Author: Clint Scott

An arbitration agreement or clause is a part of a contract in which parties agree that certain types of disputes may be handled through arbitration instead of litigation. If you sign a binding arbitration agreement, you relinquish your rights to pursue a remedy in court. But what if you are unhappy with the arbitration clause as it stands? Can you negotiate a change?

The answer is, it depends. You may be able to negotiate some parts of the mandatory arbitration clause in your insurance contract, but you could also be denied coverage for refusing to agree to the clause.

The basics of an arbitration proceeding

An arbitration proceeding is a dispute resolution process conducted privately in which either a single arbitrator or a panel of arbitrators serves in the capacity of a judge. Commonly, the arbitrator is a judge or lawyer with experience in a specific area of law and provides the arbitration services for a fee. The rules of arbitration are not as stringent as those in a standard court proceeding. There is also no jury involved. After each side has presented its case along with evidence, the arbitrator issues a decision, which is usually final, with little to no opportunity for appeal.

Although it may seem more reasonable to go through arbitration rather than through a court proceeding, the consensus is that arbitration gives companies a distinct advantage over the people who sign their contracts. The following reasons support this view:

• No jury
• Limited discovery process
• Confidentiality (no public record)
• No appeals possible (except for blatant arbiter misconduct)

Negotiating an arbitration clause in an insurance policy

Unfortunately, you may have limited options if your insurer requires you to sign an arbitration agreement. Courts have consistently given insurers the green light to make the signing of an arbitration clause a prerequisite of obtaining policy, much as they have with nursing homes, employees, and other companies. Stated another way, you may be denied coverage if you do not agree to sign an arbitration clause.

However, there may be times when you can “get around” an arbitration agreement. You can negotiate the contract from the start, before you agree to sign anything, to include provisions for:

1. Who chooses the arbiters
2. How discovery is presented
3. Who will pay which fees
4. Whether certain types of claims can still be brought in court

If you are unable to negotiate, you should seek the advice of an experienced Tennessee insurance dispute attorney. In some cases, your arbitration clause may actually be invalid. If you must abide by it, then you deserve to have a lawyer who is experienced in representing policyholders in these types of disputes.

Read More:

• What You Don’t Know about Arbitration Clauses Could Hurt You in an Insurance Dispute
• Mandatory Arbitration? Time to Check Your Policy
• Arbitration Agreements and the “Effective Vindication of Rights” Argument
• WATCH: Is a Lawsuit My Only Option?

If you need help with the negotiation of an arbitration clause, our Tennessee insurance dispute attorneys are here to provide you with the legal counsel and advice you need. The Gilbert Firm serves clients from offices in Nashville, Chattanooga, Jackson, Memphis, and Knoxville. To set up a free case review with one of our attorneys – Clint Scott, or Jonathan Bobbitt, or Brandon McWherter – give us a call at 888.996.9731, or use our contact form.

You have obtained liability insurance as a responsible property owner. In addition, you have paid your insurance premiums on time. Holding up your end of the bargain, you certainly have a right to expect your insurance company to be there for you if you become the object of a liability claim or suit. However, what does it mean if your insurer sends you a reservation of rights letter detailing various reasons why they may not cover you for certain events related to your policy?

Based on the terms of your liability insurance policy, the insurer has a legal obligation to defend you in a liability lawsuit. If an individual is injured on your property and files a lawsuit against you to recover his or her medical costs, the insurer will mount a legal defense on your behalf in accordance with your homeowner’s policy. However, the duty of the insurer to indemnify is narrower than their duty to defend.

As a result, although your insurer may investigate the claim against you and provide liability defense, they may also deny your insurance coverage at a later point in time based on their investigative findings or the lawsuit. If the insurer fails to send you a reservation of rights letter sufficiently in advance of a lawsuit against you, they may relinquish their right to deny you coverage at a later time, having failed to warn you of the possible absence of coverage.

