Zalma on Insurance

Suing an Insurer & its Chairman as Racist for Denial of Claim is not Viable

Being a good neighbor is hard work.  Sometimes it’s impossible. Marsha was not a good neighbor. She would “borrow” things from her neighbors and never return them. Most of her small kitchen appliances arrived because of such loans. Marsha had an extensive collection of CDs and long-playing records, none of which she purchased. Marsha would invite herself to lunch, but never invite her neighbo...

Failure to Fulfill Protective Safeguards Endorsement Defeats Fire Claim   In Frankenmuth Mutual Insurance Company v. Fun F/X II, Inc. and Cao Enterprises II, LLC, No. 22-1933, United States Court of Appeals, Seventh Circuit (February 28, 2023) the insurer rejected a fire claim because the named insured knew, and didn't tell, Frankenmuth, that the sprinklers in his warehouse had no water,...

Conviction for Second-Degree Reckless Homicide Could be an Accident   When there is a severe injury, like the criminal death of a child,  litigation results in an attempt to collect from an insurer since the  convict will have little or no assets to pay for the loss.   In Lindsey Dostal, Individually and as Special Administrator of the  Estate of Haeven Dostal v. Curt...

Third Party Insurance Only Protects Damage to Other than the Insured   Finger Oil &Gas, Inc. ("Finger Oil"), the insured, and Mid-Continent  Casualty Company ("Mid-Continent") disputed coverage and the magistrate  judge granted Mid-Continent's motion for summary judgment, and Finger  Oil appealed the dismissal of its misrepresentation and breach of  contract claims. &n...

GOOD CAUSE FOR IME ESTABLISHED  THE INDEPENDENT MEDICAL EXAMINATION AS A TOOL TO DEFEAT FRAUD   In Costa Rwagasore v. Grange Property & Casualty Insurance Co., No.  2022-CA-0413-MR, Court of Appeals of Kentucky (January 27, 2023) the  insurer sought an Independent Medical Examination (IME) of the claimant,  Rwagasore and the claimant claimed there was no good cause for...

There Must be an Actual Change in the Appearance, Shape, Color, Or Other  Material Aspect Of The Property for Coverage to Apply   Plaintiff MTDB Corporation d/b/a Striker Lanes (MTDB) sued seeking  declaratory judgment action against defendant, American Auto Insurance  Company (AAIC), seeking a declaration that AAIC owed it coverage for  alleged business losses and propert...

ZIFL - Volume 27, Issue 2 - The Source For Insurance Fraud Professionals

NEITHER BATTERY NOR FAILURE TO REMOVE INTOXICATED PATRON IS AN OCCURRENCE   In Crum & Forster Specialty Insurance Company v. Spike's Pub & Grub, d/b/a Vincint Von Hart LLC, and Devin Elliott, No. 3:21-CV-1722-NJR,  United States District Court, S.D. Illinois (January 4, 2023) Plaintiff  Crum & Forster Specialty Insurance Company (“CFSIC”) sought an  order declaring...

Death of Defendant Limits Recovery of Damages to Insurance Unless Timely  Claim to Estate of Decedent   In Maryland, to facilitate the prompt settlement of decedents' estates, a  person must "present" a claim against an estate within six months after  the decedent's death or two months after the personal representative  mails or delivers proper notice of the need to file a...

Intentionally Building Houses on Contaminated Property Excluded   POLLUTERS FORCED INTO BANKRUPTCY   Plaintiffs Victor Rosario, Nilda Maldonado, Jose Flores, and Noemi  Flores appealed from three Law Division orders dismissing their second  amended complaint against the defendant insurance carriers on  dispositive cross-motions on whether insurance coverage applies. Having...

Crop Insurer Can Recover Over payments from Farmer   One of the maxims of farming is the imperative each year to risk the  "up-front costs" of sowing in return for the never-guaranteed prospect  of "back-end revenue" from reaping. The Federal Crop Insurance Act helps  farmers to manage these uncertainties through a crop insurance system,  which the Federal Crop Insurance C...

