Zalma on Insurance

The Defects HTTPS://zalma.com/blog Construction defects are any deficiencies in the performance or completion of the design, planning, supervision, inspection, or construction for any new building or structure that has been remodeled or undergone repairs. Understanding what a construction defect is has become so complex that states have begun to define them by statute. For example, construction de...

Standardized Construction Contracts and Insurance Claims https://zalma.com/blog Purchasing a standardized and industry-accepted form is less expensive than asking an attorney to draft a specific contract from scratch, although on a large project, it is often a good idea to involve counsel to review and/or modify the standardized forms to protect the client’s interests. Generally though, sources th...

The Lack of Coverage by a Homeowners Policy if the Insured Does Not Actually Live There https://zalma.com/blog The homeowners policy language unambiguously requires that the property at issue be the insured's "residence premises" for coverage to apply. It does not require that the property be the Insured’s domicile. The "insured location" was defined in relevant part to mean "the residence premise...

Domicile or Residence of Insured or Insurer https://zalma.com/blog Insurance companies often see disputes relating to the terms “domicile” and “residence.” It is important, therefore, that everyone in the business of insurance must understand the meaning, and application, of the terms to insurance claims and how they relate to individuals and corporations that are insured or insurers. Definition o...

Don’t Take “The Fifth” When Your Insurer Requires An Examination Under Oath https://zalma.com/blog The most effective tool an insurer has against fraud is the examination under oath. The right to compel an insured to appear for examination under oath has been part of the standard fire policy in every state of the United States that adopted the N.Y. Standard Fire Insurance policy. The right was rec...

Benjamin Franklin and American Insuranc https://zalma.com/blog  Not content with the titles of statesman, scientist, inventor or author, Benjamin Franklin added insurer to his collection. In 1752, the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire became the first mutual fire insurance company in America. Much like London in the 1600s, houses at this time were mad...

FALSE SWEARING https://zalma.com/blog In common language the “false swearing” provision of an insurance policy merely means that if the insured lies under oath the policy is void whether the lie is in a proof of loss or at an examination under oath. In Texas and Oklahoma, false swearing is explained this way: Where an insured knowingly and willfully overestimates the value of property destroyed or...

ZALMA’S INSURANCE FRAUD LETTER JANUARY 15, 2021 https://zalma.com/blog Professional Insurance Adjusting and Insurance Fraud At the turn of the century, insurers, in a search for profit, decimated their professional claims staff. They laid off experienced personnel and replaced them with young, untrained and unprepared people. A virtual clerk replaced the old professional claims handler. Process an...

A Video Explaining the Three Major Responses to Insurance Fraud https;//zalma.com/blog Insurers are faced with three major types of insurance fraud: Fraud in the inception of a policy of insurance. Fraud in the presentation of a claim by the insured. Fraud in the presentation of a claim by a third party claimant. Fraud in the Inception The insured misrepresents or conceals facts material to the de...

The U.S. Supreme Court's Explanation of False Swearing at Examination Under Oath that Results in a Policy Being Declared Void https://zalma.com/blog The decision of the U.S. Supreme Court in CLAFLIN and others v. COMMONWEALTH INS. CO. OF BOSTON, MASSACHUSETTS, et al, 110 U.S. 81, 3 S.Ct. 507, 28 L.Ed. 76 (January 14, 1884) is the premier precedent that establishes that a falsely sworn statement at...

MOLD TESTING There are many testing methods that can detect molds. Some methods can identify a portion of the types of viable molds but these may also miss or undercount those that are not viable or will not grow well on the nutrients used to incubate the sample. Even tests that are done well only give a partial estimate of the amount and types of molds actually collected in a sample or in the sam...

An employee fabricates an injury altogether, or exaggerates a legitimate injury, in order to continue to receive benefits or more time off work. https://zalma.com/blog Multiple Claims/Identities: An employee may make injury claims and receive payments from both their workers’ compensation carrier as well as a personal healthcare provider (double-dipping). Individuals may also file multiple claims...

Need to Prove the Policy https://zalma.com/blog The first obligation of an insured suing an insurance company is to prove the existence and the terms of the insurance policy on which the claim and suit are based. The party seeking coverage bears the burden of proving the existence of the policy as well as its material terms. Insurer in action on life policy for disability benefits had burden to pl...

