WHAT SHOULD BE IN THE CLAIM FILE

William F. “Chip” Merlin, Jr. represents and advocates for policyholders both in and outside ofthe courtroom. His practice focuses on insurance claim presentation and benefit recovery,insurance coverage, bad faith and wrongful claims conduct litigation. He is a Board CertifiedCivil Trial Lawyer and currently holds bar certifications in Florida, Mississippi, Texas,Tennessee, New Jersey, New York, the District of Columbia, and California. A graduate of the University of Florida School of Law, Chip became a member of the FloridaBar in 1983. He briefly represented insurance companies in coverage litigation but since 1985has dedicated his career to seeking justice for insurance policyholders in claim presentation anddisputes with their insurance companies.

Chip is the president of the Merlin Law Group. His law firm, currently at 21 attorneys andgrowing, focuses its practice on the representation of policyholders. His thriving legal practice,with offices in Tampa, Coral Gables, and West Palm Beach, Florida, Houston, Texas, LosAngeles, California, Denver, Colorado, Phoenix, Arizona, New Jersey, and New York, focusessolely on insurance claims. The firm represents commercial, governmental, residential andprivate policyholders. Chip is routinely invited to be a featured speaker on insurance law at some of the nation’s mostprestigious conferences and seminars. He has addressed his peers at the American BarAssociation, the American Association for Justice, and the Florida Justice Association. He hasalso presented before members of such organizations as the National Association of PublicInsurance Adjusters (NAPIA), Florida Association of Public Insurance Adjusters (FAPIA),Community Associations Institute, and the Windstorm Network.

Because of the breadth and depth of his knowledge and experience, Chip is frequently sought toprovide comment and insight into current legal issues on the stage of the national media. He hasappeared on Fox News, ABC News, CNN, and MSNBC on topics as diverse as freedom ofspeech, employee’s and property owners’ rights to privacy, and slander and emotional distress.

He is also the main contributor to discussion of property insurance law on the daily blog,PropertyInsuranceCoverageLaw.com.

Contact Information Tampa Office: 813 229 1000Cell Phone: 813 695 8733

E-mail Address: [email protected]

Firm Website: www.MerlinLawGroup.com

Blog: www.PropertyInsuranceCoverageLaw.com

William F. “Chip” Merlin, Jr., Esq.

WHAT SHOULD BE IN THE CLAIM FILE

PUBLIC ADJUSTER BEST CLAIMS PRACTICES AND THE CLAIMS FILE

Best Claims Practices

Claims handling “best practices” are routinely mentioned when discussing insurance company adjusters. The discussion and analysis of what constitutes a claims handling “best practice” for a public insurance adjuster is not in current literature. This paper is a beginning of that analysis and focuses on claims file content and organization for public insurance adjusters.

Public adjuster claims handling “best practices” are ethically sound processes and procedures that lead to optimum claims settlements for policyholders. The ethical aspect of the process cannot be overemphasized. An optimum result is not fraud or a settlement that pays more than the amount fairly owed. An optimum result is one where the policyholder promptly receives all that is owed.

Nobody completely explains what property insurance claim handling “best practices” are. However, most would agree they include the following:

• Compliance with mandated laws and regulations. • Timely communication and acknowledgement of communication is paramount.

• Thorough and timely investigation of coverage and evaluation of damages.

• Claims are settled. A “good faith” effort is made to settle or resolve the claim.

• Honest and transparent communications.

• Written procedures are adopted and updated. “Best Practices” from a public adjuster’s viewpoint should include all activities required to conclude a client’s claim in a prompt and full recovery. For example, they must include contacting and contracting with the policyholder, thoroughly reading the policy, and investigating the cause of damage while considering coverage, assessing damages, and complying with post loss duties. Finally, the claim must be adjusted and settled at the most favorable terms, with the policyholder’s approval.

Best Practices in Maintaining the Claims FileClaims file1 documentation is paramount to proper claims handling. Documentation can consist of evidence, communications, diaries and working notes. Such documentation can provide evidence to show you have handled the case properly and provided timely communication. The claims file should show a clear history and development of the claim. Public adjusters should document their first meeting with a signed client, including the contract, releases and notices required by state law, and notices of anticipated costs in addition to the public adjuster’s fee. Documentation from the first meeting should also include the adjuster’s notes regarding the history of prior claims, payments, repairs, and claims correspondence that occurred before the public adjuster was retained. Always remember the claim file may be subject to discovery and might be read and examined by the insurance company, as well as a court and jury.

1 The claims file can be an electronic file, paper file, or a combination.

The claims file must also include documentation of the claims assembly. The file should reflect a clear methodology to evaluate property damage. The methodology should include obtaining evidence demonstrating the extent of damages. This evidence may be derived from pictures, diagrams, estimates, contracts, expert reports, and assessments of the insurer’s evidence. The scope and cost of damage is the public adjuster’s stock in trade and must reflect a high level of competence if full recovery is to be made. The public adjuster’s notes should identify the insured, what can be claimed under the policy, quantify and document the loss, detail the structural damage, and itemize the personal property lost or damaged. The file should also include information regarding the professionals and techniques used to investigate, mitigate, and repair damage: CVs, licenses, reports, recommendations, receipts and professional literature.

Further, claims file must evidence that the claim was submitted correctly and on time. The file must contain the proof of loss, payment documentation, proof of delivery, form requests, and all of the adjuster’s correspondence with the insurer and the policyholder.

The minimum requirements of a well documented public adjuster claims file will include:

• Contact Information

• Retention Contract

• Insurance Policy

• Summary of Coverage and Limits

• Time Deadlines—Proof, Replacement Cost, Statute of Limitations

• Diary

• Communications

• Causation Proof

• Damage Proof

• Checklist of Post Loss Requirements

• Claim Costs—listed and copies of invoices.

• Insurance Company Causation and Damage Proofs

• Claims Payments—listed and copied.

• Closing Statements or Public Adjuster Invoices for Services

The speed and cost of proper adjustment can be impacted by automation. The level of automation can determine whether repetitive tasks can be made in a systematic manner that is less costly in terms of labor and ensures timely processing of the claim. The key is to avoid duplication of work, while ensuring tasks are completed in a timely manner. A well organized claims file and systematic claims handling approach make this possible.Public adjusters should understand that a typical best practice of an insurance company adjuster will reflect the following:

The adjuster should evaluate the nature and extent of the property loss. The adjuster should obtain from the insured any documentation the insured has of the property value to further document the claim. Damage to property should be documented in the file with receipts, replacement cost, or other proof of value. The file should contain an evaluation outlining the exposure for all damages that are part of the settlement. The Settlement Evaluation should reflect a reduction of settlement value for any offsets due to depreciation, valuation limits, co-insurance clauses or policy exclusions.2

Concurrently, the public adjuster’s claims file should reflect processes that satisfy the insurance company demands for “any documentation” reflecting the scope and extent of damage, mitigation expenses and repairs. A public adjuster who fails to meet the minimum efforts required of the insurance adjuster will not be prepared to represent his client and opens both himself and his livelihood to unnecessary regulation and financial ruin.

Public adjusters who thoroughly and conscientiously perform their jobs will accumulate the documents that satisfy a Best Practice standard with little additional effort. A system to organize and maintain the records can be as simple or technologically advanced as the public adjuster chooses. If the claim is not settled and litigation ensues, the claims file will be an integral part of any litigation and likely viewed, at a minimum, by all parties and the court. Accordingly, the file should be professional and look professional. Unnecessary personal comments regarding those involved in the claim have no place in the file. Closed files should contain a record of the client’s satisfaction and any follow up. Files should be retained for the amount of time required by state law, if not longer. Retention of files protects the client in the event of a reopen claim or ensuing loss and protects the public adjuster against claims of neglect or malfeasance.

Public adjusting is an honorable and necessary profession. A majority of public adjusters perform their duties to the best of their ability and adhere to the ethical guidelines that govern our profession. Professional standards, or Best Practices, must be transcribed and easily accessible so those new to the profession or struggling will have clear guidelines and goals to which they can strive. Best Practices will put your client in the best position to achieve a full recovery, promote the profession of public adjusting, and likely lead to a long and successful career.

2 Risk Management Notes #216. Practical Risk Management, June 2006, available at http://www.irmi.com/online/pracrisk/ch0notes/prmn0216.aspx#jd_claims_best_practices

THE SEVEN BALANCING ACTS OF PROFESIONAL BEHAVIOR IN THE UNITED STATES

A Cultural Values Perspective Cornelius Grove & Willa Hallowell, 2002

The following article appeared in the 3rd Quarter 2002 issue of Focus Europe, a supplement to Velocity, the magazine of the Strategic Account Management Association (SAMA). Following is the original, unedited typescript of that article.

When a professional derails in a business setting in the United States, it's sometimes due to a lack of technical expertise or clumsiness in execution. But just as often, the reason for the derailment is an inability or unwillingness to act in a way regarded as "professional" by one's colleagues and counterparts.

Another reason why behavior deemed unacceptable occurs is because people who were not raised and socialized in the U.S. are increasingly present in American offices and plants. Immigrants, expatriates, and employees from abroad on developmental assignments all usually act in the best way they know how, yet their culturally conditioned behavior may not be regarded as fully professional by American businesspeople. The differences between American notions of good business behavior on the one hand, and European, Latin, or Asian notions of good business behavior on the other hand, are often nuanced and subtle.

Our responsibilities require the two of us to be conscious in a general way of appropriate business behavior in various cultures. Recently, we were presented with a focused opportunity to address the issue of professional behavior in the United States. A client had a newly hired employee born and raised in another country, and now in the U.S.A., who was perceived to be representing the firm in a way that did not do it credit. Those who witnessed her behavior described it as "not professional." What could we do to help?

It soon became apparent to us that very little precision and clarity exists about the meaning of professional behavior in the U.S. Before we could assist the new employee (who, fortunately, proved eager to learn), we needed to be clear in our own minds what professional means in the context of U.S. business. One of us is an interculturalist, the other is an anthropologist, so we are accustomed to bringing the perspective of cultural values to bear on the understanding of behavior patterns. In the following pages, we share with you what our "cultural values perspective" reveals about the meaning of professional.

One of Two Meanings

The word "professional" as used among U.S. businesspeople has two meanings:

• Professional refers to types of work that, to be performed well, require a high degree of knowledge, skill, sound judgment, and constant practice. For example, physicians and lawyers do professional work.

• Professional also refers to a set of qualities of one's personal behavior in work-related situations. This meaning of professional, particularly in the U.S., is what we explored on behalf of the new employee.

Let's begin with the very short definition in the Merriam Webster College Dictionary for this second use of professional: exhibiting a courteous, conscientious, and generally businesslike manner in the workplace.

That definition is very basic. Acting professionally is quite complex. We believe that acting professionally in the United States requires a balancing act between contrasting sets of American cultural values, both of which are respected by Americans but each of which tends to lead down a different behavioral path.

In this discussion we specify seven contrasting sets of cultural values that define what businesspeople in the U.S. mean when they speak of someone's acting (or failing to act) professionally. Each contrasting set is expressed in the form of "A yet B." By this we suggest that admirably professional behavior occurs when someone's behavior balances in just the right way between contrasting U.S. cultural values "A" and "B."

In work-related situations in the United States, professional behavior is. . .

1. Individualistic yet restrained.

The U.S. has an individualistic culture in which personal objectives and independence ("freedom") are emphasized. But individualism is not license to behave in an unrestrained manner. Good professional behavior is guided by the social and business-related expectations of others. The balancing act is this: One must demonstrate one's individualism and independence on the one hand; one must also observe prevailing social norms and the expectations of business associates on the other.

For example, managers in the U.S. have an expectation that their direct reports will get things done more or less independently, that is, without constant direction from above. Employees who are "initiative-takers" and "self-starters" are valued. . .up to a point. The balancing act for employees is to take initiative that is bounded and guided by the strategies of their supervisors and the overall mission of their firm.

Acting professionally in the U.S. means two things with respect to this first balancing act. First, it means demonstrating individualism in ways that are subtle, that observe locally prevailing norms of behavior, and that do not annoy or unduly distract the others with whom one is interacting. It means not demonstrating one's individualism in ways that

strongly call attention to oneself. Second, acting professionally means taking initiative on behalf of the firm in ways that support the strategies of one's superiors. Initiative is properly directed in support of the boss's objectives, not one's own unique ideas.

Undesirable: An individual is an avid fan of a certain baseball team. In work-related settings, he proclaims loudly the superiority of this team and often discusses details of the team's games, players, and operations. His behavior is unprofessional. This is because his topic is not business-related, and even more so because he is monopolizing office conversations in order to endlessly draw attention to his personal interest.

Desirable: An individual is charged with helping her firm expand operations in a particular line of business. While contacting others during her exploration of opportunities, she realizes that there may be an expansion opportunity in a related line of business. She writes a report introducing this possible opportunity and suggesting next steps. Managers will admire her for both taking initiative and remaining subject to direction.

