Zalma on Insurance

What Is Liability Insurance? https://zalma.com/blog Insurance, by definition, is a contract where the insurer, for consideration (premium) agrees to indemnify another against a contingent or unknown risk of loss. It is used as a method to spread losses among many people who are insured with the same company. The insurer, by its policy, promises, in exchange for a premium, to pay to defend and inde...

Dealing with Mold - Emergency Services https://zalma.com/blog When dealing with emergency services (loss-mitigation), restoration, construction, or mold containment, the vendors of such services should understand that the industries they serve are in a business to provide for safety to life and property and protection of human health. When mold is discovered during the evaluation or drying process...

A site for the insurance claims professional and anyone who wants to know. https://zalma.com/blog. The first thing every person representing an insurer with regard to a potential fraudulent claim must understand that the insurance policy is the basis for every insurance fraud investigation.  Without an insurance policy there can be no insurance fraud. The insurance policy contract describes t...

The following is a story from my book, Heads I Win, Tails You Lose, a collection of stories from my experience as an insurance coverage lawyer. The book is available from amazon.com as both a paperback and as a Kindle book. Names and places changed to protect the guilty. https://zalma.com/blog  THE CREATION OF A LIFE OF CRIME Insurers, if they wish to keep frauds like that described here must...

https://zalma.com/blog nsurance is considered a quasi-public utility, since modern industry and business could not effectively operate without it. The courts recognize the importance of insurers to the community as a whole and, therefore, find a need to more stringently control the actions of insurers. As illustrated by the decision in Egan v. Mutual of Omaha Insurance Co., 24 Cal. 3d 809, 819, 15...

The Morale Hazard and Unacceptable Risks https://zalma.com/blog  The property owner must understand that some risks are unacceptable under any circumstances to most major insurers. For example: Vacant property represents an unacceptable risk to many insurers. A critical factor in acceptance is the length and cause of the vacancy and the expectations of the insured for the future. Examples of...

Construction Defects That Need Insurance to Respond 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...

Negligence: The Bases of Construction Defect Claims and Suits https://zalma.com/blog  Negligence has the same definitions regardless of the state where it is alleged. It has been defined as: “a legal duty owed to the Plaintiff by the Defendant; a breach of that duty; an actual injury to the Plaintiff; and a showing that the breach was a proximate cause of the injury.” “A breach of duty exists...

ZALMA’S INSURANCE FRAUD LETTER https://zalma.com/blog On or Before November 3, 2020 It is Imperative That Everyone Votes. I Have My Preferences and I Will Exercise the Right and Obligation to Vote. I Hope You All Will Do the Same. Volume 24, Issue 21 – November 1, 2020; 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 Vide...

How Punitive are Damages Calculated https://zalma.com/blog In addition to damages that make the plaintiff whole and indemnify the plaintiff for bodily injury or property damage, the law also allows an award for Punitive damages are not meant to give the plaintiff something he or she lost due the tortious conduct of the defendant. They are meant to punish the defendant for conduct that was especial...

Soft Fraud When Perpetrated Against Insurers https://zalma.com/blog For reasons known only to governmental entities some insist on categorizing fraud into both “hard” and “soft” fraud. By so doing the governmental entities that so categorize fraud make one type of fraud less heinous and less criminal than the other. Fraud, whether categorized “soft” or “hard,” are criminal and if a person is tried...

Insurance Fraud as a State Crime People v. Murphy People v. Murphy , No. E046742 (Cal. App. Dist.4 12/28/2009) https://zalma.com/blog A jury convicted defendant Melissa Kay Murphy of procuring or offering false information for filing (count 1—Pen. Code, § 115, subd. (a)), insurance fraud (false claim) (count 2—Pen. Code, § 550, subd. (a)(4)), and insurance fraud (false statement) (Pen. Code, § 550...

The Implied Covenant of Good Faith & Fair Dealing https://zalma.com/blog Ethics is a process of systematically applying, using, defending and recommending concepts of right and wrong behavior. Ethical behavior is required of both parties to a contract of insurance for the system to work. If any party to the insurance contract acts unethically the ability of insurance to work effectively and pr...

