New Jersey Merlin Law Group attorney Jason Cieri was married last week. It was a fantastic wedding. It also provided me a chance to catch-up with some Jersey Shore public adjusters, discuss the upcoming PPAANJ seminar on November 14 and write this blog which includes a case discussion involving post loss misrepresentations made prior to an examination under oath.
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It can be difficult after a fire for an insured to remember with 100% certainty what personal property they had in their home. Most likely, receipts and other purchase records have also been destroyed. As such, public adjusters in preparing estimates and/or proofs of loss are typically left to rely upon the insured’s memory. After all, who knows better than the insured what property was there before the fire? But what if there are inaccuracies in the proof or estimate….is that enough to cause the claim to be denied based on the concealment and misrepresentation clause?
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Suspicion runs rampant with some insurance companies when it comes to alleged arson. Even if they cannot prove the policyholder had anything to do with a fire, some adjusters cannot help to look for other ways to deny an insurance claim. In Hayes vs. Metropolitan Property and Casualty Insurance Company,1 an insurer was held liable for bad faith denial of an insurance claim even though the policyholder did not win the breach of contract action because the policyholder failed to file his lawsuit within the one-year statute of limitations.
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A Nebraska court recently ruled that an insured was entitled to bad faith damages after the court found that an insurance application was ambiguous in its language.
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In many jurisdictions, for an insurer to carry its burden of proving that coverage is void due to a material misrepresentation, the insurer must prove not only that the misrepresented fact was something that the insurer wanted to know, but that the misrepresentation affected the insurer’s investigation. In other words, that the misrepresentation was material. The question often becomes, how is materiality determined?
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A court in Georgia found coverage for a loss based on the presence of a semicolon. In the case Lee v. Mercury Insurance Company,1 the court found coverage for a home destroyed by fire based on the potential ambiguity created by a semicolon.
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In the recent California case, Duarte v. Pacific Specialty Insurance Company, the appellate court examined an insured’s “misrepresentations” when applying for an insurance policy and concluded that the insurer had wrongfully denied coverage.1
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When insurers investigate insurance claims and suspect that something about the claim is not quite right, they often assign special investigation units evaluate whether the claim lacks merit or is otherwise fraudulent. In Young v. Progressive Casualty Insurance Company,1 a federal district court in California recently upheld an insurer’s denial of its insured’s claim for the theft of his motor home based on the policy’s fraud and misrepresentation provisions. The court’s decision was based primarily on the cell phone records of the insured’s son.
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Fireworks will literally be exploding outside of my home next to Channelside in Tampa. The video above depicts the view from my master bedroom. So long as those fireworks are blowing up outside of my home and over Tampa Bay, my insurance company has no problem. The question is at what point do fireworks inside the home become an insurance coverage issue.
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After a claim is made, and despite the obligation to objectively, fairly, and reasonably investigate a claim with an eye toward providing coverage and without putting the insurance company’s interests ahead of their insured’s, some insurers actively look for ways to deny coverage. One of the ways some insurers do this is by using the claim investigation to search for information that the insured provided in its insurance application that is or was inaccurate.
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