2. Egalitarian yet respectful.

The U.S. is well known for its egalitarian culture. People up and down the scale of relative power interact with one another in ways that appear strikingly similar, that lack in most instances the overt recognition of power and status found in many other cultures. But it's a mistake to imagine that people, and especially businesspeople, in the U.S. are not conscious of hierarchy.

Here's the key: American businesspeople respect and defer to roles and responsibilities at different levels. The people who fulfill those roles and responsibilities are nevertheless "just people like you and me." Americans demonstrate their common humanity with others by being overtly friendly and informal with all others. At the same time, they are alert and ready to comply when someone with power acts "in role."

Acting professionally in the U.S. means being respectful of power – roles and responsibilities at different hierarchical levels – and of the rights and privileges that belong to those levels. But powerful people are human beings, no more and no less, and one therefore is expected to be more or less informal with them.

Undesirable: An individual is a junior manager at a firm. She is friendly towards others above her in the hierarchy. She tries to engage them in conversation about key issues facing the firm and offers advice about how management should handle certain matters. Her behavior is unprofessional. It's acceptable for her act informally towards her superiors but not for her to freely contribute her recommendations to them.

Desirable: An individual is a senior manager at a firm. He has great responsibility and authority there, including the power to hire and fire numerous employees. In his daily interactions with employees, he acts in an informal manner, occasionally asks about their

individual interests and family members, and listens if anyone wants to share a concern. Though aware of his high status, he behaves in some ways as an equal.

3. Assertive yet sensitive.

In U.S. culture, self-reliance is admired. Individuals are able to be self-reliant, in part, by obtaining what they want through acting assertively towards others. Personal assertiveness, or "directness," is expected and admired, but too much is quickly felt to be aggressive and abrasive. The difference between enough and too much is determined by the actor's sensitivity to others.

Similarly, self-assurance or self-confidence is admired. . .up to a point. When it shades over into arrogance – a demonstration of one's certainty that his own view is infallible – others quickly react negatively. It is never complimentary when someone is viewed by others as opinionated, dogmatic, or arrogant.

It's often said in the U.S., regarding certain direct and self-assured behaviors, that when used by a man these are "assertive" (admired) whereas when used by a woman these are "aggressive" (abrasive). While this may be an accurate observation, some men nevertheless are perceived as aggressive and arrogant.

Acting professionally in the U.S. means putting a boundary on one's assertiveness and self-assurance, a boundary that varies across times, situations, and people. This shifting boundary is governed by one's awareness of the likely effect on others of varying levels of assertiveness. The professional constantly endeavors to be sensitive to others, thereby learning how to temper and modulate his or her behavior.

Undesirable: An individual is acting as an assistant trainer. The training topic is something about which he has personal experience. He speaks frequently, sometimes interrupting others, and tells extended stories about his experiences. His behavior is unprofessional. Although he does have relevant experience to share, he is being too assertive; he is not being sensitive to others' need to know more than just his perspective.

Desirable: Among the members of a team of six consultants is an older woman who is much more highly trained and experienced than any of the others, but who is not their supervisor. In dealing with the others, this woman is careful to avoid the impression of excessive self-assurance. She listens with interest to their ideas about how to proceed with clients, and always explains her own point of view fully and patiently.

4. Accurate yet tactful.

Accuracy is valued in U.S. culture. To be accurate means that, in verbal and written communication, one discusses people, events, things, and one's own internal states in a manner congruent with reality. Americans pepper their speech with phrases such as "honestly" and "to tell you the truth" as a way of emphasizing their accuracy. But

whenever a discussion touches on the shortcomings of someone present or on an embarrassing situation, accuracy encounters another valued quality — tact.

The desire for harmony in communication and relationships is valued less in U.S. culture than in many others (e.g., in Asian cultures). But the importance of tact in the U.S. should never be underestimated. The person who publicly says or writes something that, while accurate, is harsh, embarrassing, or causes loss of "face," will be noted and criticized behind his back — and sometimes to his face! — in strongly negative terms.

Acting professionally in the U.S. means overtly striving to be accurate in communication, yet striving as well to be sensitive to the feelings and reputations of others. In the U.S., the high value on accuracy must always be tempered by tact, even to the point of occasionally stopping short of being 100% accurate. When shortcomings must be fully revealed, the bad news should be restricted to those who are directly involved.

Undesirable: A manager becomes aware that the output of one of her project groups is not up to expected quality standards. During a meeting attended by all of her direct reports, she describes in exquisite detail the flaws in the output of the errant group. Her behavior is unprofessional. She may have been accurate, but because she spoke publicly she was tactless. She should have dealt with group members in private.

Desirable: A middle manager strongly suspects that his firm is engaging in unethical accounting practices, and because he deals with the firm's accounts he's in a position to know. He arranges to speak in complete privacy with the CEO, and he brings with him detailed exhibits of the matters that concern him. His action is admirable because it demonstrates concern for the firm's long-term reputation as well as his own.

5. Punctual yet patient.

The U.S. has a culture in which businesspeople are highly conscious of time's passage, even minute-by-minute. They schedule activities well in advance, then follow these schedules as much as humanly possible. Activities are expected to not only begin on time, but also to end on time. Being punctual is about being sensitive to the needs of others, who are also following preplanned schedules.

Another characteristic of U.S. business culture is that people have many responsibilities and tasks to attend to daily. A particular responsibility or task, therefore, may take more time to accomplish than might seem reasonable; the reason is that one has many, many other things to do to as well. So along with punctuality, one needs patience. Being patient is about being sensitive to others' workloads and priorities.

Two related points need to be made. First, deadlines are taken seriously among U.S. businesspeople. When a task is clearly high-priority and/or its completion is critical to the work of others, the deadline should be met. It's not good to miss a deadline. Rather, one should agree in advance only to a "realistic" deadline.

Second, for some – but not all – U.S. businesspeople, family responsibilities take precedence over business responsibilities. In many business settings, a person's explanation for lateness or a missed deadline will be more readily accepted if a family emergency is the reason. Note, however, that this is not uniformly true!

Acting professionally in the U.S. means being acutely conscious of others' constraints with respect to time's passage. One respects others' carefully planned schedules by arriving on-time and by meeting deadlines that are viewed as critical. But one also respects others' huge load of responsibilities by not constantly prodding them about the completion of tasks. . .other than, of course, the tasks that are most critical.

Undesirable: An individual arranges to meet a colleague at 9:00am. He doesn't take into account, however, the possibility that rush-hour traffic could be slowed by an accident. So he arrives 25 minutes late. His behavior is unprofessional. He should have planned for possible traffic problems by allowing extra driving time. And he should have phoned as soon as it became clear that he'd be more than five minutes late.

Desirable: A consultant is asked by a client firm to submit a proposal for a new training program, and does so. When she makes her first follow-up call, her contact at the client firm states his interest in the proposal, but also says he's overwhelmed with higher priority matters. Time passes. The consultant calls back about six weeks later, but the situation hasn't changed. She asks when in the future she could call back again.

6. Warm yet "cool."

The U.S. has a business culture in which a friendly demeanor is valued, even towards mere acquaintances. Both nonverbal and verbal behavior commonly convey interpersonal warmth. Such behavior is routine, expected, and usually superficial. Equally valued by U.S. businesspeople is behavior that is rational, objective, impersonal, and free of emotional highs and lows. . .in a word, "cool."

"Cool" includes the tendency of Americans to "agree to disagree." Although two people know they are on different sides of an issue, they usually avoid focusing on these differences and continue to cooperate towards common goals. They try to separate the controversy from the person. For example, one might think that "even though I think Bob is totally wrong about the budget allocation, I still like Bob personally." That Americans try to do this may help to explain their readiness to openly discuss differences of opinion.

Acting professionally in the U.S. means maintaining the appearance of positive regard towards others while avoiding any energetic, agitated display of deep feelings, especially anger. It's not a contradiction to say that U.S. businesspeople need to be both "warm" in the sense of not being emotionally flat or uncaring towards others, yet "cool" in the sense of reacting rationally and neutrally to unusual events and behavior, including emotionally upsetting situations and even well-intentioned criticism of oneself (see also item 7).

Undesirable: An individual, with a colleague, is making a marketing visit to a potential client. His colleague is prone to interrupt others. When she interrupts him during his formal presentation (to make a clarifying comment), he cuts her off with a momentary flash of anger. This behavior is unprofessional. He should have "maintained his cool" somehow, regardless of how vehemently he reacted internally to her interruption.

Desirable: An individual is involved in important but difficult negotiations with representatives of another firm. She believes that her counterparts are using questionable tactics in an attempt to gain an unfair advantage. She feels like banging the table, shouting, and stalking out of the room. Instead, she asks for a 15-minute recess, during which time she regains her composure and returns with a "cool" demeanor.

7. Optimal yet practical.

U.S. culture values progress in society; similarly, it values self-improvement in individuals. It is thought good if a businessperson takes steps on a regular basis to insure that his work and his competencies are becoming ever more nearly optimal. Complete excellence is the goal. On the other hand, Americans also are very practical people who like to get things done, to actually finish tasks.

When someone is called a "perfectionist," it may be a compliment but often it's a criticism. A perfectionist is someone who's not satisfied until whatever he's working on is perfect: 100% optimal. In a culture that values excellence, how could this bring criticism? Criticism begins when striving for perfection uses up so much time and other resources that it's impractical – tasks cannot be finished on time and on budget.

Let's consider "feedback." Feedback occurs when others with whom you are working tell you directly what they like and don't like about your performance. Americans say they value feedback, which is said to be desirable if it is "constructive" (enabling the individual to engage in self-improvement) or "for the good of the cause" (enabling the group to be more efficient, productive, or creative). The key is that feedback needs to be practical, that is, focused on making it increasingly possible to get things done well and on deadline.

Acting professionally in the U.S. means valuing excellence, with the outcome that one attempts to improve knowledge, skills, speed, and quality of output in oneself and one's coworkers. But in most situations, this quest for optimal results needs to be balanced by practical considerations. Deadlines and budgets are important, too. What use is a totally perfect product if it's never shipped to customers?

Undesirable: A manager has a strong desire to attain perfection in each new product that exits his unit. As deadlines loom, he continues to think of small ways in which improvements and innovations could be added, obliging his staff to work at breakneck speed and, often, late into the night. Though "unprofessional" might not be the word used, many others will think of him as having carried his quest for excellence too far.

Desirable: An individual in a high-tech firm is assigned the task of designing an exceptionally complex part for a new electronic device. In the course of this work, she realizes that she's discovered the principle behind an innovative switch. But transforming this principle into a marketable product will require extensive testing. She designs a less innovative part to complete her assignment, and the project makes its deadline.

* * * * *

We wish to add that these "balancing acts" that we've discussed above are not the complete story regarding professional behavior in the U.S.A. Following are four additional components of professional behavior:

• Presentable: Presentable means showing up for work groomed and dressed in a way that is attractive without being distracting. In face-to-face situations, one's physical appearance is almost always the first indication of "professionalism" that others judge. As the old saw puts it: "First impressions are lasting."

• Reliable: Reliable means consistently performing one's work, and delivering results, in an effective manner. A reliable person also is accurate about how much work he or she can actually accomplish in the projected timeframe so that unrealistic promises about quantity and quality of output are not made.

• Conscientious: Conscientious means doing high quality work in order to satisfy an internalized value that one's work ought to be done with attention to excellence. A conscientious professional takes pride in all of his or her jobs, not merely those that will receive the most notice or the highest remuneration.

• Nonjudgmental: Nonjudgmental means that one is not prone to arrive at conclusions so swiftly that relevant information is not considered, or that possible misunderstandings are never probed. In this era when people from many countries, cultural backgrounds, and ethnic groups are working together, and often at a distance from each other (as virtual teams), being nonjudgmental is more important than ever.

* * * * *

• Individualistic yet restrained• Egalitarian yet respectful • Assertive yet sensitive • Accurate yet tactful • Punctual yet patient• Warm yet "cool" • Optimal yet practical

These seven features of professional behavior in the United States were the focus of this discussion because they capture some of the contrasting cultural values that drive the behavior of American people, particularly American businesspeople. To be seen as behaving "professionally," a businessperson needs to enact behavior that maintains a delicate balance between two contrasting sets of values: "A yet B."

We believe that a very important, but often overlooked, fact stands out in our analysis of professional behavior. Although American businesspeople are widely said to be individualistic, assertive, and focused on their own personal advancement, they actually expect of each other behavior that is consistently sensitive to the needs, constraints, and feelings of others. This is what we hope readers will take away.

Rules of Professional Conduct and Ethics The following Rules of Professional Conduct and Ethics are applicable to all members of the Association:

1. The members shall conduct themselves in a spirit of fairness and justice to their clients, the Insurance Companies, and the public.

