Additional living expenses can create a number of questions about what items of expanse can be claimed following a loss. FC&S is a publication I encourage those in the claims business to subscribe. While reading the Question and Answer section of the FC&S Coverage Insider, the following additional living expense coverage question was posed:

Our insured has an ISO HO 3 policy, 1991 edition, and recently suffered a fire loss. Coverage for her home and contents is not at issue; however, she has had to relocate to a motel until restoration of her home is complete. Prior to the loss, she stored some of her personal property in half of her two-car garage. Because of the fire, she can no longer use this space until repairs have been completed.

The insurance company is questioning two items under additional living expense—the cost to rent a storage space, and the cost to dry clean the clothing she took with her.

We think this is additional living expense, and should be covered. What is your opinion?


Continue Reading Storage Space and Dry Cleaning—Can These Be Considered Additional Living Expenses Under A Homeowners Policy?

Merlin Law Group attorneys have an advantage over many other law firms and lawyers because we invest in an extensive insurance law reference library and with an attorney, Ruck DeMinico, who holds a library science degree and oversees this reference resource. During his presentation at NAPIA‘s mid-year meeting, insurance author and coverage expert Bill Wilson claimed that he finds the best insurance coverage discussion in IRMI.
Continue Reading Bill Wilson Says IRMI Has the Best Insurance Coverage Reference Discussions

Chip Merlin, Ashley Harris and I settled an Equipment Breakdown Coverage (aka Mechanical Breakdown Coverage) lawsuit in New Jersey yesterday. Chip Merlin took this picture of Ashley and me after the settlement. While the settlement is confidential, there are a number of lessons to be learned and reasons why this coverage is so important to small business manufacturers.
Continue Reading Small Business Manufacturers Should Purchase Equipment Breakdown Coverage

A public adjuster called with a common situation—a property loss occurred during repair and the insurance company had initially denied the claim, saying that the loss was from defective construction. The smart public adjuster thought the property damage caused in part by defective construction could lead to coverage under an ensuing loss provision. The policyholder did not want to get bogged down in years of possible litigation with its repair contractor.
Continue Reading Defective Construction and Ensuing Loss Provisions

The International Risk Management Institute (IRMI) web site provides an wealth of information for those who work in the insurance industry. This week, since I am discussing the calculation of actual cash value in Iowa, which is one of the states that follows the Best Evidence Rule to calculate actual cash value, I thought I would share with all readers IRMI’s definition of the Best Evidence Rule:

A valuation rule that has evolved in some states and does not adhere to the principle that the traditional measure of actual cash value (ACV) (replacement cost less depreciation) is the sole measure of value at the time of loss. This rule provides for the examination of every standard of value having a bearing on the property under consideration, such as the age of the property, the profit likely to accrue on the property, and the property’s tax value. Ultimately, it calls for the selection of that "value," which, in the event of a total loss, will provide complete indemnification and no more.1


Continue Reading Calculating Actual Cash Value: Part 11: Iowa

As noted before in To Consider the Economy, or Not To? ‘That is the Question’ — Understanding Business Interruption Claims, Part 9 and What’s Good for the Goose is Good for the Gander – Post-Loss Market Conduct Ignored in Louisiana – Understanding Business Interruption Claims, Part 36, there are two diverging views on whether post-loss market conduct should be considered to determine the value of a business interruption loss.


Continue Reading How To Consider the Market Conditions After A Loss? – Understanding Business Interruption claims

Maximizing recovery after a catastrophic loss requires expertise in preparing hospitality business interruption claims, combined with a thorough understanding of the hotel’s unique market and operation.


Continue Reading Considerations for the Hospitality Industry – Understanding Business Interruption Claims, Part 58

The issue of whether a total cessation or a mere slowdown in productivity is required to trigger business interruption coverage is one of those questions that will most likely be defined in the policy. If not, courts will be given an opportunity to answer the question, which could lead to undesired results for either party. While many carriers require a “total cessation” in order to trigger coverage under a business income provision (not extra expense), some courts have disagreed with this “all or nothing” approach, depending on the language of the policy in question.


Continue Reading The Shortcomings of a “Total Cessation” Requirement – Understanding Business Income Claims, Part 55

A recent IRMI article titled “Limiting the Interruption in Business Interruption” discussed the importance of considering payroll during the risk assessment phase of obtaining business insurance coverage. The forms regarding business income and ordinary payroll are hyperlinked for ease of use and understanding.


Continue Reading Considerations Regarding Ordinary Payroll – Understanding Business Interruption Claims, Part 43

Our firm subscribes to IRMI Online, which is an excellent source of information for any insurance claims professional. In doing research, I came across an interesting article by Daniel Torpey, from Ernst Young, LLP, Dealing with a Difficult Claim: Breaking the Gridlock of the Property and Business Interruption Claims Process.


Continue Reading Good tips on how to handle business interruption claims – Understanding Business Interruption Claims, Part 39