It is Time For Insurers to be Proactive Against Fraud  There has been much hand wringing and wailing over the malfeasance of the  corporate officers and directors of FTX Crypto Exchange, Enron,  WorldCom and others. No one, however, has gone to the root causes of the  situation.  It should be a foremost duty of the insurance industry to do  whatever it can to defeat i...

Insurer Committed Fatal Sin by Sitting Back and Doing Nothing   Failure to Conduct a Full and Thorough Investigation to Protect the  Insured Caused a Bad Faith Judgment in Favor of one Insurer Against  Another

How Laid Off Workers Innocently Become Fraud Perpetrators.   The story that follows is fiction. It is based, however, on a true  situation faced by employers and workers’ compensation insurers in  Californian where I live.  Ralph was a good employee. He arrived for work every day on time.  He  did his job eight hours a day and never goofed-off.  He was loyal to h...

How Laid Off Workers Innocently Become Fraud Perpetrators.   The story that follows is fiction. It is based, however, on a true  situation faced by employers and workers’ compensation insurers in  Californian where I live.  Ralph was a good employee. He arrived for work every day on time.  He  did his job eight hours a day and never goofed-off.  He was loyal to h...

The Tort of Bad Faith   The implied covenant of good faith and fair dealing is a concept of  insurance law at least three centuries old. It first appeared in British  jurisprudence in a case decided by Lord Mansfield sitting in the House  of Lords as the highest court in Britain. In Carter v. Boehm. 3 Burrow,  1905, Lord Mansfield explained that insurance is a contract upo...

Claim that $16 Extra Premium on Renewal is Bad Faith Fails  Peter Gottlieb claimed that the price he agreed to pay Amica Mutual  Insurance Company to insure his home was $16 too high because it was  based on an excessive coverage limit. Claiming as well that other Amica  insureds paid too much to insure their homes, he filed this putative  class action. After the district...

Payment of Renewal Premium is Acceptance of Policy as Written   Ronald Morgan and Cheryl Morgan appealed from the trial court's grant of  summary judgment in favor of Dickelman Insurance Agency, Inc.,  Dickelman Insurance, Inc., Jason Dickelman, and State Farm Fire and  Casualty Co. (collectively Defendants) on the Morgans' complaint for  breach of contract, promissory est...

New Book for the New Year   To start off the New Year I published my newest insurance coverage and  claims book entitled: A Compact Book on How Judges Read, Understand,  Interpret and Rule on Insurance Policy Issues: Every Person Who is  Insured Needs to Understand How Judges interpret Insurance Policies.  The book provides those who are insured, insurance claims people, &...

There is More Than One Way to Skin A Fraudster   DELAYED RESCISSION FAILS BUT EXCLUSION APPLIES   Evanston Insurance Company appealed from a bench trial on an  insurance-coverage dispute. After determining that Evanston failed to  timely rescind the policy after learning that the insured lied on the  application to avoid discovery of his embezzlement scheme, and that a &nb...

ZIFL January 1, 2023 - Volume 27, Issue 1   The Source for the Insurance Fraud Professional   Starting the 27th year of publication of Zalma's Insurance Fraud Letter,  ClaimSchool, Inc., Barry Zalma and the Zalma family wish you a happy  and prosperous new year.  Read the full pdf version of ZIFL at http://zalma.com/blog/wp-content/uploads/2022/12/ZIFL-01-01-2023...

EXCLUSION FOR LOSSES WHEN DRIVER UNLICENSED IS ENFORCED

Building Must Actually Fall Down for Collapse to be Covered  Windcrest Owners Association filed a lawsuit against Allstate Insurance  after the company declined a claim for property damage to a building in  its condominium development. Allstate moved for summary judgment,  alleging that the property damage was not covered as a "collapse" and  was excluded from coverage bec...

Insurer's $25,000 Assault and Battery Limit Applied to Stabbing on Hotel  Property Great American E & S Insurance Company obtained a trial court  judgment that it is only obligated to provide coverage up to a limit of  $25,000 under a policy of insurance issued to the defendant Commack  Hotel, LLC, doing business as Howard Johnson, in an underlying action  where Stanle...