Category: Insurance Disputes

The protection you purchase with your insurance policy is supposed to be there when you need to access it for yourself or your loved ones. However, too often insurance companies fail to live up to their promises when accidents, storms, tragedy or disaster hits. A claim denial or delay can keep you from accessing the benefits you are owed under the terms of your policy. You might even experience a retroactive cancellation of your policy after you file a claim. Or, your insurer may fail to resolve your claim the way the policy dictates. These situations and others are at the core of insurance disputes and often involve bad faith on the part of the insurance company.

Having an experienced attorney handle your insurance dispute is often the only way to fully and properly resolve the claim and obtain the benefits you are owed.

Bad faith insurance actors

When an insurer issues an insurance policy, that company makes a promise that it will operate fairly and in good faith with you, its insured customer. Companies that fail to adhere to their policy terms may be acting in bad faith and can be held responsible for damages. It’s no secret that insurance companies save money when they are able to avoid paying out on customer claims. Unfortunately, many claims are wrongfully denied, and many of these claim denials are not disputed by the victims, enabling insurers to keep millions of dollars otherwise owed to their customers.

An attorney can enforce the insurer’s obligations

The good news is that legal help is available for insurance policyholders both at the outset of your insurance claim or even in the middle of an insurance dispute. If your insurance company denies your claim, refuses to fully pay your claim, or offers you a lowball settlement, you need an experienced lawyer in the area of insurance disputes to force the insurance company to meet its obligations. Please also remember that you do not have to wait until there is a dispute to hire a lawyer. There are cost effective ways to hire our firm to help you at the outset of your claim in order to hopefully avoid a dispute altogether.

Regardless of whether you purchase homeowners, disability, life or auto insurance, you deserve to receive 100 percent of the benefits of your policy if your claim is legitimate and covered. If the insurance company delays approval or payment of your claim or refuses to pay your claim outright, you may have a claim involving bad faith insurance.

Just some examples of insurance companies practicing bad faith insurance practices include:

• Unreasonable (lowball) settlement offer on a valid claim
• Failing to pay undisputed portions of the claim
• Failing to thoroughly and promptly investigate a claim
• Unreasonable denial of insurance benefits
• Unreasonable interpretation of policy language
• Canceling an insurance claim that should have been paid
• Hiring biased and outcome determinative experts to deny you claim
• Causing unreasonable delays in payments
• Refusing to reimburse you for your total loss or settle the case
• Failure to defend you (without proper reason) when you are sued under your liability coverage

The language of insurance policies can be confusing to even the most astute policyholder. Sometimes these policies contain loopholes that can prevent you from accessing the benefits you are owed. An experienced insurance lawyer can sort out the coverage you are actually owed for your losses and determine if the insurer has wrongly withheld your benefits.

At the Gilbert Firm, our Tennessee insurance dispute attorneys have extensive experience dealing with insurance companies that have not held up their end of the bargain with their customers. If you need help dealing with a difficult insurance company, we can help you obtain the justice you seek and the claim benefits you deserve. We serve our Tennessee clients from offices in Nashville, Jackson, Memphis, Chattanooga, and Knoxville; our Mississippi clients from offices in Tupelo and Jackson, and our Kentucky clients from our office in Louisville. To set up a free consultation, contact attorney Jonathan Bobbitt, Clint Scott or Brandon McWherter today – please call 888.996.9731 or send us a request through our contact form.

 

On July 13, the Sixth Circuit reversed a lower court’s decision and ruled that Travelers insurance company must cover the losses incurred by a tool manufacturer, after they lost more than $800,000 to theft.

In a unanimous opinion, a panel of the appellate court flipped U.S. District Judge John Corbett O’Meara’s decision, and ruled that Travelers must pay out for their policyholder American Tooling Center Inc.’s (ATC) $834,000 loss from a scheme where thieves posed as a vendor using fraudulent emails and deceived the company into wiring money to a fake bank account. In perpetuating this fraud, the thieves impersonated employees of ATC’s vendor Shanghai YiFeng Automotive Die Manufacture Co. Inc.

