Monthly Archives: February 2014

Contract of Personal Indemnity

Not an Insured — Not Covered First party property insurance is a contract of personal indemnity. It does not follow the ownership of the property. It is a personal contract between the insurer and the persons named in the policy. … Continue reading

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Death Penalty for Murder for Insurance

Insurance Fraud Is NOT A Victimless Crime The plaintiffs’ bar, many members of the public, the courts, police and prosecutors believe that insurance fraud is a victimless crime since only an impersonal, rich and disliked corporation is harmed. The California … Continue reading

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Bad Deal Worse Than No Deal

Don’t Jump Out of a Perfectly Good Airplane People severely injured believe that the only possible recourse is the insurance available to the tortfeasor. The injured party, if the insurer refuses to cover the tortfeasor, will enter into an agreement … Continue reading

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Plain Language of Policy Controls

Contingent Business Interruption Insurance is a contractual relationship. Insurers have the right to choose the risks they are willing to take and, by clear language of the policy, avoid the risks the insurers are unwilling to take. In Millennium Inorganic … Continue reading

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Estoppel Cannot Create Coverage

No Coverage No Bad Faith Lawyers with a weak case get creative when attempting to obtain coverage for a person insured whose claim was denied. In Lewis Holding Company, Inc. v. Forsberg Engerman Co., S-13-0093 (Wyo. 02/21/2014) the Supreme Court … Continue reading

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Subrogation Available for Separate & Distinct Coverage

Once Insured Made Whole Subrogation May Proceed The language of insurance policies provide the insurer with a right of subrogation so it can recover from a tortfeasor the amount it paid to its insured. Courts have changed the application of … Continue reading

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Man Bites Dog Story – Court Admits It Was Wrong

Insurer Who Wrongfully Refuses Defense May Still Assert Exclusions American Guarantee & Liability Insurance Company asked the highest court in New York to consider its reargument that its prior decision in K2 Inv. Group, LLC v Am. Guar. & Liab. … Continue reading

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Cancellation & Premium Finance

Premium Financed Belongs to Lender on Cancellation When a policy is financed the premium finance company obtains promises from the borrower/insured and the insurer: First: That the loan will be repaid by the borrower. Second: That if the policy is … Continue reading

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Insurer May Dispute Amount of Loss

Appraisal Award Ends Dispute First party property policies contain a condition that, if the parties can’t agree on the amount of loss, that the dispute be resolved by a panel of appraisers appointed by the insured and an umpire selected … Continue reading

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Read Policy Obtained by Others Or Else

Don’t Rely on Others to Insure You In many lease agreements the lessor or lessee often rely on the other to purchase insurance to protect the risks faced by the other. Lawyers negotiate with vigor to write a lease or … Continue reading

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Murder & Insurance Fraud

Plaintiffs’ Asbestos Lawyers Get Sued In the fourth issue of its 18th year of publication of Zalma’s Insurance Fraud Letter (ZIFL) Barry Zalma, on February 15, 2014, continues the effort to reduce the effect of insurance fraud around the world. … Continue reading

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Divorce Doesn’t Pay

Life Beneficiary Loses Right to Proceeds by Statute When a couple divorces the court distributes the assets and liabilities of the divorcing couple to each party in a fair and equitable manner. When, after a divorce, a spouse dies and … Continue reading

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Insured Must Be Made Whole

Indemnity Payments Used To Exhaust SIR It is assumed – incorrectly – that insurers carefully word the policies they issue. Often they attempt to enforce the language they intended to write rather than the the wording they actually wrote. As … Continue reading

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Reinsurer Sues IRS

Retrocessions are Not Reinsurance The United States has been very creative in its efforts to increase tax revenue. It becomes even more creative when it can tax a foreign corporation for its business efforts in the United States. Many fear … Continue reading

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Nonrenewal Effective

Proper Notice Is Enough to Effectively Nonrenew States across the country have enacted statutes that place restrictions on insurers who wish to cancel or nonrenew policies of insurance. The statutes usually include a long notice requirement and limit the grounds … Continue reading

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Jurors Assessment of Punitive Damages is Not Unbridled

Due Process Limits Punitive Damages to a Ratio of 10:1 An insurance company refused to pay benefits it owed to a paraplegic ex-marine that it clearly owed. The jury, after hearing all of the evidence, decided to punish the insurer … Continue reading

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Just for Fun

How Not To Commit Arson 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 people is purely coincidental. … Continue reading

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No Agreement No Contract

Life Policy Must Be Enforced as Written Business owners often purchase key man life insurance to protect the company from the loss of a key man. When, in Selzer v. Dunn, 12-12-00150-CV (Tex.App. Dist.12 01/31/2014), the two key men bought … Continue reading

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Risk Transfer Device Works

Waiver of Subrogation Defeats Suit Against Contractors Almost every construction contract and almost every standard American Institute of Architects (AIA) construction contracts contain a waiver of subrogation provision. Some courts even conclude that a contract that makes both the owner … Continue reading

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Court Should Never Rewrite Policy

FAIR Plan Coverage Limited by Statute In 1968, the Legislature enacted the California FAIR Plan to provide property insurance to the otherwise uninsurable. Appellants, who lived in high fire risk areas, were insured under the FAIR Plan. Following wildfires, appellants … Continue reading

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Agent Loses License

Selling After License Revoked Fatal to License Insurance agents, brokers and intermediaries may only sell insurance policies if they are licensed by the state. The licensing laws are designed to protect the public against unscrupulous agents and brokers. When the … Continue reading

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