Category: Insurance Disputes

When we talk about agent negligence, we’re not talking about your agent stealing your premiums or selling you a fake insurance policy. As popular as that trope might be on television or in film, outright theft is pretty rare (which is why stories about it go viral so quickly online; it happens so infrequently that it becomes instant news). Agent negligence, however, is a far more common problem, and it could lead to your claim being denied even if you crossed all your “T’s” and dotted all your “I’s.”

Acts of agent negligence

There are a number of ways an agent may be negligent when it comes to your insurance policies. Some of the more common ones include your agent:

• Completing your application with inaccurate information. Agents often complete applications without asking policyholders the questions contained on the application. This may result in false information being provided to the insurance company and a denial being issued for misrepresentations on the application. This may be negligence for which the agent and the insurance company are responsible.
• Giving you incomplete information about your options. Your agent’s job is to listen to your needs, figure out what coverage you require (and anticipate other types of coverage that you might end up needing), and then create options for you. Failing to properly explain what you might need and why may constitute negligence on the agent’s behalf.
• Failing to submit your application. The agent is the person who submits your application for insurance to the underwriter. Failing to procure coverage is one of the more common errors made by agents, and as such is a common reason why people sue their agents and insurers.
• Improperly explaining the exclusions in your policy. It is not enough to simply say there are exclusions; your agent should explain what that means, so you are prepared. Likewise, he or she should offer you options for additional coverage to close up any gaps.
• Improperly valuing your assets, leaving you with inadequate coverage. With any policy, you may be inadequately covered. Your agent should identify areas where your coverage may not be enough.
• Failing to properly explain any changes in your coverage. Some agents send out a newsletter, or schedule an annual review of your coverage in case anything has changed. If your agent fails to do this, or does not fully explain what changes have been made, why, and how they might affect you, you could have a claim for negligence.

Insureds count on their agents to obtain for them the right type of policy with the right amount of coverage. As a policyholder, you may be able to make a claim against your insurer if your agent failed to perform his or her duties with a certain level of care.

At the Gilbert Firm, our insurance dispute attorneys assist policyholders whose claims have been denied through no fault of their own. To schedule consultation with an experienced Tennessee bad faith attorney, please contact Brandon McWherter or Clint Scott, or one of our offices in Nashville, Chattanooga, Memphis, Jackson or Knoxville, by calling 888.996.9731 or using our contact form.

The worst has happened; there’s been a fire in your home, or a windstorm damaged the roof and walls, or some other horrific thing has occurred and rendered your house unlivable. So you put your claim in to the insurance company, who turns around and asks for a tremendous amount of paperwork – paperwork that you are sure they already have on file in their offices somewhere. Your copies, however, are hard to find and covered in debris. Do you really need to keep filling out these forms and submitting that documentation? Do you really need to let your claims adjuster keep coming back to the house, over and over again, to take pictures or inspect the property?

The short answer is yes, you do. In your homeowners’ policy, you have something called a “cooperation clause,” written in rather general language, which states that policyholders must cooperate with insurers in the event that the policyholder makes a claim. The American Bar Association uses this example of a basic cooperation clause:

“The [Insurer] and the Insured persons agree to provide the Underwriter with all information, assistance and cooperation which the [Insurer] reasonably requests and agree that in the event of a Claim the Company and the Insured Persons will do nothing that shall prejudice the [Insurer’s] position or its potential or actual rights of recovery” (emphasis ours).”

The words “reasonably requests” are important, as the ABA recognizes “Over the years, courts that have interpreted the cooperation clause have developed differing standards.” What is reasonable to one judge may not be so to another.

What this means for policyholders

The clause is purposely broad, because the insurance company wants to make sure they protect themselves in the event of a dispute. Still, there are limits to what your claims adjuster (or other agents or employees) can request. For example, it is probably not reasonable to meet them at your property at 2:00am for an inspection. It is reasonable, however, to ask you to submit to an Examination Under Oath.

In sum, your claims adjuster may ask you to submit any relevant documentation or information that is material to your loss. Attempts to block a claim based on your refusal to “cooperate,” even if said cooperation is clearly beyond reason, could be an act of bad faith on behalf of your insurer. Every claim is different, as are the circumstances surrounding that claim, so there’s no definitive answer that says, “Yes, this is reasonable” or “No, you’re acting in bad faith.” That is why working with an experienced Tennessee bad faith attorney can help you through the process.