According to court documents, ATC claimed losses under their policy’s coverage for any “direct loss” that was “directly caused by” the use of a computer. Travelers refused to cover the losses, claiming that ATC didn’t experience a direct loss that could be attributed to the use of a computer because their employees took multiple steps in between receiving the fraudulent emails and wiring money to the bank accounts.

Although Judge O’Meara initially ruled in favor of the insurer last August, the Sixth Circuit rejected Travelers argument, stating that the emails in fact directly caused ATC’s loss under Michigan case law.

Circuit Judge Karen Nelson Moore wrote, “ATC immediately lost its money when it transferred the approximately $834,000 to the impersonator. There was no intervening event.”

Background on the theft

At some point in 2015, unknown individuals accessed the email systems of either ATC or YiFeng, intercepting emails and doctoring messages to make them appear as though they came from YiFeng. The individuals posed as YiFeng representatives and asked ATC to wire approximately $834,000 in payment for invoices to a fake bank account, between the dates of March and May 2015. ATC did so, and even after discovering the fraud, they couldn’t retrieve the money.

Travelers denied the insurance claim filed by ATC, leading ATC to bring a suit against them in 2017. Judge O’Meara sided with Travelers in August, writing, “Given the intervening events between the receipt of the fraudulent emails and the [authorized] transfer of funds, it cannot be said that ATC suffered a ‘direct’ loss ‘directly caused’ by the use of any computer.”

American Tooling Center appeals

After ATC appealed to the Sixth Circuit, the Court found in their favor, stating that the circumstances of the losses did meet the requirements of the insurance policy. The appellate panel determined the theft to be computer fraud as the thieves used a computer to craft their emails. Judge Moore wrote, “ATC received the fraudulent email at step one. ATC employees then conducted a series of internal actions, all induced by the fraudulent email, which led to the transfer of the money to the impersonator at step two. This was ‘the point of no return,’ because the loss occurred once ATC transferred the money in response to the fraudulent emails.”

This decision marks another victory for policyholders concerning coverage for email-based thefts (phishing or spoofing scams) under crime policies. On July 6, a Second Circuit panel ruled in favor of a technology company in a case with Federal Insurance Company over coverage for a $4.8 million spoofing loss – although, federal courts have generally been split on this type of coverage under crime policies

If your insurance company is refusing to cover your losses when you pay good money for your policy, The Gilbert Firm can help. Our Tennessee insurance dispute lawyers will review your policies and ensure your insurance company isn’t taking advantage of you. Look to Clint Scott, Brandon McWherter and Jonathan Bobbitt for experienced representation. Call us today at 888.996.9731, or to fill out our contact form. We maintain offices in Nashville, Chattanooga, Memphis, Jackson and Knoxville.

 

 

 

 

 

On July 17, a Texas appellate court partially revived a lawsuit between Kenyon International Emergency Services Inc. and Starr Indemnity and Liability Company. Although a trial court judge granted an early victory to Starr in May of 2017, the appellate panel overruled that decision, stating there’s a factual issue as to whether Starr must cover the bill for services Kenyon provided to Seaport Airlines in the wake of a fatal crash in 2015.

Seaport’s crash and ensuing bankruptcy

In November 2014, Kenyon and Seaport entered into a one-year contract to provide emergency services should the airline need it in the event of a disaster. In July 2015, a Seaport plane crashed in Alaska, killing the pilot and injuring four others. Kenyon provided the services as outlined in the contract, but Seaport didn’t pay for them.

After Seaport filed for bankruptcy, Kenyon received permission from the bankruptcy court to file suit against Seaport for breach of contract and won a default judgement of $215,000 in damages. Kenyon then filed suit against Starr, with the argument that because Starr was Seaport’s insurer, they were liable to pay the emergency services bill.

A trial court ruled in Starr’s favor, and the instant appeal followed. The opinion was authored by Judge Jennifer Caughey and joined by Judges Laura Carter Higley and Harvey G. Brown. The case is Kenyon International Emergency Services Inc. v. Starr Indemnity & Liability Company, case number 01-17-00386-cv, in the First Court of Appeals of Texas.

