One of the lessons from the treble damage case noted in yesterday’s blog, Treble Damages for Insurance Company Misconduct in North Carolina and Collapse Coverage Confirmed, is that denial letters from insurance companies should be accurate. They should not be quoting irrelevant policy language. Denial letters should only cite the policy language the insurer is relying upon to deny a claim. By law in most states, the letter should accurately state facts and the applicable policy language for denial.
Continue Reading Overbroad Denial Letters Are Deceptive and Not in Good Faith

Cast iron pipe systems are actively corroding across the country. Florida commercial and residential properties are even more susceptible to corrosion due to Florida’s salt and moisture-rich environment. Unfortunately, insurance companies often try to deny pipe damage claims based on carefully worded exclusions such as “wear and tear” or claiming the pipes have reached the natural end of their lifespan. Even in accepted claims, insurance companies will often lowball a policyholder, leaving them with costly excess repair fees that they are unprepared to take.
Continue Reading Limited Water Damage Endorsement Will Not Limit the Liability for the “Tear Out” Costs

For a crash course in right to repair issues, one need only perform a brief search of cases involving People’s Trust Insurance Company (“People’s Trust”). When it comes to policies issued by People’s Trust, there seems to be only one thing that people can trust—a Preferred Contractor Endorsement will be included in exchange for a “premium discount.” For various reasons, the Preferred Contractor Endorsement issued by People’s Trust has been labeled a “trap for many homeowners” (see Beaujeaux de Lapouyade’s blog post, Declaratory Judgment Action May Be Forthcoming If An Insurer Invokes Its Right To Repair). In fact, I challenge Florida homeowners to ask their insurance agent to procure a People’s Trust policy that does not have the Preferred Contractor Endorsement—do not be surprised if your agent cannot find such a policy.
Continue Reading Right to Repair: How People’s Trust Insurance Company’s Preferred Contractor Endorsement Leaves Policyholders Over a Barrel

Many people think the declarations page and subsequent coverage and exclusion sections make up the important part of an insurance policy. However, add-on forms known as “endorsements” or “riders” may be just as important as they have the ability to significantly change the policy, depending on their language. For example, an endorsement to an insurance contract can add, remove, or change the coverage in the policy. While these pages often come at the end of the contract, they should be read in conjunction with the declarations page and the entirety of the policy.
Continue Reading Reading the Fine Print of Add-On Forms in Policies – Catastrophe Area Notice Limitations and More

The title to this post would almost certainly be answered “no” by any insurance regulator or consumer advocate. But Liberty Mutual Insurance Company argues this is exactly what it can do with no consequence because the fraudulent and deceptive statements in the declarations should have been found by the policyholder reading the fine print in the policy endorsement—which is anything other than an enhanced product.
Continue Reading Can Insurance Companies Send Declaration Pages Which Indicate Enhanced Coverage Yet Deliver Diminished Coverage In The Fine Print In The Back of Endorsements?

Business owners and owners of commercial property should not buy Farmers Insurance. Virtually every insurance company in the United States considers the entire cost of restoration right away when making payments, including at actual cash value—except Farmers Insurance. Farmers Insurance has declared war on its own customers and independent restoration contractors.
Continue Reading Farmers Insurance Sells Substandard Commercial Policy and Business Owners Should Not Purchase Farmers Insurance

We see many commercial insurance claims denied because the insured did not maintain a particular “protective safeguard” required by the policy. For example, a policy may require burglar alarms, and exclude coverage for theft if alarms are not working at the time of a loss. Or, a policy may require fire sprinklers, and exclude coverage for fire loss if the property does not have any. Some provisions may even allow the insurer to deny coverage if the insured failed to have a contract in place for regular service of the protective safeguard, something often seen for Ansul systems in restaurants. Courts across the country have almost uniformly upheld the validity of these endorsements.1
Continue Reading Protective Safeguards Endorsements: Does Your Policy Have One?

Back in January 2017, I blogged about the landmark case of Pichel v. Dryden Mutual Insurance Company,1 where New York’s Third Department ruled that the insurance policy contained an ambiguity when differentiating between loss caused by backup to a sewer or drain and a loss caused by backup to an internal plumbing system.
Continue Reading Court Rules Sewer Backup Clause Does Not Include Internal Plumbing