Monthly Archives: October 2012

Failure to Defend Deprives Coinsurer of Right to Question Costs of Defense

Equitable Contribution Required St. Paul Mercury Insurance Company (St. Paul Mercury), the general liability insurer for the general contractor, sought equitable contribution from Mountain West Farm Bureau Mutual Insurance Company (Mountain West), the insurer for the framing subcontractor, based on … Continue reading

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Notice-Prejudice Rule Applied to Proof Of Loss Condition

California Court of Appeal Ignores Prior Supreme Court Decision Courts try to do justice and modify statutes and earlier precedent to provide a remedy to people otherwise not entitled to receive it by ignoring the fact that there is no … Continue reading

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Failing to Predict A Tort Judgment Is not Bad Faith

The Defense Wins In The Insurance Company of the State of Pennsylvania v. Old Republic General Insurance Corporation, Inc., United States District Court, Central District of California, Case No. 2:11-ev-05856-JHN-FFMx the Insurance Company of the State of Pennsylvania (ISOP) sued … Continue reading

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Just for Fun

Chapter 15 from “Heads I Win, Tails You Lose” The story that follows is based on fact. It is, however, a work of fiction. The names, places and descriptions have been changed to protect the guilty. Any resemblance to real … Continue reading

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Targeted Tender Binds Insurer

More than One Insurer Insured Chooses Who Defends Insurance companies are not popular or well liked by the public. Triers of fact will, on occasion, allow their dislike of insurers to color their decision. When insurers sue each other, however, … Continue reading

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Divorced Spouse Collects Life Benefits

Failure to Change Beneficiary Fatal When people are divorced they want nothing more than to totally forget the ex-spouse. Usually that is a healthy thing to do for the psyche of the spouses. It is not a good thing with … Continue reading

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Posted in Zalma on Insurance | 1 Comment

REGULAR USE EXCLUSION EFFECTIVE

An Apple Can Never Be an Orange Erie Insurance Exchange (“Erie”) appealed to the Superior Court of Pennsylvania from the grant of summary judgment in favor of Patrick and Daryl Rother (“Mother”) in a declaratory judgment action involving the applicability … Continue reading

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Insurers and Reinsurers Must Read Their Agreements

No Relief From Terms of Contract The Connecticut Court of Appeal was asked to resolve a dispute between an insurance holding company and a reinsurer in Trenwick America Reinsurance Corporation v. W. R. Berkley, No. (AC 33388) (Conn.App. 10/23/2012). The … Continue reading

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Anger Resolves Nothing

Good Faith is a Two Way Street Most states, including Louisiana, require insurers to pay all agreed claims within 30 days of the agreement. Sometimes it is difficult for an insurer to cross all the “t’s” and dot all the … Continue reading

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Employee Dishonesty Covered

Embezzlement From Payroll Account Not Salary When an insurer interprets its insurance policy it must read the entire contract and apply the facts to the wording of the policy to determine coverage. It should never read the policy with a … Continue reading

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Defective Construction Not an “Occurrence”

Fortuity Rules The Sixth Circuit Court of Appeal asked the Ohio Supreme Court to resolve a question that had not been resolved in Ohio about coverage for construction defects. The Supreme Court answered the Sixth Circuit’s question in Westfield Insurance … Continue reading

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Evil Gets a Hearing At the Supreme Court

Black Widows Remain in Jail For Life Evil should not be honored by the courts. The infamous Black Widows who killed homeless men and defrauded insurers of millions had the unmitigated gall to claim that their Sixth Amendment right to … Continue reading

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Fidelity Bond Not Liability Insurance

Bond Only Protects Insured From Infidelity When an investment company went bankrupt and its investors lost their investment the investors took an assignment from the investment company against the insurers who had issued a fidelity bond to the investment company … Continue reading

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Poor Claims Handling Causes Litigation

Excess May Sue Primary in Kentucky for Bad Faith Refusal to Settle Almost every tort lawsuit involves insurance. When a person or company is sued he, she or it asks its insurer to defend or indemnify he, she or it … Continue reading