Insurance companies should not shouldn’t be allowed to deny claims while citing the cooperation clause, when their requests have been unreasonable. The Gilbert Firm helps protect policyholders facing disputes on their claims. To make an appointment with a skilled Tennessee bad faith attorney, please contact Brandon McWherter, Clint Scott, or one of our offices in Nashville, Chattanooga, Memphis, Jackson or Knoxville by calling 888.996.9731 or filling out our contact form.

Recently, we wrote a quick synopsis on all-risk policies vs. named perils policies. In that post, we covered some of the more common types of exclusions most Tennessee homeowners have in their named-perils policies. One we have not yet talked about is infestation. Just as brakes and tires are rarely covered under a warrantee, the creepy-crawlies that sometimes end up in our homes may also be excluded.

Infestations are not limited to bugs, either. Mice, rats, squirrels, snakes, birds – whether they run, fly or slither, they may not be covered under your policy. More frustrating, however, is that the damage they do may also not be covered. Insurance policies often have exclusions for infestations. Thus, your policy may exclude coverage for the infestation, and your policy must be analyzed to determine whether you have coverage for the damage caused by an infestation. For example, damage caused by termites is likely to be excluded by your policy, which means you are probably on the hook for the costs associated with those repairs.

Homeowners’ policies can have a lot of exclusions. For this reason, it is important to understand the coverage provided by your policy and have your policy analyzed as soon as a potential claim arises to ascertain whether or not you have coverage. The Gilbert Firm helps policyholders in Tennessee recover the compensation they are entitled to receive after they have sustained damage to their home covered under their policy. To make an appointment with Tennessee bad faith attorney Brandon McWherter or Clint Scott, please contact us. With offices in Nashville, Chattanooga, Memphis and Jackson, the Gilbert Firm is always nearby when you need us most.

#badfaithattorney #buginfestation #insurancepolicies

In many professional and commercial liability policies is a provision called “defense within limits.” In a nutshell, a DWL provision means that the amount of your policy that can be paid out in a claim must include legal defense costs. As a policyholder, this puts you in a unique predicament: if you are being sued, do you spend the extra money and hope you win, or do you try to settle as quickly as possible because you know exactly how much money your policy offers?

Because these types of policies are often less expensive than more inclusive policies, they are a popular choice for small businesses and start-ups, where the initial capital amount might be small. They also give policyholders a small amount of control over how their sides are presented, because they are entitled to their own independent counsel.

Another potential problem comes in the guise of bad faith in terms of defense costs – namely, how do you know if your insurer is really doing their best for you and your business? For example:

1. Did the defense need to cost that much? Let us say your policy has a limit of $1 million, and your carrier spends half of that defending you. That leaves you with $500,000 in your policy to pay out a settlement. If your insurance company overspent, failed to manage its finances or opted for more expensive strategies, you can make an argument that it acted in bad faith.
2. Were you kept in the loop about expenses? Just like in general liability policies, your insurer must be upfront about where things stand. Failing to communicate exactly how much money has been spent, or what the expected “burn rate” is, leaves you unable to make decisions about whether or not to offer a settlement. This could also be construed as an act of bad faith.
3. Did they even discuss a settlement? Your insurer knows how much your policy is worth. If a settlement offer was never on the table when it really should have been, because your insurer failed to discuss that option, the company may be found to have acted in bad faith.

We know that this particular provision may not affect all of our clients in Tennessee, but it should serve as a warning to anyone with any kind of insurance policy. If you are a victim of bad faith, an experienced Tennessee insurance disputes attorney can help. The Gilbert Firm has provides compressive representation on behalf of insureds throughout the state. Please contact attorneys Brandon McWherter or Clint Scott to find out more. The firm maintains offices in Nashville, Chattanooga, Memphis and Jackson for your convenience.

