Q: Part of my home burned, and I'm repairing the large burned section of the home. County building codes require upgrades from what was originally there. Does my homeowners policy cover this added expense?
A: It depends. If your policy has what's called "law and ordinance coverage" -- it's often referred to as "L&O" or "upgrade coverage," then yes, your policy would address the added costs to make the required upgrades.
As a precaution, ask your agent or insurer if you already have the coverage or if you can add it to your policy.
Note: This is one of a series of common -- or in some cases, particularly unusual -- questions received by our consumer advocacy staff, who answer questions from consumers.
Got a question or insurance problem of your own? If you live in Washington, feel free to give us a call, toll-free at 1-800-562-6900. We'll do our best to help. (And if you live in another state or territory, here's a handy map that lists the contact info for your local insurance regulatory office.)
Senin, 30 April 2012
Kamis, 26 April 2012
Insurance and fallen trees
Q: Will my insurance pay to repair my neighbor's home if my tree falls on his home?
A: It may not have to. Typically, a homeowner's own insurance coverage pays for such damage, unless you were negligent and your negligence caused the tree to fall.
Say the tree was obviously diseased or damaged and posed a clear risk to your neighbor's home, for example. In such cases, you could be found negligent and your insurer would cover the claim.
Note: This is one of a series of common -- or in some cases, particularly unusual -- questions received by our consumer advocacy staff, who answer questions from consumers.
Got a question or insurance problem of your own? If you live in Washington, feel free to give us a call, toll-free at 1-800-562-6900. We'll do our best to help. (And if you live in another state or territory, here's a handy map that lists the contact info for your local insurance regulatory office.)
A: It may not have to. Typically, a homeowner's own insurance coverage pays for such damage, unless you were negligent and your negligence caused the tree to fall.
Say the tree was obviously diseased or damaged and posed a clear risk to your neighbor's home, for example. In such cases, you could be found negligent and your insurer would cover the claim.
Note: This is one of a series of common -- or in some cases, particularly unusual -- questions received by our consumer advocacy staff, who answer questions from consumers.
Got a question or insurance problem of your own? If you live in Washington, feel free to give us a call, toll-free at 1-800-562-6900. We'll do our best to help. (And if you live in another state or territory, here's a handy map that lists the contact info for your local insurance regulatory office.)
Rabu, 25 April 2012
Actions by Insured against Insurer – Limitation Period not always Certain
Shaver v. Co-operators General Insurance Co. [2011] AJ No. 1411
Mr. Shaver was injured in a three vehicle accident on July 14, 2000 with one other identified driver. The Motor Vehicle Accident Claims Fund accepted liability for the accident and consented to a partial judgement in Mr. Shaver’s favour for $100,000.00. This judgement was entered on January 19, 2010.
Mr. Shaver found this compensation to be inadequate and issued a claim against his insurer, the Co-operators, on July 29, 2010 based on the SEF 44 endorsement in his policy:
Every action...against the insurer...under this endorsement shall be commenced [within 2 years] from the date upon which the eligible claimant...knew or ought to have known that the quantum of the claims with respect to an insured person exceed the minimum limits for motor vehicle liability insurance in the jurisdiction in which the accident occurred.
The Co-operators brought a summary judgment motion in Alberta arguing that Mr. Shaver was out of time as more than 10 years had passed since the claim arose. Mr. Shaver argued that his claim against the Co-operators arose only on January 19, 2010.
The court held that the limitation period in this endorsement allowed an injured person to sue later than the ultimate 10 year statutory limitation period in cases where the insured learned of inadequate insurance or of total claims exceeding the insurance limits after the expiry of that limitation period. The Co-operators appealed this decision to the Alberta Court of Appeal.
The Alberta Court of Appeal upheld the lower court’s decision, citing the principle provided by the Alberta Court of Appeal in Wawanesa Mutual Insurance Co., [1994] AJ No. 126:
An insured’s claim against his own insurer arises not at the time of the accident, but when he knows, or should have known, that the tortfeasor’s coverage will be inadequate to cover the insured’s damages.
In the case at hand, both parties agreed that it was not until January 19, 2010 that Mr. Shaver knew that the torfeasor’s coverage would not be sufficient.
