Breach of Contract Lawsuit Filed Against Property Insurer for Allegedly not Covering Hail Damage

Kyle Barnett | Louisiana Record | April 25, 2015

A Marrero homeowner is suing her property insurer for allegedly not providing her with a proper insurance settlement following a hailstorm.

Lafonya Broussard filed suit against Centauri Specialty Insurance Company in the 24th Judicial District Court on Feb. 23.

Broussard contends she owns a home located at 4216 S. Ridgeland Drive in Marrero that had a homeowner’s insurance policy provided by Centauri Specialty Insurance Company covering it when a hailstorm struck the area on Feb. 24, 2013. The plaintiff asserts the hailstorm damaged her home’s roof that subsequently allowed waster intrusion and resulting damage to the interior of the property and its contents.

Broussard claims Centauri Specialty Insurance Company hired an insurance adjuster to assess the damages, but that they did not spend enough time inspecting the property before offering a insurance settlement far lower than the amount of actual damages.

The defendant is accused of breach of contract, bad faith claims handling, negligent claims handling, non-prompt payment, negligent misrepresentation and violation of state law.

Damages in excess of $50,000 is sought for diminution in property value, repair and remediation expenses, amount due under the insurance policy, cost to hire investigative and engineering firms, consequential damages, loss of use and attorney’s fees.

Broussard is represented by Tiffany R. Christian of New Orleans-based Binegar Christian.

The case has been assigned to Division P Judge Lee V. Faulkner Jr.

Case no. 747-019.

via Breach of contract lawsuit filed against property insurer for allegedly not covering hail damage | Louisiana Record.

Settlements for Rejected Superstorm Sandy Insurance Claims Hit Roadblock

Caitlin Bronson | Insurance Business America | April 16, 2015

Legal action taken against several insurance companies in the wake of Superstorm Sandy stalled this week after government officials declined to pay the plaintiffs’ legal fees, citing federal law.

According to a Newsday report, attorneys for the Department of Homeland Security – which oversees FEMA – concluded the government was prohibited from covering legal fees for roughly 2,000 home and business owners involved in the lawsuit. The ruling means plaintiffs will now owe their lawyers as much as one-third of any settlement from the National Flood Insurance Program and affiliated private insurance companies.

Talks, however, are still ongoing and attorneys working on the lawsuits say they are optimistic about reaching a deal. So, too, are government regulators.

“We remain committed to reaching a settlement with policyholders,” FEMA spokesman Rafael Lemaitre told Newsday.

The lawsuits were filed after flood insurance claims from the 2012 storm were rejected with engineering companies associated with private NFIP-backed carriers filed bogus reports eliminating flooding as the cause of property damage. Policyholders allege insurance companies and engineering firms were engaging in a racketeering scheme, driving up claims handling costs and exploiting the storm’s damages for their own financial benefit.

The accusations have led to a criminal probe by the New York attorney general’s office, as well as a federal order for insurance companies to turn over to home and business owners all copies of claims reports made after Sandy.

Perhaps most significantly, reforms to the flood insurance program were made shortly after the lawsuits were filed. As of December 2014, FEMA is authorized to penalize insurers just as much when they underpay a legitimate flood insurance claim as when they overpay a claim. Additionally, a flood insurance advocate’s office will be installed within FEMA to protect consumer rights.

The news comes at an already difficult time for NFIP, as the program faces backlash following significant premium spikes for flood insurance policyholders.

As part of a renegotiation of the Biggert-Waters Act, gradually higher premiums and new surcharges are asking home and business owners to pay an average 15% to 18% on their flood policies. Premiums will increase 25% per year, reducing the number of NFIP policies receiving premium subsidies, until they reflect the building’s actual flood risk.

via Settlements for rejected Superstorm Sandy insurance claims hit roadblock.

