A typical claim for a homeowner will involve some type of damage to the property, which, in turn, prompts the insurer to perform an inspection of the insured property, so as to assess the cause and extent of the alleged damage. Depending on the nature of the claim, insurers may be able to have a solitary claims professional perform the inspection in a rather minimal amount of time, but that is not always the case. In particular, when an insured has claimed damage to the property’s roof, the claims professional may need assistance in gaining access to the roof—perhaps requiring a ladder assist—or otherwise will need to use caution in assessing the claim, which can be time consuming.
Continue Reading Drones and Insurance: How Unmanned Aircraft Systems Can Assist Insurers in Timely and Effectively Evaluating Property Damage Claims
Appraisal
Massachusetts Reference Award and Alleged Chapter 93A Violation Addressed By Federal District Court Opinion
The Massachusetts reference process is a creature of statute designed to provide an expeditious method to resolve disputes over the amount of loss covered by a property insurance policy. While a reference panel cannot decide coverage issues, its calculation of the amount of loss is “conclusive and final” under the governing statute, and courts have concluded that such an award is not subject to challenge except on grounds such as fraud, collusion, or bias. The United States District Court for the District of Massachusetts recently affirmed the finality of a reference award in Bearbones, Inc. v. Peerless Indemnity Ins. Co., Civil Action No. 3:15-cv-30017 (KAR) (D. Mass. Oct. 17, 2017).
Bearbones involved a burst water pipe at a commercial bakery in Pittsfield, Massachusetts that caused physical damage to the bakery’s building and business personal property and interrupted its business operations. After receiving notice of the loss, Peerless conducted an investigation and issued payments totaling $32,496.08 for building and business personal property losses.
Continue Reading Massachusetts Reference Award and Alleged Chapter 93A Violation Addressed By Federal District Court Opinion
Connecticut Supreme Court Reaffirms Court’s Limited Power To Review Appraisal Awards
The Connecticut Supreme Court recently handed down an important decision reiterating the high bar to overturning arbitration awards while, at the same time, clarifying a portion of the applicable statute providing for vacating an arbitration award as well as a prior ruling concerning the timing of payment of heldback depreciation.
In Kellogg v. Middlesex Mutual Assurance Company, the plaintiff insured her historic property under the defendant’s restorationist policy. Unlike traditional homeowners policies, the restorationist policy had no policy limit; rather, if repairs were completed, it provided for the full replacement or restoration cost of the property without deduction for depreciation. The insured property was damaged when a large tree fell on the roof and chimney during a storm. When the parties could not agree as to the amount of the loss, the insured submitted the dispute to appraisal. Following seven site visits, the submission of voluminous materials, and hearings with multiple witnesses concerning the correct amount of the claim ($1.6 million v. $476,000), the umpire and the insurer’s appraisal awarded the insured nearly $580,000 on a replacement cost basis. The insured filed an application with the Connecticut Superior Court to vacate the arbitration award under Conn. Gen. Stat. § 52-418. Following an eight day trial that covered the entirety of the claim and appraisal process, the court vacated the award and ordered a new arbitration hearing.
Continue Reading Connecticut Supreme Court Reaffirms Court’s Limited Power To Review Appraisal Awards
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 before the suit limitation expired. MZM Real Estate Corp. v. Tower Ins. Co. of New York, 2017 N.Y. Misc. LEXIS 1292 (Apr. 7, 2017). MZM incurred damages as a result of Storm Sandy on October 29, 2012. The Tower insurance policy contained a typical suit limitation provision stating that no one may bring action against the insurer unless suit is filed within two years “after the date on which the direct physical loss or damage occurred.” In November 2012, Tower Insurance paid $4,000, the undisputed amount of the claim. On October 28, 2013, over a year after the date of the loss, MZM demanded appraisal. On February 2, 2015, an unsigned appraisal award was issued in the amount of $170,129. Tower refused to pay the appraisal award on various grounds, including that the award included amounts that were not covered by the insurance policy.
Continue Reading Appraisal Award Unenforceable Where Suit Limitation Period Expired Prior To Filing Suit: New York County Dismisses Storm Sandy Coverage Suit
Insurance Company Drones May Be Hitting the Skies
Back in March, our Data Privacy + Security Insider blog reported an increase in the use of commercial drones by State Departments of Transportation across the country. Now, insurance companies are also getting in the game. Using drones for underwriting, determining property values and conditions for policy issuance, inspections and risk evaluations may be more…
Insurance Fraud Case: Second Circuit Addresses Adverse Inference Instruction, Restitution For Prior Payments
In insurance fraud cases involving actual or alleged destruction of evidence by the insured, an issue often arises regarding whether an adverse inference instruction is appropriate, and, if so, what form it should take. The Second Circuit recently approved a “light” form of adverse inference instruction that allowed the jury to make an adverse inference…
Florida Second DCA Rules That Payment Of Appraisal Award Satisfies The “Favorable Resolution” Requirement For A Bad Faith Action
In Florida, bad-faith actions against insurers pursuant to Section 624.155 cannot be brought until (1) the insured files a civil remedy notice (CRN) accepted by Florida’s Department of Financial Services; and (2) the underlying breach of contract lawsuit is “resolved in the insured’s favor.” See Blanchard v. State Farm Mut. Ins. Co., 575 So.…
Florida Administrative Rule Requiring Notification of Mediation Program Within Five Days Deemed Invalid
Administrative regulations enacted pursuant to a state statute often impose strict deadlines by which insurers are required to perform a variety of tasks, including the prompt issuance of a reservations of rights, notification of coverage determinations, and advising of an insured’s right to file a complaint with the state’s insurance department. Often overlooked is the…
When is an Appraisal Demand Premature? Southern District of Florida Addresses a Post-Litigation Appraisal Demand
When is an Appraisal Demand Premature? Southern District of Florida Addresses a Post-Litigation Appraisal Demand
Biscayne Cove Condominium Association, Inc. v. QBE Ins. Corp., 2013 U.S. Dist. LEXIS 5194 (S.D. Fla. Jan. 14, 2013), involved a Hurricane Wilma property coverage dispute at a condominium complex. In this case, the court denied the insurer’s (“QBE’)…
Attorneys’ Fees and Prejudgment Interest Recovery in Appraisal Context: Florida Federal Court Determines Attorneys’ Fees Are Appropriate, but Prejudgment Interest Is Not
The ability to recover extra-contractual damages such as attorneys’ fees, costs and interest in insurance coverage cases varies widely in jurisdictions nationwide. The Southern District of Florida’s recent decision in Sands on the Ocean addresses the recovery of attorneys’ fees and prejudgment interest in an appraisal context in Florida. In Florida, a statute generally provides…