#insurancedisputes #insurancedisputeattorney #badfaith

This is one of those examples that make insurance dispute lawyers angry. Let us say that a rogue thunderstorm sweeps through town, causing the trees to shake loose of branches, limbs and acorns. After the storm, you realize that your roof is stippled like a golf ball. It is still functional, and there is no damage to any other part of your property and the roof doesn’t leak – it’s just, well, ugly. You file a claim with your insurance company for the damage to your roof, only to hear them reply that cosmetic damage is not “functional” damage, and therefore your claim will not be covered.

Turns out, this is not necessarily true. Whether the damage was cosmetic, functional or some combination of the two, it still constitutes direct physical loss – and more than likely, direct physical loss is what is covered under your policy.

Bad Faith vs. Bad Policy

This does not mean you can immediately start making claims for cosmetic damage. If your policy is an “all-risk” policy covering all risks of direct physical loss, and it does not specifically exclude damage that is cosmetic only, then you most likely have a strong claim for reimbursement for the damage. In fact, some courts have held that refusing to pay for hail dents just because the roof is still functional can constitute bad faith. Unfortunately, in response to this, some insurance companies have begun adding exclusions to their policies that specifically exclude direct physical loss that is cosmetic only in nature. I haven’t seen many (if any) of these policies in Tennessee yet, but I have seen a few from other states. This is yet another reason to carefully review your insurance policy before you have a loss. It goes without saying that most people assume that if hail falls and beats up their metal roof, causing dents visible from the ground, that those dents would be covered by their insurance policy. But if your policy has that exclusion, then you might be in for a surprise.

As a final word about the “cosmetic v. functional” distinction, it is important to note that dents in a metal roof can still constitute “functional” damage (for those policies that have such a requirement). For example, if the hail caused the paint or finish on the metal roof to crack or peel, then that exposes the bare metal, thereby causing rust and oxidation and ultimately shortening the life span of the roof. This is “functional” damage and therefore would be a compensable claim even under insurance policies that exclude damage that is cosmetic only.

Tennessee Trial Court Opinion on Cosmetic Damage

There are handful of opinions around the country holding that there is no distinction between cosmetic and functional damage in policies covering all risks of direct physical loss. I’m not aware of any that hold in favor of the insurance company that “cosmetic only” damage is not covered. Last summer, I was involved in a Nashville claim involving a metal roof on a hotel that was dented during a hailstorm, and we were finally able to get a decision on this important issue by a Tennessee judge. In that case, Chancellor Russell Perkins held:

Based on the undisputed facts, the Court is asked by [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][the insured] to rule, as a matter of law, that the hail dents to the metal mansard roof of the Insured Premises constitute direct physical loss or damage under the subject insurance policy. . . . The Court concludes as a matter of law that if there are hail dents to the metal mansard roofs, no matter where they are visible from the ground or visible with or without the aid of chalk, then such dents constitute direct physical loss or damage under the insurance policy and therefore constitute a covered claim under the policy.

Chancellor Perkins got it right, but his opinion is not binding precedent. As a result, this fight will continue until the issue is decided by the Court of Appeals.

Bringing a bad faith claim is anything but plain and simple. That is why you want the help of an experienced Tennessee insurance dispute attorney to assist with your claim. The Gilbert Firm has successfully represented clients in Nashville, Chattanooga, Memphis and Jackson, and in other states around the Southeast, in breach of contract and bad faith actions against insurers. To make an appointment, please contact Brandon McWherter or Clint Scott, or contact our office to learn more.

#insurancedisputeattorney #insuranceclaim #badfaith #cosmeticdamage[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

When we buy homeowners insurance, we mostly think about what we want it to cover: a fire, wind or hail damage, earthquake – those types of things. What most people don’t think about (and what they really should) is what their policies don’t cover. These are called exclusions, and they can vary from policy to policy. Knowing what your policy excludes is absolutely critical.

All-risk policies vs. named perils policies

Property insurance policies are generally one of two types: an all-risk policy or a named peril policy. All-risk policies cover everything except losses that are specifically excluded or limited by the policy. On the other hand, named peril policies cover nothing except for specifically listed perils, such as fire, theft, etc. Of course, all-risk policies are preferable, but many property owners don’t discover the difference until it’s too late.

The average all-risk policy will begin with language that indicates that coverage is provided for all risks of direct physical loss except for certain perils that are not covered. So, for example, if your dog destroys your couch and there is no exclusion for damage caused by pets, then the damage to the couch should be covered. In contrast, if you have a named perils, the damage to the couch will not be covered unless it specifically says that damage caused by pets will be covered by the policy (which is unlikely).

