rapidly changing California Insurance Code and applying it to your claim representation.…
Continue Reading 2021 California Legislative Update: Senate Bill 872

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

If an insured suffers a loss caused by a third-party and an insurer compensates the insured, either wholly or partially, the insurer typically may subrogate the claim in an attempt to recover its payment. However, when an insured does not receive enough funds from its insurer to be made whole, typically due to underinsurance or limiting policy provisions, does the insurer or the insured have priority of funds from the responsible third-party? This is an important distinction when the third-party has limited funds available.…
Continue Reading The Made Whole Doctrine in California

In California, insurance carriers seeking to avoid allegations of committing bad faith, whether in litigation or not, will often ask insureds if they are willing to enter into “White waiver” agreements. The purpose of such an agreement is to allow an insurance carrier to make offers of settlement without fear of the amount of the settlement being used as evidence against the carrier for bad faith, if the perceived amount of the settlement offer is too low.…
Continue Reading Should Policyholders Sign a “White Waiver” Agreement?

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”

If you’re a repeat reader of the Property Insurance Coverage Law Blog, you have likely come across a reference to one of Bill Wilson’s most important policy interpretation doctrines: RTFP!1 or “Read the full policy.” But what happens when you encounter a conflict not contemplated in the policy? Or worse yet, are not aware that consumer protections exist that can assist claim handling and broaden or clarify coverage?…
Continue Reading 2021 California Legislative Update: Assembly Bill 3012

Most California authorities say that the “implied covenant of good faith and fair dealing” obligates the insurer to investigate, process, and evaluate the insured’s claim promptly, thoroughly, and fairly.1 The seminal case describes bad faith as insurer conduct that impairs the insured’s right to receive the benefits for which they contracted.2 My favorite line from case law describes bad faith as an “imprecise label for what is essentially some kind of unreasonable insurer conduct[.]”3…
Continue Reading Did the Insurance Company Commit Bad Faith?