- Kristen Dearlove, Student-at-Law
Mr. Shaver was injured in a three vehicle accident on July 14, 2000 with one other identified driver. The Motor Vehicle Accident Claims Fund accepted liability for the accident and consented to a partial judgement in Mr. Shaver’s favour for $100,000.00. This judgement was entered on January 19, 2010.
Mr. Shaver found this compensation to be inadequate and issued a claim against his insurer, the Co-operators, on July 29, 2010 based on the SEF 44 endorsement in his policy:
Every action...against the insurer...under this endorsement shall be commenced [within 2 years] from the date upon which the eligible claimant...knew or ought to have known that the quantum of the claims with respect to an insured person exceed the minimum limits for motor vehicle liability insurance in the jurisdiction in which the accident occurred.
The Co-operators brought a summary judgment motion in Alberta arguing that Mr. Shaver was out of time as more than 10 years had passed since the claim arose. Mr. Shaver argued that his claim against the Co-operators arose only on January 19, 2010.
The court held that the limitation period in this endorsement allowed an injured person to sue later than the ultimate 10 year statutory limitation period in cases where the insured learned of inadequate insurance or of total claims exceeding the insurance limits after the expiry of that limitation period. The Co-operators appealed this decision to the Alberta Court of Appeal.
The Alberta Court of Appeal upheld the lower court’s decision, citing the principle provided by the Alberta Court of Appeal in Wawanesa Mutual Insurance Co., [1994] AJ No. 126:
An insured’s claim against his own insurer arises not at the time of the accident, but when he knows, or should have known, that the tortfeasor’s coverage will be inadequate to cover the insured’s damages.
In the case at hand, both parties agreed that it was not until January 19, 2010 that Mr. Shaver knew that the torfeasor’s coverage would not be sufficient.
- Kristen Dearlove, Student-at-Law
Senin, 23 April 2012
Insurance: When a car is burglarized
Q: My clothes, camping gear, camera and guitar were stolen from my car. Will my auto insurance pay for these things?
A: Maybe, but there may well be dollar limits for things like clothing, sports equipment, etc. that might be incidental to an outing or vacation. Your auto policy would specify those limits. (We had an odd fraud case a couple of years ago involving a man who kept claiming that his $33,000 collection of silk neckties was being stolen from his car.)
For things that are generally considered personal property, rather than auto-related property like a spare tire, jack, or roadside emergency kit, you might be able to file a homeowner's or renter's insurance claim. Talk to your agent or insurer -- and think about your deductibles. If you have a high deductible, it may not be worth it to file a claim for a small loss.
Note: This is one of a series of common -- or in some cases, particularly unusual -- questions received by our consumer advocacy staff, who answer questions from consumers.
Got a question or insurance problem of your own? If you live in Washington, feel free to give us a call, toll-free at 1-800-562-6900. We'll do our best to help. (And if you live in another state or territory, here's a handy map that lists the contact info for your local insurance regulatory office.)
A: Maybe, but there may well be dollar limits for things like clothing, sports equipment, etc. that might be incidental to an outing or vacation. Your auto policy would specify those limits. (We had an odd fraud case a couple of years ago involving a man who kept claiming that his $33,000 collection of silk neckties was being stolen from his car.)
For things that are generally considered personal property, rather than auto-related property like a spare tire, jack, or roadside emergency kit, you might be able to file a homeowner's or renter's insurance claim. Talk to your agent or insurer -- and think about your deductibles. If you have a high deductible, it may not be worth it to file a claim for a small loss.
Note: This is one of a series of common -- or in some cases, particularly unusual -- questions received by our consumer advocacy staff, who answer questions from consumers.
Got a question or insurance problem of your own? If you live in Washington, feel free to give us a call, toll-free at 1-800-562-6900. We'll do our best to help. (And if you live in another state or territory, here's a handy map that lists the contact info for your local insurance regulatory office.)
Jumat, 20 April 2012
Dogs and insurance
Q: Am I covered if my dog bites someone else visiting my home, or when we're at a city park or campground?
