Yearly Archives: 2021

No Bad Faith When Insurer Relied on Opinion of Independent Consultant

Posted on August 31, 2021 by Alycen A. Moss, Elliot Kerzner

The Court of Appeals of Georgia recently held that an insurer’s reliance on the report of an independent consultant creates a presumption that it did not act in bad faith in denying coverage. In Montgomery v. Travelers Home and Marine Ins. Co., 859 S.E.2d 130 (Ga. Ct. App. 2021), the insured made a claim under her homeowners insurance policy for water damage to her basement that she asserted had been caused by a ruptured garden hose. The insurer’s claims adjuster inspected the property two days later and saw damage that appeared to be from ground water rather than the ruptured hose. The adjuster sought input from his supervisor, who suggested that he hire an independent engineer to determine the cause…

Claim Investigation Not Necessarily Protected by Work Product Doctrine in Illinois

Posted on August 17, 2021 by Alycen A. Moss, Elliot Kerzner

In determining when the work product doctrine is triggered, the Northern District of Illinois recently held that, rather than adopting a bright-line rule, the issue should be decided on a case-by-case basis at the court’s discretion. In Club Gene and Georgetti, LP v. XL Insurance America, Inc., No. 20 C 652, 2021 WL 1239197 (N.D. Ill. Apr. 2, 2021), the insured’s steakhouse was damaged in a fire. When the insured sued for coverage, the insurer refused to produce documents prepared in the course of its investigation of the claim on the basis of the work product doctrine. The issue of contention was: at what point in an insurer’s claim investigation can the insurer claim that litigation was reasonably anticipated? In…

Policyholder Permitted to Videotape Appraisal

Posted on July 30, 2021 by Maria Louise (Ria) Cousineau

In Silversmith v State Farm Insurance Company, 2021 W.L. 2910240 (Fla. 4th DCA July 7, 2021), Florida’s Fourth District Court of Appeal ruled that policyholders may openly videotape an inspection by the insurance company appraiser, despite the state’s “two-party consent law.” The court held that an appraiser has “no legitimate expectation of privacy while in the insured’s home for the inspection.” Silversmith v State Farm, 2021 WL 291040, p.1. The facts revealed that the insurer invoked the appraisal clause on a property loss, and the policyholder sought to videotape the appraisal. The insurer’s appraiser objected on privacy grounds. The policyholder filed an action seeking permission to videotape the appraisal of her home, and the trial court refused. Relying on Section…

Tagged with: appraisal, home inspection, property insurance, videotape
Posted in Arbitration and Appraisal

Wind Before Storm May Blow Away Flood Exclusions

Posted on July 21, 2021 by Elliot Kerzner, Alycen A. Moss

Flood exclusions may not apply when floods are preceded by winds strong enough to independently cause the loss, according to a recent decision issued by the Western District of Louisiana. In Doxey v. Aegis Security Ins. Co., No. 2:21-CV-00825, 2021 WL 2383834 (W.D. La. Jun. 10, 2021), an insured sought coverage for wind damage sustained to his home by Hurricane Laura under a property insurance policy that excluded coverage for damage “caused by, contributed to or aggravated by” flooding. The policy also contained an anti-concurrent causation clause, which excluded losses caused by excluded perils “regardless of any other cause or event contributing concurrently or in any sequence to the loss.” The insurer denied coverage under the flood exclusion on the…

Reasonableness of Insurer’s Coverage Decision Determined by Evidence Available at Time of Decision

Posted on July 13, 2021 by Elliot Kerzner, Alycen A. Moss

The Eighth Circuit Court of Appeals recently held that, under Iowa law, an insurer is not liable for breach of contract or bad faith if its coverage decision was objectively reasonable at the time it was made. In Hallmark Specialty Ins. Co. v. Phoenix C & D Recycling, Inc., No. 20-1339, 2021 WL 2197068 (8th Cir. June 1, 2021), a fire originated from a pile of biofuel material on an insured’s power plant, causing alleged damage to buildings, wiring, equipment, and other materials. The insurer paid for a portion of the insured’s equipment losses, but not for removal and installation of wiring and equipment because the policy did not require such payment until damaged property had been repaired or replaced.…

Tagged with: Bad Faith, breach of contract, Court of Appeals, Eighth Circuit, evidence, Iowa, reasonableness
Posted in Coverage

New Jersey Federal Court Holds That Insurance Coverage Issues Do Not Need To Be Decided Before Appraisal

