Zalma's Insurance 101 Videoblog

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Policy Void From Its Inception – No Duty to Defend The implied covenant of good faith and fair dealing applies equally on the person insured as it applies to an insurer. When a person applies for insurance and misrepresents material facts the covenant is breached and the insurer has the right to seek a court order that the policy is rescinded from its inception and that any duty to defend on the policy does not…
Expected or Intended: The Fortuity Doctrine The fortuity doctrine arises from the basic concept upon which insurance is founded: that insurance covers risks, not losses that were planned, intended, or anticipated by the insured. It has always been the view of insurers that losses that were expected by the insured could not be insured. To do so would have a counterproductive effect. No one would buy insurance until they were certain they would have a…
Investigation of Liability Claims Insurance is designed to indemnify an insured against contingent or unknown losses. Insurance makes no sense if it can be purchased after the loss has occurred. For example, in California, “Insurance is a contract whereby one undertakes to indemnify another against loss, damage, or liability arising from a contingent or unknown event.”1 For there to be an insurable loss it is necessary that the loss, damage or liability arose from an…
The Release of All Claims – 3 In Bogy v. Ford Motor Co., No. 06-60308 (5th Cir. 01/16/2008), the Fifth Circuit reached the opposite result applying the law of Mississippi. Bogy claimed that Ford had falsely testified in responses to discovery and that truthful responses would have changed the position of the plaintiffs. The following video was adapted from my book, “Insurance Claims A Comprehensive Guide” Published by the National Underwriter Company and is available…
The Release of All Claims – 2 When the case was returned to the trial court, State Farm filed a motion for judgment on the pleadings. State Farm asserted the complaint did not state a claim upon which relief could be granted, because the Association’s claims were barred by the settlement agreement and release, and the Association could not rescind the settlement agreement without first offering to restore to State Farm the consideration it paid…
The Release of All Claims A first party property insurer may not require a general release from an insured when paying a claim because the payment is one of contractual indemnity where the amount is certain. At most, the insurer is entitled to a proof of loss or a receipt acknowledging receipt of payment. The only reason for a general release between a first party property insurer and its insured, is when the amount of…
The Claim File In each investigation, the adjuster’s claim file should document the investigation in detail. It is a record of what the claims person did and how he or she performed the duties of an insurance adjuster. The following video was adapted from my book, “Insurance Claims A Comprehensive Guide” Published by the National Underwriter Company and is available at the Zalma Insurance Claims Library http://www.zalma.com/videoblog/wp-content/uploads/2016/01/Recording-616-1.mp4 Legal Disclaimer The author and publisher disclaim any…
 Immunity of Appraisers In Lambert v. Carneghi, No. A113388 (Cal. App. Dist.1 01/11/2008), the California Court of Appeal found that since an appraisal is an arbitration under California law, the appraiser is immune from suit for actions in the appraisal. “It long has been recognized that, in private arbitration proceedings, an arbitrator enjoys the benefit of an arbitral privilege because the role that he or she exercises is analogous to that of a judge. The…
Setting Aside Award – 2 The Arbitration Act requires proposed neutral arbitrators to disclose to opposing parties the existence of any potential grounds for disqualification. If a party objects to the proposed neutral arbitrator, California Civil Code section 1281.91 requires the objecting party to serve a notice of disqualification within 15 days of receipt of the disclosure statement. The following video was adapted from my book, “Insurance Claims A Comprehensive Guide” Published by the National…
Setting Aside Award Setting aside an award is permitted only when there is a showing of fraud, bad faith, a material mistake, or a lack of understanding or failure to complete the task assigned. The decision to vacate the award is determined by reviewing the face of the award. If the face of the award fails to demonstrate these infirmities, then the award should not be disturbed. The following video was adapted from my book,…