Details of the dispute

In the lawsuit, Kenyon wanted Starr to pay approximately $215,000 in damages for insurance breach of contract, arguing that Starr was liable for the cost of Kenyon’s services under Starr’s insurance policy with the airline. Kenyon stated that they should be allowed to pursue their claim because they paid for services that Seaport (now bankrupt) should have covered, and the appellate panel agreed.

Kenyon, an emergency services company, seeks reimbursement for providing a welfare support line, mental health support for family and staff, and other disaster response services in the aftermath of a Seaport plane crash. In their decision, the panel wrote that Kenyon presented evidence that Starr could, in fact, be liable for some of the damages Kenyon is seeking to recover because they involved the bodily injury of Seaport passengers.

They said, “And some may fall under the rubric of related claims — any and all other damages from or arising out of any bodily injury to any person or passenger. In other words, Kenyon has raised a fact issue as to whether the reason at least some of the post-crash emergency services were performed — and potentially had to be performed — was bodily injury sustained in the plane crash, or any and all claims related to bodily injury.”

However, the panel did rule that the original trial court was correct in throwing out Kenyon’s breach of contract claim against Starr. They wrote that Kenyon wasn’t a party to the contract Starr had with Seaport, and rejected their argument that they should be allowed to bring their claim as a third-party beneficiary.

When you’re having a dispute with your insurance company, talk to The Gilbert Firm for professional, experienced representation. Our Tennessee insurance dispute attorneys understand the intricacies of insurance policies and will help ensure you get the coverage you’re paying for. Look to Clint Scott, Jonathan Bobbitt and Brandon McWherter when your insurer fails to pay out a claim, delays payment, or acts negligently. Call us today at 888.996.9731, or fill out our contact form. We maintain offices in Nashville, Chattanooga, Memphis, Jackson and Knoxville.

 

 

 

 

 

When you buy an insurance policy for your property – no matter whether that property is commercial or residential – that policy is most likely going to have an appraisal clause. Although few people take advantage of the appraisal process, nearly all insureds have the option of using appraisal to resolve disputes over the “amount of loss.”

When a property owner sustains damage because of, for example, a hail storm, the insurance company will typically send someone to inspect the damage and prepare an estimate. The policyholder might think the damage is worth X; the insurance company believes it is worth Y. At this time, either the policyholder or the insurance company may invoke the policy’s appraisal clause. When people hear the word “appraisal,” they usually think of a real estate appraiser, but in the insurance context it is more appropriate to think of an appraiser as a damage assessor. Pursuant to the appraisal clause, both the policyholder and the insurance company must select an appraiser to value the amount of the loss, and those two individuals will attempt to reach an agreement on the replacement cost value and actual cash value (replacement cost minus depreciation) of the loss.

If the two appraisers are unable to agree, a third neutral party, called “the umpire,” comes in and resolves the appraisers’ disagreements. The umpire is the third member of a three-person appraisal panel. In most policies, an agreement between any two of the three members of the appraisal panel becomes binding as to the amount of the loss.

How is an appraiser different from an adjuster?

An insurance adjuster is the person who inspects your property to determine how much damage has been done, and what that damage is worth.  Remember that insurance adjusters usually work for the insurance company – not the policyholder (public adjusters are the exception; they work for policyholders). Although insurance adjusters are supposed to accurately value the loss, they often leave things out which can leave the policyholder in a lurch when it comes time to make repairs.

An appraiser is the person who comes in after the adjuster has offered a settlement, if the insured feels the payment offered is inappropriate. Adjusters assess the damage, investigate the cause and extent of the loss, take statements, make recommendations for payment, and interpret the policy. On the other hand, appraisers serve the singular purpose of determining the amount of the loss in the context of the insurance policy’s appraisal clause when the insurance company and insured are unable to agree.

Appraisal can be an awesome tool for insureds because it takes the decision-making power out of the insurance company’s hands as it relates to the amount of the loss. By the same token, insurance companies can invoke appraisal too. However, appraisal does have its limitations because appraisers are not authorized to make coverage decisions, i.e., determine whether damage is covered by the policy.