Posted on July 06, 2021 by Paul Ferland, Vincent Passarelli

A federal court recently held that ongoing insurance coverage issues should not prevent an appraisal from going forward as per an appraisal clause in the insurance policy. In DC Plastic Products Corp. v. Westchester Surplus Lines Insurance Co. Case No. 17-13092 (D.N.J. May 19, 2021), the District Court of New Jersey directed the parties to proceed with the appraisal process as set forth in the relevant policy, despite the defendant-insurer’s argument that appraisal is improper under New Jersey law where unresolved coverage issues exist. Plaintiff DC Plastics Products Corporation (“DC Plastics”) made an insurance claim to its insurance carrier Westchester Surplus Lines Insurance Co. (“Westchester”) after DC Plastics’ premises in Bayonne, New Jersey was damaged as a result of Superstorm…

Tagged with: Arbitration and Appraisal, Causation, Causes of Loss, Coverage, Valuation
Posted in Causation, Causes of Loss, Valuation

Appraisal Process Tolls Contractual Suit Limitation Period Even For Non-Covered Claims

Posted on June 28, 2021 by Alycen A. Moss, Elliot Kerzner

The Eleventh Circuit Court of Appeals recently held that, under Georgia law, an appraisal process tolled a commercial property policy’s two-year contractual suit limitation period even for non-covered claims. In Omni Health Solutions, LLC v. Zurich Am. Ins. Co., No. 19-12406, 2021 WL 2025146 (11th Cir. May 21, 2021) (unpublished), the insured filed a property insurance claim with its insurer, reporting hail damage to the roof of its medical facility in Macon, Georgia, and water intrusion. The policy required the insurer to give notice of its intentions with respect to a claim within 30 days of receiving a sworn proof of loss. Following a protracted appraisal process, the insured sued the insurer in Georgia superior court for breach of contract…

Florida Court Holds Rust and Corrosion is “Act of Nature”

Posted on June 21, 2021 by Alycen A. Moss, Elliot Kerzner

A Florida court recently held that rust and corrosion of water pipes is an “act of nature,” and, thus, was excluded from coverage under a homeowner’s insurance policy. In Dodge v. People’s Trust Insurance Company, 2021 WL 2217299 (4th DCA Jun. 2, 2021), Florida’s Fourth District Court of Appeals defined “act of nature” as a naturally occurring force that does not require an uncontrollable or unpreventable event. About The Authors

Tagged with: act of nature, corrosion, deterioration, dodge, exclusion, Florida, Fourth District Court of Appeals, naturally occurring, overflow, people’s trust insurance company, rust, water pipes
Posted in Act of Nature

A Look Inside Florida’s Recent Property Insurance Reform

Posted on June 14, 2021 by John David Dickenson, Chad A. Pasternack

Two years after implementing meaningful assignment of benefits reform, Florida enacted broader property insurance claim reform. On June 11, 2021, Governor DeSantis sign S.B. 76, which takes effect on July 1, 2021. S.B. 76 focuses on reducing insurance claim litigation by, amongst other things, requiring timely notice of claims, curtailing certain solicitation practices used by roofing contractors, and limiting the circumstances in which attorney’s fees can be awarded to policyholders in property insurance lawsuits. About The Authors

Tagged with: 626.854, 626.9373, 627.428, 627.70131, 627.70132, 627.70152, 627.70153, 768.79, Attorney’s Fees, Claim, contractors, Florida, Insurance, notice, offer of judgment, presuit, property, reform, roof, S.B. 76, statutes
Posted in Property Insurance Reform

South Carolina Allows Depreciation of Labor Costs In ACV Calculation

Posted on June 09, 2021 by Alycen A. Moss, Elliot Kerzner

Insurers in South Carolina may now depreciate both labor costs and material costs when determining the “actual cash value” (ACV) owed to policyholders for property damage. In Miriam Butler et al. v. Travelers Home and Marine Insurance Co. et al., Case No. 2020-001285 (S.C. May 12, 2021), the South Carolina Supreme Court held that insurers may depreciate labor costs to determine the ACV of a damaged property when an insurance policy does not define ACV and the “cost to repair or replace the damaged property at issue includes both materials and embedded labor components.” Id. About The Authors

Tagged with: Actual Cash Value, depreciation, Insurance, joseph stewart, Labor, labor costs, miriam butler, property, property damage, replacement cost value, South Carolina, south carolina supreme court, travelers
Posted in Actual Cash Value