As an example, since your policy likely only covers losses due to acts of negligence, a reservation letter sent by the insurer may warn you of an absence of coverage if:

• You fail to abide by the terms of the policy, or
• If the lawsuit reveals that you injured someone intentionally.

How a reservation of rights letter can affect you, the policyholder

As a policyholder, a reservation of rights letter can affect you if the insurer later refuses to cover you on certain claims made against you in a lawsuit. If this happens, and you are found liable, you may then be responsible for those damages. If there is a conflict of interest between you and your insurer, a reservation of rights letter may indicate this conflict prior to the damage phase of the lawsuit. In such a case, it may be necessary to hire a different attorney rather than staying with the insurance company that has interests divergent from yours.

In addition, while the insurer must supply and pay the costs of your defense – provided the claim involved is potentially covered under your policy – the insurer may attempt to have you sign an agreement enabling them to recover their costs if they decide later the claim is not covered. Or, the insurer may attempt to recover those costs without an agreement.

What to do after receiving a reservation of rights letter

If the reservation of rights letter sent by your insurer is a general form letter with no specifics provided about you or your case, it is a good idea to contact the insurer and inquire why they believe your claim may not be covered under the policy. This can provide you with information about how likely they are to deny coverage, and the type of defenses they may assert.

If your insurance company indicates they will deny part or all of your claim, or if they are not forthcoming, you are well advised to contact an experienced outside insurance dispute attorney for an initial evaluation of your case at a minimum. Retaining independent counsel at the early stages is beneficial in ensuring the strongest defense possible and the sharing of too much valuable information with your insurer or other parties in the lawsuit.

Regardless of whether your insurance company has acted in bad faith or you need legal representation for any type of insurance dispute, our team at The Gilbert Firm can help you pursue your rightful benefits. To set up a consultation about your case with Jonathan Bobbitt, Brandon McWherter, or Clint Scott, call us today at 888.996.9731 or complete our contact form. We serve policyholders throughout Tennessee from our offices in Nashville, Knoxville, Chattanooga, Memphis, and Jackson.

The average person doesn’t always read his or her insurance policy, except in one or two instances – when it becomes necessary to file a claim or when an insurance claim is denied by the insurer. We understand why: these contracts are often filled with dense legal jargon, and reading them can seem like an exercise in futility for most people. Knowing the actual definitions of your insurance policy is essential when the time comes to access the benefits you have or you assume you have under your policy.

Sometimes, however, those policy definitions are broad, and may be used by the insurer to avoid paying out on your claim even when your claim should be covered. We wanted to examine how that language can harm policyholders, and allow agents to act in bad faith.

Conditions, limitations, and exclusions

Most insurance coverage has limitations, conditions, and exclusions that reduce or eliminate your coverage under particular circumstances. The exclusions and limitations may be likened to the holes in Swiss cheese. Too often, the coverage (the cheese) is severely diminished or removed completely by the conditions, exclusions, and limitations (the holes).

On top of that, insurance policies often contain difficult-to-understand phraseology and technical verbiage the average consumer is not accustomed to digesting. You may not even realize that you agreed to a policy with more holes than cheese.

Courts side in favor of the insured when policies are ambiguous

There is some good news for the insured, however. Laws have been formulated to prevent insurers from relying on vague or unclear policy provisions to deny a claim.

So, if your insurer has denied your claim unfairly based on ambiguous language in your insurance policy, the denial may be unlawful. Ambiguous policy terms are interpreted against the drafter, i.e., the company that wrote the insurance policy.

Examples of case law on unclear policy language

• In Washington National Insurance Corporation v. Ruderman, 2013 WL 3333059 (Fla. July 3, 2013), the Florida Supreme Court maintained that an insurance contract with ambiguous language is to be interpreted liberally in favor of coverage. This interpretation was to stand despite any extrinsic evidence that may be found to clear up the ambiguity.
• According to Insurance Co. of Illinois v. Markogiannakis, 188 Ill.App.3d 544 N.E.2d 1082 (1 Dist. 1989): “The test is not what the insurer intended its words to mean, but what a reasonable person in the position of the insured would understand them to mean, and the ambiguity will be resolved against the insurer.”
• In Wolf v. American Cas. Co. of Reading, Pa., 2 Ill.App.2d 124, 118 N.E.2d 777 (1st Dist. 1954), the court stated: “Ambiguous provisions or equivocal expressions whereby an insurer seeks to limit its liability will be construed most strongly against the insurer and liberally in favor of the insured.”