Why you might need a lawyer to uphold your rights as a policyholder

Our firm has represented clients in countless claims involving appraisals.  Sometimes we conclude appraisal is the best option to quickly resolve a dispute. In those cases, we will help our clients screen and select an independent and impartial appraiser and guide the insured through the process. In other cases, we are hired because the insured has already demanded appraisal, but the insurance company has refused to allow the claim to go to appraisal based on assertions of “coverage questions.”  Additionally, we are often called upon to represent clients who have received an appraisal award, but the insurance company refuses to pay it. The scenarios are endless, but whatever the facts may be, call us for a no obligation consultation and we’ll point do our best to get your claim heading back in the right direction.

Dealing with property loss is frustrating; choosing the right attorney to fit your needs should not be. The Gilbert Firm has been protecting commercial and residential policyholders for years. To speak with an insurance dispute lawyer like Brandon McWherter, Clint Scott or Jonathan Bobbitt, please call 888.996.9731, or to fill out our contact form. We maintain offices across Tennessee, with satellite offices in Mississippi, for your convenience.

My brilliant law partner, Brandon McWherter, has written on this topic in the past, but it appears that a quick “ICYMI” note is warranted. Truth is, despite that fact that there still seems to be a bunch of fussing over this topic, the answer to when Overhead and Profit (O&P) is owed is pretty straight-forward. In Tennessee, Overhead and Profit is recoverable if the insured would “reasonably be expected to hire a contractor to repair its property.” Despite the clarity of this rule, many insurers do not pay Overhead and Profit properly. Some insurance companies fail to pay O&P on actual cash value payments promptly, waiting for the completion of the work until payment is made.

Some insurers will hold back O&P from specific categories of the contractor estimate, such as debris removal, cleaning, roofing, or mitigation. Other companies fail to provide O&P completely, asserting that the business interruption insurance claim is not sufficiently complex to justify Overhead and Profit. Fire and water loss claims have also been denied O&P coverage.

These denials and delays are not only improper, but may be legally classified as acts of bad faith by the insurance carrier.

When is O&P applicable?

The question to be answered in any O&P dispute case is: was the insured reasonably likely expected to hire a contractor to take care of property repairs? There is a process in Tennessee for determining when the insured is reasonably likely to be expected to hire a contractor. On January 1, 2014, a bulletin that explains when a policyholder is reasonably expected to hire a contractor was issued by the Board of Licensing Contractors in Tennessee. Policyholders in Tennessee can follow the guidance provided by this bulletin.

In summary, if a project is valued at $25,000 or more (not including masonry), or when multiple subcontractors or tradesman will be present on the project, a contractor is required. According to the Board of Licensing, bids or estimates on projects of $25,000 or more or those that will involve more than one subcontractor may not take place without a contractor’s license. Contractors who have worked hard to become licensed are owed compensation to cover Overhead and Profit for the work they have completed. BEWARE OF THE “OR.” Many insurance companies try to ignore the “or” and argue that only projects with a certain number of involved trades warrant O&P. That’s simply not the case. The $25,000 limit alone is sufficient to involve the use of a licensed general contractor.

You are paying for O&P – you deserve it

As Brandon points out, remember that the insurance premiums you pay are calculated based on a replacement cost value. Your insurance agent will use software to calculate this replacement cost and that cost will include Overhead and Profit charges from a general contractor. Due to the fact that you are currently paying an insurance premium for O&P, you are owed compensation for O&P on all repairs and/or losses that reflect the criteria mentioned above – and those losses and/or repairs may also involve restoration or mitigation services. In addition, any restoration company that is a licensed contractor is owed O&P on the work they perform.

Our Tennessee insurance dispute lawyers at the Gilbert Firm are here to help you recover any losses you have suffered due to a business interruption. Tennessee insurance dispute attorneys Jonathan Bobbitt, Clint Scott and Brandon McWherter have the experience and skills to maximize your compensation. To set up a free case evaluation, call us today at 888.996.9731 or complete our contact form. We serve clients from our office locations in Nashville, Memphis, Chattanooga, Knoxville, and Jackson. We also maintain offices in Tupelo and Jackson, MS as well as Louisville, KY.

On March 16, 2018, an Illinois federal judge ruled that an “earth movement” exclusion in a commercial building’s insurance policy allowed Acuity Mutual Insurance Company to avoid paying the repair costs for damages to its Insureds’ building.