OSHA’s Top 10 Most Cited Violations – For the Construction Industry

Below is the list of the most cited OSHA violations for the construction industry (NAIOS Code 23 Construction) for Fiscal-Year 2014 (October 2013 – September 2014), included are the title and standard number along witht the top 10 rank for the previous year and the  number of citations.


Standard Number 1926.501

Title: Duty to Have Fall Protection

FY2013 Top 10 Rank: 1

Number of Citations: 6,064


Standard Number 1926.451

Title: General Requirements

FY2013 Top 10 Rank: 2

Number of Citations: 3,834


Standard Number 1926.1053

Title: Ladders

FY2013 Top 10 Rank: 3

Number of Citations: 2,361


Standard Number 1926.503

Title: Training Requirements

FY2013 Top 10 Rank: 4

Number of Citations: 1,461


Standard Number 1926.102

Title: Eye and Face Protection

FY2013 Top 10 Rank: 6

Number of Citations: 1,051


Standard Number 1926.100

Title: Head Protection

FY2013 Top 10 Rank: 7

Number of Citations: 893


Standard Number 1926.1200

Title: Hazard Communication

FY2013 Top 10 Rank: 5

Number of Citations: 821


Standard Number 1926.20

Title: General Safety and Health Provisions

FY2013 Top 10 Rank: 10

Number of Citations: 757


Standard Number 1926.453

Title: Aerial Lifts

FY2013 Top 10 Rank: 8

Number of Citations: 721


Standard Number 1926.453

Title: Specific Excavation Requirements

FY2013 Top 10 Rank: 9

Number of Citations: 614

What Constitutes Insurance “Bad Faith” in Wisconsin?

Kenneth Kan | Property Insurance Coverage Law Blog | April 16, 2015

Earlier this week, college hoops fans were treated to a great matchup between the University of Wisconsin and Duke University in the championship game of the 2015 NCAA Basketball Tournament. Last week, in the spirit of the tournament, I wrote about insurance “bad faith” in Kentucky. Perhaps I jinxed the Kentucky Wildcats because they ended up losing to the Badgers of Wisconsin. Well, this week I was initially going to blog about what constitutes insurance “bad faith” in North Carolina (to honor Duke as the champions), but my colleague Nicole Vinson works cases in North Carolina and has blogged extensively about insurance subjects relating to the state. So, it makes sense for me to turn my attention to Wisconsin and share my research on what it takes to establish a claim for bad faith in Wisconsin.

To establish a claim for bad faith in Wisconsin, the insured must show the following:

1) the absence of a reasonable basis for the insurance company’s denial benefits of the policy; and

2) the insurance company’s knowledge or reckless disregard for the lack of a reasonable basis for denying the claim.1

Courts in Wisconsin have classified the above two-prong test applying objective and subjective standards. The first prong is objective and the “insured must establish that under the facts and circumstances, a reasonable insurer could not have denied or delayed payment of the claim.”2 Here, the trier of fact must “determine whether the insurer properly investigated the claim and whether the results of the investigation were subjected to reasonable evaluation and review.”3 Under this analysis, the conduct of that insurer is measured against what a reasonable insurer would have done under the same facts and circumstances. If the insurer violated the first/objective prong of the bad faith test, then we have to turn to the second prong which is a subjective standard. An insurer violates the subjective prong if there are sufficient grounds for the trier of fact to draw the inference that the insurer acted with “a reckless disregard of lack of a reasonable basis for denial or a reckless indifference to facts or to proofs submitted by the insured.4

Like most other states, Wisconsin has statutes governing insurance claim adjustment practices. You can find them enumerated in the Wisconsin Administrative Code, Chapter 6, starting with section 6.11. If an insurance company is engaged in claim settlement practices that are unfair, a policyholder may be able to cite such violations as further indicia of bad faith.

1 Anderson v. Continental Ins. Co., 85 Wis.2d 675, 691 (1978).

2 Weiss v. United Fire and Cas. Co., 197 Wis.2d 365, 378 (1995).

3 Id.

4 Anderson at 693.

via What Constitutes Insurance “Bad Faith” in Wisconsin? : Property Insurance Coverage Law Blog.

