Monthly Archives: January 2014

Insurance Fraud Requires Direct Trip to Jail

In the third issue of its 18th year of publication of Zalma’s Insurance Fraud Letter (ZIFL) Barry Zalma, on February 1, 2014, continues the effort to reduce the effect of insurance fraud around the world. The current issue of ZIFL … Continue reading

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Advertising Injury Coverage

Defense by Independent Counsel Dangerous In June 2006, Theodore W. Lay, d/b/a Ted Lay Real Estate Agency (Lay), faxed an advertisement in regard to the sale of a particular property to Locklear Electric, Inc. (Locklear), and others. Because the facsimile … Continue reading

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An “Auto” By Any Other Name

Inadequate Underwriting Is Expensive One of the operators of a leased food truck was burned inside the truck by oil from a deep fryer that splashed on her. The insurers for the lessor dispute with one another coverage. The automobile … Continue reading

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Pollution Exclusion Effective

Percholorate is a Pollutant Insurers, after being forced to cover a risk none had anticipated, the clean up of environmental pollution, inserted into Commercial General Liability (CGL) policies a total pollution exclusion. In addition, the insurance industry created separate policies … Continue reading

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First Party vs. Third Party

“Other Insurance Clause” Eliminates Coverage First party property insurance only insure the owner of the property for its loss and makes no promise to defend or indemnify the insured against claims of third parties. Even in bailment situations, where the … Continue reading

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Potential Coverage Requires Defense

Subrogation Against Insurer that Failed to Defend Just because one of two available insurers agrees to defend an insured another insurer has no right to refuse to defend. In Yousuf v. Cohlmia, 12-5034, 12-5038 (10th Cir. 01/21/2014) American National Property … Continue reading

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Policy Must Be Read as A Whole

Single Fire – Multiple Occurrences Bad facts with severe injuries make bad insurance law when courts attempt to interpret policies to provide maximum funds available for the victim. The Supreme Court of Connecticut was asked to interpret various provisions of … Continue reading

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No Assumption of Liability

AIA Contract Promises No More Than to Perform Work in a Good and Workmanlike Manner The United States Court of Appeals for the Fifth Circuit sent the following certified questions to the Supreme Court of Texas. The certified questions are: … Continue reading

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Insurer Has Burden of Proving Exclusion

“Unknown Cause” is Different than Intentional Accidental life insurance policies require that the death must be accidental. If an insurer believes the death was not accidental it has the burden of proof. Sometimes insurers carry the burden and sometimes insurers … Continue reading

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Insurable Interest In Life Policy

Life Policy Cannot Be Cancelled by Life Insured When a life insurance policy is purchased and paid for by persons other than the life insured, disputes invariably arise. When the personal representative of a life insured attempted to cancel a … Continue reading

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Making it Easy to Serve Suit Is Dangerous

Insurer Lives and Dies by the Words of Its Policy Insurance companies, like the people they insure, sometimes fail to read the policies they issue. When an insurer creates a “service of suit” clause that allows an insured to serve … Continue reading

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Insured Must Pay Premium to Effect Insurance

If Judge Doesn’t Believe You – You Lose Mark Brooks appealed from a judgment of the Superior Court in favor of Massachusetts Mutual Life Insurance Company (MassMutual) following a jury-waived trial. At trial, Brooks asserted that MassMutual made misrepresentations to … Continue reading

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Immunity for Reporting Suspected Fraud

Zalma’s Insurance Fraud Letter January 15, 2013 In the second issue of its 18th year of publication of Zalma’s Insurance Fraud Letter (ZIFL) Barry Zalma, in the January 15, 2014 issue, continues the effort to reduce the effect of insurance … Continue reading

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Failure to File Timely Suit Fatal

Third Party Beneficiary Must Fulfill Conditions The Iowa Supreme Court, in Osmic v. Nationwide Agribusiness Insurance Co., 12-1295 (Iowa 01/10/2014),  was asked whether a policy provision limiting the time to file an action to recover underinsured motorist’s benefits is binding on … Continue reading

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Flood Insurance Conditions

No Proof of Loss – No Coverage The National Flood Insurance Program is a creature of Congress and the Federal Emergency Management Agency (FEMA) who wrote the terms and conditions of the policy. The statute and FEMA Regulations require that … Continue reading

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Flood Insurance

Statute Requires Bank to Demand Borrower Buy Full Replacement Value Flood Insurance People do not like to pay for insurance. They consider it a useless expense until a hazard occurs. Lenders require borrowers to insure against certain hazards to protect … Continue reading

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A Claim Is Not A Suit

The Danger of Taking Assignment of A Claim Against an Insurer Some people and their lawyers believe it is best to settle with a defendant and take an assignment of the defendants’ rights against its insurer rather than get a … Continue reading

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Fraud Punished With Mercy

Insurer & Regulators Defrauded by Insurer Management The Delaware Court of Chancery was faced with fraud by the principal of a Risk Retention Group insurer, Indemnity Insurance Corporation, RRG (“Indemnity”). When the state attempted to liquidate Indemnity it found that … Continue reading

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Disbarred

A Lawyer Must Never Steal from Client Lawyers take in money for clients in the normal course of practice to settle lawsuits, claims or deal with the sale of real property. They are charged as fiduciaries to hold the money … Continue reading

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UM Requires Uninsured Vehicle

U.S. Army Vehicle Not Uninsured The United States Army operates many vehicles on the roads of the United States. None are insured because the government has unlimited funds to pay claims. The Army limits the use of military vehicles to … Continue reading

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There is No Free Lunch

Medicare is a Secondary Payer Medicare, by statute, is a secondary payer of medical expenses for the elderly who are Medicare beneficiaries. The statutes that created Medicare pays for all of the immediate medical expenses of a Medicare beneficiary as … Continue reading

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Fiduciary Relationship Never Unilateral

Ignorance Can Be Cured But Not Ignored People who insure their property must order the insurance they or their business requires. Insurance brokers transact the business of insurance with, but not on behalf of insurers while insurance agents transact insurance … Continue reading

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Happy New Year Everyone

Fraud Convictions Withstand Challenge Starting its 18th year of publication of Zalma’s Insurance Fraud Letter (ZIFL) with its first Issue, Barry Zalma, in the January 1, 2014 issue, continues the effort to reduce the effect of insurance fraud around the … Continue reading

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