A: Generally yes. Your homeowners policy will typically cover the incident at home or away from home, but once your insurance company knows that your dog caused an injury, the company may take a second look at you as a risk. The company may not want to continue coverage, or could raise its rates, since it's hard to guarantee that the dog will never bite someone again.
Note: This is one of a series of common -- or in some cases, particularly unusual -- questions received by our consumer advocacy staff, who answer questions from consumers.
Got a question or insurance problem of your own? If you live in Washington, feel free to give us a call, toll-free at 1-800-562-6900. We'll do our best to help. (And if you live in another state or territory, here's a handy map that lists the contact info for your local insurance regulatory office.)
A: Generally yes. Your homeowners policy will typically cover the incident at home or away from home, but once your insurance company knows that your dog caused an injury, the company may take a second look at you as a risk. The company may not want to continue coverage, or could raise its rates, since it's hard to guarantee that the dog will never bite someone again.
Note: This is one of a series of common -- or in some cases, particularly unusual -- questions received by our consumer advocacy staff, who answer questions from consumers.
Got a question or insurance problem of your own? If you live in Washington, feel free to give us a call, toll-free at 1-800-562-6900. We'll do our best to help. (And if you live in another state or territory, here's a handy map that lists the contact info for your local insurance regulatory office.)
Kamis, 19 April 2012
Job openings: Actuary, financial examiner, analyst, technician, receptionist
Due to retirements, a promotion, etc., we have several jobs that we're looking to fill. It's been quite a while since we've had this many openings.
The jobs are listed below, along with a few highlights. For the official job listing and specifics, including duties, salaries, required qualifications, etc., please click on each job's link below. Application deadlines vary -- these are listed under each job description -- but the earliest is next Monday.
Actuary: We're looking for someone to review health and disability insurance rate filings submitted by insurance carriers to our office. This person will also provide assistance to our company supervision division's work, which includes analysis of the finances of insurers, holding companies and other entities.
Financial examiner: These positions work out of our office in downtown Seattle. Among other duties, our examiners audit the operation of insurers.
Analyst: We're looking for a life- and health insurance compliance analyst to work in our consumer protection division, which is located in our main building in Tumwater. The job involves helping consumers with insurance questions, problems and complaints.
Insurance technician: This position involves answering consumer hotline calls and routing them to staff in various divisions, including agent/broker licensing and consumer advocacy. It also entails some IT support work.
Office assistant: This person will provide receptionist services and first-line help to phone and walk-in customers, as well as a variety of complex clerical duties.
The jobs are listed below, along with a few highlights. For the official job listing and specifics, including duties, salaries, required qualifications, etc., please click on each job's link below. Application deadlines vary -- these are listed under each job description -- but the earliest is next Monday.
Actuary: We're looking for someone to review health and disability insurance rate filings submitted by insurance carriers to our office. This person will also provide assistance to our company supervision division's work, which includes analysis of the finances of insurers, holding companies and other entities.
Financial examiner: These positions work out of our office in downtown Seattle. Among other duties, our examiners audit the operation of insurers.
Analyst: We're looking for a life- and health insurance compliance analyst to work in our consumer protection division, which is located in our main building in Tumwater. The job involves helping consumers with insurance questions, problems and complaints.
Insurance technician: This position involves answering consumer hotline calls and routing them to staff in various divisions, including agent/broker licensing and consumer advocacy. It also entails some IT support work.
Office assistant: This person will provide receptionist services and first-line help to phone and walk-in customers, as well as a variety of complex clerical duties.
Rabu, 18 April 2012
Trampolines and insurance
Q: I'm thinking about buying a trampoline for my kids. Are there any insurance issues?
A: Yup. Trampolines, while definitely fun, can cause injuries or even death. So it's a good idea to first talk to your insurance agent. Your insurance company may not want to continue coverage if you buy a trampoline. Also, if there is an injury claim, your insurer would review the claim, but might decide to later cancel your coverage. It's well worth a phone call to your agent or insurer first, rather than being surprised later.
Note: This is one of a series of common -- or in some cases, particularly unusual -- questions received by our consumer advocacy staff, who answer questions from consumers.
Got a question or insurance problem of your own? If you live in Washington, feel free to give us a call, toll-free at 1-800-562-6900. We'll do our best to help. (And if you live in another state or territory, here's a handy map that lists the contact info for your local insurance regulatory office.)