What was this insurance case about?

Back in August 2013, SSV and Temperature Service performed excavation around their property in order to build detached storage. During this process, they discovered what’s called “urban backfill” in the soil around the property. Urban backfill is manmade debris in the soil, such as concrete or asphalt. This debris was found to have caused damage to the building, including cracks in the foundation, steps, and drywall, as well as damage to the building’s windows and doors.

SSV and Temperature Service requested that Acuity, their insurance provider, cover the costs of repairing the building—stabilization, upgrades, and other repairs. Their request was denied and that February the company sued Acuity in Illinois federal court. The basis of the insurance dispute was over the word “commencing” in the policy.

When did the damage commence? Before the plaintiff bought the commercial insurance policy in January 2013 or after? Acuity argued that they did not have to cover the damage if any of the damage commenced before the policy became was put in place. The Insureds argued that if any of the damage occurred within the policy period, Acuity should be responsible. Judge Durkin ruled that the word “commencing” was ambiguous and that there was insufficient evidence of when the damage occurred.

Judge rules in favor of Acuity

After expert studies were performed, a soil analyst concluded this backfill damage came from “differential soil settlement” caused by “building loads and nonuniform soil conditions,” activated by local weather conditions like rain or snowfall.

Judge Durkin interpreted this to match with verbiage in the insurance policy that reads, “We will not pay for loss or damage caused directly or indirectly by… earth sinking (other than sinkhole collapse), rising or shifting including soil conditions which cause settling, cracking or other disarrangement of foundations or other parts of realty. Soil conditions include contraction, expansion, freezing, thawing, erosion, improperly compacted soil and the action of water underlying the ground surface.”

The conclusion was that the property had suffered from “earth movement” and was thus not eligible for insurance coverage.

This case is of interest because it illustrates that damage to a building may not be covered by insurance, even if the soil damage and “earth movement” is caused by human intervention.

If you believe you have been the victim of unfair insurance practices, the team at Gilbert Firm can review your situation and explain your legal remedies going forward. Let’s discuss your complaint. Call Tennessee insurance dispute attorneys Clint Scott, Jonathan Bobbitt, or Brandon McWherter at 888.996.9731, or to fill out our contact form. We maintain offices in Nashville, Chattanooga, Memphis, Jackson and Knoxville.

A Pennsylvania federal judge ruled on March 9, 2018 that Cincinnati Insurance Company didn’t have to pay out more than $100,000 to its policyholder Wescott Electric Co. regarding a multi-million-dollar theft. U.S. District Judge Gene Pratter pointed out that Wescott should have been aware of the discontinuation of grace periods for claims reporting in their policies.

This insurance dispute came down to the simple matter of understanding policy language.

Wescott argues “reasonable expectation”

Wescott purchased four insurance policies from Cincinnati in 2004, 2007, 2010, and 2013. The 2004 and 2007 policies contained a grace period of one year for discovering and reporting any issues that occurred during the policy. However, in the last two policies, that language was removed.

In 2013, Wescott discovered an employee had stolen nearly $3 million from the company over the span of a decade via fraudulent checks and theft of copper wire. Their report of the discovery was five months too late to be claimed under the 2010 policy, due to the removal of the one-year grace period. Cincinnati refused to pay out, and Wescott took them to court in an attempt to get their losses covered. Their argument was that they were never notified about the change, and had a reasonable expectation that the 2010 policy would contain the same terms as the 2004 and 2007 policies. They claimed the 2010 policy was not explained to them and was simply included in the document, which contained hundreds of pages.

Cincinnati’s counter-argument

Cincinnati counter-argued that they provided notice in 2008 the policy would be changing, and that the change was listed in the first paragraph of the Commercial Crime Coverage section. They also claimed that Wescott never specifically requested the one-year discovery window when they bought the 2010 policy, and that they were indeed notified that Cincinnati changed their policy. Wescott did make a claim under their 2013 policy, however, and received $100,000 under the policy.

As of now, Wescott has no plans to appeal. The case is Wescott Electric Co. v. Cincinnati Insurance Co., case number 2:17-cv-04718, in the U.S. District Court for the Eastern District of Pennsylvania.

