Zalma on Insurance

A Video Explaining An SIU Profit Center   The False Claims Act, also known as the “Lincoln Law,” dates back to the  Civil War. President Lincoln signed the act into law in 1863 because  war profiteers were selling the Union Army shoddy supplies at inflated  prices. The original law included qui tam provisions that allowed a  private person (plaintiff) to sue those who defr...

Lawyer Lies on Application for Malpractice Insurance - Policy Rescinded   Travelers issued a Lawyers Professional Liability Insurance Policy to  Grimmer, Davis, Revelli & Ballif (“Grimmer Davis”). Grimmer Davis is  a law firm with its principal place of business in Lehi, Utah. Matthew  Grimmer was the sole shareholder of Grimmer Davis and had general  managing and gove...

A Video Explaining How Mold Claims Became Popular  https://zalma.com/blog The fear of mold claims was engendered in the insurance industry by the  trial court decision in Ballard v. Fire Insurance Exchange, No. 99-05232  (Texas District Court, Travis County, June 1, 2001), cited in Jury  Awards: $32 Million to Texas Homeowner in Mold Coverage Action, 6, No.  12, Mealey’s E...

A Video Explaining the Union or Standard Mortgage Clause   https://zalma.com/blog Since properties are frequently encumbered by mortgages, most first  party property policies contain provisions that protect the mortgagee’s  interest in the event the insured property is damaged or destroyed.  Historically there have been two types of mortgage clauses:  a loss payable or ope...

Every Professional Claims Person Must Understand Insurance  The excellence in claims handling program requires thorough training  providing each member of the claims staff with a minimum of the  following educational programs:   1 How to read and understand the contract of insurance that is the basis  of every adjustment, including but not limited to:  2 The formation...

Explaining the Need For Professional Claims Handlers    In search of profit, insurers have decimated their professional claims  staff. They laid off experienced personnel and replaced them with young,  untrained, unprepared people. A virtual clerk replaced the old  professional claims handler.  Process and computers replaced hands-on human skill and judgment. Money &n...

Description of Zalma’s Insurance Fraud Letter    https://zalma.com/blog Volume 25 Number 21 The Reason for the Examination Under Oath  Courts that construe submission to an EUO as a condition precedent to  recovery generally do not require the insurer to prove that it suffered  actual prejudice from an insured's unexcused refusal to submit to an  examination. Lorenzo–...

 Explaining Insurable Interest    https://zalma.com/blog It may be said, generally, that any one has an insurable interest in  property who derives a benefit from its existence or would suffer loss  from its destruction. An insurable interest in property is any right,  benefit or advantage arising out of or dependent thereon, or any  liability in respect thereof,...

Explaining Insurable Interest    https://zalma.com/blog It may be said, generally, that any one has an insurable interest in  property who derives a benefit from its existence or would suffer loss  from its destruction. An insurable interest in property is any right,  benefit or advantage arising out of or dependent thereon, or any  liability in respect thereof, or an...

About an Essential Element of the Rescission Remedy    https://zalma.com/blog  Every rescission requires proof that the facts misrepresented or  concealed were material.  Different courts have characterized the element of materiality  differently.  For example, in Connecticut:  A fact is material . . . when . . . it would so increase the degree or  char...

Settlements and the Ethical Burden on Attorneys    HTTPS://ZALMA.COM/BLOG Settlements of litigation, whether funded by insurance or not, raise  ethical issues that all parties and their attorneys must deal with  before the settlement is effected. The decision to settle belongs to the  plaintiff. This is especially important in cases with multiple parties  and multiple...

Explaining the Use of an IME  https://zalma.com/blog Medical examiners have established their own codes of ethics with regard  to an IME and are obligated by those codes to report their findings  fairly and accurately. The American Board of Independent Medical  Examiners has published the following Code of Ethics:  Physicians shall:  Be honest in all communications. R...