A: Yup. Trampolines, while definitely fun, can cause injuries or even death. So it's a good idea to first talk to your insurance agent. Your insurance company may not want to continue coverage if you buy a trampoline. Also, if there is an injury claim, your insurer would review the claim, but might decide to later cancel your coverage. It's well worth a phone call to your agent or insurer first, rather than being surprised later.
Note: This is one of a series of common -- or in some cases, particularly unusual -- questions received by our consumer advocacy staff, who answer questions from consumers.
Got a question or insurance problem of your own? If you live in Washington, feel free to give us a call, toll-free at 1-800-562-6900. We'll do our best to help. (And if you live in another state or territory, here's a handy map that lists the contact info for your local insurance regulatory office.)
In rear end collisions, liability is often considered to be automatic. But the Court of Appeal has reminded us that there is no such fixed rule.
In Martin-Vandenhende v. Myslik, 2012 ONCA 53 (C.A.), the plaintiff alleged the defendant rear-ended her vehicle as she slowed to make a left turn. She testified she activated her left turn signal prior to slowing down and commencing the turn. The defendant’s version of events was that the plaintiff activated her right turn signal and pulled to the right, which he interpreted to mean she was pulling over to allow him to pass. As he pulled around her vehicle, she turned left into him.
The trial judge found in favour of the plaintiff. He held that “taken at its highest”, the signal was “perhaps confusing” and the plaintiff was “perhaps giving [the defendant] inconsistent signals”. The Court held that this was not taking the defendant’s evidence at its highest, as his evidence was unequivocal: he was not confused or being given inconsistent signals, as he testified the plaintiff indicated she was going right, not left.
Justice Blair cited Beaumont v. Ruddy , [1932] O.R. 441 (C.A.) for the proposition that generally speaking, where one car runs into another from behind, the fault lies with the driver of the rear car, and he must satisfy the Court that the collision did not occur as a result of his negligence. Since the trial judge did not make factual findings to resolve the conflicting testimony between the parties, it could not be said one way or another whether Beaumont had been satisfied. Justice Blair held:
31 In addition, the trial judge's approach was wrong in law, in my view. The common law principle enunciated in Beaumont v. Ruddy does not prescribe that a following driver is always at fault if he or she runs into another from behind. It simply states that generally speaking this will be the case, and shifts the onus to the following driver to show otherwise. There is no principle of law of which I am aware that automatically fixes a following driver who runs into another vehicle from the rear with liability "no matter what [the lead driver] chooses to do, within [his or] her own lane." Subject to the law's general bias in favour of fault on the part of the following driver and the "following too closely" jurisprudence, liability - as in any negligence case - depends upon whether the following driver was acting reasonably in the circumstances and, conversely, whether the lead driver was as well.
The Court allowed the appeal and ordered a new trial.
- Tara Pollitt
In Martin-Vandenhende v. Myslik, 2012 ONCA 53 (C.A.), the plaintiff alleged the defendant rear-ended her vehicle as she slowed to make a left turn. She testified she activated her left turn signal prior to slowing down and commencing the turn. The defendant’s version of events was that the plaintiff activated her right turn signal and pulled to the right, which he interpreted to mean she was pulling over to allow him to pass. As he pulled around her vehicle, she turned left into him.
The trial judge found in favour of the plaintiff. He held that “taken at its highest”, the signal was “perhaps confusing” and the plaintiff was “perhaps giving [the defendant] inconsistent signals”. The Court held that this was not taking the defendant’s evidence at its highest, as his evidence was unequivocal: he was not confused or being given inconsistent signals, as he testified the plaintiff indicated she was going right, not left.
