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District of New Jersey Finds Post-Denial Communications By Insurer’s Counsel Insufficient to Sustain Bad Faith Claim

Under New Jersey law, an insurer cannot be held liable for bad faith in denying an insurance claim if the claim is “fairly debatable.” Therefore, unless a plaintiff can establish a right to summary judgment on the underlying cause of action for breach of contract, the coverage denial is considered “fairly debatable” and the court … Continue Reading

Scope of Recoverable Damages: District of New Jersey Finds Insureds Not Entitled to Replacement Cost Value Until Damaged Property is Repaired or Replaced

Property insurance policies typically require that the insured repair or replace damaged property before recovering on a replacement cost value (RCV) basis. Until then, the insured is entitled only to the actual cash value (ACV) of the damaged property. The U.S. District Court for the District of New Jersey recently decided a case involving the … Continue Reading

Work Product and Attorney-Client Privilege Concerning Documents Drafted Prior To Litigation: Eastern District Of New York Finds Insurer’s Documents Are Not Discoverable

Insurers retain outside counsel during claim investigations for a variety of reasons, including, among others, providing coverage advice, assisting in reviewing and responding to communications with insureds that have legal implications, and providing settlement recommendations. When coverage disputes arise, policyholders often seek the production of these pre-suit communications, arguing that outside counsel was merely performing … Continue Reading

New Texas Insurance Code Chapter 542A, Effective September 1, 2017, May Reduce The Number of Harvey Lawsuits

Recently, the Texas legislature acted to curb abusive lawsuits filed by insureds as a result of hailstorm and other property insurance claims.  According to the Executive Director of The Texas Coalition for Affordable Insurance Solutions (TCAIS), the sheer quantity of abusive lawsuits filed against insurers in Texas was affecting the “availability and affordability of homeowners … Continue Reading

Suit Limitation Period In Standard Flood Insurance Policy Is Not Tolled By Filing In State Court: Hurricane Irene Claim Dismissed By Fourth Circuit

The terms and conditions of the Standard Flood Insurance Policy (“SFIP”) are specified by regulations promulgated under the National Flood Insurance Act (“NFIA”). One of the terms in the SFIP provides that the insured cannot sue the flood carrier unless the insured has complied with all requirements of the policy and the insured must “start … Continue Reading

Appraisal Award Unenforceable Where Suit Limitation Period Expired Prior To Filing Suit: New York County Dismisses Storm Sandy Coverage Suit

Suit limitation provisions in insurance policies shorten the statutory period of time that a plaintiff may bring a suit against an insurer for certain causes of action. A New York court recently held that an appraisal award issued a few months after the suit limitation expired was unenforceable where the insured failed to file suit … Continue Reading

Innocent or Unintentional Mistake in Application is Irrelevant: NY’s Second Department Finds Rescission Appropriate and Affirms Summary Judgment Based on Insurer’s Claim of Misrepresentation

When an insurer finds that the insured misrepresented a material fact in an application for insurance, the insurer may rescind the policy of insurance, and take the position that no coverage exists for a claimed loss. In a recent case analyzed by New York’s Second Department, Otsego Mutual rescinded its policy of insurance with the … Continue Reading

District of Connecticut Reaffirms That Definition Of “Collapse” Is Unambiguous

The United States District Court for the District of Connecticut recently reaffirmed its ruling that the term “collapse,” as defined by a homeowners insurance policy, is unambiguous and that the policy in question did not provide coverage for the alleged “cracking” and/or “bulging” of the insureds’ foundation walls.  In Alexander v. Gen. Ins. Co. of … Continue Reading

Competing Causes of Loss: Florida Supreme Court Issues Decision Applying The Concurrent Causation Doctrine

We have discussed on a number of occasions the issue of causation when there are multiple causes of loss, some covered and some not covered. Most jurisdictions apply what is known as the efficient proximate cause analysis with a minority of jurisdictions applying the concurrent causation analysis, both of which are explained on our blog … Continue Reading

Ambiguity And Ensuing Loss: The Second Circuit Affirms The Southern District Of New York’s Holdings In a $675 Million Superstorm Sandy Insurance Coverage Dispute

In National Railroad Passenger Corp. v. Aspen Specialty Ins. Co., 2016 U.S. App. LEXIS 16074 (2d. Cir. Aug. 31, 2016), Amtrak sought the entire $675 million of available coverage from a number of its insurers for damages incurred as a result of Superstorm Sandy.  Most of Amtrak’s damages resulted from flooding of tunnels under the … Continue Reading

Drone Mapping the Way of the Future for Insurance Companies

Drone mapping provides insurance companies with an easy, fast and accurate method of documenting a scene and preserving key details  while also letting the process of clean-up and reconstruction begin as quickly as possible. Recently, Dronotec, a start-up company specializing in drone inspection for insurance companies conducted a case study to determine just how much … Continue Reading

New York’s Second Department Holds That Omission of Exclusion in Declination Letter Does Not Operate As Waiver

