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Avoid Inconsistent Communications By “Revolving Door” Adjusters

In CE and CLE courses, we hear all the time that the most often cited reason for a grievance or complaint is lack of communication.  This truism provides a useful rule of thumb to avoid bad faith claims.  Remember, for most claimants, the event giving rise to an insurance claim often is the most significant event which will happen to the claimant this year.  Events such as a car wreck, an injury claim, a home fire, a product disruption can wreak havoc on the insured.   And, many insureds have little idea as to how to cope with these disruptions.  At these times, when tension runs high and patience runs low, the carrier which responds promptly to communications from the claimant

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Posted in Bad Faith

Except In Two Circumstances, There Can Be No Claim For Bad Faith Without A Breach of The Contract – The Houston Fourteenth Court of Appeal Reconfirms

In Lexington Insurance Company v. Jaw The Pointe, LLC, 2013 WL 3968445 (Houston [14th Dist.] August 1, 2013) the dispute arose from Hurricane Ike-related damage to an apartment complex in Galveston, Texas. The property sustained both wind and flood damage. The policy precluded coverage for loss or damage caused directly or  indirectly from flood “regardless of any other cause or event that contributes concurrently or in any sequence to the loss.” The insured submitted a claim for the cost to demolish and rebuild the apartment complex to comply with local flood damage reduction regulations.  The insurer paid the estimate to repair the wind damage only and denied the insured’s claim for cost to demolish and rebuild the complex. First, the

Posted in Bad Faith

A Claim for Bad Faith is Not Eliminated By A Late Payment of the Insured’s Economic Damages

The United States District Court for the Southern District of California recently considered whether the carrier’s late payment of the insureds’ economic damages eliminated a claim for bad faith and held that it does not. Polcyn v. Liberty Mut’l Ins. Co., 2013 U.S. Dist. LEXIS 76193 (S.D. Cal. May 30, 2013). In that case, the insurer at first rejected and later accepted the insureds’ tender of the underlying lawsuit.  After accepting the tender, the insurer agreed to pay all of the insured’s economic damages incurred in defending the underlying lawsuit and enforcing their claim under the policy.  The insurer, however, refused to pay for emotional distress damages claimed.  The insureds filed suit and the carrier moved to dismiss the complaint

Posted in Bad Faith

Prompt Payment of An Appraisal Award Bars Bad Faith Per Austin U.S. District Court, Although Some Acts By An Insurer May Leave The Door Open Per Galveston U.S. District Court

The United States District Court for the Western District of Texas in Austin recently held that an insurer’s timely payment of an appraisal award bars the insured’s extra-contractual tort claims. Michels v. Safeco Ins. Co. of Indiana, No. 1:12-cv-00511-SS (W.D. Tex. March 13, 2013). In Michels v. Safeco Ins. Co. of Indiana, the insured claimed smoke damage to his property as a result of wildfires and the parties disagreed as to the extent of the damage to the home. The insured initially invoked appraisal, and after the parties designated their appraisers, rescinded his appraisal demand. Thereafter, the insurer made its own demand for appraisal and obtained a court order compelling appraisal. After the appraisal award was entered, the insurer paid

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Avoiding Insurance Bad Faith
Cozen O’Connor represents insurance clients in jurisdictions throughout the U.S. against statutory and common law first- and third-party extracontractual claims for actual and consequential damages, penalties, punitive and exemplary damages, attorneys’ fees and costs, and coverage payments. Whether bad faith claims are addenda to a broader coverage matter or are central to the complaint, Cozen O’Connor attorneys know how to efficiently respond to extracontractual causes of action. More
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