Justice Blair cited Beaumont v. Ruddy , [1932] O.R. 441 (C.A.) for the proposition that generally speaking, where one car runs into another from behind, the fault lies with the driver of the rear car, and he must satisfy the Court that the collision did not occur as a result of his negligence. Since the trial judge did not make factual findings to resolve the conflicting testimony between the parties, it could not be said one way or another whether Beaumont had been satisfied. Justice Blair held:
31 In addition, the trial judge's approach was wrong in law, in my view. The common law principle enunciated in Beaumont v. Ruddy does not prescribe that a following driver is always at fault if he or she runs into another from behind. It simply states that generally speaking this will be the case, and shifts the onus to the following driver to show otherwise. There is no principle of law of which I am aware that automatically fixes a following driver who runs into another vehicle from the rear with liability "no matter what [the lead driver] chooses to do, within [his or] her own lane." Subject to the law's general bias in favour of fault on the part of the following driver and the "following too closely" jurisprudence, liability - as in any negligence case - depends upon whether the following driver was acting reasonably in the circumstances and, conversely, whether the lead driver was as well.
The Court allowed the appeal and ordered a new trial.
- Tara Pollitt
Selasa, 17 April 2012
Trying to make our website better
We are redesigning the website for our agency (not this blog, but the whole Office of the Insurance Commissioner website). The point is to make it easy for consumers and other users of our site to quickly find exactly what they need.
Please help us by taking part in a brief interactive survey that will help us decide what topics to put where. It just takes a few minutes.
Many thanks.
Please help us by taking part in a brief interactive survey that will help us decide what topics to put where. It just takes a few minutes.
Many thanks.
OIC web applications: Back online
We updated the system underlying many of our web-based applications last night, and everything's back online. Thanks for your patience.
Senin, 16 April 2012
Our web applications will be down for several hours tonight
Shortly after midnight tonight, we'll be taking all of our web-based applications offline for system maintenance. They will be back up by 7 a.m.
During this time, most of our online services will be down. This includes things like online licensing, consumer complaints, E-tax filings, searches for health insurance rate filing, company lookups, agent/broker lookups, etc.
The website itself will still be up.
During this time, most of our online services will be down. This includes things like online licensing, consumer complaints, E-tax filings, searches for health insurance rate filing, company lookups, agent/broker lookups, etc.
The website itself will still be up.
Rabu, 11 April 2012
Kusnierz - Combining Impairments in Determining Catastrophic Impairment
Kusnierz v. The Economical Insurance Company (2012) 108 O.R. (3d) 272 (C.A.)
Kusnierz is an important Court of Appeal decision regarding catastrophic impairment under the SABS.
Mr. Kusnierz suffered a below the knee amputation and clinical depression in a 2001 accident. The parties disagreed as to whether he met the criteria to be declared catastrophically impaired, and the trial judge held that he did not. The key issue was whether physical and psychological impairments can be combined in evaluating whether a person is catastrophically impaired under the SABS.
The Court of Appeal held that it is permissible to combine physical and psychological impairments for the following reasons:
1. The legislator did not expressly forbid the combination;
2. The AMA Guides aim to assess the total effects of a person’s impairments on daily activities;
3. The Guides describe a number of situations where physical impairments should take into account mental and behavioural impairments;
4. The combination of impairments is consistent with the purpose of the SABS. The Court noted that the respondent conceded that there are few cases where physical and psychological impairments are catastrophic when combined but not when assessed separately. The class of persons who are CAT will therefore remain small; and
5. Combination promotes fairness and the objectives of the statutory scheme.
Although Kusnierz has the potential to open up the floodgates for catastrophic claims, it may be that the class of cases that fit into this situation remains small, as predicted by the Court of Appeal. It may take time before the full effects of Kusnierz are truly known.
- Tara Pollitt
Kusnierz is an important Court of Appeal decision regarding catastrophic impairment under the SABS.
Mr. Kusnierz suffered a below the knee amputation and clinical depression in a 2001 accident. The parties disagreed as to whether he met the criteria to be declared catastrophically impaired, and the trial judge held that he did not. The key issue was whether physical and psychological impairments can be combined in evaluating whether a person is catastrophically impaired under the SABS.
The Court of Appeal held that it is permissible to combine physical and psychological impairments for the following reasons:
1. The legislator did not expressly forbid the combination;
2. The AMA Guides aim to assess the total effects of a person’s impairments on daily activities;
3. The Guides describe a number of situations where physical impairments should take into account mental and behavioural impairments;
4. The combination of impairments is consistent with the purpose of the SABS. The Court noted that the respondent conceded that there are few cases where physical and psychological impairments are catastrophic when combined but not when assessed separately. The class of persons who are CAT will therefore remain small; and
5. Combination promotes fairness and the objectives of the statutory scheme.
Although Kusnierz has the potential to open up the floodgates for catastrophic claims, it may be that the class of cases that fit into this situation remains small, as predicted by the Court of Appeal. It may take time before the full effects of Kusnierz are truly known.
