Determining and calculating pre-judgment interest has been the topic of many blog posts over the years. Recently, the Minnesota Court of Appeals addressed this issue of what triggers the running of statutory interest in the case of Blehr v. Anderson, No. A20-0691, 2021 WL 79163 (Minn. App. Jan. 11, 2021). While this case arises in the context of an insurance dispute arising from an automobile accident, it applies to property insurance disputes.
Continue Reading What Constitutes “Written Notice” for Triggering Prejudgment Interest?

In Oklahoma, insurance companies have an incentive to timely investigate and resolve claims submitted by insureds. Part of this incentive exists through a fee-shifting statute,1 where insureds can recover attorneys’ fees and costs if they are the prevailing party at trial. I recently wrote about an Oklahoma Supreme Court decision relating to recovery of fees and costs, Insured Oklahomans Have a Confirmed Right to Make Their Insurance Company Pay Their Attorneys Fees and Costs for Wrongfully Denied Claims.
Continue Reading Recovery of Interest for Wrongfully Denied or Underpaid Claims in Oklahoma

My colleague, Jason Cieri, in a recent blog post, Prejudgment Interest, What Is It and How Does It Help Me, explained what prejudgment interest is and how it helps a policyholder:

In jurisdictions that don’t have attorney fee shifting statutes, insured are left with very few tools to level the playing field against the behemoth insurance companies. Depending on your jurisdiction, prejudgment interest could be used to help level that playing field.
Continue Reading Not Awarding Prejudgment Interest For Time Before And After Arbitration Award Would Lead To Absurd Results

Insurers often delay and deny payment even when a claimant is rightfully entitled to that money. As such, courts may award interest for the loss of the use of money that plaintiffs suffer. Interest that accrues prior to a judgment being entered is referred to as prejudgment interest.
Continue Reading Delayed and Denied Tennessee Insurance Claim Problems? Does Tennessee Award Prejudgment Interest?

Dewey Hill owned eight townhome buildings in Minnesota insured by Auto-Owners.1 On August 16, 2013, a hail and windstorm damaged the buildings. Three days later, Dewey Hill notified Auto-Owners of the loss and submitted written property loss notices ten days later. Auto-Owners investigated the claim and approximately nine months later issued its first payment to Dewey Hill. A second payment was made by Auto-Owners approximately four months after that.
Continue Reading Insured’s Prejudgment Interest Award Runs From Date Appraisal Was Demanded

I recently had a public adjuster reach out to me asking me how pre-award interest on an appraisal award was calculated. Coincidently, in Creekview of Hugo Association v. Owners Insurance Company,1 the United States District Court for the District of Minnesota recently addressed the application of pre-award or pre-judgment interest under Minnesota Law.
Continue Reading When Does Pre-Award Interest Begin to Run on an Appraisal Award?

At Merlin Law Group, we want policyholders to have the tools necessary to maximize recovery following a loss. Understanding when policyholders are entitled to statutory interest and knowing how to calculate it is a small trick of the trade in the property insurance industry.
Continue Reading Florida Statutory Interest: What Is It and How Do I Calculate It?

I recently wrote about the case of Poehler v. Cincinnait Insurance Company,1 in which the Minnesota Supreme Court recently held that Minnesota Statute section 549.09 provides for pre-interest on insurance appraisal awards. Following this decision, the Eighth Circuit Court of Appeals in Housing and Redevelopment Authority of Redwood Falls v. Housing Authority Property Insurance,2 similarly held that the insured was entitled to recover pre-award interest from its insurer.
Continue Reading Eighth Circuit Agrees: Pre-Award Interest on Appraisal Award is Appropriate

The True Value of Insurers’ Float, by Tom Mielenhausen, offers an excellent view of how insurers profit from delay and denial. Mielenhausen noted that:

[I]nsurance companies borrow money from policyholders interest free. Insurers enjoy the use of free money and get paid for holding it.

The true value of a property/casualty insurer’s float, therefore, is not merely the “return-on-investment value” – i.e., the return the insurer makes by investing premiums in bonds and other investments. Rather, the true value of the float also consists of the “use value” of the money the insurer borrows from its policyholders, which can be measured by the avoided cost of borrowing the money (typically two percent or more above the prime rate). If an insurer were required to disgorge the true value of the money it kept while erroneously denying coverage, it would pay the cost of borrowing that money plus any return on investment during that time.

When both the use value and return value are taken into account, the true value of the property/casualty insurer’s float far exceeds the single-digit rate of prejudgment interest set forth in a number of state statues. As a result, an insurer involved in coverage litigation in those states has little incentive to timely resolve the claim. In those states, legislative reform is due.

Continue Reading Prejudgment Interest and Playing the Float