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INSURED AND BODY SHOP CONVERT INSURANCE SETTLEMENT

Requirement for Insurance Must Be Honored When a person borrows money to buy a car and promises the lender that insurance will be purchased to protect the interest of the lender the borrower must, in good faith, obtain the insurance … Continue reading

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MORE FRAUD – LESS PROSECUTIONS

MORE FRAUD – LESS PROSECUTIONS Continuing with the twentieth issue of the 16th Year of publication of Zalma’s Insurance Fraud Letter (ZIFL) Barry Zalma reports in the October 15, 2012 issue about: the end of the story of serial fraud … Continue reading

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No Cover for Damage to Contractor’s Work

No Right to Defense if No Right to Indemnity The Wisconsin Court of Appeal, in Pamperin Rentals II, LLC, Pamperin Rentals III, LLC v. R.G. Hendricks & Sons Construction, Inc, No. 2011AP2544 (Wis.App. 10/10/2012), was called upon to resolve a … Continue reading

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Court Too Nice to Arsonist

No Mercy to an Arsonist Arson is a violent crime. People, usually firefighters fighting the fire, are injured and killed. It is for that reason that when a person is convicted of arson and attempted insurance fraud, he or she … Continue reading

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Arson & the Loss Payable Clause

Arson By Insured Does Not Eliminate Rights of Mortgagee The Sixth Circuit Court of Appeals was called upon to determine whether certain insurance policies exclude coverage to a loss payee when the primary insured caused the loss by intentionally burning … Continue reading

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Limit on Non-Economic Damages Constitutional

No Right to Unlimited Non-Economic Damages In Kansas, determining whether a statute violates the constitution is a question of law subject to unlimited review. In Amy C. Miller v. Carolyn N. Johnson, M.D, No. 99,818 (Kan. 10/05/2012) Miller claimed that … Continue reading

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It is Expensive to Fight Insurance Fraud & Worth Every Penny

No Mercy for Insurance Fraud When a police officer arrests a person for insurance fraud with the assistance and cooperation of the insurance industry only to find that the prosecution fails he, and the insurers who helped him, will find … Continue reading

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Insured Who Rushed to Sue Must Submit to Appraisal

APPRAISAL IS A CONDITION PRECEDENT TO SUIT In 2010, Patricia Gainey brought a claim under her homeowner’s insurance policy with American Integrity Insurance, claiming that her residence was damaged by a water leak. After an inspection, American issued a check … Continue reading

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Statute Revokes Beneficiary Designation

Ex-Wife Loses In Pennsylvania, if a spouse is named as a beneficiary of a life insurance policy, can lose those rights after a divorce if the beneficiary designation or divorce settlement agreement fails to deal with the issue. A simple … Continue reading

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Evidence Of Physical Manifestation Required

Emotional Distress Alone Not “Bodily Injury” People continue to bring cases to the courts asking that the court rewrite a policy to provide coverage that the insurer never promised to provide. Even when the plaintiffs have suffered greatly they cannot … Continue reading

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Insurer v. Insurer Suits Should Be Avoided If Possible

Employers Liability Policy Promises Limited Duty to Defend In a state like New Jersey where coverage disputes are limited to the four corners of the facts alleged in a suit, before disputing coverage it is essential that the insurer analyze … Continue reading

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Breach of Contract Not an Accident

Insurer Enforces Clear Exclusion Liability insurance is a contract whereby the insurer agrees defend or indemnify the insured against contingent or unknown events subject to the terms and conditions of the policy. No insurance policy has ever insured against every … Continue reading

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INSURANCE FRAUD CONTINUES UNABATED

Zalma’s Insurance Fraud Letter — October 1, 2012 Continuing with the eighteenth issue of the 16th Year of publication of Zalma’s Insurance Fraud Letter (ZIFL) Barry Zalma reports in the October 1, 2012 issue about a fraud conference operated by … Continue reading

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