To sum up, Cincinnati will only have to pay out the $100,000 and no more, because of policy language. It’s crucial that you are always aware of the terms of your insurance policy, whether you own a home, a commercial property, or multiple properties. Make sure to review your policies carefully, and seek clarification from your agent every time your policy changes.

The Tennessee insurance disputes attorneys at the Gilbert Firm can review your policies with a fine-tooth comb and ensure they are working in your favor, and not the insurer’s. If you’re being treated unfairly, Clint Scott, Jonathan Bobbitt and Brandon McWherter can help protect you. Call us today at 888.996.9731, or to fill out our contact form. We maintain offices in Nashville, Chattanooga, Memphis, Jackson and Knoxville.

Over the next few months, insurance experts and policyholders should pay attention to some key decisions expected by the courts. Several rulings set to come out over the next few months include decisions on insurance bad faith, coverage for data breaches, interpretation of computer fraud provisions, and settling a dispute over covering asbestos-related injuries.

Some of these decisions could affect policy change and set new precedents, and therefore are important cases to watch.

Rosen Millennium v. St. Paul

Florida federal courts are deciding some interesting questions about cybersecurity issues in this case regarding commercial liability policies. An IT provider, Rosen Millennium, Inc. is seeking a decision about coverage from its insurance company, St. Paul Fire and Marine Insurance Co., after it filed a claim for $1.4 million after a data breach of customer credit card information from its sister company Rosen Hotel and Resorts.

The IT company argues that criminal defense coverage is available in its personal injury and property damage sections. However, St. Paul counter-argues that the hotel should have purchased specialty cyber insurance if it needed coverage for data breach losses, as their policies lack explicit exclusions for data breach incidents. The suit is St. Paul Fire & Marine Insurance Co. v. Rosen Millennium Inc. et al., case number 6:17-cv-00540, in the U.S. District Court for the Middle District of Florida.

InComm v. Great American Insurance Co.

Another case hinging on computer fraud, this case will interpret crime policies computer fraud provisions. InComm Holdings Inc. is in a dispute with Great American Insurance Co. (GAIC) over fraudulent use of InComm’s debit cards. These debit cards allowed retailers to load funds onto the cards, and cardholders could redeem the funds by calling InComm, who would transfer the funds to the customer’s bank. A coding error allowed cardholders to use the cards more than once, constituting fraud and causing over $11 million in false charges.

InComm’s crime policy with GAIC included a computer fraud provision, but GAIC refused to honor it, claiming that the fraud didn’t happen through a computer, but rather via phone. InComm argues that the phone call to activate the card connects to a computer. This case brings up the question of, “When is a criminal knowingly using a computer to commit a crime?” The case is Interactive Communications International Inc. et al. v. Great American Insurance Co., case number 17-11712, in the U.S. Court of Appeals for the Eleventh Circuit.

Continental Insurance Co. v. Honeywell International

Finally, in this case, we will be watching for the long-awaited decision about whether Honeywell must cover costs for asbestos-related injuries after its insurers began excluding asbestos coverage. Our firm does not handle products liability claims, but we do work with commercial properties – and many of our cases hinge on policy exclusions.

Insurance carriers St. Paul Fire and Marine Insurance Co. and parent Travelers Casualty are attempting to get New Jersey courts to overturn a July 2016 decision that stated Honeywell didn’t have to pay for a pile of product liability lawsuits after exclusions for asbestos claims became standard in liability policies in 1987.

Travelers’ attorneys argued that the unavailability exception shouldn’t apply to Honeywell, as their predecessor continued manufacturing brakes and clutch pads with asbestos long after asbestos coverage was ended in 1987. Honeywell’s attorneys counter that Travelers’ argument that the unavailability exception shouldn’t apply to Honeywell was never raised before the lower courts and should therefore be disregarded. They also stated that the only thing that matters is the fact that Honeywell’s predecessor couldn’t obtain asbestos coverage after 1987, not any of the company’s post-1987 conduct.

This ruling could have enormous consequences, as settlements and costs for asbestos lawsuits can run into the tens of millions of dollars. The case is Continental Insurance Co. et al. v. Honeywell International Inc. et al., case number 078152, in the Supreme Court of the State of New Jersey.