- Tara Pollitt
Senin, 09 April 2012
Man charged with insurance fraud after $17,000 stolen-bicycle claim
A Pierce County man has been charged with insurance fraud, forgery and attempted theft after filing a $17,000 claim for two bicycles that investigators say he never owned.
John Leonard Southerly, of Fox Island, last May told his insurance company that two Specialized Epic bicycles and accessories had been stolen from his garage. He filed a police report with a Pierce County sheriff's deputy, saying that he'd left the garage door open and discovered that the two bikes, valued at $17,562, were gone.
Southerly told his insurer, Travelers Indemnity Co., that he'd bought both bikes from an Arizona company. When Travelers asked for copies of his receipts, Southerly sent an email that was purportedly from the bike company. The bike company email came from a Gmail account. Attached was an invoice for each bike. Southerly later also filed a sworn statement of proof of loss for the bikes.
Travelers sent an investigator to talk to the bike shop owner and try to verify that the invoices were authentic. Nope, the owner said, pointing out discrepancies.
Then, last June, Travelers received an email from a different Gmail address.
"This is Detective Harris," it began. "I work out of the Tacoma office. I am trying to follow up on a case that involves Mr. Southerly..."
The email didn't contain contact information for this "Detective Harris," or even specify which law enforcement agency the detective supposedly worked for.
Travelers denied Southerly's claim and turned the case over to the state insurance commissioner's Special Investigations Unit. It quickly determined that there is no Detective Harris working for the Pierce County Sheriff's Office, the Tacoma Police Department or the Lakewood Police Department.
With search warrants, the Special Investigations Unit determined that both Gmail accounts listed Southerly's real email as a secondary contact and were sent from Southerly's IP address.
On March 30, Southerly was charged in Pierce County Superior Court with one count of insurance fraud ("false claims or proof"), three counts of forgery and one count of attempted first-degree theft.
His arraignment is set for Friday.
John Leonard Southerly, of Fox Island, last May told his insurance company that two Specialized Epic bicycles and accessories had been stolen from his garage. He filed a police report with a Pierce County sheriff's deputy, saying that he'd left the garage door open and discovered that the two bikes, valued at $17,562, were gone.
Southerly told his insurer, Travelers Indemnity Co., that he'd bought both bikes from an Arizona company. When Travelers asked for copies of his receipts, Southerly sent an email that was purportedly from the bike company. The bike company email came from a Gmail account. Attached was an invoice for each bike. Southerly later also filed a sworn statement of proof of loss for the bikes.
Travelers sent an investigator to talk to the bike shop owner and try to verify that the invoices were authentic. Nope, the owner said, pointing out discrepancies.
Then, last June, Travelers received an email from a different Gmail address.
"This is Detective Harris," it began. "I work out of the Tacoma office. I am trying to follow up on a case that involves Mr. Southerly..."
The email didn't contain contact information for this "Detective Harris," or even specify which law enforcement agency the detective supposedly worked for.
Travelers denied Southerly's claim and turned the case over to the state insurance commissioner's Special Investigations Unit. It quickly determined that there is no Detective Harris working for the Pierce County Sheriff's Office, the Tacoma Police Department or the Lakewood Police Department.
With search warrants, the Special Investigations Unit determined that both Gmail accounts listed Southerly's real email as a secondary contact and were sent from Southerly's IP address.
On March 30, Southerly was charged in Pierce County Superior Court with one count of insurance fraud ("false claims or proof"), three counts of forgery and one count of attempted first-degree theft.
His arraignment is set for Friday.
Rabu, 04 April 2012
Material Changes in Risk – Duty of Insurers to Communicate to Insureds
Thomas v. Aviva Insurance Co. [2011] N.B.J. No. 371
A fire occurred in an elderly insured’s home which was caused by a wood stove. When the insured had applied for insurance seven years earlier, he had indicated that he had electric heat as his primary heating source. One year later, a wood stove had been installed as a secondary heat source.