In these cases, the insured claimant was pursuing coverage from the insurer to cover a loss. The insurance companies denied claims of the insured based on alleged conditions, exclusions, or limitations. In these cases, the courts determined that the language in the insurance policy was sufficiently ambiguous such that they awarded coverage in favor of the consumer.

The test of the language within an insurance policy is to be what the insured understood the language to be, not what the insurance company intended. As described above, the courts are protecting the unsophisticated insured against the sophisticated, savvy insurer.

However, when faced with ambiguous insurance policy language, it is often best to access an experienced Tennessee insurance dispute attorney instead of seeking policy changes or explanations on your own from the insurer.

Are you up against bad faith insurance practices or in the midst of an insurance dispute due to ambiguous language in your insurance policy? Regardless of the difficulty you are facing with your insurance company and accessing the insurance proceeds you deserve on your claim, our experienced Tennessee insurance dispute attorneys at The Gilbert Firm can help. To set up a free consultation, get in touch with Brandon McWherter, Clint Scott, or Jonathan Bobbitt by calling 888.996.9731 or completing contact form. With offices in Nashville, Chattanooga, Knoxville, Jackson, or Memphis, we are able to fight effectively for the benefits you deserve.

Having bricks installed on the exterior of your Tennessee home helps improve the overall appearance and value of the home. The problem with bricks, though, is that insurance companies often try to avoid paying for matching materials when repairs are required. Today, we’d like to look at why that is.

Why are bricks problematic?

Bricks are made in batches, and no two batches are the same, even if you order different batches from the same company. So, if you need to replace 100 damaged bricks on the exterior of your home, the new ones you install will not match the bricks still on the home. Bricks also decay at different speeds and change colors over time, which means you likely will need to replace the entire wall or all of the brick, as opposed to just one section, in order to restore an aesthetically pleasing and uniform appearance to your home or business. This can be a costly project, and insurance companies don’t like to pay out if they can avoid it.

Policy Language

In order to limit their exposure, some insurance companies have added provisions to their policies stating that they do not have to pay for “matching” when making repairs. For this reason, it is important to know what your policy does and does not cover before you find yourself in this position.

Matching Issues are Real

If your home’s exterior is entirely made up of bricks, damage to even a few could lead to a major claim with the insurance company. No one wants to have a mismatched exterior of a home, as it is not aesthetically pleasing and lowers the value of your property. Getting the insurance company to pay for a total brick replacement is not easy. Make sure to talk about matching with your insurance agent when purchasing or renewing your property insurance coverage, so that you do not find yourself without the coverage that you need.

Are you fighting with your insurance company over matching issues? If so, it’s time to speak with an experienced Tennessee insurance dispute attorney from the Gilbert Firm. Call Clint Scott, Brandon McWherter, and Jonathan Bobbitt at 888-996-9731 or complete a contact form to schedule a consultation in Nashville, Chattanooga, Memphis, Jackson, and Knoxville.

Tennessee has a lot of condominiums. When condo owners suffer losses, they sometimes face challenges that single-family homeowners don’t. The insurance company may deny the claim based on exclusions, or lowball the claim based on the type of damage done.

Your personal condominium insurance policy, known as an HO-6 policy, will most often cover losses you suffer inside your condo or damages that occur inside your condo. The policy held by the condo association where you live will most often cover damage done to the common areas of the property and damage to the building itself. It’s also possible that both policies could activate and handle damage at the same time. For example, if the roof leaks and does damage to the interior of your condo, your policy could cover interior damage and the association policy will handle damage to the exterior roof.

