Zalma on Insurance

A Video True Crime Story of Insurance Fraud  https://zalma.com/blog They were All-American girls. Muffy and Buffy met each other as  cheerleaders in high school. They were best friends. They did everything  together. The two young women shared everything from clothes to  boyfriends. They decided to use insurance fraud to supplement their  income and allow them to continue...

Unintended Consequences of the tort Bad Faith    https://zalma.com/blog  In a typical contract, one party has a duty to perform (construct a  building, deliver goods, convey real estate, pay indemnity) and the  other party has a duty to pay money or perform a task.  Breach by the  performer may take the form of nonperformance, defective performance, or  dela...

Bad Faith Set-Ups Defeat the Purpose of the Tort of Bad Faith - https://zalma.com/blog One tactic for setting up a bad faith claim is to make a settlement  offer that likely cannot be complied with by the insurer. Knowing the  settlement demands may not be met, the insured/claimant waits for the  insurer’s misstep, then asserts a bad faith claim.  Sometimes the insured/claimant...

Explaining the Need for Liability Claims Adjusters    https://zalma.com/blog The insurance adjuster is seldom, if ever, mentioned in a policy of  insurance. The strict wording of the third party liability policies set  the obligation to prove a claim that entitles the insured to defense or  indemnity of a claim against the insured by an injured third party. Over  a ce...

Intentional Acts Exclusions and Fortuity    https://zalma.com/blog Implicit in the concept of insurance is that the loss occur as a result  of a fortuitous event not one planned, intended, or anticipated. Oddly,  the fortuity principle never appears in insurance contracts. The  principle is rooted in common law and in the statutes of at least six  states. The fortuity...

ZIFL - Volume 25, No. 9  https://zalma.com/blog & https://rumble.com/vgbcof-zalmas-insurance-fraud-letter-may-1-2021.html The May 1, 2021 issue of Zalma's Insurance Fraud Letter includes the  following articles and a video reporting on the key article about the  Examination Under Oath at  The Examination Under Oath is an Important Tool for Every Fraud  Investigation Th...

Construction Defects that Cause Illness or Disease  https://zalma.com/blog  Sick building syndrome (SBS) covers a whole range of health problems  that are related to toxin exposure in a building. There are serious  questions raised by physicians and mold experts about the existence of a  true relationship between the mold and bacterial infections that have  been repor...

"Additional Insured" Requirements of Construction Contracts and Policies     https://zalma.com/blog Although the “additional insured” requirement provides additional  security to the owner and architect, it can add to the cost of  insurance. Regardless, the requirement is often included in contract  documents and, if not carefully drafted, can result in multiple dispu...

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 is called upon to interpret a con...

Why it is Time to Abolish the Tort of Bad Faith    https://zalma.com/blog It is indisputable that in the 1950’s, 1960's and 1970’s the insurance  industry abused some insureds to avoid paying legitimate claims. Without  a factual basis, insureds were accused of arson or other variations on  insurance fraud. Indemnity payments were refused on the flimsiest of  excuses....

The Marine Rule   https://zalma.com/blog In some states, even if the false statements made in the application  were not warranties but were merely misrepresentations or concealments  (whether innocent or intentional), grounds exist for rescission.  Fraud  need not be proved; this is called the Marine Rule.  In Gates v. Madison County Mut. Ins. Co. (5 N.Y. 469, 55 Am....

The Denial Must Be in Writing Setting Out All Reasons for the Denial    https://zalma.com/blog Once a claim is denied, the insured no longer need comply with the  conditions of the policy.  He or she need not submit a sworn proof of  loss nor respond to requests for records or an examination under oath.   Therefore, an insurer should not make the decision to deny...

Even Honest People are Tempted To Commit Insurance Fraud    https://zalma.com/blog Career criminals are not the only people who perpetrate insurance fraud.  The temptation has become so great that almost anyone who is given the  opportunity, will try. Those who do not premeditate insurance fraud are  called perpetrators of soft frauds. Most are small. Some are not. The &nb...