Serious Injuries & Clear Liability Require Quick and Thorough Action    https://zalma.com/blog Some lawsuits are based on clear liability and terrible facts and  injuries that compel the parties involved to settle the case as quickly  as possible. In such cases defending and indemnifying the insured is  liable to be costly and could easily exceed the available policy l...

Criminal Acts by Public Adjusters  https://zalma.com/blog Although they are considered professional claims people they will are  not allowed to impinge on the work of the legal profession. Insurance  company adjusters and independent insurance adjusters working for  insurance companies can deal with insurance coverage issues but a PA may  not.  In one case, a public a...

Explaining the Obligations of the Public Adjuster    https://zalma.com/blog Most policyholders do not have the in-house capability to investigate,  evaluate, and negotiate significant property insurance losses. While  some losses, such as a small fire loss requiring only minor repairs, may  be dealt with easily, others, which involve more complex damages and  differen...

Explaining the Limitations Imposed by the U.S. Supreme Court on  the Award of Punitive Damages    The US Supreme Court has restricted the extent of available punitive  damages in State Farm Mutual Automobile Insurance Co. v. Campbell, 123  S.Ct. 1513, 155 L.Ed.2d 585 (U.S. 2003), where it overturned a $145  million verdict against an insurer. It said that a punitive d...

Zalma’s Insurance Fraud Letter Volume 25, Number 20  https://zalma.com/blog Criminal Caused Suit on Policy to Drag on for More than Six Years Court Finally Stopped an Unconscionable Level of Overlitigation  United States District Judge Gary R. Brown was faced with a legal  dispute that, perhaps because the defendant was a criminal, went on for  years without a final disposition...

A Video Explaining the Doctrine of Reasonable Expectations    https://zalma.com/blog The act of infamy at the World Trade Center (WTC) in New York City on  September 11, 2001, is responsible for a great deal of insurance  litigation concerning, among other things, the meaning of the term  “occurrence” in first party property policies and the methodology  required of i...

Rules of Contract Interpretation    https://zalma.com/blog The following rules govern the construction of contracts of insurance:  If the terms of a promise are in any respect ambiguous or uncertain, it  must be interpreted in the sense in which the promisor believed at the  time of making it, that the promisee understood it. [California Civil  Code § 1649] (which pro...

A Video Explaining What to Do When a Claim Includes Multiple Occurrences  https://zalma.com/blog CGL policies are written with endorsements that make the number of  occurrences highly important, especially in continuing loss cases.  deductibles or self-insured retentions are charged based on the number  of occurrences or the number of claims. policy limits can apply  indiv...

A Video Explaining the Nature of Insurance Underwriting    https://zalma.com/blog Before the insurance claims adjuster begins a claims investigation he or  she must understand the nature of underwriting because it is how an  insurance policy comes into existence.  Underwriting is defined as the process of accepting or rejecting risks.  It requires a determination by t...

A Video Explaining the Construction Contract    https://zalma.com/blog When a construction contract, like every other contract, is unambiguous,  the parties’ intent may be determined from the contract alone, and it  is the duty of the court—not the jury—to state its meaning.  Construction contracts are governed by the same rules as all other  contracts. When a court i...

A Video Explaining Insurance for Construction Defects Regarding  Structural Failures    https://zalma.com/blog Structural integrity failures can involve any of the following:  concrete; masonry; carpentry; or foundations.   Defects related to site preparation can be caused by any of the  following:  building on expansive soil or other defective soils incapab...

An Introduction to the Excellence in Claims Handling Program    https://zalma.com/blog  In search of profit, insurers have decimated their professional claims  staff. They laid off experienced personnel and replaced them with young,  untrained, unprepared people. A virtual clerk replaced the old  professional claims handler. Process and computers replaced hands-on &nb...

Explaining Why Property Insurance Insures People not Property  https://zalma.com/blog First party property insurance is a contract of personal indemnity. The  insurer promises to indemnify the first party, the insured, in the event  the insured incurs a loss as a result of one of the perils insured  against by the wording of the policy. Insurance does not follow title to  ...