How to ensure your claim is approved

There’s no guarantee that a condo claim will be approved, but you can take steps to improve the odds that the claim will be handled in your favor. Here are some suggestions if damage to your condo occurs or you suffer injuries inside your condo:

• Write down the date and time of the event
• Take photos or videos of all the damage
• Create a list that details all of the items stolen or damaged that includes estimated values
• Obtain multiple estimates for any damage that requires repairs
• Always have a contractor present when the adjuster is assessing damages
• Don’t sign anything form your insurance company until an attorney looks it over

It is in your best interest to read the policy you acquire for your condominium from cover to cover. You need to know what type of exclusions or limitations are included in the policy, the damage that is not covered, and any other pertinent information before you go to file a claim. If your insurance company is trying to “pull a fast one,” you may need legal representation.

If you filed a claim against your condominium insurance policy and it was denied, you might have the basis for a lawsuit. The Tennessee insurance dispute attorneys at the Gilbert Firm are here to help. Call the office to schedule an appointment at 888-996-9731 or complete the contact form on our website. Clint Scott, Brandon McWherter and Jonathan Bobbitt have offices in Nashville, Chattanooga, Memphis, Jackson, and Knoxville to better serve our clients.

Residential and commercial builders are now using drones to perform aerial views of properties, enabling them to use the recorded images and data for more efficient and accurate construction activities. Drone videography and photography services are also used by real estate agents and property developers to market listings and prospect for land development opportunities, respectively.

Developers and construction companies who use drones for commercial purposes are required to follow the Federal Aviation Administration’s (FAA) operational requirements for business use, referred to as Part 107. The FAA regulates both the business and personal use of drones. The goal of the agency is to protect the national airspace and also human life and property in the air and on the ground.

As part of these rules, users must obtain a required remote pilot airman certificate. The FAA requires all owners of drones that weigh between 0.55 and 55 pounds to register their unmanned aircraft online before sending it up into the airspace.

Drone use for home reconstruction

The tasks drones are now used for on a consistent basis include property surveying and estimating the quantity of excavated material at a site. These drones utilize mapping software that is able to calculate the volume of material at a location and whether enough is available on site for adequate site leveling, or whether additional material must be hauled in to the site to adhere to the construction plans.

As Jeffrey J. Nix, partner at Taylor English Duma LLP states, “It’s a lot cheaper and quicker than going out and trying to figure out elevations throughout the entire site.”

Why policyholders should care about drones

The FAA is obviously concerned about the threat posed by drones – both commercial and personal – to commercial and private aircraft. At the same time, the insurance industry is concerned about how drone use affects home insurance. As more drones fill the airspace, claims against drone owners will also increase due to accidents that cause property damage and personal injury. The question for homeowners is whether or not their current homeowners’ insurance policy covers damage involving accidents caused by drones.

A standard homeowners’ policy provides coverage for property damage and bodily injury. However, such coverage may be narrowed due to policy exclusions. The ownership, use, or maintenance of aircraft may be an exclusion on certain policies. Therefore, one may not necessarily assume coverage for drone use, until the policy language is examined.

Perhaps more pressing, however, is whether drones will lead to increased denials of claims based on the footage they capture. Insurance coverage only extends to damage caused by an event: a tree falling on your roof, damage from hail, house fires, etc. Policyholders have a difficult enough time getting fair compensation for their claims; would that change if drone footage is allowed to be used to justify a denial? Construction companies aren’t using military-grade hardware and software, which means the footage can be grainy and unfocused. This will present just another obstacle in the way of policyholders getting the compensation they need.

If you are having trouble obtaining the insurance payout you deserve in the wake of residential property damage caused by a negligent party, we are here to help. Our Tennessee property claims attorneys at the Gilbert Firm serve clients from our offices in Nashville, Memphis, Jackson, Chattanooga, and Knoxville. To arrange a free consultation, call attorney Jonathan Bobbitt, Clint Scott or Brandon McWherter today at 888.996.9731 or send us a message through our contact form.