2. Members shall refrain from improper solicitation. 3. No misrepresentation of any kind shall be made to an assured or to the Insurance

Companies. 4. Commission rates shall be fair and equitable, and strictly in accordance with the

prevailing custom in the locality, and must, where laws or regulations of insurance departments exist, comply fully with such laws or regulations.

5. Members shall conduct themselves so as to command respect and confidence. They shall work in harmony with one another, with their clients, and the Insurance Companies' representatives, so as to foster a cordial and harmonious relationship with all branches of the insurance business, and with the general public.

6. Members must be fitted, by knowledge and experience, for the work they undertake. They must not endanger the interests of the public adjusting profession, or risk injustice to assureds or to the Insurance Companies, by attempting to handle losses or claims for which they are not qualified, and for which they cannot find competent technical assistance.

7. Members shall not engage in the unauthorized practice of law. 8. Members shall not acquire any interest in salvaged property or participate in any

way, directly or indirectly, in the reconstruction, repair or restoration of damaged property, except with the knowledge, consent and permission of the assured.

9. Members shall be cooperative and assist one another in every possible way.10. Members shall not disseminate or use any form of agreement, advertising, or any

printed matter that is harmful to the profession of public adjusting, or which does not comply with the rules and regulations of the Insurance Department of the state in which such member is professionally engaged, or which might subject public adjusting and public adjusters to criticism or disrespect.

Copyright 2009 National Association of Public Insurance Adjusters

CPPA AND SPPA REQUIREMENTS AND APPLICATION

A. Certified Professional Public Adjuster (CPPA) Requirements.

Must have at least five years experience in adjusting on a full-time basis.

Must have a college degree or its equivalent in education, experience, or knowledge.

Must pass a nationally administered test. The exam is prepared and given by the AICPCU and IIA, and consists of 100 multiple choice questions.

B. Senior Professional Public Adjuster (SPPA) Requirements.

Must have at least ten years experience in adjusting on a full-time basis.

Must have a college degree or its equivalent in education, experience, or knowledge.

Must pass a nationally administered test. The exam is prepared and given by the AICPCU and IIA, and consists of 30-35 short essay questions.

An information and registration booklet prepared by the National Association of Public Insurance Adjusters is available at:

http://www.napia.com/docs/Registration-PacketCPPA-SPPA.pdf

The booklet contains a copy of the application which must be completed to register for either examination. An online copy of the application is also available, and can be completed and submitted at:

http://www.napia.com/learn/certification-form.asp

What are the two basic functions of a property insurance adjuster?

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When investigating facts of coverage, what are the minimum requirements that a public adjuster needs to perform?

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What are the minimum standards regarding the evaluation of damages?

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The public adjuster’s file should reflect all post loss duties that are in compliance. What are all of the post loss duties?

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Best Practices for Documenting a Claim

Q & A

Is there a difference between a RCV (Replacement Cost Value Claim) and an ACV (Actual Cost Value Claim)? What does a Public Adjuster have to do to verify a claim is RCV and ACV or both?

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What should a public adjuster document in a claim file after receiving a check for anything other than a final payment?

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In Colorado, what happens if your contract doesn’t meet the requirements of 3 Colo. Code Regs. 702-1:1-2-19?

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Should you keep a claims diary?

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When does a public adjuster engage in the “Unauthorized Practice of Law?”

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When the insurer asks for a proof of loss, should you provide one?

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When the insurer or its adjusters engage in bad faith conduct, should you point that out to them in writing?

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Case Law, Statutory, & Regulatory

Update

2014 RMAPIA Insurance Case Law Update

I. Arizona

Gray v. Am. Fam. Mut. Ins. Co., CV-11-1635-PHX-SMM, 2013 WL 5274242 (D. Ariz. 2013)A wind and hail storm damaged the Gray’s home in Scottsdale which included tree branches striking the house, hail stones bursting through skylights and breaking windows, water entering the home and the air conditioning units not working after the storm. The insurer’s adjuster briefly inspected the home to evaluate storm damage, spending only 20 minutes at the home, rushing from room to room, snapping a few pictures and moving on without making any more than a quick visual inspection of the exposed surfaces. The insurer’s basis for coverage denial was that the Gray’s made extensive additional interior repairs to the hallway, guest bathroom and bedrooms that greatly exceeded the estimate provided by their adjuster. The Gray’s alleged that the insurer wrongfully denied proper coverage for all their property damaged by the storm. They also contend that the insurer’s investigation, evaluation and estimate of storm damage was unreasonably inadequate. The Court found in favor of the insurer on the bad faith claim since the policy provides that the insured “show [the insurer] the damaged property before permanent repairs or replacement is made.” Further, the Gray’s failed to contact the insurer regarding alleged additional damage to the guest bathroom, hallway and bedrooms before making permanent repairs.

T & B McDowell, LLC v. Peerless Indem. Ins. Co., CV-13-00138-PHX-FJM, 2013 WL 2287087 (D. Ariz. 2013), appeal dismissed (Aug. 6, 2013)The insured’s property was damaged by a hail storm and it submitted a proof of loss to the insurer. The parties agreed to an appraisal. The insured argued that the appraisal award in the amount of $32,200 was insufficient because it did not include actual cash value and replacement cost value. The insured asserted a claim for bad faith alleging that the insured acted in bad faith by refusing to instruct its appraiser to reconvene to enter a new award. Because the insured did not accuse the appraisers of fraud, corruption or other prejudicial misconduct, the appraisal award clearly stated the amount of loss, the appraisers complied with the insurance policy and the appraisal agreement which did not require that the appraisers separate the amount of the award into actual cash value and replacement cost value, the court held there were no grounds to overturn the appraisal award.

II. Colorado

Travelers Indem. Co. v. Bd. of County Com’rs ex rel. Larimer County, 508 Fed. Appx. 733 (10th Cir. 2013)(unpublished)Several of the Larimer County, Colorado fairgrounds buildings sustained damages to their roofs as a result of snowstorms and buckling and rolling of purlins (horizontal beams which run along the length of a roof, resting upon the principal rafters at right angles and supporting the ordinary rafters or boards to the roof). Travelers concluded that the loss was excluded from coverage under the property insurance policy because the damages to the displaced purlins were caused by design and construction defects. The Tenth Circuit affirmed the district court’s entry of summary judgment, reasoning as follows:

The Policy requires Travelers to “ ‘pay for direct physical loss or damage’ to the property if that damage is ‘caused by or resulting from a Covered Cause of Loss.’ ” Travelers Indem. Co. v. Bd. of Cnty. Commn’rs ex rel. Larimer Cnty., No. 10–cv–02160–MSK–CBS, 2012 WL 1059976, at *3 (D.Colo. Mar.29, 2012) (quoting Aplt.App. at 391 (the Policy)). “ ‘Covered Cause of Loss’ ” is defined as “ ‘risks of direct physical loss unless that loss is excluded’ by other provisions in the policy.” Id. (quoting Aplt.App. at 391 (the Policy)). This language, the court explained, “effectively provides that Travelers will pay for physical loss or damage to covered property resulting from any cause, except losses or damage resulting from causes falling within a specific

policy exclusion.” Travelers Indem. Co., 2012 WL 1059976, at *3. Accordingly, the court next turned to the Policy’s defective construction exclusion (relied upon by Travelers), noting an applicable exception. See id. Specifically, “ ‘in the event that an excluded cause of loss [e.g., defective construction,] ... results in a Covered Cause of Loss, the Company will be liable only for such resulting loss or damage.’ ” Id. (quoting Aplt.App. at 402 (the Policy)).

Wagner v. Am. Fam. Ins., No. 12-CV-01420-MSK-MJW, 2013 WL 5366398 (D. Colo. 2013)A homeowner’s policy contained an “earth movement” exclusion which excluded coverage for losses directly and indirectly caused by earth movement such as collapse of the home due to an earthquake, or damage to walls or joints caused by sinking of one side of the home’s foundation. The homeowner’s damages consisted of damage to the home’s drywall, flooring, and slab that was indirectly caused by movement of the slab, due to erosion of soil beneath it resulting from leaking pipe below slab. The court held that the earth movement exclusion applied and barred coverage. Further, under Colorado law, the policy’s “resulting loss” exception applied when an excluded peril causes a separate and independent covered peril; damage resulting from the covered peril is then covered under the resulting loss provision, while the damage resulting from the initial excluded peril remains uncovered.

Maldonado v. Allstate Fire and Cas. Ins. Co., 849 F. Supp. 2d 1080 (D. Colo. 2012)The insureds owned a home in Pueblo, Colorado, however the home was unoccupied for five months while the insured’s husband, a sergeant in the US Army, was stationed in Fort Hood, Texas. During this time, one or more frozen pipes in the attic burst and caused substantial water damage. The insureds had not shut off the water for the cold winter months, but they traveled back to Colorado to check on the house every other month and also had family members and neighbors periodically check on the house during the other months. The insurer moved for summary judgment based upon a frozen pipes exclusion in the policy. The District Court ruled in favor of the insured, holding that there were genuine issues of material fact and that whether the home was unoccupied at the time of the water damage and whether the insureds exercised reasonable care to maintain heat in the home were questions for the jury.

Kesling v. Am. Fam. Mut. Ins. Co., 861 F. Supp. 2d 1274 (D. Colo. 2012)Homeowners in Colorado suffered water damage to deck and siding. The policy contained a one-year limitations period within which to file suit. The homeowners originally reported the water damage to the deck and siding by telephone to the insurer, however stated that it was unknown how the water damage occurred. The homeowners failed to file suit until 22 months later, which was 20 months after the insureds obtained an engineering report which attributed the damage to water intrusion due to wear and tear, deterioration, and faulty workmanship, materials, repairs and construction; such conclusions which were confirmed by the insurer’s investigation. The Court barred the homeowners’ breach of contract claim, except to the extent that it concerned property damage that was entirely unrelated to and independent of problems with the deck, e.g., damage to the roof, which raised issues of fact to be determined by the factfinder. Damage to parts of the house other than a deck, the roof and a crawlspace resulting from water or moisture infiltration caused by defective construction in those structures constituted “any resulting damage” within the meaning of an exception to a defective construction exclusion.

III. Idaho

Travelers Cas. Ins. Co. of Am. v. Wild Waters, LLC, 2:12-CV-00481-CWD, 2013 WL 4710271 (D. Idaho 2013)The insured, which operates a water park in Idaho, obtained a commercial property insurance policy from Travelers and filed a claim for vandalism damage. The water park was closed at the date of loss and had not operated as a water park for two summer seasons. Travelers, relying on a vacancy clause in the policy, contended than the park was vacant at the time of the loss and for a sixty day period prior to the loss. The insured further argued that Travelers either waived or should be estopped from applying the vacancy clause to deny coverage, because Travelers’ agent, knew that the water park would be closed periodically, yet he had procured a renewal of the Travelers policy each year. The Court denied Travelers’ motion for summary judgment as there were disputed facts as to whether Travelers knew that the park had been closed prior to Travelers’ renewal of the policy, and that Travelers did not meet its burden of demonstrating the absence of a genuine issue of material fact on the issue of waiver or estoppel.

Rizzo v. State Farm Ins. Co., 305 P.3d 519 (Idaho 2013)State Farm denied a homeowner’s claim for water damage where an extremely high level of rainfall collected in the home’s window well and caused pressure on the home. Wind also contributed to the damage. The policy contained a “surface water” exclusion whereby the insurer did not insure for any loss which occurs as a result of “water damage” meaning “flood, surface water, waves, tidal water, tsunami, seiche, overflow of a body of water, or spray from any of these, all whether driven by wind or not”, or “water below the surface of the ground, including water which exerts pressure on, or seeps or leaks through a building, sidewalk, driveway, foundation, swimming pool or other structure.” The insured argued that rainwater does not become surface water when it hits the ground and collects. The Court disagreed, holding that the surface water exclusion operated to bar coverage for the insured’s claim and therefore that State Farm did not violate the good faith requirement of the Insurance Code: “the implied covenant of good faith and fair dealing requires that the parties to an insurance contract perform in good faith the obligations imposed by their agreement, and a violation of the covenant occurs only when either party violates, nullifies or significantly impairs any benefit of the contract.”

Lakeland True Value Hardware, LLC v. Hartford Fire Ins. Co., 291 P.3d 399 (Idaho 2012), reh’g denied (Jan. 9, 2013)In January 2008, an insured hardware store’s roof collapsed as a result of a snowfall, damaging the majority of its inventory and damaging or destroying fixtures. The insurer advanced $50,000 for business personal property damage and $50,000 for loss of business income, and determined that the period of restoration ended October 31, 2008. The insured sued for breach of contract and bad faith, claiming that the insurer delayed payment. The insurer sought documentation from the insured during the lawsuit and paid the insured policy limits of $370,000 on the property loss claim and $266,400 on the business income claim. On a summary judgment, the Court ruled in favor of the insurer, holding that the insured’s business personal property claim and claim for lost business income arising from collapse of building roof were fairly debatable, and insured had no bad faith claim against insurer, where delay in payment of insured’s claims was directly related to insured’s failure to provide insurer with information necessary to evaluate claim. A claim for bad faith exists where (1) the insurer intentionally and unreasonably denied or withheld payment, (2) the claim was not fairly debatable, (3) the denial or failure to pay was not the result of a good faith mistake, and (4) the resulting harm is not fully compensable by contract damages.

