Monthly Archives: October 2016

Silent Fraud Sufficient to Rescind

Silent Fraud – Concealment of Material Fact – Requires Rescission Plaintiffs’ lawyers often ignore the fact that the covenant of good faith and fair dealing imposes duties on both the insurer and the insured to do nothing that will deprive … Continue reading

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No Potential for Coverage No Duty to Defend

Don’t Take an Assignment Against an Insurer Until Coverage Counsel Tells You that You Can Win For many years I have recommended against taking assignments from defendants in order to sue the defendant’s insurer and give up the right to … Continue reading

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Lie About Prior Losses — Lose All Coverage

It is Expensive to Lie on an Insurance Application For some reason people who buy insurance forget – or ignore – the fact that insurance is a contract whose viability requires that each party treat the other with good faith. … Continue reading

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Lie to Your Insurance Company & Lose Everything

Misrepresentation of Material Fact Allows Insurer to Rescind I will speak tomorrow to the meeting of the Southern California Fraud Investigators Association in Palm Springs California about how the equitable remedy of rescission can be used by insurers to defeat … Continue reading

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Ignorance Can Be Cured – Stupid is Forever

Motions That Are So Patently Without Merit Deserve Punishment Insurance companies often prefer federal jurisdiction while tort plaintiffs’ counsel prefer state court jurisdictions, especially when there insurance coverage issues present. In Norma J. Staley v. Liberty Mutual Insurance…, United States … Continue reading

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Sell a Policy on Your Life & Beware The Buyer

Insurable Interest in Life Not Required in Wisconsin Life insurance, by definition, is not a place to bet or gamble on the life of the person whose life is the subject of the policy. However, the tradition can be, and … Continue reading

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AIG Saves More Than $50 Million Because Insured Did Not Read Policy

Failure of Risk Manager to Insure Proper Party Fatal to Claim Major commercial entities, like the owners of oil refineries should have professional risk managers on staff – or  on retainer – to make sure that all insurance purchased insures … Continue reading

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“Post Loss Underwriting” is an Oxymoron

Politically Correct Relabeling of Rescission From my new e-book, the California Insurance Rescission Law Handbook now available at Zalma Books. What is Underwriting? Some plaintiffs’ lawyers contend that rescission is “post loss underwriting” rather than the exercise of a legitimate … Continue reading

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Collateral Source Rule Allows a Plaintiff to Profit From Injury

Application of Collateral Source Rule Encourages Fraud It is axiomatic that that bad facts make bad law. In this case, because of the negligence of federally-supported health center resulted in the birth of a child who is living in a … Continue reading

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Two New E-Books

Insurance Law Handbook The earnings of almost every civil lawyer in the United States are funded by the insurance industry. Insurance can best be described as the mother’s milk of the legal profession. The civil defense lawyer is paid by … Continue reading

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Go Directly to Jail, Do Not Pass Go

 Go Directly to Jail, Do Not Pass Go Presenting Same Bill to Two Different Insurers Is Insurance Fraud In the last 49 years that I have been in the business of insurance I have learned the one thing that is … Continue reading

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The Orphan Child of the Criminal Justice System

Insurance Fraud Criminal Trials are Almost Non-Existent Insurers, Not Police, Must Investigate Criminal Fraud For insurance fraud to be prosecuted as a crime the insurer must do the work to complete a thorough investigation that can be presented to a … Continue reading

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Successful Insurance Fraudster Got Greedy & Lost

Rescission an Effective Defense to Insurance Fraud One of the most effective – and seldom used – tool to defeat insurance fraud, is the equitable remedy of rescission. Because insurers have little stomach to fight insurance fraud perpetrators they encourage … Continue reading

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Go Directly to Jail, Do Not Pass Go

Presenting Same Bill to Two Different Insurers Is Insurance Fraud In the last 49 years in the business of insurance I have learned the one thing that is a certainty: the quality of insurance fraud perpetrators is almost non-existent. That … Continue reading

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No Good Deed Goes Unpunished

Poor Policy Drafting Provides Coverage Not Intended Insurers must be aware that, when writing a policy of insurance, must be very careful in the words and definitions used in the policy. Ever since the state Legislatures across the country required … Continue reading

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Frivolous Suit Fails Seeking Coverage the Insured Refused

Rejection of UM/UIM Coverage Can’t Be Avoided Most states require that auto insurers offer uninsured motorist, underinsured motorist coverage (UM/UIM) and it must exist unless the coverage is rejected by the insured. When there is an accident after UM/UIM coverage … Continue reading

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Hospital Escapes Liability With Form

Patient Agreed That Physician Was an Independent Contractor Medical malpractice insurers should make sure that their hospital insureds insist that all patients sign admission forms that make clear that the patient acknowledges that the individual physician is not an employee … Continue reading

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Insured’s Bad Faith Defeats Attempt to Collect Consent Judgment

Insured’s Bad Faith & Fraud Fails Since it was first described in 1766 the covenant of good faith and fair dealing applies equally to the insured as it does to the insurer. Often, when an insurer correctly refuses to defend … Continue reading

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Must be Named as Insured to Recover

Employee Leasing Company Only Provides Cover for Named Additional Insureds Who is insured is seldom difficult. Most insurance polices name those who it insures on the first page – the Declarations Page – of the insurance policy. Additional insureds are … Continue reading

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Statute Requiring Proof of Insurance Strictly Enforced

Failure to Comply With Statute Results in Suspended License The state of Pennsylvania requires all operators of motor vehicles to prove financial responsibility. When an insurer cancels a policy it is required to, and does, inform the state’s Department of … Continue reading

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October 1, 1979 – 2016 Another Anniversary

Zalma’s Insurance Fraud Letter October 1, 2016 Thirty seven years ago today I left the world of the employed and became an entrepreneur by opening my own law firm that was incorporated shortly thereafter as Barry Zalma, Inc. When I … Continue reading

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