Hard Fraud is a Crime    https://zalma.com/blog The following types of fraud are premeditated and intentionally  committed.  Those who differentiate between types of fraud would place  these in the category of “hard fraud,” which is considered more  egregious than “soft fraud” since it is performed with malice  aforethought.  Hard fraud takes planning, schem...

Lawyers & Adjusters Must Work Together    https://zalma.com/blog Defense Counsel   Whenever an insured is sued and requires a defense or the insurer is  sued, the insurance adjuster and the defense attorney must understand  their respective roles in preparing the case for trial. They must  develop a rapport with each other and with the insured person or entity &nb...

ZIFL 4/15/2021 https://zalma.com/blog Zalma’s Insurance Fraud Letter,  in its 25th year is free to anyone who  subscribes or goes to the Mr. Zalma’s Website where you can Subscribe to  e-mail Version of ZIFL, it’s Free!  Read last two issues of ZIFL  here.  Go to the Barry Zalma, Inc. web site here Videos from “Barry Zalma on  YouTube”   Go to Barry Zal...

How to Determine the Priority of Rights to Salvage    https://zalma.com/blog One case involved a dispute among three groups of divers for the right  to salvage silver from the cargo of a ship sunk and for the title to  whatever silver is recovered. In resolving the problem, the court  considered the common law of finds that treats property that is  abandoned as return...

It is the Obligation of the Adjuster to Negotiate Settlement with  Insured   https://zalma.com/blog  After the adjuster has completed the bid comparison and established the  objective amount of the loss, he or she should meet with the insured and  present each of the estimates and the bid comparison. The adjuster will  then advise the insured that the settlement of th...

The Flying Carpet, a  Fictionalized True Crime Story of Insurance Fraud  https://zalma.com/blog From an Expert who  explains why Insurance Fraud is a “Heads I Win, Tails You Lose”  situation for Insurers. The stories help to Understand How, and why, my  book Insurance Fraud in America is Costing Everyone was written to  explain to those who buy insurance thousands of...

The Law of Unintended Consequences and the Tort of Bad Faith   https://zalma.com/blog  US law was first organized using English common law. When a contract was  breached, only contract damages could be recovered. Tort damages were  limited to tortious conduct and the two categories of damages were  mutually exclusive.  The primary purpose of damages for breach of a co...

Some of the First Cases   https://zalma.com/blog Comunale v. Traders & Gen. Ins. Co  In Comunale v. Traders & Gen. Ins. Co., 50 Cal. 2d 654 (1958), the  insurance company wrongfully refused to defend its insured who had been  sued in the underlying action for damages arising out of an automobile  accident. It also refused to conclude the suit after receiving an off...

Silberg and Egan and Why There is a Tort of Bad Faith   https://zalma.com/blog In Silberg v. California Life Ins. Co., 11 Cal. 3d 452 (1974), the  insurer advertised an accident policy with the phrase “Protect Yourself  Against the Medical Bills That Can Ruin You.” It issued an accident  policy to Mr. Silberg. The policy excluded injuries covered by workers’  compensation....

Setting Reserves & Discovery of the Insurance Claims File  https://zalma.com/blog The insurer is required to evaluate a claim based upon its merits, and  without regard to policy limits. Eastham v. Oregon Auto Ins. Co., 542 P.  2d 895 (Or. 1975).  The adjuster must determine the value of the claim  without a thought to limits of liability in the policy and then compare...

Burden of Proof & Exclusions   https://zalma.com/blog It is the obligation of the insured to prove that property has been  physically damaged. The loss of marketability is not a peril insured  under a property policy; only physical damage to tangible property is  insured.  In Lundstrom v. United Servs. Auto. Ass’n-CIC, 192 S.W.3d 78 (Tex. App.  2006), a case invol...

Not a Joke - Zalma's Insurance Fraud Letter Volume 25, Number 7    zalma.com/blog Arson for Profit Conviction Affirmed in Pennsylvania  John M. Sekerak appealed from the January 16, 2020 judgment of sentence  entered in the Court of Common Pleas of Berks County ("trial court"),  following his jury convictions for two counts of arson, recklessly  endangering another pe...