The Tennessee insurance dispute attorneys at the Gilbert Firm are at the forefront of insurance issues and rulings across the nation. Our years of experience give us the knowledge to answer all of your questions and concerns about your insurance policy and claims. To review your case with a knowledgeable Tennessee lawyer like Jonathan Bobbitt, Brandon McWherter or Clint Scott, call us today at 888.996.9731, or to fill out our contact form. We help residents of Nashville, Chattanooga, Memphis, and Jackson.

 

 

 

 

 

 

There are primarily three different types of adjusters. There are independent adjusters who work for the insurance company. They’re not employed by the insurance company, but they work only for them, not for the policy holder. There’s in-house adjusters, who’re actually employed by the insurance companies. Then the third type are public adjusters, and public adjusters are those who work for the policy holder. So they help fight for those people to make sure that the amount of the loss is set correctly.

I work with public adjusters all over the southeast. I’ve worked with dozens and dozens of them, and I welcome any public adjusters who have cases that they want to run by me, and be pleased to talk with you.

The Gilbert Firm is proud to represent policyholders and public adjusters on residential and commercial claims. To speak to an experienced Tennessee insurance dispute attorney like Brandon McWherter, please call us 888.996.9731, or fill out our contact form. We have offices are based in Nashville, Chattanooga, Memphis, Jackson, and Knoxville, Tennessee.

Let’s start with the basics. If you, as a homeowner, sustain property damage or losses because of a covered event (like a fire, for example), you will need your home fixed. You choose a contractor or restoration company to do the work – but the check from the insurance company has not come through yet, and you need them to start right away. So, what can you do?

You can sign an “assignment of claim,” which assigns your rights (as the policyholder) to benefits and proceeds from the loss, to the company or contractors. In the simplest of terms, the assignment of claim allows your contractor to get paid directly from the insurance company.

However, many contractors and purchasers of the damaged property have found themselves in a tight spot over the years, because of something called the anti-transfer clause. As explained on the Tennessee Insurance Litigation Blog, the anti-transfer clause “usually reads something like this: ‘Your rights and duties under this policy may not be transferred without our written consent except in the case of death of an individual named insured.’” Sometimes, the insurance company requires their written consent before an assignment of claim can be made.

This clause routinely allows insurers to deny payments to contractors – but it shouldn’t, when an assignment of claim is made post-loss.

Pre-loss vs. post-loss assignments

The Courts of Tennessee have routinely ruled on behalf of contractors and purchasers who were assigned the claim after the loss occurred. That is because the original assignee – the homeowner – was approved by the insurance company in the first place, and because the damage occurred regardless. There was no additional risk for the insurance company. Therefore, even if the contractor has a long and storied history of rule-breaking (or even criminal activity), the homeowner can assign the claim however he or she chooses; after all, the loss already happened.

Where insurance companies can (and do) have a leg-up is for pre-loss assignments. The insurance company underwrote the risk on Bob and Jane Homeowner because it felt confident enough to do so. Bob and Jane cannot assign their policy to another person without the approval of the insurer, even when no loss has occurred.

Even if there is an anti-transfer clause in your policy, the chances are very good that a post-loss assignment cannot be legally denied by your insurer. If it is, seek out a lawyer to help you dispute the denial.

One last note for policyholders

In some cases, the insurance company may decide that the amount of your loss is worth less than what the contractor is charging you for the renovations. If this happens, you could be on the hook for the remainder of the costs., depending, of course, on the language of the deal with your contractor.

Because of this risk, you should contact an attorney before making any decisions. Get informed about your rights from the start, and let your lawyer address any potential hiccups along the way. If your insurer lowballs your claim, your attorney can handle the dispute, to ensure that you are compensated fairly.

At the Gilbert Firm, we have spent years fighting against unfair insurance claims policies in Tennessee and Mississippi. Let Brandon McWherter, Jonathan Bobbitt and Clint Scott  put their knowledge and experience to work for you. Please call 888-996-9731 or fill out our contact form to schedule a consultation at once of our offices in Nashville, Chattanooga, Memphis, Jackson, and Knoxville.