Zalma’s Insurance Fraud Letter – September 15, 2018

Ethics & the Insurance Fraud Investigation

 Uberrimae Fidei – Utmost Good Faith

Insurance adjusters and fraud investigators, like everyone else, can become frustrated. Every adjuster and fraud investigator have had “gut feelings” about a case that are not supported by the evidence. Frustration faced by an adjuster was responsible for allowing the California Supreme Court the foundation for creating the tort of bad faith in first party insurance claims.
In 1973 an insurance adjuster, without sufficient evidence, caused his employer’s insured to be arrested for arson and fraud. The adjuster was frustrated by his failure to prove that a bar owner had destroyed his bar by arson a few years before and was convinced he had done so again. The adjuster told a police officer of his suspicions, past experience with the insured and his gut feeling that the insured caused the fire.
The insurer demanded that the insured appear for examination under oath in accordance with conditions of the policy. The insured refused to appear because of the arrest citing his First Amendment Right against self-incrimination, but offered to appear as soon as the criminal charges were resolved.

The California Supreme Court, in Gruenberg v Aetna Insurance Co., 9 Cal 3d 566, 108 Cal Rptr 480 (1973), concluded that unfounded actions by an investigator which caused an insured to be arrested for arson required the application of the new tort of bad faith to first-party insurance cases.

The Current Issue Contains the Following 

  • Ethics & the Insurance Fraud Investigation
  •  Illumeo Continuing Education
  • Barry Zalma Speaks at Your Request
  • Fraud Attempt Fails
  • Wisdom
  • Training the Fraud Investigators
  • Barry Zalma
  • About Time – Michigan
  • Good News From the Coalition Against Insurance Fraud
  • Zalma’s Flat Rate Opinions
  •  Health Insurance Fraud Convictions
  • Other Insurance Fraud Convictions
  • Books from Barry Zalma
  • Books from the American Bar Association
  • Property Investigation Checklists: Uncovering Insurance
    Fraud, 12th Edition
  • Zalma on Insurance Claims

Zalma Books

New: Zalma on Insurance Claims in ten volumes, Construction Defects and Insurance in eight volumes.

Zalma on Insurance Claims includes:

Part 101 This part includes a discussion of industry basics, rules of contract interpretation (with a special application to the 9/11 World Trade Center loss), and policy basics by type of insurance contract. The rules of contract interpretation alone make this part an essential educational tool, not only for claims personnel, but also for any insurance professional, including underwriters, agents, attorneys, consultants, and risk managers.

Part 102 This part focuses on coordinating claims where multiple insurers are involved. Beginning with a discussion of Other Insurance clauses, it details the critical considerations, including allocating defense costs. It also examines relevant policy conditions, exclusions, and warranties.

Part 103 This part lays out the duties of all involved parties, particularly insurer and insured, and examines the processing steps involved in resolving claims. It also enumerates common mistakes that occur in the process.

Part 104 This part addresses specific issues dealing with property claims, such as mortgagees and valuation approaches.

Part 105 This part details investigative procedures, especially with regard to liability claims, and the determination of when the duty to defend exists.

Part 106 This part is largely devoted to bad faith claims against insurers, how to examine their merit, and how insurers can avoid such claims.

Part 107 This part provides additional detail on how to evaluate and settle property and liability claims, including the critical issue of when it is appropriate to settle early.

Part 108 While a minority of claims ever reach the trial level, understanding how to proceed effectively is critical, so this part focuses on trial preparation, including interviewing applicable parties.

Part 109 Mr. Zalma is recognized internationally as one of the foremost authorities on fraud and this part demonstrates why that recognition is well deserved. All aspects of fraud are examined, with notable attention to “red flags” to be aware of.

Part 110 This final part continues the fraud discussion and introduces considerations for unfair claims settlement practices and contract rescission by type of claim, concluding with tips on how to prepare the case, including procuring relevant expert testimony.

Read for detail at http://zalma.com/zalma-books/


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About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
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