A New Twist in the California Debate Over Allegedly Inadequate Replacement Cost Limits in Homeowners’ Policies

Joann Selleck and Maria Louise (Ria) Cousineau | Cozen O’Connor’s Property Insurance Law Observer | April 15, 2015

The April 8, 2015 decision of the California Court of Appeals in Ass’n. of Cal. Insurance Companies v. Jones, 2015 WL 1569669, 2015 Cal. App. LEXIS 298 (Cal.Ct.App., Apr. 8, 2015) held that the state’s Insurance Commissioner overstepped his authority in attempting to regulate the content and format of replacement cost estimates under homeowners’ insurance policies.  Although the legislature may choose to provide such a definition, it has not done so.  While the sufficiency of policy limits remains a concern in the insurance industry and there are other valid statutes in effect that address replacement cost, pending a potential appeal of the decision the Regulation at issue, Title 10, Cal. Code of Regulations, §2695.183, is therefore no longer effective.

Fire victims, whose homes have been lost in any number of Southern California wildfires, have repeatedly argued that their replacement cost limits were insufficient to cover their rebuilding costs.   Historically, many such homeowners filed lawsuits against their brokers or their insurers, alleging negligence and misrepresentation in policy placement.  Insurers, community activists, and others have held numerous public hearings on the subject, and agencies have conducted studies to assess the adequacy of replacement cost limits in homeowners’ policies over the last decade.  Attempting to remedy some of these concerns, effective in June 2011, the Insurance Commissioner issued  §2695.183.  Entitled “Standards for Estimates of Replacement Value,” this elaborate Regulation set forth requirements for establishing replacement cost limits for homeowner’s policies.

The Association of California Insurance Companies (ACIC) filed a declaratory relief complaint against the Insurance Commissioner, arguing: (1) that the Regulation was invalid because the Commissioner lacked the authority to regulate the underwriting of homeowners insurance;  (2) that Cal. Ins. Code § 790.03 (the “Unfair Insurance Practices Act” or UIPA) did not authorize the imposition of a single detailed method for estimating the replacement cost of houses; and (3) that the Regulation violated the insurance companies’ free speech rights under the First Amendment of the United States Constitution.  ACIC also argued that the Regulation was ineffective because it rendered, as unfair and deceptive, estimates that were accurate but not in the format directed by the Regulation while at the same time it did not sanction an inaccurate estimate that complied with its format and content requirements.

After a bench trial consisting of lengthy briefing and oral argument, the trial court sided with ACIC and agreed that the Insurance Commissioner lacked the authority to enact §2695.183.  On behalf of the Commissioner, the Attorney General appealed.  On April 8th, the California Court of Appeal for the Second Appellate District issued an opinion that affirmed the trial court and held that the Insurance Commissioner did not have authority to promulgate the Regulation under the authority delegated to him by UIPA.

The court’s opinion provides an intricate discussion of statutory construction, the extent of legislative authority, and the arguments made both by the insurers that brought the declaratory judgment action and by the policyholders and amici who were defendants.

The appellate court concluded that the California legislature, with limited exceptions not applicable here, was the only body with authority to add new definitions of what constituted a violation of Cal. Ins. Code §790.03.   The court noted that while the legislature could have defined the content and format of replacement cost estimates and could have determined that inadequate replacement cost estimates should be included in the list of unfair and deceptive practices under UIPA, it had chosen not to do so.  Further, the court concluded that UIPA did not give the Insurance Commissioner the authority to regulate the content and format of replacement cost estimates.

We expect the defendants will seek an appeal with the state Supreme Court.

via A New Twist in the California Debate Over Allegedly Inadequate Replacement Cost Limits in Homeowners’ Policies | Cozen O’Connor’s Property Insurance Law Observer.