People who commit insurance fraud think it is a crime without punishment or concern. When they are caught, prosecuted and convicted, the perpetrator is so amazed that he or she is one of the few unlucky ones who were caught that they use their ill-gottengains to fund unfounded and frivolous appeals. https://zalma.com/blog  Peter Costas bribed dozens of people addicted to heroin and other drug...

There appears to be a growing trend in the United States where insurers file malpractice suits against counsel retained to defend their insureds. When an insurer retains a defense lawyer to represent its insured only to find they are incompetent or committed malpractice in providing the defense, rather than admit the error in choosing a poor lawyer for the insured the insurer sues the lawyer for m...

Salvage https://zalma.com/blog The term “salvage” simply means used or damaged property that retains an asset value. It does not connote equipment that was valueless or incapable of use. [G.J. Leasing, Co. v. Union Elec., 854 F. Supp. 539 (S.D.Ill. 06/6/1994).] Historically, courts have applied the maritime law of salvage when ships or their cargo have been recovered from the bottom of the sea by...

Zalma’s Insurance Fraud Letter January 1, 2021 https://zalma.com/blog Read last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/ Happy New Year – 2021 Must, and will be, Better than 2020 Guilty of Insurance Fraud People who commit insurance fraud think it is a crime without punishment or concern. When they are caught, prosecuted and convicted, the perpetrator is so amazed t...

The Crime-Fraud Exception to the Attorney-Client Privilege and the Work Product Protection https://zalma.com/blog The Crime-Fraud Exception A waiver of the privilege also may result when the carrier is sued for bad faith and/or fraud. For example, California Evidence Code Section 956 provides: “there is no privilege under this article if the services of the lawyer were sought or obtained to enable...

Important Torts that are Neither Negligent nor Intentional https://zalma.com/blog Strict product liability is “a manufacturer’s or seller’s tort  liability for any damages or injuries suffered by a buyer, user, or  bystander as a result of a defective product. Products liability can be  based on a theory of negligence, strict liability, or breach of  warranty.” This rule applie...

The Tort of Bad Faith Should be Abolished or Insurers Should be Allowed to Gain Tort Damages from Insureds who Breach the Covenant of Good Faith and Fair Dealing https://zalma.com/blog . Insurance companies are understood to be persons who operate in the United States and are entitled to all the rights, benefits and protections of the U.S. Constitution. The Fourteenth Amendment provides in clear a...

How to Deal with a Claim that a Property Collapsed or Collapse was Imminent https://zalma.com/blog A collapse is a sudden or relatively abrupt occurrence causing serious structural damage, and not a gradual occurrence over a period of time: [A] homeowners insurance policy will most likely provide “collapse” coverage for “any serious impairment of structural integrity…” Consequently, the term “coll...

Intentional Acts https://zalma.com/blog In Automobile Insurance Co. of Hartford v. Cook, the court was faced with the legal question of whether an individual’s homeowner’s insurance policy affords coverage when that individual is sued for wrongful death after killing a person in self-defense. On February 20, 2002, defendant Alfred S. Cook shot and killed Richard A. Barber, the decedent, after a di...

https://zalma.com/blog In Maryland Cas. Co. v. Blackstone Intern. Ltd 442 Md. 685, 706, 114 A.3d 676, 688 (2015) Maryland’s highest court concluded that none of the acts of the plaintiffs involved advertising injury and there was no obligation on the Insurers to defend or indemnify Blackstone. In Brohawn v. Transamerica Insurance Company, 276 Md. 396, 347 A.2d 842 (1975), the Maryland high court r...

Excellence in Claims Handling 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 human skill and judgment. Money was saved by paying lower salaries. Wit...

First Party Property Claims https://zalma.com/blog What Is an Adjuster? An “adjuster” or “insurance adjuster” is by statutory definition, a person, co-partnership or corporation who undertakes to ascertain and report the actual loss to the subject-matter of insurance due to the hazard insured against. Insurance companies create, by issuing an insurance policy, a contractual obligation to pay its i...