IV. Montana

Lincoln County Port Auth. v. Allianz Global Risks U.S. Ins. Co., 315 P.3d 934 (Mont. 2013), reh’g denied (Jan. 14, 2014)A fire destroyed a building which was located at an industrial facility containing a lumber mill operated by the Lincoln County Port Authority. The insurer issued an excess catastrophic insurance policy to a self-insured association of counties, and the Lincoln County Port Authority was an “insured” under the policy. When the roof originally collapsed as result of a snowfall, the insured received a settlement of over $3 million. The insurer then canceled coverage for the building after the roof collapse. Later, the fire destroyed the entire building. At the time of the loss, portions of the building were slated for demolition. The Montana Supreme court affirmed the District Court’s ruling that the policy provided coverage for the building based upon its location within 1,000 feet of a covered building. It also refused to reform the policy because the insuer waited over a year to modify the policy to eliminate any ambiguity as to whether it covered the Plywood building as being located within 1,000 feet of the covered building and the insurer could not prove that the policy expressed something other than what the parties mutually intended. To obtain judicial reformation, the parties must have reached a mutual understanding and executed a written contract in furtherance of that understanding, but made a mistake incorporating the understanding that they had reached into the contract that they executed. MCA 28–2–1611. Furthermore, because the insured never planned to rebuild the portions of the covered building that was damaged by the roof collapse, the Montana Supreme Court held that the insured was not entitled to receive replacement cost for those portions, however could only receive actual cash value.

Barnard Pipeline, Inc. v. Travelers Prop. Cas. Co. of Am., CV 13-07-BU-DLC, 2014 WL 980120 (D. Mont. 2014)When an insured made a claim under its builder’s risk policy for losses associated with damage to a right of way used in construction of a pipeline in Montana, the insurer argued that a land exclusion precluded coverage. The policy defined “covered property” as “builder’s risk”, which was defined as property described in the declarations page, including temporary structures, but excluding land, given that policy’s declarations page included an expansive project description. The right of way had been cleared, excavated and leveled by the insured. The Court held that the land exclusion “did not clearly exclude coverage for the right of way after it had been intentionally and systematically altered from its natural state in order to improve its functional capacity for completion of the Project.” Therefore, the right of way constituted a “structure” and was “covered property” within the meaning of the policy.

V. New Mexico No recent pertinent property insurance decisions.

VI. Nevada

Sierra P. Power Co. v. Hartford Steam Boiler Inspection & Ins. Co., 490 Fed. Appx. 871, 874 (9th Cir. 2012)(unpublished)An insured, operator of power generation stations in Nevada and California, sued property insurers seeking coverage for damages resulting from the destruction of a dam by a flood. The cost of replacing the dam was materially affected by changes in the building code and other laws over the years. The policy contained a Building Ordinance or Law Exclusion. The issue before the Court was whether the exclusion operated to eliminate the increased construction costs from the ACV calculation. The Ninth Circuit certified the question to the California Supreme Court, in light of a split of authority in California on the issue. The California Supreme Court, however, declined to provide guidance and the Ninth Circuit was “forced” to make a choice. It adopted the most recent California Court of Appeal decision which found that the law and ordinance exclusion operated to exclude damage caused by a building ordinance, but did not apply to any increase in the replacement due to a building ordinance where loss itself was caused by a covered peril.

Fourth Street Place, LLC v. Travelers Indem. Co., 127 Nev. Adv. Op. No. 86, 2011 WL 6842618 (Nev. 2011).The insured owned an office building in Las Vegas which suffered damages when a roofing subcontractor who was hired to repair and renovate the building failed to take adequate measure to protect a partially repaired roof from rain. Travelers denied the insured’s claim on the basis that it did not result from a covered cause of loss as the all-risk property insurance policy precluded coverage for damage resulting from rain unless the building’s roof or walls were first damaged by wind or hail. Travelers also argued that the “faulty workmanship” exclusion excluded coverage unless faulty workmanship resulted in a covered cause of loss. In a case of first impression, the Nevada Supreme Court adopted the doctrine of efficient proximate cause, which provides that where covered and noncovered perils contribute to a loss, the peril that set in motion the change in events is deemed the efficient proximate cause of the loss. Fourth Street Place, LLC v. Travelers Indem. Co., 127 Nev. Adv. Op. No. 86, 2011 WL 6842618 (Nev. 2011).

Powell v. Liberty Mut. Fire Ins. Co., 252 P.3d 668 (Nev. 2011)A water pipe in the homeowner’s home ruptured, flooding the home’s dirt sub-basement, resulting in a shift in the foundation, extensive cracking, and separation in the wall and ceiling in the entryway, kitchen, and two bedrooms. The insurer denied the claim based on the policy’s “earth movement” exclusion which stated:

“We do not insure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss. ... Earth movement, meaning earthquake including land shock waves or tremors before, during or after a volcanic eruption; landslide, mine subsidence; mudflow; earth sinking, rising or shifting.”

The Supreme Court of Nevada found ambiguity in whether the exclusion applied to both natural and man-made earth movement and construed it against the insurer, reasoning that the exclusion listed mine subsidence, which typically is man-made, but the inclusion of a single type of man-made earth movement rendered the exclusion “even less clear than most earth movement exclusions regarding what is excluded.”

Herrera v. Allstate Fire and Cas. Co., 2:13-CV-00908-MMD, 2013 WL 6408490 (D. Nev. 2013)

This case was a class action by Nevada residents who were insured under an auto insurance policy with the insurer and did not receive fair market value for the “total loss” of their vehicle and/or all applicable taxes and fees. Because the insurer invoked right to appraisal under the Policy, the insured is contractually required to submit to the appraisal process before bringing suit and the Court stayed the action pending the appraisal conducted pursuant to the Policy. The Court held that the appraisal provision was not a “binding arbitration” provision.

VII. Utah

Ft. Lane Village, L.L.C. v. Travelers Indem. Co. of Am., 805 F. Supp. 2d 1236 (D. Utah 2011)A vacant home which was damaged by a fire adjoined one of an insured commercial property owner’s properties. When the fire occurred, the home had been vacant for over a year. The insured’s policy contained an exclusion for vandalism if the building where the loss occurred was vacant for more than 60 consecutive days. The insured argued that the term “vandalism” was ambiguous because the policy distinguished between “vandalism” and “fire” as two different types of covered causes of loss, so a loss resulting from a fire is not vandalism. The insurer argued that the term “vandalism” is unambiguous and its ordinary meaning encompasses a claim arising from an arson fire. On a motion for summary judgment, the Utah federal trial court found in favor of the insured, finding that the term “vandalism” as found in a vacancy exclusion was ambiguous and thus should be construed in favor of the insured.

VIII. Wyoming

W.N. McMurry Const. Co. v. Community First Ins., Inc. Wyoming, 160 P.3d 71 (Wyo. 2007). An insured general contractor’s contract with the owner (State of Wyoming) required that it obtain insurance in the amount of $4.5 million for construction of two steel buildings at the State Fairgrounds, a livestock pavilion and a multi-purpose show center. The insured was mistakenly issued an insurance policy with coverage limits of only $1 million. In a case of first impression, the Wyoming Supreme Court ruled that the insured’s failure to read its policy barred its claims for breach of contract and negligence against its insurance company and agent, however it did not bar the insured from seeking reformation of policy limits to include the higher limits it had originally requested.

Bulletin B-5.1, CO Bulletin No. B-5.1 (2007)

© 2014 Thomson Reuters. No claim to original U.S. Government Works. 1

CO Bulletin No. B-5.1 (US), 2007 WL 1893882 (US)CO Bulletin No. B-5.1 (May 8, 2007)

This document supersedes12-98COLORADO INSURANCE BULLETINS AND RELATED MATERIALS

BULLETINS

Bulletin B-5.1May 8, 2007

FROM: Marcy MorrisonCommissioner Of InsuranceDATE: May 8, 2007RE: CALCULATION OF ACTUAL CASH VALUE: PROHIBITION AGAINST DEDUCTING CONTRACTORS'

OVERHEAD AND PROFIT FROM REPLACEMENT COST WHERE REPAIRS ARE NOT MADE

I. BACKGROUND AND PURPOSE

The purpose of this bulletin is to clarify the position of the Division of Insurance regarding the calculation of actual cashvalue in residential insurance policies. This bulletin replaces Bulletin 12-98 in its entirety.

Bulletins are the Division's interpretations of existing insurance law or general statements of Division policy. Bulletinsthemselves establish neither binding norms nor finally determine issues or rights.

II. APPLICABILITY AND SCOPE

This bulletin is intended for and applies to all property and casualty insurance companies providing replacement cost coverageof dwellings. The scope of this bulletin is limited to the calculation of actual cash value for dwelling coverage in replacementcost policies, where the policy language below, or substantially similar language to that shown below, is used.

III. DIVISION POSITION

Insurers shall be prohibited from deducting contractors' overhead and profit in addition to depreciation when policyholdersdo not repair or replace the structure.

The relevant policy language states:

‘We will pay the actual cash value of the damage to the buildings, up to the policy limit, until actual repair or replacementis completed.‘

The Division of Insurance has learned that one or more insurers have interpreted this language, or substantially similarlanguage, to permit deduction for contractors' overhead and profit, in addition to depreciation, from replacement cost incalculating actual cash value.

The position of the Division of Insurance is that the actual cash value of a structure under a replacement cost policy, whenthe policyholder does not repair or replace the structure, is the full replacement cost with proper deduction for depreciation.



Deduction of contractors' overhead and profit, in addition to depreciation, is not consistent with the definition of actual cashvalue. The Division of Insurance will interpret policy provisions containing the foregoing or similar language to prohibitdeduction of contractors' overhead and profit, in the calculation of actual cash value, where the dwelling is not repaired orreplaced by the policyholder.

Nothing in this bulletin shall be construed as prohibiting the carrier and insured from explicitly agreeing to a different methodfor calculating actual cash value.

*2

IV. ADDITIONAL DIVISION RESOURCES

FOR MORE INFORMATION

Colorado Division of Insurance

ICARE - Property and Casualty Section

1560 Broadway, Suite 850

Denver, CO 80202

Tel. 303-894-7499

Internet: http://www.dora.state.co.us/insurance

V. HISTORY

• Originally issued as bulletin 12-98, December 21, 1998.

• Reissued May 8, 2007.

End of Document © 2014 Thomson Reuters. No claim to original U.S. Government Works.



CO Bulletin No. B-5.26 (US), 2009 WL 565699 (US)CO Bulletin No. B-5.26 (February 27, 2009)

COLORADO INSURANCE BULLETINS AND RELATED MATERIALSBULLETINS

Bulletin B-5.26February 27, 2009

FROM: Marcy MorrisonCommissioner of InsuranceDATE: February 27, 2009RE: INSURER REQUIREMENTS RELATED TO DISPUTED CLAIMS SUBJECT TO APPRAISAL


The purpose of this bulletin is to clarify the position of the Division of Insurance regarding the consumer's rights when thereis a dispute during the claim handling process. Specifically, the bulletin provides guidelines to insurers when an insured hasinvoked his/her rights relating to the appraisal clause found in most, if not all, property insurance policy contracts.



This bulletin is intended for and applies to all property and casualty insurance companies providing real property coverage.


Most, if not all, property insurance policy contracts include an appraisal clause which may be invoked if there is a disputebetween the insured and the insurer regarding a coverage determination, the claim handling process, or the settlement amount.To the extent that these policies include an appraisal provision, and the insured has invoked his/her rights to an appraisal, theselected appraiser and/or umpire must be fair and impartial.

It has come to the Division's attention that insurers may not be selecting ‘fair and impartial‘ appraisers. Furthermore, disputedclaims subject to appraisal are being delayed and insurers are not communicating in a fair and consistent manner causingsignificant harm to the Colorado consumer.

The position of the Division is that an insurer must comply with its own policy language when selecting an appraiser and/orumpire under the appraisal clause. For purposes of requiring impartiality of appraisers and umpires, the Division will follow theUniform Arbitration Act, §13-22-201 ET SEQ., and in particular, §13-22-211 (2), which sets forth the standard for impartialityof an arbitrator as: ‘An individual who has a known, direct, and material interest in the outcome of the arbitration proceedingor a known, existing, and substantial relationship with a party may not serve as an arbitrator if the agreement requires thearbitrator to be neutral.‘ This same standard will apply to appraisers and umpires, and to ensure compliance with this standardthe Division requires the following:



1. The appraiser and umpire must disclose to all parties any other appraiser and any other umpire, as well as any known factsthat a reasonable person would consider likely to affect the impartiality of the appraiser including:

*2

(a) A financial or personal interest in the outcome of the appraisal; and

(b) A current or previous relationship with any of the parties to the agreement to appraise or the appraisal proceeding, theircounsel or representatives, a witness, or another appraiser or the umpire.