On April 6, 2016, New York’s Second Department issued a decision in Provencal, LLC v. Tower Insurance Company of New York, 2016 N.Y. App. LEXIS 2529 (Apr. 6, 2016) holding that an insurer does not waive application of an exclusion in an insurance policy if the insurer omits the language of the exclusion in the declination … Continue Reading

Suit Limitation Is A Contractual Term, Not A Statute Of Limitations: Virginia Supreme Court Orders Allstate’s Demurrer Be Granted

The Virginia Supreme Court recently clarified that, even if the suit limitation in a standard fire insurance policy incorporates the language required by Virginia Code, the suit limitation language is not subject to statutory tolling of statutory limitation periods.  In Allstate Property and Casualty Ins. Co. v. Ploutis, 2015 Va. LEXIS 109 (Sept. 17, 2015), … Continue Reading

Mold Exclusion: Louisiana Federal Court Interprets Exclusion And Endorsement

Many insurance policies include exclusions that are modified by endorsement. An analysis of the specific language in both the exclusionary provision and the modifying endorsement are critical in determining whether a peril is excluded by the policy. Evonthe Hayes v. Southern Fidelity Insurance Company, 2014 U.S. Dist. LEXIS 14692 (E.D. La. October 15, 2014) involved … Continue Reading

Robinson+Cole’s Insurance Practice Group Members Present At 1st Annual Bad Faith Litigation Strategies ExecuSummit

On November 4 and 5, a number of our Insurance and Reinsurance Practice Group members attended the 1st Annual Bad Faith Litigation Strategies ExecuSummit, which was held near New Haven, Connecticut. Deb Vennos and Greg Varga were panelists, and presented on the topic of Unfair Trade Practice Acts nationwide. The ExecuSummit was well-attended by claims adjusters … Continue Reading

Superstorm Sandy Named Storm Deductible: Central District of California Denies Summary Judgment to Insurer Based on California Law

As we reported in March the issue of whether Named Storm deductibles apply will likely be the subject of Sandy litigation. As a reminder, many state insurance departments issued bulletins indicating that insurance companies should not impose hurricane deductibles on homeowners, mainly because the classification of Sandy shifted from a hurricane to a post-tropical storm as … Continue Reading

Extra-contractual Claims Dismissed In Hurricane Sandy Cases: Two Eastern District of New York Judges Issue Decisions Sua Sponte

In a series of recent sua sponte decisions in six Superstorm Sandy cases, Judges Seybert and Feuerstein dismissed extra contractual claims and dismissed all but the first named plaintiffs’ claims pursuant to Fed. R. Civ. P. 20. The cases involve up to two hundred and seventeen named plaintiffs (perhaps in an attempt to avoid separate filing … Continue Reading

Suit Limitation Provision Does Not Apply To Intervenor: Connecticut Supreme Court Finds Motion To Intervene Relates Back To Date Of Complaint

In Austin-Casares v. Safeco Ins. Co., 2013 Conn. LEXIS 409 (Dec. 3, 2013), the Connecticut Supreme Court, in a case of first impression, reversed a trial court’s decision, which held that the suit limitation provision unambiguously precluded a mortgagee from intervening in a suit when the motion to intervene was filed after the suit limitation … Continue Reading

Failure To Establish A Violation of the Connecticut Unfair Insurance Practices Act Renders A Claim For Violation Of The Connecticut Unfair Trade Practices Act Meritless

The Connecticut Supreme Court’s recent decision reaffirming that a CUTPA claim against an insurance company (or agent or broker) must be strictly limited to alleging improper practices that are in violation of CUIPA will be particularly helpful to insurers in defending lawsuits asserting unfair trade practice and other bad faith claims. State of Connecticut v. … Continue Reading

Connecticut Property Insurance Mediation Law Enacted: Insurance Department Authorized To Implement Mediation Program For Catastrophic Losses

Last week, Connecticut’s Governor signed into law Public Act 13-148, titled “An Act Establishing A Mediation Program For Certain Insurance Policy Claims and Concerning Requirements for Persons Performing Repairs, Remediation or Mitigation Pursuant to a Loss” (“PA 13-148” or “Act”). Applicability PA 13-148, which will become effective on October 1, 2013, allows Connecticut’s Insurance Department … Continue Reading

Boston Bombings: Massachusetts Commissioner of Insurance Issues Bulletin Regarding Procedures for Insurance Claims

On April 25, 2013, the Massachusetts Division of Insurance (“DOI”) issued a bulletin offering “guidance and recommendations” regarding the handling of insurance claims, premium payments, and underwriting of coverage related to the April 15, 2013 bombings in Boston. Of note, the DOI indicates that insurers are required to promptly investigate all claims, and “encourages” insurers … Continue Reading

New Jersey’s Department of Banking and Insurance Unveils Mandatory Mediation Program for Sandy Claims

New Jersey’s Department of Banking and Insurance Unveils Mandatory Mediation Program for Sandy Claims On March 26, 2013, New Jersey’s Department of Banking and Insurance (“Department”) issued a significant new Hurricane Sandy-related order that will affect nearly all insurers doing business in the State of New Jersey.  Order No. A13-106 (“Mediation Order”) requires insurers to participate … Continue Reading
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