The insurer voided the policy and denied coverage on the basis that the insured failed to notify them of the installation of the wood stove. The insurer took the position that the installation of the wood stove constituted a material change in risk.
The insured was sent renewal policy notices that contained a caution to ensure that all information in the policy was accurate. The insured had dropped out of school at the age of 16 and never read the policy and was unaware of the obligation to inform the insurer of the installation of the wood stove.
The insured sued for breach of contract and was successful at trial. The trial judge held that the “insured’s knowledge was the determinative factor and the lack of guilty knowledge on the part of the insured supported the conclusion that the wood stove, as a supplementary or auxiliary heating unit, was not a material change of risk”.
The insurer appealed to the New Brunswick Court of Appeal. The appeal was dismissed. Chief Justice Drapeau found that the insurer had treated the matter of auxiliary heating sources as inconsequential “and effectively advised [the insured] in its various renewal notices that only the information provided in the original application was material to the risk”. In the original application for insurance, the insured was only asked about his home’s primary heating source. This suggests that the insurer did not consider the installation of the wood stove to be a material circumstance requiring disclosure. Lastly, Chief Justice Drapeau held that even if the installation of the wood stove constituted a change material to the risk, the insurer’s duty of good faith to the insured required that the insured be advised of this in plain language. This last point seemed to be especially important in this case as the insured had “very limited formal education”.
- Kristen Dearlove, Student-at-Law
A fire occurred in an elderly insured’s home which was caused by a wood stove. When the insured had applied for insurance seven years earlier, he had indicated that he had electric heat as his primary heating source. One year later, a wood stove had been installed as a secondary heat source.
The insurer voided the policy and denied coverage on the basis that the insured failed to notify them of the installation of the wood stove. The insurer took the position that the installation of the wood stove constituted a material change in risk.
The insured was sent renewal policy notices that contained a caution to ensure that all information in the policy was accurate. The insured had dropped out of school at the age of 16 and never read the policy and was unaware of the obligation to inform the insurer of the installation of the wood stove.
The insured sued for breach of contract and was successful at trial. The trial judge held that the “insured’s knowledge was the determinative factor and the lack of guilty knowledge on the part of the insured supported the conclusion that the wood stove, as a supplementary or auxiliary heating unit, was not a material change of risk”.
The insurer appealed to the New Brunswick Court of Appeal. The appeal was dismissed. Chief Justice Drapeau found that the insurer had treated the matter of auxiliary heating sources as inconsequential “and effectively advised [the insured] in its various renewal notices that only the information provided in the original application was material to the risk”. In the original application for insurance, the insured was only asked about his home’s primary heating source. This suggests that the insurer did not consider the installation of the wood stove to be a material circumstance requiring disclosure. Lastly, Chief Justice Drapeau held that even if the installation of the wood stove constituted a change material to the risk, the insurer’s duty of good faith to the insured required that the insured be advised of this in plain language. This last point seemed to be especially important in this case as the insured had “very limited formal education”.
- Kristen Dearlove, Student-at-Law
Selasa, 03 April 2012
"Hobo Prince" ordered to stop selling illegal insurance in WA
From a press release we just issued:
OLYMPIA, Wash. – A Clark County man who promises years’ worth of weekly $900 payouts in exchange for a one-time $25 signup fee has been ordered to stop selling illegal insurance in Washington.
The order was issued Monday by the Washington state Office of the Insurance Commissioner, Mike Kreidler.
Shelby Horatio Bell, doing business as “Hobo Prince Economic Project,” has held seminars in Washington and Oregon, encouraging people to sign up for his plan. Once a participant pays a one-time $25 fee, Bell promises to pay the participant $900 a week for seven years.
He maintains that each person’s contract is financed through a complex series of transactions, including issuance of a $500,000 “reverse” insurance policy purchased with a $25,000 payment from an unnamed bank. A contract obtained by Kreidler's Legal Affairs Investigators named a well-known insurer and one of its brokers – neither of which have any insurance arrangement with Bell or his program. In another contract, Bell maintained that he was the insurer.