2. The appraiser shall have a continuing obligation to disclose to all parties to the agreement to appraise, the appraisalproceeding and to any other appraisers and the umpire any facts that the appraiser learns after accepting appointment that areasonable person would consider likely to affect the impartiality of the appraiser.

In accordance with §13-22-212 (3), C.R.S. if a party timely objects to the appointment or continued services of a selectedappraiser the objection may be a ground under §13-22-223(1)(b), C.R.S. for vacating an award.

3. The insurer must not have EX PARTE communications with the appraiser or umpire during the appraisal process. Anycommunications between the appraiser, the umpire and the insurer shall include the insured or the insured's representative.

4. Upon reaching an agreed upon value (either through the selected appraiser or an umpire) the insurer shall comply with theclean claim standards found in Colorado Regulation 5-1-14.



Property/Casualty Section

1560 Broadway, Ste 850

Denver, CO 80202

Tel. 303-894-7499



Bulletin B-5.28 (Amended), 2012 WL 2376633 (US) (2012)


2012 WL 2376633 (US)CO Bulletin No. B-5.28 (Amended) (June 20, 2012)

This document supersedesB-5.28COLORADO INSURANCE BULLETINS AND RELATED MATERIALS

BULLETINS

Bulletin B-5.28 (Amended)June 20, 2012

FROM: Jim ReisbergCommissioner Of InsuranceDATE: June 20, 2012RE: EQUITABLE PAYMENT OF CLAIMS RESULTING FROM NATURAL DISASTERS


The purpose of this bulletin is to provide guidance to insurers of property destroyed by catastrophic natural disasters.



This bulletin is intended for all regulated insurance entities issuing dwelling fire or homeowner insurance policies in the areasaffected catastrophic natural disasters.


The Colorado climate is such that wildfires, tornados and other natural disasters can devastate a community without warning.The Division recognizes that insurance companies work diligently to determine values and pay coverage benefits to thepolicyholders of damaged or totaled properties. However, natural disasters present additional challenges and limitations,which are unpredictable. The availability of contractors and materials as well as inclement weather restrictions may preventhomeowners from beginning the rebuilding process. Additionally, traditional methods of determining the cost to rebuild maynot be adequate to fully address special characteristics of the location or architecture of these properties.

Therefore, following a natural disaster event the Division encourages insurance companies consider the following:

• While some insurance contracts offer more, most standard homeowner contracts include twelve (12) months, or 30 percentof Dwelling Coverage, for Additional Living Expense coverage. The Division expects full transparency and disclosure withregard to the extent of available coverage. If a policyholder appears to reach his/her coverage limit the insurer should provideadequate and timely information before coverage ceases.

• Any policyholder with replacement cost provisions is entitled to complete repairs to the property and replace contents.If the policyholder has made a good faith effort to adhere to the policy provisions and has requested an extension within theapplicable time period, the insurance company should consider a reasonable extension of time to allow the policyholder, with a

Bulletin B-5.28 (Amended), 2012 WL 2376633 (US) (2012)


replacement cost provision, to receive benefits of replacement cost coverage value of the covered damage that has been repairedor replaced, without reduction due to depreciation.

*2

• Settlement of claims shall be handled in accordance with Colorado insurance regulation 5-1-14. Provided the insured hascomplied with the terms and conditions of the policy contract, the insurer shall make reasonable attempts to settle the claimspromptly, allowing policyholders to rebuild their dwellings, other structures and replace personal property in a timely manner.

• While the use of an estimating program may be a tool in determining the cost of rebuilding a dwelling, the insurer shouldconsider other factors that may not be included in the estimating program. Specifically, the slope of land, building grade ofthe dwelling and availability of labor and materials, generally, will impact the actual cost to rebuild. An insurer's refusal toconsider additional information related to the cost to rebuild a particular dwelling may constitute a violation of § 10-3-1104(1)(h)(IV), C.R.S.

• Section 10-4-120 (3), C.R.S. requires insurers pay the prevailing competitive market price for the geographic area in whichthe loss occurred.



Property/Casualty Section

1560 Broadway, Ste 850

Denver, CO 80202

Tel. 303-894-7499


V. HISTORY

• Issued January 31, 2011

• Amended June 20, 2012


WY BULLETIN No. 9-20-95, WY BULLETIN No. 9-20-95 (1995)


WY BULLETIN No. 9-20-95 (US), 1995 WL 17803875 (US)RVIBULWYINSBULWY32755367210182006199509200220175602201756327553672WY Bulletin 9-20-95WY Bulletin9-20-95 (September 20, 1995)WYBL9-20-951000065994WY *1 1995WYOMINGWYOMING INSURANCE BULLETINSAND RELATED MATERIALSBULLETINSBulletin 9-20-95September 20, 1995TO: Insurers, and All Licensed Agents,Brokers, Adjusters, and Solicitors Doing Business in the State of WyomingFROM: John P. McBride InsuranceCommissionerDATE: September 20, 1995RE: DEPARTMENT POLICY, PAYMENT OF ROOF DAMAGE CLAIMSAnumber of insurance company representatives and agents have requested that this department clarify its policy on paymentof roof damage claims. Specifically, the department has been asked to clarify its policy on whether an insurer isresponsible for payment of roof damage claims when the exact time of loss or damage is not clear or has not beenpreviously paid.It is the policy of the Wyoming Insurance Department that an insurer insures a dwelling or building“as is” and therefore, IN THE ABSENCE OF FRAUD BY AN INSURED, is responsible for payment of that damageclaim when made. It is not the policy of this department, however, that an insurer, or insurers, be required to paymore than once for the same damage presented by the same insured.The policy of the Wyoming Insurance Departmentrelative to roof damage is that in the absence of fraud by an insured, in the absence of the insured having already beencompensated for the same damage, and based on the insurers right to inspect said premises prior to issuing insuranceon said property, the insurer insuring the property AT THE TIME OF THE CLAIM, is responsible for payment of thatclaim.Any questions concerning this memorandum of policy should be directed to Mr. Roy Lesh, Insurance StandardsConsultant at (307) 777-7401.Insurance Product Line: General, Property/CasualtyWICGENWICPRCAA-to-Z IndexTerms:CLAIMSWICC053CLAIMS - PaymentsWICC059PROPERTY INSURANCE - ClaimsWICP095WICCORE BULWY BULLETIN No. 9-20-951995 WL 17803875000000022017560000000017WYOMING

WY Bulletin 9-20-95200610181530RVIBWY000003WY0000017


Memorandum 7-6-2009, MT Memorandum 7-6-2009 (2009)


MT Memorandum 7-6-2009 (US), 2009 WL 1956722 (US)MT Memorandum July 6, 2009

MONTANA INSURANCE BULLETINS AND RELATED MATERIALSMEMORANDUMS

Memorandum 7-6-2009July 6, 2009

TO: All Licensed Insurers Authorized To Write Property/Casualty Insurance; All Insurance Producers Authorized To Sell,Solicit Or Negotiate Property; Casualty Insurance And Insurance Adjustors

FROM: Monica J. LindeenInsurance CommissionerDATE: July 6, 2009RE: MATCHING BUILDING MATERIALS IN THE EVENT OF DAMAGE

It is the position of this agency when a loss requires replacement of building materials that the materials must be replacedwith similar quality, kind, texture, and colored materials such that there is a reasonable match with any existing materials. Inthe event that materials which meet these criteria are not available, the existing materials must be replaced to achieve a match.This applies to interior and exterior losses.


Memorandum 8-20-2003, MT Memorandum 8-20-2003 (2003)


MT Memorandum 8-20-2003 (US), 2003 WL 25759819 (US)MT Memorandum August 20, 2003

MONTANA INSURANCE BULLETINS AND RELATED MATERIALSMEMORANDUMS

Memorandum 8-20-2003August 20, 2003

FROM: John MorrisonCommissioner Of InsuranceDATE: August 20, 2003RE: MATCHING ROOFING MATERIALS IN THE EVENT OF DAMAGE

To Whom It May Concern:

It is the continuing position of this agency that under a ‘make whole‘ provision in any insurance contract, damaged roofmaterials must be replaced with similar quality, kind, texture and colored materials such that there is a reasonable match withany existing materials. In the event materials that meet this criteria are not available, the existing materials must be replacedto achieve a match.


Circular Letter 2000-11, AZ Circular Letter No. 2000-11 (2000)


AZ Circular Letter No. 2000-11 (US), 2000 WL 35356808 (US)AZ Circular Letter No. 2000-11 (September 20, 2000)

ARIZONA INSURANCE BULLETINS AND RELATED MATERIALSCIRCULAR LETTERS

Circular Letter 2000-11September 20, 2000

TO: All Licensed Adjusters, Authorized Property and Casualty Insurers, Insurance Trade Associations, and Other InterestedParties

FROM: Charles R. CohenDirector of InsuranceDATE: September 20, 2000RE: ADJUSTERS' SCOPE OF AUTHORITY; INSURERS' OBLIGATIONS WHEN INSURED IS REPRESENTED BY

ADJUSTER

In June 1999, the Arizona State Bar Committee on the Rules of Professional Conduct issued Opinion No. 99-07 [FN1]pertaining to the ethical implications for attorneys who interact with adjusters licensed pursuant to A.R.S. § 20-312 who are notemployed by an insurer or otherwise supervised by a licensed attorney. The opinion concludes, in part, (1) that an attorney maynot ethically negotiate with an opposing party's nonlawyer adjuster representative who is not supervised by an attorney and isnot authorized to practice law; and (2) that an attorney may ethically communicate directly with an opposing party when theopposing party is represented by a nonlawyer adjuster who is not supervised by an attorney and is not authorized to practice law.

Though not binding upon nor directed at licensed adjusters and insurers transacting business in this state, the opinion obviouslyhas a significant indirect impact on them. It therefore also indirectly impacts insureds in this state.

The purpose of this letter is to clarify the scope of an adjuster's authority under the license issued by this Department, and toclarify an insurer's obligations when interacting with an insured represented by a licensed adjuster.

ADJUSTER'S SCOPE OF AUTHORITY

It is not the province of this Department, and therefore not part of the purpose of this letter, to determine whether adjustersacting within the scope of authority granted by their licenses are engaged in the ‘practice of law‘. The Department is vested bythe state constitution with the authority to license, control and supervise insurers transacting business in this state, ‘as prescribedby law.‘ A.R.S. Const. Art. 15, § 5. Accordingly, the specific powers and duties of the Department are prescribed by the statelegislature in the insurance code, A.R.S. Title 20. Adjusters are also creatures of the insurance code; the parameters of theirauthority are therefore no more nor less than the content and intended effect of the statutes that establish them. The Department'sprerogative in this matter extends no further than our review of A.R.S. Title 20 to determine what functions the legislatureintended licensed adjusters to be authorized to perform, and how their participation in an insurance transaction affects insurers'regulatory obligations.

*2

Pursuant to A.R.S. §§ 20-281 and 20-312, a licensed adjuster is authorized to ‘investigate and negotiate the settlement ofclaims arising under insurance contracts, on behalf of either the insurer or the insured.‘

The primary rule of statutory interpretation is to ascertain and give effect to the legislature's intent. Mail Boxes v. IndustrialCom'n of Arizona, 181 Ariz. 119, 888 P.2d 777 (1995). Interpretation of a statute begins with the words of the statute. Kriz v.

§ 10-2-417. Public insurance adjuster--license required--financial..., CO ST § 10-2-417


West's Colorado Revised Statutes AnnotatedTitle 10. Insurance (Refs & Annos)

LicensesArticle 2. Licenses (Refs & Annos)

Part 4. Licensing and Appointment of Insurance Producers (Refs & Annos)

C.R.S.A. § 10-2-417

§ 10-2-417. Public insurance adjuster--license required--financial responsibility--standards of conduct--rules

Effective: January 1, 2014Currentness

(1)(a) A person shall not act or hold himself or herself out as a public adjuster in this state unless the person is licensed as apublic adjuster in accordance with this article. No person who, on or before January 1, 2014, holds a license as a public adjusterpreviously issued under the laws of this state is required to secure an additional license under this article, but is otherwisesubject to this article including complying with the financial responsibility requirements of subsection (2) of this section. Thepreviously issued license is, for all purposes, considered a license issued under this article.

(b) A person licensed as a public adjuster shall not misrepresent to an insured that he or she is an adjuster representing an insurerin any capacity, including acting as an employee of the insurer or acting as an independent adjuster, unless so appointed by aninsurer in writing to act on the insurer's behalf for that specific claim or purpose. A licensed public adjuster is prohibited fromcharging an insured a fee if the public adjuster accepts an appointment by the insurer.