Exclusions to think about

Because the types of exclusions your policy has will vary from insurer to insurer (and policy to policy), it is impossible to list out here all of the various exclusions that may apply. However, there are some common exclusions that are present in most insurance policies, and we’ll cover some of these in a series of posts to better help you make better choices as a policyholder. We plan on covering in some degree:

• Wear and tear/ deterioration
• Improper workmanship/materials/design (that often has an exception for resulting or ensuing damage)
• Intentional acts
• Earth movement (earthquake/sinkhole, etc.)
• Flood (surface water)
• Mold
• Pollution
• Slow leaks (many policies exclude water losses occurring over a period of “weeks, months or years” – must be sudden event such as a pipe busting as opposed to a slow drop)

These are all commonly excluded perils, but that doesn’t mean they are the only ones. The insurance world is full of tricks, traps, and loopholes, and it is often important to work with a skilled Tennessee insurance dispute attorney to best present your insurance claim. If you think your insurer is acting in bad faith, or trying to avoid making payment on your claim, you definitely want to see a lawyer before you take another step.

At the Gilbert Firm, we know insurance. We’ve helped policyholders throughout Tennessee and other parts of the Southeast obtain the compensation they need to rebuild after their home has been damaged. To make an appointment with an experienced Tennessee insurance dispute attorney like Brandon McWherter or Clint Scott, we invite you to contact us. With offices in Nashville, Chattanooga, Memphis and Jackson, our team is where you need us, when you need us. Discover what we can do for you.

When you make a claim to your insurance company, you may be asked to submit to an Examination Under Oath (EUO). Insurers often use the EUO process as a way to vet claims before they make a payment. EUOs are becoming more and more common, and often indicate there is a red flag of some sort associated with the claim. The “red flag” possibilities are endless. Perhaps the insurance carrier suspects there was a misrepresentation on the application, there may be questions about the amount of the claim, or the cause of the loss could be suspect. In our experience, the motive behind an EUO request is sometimes pure and other times not. But one thing is for sure and that is the policyholder’s obligation to appear and participate in the EUO. As attorneys who represent Tennessee policyholders, we have represented our fair share of clients during these proceedings, and so we offer you some basic information about what might happen, and what steps you will need to take.

The process generally works like this: you submit a claim for a loss to your insurance company. Your insurer has a question about your claim – or has begun an investigation into your claim – and asks you to submit to the EUO. You are then asked to meet with the insurer’s attorney(s) and to bring in additional supporting documentation. Because you are under oath, you will be sworn in just as you would during a court session; there is usually a court stenographer on hand, too. During the Examination, your insurer’s attorney(s) will ask you highly detailed, specific questions about your loss and the claim you submitted. The process can last for hours, and depending on the nature of the claim, sometimes for a full day or more. After the EUO, the questions and answers will be typed and bound in the form of a transcript, which you will have the opportunity to review and correct any errors before signing and returning to the insurance company.

Additional information you need to know

If your insurer requests that you submit to an EUO, you cannot say no or disregard that request. Most insurance policies have language included in them regarding your cooperation with their investigations (or with the process of the claim in general), and failing to show up or refusing the request can be grounds for them to deny your claim outright.

This is why working with an experienced attorney is so important. We help our clients by reviewing their claims and preparing them for the types of questions they may be asked during the EUO. We also help you by documenting the evidence you have of your loss, and organizing that documentation so it is accessible and complete. Should your insurance company attempt to deny your claim despite evidence that the claim is valid, we can help you determine the appropriate steps to take next.

The Examination Under Oath can be a nerve-wracking part of the claims process; you don’t have to go it alone. The Gilbert Firm represents Tennessee policyholders in insurance disputes to ensure that valid claims are fully and promptly paid. To make an appointment with an experienced Tennessee insurance disputes attorneys, such as Brandon McWherter or Clint Scott, please contact the firm. We maintain offices in Nashville, Chattanooga, Memphis and Jackson for your convenience.