How Prudent Insurers Profit From Effective Anti-Fraud Programs https://zalma.com/blog Anti-fraud statutes and regulations enacted in the various states now require that insurers institute anti-fraud programs. Good business sense should have dictated the existence of such anti-fraud programs from the date the first insurance policy was issued, but insurers have always been caught in the Catch-22 ob...

Use of House Counsel and Requirement that Adjuster & Attorney Work Together to Defend Insured Go to https://zalma.com/blog Challenges to Use of in House Counsel Defense counsel are sometimes employees of the insurance company. Some attorneys have challenged the use of in-house counsel on the ground that the insurer, as an employer of attorneys, is not licensed to practice law. They claimed tha...

Investigation Needed to Effect a Right of Subrogation at https://zalma.com/blog Cases with Subrogation Potential There is subrogation potential to the insurer on nearly every loss the adjuster investigates, no matter how slim the chances of collecting from the other party. The adjuster must listen carefully to what the insured says when he or she tells the adjuster what happened. The adjuster shou...

The Crime-Fraud Exception Go to https://zalma.com/blog 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 or aid anyone to commit or plan to commit a crime or a fraud.” Even without a statut...

The Notice-Prejudice Rule Limits the Effectiveness of a Material Condition Go to https://zalma.com/blog. The usually uncomplicated phrase “late notice” has become a target of courts that change clear and unambiguous to a situation of confusion and doubt. The timely notice of claims is generally an express requirement of an insurance policy and fundamental to the efficient and predictable administr...

Jewelers Block Policies The purpose of the unattended auto exclusions is twofold: to curb what is called “moral hazard” and to limit coverage in high-risk settings even when there is no moral hazard. Moral hazard refers to the effect of insurance in causing the insured to relax the care he takes to safeguard his property because the loss will be borne in whole or part by the insurance company. &nb...

The Claims Made Policy is Different from an Occurrence Policy https://zalma.com/blog Liability policies generally contain language promising “to defend any suit against the insured.” The policies will generally distinguish between a claim and a suit by compelling the insured to give notice of claims as well as suits. Courts usually recognize that there is a difference. A claim can be made without...

Zalma's Insurance Fraud Letter See the full article, and the previous Fraud Letter, in Adobe pdf format at https://zalma.com/zalmas-insurance-fraud-letter-2/ On or Before November 3, 2020 It is Imperative That Everyone Votes.  Unlicensed Doctor Convicted of Insurance Fraud and Other Crimes After Patrick E. Usanga (Usanga) was convicted for many crimes of fraud he appealed his convictions unsu...

Warranties in Insurance https://zalma.com/blog Certain policies contain the term “warranty.” This is a word of great power. Generally, a warranty can be defined as follows: "A “warranty” in insurance law is a statement or condition forming part of a contract whereby insured agrees that certain acts have been or shall be done, and validity of contract depends upon exact fulfillment of condition, re...

First Party Property Insurance The insurance claims adjuster (the adjuster) must always ascertain that the owner, or a person with some other insurable interest in the property, is the person insured and that the person insured has an interest in the property. Failure to do so could result in the insurer paying the wrong person or paying a person with no right to the benefits promised by the polic...

The Homeowners 3 – Special Form https://zalma.com/blog A type of Homeowners 3 – Special Form for the American Association of Insurance Services, Inc (AAIS) - HO 00 03 01 06 is included used as a basis for this analysis. Samples are available here.  The following is an analysis of the important parts of the basic homeowner’s insurance policy. Unlike the Standard Fire Insurance policy the Homeo...

The Red Flags of Fraud See the full video at https://youtu.be/7-2Hshdbzw0 or at https://zalma.com/blog  Red Flags are only indicators of fraud. They are not evidence of fraud They are not proof of fraud. They are tools to help claims handlers identify potential fraud for further investigation. When more than three substantial red flags appear in a claim  investigation it should be referr...