(c) A business entity acting as a public adjuster is required to obtain a public adjuster license. Application shall be made in theform required by the commissioner. Before approving the application, the insurance commissioner shall find that:

(I) The business entity has paid the fees set by the commissioner; and

(II) The business entity has designated a licensed public adjuster responsible for the business entity's compliance with theinsurance laws and rules of this state.

(2)(a) Before receiving a license as a public adjuster and for the duration of the license, the applicant shall secure evidence offinancial responsibility in a format prescribed by the commissioner through a surety bond executed and issued by an insurerauthorized to issue surety bonds in this state, which bond:

(I) Must be in the minimum amount of twenty thousand dollars;

(II) Must be in favor of this state and must specifically authorize recovery by the commissioner on behalf of any person in thisstate who sustained damages as the result of the applicant's erroneous acts, failure to act, conviction of fraud, or conviction ofunfair practices in his or her capacity as a public adjuster; and



(III) Must not be terminated unless at least thirty days' prior written notice is filed with the commissioner and given to thelicensee.

(b) The issuer of the evidence of financial responsibility shall notify the commissioner upon termination of the bond, unlessotherwise directed by the commissioner.

(c) The commissioner may ask for the evidence of financial responsibility at any time the commissioner deems relevant.

(d) The commissioner shall summarily suspend the authority to act as a public adjuster if the evidence of financial responsibilityterminates or becomes impaired.

(3) A public adjuster shall not pay a commission, service fee, or other valuable consideration to a person for investigating orsettling claims in this state if that person is required to be licensed under this article and is not licensed.

(4) In the event of a catastrophic disaster, no public adjuster shall charge, agree to, or accept as compensation or reimbursementany payment, commission, fee, or other thing of value in excess of ten percent of any insurance settlement or proceeds. No publicadjuster shall require, demand, or accept any fee, retainer, compensation, deposit, or other thing of value prior to settlementof a claim.

(5) A public adjuster who receives, accepts, or holds any funds on behalf of an insured towards the settlement of a claim forloss or damage shall deposit the funds in a noninterest-bearing escrow or trust account in a financial institution that is insuredby an agency of the federal government in the public adjuster's home state or where the loss occurred.

(6)(a) A public adjuster is obligated, under his or her license, to serve with objectivity and loyalty the interest of his or her clientalone and to render to the insured such information, counsel, and service, within the knowledge, understanding, and opinion ingood faith of the licensee, as will best serve the insured's insurance claim needs and interests.

(b) A public adjuster shall not solicit, or attempt to solicit, an insured during the progress of a loss-producing occurrence, asdefined in the insured's insurance contract.

(c) A public adjuster shall not permit an unlicensed employee or representative of the public adjuster to conduct business forwhich a license is required under this article.

(d) A public adjuster shall not have a direct or indirect financial interest in any aspect of the claim, other than the salary, fee,commission, or other consideration established in the written contract with the insured.

(e) A public adjuster shall not acquire any interest in salvage of property subject to the contract with the insured unless thepublic adjuster obtains written permission from the insured after settlement of the claim with the insurer.



(f) A public adjuster shall not refer or direct the insured to get needed repairs or services in connection with a loss from anyperson:

(I) With whom the public adjuster has a financial interest; or

(II) From whom the public adjuster may receive direct or indirect compensation for the referral.

(g) A public adjuster shall not participate directly or indirectly in the reconstruction, repair, or restoration of damaged propertythat is the subject of a claim adjusted by the public adjuster.

(h) A public adjuster shall not engage in any other activities that may reasonably be construed as presenting a conflict of interest,including soliciting or accepting any remuneration from, or having a financial interest in, any salvage firm, repair firm, or otherfirm that obtains business in connection with any claim the public adjuster has a contract or agreement to adjust.

(i) Public adjusters shall adhere to the following general ethical requirements:

(I) A public adjuster shall not undertake the adjustment of a claim if the public adjuster is not competent and knowledgeable asto the terms and conditions of the insurance coverage or if the adjustment of the claim otherwise exceeds the public adjuster'sexpertise;

(II) A public adjuster shall not knowingly make any oral or written material misrepresentations or statements which are falseand intended to injure any person engaged in the business of insurance to any insured client or potential insured client;

(III) A public adjuster, while licensed in this state, shall not represent or act as a company adjuster or independent adjusteron the same claim;

(IV)(A) The insured may rescind any contract or other form of agreement for representation in a property or casualty loss orclaim if the insured exercises this right of rescission in writing addressed to the insurer and the public adjuster and puts thewritten rescission, postage prepaid, in the United States mail within seventy-two hours after signing a settlement representationagreement. All public adjusters taking a representative agreement to resolve a property or casualty loss or claim on behalf ofan insured shall give to the insured written notice of, and direction as to, the ability to exercise the insured's right of rescission.

(B) A public adjuster shall not enter into a contract that prevents an insured from pursuing any civil remedy after the requiredrescission period under sub-subparagraph (A) of this subparagraph (IV);

(V) A public adjuster shall not enter into a contract or accept a power of attorney that vests in the public adjuster the effectiveauthority to choose the persons who perform repair work; and

(VI) A public adjuster shall ensure that all contracts for the public adjuster's services are in writing and set forth all terms andconditions of the engagement.



(j) A public adjuster shall not agree to any loss settlement without the insured's knowledge and consent.

(7) The commissioner may promulgate rules as necessary to carry out this section, including:

(a) Requirements and standards for written contracts between public adjusters and insureds; and

(b) The required retention of records by public adjusters.

CreditsAdded by Laws 1995, H.B.95-1230, § 5, eff. March 30, 1995. Amended by Laws 2013, Ch. 61, § 4, eff. Jan. 1, 2014.

C. R. S. A. § 10-2-417, CO ST § 10-2-417Current with Chapters 1-3, 5-8, 10-12, 15-18, 21-23, 25-27, 31, 32, 34, 36-40


702-1:1-2-19. CONTRACT AND RECORD RETENTION..., 3 CO ADC 702-1:1-2-19


West's Colorado Administrative CodeTitle 700. Department of Regulatory Agencies

702. Division of Insurance3 CCR 702-1. Administrative Procedures

3 CCR 702-1:1-2-193 Colo. Code Regs. 702-1:1-2-19

702-1:1-2-19. CONTRACT AND RECORD RETENTION RULES FOR PUBLIC ADJUSTERS

Currentness

Section 1 Authority

This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of §§ 10-1-109 and 10-2-417,C.R.S.

Section 2 Scope and Purpose

This regulation sets forth the requirements and standards for contracts between a public adjuster and an Insured. This regulationalso sets forth the requirements for the retention of records by public adjusters and the securing of evidence of the financialresponsibility of a public adjuster through a surety bond executed and issued by an insurer.

Section 3 Applicability

This regulation shall apply to all resident and nonresident public adjusters licensed in the state of Colorado.

Section 4 Definitions

For purposes of this regulation, and unless the context requires otherwise:

A. “Business entity” shall have the same meaning as defined in § 10-2-103(5), C.R.S.

B. “Commissioner” means the Commissioner of Insurance for the state of Colorado.

C. “Division” means the Colorado Division of Insurance.

D. “Erroneous act” means, for the purposes of this regulation, shall include, but not be limited to, a violation of Articles 2 or3 of Title 10 of the Colorado Revised Statutes and Division of Insurance Regulations.

E. “Home state” means, for the purposes of this regulation, the District of Columbia and any state or territory of the UnitedStates in which the public adjuster's principal place of residence or principal place of business is located. If neither the state in



which the public adjuster maintains his or her principal place of residence nor the state in which the public adjuster maintainshis or her principal place of business has a substantially similar law governing public adjusters, the public adjuster maydeclare another state in which he or she becomes licensed and acts as a public adjuster to be the “home state.”

F. “Person” shall have the same meaning as defined in § 10-2-103(8), C.R.S.

G. “Public adjuster” shall have the same meaning as defined in § 10-2-103(8.5), C.R.S.

Section 5 Contract and Disclosure Statement between Public Adjuster and Insured

A. Public adjusters shall ensure that all contracts for their services are in writing and contain the following:

1. Legible full name of the adjuster signing the contract, as specified in Division records;

2. Permanent home state business address and phone number;

3. Division license number;

4. Title of “Public Adjuster Contract”;

5. The insured's full name, street address, underwriting insurance company name and policy number, if known or uponnotification;

6. A description of the loss and its location, if applicable;

7. Description of the services to be provided to the insured;

8. Signatures of the public adjuster and the insured;

9. Date contract was signed by the public adjuster and date the contract was signed by the insured;

10. Attestation language stating that the public adjuster is fully bonded pursuant to state law;

11. The policy number and issuing insurance company name for the surety bond required by § 10-2-417(2), C.R.S., andthis regulation;

12. Full salary, fee, commission, compensation or other considerations the public adjuster is to receive for services; and



13. Notice of the right to rescind the contract within seventy-two (72) hours after the signing of the contract.

B. The contract may specify that the public adjuster may be named as a co-payee on an insurer's payment of a claim.

1. If the compensation is based on a share of the insurance settlement, the exact percentage shall be specified.

2. Initial expenses to be reimbursed to the public adjuster from the proceeds of the claim payment shall be specified bytype, with dollar estimates set forth in the contract and with any additional expenses approved by the insured.

3. Compensation provisions in a public adjusting contract shall not be redacted in any copy of the contract provided tothe Division.

C. If the insurer, within seventy-two (72) hours after the date on which the loss is reported to the insurer, either pays orcommits in writing to pay to the insured the policy limit of the policy, the public adjuster shall:

1. Not receive a commission consisting of a percentage of the total amount paid by the insurer to resolve a claim;

2. Inform the insured that the loss recovery amount might not be increased by the insurer; and

3. Be entitled to only reasonable compensation from the insured for services provided by the public adjuster on behalfof the insured until the claim is paid or until the insured receives a written commitment to pay from the insurer. Suchreasonable compensation shall be based on the time spent and the expenses incurred by the public adjuster on the claim.

D. A public adjuster contract shall not contain any contract term or clause that:

1. Allows the public adjuster's percentage fee to be collected when money is due from an insurance company, but not paid,or that allows a public adjuster to collect the entire fee from the first check issued by an insurance company, rather thanas a percentage of each check issued by an insurance company;

2. Requires the insured to authorize an insurance company to issue a check only in the name of the public adjuster;

3. Imposes collection costs or late fees; or

4. Precludes any person from pursuing civil remedies.

E. Prior to the signing of the contract the public adjuster shall provide the insured with a separate disclosure documentregarding the claim process and the contract that states:



1. Property insurance policies obligate the insured to present a claim to his or her insurer for consideration. There are three(3) types of adjusters that could be involved in that process. The definitions of the three (3) types are as follows:

a. “Company adjuster” means the insurance adjusters who are employees of an insurance company. They represent theinterest of the insurance company and are paid by the insurance company. They will not charge you a fee.

b. “Independent adjuster” means the insurance adjusters who are hired on a contract basis by an insurance company.They represent the insurance company's interest in the settlement of the claim and are paid by the insurance company.They will not charge you a fee.

c. “Public adjuster” means the insurance adjusters who do not work for any insurance company. They work for you, theinsured, to assist in the preparation, presentation and settlement of the claim. The insured hires them by signing a contractagreeing to pay them a fee or commission based on a percentage of the settlement, or other method of compensation.

2. The insured is not required to hire a public adjuster to help the insured meet his or her obligations under the policy,but has the right to do so;

3. The insured has the right to initiate direct communications with the insured's attorney, the insurer, the insurer's adjuster,and the insurer's attorney, or any other person regarding the settlement of the insured's claim;

4. The public adjuster is not a representative or employee of the insurer;

5. The salary, fee, commission, or other consideration is the obligation of the insured, not the insurer; and,

6. The insured has the right to rescind the contract within seventy-two (72) hours of the contract being signed. The rescissionshall be in writing, addressed to the public adjuster, at the address in the contract, and the insurer, and placed in the mailor delivered to the public adjuster within seventy-two (72) hours.

F. The contracts and disclosure statement shall be executed in duplicate to provide an original contract and disclosurestatement to the public adjuster and an original contract and disclosure statement to the insured. The public adjuster's originalcontract and disclosure statement shall be available at all times for inspection by the Commissioner or his or her designee.

G. The public adjuster shall provide the insurer a notification letter, which has been signed by the insured, authorizing thepublic adjuster to represent the insured's interest. The letter shall be accompanied by a copy of the signed public adjustercontract.

H. The public adjuster shall give the insured written notice of the insured's rights as provided in the Colorado ConsumerProtection Act, Title 6 of the Colorado Revised Statutes.



I. The insured has the right to rescind the contract within seventy-two (72) hours of the contract being signed. The rescissionshall be in writing, addressed to the public adjuster, at the address in the contract, and the insurer, and placed in the mail ordelivered to the public adjuster within seventy-two (72) hours.

