In a recent deposition in an insurance producer malpractice case, the producer was asked about the purpose of co-insurance and how our insured would be impacted under the provision if the building was underinsured. Unfortunately, the producer was unable to explain how the co-insurance provision worked or how the insured could be penalized. This prompted me to think maybe it’s time for a property co-insurance refresher.
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I wrote about Streit v. Metropolitan Casualty Insurance Company1 in a recent blogpost. In Streit, the Seventh Circuit Court of Appeals concluded that an insurance policy “intentional loss” exclusion which precluded innocent co-insureds from recovering for a fire loss was unenforceable because it violated the minimum level of protection afforded by the Illinois Standard Fire Policy.
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The above photograph depicts the panel I was on at the Florida Association of Insurance Agents Convention last week. It was a wonderful presentation moderated by a fantastic insurance educator, David Thompson. The workshops, myriad insurance vendors, and networking opportunities opened my eyes about a truly important association which dedicates itself to promoting professionalism by those participating in the important business of selling insurance to policyholders.
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One of the favorite tricks of insurance companied to avoid paying claims is to allege fraud by the insured. The fraud can be in the policy application, in causing the loss or in an alleged misrepresentation of the value of the loss. Even the slightest misstep by an insured can cause them to lose their entire claim. The question then becomes, what happened to other insured innocent of the alleged misconduct? My colleague, Jeffrey Greyber, explained Florida’s stance on this issue back in January: Innocent Co-Insured Doctrine. I figured it would be good to trace this issue back to my home state of New Jersey and see how the Garden State weighs in.


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I wanted to clarify my post from last week, Navigating Florida’s Valued Policy Law—The Effect Of Co-Insurance. In last week’s post, I stated “[T]he existence of a co-insurance clause can prevent full recovery in the event of total loss or a partial loss by fire or lightning.” Since the post last week, I have had several discussions with Stephen Sarasohn, who is a very experienced adjuster.


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A co-insurance clause can operate to reduce the recoverable loss once a loss is sustained. What about in a claim under Florida’s Valued Policy Law (“VPL”)? Would a co-insurance clause reduce the recovery? This question has to do with the appropriate measure of damages under Florida’s VPL. As I have written previously, the VPL is meant to address the measure of damages for claims that fall within its terms.


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