Texas policyholders can no longer cut deals with storm repair contractors to pocket their deductibles for storm repairs. The Texas Legislature has amended the Texas Insurance Code and Texas Business & Commerce Code, targeting construction companies that offer “free roofs” and “waived deductibles” as enticements to policyholders. Previously, for example, contractors would reach an agreement to perform work for a policyholder, but waive or absorb the portion of the repair cost equal to the deductible. This waiver or absorption could occur through numerous paperwork tricks. Now, the policyholder must pay its deductible, otherwise the insurer can refuse to pay certain claims and the contractor can be charged with a crime. About The Author
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New Texas Laws Take Aim at Common Practice in Storm-Related Repairs
Tagged with: Absorb, Deductible, Legislation, Roofer, Waive
Posted in Deductible, Flood, Hurricane, Waiver
Posted in Deductible, Flood, Hurricane, Waiver
Insured Made Whole After Subrogation Recovery
A property insurer, having paid for covered damage, can recover the loss by seeking reimbursement from its insured where the insured has recovered funds from a responsible third-party, or the insurer may pursue a claim directly against the third-party. If the insurer makes a direct claim against the responsible party, to what extent must the insurer allocate the money it recovers to reimburse the insured for its deductible? In an opinion issued on July 3, 2019, the Washington Supreme Court held that a fault-free insured must receive the full amount of its deductible before the insurer may allocate any of the recovered funds to itself. Daniels v. State Farm Mutual Automobile Insurance Co., Wash., No. 96185-9, 2019 WL 2909308 (July…
New York Court: Undefined Word “Occurrence” in a Deductible Provision Must be Construed by the Finder of Fact
Many property policies expressly define the term “occurrence” to encompass a series of similar and related events. Last month, however, in Rokeach v. Hanover Ins. Co., 2015 WL 2400097, U.S. Dist. LEXIS 6580 (May 19, 2015, S.D.N.Y.), a New York federal court held that when the word is employed in the policy’s deductible provision without either emphasis or quotation marks, it is effectively undefined, and the question of whether it should be understood to denote a single occurrence or a series of multiple occurrences must be determined by the jury. The policyholder operated a welding business in Uniondale, and the company stored scrap metal in an ungated yard on the property. As summarized by the court, the undisputed facts were…
New Jersey Court Holds $22 Million “Named Storm” Deductible Applicable to a Superstorm Sandy Loss
On October 29th, a New Jersey trial court held that a commercial policyholder’s Superstorm Sandy claims were subject to a $22 million “named storm” deductible equal to 2% of the total insurable values at risk at all of the loss locations for which the insured made claim. In Wakefern Food Corp., et al. v. Lexington Ins. Co., Case No. L-6483-13 (N.J.Super.Ct., Middlesex Cty., Oct. 29, 2014), the court held that damage had begun to occur hours before Sandy was downgraded and no longer constituted a “named storm” as defined and that that fact “created a substantial nexus between the storm and Wakefern’s total losses” justifying application of the deductible. Plaintiff Wakefern was a buying cooperative consisting of the owners of…
Tagged with: Named Storm Deductible, New Jersey, Total Insurable Values
Posted in Deductible, Hurricane, Superstorm Sandy
Posted in Deductible, Hurricane, Superstorm Sandy