J. If the insured exercises the right to rescind the contract, anything of value given by the insured under the contract will bereturned to the insured within fifteen (15) business days following the receipt by the public adjuster of the cancellation notice.

Section 6 Financial Responsibility

A. A business entity acting as a public adjuster, as described at § 10-2-103(8.5), C.R.S., is required to obtain a public adjusterlicense and shall comply with § 10-2-417(2), C.R.S., by securing a surety bond in the format attached hereto as Appendix A.

B. Effective January 1, 2014, all persons and business entities originally licensed as a public adjuster pursuant to § 10-2-417,C.R.S (2012) must secure a surety bond in the format attached hereto as Appendix A, which is executed and issued byan insurer authorized to issue surety bonds in this state in order to satisfy the financial responsibility requirements of §10-2-417(2), C.R.S. Effective January 1, 2014, a failure on the part of a person or business entity originally licensed as apublic adjuster pursuant to § 10-2-417, C.R.S. (2012), to secure a surety bond in the format attached hereto as Appendix Ashall result in the summary suspension of the public adjuster licensee.

C. Prior to receiving a public adjuster license, a person or business entity applying for the public adjuster license must securea surety bond in the format attached hereto as Appendix A, which is executed and issued by an insurer authorized to issuesurety bonds in this state in order to satisfy the financial responsibility requirements of § 10-2-417(2), C.R.S. A failure onthe part of the person or business entity to secure the surety bond in the format attached hereto as Appendix A shall resultin the denial of the license application.

D. The original surety bond and power of attorney required pursuant to Section 6.B., above shall be mailed or delivered tothe Commissioner of Insurance on or before January 2, 2014.

E. The original surety bond and power of attorney required pursuant to Section 6.C. above shall be submitted, to the Divisionof Insurance, with the application for licensure.

Section 7 Record Retention

A. A public adjuster shall maintain a complete record of each transaction as a public adjuster. The records required by thissection shall be retained for five (5) years from the date of contract or upon completion of contract, whichever is longer. Therecords required by this section include the following:

1. Name of the insured;

2. Date, location and amount of the loss;



3. Copy of the contract between the public adjuster and insured;

4. Name of the insurer, amount, expiration date and number of each policy carried with respect to the loss;

5. Itemized statement of the insured's recoveries;

6. Itemized statement of all compensation received by the public adjuster, from any source whatsoever, in connectionwith the loss;

7. A register of all monies received, deposited, disbursed, or withdrawn in connection with a transaction with an insured,including fees transfers and disbursements from a trust account and all transactions concerning all interest bearing accounts;

8. Name of public adjuster who executed the contract;

9. Name of the attorney representing the insured, if applicable, and the name of the claims representative(s) of the insurancecompany;

10. A copy of the bond required by § 10-2-417(2), C.R.S., that was in effect during the course of the transaction;

11. A copy of the letter mailed to the insurance company as required by Section 5.G. of this regulation;

12. A copy of the written notice of the insured's rights as required by Section 5.H. of this regulation;

13. All written communication, whether stored electronically or by other means, between the public adjuster and the insuredor between the public adjuster and the insurance company; and

14. A copy of the disclosure statement required by Section 5.E. of this regulation.

Section 8 Severability

If any provision of this regulation or the application to any person or circumstance is for any reason held to be invalid, theremainder of the Regulation shall not be affected.

Section 9 Enforcement

Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutespertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease anddesist orders, and/or suspensions or revocation of license, subject to the requirements of due process.



Section 10 Effective Date

This regulation shall be effective January 1, 2014.

Section 11 History

Original Regulation 1-2-19, effective January 1, 2014.

CreditsAdopted Jan. 1, 2014.

Current through CR, Vol. 37, No. 6, March 25, 2014.

3 CCR 702-1:1-2-19, 3 CO ADC 702-1:1-2-19


Colorado's Court of Appeals Interpretes Damages for an Insurer's Un-reasonable Delay to Properly Compensate a PolicyholderBy David Furtado January 8, 2014

On December 19, 2013, the Colorado Court of Appeals issued its opinion in the case Hansen v. American Fam-ily Insurance Company.1 In this case, American Family Mutual Insurance Company appealed the unreasonable delay or denial of a covered benefit judgment award of damages to one of its policyholders, Jennifer Hansen. In this case, Ms. Hansen settled her breach of contract claim against American Family Mutual Insurance Company for the full amount of the benefits owed ($75,000.00) six weeks prior to the trial. At the trial, the jury found that as to Ms. Hansen’s common law claim (bad faith), the jury found that the insurance company did not “unreason-ably deny payment of [the claimant's] insurance claim,” or “know its denial of such claim was unreasonable,” or “recklessly disregard the fact that its position was unreasonable”; and, although the claimant had incurred dam-ages, the insurance company's denial of the claim was not a cause of those damages.

As to Ms. Hansen’s statutory claims (C.R.S. 10-3-1115 and 10-3-1116), the jury found:

Ms. Hansen incurred damages; The insurance company denied and/or delayed payment without a reasonable basis for its action; and The insurance company’s unreasonable conduct was a cause of the claimant’s damages and losses.

In addition, the jury found the UIM benefit for which payment was delayed or denied without reasonable basis was $0. The trial court entered judgment on the jury’s verdict in favor of Ms. Hansen on her statutory (C.R.S. 10-3-1116) claim, awarded her attorney fees and costs, but did not enter a monetary award. Ms. Hansen filed a motion to amend the judgment and requested that the court award a statutory penalty of two times the covered benefit, or $150,000, under section 10–13–1116(1), in addition to attorney fees and costs. The trial court granted the Ms. Hansen’s motion. In response to Ms. Hansen’s motion, American Family filed a motion to amend the judgment, arguing that the court had incorrectly calculated the statutory penalty. The trial court conducted a hearing on the insurance company’s motion, denied it, and issued a final judgment in favor of the claimant for $199,683.28 in attorney fees and costs, and a $150,000 penalty under section 10–3–1116.

American Family appealed the trial court’s ruling stating that there could not have been an un reasonable delay of denial as the policy of insurance was ambiguous that due to the fact that Ms. Hansen’s claim for coverage was fairly debatable. The court of appeals found that although the coverage may be fairly debatable, the insurer must still exercise reasonable care and good faith in defending a claim. The fact that American Family characterized Ms. Hansen’s claim for contractual benefits was “fairly debatable” was not enough to establish that American Family’s actions were reasonable as a matter of law.

American Family also appealed the trial court’s awarding of two times the covered benefit ($75,000.00) as the jury found that the amount of damages for the payment that was unreasonably delayed or denied was $0.00. The Court of Appeals looked to the plain meaning of Colorado Revised Statute Sections 10-3-1115 and 10-3-1116 and noted that in Colorado Revised Statute 10-3-1115, a first party claimant whose claim for benefits has been unreasonably delayed or denied may bring an action in a district court to recover reasonable attorney fees and court costs and two times the covered benefit.

Blogs: PropertyInsuranceCoverageLaw.com

The appeal court affirmed the final judgment, as 10-3-1116 does not state double the amount of damages (in this case, $0.00) as penalty, but the amount of the covered benefit (in this case, $75,000.00).

This case is a great step for policyholders as insurance companies may not unreasonably delay or deny payment of benefits even though the insurance company may believe the claim value is fairly debatable, and clarifies the penalty as double the amount of benefits owed and which payment was delayed.

1 Hansen v. American Family Ins. Co., --- P. 3d ---, 2013 WL 6673066 (Colo. App. Dec. 19, 2013).

Colorado State Legislature and Governor Hickenlooper Stop Insurers from Shortening the Statute of Limitations on Unsuspecting PolicyholdersBy David Furtado October 22, 2013

On May 10, 2013, Governor Hickenlooper ended the ability of insurers to shorten the statute of limitations through provisions in contracts with their policyholders. The bill Governor Hickenlooper signed made changes to Colorado Revised Statute Section 10-4-110.8, now entitled Homeowner’s insurance--prohibited and required practices--estimates of replacement value--additional living expense coverage--copies of policies--personal property contents coverage--inventory of personal property--definitions—rules. Although most of the changes to the statute take effect on January 1, 2014, one of the changes, stopping insurers shortening the statute of limi-tations through language in its contract of insurance, was effective on the date Governor Hickenlooper signed the bill, May 10, 2013.

The statutory language added to Colorado Revised Statute Section 10-4-110.8 that disallows insurers from short-ening the statute of limitations is contained in paragraph 12 of the statute and states:

(12)(a) Notwithstanding any provision of a homeowner’s insurance policy that requires the policyholder to file suit against the insurer, in the case of any dispute, within a period of time that is shorter than required by the applicable statute of limitations provided by law, a homeowner may file such a suit within the period of time allowed by the applicable statute of limitations; except that this paragraph (a):

(I) Does not revive a cause of action that, as of the effective date of this subsection (12), has already been barred by contract; and

(II) Applies only to a cause of action that, as of the effective date of this subsection (12), has not been barred by contract.

(b) On and after January 1, 2014, an insurer shall not issue or renew a homeowner’s insurance policy that re-quires the policyholder to file suit against the insurer, in the case of any dispute, within a period of time that is shorter than required by the applicable statute of limitations provided by law.

The above statute will not help a policyholder in which the shortened contractual statute of limitations period barred a lawsuit prior to May 10, 2013, but if the shortened contractual statute of limitations period had not time barred a policyholder’s claim prior to May 10, 2013, then the 3-year statute of limitations period regarding breach of contract claims would apply.

I say bravo to the Colorado State Legislature and to Governor Hickenlooper for protecting victims who are seek-ing to be made whole due to events that have occurred for which they have insured themselves. Insurers should never have been able to bury a provision within a contract that would shorten a statute of limitations. This statute brings consistency to our state as now every contract action must be brought within 3 years, not some arbitrary time period chosen by an insurance company.

Colorado’s Unreasonable Delay StatutesBy David Furtado October 16, 2013

As promised in my post, Statute of Limitations in Colorado, this week I will discuss Colorado’s unreasonable de-lay statutes. In Colorado, insured’s have a cause of action they can utilize when pursuing a claim for benefits due after a loss pursuant to their policy of insurance. Colorado Revised Statute Section 10-3-1115(1)(a) states:

A person engaged in the business of insurance shall not unreasonably delay or deny payment of a claim for benefits owed to or on behalf of any first-party claimant.

“First-party claimant” is defined within this section in paragraph (b)(I) as an individual, corporation, associa-tion, partnership, or other legal entity asserting an entitlement to benefits owed directly to or on behalf of an insured under an insurance policy. This statute further states in paragraph (b)(II)(B)(2) that for the purposes of an action brought pursuant to this section and section 10-3-1116, an insurer’s delay or denial was unreasonable if the insurer delayed or denied authorizing payment of a covered benefit without a reasonable basis for that action.

Colorado Revised Statue Section 10-3-1116 provides for the remedies when an insured believes that an insurer violated Colorado Revised Statute Section 10-3-1115. Paragraph 1 of Colorado Revised Statute Section 10-3-1116 states:

A first-party claimant as defined in section 10-3-1115 whose claim for payment of benefits has been unrea-sonably delayed or denied may bring an action in a district court to recover reasonable attorney fees and court costs and two times the covered benefit.

Paragraph 4 of Colorado Revised Statute Section 10-3-1116 states:

The action authorized in this section is in addition to, and does not limit or affect, other actions available by statute or common law, now or in the future. Damages awarded pursuant to this section shall not be recover-able in any other action or claim.

This means an insured can bring an action for violation of Colorado Revised Statue Section 10-3-1115 in addi-tion to both a breach of contract action and a common-law bad faith action.

Under Colorado law, the determination of whether an insurer has breached its duties to the insured is one of rea-sonableness under the circumstances; in other words, the question is whether a reasonable insurer under similar circumstances would have denied or delayed payment of the claim.1

Under Colorado law, for purposes of a statutory claim for unreasonable delay or denial of payment of insurance claim, reasonableness of an insurer’s conduct is determined objectively, based on proof of industry standards.2

Statutes imposing liability on insurers for unreasonable delay or denial of claims are applied prospectively, not retrospectively, to the insurer’s new acts of unreasonable denial and delay in paying benefits due pursuant to the contract of insurance.3 This means in order to have an action for unreasonable denial of insurance benefits the unreasonable denial must have occurred after the enactment of Colorado Revised Statute Sections 10-3-1115 and 10-3-1116. These statutes became effective on August 5, 2008.

Statutes strengthening penalties for unreasonable conduct of an insurance carrier with respect to denial or delay of benefits create a right of action separate from the common law tort of bad faith breach of an insurance con-tract; language of statutes provides that action under statutes is in addition to, and does not limit or affect, other action available by statute or common law.”4 This means in addition to an unreasonable denial of benefits cause of action an insured can also pursue the common law tort of bad faith breach of an insurance contract. I will be discussing this cause of action in my next blog.

