Blog Archives

What Is Reasonable Care for Maintaining Heat in an Unoccupied Home?

The New York Supreme Court recently weighed in on what constitutes “reasonable care” to maintain heat in the context of a first-party insurance policy exclusion requiring such reasonable care. In Michael Zimmerman v. Leatherstocking Cooperative Insurance Company, CV-23-0362, 2024 NY Slip Op 02113 (April 18, 2024), the Plaintiff was in the process of selling his home in Saratoga Springs, New York. The house was insured under a homeowners policy issued by Leatherstocking Cooperative Insurance Company. On January 2, 2019, a real estate broker arrived at the house and discovered extensive water damage. Plaintiff, who had left for an extended vacation a month prior, notified Leatherstocking of the loss. About The Authors

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Texas Court of Appeals Adds Confusion to Post-Appraisal Litigation Under the TPPCA

Ever since the Texas Supreme Court changed the landscape of Texas law regarding appraisal in Barbara Technologies Corp. v. State Farm Lloyds, 589 S.W.3d 806 (Tex. 2019) and Ortiz v. State Farm Lloyds, 589 S.W.3d 127 (Tex. 2019), practitioners and courts have been struggling to apply the Texas Supreme Court’s holdings.  Barbara Technologies and Ortiz answered some questions but raised others.  About The Authors

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Missouri Takes A Stand On Depreciation

On June 28, the Missouri Court of Appeals upheld a lower court’s decision finding Lexington Insurance Company (“Lexington”) breached its policy with homeowner Cynthia Franklin. Franklin’s home has sustained damage in a May 2016 storm for which she submitted a claim with Lexington. Lexington utilizes a two-step adjusting process in which it first determines the ACV of a covered loss and issues an ACV payment. Then, if an insured requests additional reimbursement for repair and replacement costs over the amount previously paid, Lexington assesses the appropriateness of payment. In processing Franklin’s claim, Lexington withheld over $5,000 in actual cash value, citing to “depreciated labor costs.” Lexington, in a letter dated July 7, 2016, explained that Franklin could recover “applicable depreciation

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Florida Property Insurance Reform Round Three Brings Big Changes

For the third time since 2019, the Florida Legislature has enacted broad property insurance reforms with the goal of stabilizing the insurance market and curbing litigation filed by unscrupulous contractors. The bill, S.B. 2D, creates a reinsurance program, amends certain prohibited advertisement practices for contractors, permits issuance of personal lines policies with separate roof deductibles, and reigns in property insurance bad faith litigation and litigation by assignees. In this article, we will focus on the statutory changes that affect the handling and litigation of property insurance claims. About The Authors

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A Look Inside Florida’s Recent Property Insurance Reform

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

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Posted in Property Insurance Reform

South Carolina Allows Depreciation of Labor Costs In ACV Calculation

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

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Posted in Actual Cash Value
About The Property Insurance Law Observer
For more than four decades, Cozen O’Connor has represented all types of property insurers in jurisdictions throughout the United States, and it is dedicated to keeping its clients abreast of developments that impact the insurance industry. The Property Insurance Law Observer will survey court decisions, enacted or proposed legislation, and regulatory activities from all 50 states. We will also include commentary on current issues and developing trends of interest to first-party insurers.
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