Monthly Archives: July 2013

The Insurance Warranty

Breach Warranty – Lose Coverage Insurers who insure the liability of contractors will often include in their policy a warranty that compels the general contractor to obtain proof that all its subcontractors are insured. In an important case, North American … Continue reading

Share
Posted in Zalma on Insurance | Comments Off on The Insurance Warranty

Corporation Forced to Buy Insurance

First Amendment Free Exercise of Religion Doesn’t Apply to For Profit Corporation It is the dream of every business that its customers be required by law to enter into a contract to buy the product of the business. Insurance is, … Continue reading

Share
Posted in Zalma on Insurance | Comments Off on Corporation Forced to Buy Insurance

Adjuster Class Defeated

Change In Law Defeats Ruling The California Supreme Court has the authority to depublish an appellate decision without making a decision on the facts or law in the case before it. The decision to depublish is the same as the … Continue reading

Share
Posted in Zalma on Insurance | Comments Off on Adjuster Class Defeated

Make Whole Doctrine Explained

Insured Can’t Profit From Loss The Supreme Court of Connecticut was asked by the United States Court of Appeals for the Second Circuit whether the make whole doctrine is recognized as the default rule under Connecticut law; and, if so,does … Continue reading

Share
Posted in Zalma on Insurance | Comments Off on Make Whole Doctrine Explained

Contract Term Unenforceable

Private Limitation of Action Provision Unreasonable It is axiomatic that parties to insurance contracts may agree to any terms and conditions they desire as long as they do not violate public policy. Courts across the country enforce private limitations of … Continue reading

Share
Posted in Zalma on Insurance | Comments Off on Contract Term Unenforceable

First Party Bad Faith Is Born

Insured Can Avoid EUO In Gruenberg v. Aetna Insurance Co., 9 Cal. 3d 566, 510 P.2d 1032, 108 Cal. Rptr. 480 (Cal. 06/11/1973)  the Supreme Court of California changed its own precedent and precedent set by the United States Supreme … Continue reading

Share
Posted in Zalma on Insurance | 1 Comment

The Birth of the Covenant of Good Faith and Fair Dealing

Insured Need Not Disclose What is Known to Insurer In 1766, before the idea of the United States of America was conceived, the British House of Lords recognized the existence of the covenant of good faith and fair dealing in … Continue reading

Share
Posted in Zalma on Insurance | Comments Off on The Birth of the Covenant of Good Faith and Fair Dealing

Insurers Must Keep Promises

Post Judgment Interest Must Be Paid In Addition to Policy Limits The plaintiffs-appellants were awarded six million dollars in damages for injuries sustained in an automobile accident. Defendant-appellee Cooperativa de Seguros Múltiples de Puerto Rico (“Cooperativa”) had issued an automobile … Continue reading

Share
Posted in Zalma on Insurance | Comments Off on Insurers Must Keep Promises

Insured Must Prove Loss

Oldie But Goodie Compagnie des Bauxites de Guinee (CBG) appealed from a judgment against Insurance Company of North America (INA) for $72,273 in its suit on an insurance policy. CBG contends that the judgment should have been no less than … Continue reading

Share
Posted in Zalma on Insurance | Comments Off on Insured Must Prove Loss

From Heads I Win, Tails You Lose

The Long Hot Spring [The story that follows is fiction based on reality. The names, places and facts were changed to protect the guilty. It is one of more than 80 stories of insurance fraud to be found in the … Continue reading

Share
Posted in Zalma on Insurance | 1 Comment

Insurance Fraud Continues Unabated

Just a few insurance fraud convictions for your consideration: Sexy Doc Guilty of Disability Insurance Fraud Dr. Joseph Mermelstein, a New York ophthalmologist, pleaded guilty and was convicted of mail fraud after his mistress testified that his bedroom technique showed … Continue reading

Share
Posted in Zalma on Insurance | 1 Comment

New Prices for E-Books

Continuing education is the key to the professionalism of claims personnel, claims attorneys, insurance defense attorneys, public adjusters and attorneys for policyholders. Barry Zalma has created multiple e-books covering various aspects of insurance law and needed by every insurance professional. … Continue reading

Share
Posted in Zalma on Insurance | Comments Off on New Prices for E-Books

Intentional Act Not an “Occurrence”

“Occurrence” Determined from Viewpoint of Insured  An insurance policy must be interpreted to provide the protection the parties intended. It is not a device to protect against every possible incident and, by definition, can only insure against fortuitous events. This … Continue reading

Share
Posted in Zalma on Insurance | Comments Off on Intentional Act Not an “Occurrence”