1 Sipes v. Allstate Indem. Co., No. 11-2369, 2013 WL 2467704, (D. Colo. June 7, 2013).2 Baker v. Allied Property and Cas. Ins. Co., No. 12-10, 2013 WL 1397297 (D. Colo. April 5, 2013).3 In re Estate of DeWitt, 54 P. 3d 849, 854 (Colo. 2002).4 Vaccaro v. American Family, 275 P. 3d 750 (Colo. App. 2012).

Statute of Limitations in ColoradoBy David Furtado October 9, 2013

My first blog as a member of Merlin Law Group is regarding the statute of limitations for certain actions in Colo-rado. I chose this topic since it is the first thing I analyze and advise a prospective client when I am contacted regarding a possible first party insurance claim.

The purpose of having statute of limitations is to promote justice, discourage unnecessary delay, and to forestall prosecution of stale claims.1 Their conclusive effects are designed to promote justice by preventing surprises through revival of claims that have been allowed to slumber until evidence has been lost and witnesses have disappeared.2 Pursuant to Colorado Revised Statute Section 13-80-101, the statute of limitations for a breach of property insurance contract in Colorado is three (3) years from the date the action accrues.

Colorado Revised Statute Section 13-80-108 defines the accrual date as the date both the damage to the property and the cause of the damage are known or should have been known by the exercise of reasonable diligence. Sim-ply put, the date that the insured property sustained damage is the accrual date. This means that a lawsuit must be filed within three (3) years of the occurrence of the loss or, the date the insured property was damaged.

In cases where a tortious breach of contract is part of the causes of action against an insurer, Colorado Revised Statute Section 13-80-102 provides for a two (2) year statute of limitations. This means that a bad faith breach of insurance contract claim is governed by the two (2) year statute of limitations.3 For prospective clients, this means that although the statute of limitations for a breach of contract claim is three years from the date of loss, the shorter statute of limitations period of two years is what I use to determine the timing of the filing of a law-suit to toll the statute of limitations if our client’s claim is against an insurer who did not treat the client fairly and failed to adjust the client’s claim in good faith.

1 Colorado State Bd. of Medical Examiners v. Jorgensen, 599 P.2d 869, 198 Colo. 275 (Colo. 1979).2 Continental Bank & Trust v. Tri-State General Agency, Inc., 185 F. Supp. 208 (D. Colo. 1960).3 See Cork v. Sentry Ins., 194 P.3d 422 (Colo. App. 2008).

Arizona: How Long Does a Policyholder Have to File Suit Under an Insurance Policy?By Kenneth Kan September 9, 2013

In Arizona, the law permits insurance companies to contractually shorten the statute of limitations period by which the policyholder must file suit.

In a homeowner policy, the limitation clause usually states that the suit must be commenced within one year after the loss. In business policies, we often see limitation clauses that require suit to be initiated within two years after the loss. (In Arizona, an ordinary breach of contract case that does not involve an insurance policy that has contractually shortened the period, a six-year statute of limitations applies.) It is imperative that the one or two-year anniversary of the date of loss be calendared (with intermittent reminders) by those who have a claim or are adjusting a claim, to preserve sufficient time to get a lawsuit filed, if necessary.

What happens if an Arizona policyholder files suit beyond the time limitation set forth in the policy? Is the suit time barred? Does the policyholder have any hope? To answer these questions, we can turn to an Arizona Su-preme Court case: Zuckerman v. Transamerica Insurance Company.1 In Zuckerman, the policyholder’s suit against the insurance company was filed approximately three months after the expiration of the one-year policy limita-tion period. Transamerica contended that the suit was time-barred by the one-year provision. So, the issue was whether the insurance company could enforce the policy limitation period to get the case thrown out of court.

Guided by equity principles and public policy, the Zuckerman court held:

[W]hile the policy condition shortening the applicable statute is valid…the insurer may be estopped from raising a defense based upon such an adhesive clause where the enforcement of the clause would work an unjust forfeiture. The key factor in the determination of this issue is the question of whether the insurer has shown prejudice by reason of the delay in filing suit. In the absence of such a showing, it is fair to say that the purpose for which the insurer was given permission to insert the clause will not be served by its enforcement.

In sum, it is always the best course to file suit within the policy limitation period. Sometimes, circumstances pre-vent that from happening or make it difficult to do so. In Arizona, assuming the policyholder has a valid claim and if the insurance company cannot demonstrate any prejudice from the delay, then a suit that is filed late can nonetheless be maintained despite the time challenge.

1 Zuckerman v. Transamerica Ins. Co., 133 Ariz. 139, 650 P.2d 441 (Ariz. 1982).

The Appraisal Process in Arizona and Disputes Concerning “Amount of Loss”By Kenneth Kan August 7, 2013

Recently, I have been getting a number of calls from homeowners and public adjusters in Arizona with questions about the appraisal process. When determining whether appraisal is the appropriate method to resolve a claim, the predominant issue usually is what actually can be appraised?

Most homeowner policies contain an appraisal provision that starts off with this:

If you and we fail to agree on the amount of loss, either may demand an appraisal ofthe loss. In this event, each party will choose a competent and disinterested appraiser within 20 days after receiving a written request from the other. The two appraisers will choose a competent and disinterested umpire. . . .

“Amount of loss” is typically not defined in the policy. So, that begs the question, what does “amount of loss” re-ally mean or include? In Arizona, appraisers “only determine the amount of damage and do not resolve questions of coverage.”1 I know the rules may differ depending on the state. Quite often though, I see insurance companies being all too quick to argue that the damages being claimed by the insured relate to “coverage issues” and avoid or attempt to avoid appraisal altogether. This comes up frequently when there is a dispute over what repairs are necessary to restore the property to its pre-loss condition. From the insured’s perspective the dispute concerns the amount whereas the insurance company will argue the dispute is about coverage.

To best illustrate how this situation arises, here are two examples of how Arizona courts have addressed the ap-praisal dispute:

Example 1: Insured’s home was damaged by a wind and hail storm. Insurance company determined that the home did sustain storm-related damage to the tiled roof. Insured contends that fixing the damage would require replacement of the entire roof. Insurance company argues that many of the broken tiles constitute wear and tear excluded from coverage. The two estimates differ in that the insured seeks the cost to replace the entire roof, demolition costs, overhead costs, etc. The insured demands appraisal. In this situation, the court reasoned that if it is clear that the added costs relate to replacement of tiles damaged through wear and tear, appraisal should be denied. However, here, the court could not readily determine how to classify the dispute so it sided with the insured and ordered appraisal.2

Example 2: Insured’s home sustained damage due to a fire. The fire was contained to the exterior of the home and an interior wall. Insurance company agreed to cover damage caused by fire and smoke. Insurance company obtained an estimate for cleaning and minor repairs. Insured’s estimate differed significantly in that it included the cost to drop the ceiling to remove smoke odor, repaint the home, and re-clean the carpet. Insured requested appraisal. Insurance company refused the request for appraisal asserting that “cause of loss, scope of repairs, and direct physical loss” are coverage issues not subject to appraisal and many of the insured’s requested repairs are not needed. The court determined that the parties disagreed about the repairs necessary to restore the home to its pre-fire state and concluded that this was a disagreement about the “amount of loss” subject to appraisal.3

In Arizona, courts have determined that good faith disputes over cost of necessary repairs should be resolved in favor of appraisal. Moreover, any doubts concerning the scope of the appraisable issues, should likewise be resolved in favor of appraisal.4

1 Carbonneau v. American Family Mutual Insurance Co., No. 06-1853, 2006 WL 3257724 (D. Ariz. November 9, 2006).2 Id.3 Ori v. American Family Mutual Insurance Co., No. CV–2005–697, 2005 WL 3079044 (D. Ariz. November 15, 2005).4 Carbonneau at 2.

Q & AStandards of Conduct

Question 1: Why is it an ethical concern for public adjusters any time they confront a loss if they do not know the law, do not know the science or have not previously worked on a similar claim?

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Matching and Uniform Repair

A leaking drain pipe caused water damage to the carpet in the master bedroom and adjacent hall-way. The insured’s interior decorator was qualified as an expert witness and testified it was impos-sible to replace the damaged carpeting without replacing all of the carpeting in the bedroom wing because the color and pattern of the damaged carpeting had been discontinued. Further, even if the same carpeting could be obtained, replacing only the damaged portions of the carpet “would result in unsightly seams at the juncture point.” The contrast between the old and new carpeting would be obvious. A realtor also testified that the market value of the house would diminish if the carpeting of the house’s entire bedroom wing was not of the same texture and color.

Question 2: Assuming the loss is covered, must the insurer pay the cost of replacing all the carpet in the bed-room wing or just the cost of replacing the carpet in the master bedroom and adjacent hallway?

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Question 3: If the insurer presented competent evidence that the same carpet was available and repairs could be made seamlessly, would it still have to pay to replace all of the carpet in the bedroom wing?

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Question 4: In Montana, what would be the result if carpet in the bedroom wing of similar quality, kind, texture and color is not available?

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Question 5: Does it make a difference in Montana if the damage involves matching of roofing materials?

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Assignment of a Post Loss Claim

An owner of a commercial property owned the property subject to a mortgage. When the Bank learned that the owner failed to insure the property, the Bank’s parent company obtained coverage through a blanket policy. The policy named the parent company, and its branches, including the Bank as the “’named insured mortgagee”, and provided that losses would be paid to the named insured mortgagee to the extent of its interest and that any benefits payable in excess of that in-terest “shall be paid to the mortgagor” (the owner). The policy also contained a non-assignment provision. When the property was damaged by vandalism and burglary, the owner notified the insurance company. After the loss, the parent company and the Bank assigned to the owner all of their rights with respect to the vandalism and burglary claim, however the insurance company did not consent to the assignment. Therefore, the insurance company refused to pay the owner and tendered a check to the bank.

Question 6: Does the anti-assignment clause of the Policy preclude the assignment of a postloss claim under the Policy?

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Design and Defects Exclusion

Several roofs of fairgrounds buildings in Larimer County, Colorado sustained damages as a result of snowstorms and buckling and rolling of purlins (horizontal beams which run along the length of a roof, resting upon the principal rafters at right angles and supporting the ordinary rafters or boards to the roof). The county asserted “widespread damage to the roof structures ... as evi-denced by the buckling and rolling of the purlins ... caused by the weight of built up snow and ice.” The Policy required Travelers to “ ‘pay for direct physical loss or damage’ to the property if that damage is ‘caused by or resulting from a Covered Cause of Loss.’ ” The Policy defined “Covered Cause of Loss” as risks of direct physical loss unless that loss is excluded by other provisions in the policy.

Travelers concluded that the loss was excluded from coverage under the property insurance poli-cy because the damages to the displaced purlins were caused by design and construction defects.

Question 7: Will the insurer have to pay for the repair costs for the damaged purlins?

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Question 8: What if a damaged purlin would have fallen and damaged the floor of the building, would the policy have covered damage to the floor?

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Actual Cash Value

The roof of an insured’s mobile home in Arizona was built with a 20 pound roof load capac-ity. After a snowstorm, the roof collapsed. The County changed its Building Code to require a 40 pound roof load collapse on mobile homes. The owner’s insurance policy provided that “a covered property loss will be settled on an actual cash value basis.” The insurer refused to pay for the necessary upgrades.

Question 9: Were the homeowners entitled to the cost of repairing their mobile home to comply with the county’s post-loss building code?

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Statute of Limitations

A policyholder suffered property damage to its home as a result of a hailstorm on October 5, 2010. He notified his insurance carrier on October 10, 2010. The carrier denied the claim on March 1, 2011. The policyholder commenced a lawsuit for breach of the insurance policy on October 1, 2013.

Question 10: In Colorado, is the breach of contract lawsuit timely?

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Question 11: What if there was a count for tortious breach of contract included in the lawsuit that was filed on October 1, 2013?

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Question 12: In Arizona, is the claim for breach of contract timely?

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An insurance policy is more than just a collection of words. It is an expression of trust and an exchange of promises. But what happens when, after faithfully honoring his or her word and sending off premiums, the policyholder needs the insurance company to be there, but it fails to live up to its end of the bargain? This kind of breach, this violation of trust, demands a response.

At Merlin Law Group, P.A., our mission is to provide efficient and effective legal counsel, service, and advocacy to insurance policyholders and claimants. Our practice is focused on property insurance law.

Our attorneys are passionate about the rights of individuals and fervently believe that insurance companies should be held to their word. When our attorneys enter into discussions or set foot inside of the courtroom, there is no doubt about whose side Merlin Law Group is on. We represent the policyholder. Inside and outside the courtroom, our firm’s attorneys are always seeking Justice for the Policyholder.® In all cases, it is our de-termination to use every ounce of the intellect, creativity, and tenacity that we possess to secure full and fair compensation for our policyholder client.

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Documents

WHAT SHOULD BE IN THE CLAIM FILE