A year ago, we wrote about a rapidly emerging area of insurance litigation in Connecticut: crumbling foundations. As a quick recap, tens of thousands of homes in northeastern Connecticut built over a span of more than 30 years may have been constructed with defective concrete that causes basement walls to prematurely deteriorate and eventually become structurally unsound. The Crumbling Foundation Crisis The problem, known as alkali-silica reaction (ASR), is the result ... Keep Reading »
Homeowners
Court Finds Animals Incapable of Vandalism or Malicious Mischief for Insurance Purposes (and all other purposes, too)
I am willing to go out on a limb and say that if asked whether an animal, say, a raccoon, is capable of committing malicious criminal acts, most humans would agree that the issue is beyond dispute. But, alas, most humans would be wrong (apparently it very much can be disputed). There is good news, however. The nation’s courts have been quietly tackling the issue, and, thankfully, they have been able to allay any fear of a raccoon uprising occurring in the near future. A ... Keep Reading »
Appraise Away Says Florida’s Fifth DCA
Many homeowners insurance policies allow the insurer or the insured to invoke appraisal to resolve disagreements about the amount of the loss. Nonetheless, when one party invokes appraisal, the other party will sometimes refuse to participate in the process, forcing the party invoking appraisal to obtain a court order compelling the other party to participate. Fortunately, the recent decision in Underwriters at Lloyd's, London, ICAT Syndicate 4242 v. Sorgenfrei, No. ... Keep Reading »
The Insurer’s Howler, or How Travelers Proved Its Insured’s Case
What happens when an insurer presents evidence at trial that supports the insured's case? Answer: The evidence can be used to sustain the jury verdict for the insured-plaintiff. That is the lesson learned by Travelers in the Connecticut Supreme Court, despite: (1) Travelers' moving for directed verdict after the plaintiff's case-in-chief; (2) the trial court's reserving its ruling until after the defense's case; and (3) Travelers' renewing its motion for directed ... Keep Reading »
Tennessee Supreme Court Holds That Replacement Cost Less Depreciation Does Not Allow for Depreciation of Labor When Calculating Actual Cash Value of a Property Loss
Insurance policies are designed to indemnify an insured by putting the policyholder in the same position he or she would have been in had no loss occurred. In the context of property insurance policies, damaged property is typically valued based on its estimated actual cash value (ACV) if it is not repaired or replaced. In order to calculate ACV, an insurer will often calculate the replacement cost (RCV) based on the cost to repair or replace the property with materials ... Keep Reading »
Homeowners Insurance Has Unintended Consequence, Insurer Must Defend Teen in Cyberbullying Suit
In State Farm Fire and Casualty Co. v. Motta, et al., No 18-cv-3956 (E.D. Pa. Dec. 11, 2018), the Eastern District of Pennsylvania Court held that State Farm Fire and Casualty Co. had a duty to defend a teenage boy against a lawsuit accusing him of cyberbullying one of his classmates that led her to commit suicide, under the boy’s mothers’ homeowners insurance policy. Julia Morath died by suicide within a couple of days of Zach Trimbur attacking her, via text message ... Keep Reading »
Court Enforces Policy’s Crumbling Foundation Plain Language in Dismissing Claims Against Insurers
A federal judge in Connecticut recently dismissed claims against insurers related to their denial of a claim by two homeowners whose home’s foundation was crumbling. The case, Hyde v. Allstate Ins. Co., No. 3:18-cv-00031 (D. Conn. Dec. 4, 2018), marks the latest development in what is quickly becoming a major source of litigation. When the Hydes tried to sell their house in 2016, they discovered that the home’s foundation was crumbling. Their foundation had allegedly ... Keep Reading »
Florida Court Enforces Condition on Post-Loss Assignment of Benefits, Creating Conflict Between District Courts of Appeal
As we have reported, an assignment of benefits (AOB) is a legal tool that allows a third party, like a contractor, to be paid for services performed, like repairs following an insured loss, for an insured property owner who would normally be reimbursed by the insurance company directly after making a claim. Most AOBs allow the contractor to stand in the shoes of the property owner for insurance collection purposes. Such post-loss assignments are enforceable in most ... Keep Reading »
Florida Court Rejects Property Insurer’s Effort to Limit Assignment of Benefits
An assignment of benefits (AOB) is a legal tool that allows a third party to be paid for services performed for an insured property owner who would normally be reimbursed by the insurance company directly after making a claim. An AOB is commonly used when a property owner experiences a loss and contacts a contractor for assistance. Most AOB agreements allow the contractor to stand in the shoes of the property owner for insurance collection purposes. These agreements are ... Keep Reading »
Navigating Florida Property Coverage Waters After Hurricane Irma
As the waters recede from Hurricane Irma, there are many issues for property insurers to consider as they adjust claims in Florida, including unique issues raised by assignment of benefits, Florida law on concurrent causation, and time element considerations. Assignment of Benefits An assignment of benefits (AOB) is a legal tool that allows a third party to be paid for services performed for an insured property owner who would normally be paid or reimbursed by the ... Keep Reading »