Once upon a time in a far away land (South Dakota), a policyholder by the name of Mark Lillibridge purchased a builder’s risk policy from Nautilus Insurance Company in conjunction with the remodeling of his home. In the wake of a hailstorm that caused significant damage to his home, Lillibridge expected Nautilus to handle his claim expeditiously and with his best interests in mind. Lillibridge was let down by Nautilus and ultimately waged bad faith litigation against the carrier in the United States District Court of South Dakota.1

Continue Reading Pattern and Practice Bad Faith Discovery — Dynamite Discovery Decisions, Part 6

I recently deposed corporate representatives from American Family, Auto Owners, State Farm and Allstate Insurance Companies and received the following admissions from some of those corporate representatives:

  1. the independent adjuster (often catastrophe adjusters) failed to follow key aspects of the insurers’ own claims handling guidelines;
  2. the independent adjuster failed to properly document the claims file, including failure to enter log notes regarding investigation of the claim;
  3. refusal by the independent adjuster to consider additional evidence submitted by the homeowner regarding the property damage claim;
  4. there was zero oversight the by insurer’s claim file manager, including no supervision of the independent adjuster;
  5. the claims manager failed to have any meaningful participation in the claim and failed to ensure the claims file was properly documented.
  6. the independent adjuster made an on site coverage determination and informed the homeowner in-person of the denial of coverage– without prior review of the claim or any supervision by the insurer’s claims manager.

Continue Reading Insurers’ Pattern And Practice Of Hiring Independent Adjusters Known To Have Previously Disregarded Insurers’ Claims Handling Guidelines