Neither Bell nor his companies (Hobo Prince Economic Project and an Oregon company known as Be’Rio Transports) are authorized to transact insurance in Washington state. The arrangement being offered violates multiple provisions of the state’s insurance code.
Kreidler’s office repeatedly tried to contact Bell by phone and mail. Reached by cell phone at one point, Bell agreed to meet with a state investigator, but then didn’t show up for the appointment.
The cease and desist order requires Bell and his companies to immediately stop selling, offering, or soliciting any insurance in Washington. It also bars him from transacting insurance business in the state.
Nothing in the order prevents Bell or his companies from fulfilling the contracts that he has already entered into. Nor does it prevent him from refunding money paid by Washington consumers.
Bell has the right to demand a hearing to contest the order.
The full order can be found at: http://www.insurance.wa.gov/oicfiles/orders/2012orders/12-0076.pdf
OLYMPIA, Wash. – A Clark County man who promises years’ worth of weekly $900 payouts in exchange for a one-time $25 signup fee has been ordered to stop selling illegal insurance in Washington.
The order was issued Monday by the Washington state Office of the Insurance Commissioner, Mike Kreidler.
Shelby Horatio Bell, doing business as “Hobo Prince Economic Project,” has held seminars in Washington and Oregon, encouraging people to sign up for his plan. Once a participant pays a one-time $25 fee, Bell promises to pay the participant $900 a week for seven years.
He maintains that each person’s contract is financed through a complex series of transactions, including issuance of a $500,000 “reverse” insurance policy purchased with a $25,000 payment from an unnamed bank. A contract obtained by Kreidler's Legal Affairs Investigators named a well-known insurer and one of its brokers – neither of which have any insurance arrangement with Bell or his program. In another contract, Bell maintained that he was the insurer.
Neither Bell nor his companies (Hobo Prince Economic Project and an Oregon company known as Be’Rio Transports) are authorized to transact insurance in Washington state. The arrangement being offered violates multiple provisions of the state’s insurance code.
Kreidler’s office repeatedly tried to contact Bell by phone and mail. Reached by cell phone at one point, Bell agreed to meet with a state investigator, but then didn’t show up for the appointment.
The cease and desist order requires Bell and his companies to immediately stop selling, offering, or soliciting any insurance in Washington. It also bars him from transacting insurance business in the state.
Nothing in the order prevents Bell or his companies from fulfilling the contracts that he has already entered into. Nor does it prevent him from refunding money paid by Washington consumers.
Bell has the right to demand a hearing to contest the order.
The full order can be found at: http://www.insurance.wa.gov/oicfiles/orders/2012orders/12-0076.pdf
Senin, 02 April 2012
King County woman pleads guilty to forgery and attempted fraud
A King County woman has pleaded guilty to attempted fraud and forgery for trying to claim weeks of injury-related lost wages after an auto accident. The problem: She didn't have a job at the time.
Ka'Yah M. Alexander claimed that a 2010 accident in the parking lot of a Memphis, Tenn. hotel left her unable to return to work for 37 days due to her injuries. She sent a demand letter to Travelers Insurance, seeking $10,000 for lost wages, pain and medical expenses. She also sent the company a letter, purportedly from the group home where she worked, saying that she was on medical leave from work.
An investigation by Travelers and by the state insurance commissioner's Special Investigations Unit determined that the work-loss letter was not authentic.The company provided a termination letter showing that Alexander had been let go from her job two days after the accident.
Alexander pleaded guilty last month. She was sentenced to fines and community service.
Ka'Yah M. Alexander claimed that a 2010 accident in the parking lot of a Memphis, Tenn. hotel left her unable to return to work for 37 days due to her injuries. She sent a demand letter to Travelers Insurance, seeking $10,000 for lost wages, pain and medical expenses. She also sent the company a letter, purportedly from the group home where she worked, saying that she was on medical leave from work.
An investigation by Travelers and by the state insurance commissioner's Special Investigations Unit determined that the work-loss letter was not authentic.The company provided a termination letter showing that Alexander had been let go from her job two days after the accident.
Alexander pleaded guilty last month. She was sentenced to fines and community service.
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