Void From Inception

Misrepresentation Requires Insured to Return Claim Payment Insurance companies rely on the good faith and fair dealing of prospective insureds when making a decision to insure or not insure against a particular risk of loss. When the insured fails to … Continue reading

Share
Posted in Zalma on Insurance | Comments Off on Void From Inception

Feds Abandon Anti-Fraud Efforts

Zalma’s Insurance Fraud Letter  July 15, 2013 Continuing with the forteenth issue of the 17th year of publication of Zalma’s Insurance Fraud Letter (ZIFL) Barry Zalma reports in the July 15, 2013 issue on: 1.    Are Anti-Fraud Efforts Being Abandoned … Continue reading

Share
Posted in Zalma on Insurance | Comments Off on Feds Abandon Anti-Fraud Efforts

Insurer Controls Settlement

Insured Settles Without Consent of Insurer The courts of the state of Pennsylvania were called upon to resolve an insurance coverage dispute between Appellants American Nuclear Insurers and Mutual Atomic Energy Liability Underwriters (collectively, “ANI”) and The Babcock & Wilcox … Continue reading

Share
Posted in Zalma on Insurance | Comments Off on Insurer Controls Settlement

Workers’ Compensation Audit Hurts

Failure to Present Records is Costly Because of the ever-changing nature of a business, the policy premium for a workers’ compensation policy usually cannot be determined until after the policy has expired. For this reason, the insurer, applying the covenant … Continue reading

Share
Posted in Zalma on Insurance | 1 Comment

The Purpose of UIM Insurance

UIM Policy Language Means What it Says The purpose of underinsured-motorist (UIM) coverage is to fill the gap between the claim and the tortfeasor’s insurance and to prevent the insured from recovering amounts from the insurer over and above the … Continue reading

Share
Posted in Zalma on Insurance | Comments Off on The Purpose of UIM Insurance

Don’t Sit On Your Rights

Delay in Filing Suit Unreasonable The purpose of a statute of limitations is to promote justice by preventing surprises through the revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses … Continue reading

Share
Posted in Zalma on Insurance | Comments Off on Don’t Sit On Your Rights

Subrogation Waiver

Lease Deprives Insurer of Right of Subrogation Subrogation is an equitable remedy where an insurer that has paid a loss under an insurance policy is entitled to all the rights and remedies belonging to the insured against a third party with … Continue reading

Share
Posted in Zalma on Insurance | Comments Off on Subrogation Waiver

“Heads I Win, Tails You Lose – 2013”

New E-Book from Barry Zalma This E-book started as a collection of columns insurance consultant, expert witness and insurance lawyer Barry Zalma wrote and published in the magazines “Insurance Journal,” “Insurance Week,” and “The John Cooke Insurance Fraud Report.” It … Continue reading

Share
Posted in Zalma on Insurance | Comments Off on “Heads I Win, Tails You Lose – 2013”

Insurer Must Pay Replacement Cost

The Danger of Good Intentions The Florida Legislature enacted a statute requiring insurers to pay full replacement cost after a fire or other loss whether the insured actually replaces the property or not. The statute was enacted to protect property … Continue reading

Share
Posted in Zalma on Insurance | Comments Off on Insurer Must Pay Replacement Cost

Effective Surveillance

Don’t Lie to Your Employer Workers’ Compensation is a no-fault system that pays medical costs and disability payments to a worker injured on the job. Because the system was abused state legislatures, like the legislature of the state of California, … Continue reading

Share
Posted in Zalma on Insurance | Comments Off on Effective Surveillance

Invitation to Fraud

Florida Statute Eliminates Right to EUO It has been axiomatic in insurance law that courts must interpret insurance policies as written. Automobile liability policies and automobile no fault personal injury protection (PIP) policies are statutorily mandated and must be approved … Continue reading

Share
Posted in Zalma on Insurance | Comments Off on Invitation to Fraud

Ninth Refuses to Extend Montrose

Occurrence Must Be During Policy Period Insurance is usually limited to losses that occur during the stated effective dates of the policy, known as the policy period. In Montrose Chemical Corp. v. Admiral Insurance Co, 913 P.2d 878 (Cal. 1995) … Continue reading

Share
Posted in Zalma on Insurance | Comments Off on Ninth Refuses to Extend Montrose

Fraud Progresses

Continuing with the thirteenth issue of the 17th year of publication of Zalma’s Insurance Fraud Letter (ZIFL) Barry Zalma reports in the July 1, 2013 issue on: 1.    Don’t Lie to Your Insurer. 2.    It Pays to Report Fraudsters in … Continue reading

Share
Posted in Zalma on Insurance | Comments Off on Fraud Progresses