Insurance Claims And Issues

Level of Insurance Coverage Levels the Playing Field.

     Disputes between Insurance Companies and their Policyholders is nothing new.  In California, for example, there is a dispute brewing about who is responsible for maintaining levels of Insurance Coverage necessary to provide the money to rebuild after recent wildfires there, the Insurance Companies or the Policyholders, or both.  Marc Lifsher, "Wildfires Heat up Debate on Inadequate Insurance Coverage" (Los Angeles Times Online, Friday, June 6, 2008, a link which may or may not work if TypePad issues are not resolved, but available online at www.latimes.com.

     One thing remains certain.  Maintaining the level(s) of Insurance Coverage which provide payouts adequate to rebuild a home after a covered loss is a very good idea if the desired result is to rebuild a home after a covered loss.

Please Read The Disclaimer.

Let Coverage (and a Smile) be Your Umbrella.

    The problem with Umbrella Insurance Policies is not that Policyholders do not buy them.   The Premiums are way lower on average than the Premiums charged for the same amount of Primary Insurance Coverage.

    Rather, the problem with Umbrella Insurance Coverage is that the vast majority of Policyholders are not insured with adequate limits on their Umbrella and other Excess Insurance Coverages over and above their Primary Homeowner's Insurance or Automobile Insurance Policies, for example.  Joseph B. Treaster, "Umbrella Coverage for Preventing Your Ruin" (New York Times.com, Tuesday, March 18, 2008).

    There is no time like the present to take the counsel of this respected reporter in the article linked above, and check on your own Umbrella Insurance Policy Limits, or to counsel others you may represent to do the same.

Please Read The Disclaimer.

Primary and Excess Flood Insurance ... And CatClaim Computer Models.

   Chubb has just issued a Press Release announcing that in addition to its Primary Flood Insurance offering, "Chubb Introduces Broad Excess Flood Policy ...."  Link to the Chubb December 20, 2006 Press Release here.

    A valuable gift is given us at this time of the rolling year, by taking a closer look at where Chubb is going.  A concise and valuable education is available in Coverage issues for Catastrophe Claims and what to offer to address and relieve them, as perceived by one of the world's leading Insurance Companies.  Chubb currently offers Primary Flood Insurance in 20 States in the United States.  Chubb's Primary offering is both broader in potential Coverage than the mainstay Federal Flood Insurance Policy provisions, and it offers much higher Policy Limits:  $15,000,000.00 in Home and Contents Coverage, attractive to high-tax-bracket Policyholders.

    The new Excess Flood Insurance Policy offered by Chubb will be made available in 15 of the 20 States in which the Primary Flood Policy is offered.  In the future, more States will receive the Excess offering, according to the linked Press Release. 

   Imagine a map of the United States with me for a moment.  10 of the 20 States where Chubb offers it Primary Flood Insurance are located inland.  These are places where rivers and lakes are likely to be the primary sources of flooding, such as Illinois, Missouri, and Pennsylvania.  8  States in this group are located on the Atlantic Coast.  Florida is the only State located on the Gulf Coast, and Florida is the only State on the list which is located on the Atlantic Coast south of Virginia.   Finally, 2 States on the Pacific Coast are on Chubb's Primary offering list.   15 of these 20 States make the cut for Chubb's Excess Flood offering:  Currently, Arizona, Colorado, Idaho, Ohio and Utah do not.

   Anyone would ask why, with several Insurance Companies refusing to tread where many different kinds of Claim risks are associated with Hurricanes and other Catastrophes -- such as from Wind -- why is Chubb, an admittedly bright group of people, offering any sort of new Coverage that would be available only in the event of a Catastrophe?

   One reason appears in a newspaper report apparently based at least in part on Chubb's linked Press Release, above.  The newspaper report contains a quote that is not found in the Press Release, along with other additional and useful information.  Stated on Web Site as Available ONLY TO WALL STREET JOURNAL ONLINE SUBSCRIBERS:  Lavonne Kuykendall, "Chubb to Offer Flood Insurance for Some Upscale Coastal Customers" (Wall Street Journal, Thursday, December 21, 2006, p. D2, col. 1).    In the newspaper report, Chubb's spokesperson who was responsible for rolling out this new Flood Insurance product is quoted as stating that some other Insurance Carriers are adjusting their offerings because those other Insurance Carriers are relying on "'new catastrophe models'" which suggest that "'they are more exposed than they thought they were.'"  In other words, Chubb is basing its projections and thus its new Flood Insurance offerings on the reliable fact-based Computer Model for Hurricanes and other Catastrophes.

   The clear and obvious result of some, but by no means all other Insurance Companies, buying in to a new 'model' based instead on opinions about past and future claims is that those other Insurance Companies are adjusting their own offerings down. 

   Hoping for protection to All which addresses Catastrophes in the United States and the World, Happy Holidays to All!

REMINDER:  THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP.  ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY FAMILIAR WITH THE PARTICULAR INSURANCE ISSUE IN THAT JURISDICTION, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.

 

 

When a Primary Carrier Becomes Excess ....

                     Then the Excess-Once-Primary Becomes the Insured!
                                                            
    Federal District Judges have to decide State Law Questions.  It is not easy because they are not State Court Judges.  Still, what Federal Judges say usually counts for something.  Sometimes even in Insurance, if not always.  A recent example comes from the decision in the case of St. Paul Fire & Marine Insurance Co. v. Lexington Insurance Co., 2006 WL 1295408 (S.D. Fla. Case No. 05-80230-CIV Opinion Filed April 4, 2006)(subscription required), Download St. Paul v. Lexington (S.D. Fla. April 4, 2006).pdf.

    In St. Paul v. Lexington both insurance companies had what the Federal  District Judge called "virtually identical" provisions that made them both primary.  Nonetheless, in the space of about 6 pages the Federal Court made Lexington primary, and St. Paul excess.

    This involved St. Paul having a right of "equitable subrogation" against Lexington by which St. Paul stood in the shoes of the insureds "and assumes the rights of those insureds."  In other words, St. Paul became the insureds because of equitable subrogation.

    Then the Federal Court put this holding into action.  Lexington should have defended the lawsuit against the real insureds, said the Federal Court, "in good faith, and, at a minimum, to give notice to St. Paul as the following carrier of the critical aspects of the case as it progressed."  The problem there is that when equitable subrogation is involved, the case against the insureds is always over.    Which it was.

    When the case against the insured is over, there is, at a minimum, nothing to give notice about because nothing is happening.  Not notice to anyone, including a "following carrier" whatever that may mean.  Much less to give notice about "critical aspects" since those are not happening, either, of course.
   
    St. Paul v. Lexington is a Federal Court's honest answer with undoubtedly good intentions to address Florida Insurance Law Questions decided otherwise in other cases in Florida State Courts.  St. Paul and Lexington are doubtless bound by the result in the Federal case regardless.

REMINDER:  THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP.  ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.