In an effort to avoid paying valid insurance claims, insurance companies often deny payment by claiming that a policyholder has made material misrepresentations either before the policy was issued or after the policy was issued. For example, the insurance company may claim that an insured “lied” on the application for insurance. In Tennessee, Tenn. Code Ann. § 56-7-103 states:

“No written or oral misrepresentation or warranty made in the negotiations of a contract or policy of insurance, or in the application for contract or policy of insurance, by the insured or in the insured’s behalf, shall be deemed material or defeat or void the policy or prevent its attaching, unless the misrepresentation or warranty is made with actual intent to deceive, or unless the matter represented increases the risk of loss” (emphasis ours).

This section of the law applies to alleged misrepresentations during the application process, before the policy is delivered. Whether the law applies to an individual situation requires an in depth analysis of the argument being made by the insurance company and of the application process, as well as the potential negligence of the insurance agent if there are in fact mistakes on the insurance application.

Misrepresentation after a policy has been delivered

On the other hand, the insurance policy language governs the relationship between the policyholder and the insurance company, including any alleged material misrepresentations that the insurance company may claim to have occurred, after the policy was delivered. For example: let us say a policyholder suffers a house fire. He or she puts a claim in for the losses. The insurance company claims that the policyholder has made material misrepresentations in submitting his/her claim for insurance proceeds as to contents that were damaged/destroyed in a fire loss.

The policy will most likely deny coverage where material misrepresentations after made after delivery of the policy. This language is generally found under the general policy conditions with a heading of “Concealment” or “Fraud” that says the entire policy is void, if whether before, during, or after a loss, any insured has:

• Intentionally concealed or mispresented any material fact or circumstance;
• Engaged in fraudulent conduct; or
• Made false statements relating to this insurance

The language may differ from policy to policy, but the intent generally remains the same.

Once again, there are a variety of issues that arise in this context which must be analyzed to prevent an insurance company from seizing on an honest mistake by the policyholder (i.e. listing the wrong brand of toaster oven on their contents inventory) in an effort to avoid paying what is rightfully due and owing under the insurance policy.

Policyholders are entitled to the protection provided under their insurance policy and for which they have faithfully paid premiums in the event that disaster strikes. All too often, insurance companies try to use “honest” mistakes as a way to avoid paying valid claims. This is why you want a skilled Tennessee insurance dispute attorney on your side if your claim has been denied because of an alleged misrepresentation, or any other reason. The Gilbert Firm protects the rights of policyholders in Nashville, Chattanooga, Memphis, and Jackson, and throughout Tennessee, in claims disputes and in bad faith actions. To schedule a consultation with Brandon McWherter, Clint Scott, or any Tennessee insurance claim dispute lawyer at our firm, please contact us.

The French poet Charles Baudelaire once said “The finest trick of the devil is to persuade you that he does not exist.” This is a particular trick of the insurance industry as well, though they call it “post-claims underwriting.” In short, post-claims underwriting means this: you purchase an insurance policy. You suffer a loss. You make a claim for that loss. The insurer turns around and says, “You never should have been given this policy in the first place because you were a bad risk. We’re not paying it.” While it is bad faith for the insurer go back to your policy and somehow rewrite the claim to ensure that you cannot be paid, that does not mean that all refusals are illegal.

For example, let us say that you purchase homeowners’ insurance, and you are asked if you have had any prior insurance losses. You respond that you have not had any losses, but forgot about the hail claim you made on your car ten years ago. One night, your house catches on fire. If your response regarding prior insurance losses was not accurate, the insurance company may be able to rescind your policy.

Why some insurers “get away” with it

When you apply for an insurance policy, the company sends the policy to be underwritten by someone who is supposed to evaluate what kinds of risks you pose as a policyholder. The underwriter is the one who determines what the cost of your policy will be, or whether or not you can even get a policy. When an insurance agent misrepresents your policy, or purposely asks you rather vague questions, he or she may be setting you up to have a claim denied later.

Another reason why we may see an increase in claims being denied has to do with policyholders’ propensity for buying insurance online. Online applications are often brief and general, and when the actual application comes – which is long and detailed, and usually filled with terms that no one outside of the insurance company can understand – most people simply check the “I agree” box and move forward. After all, they understood the initial online application, so why do they need to read the longer one?

Under certain circumstances, these practices are legal. In others circumstances, they are acts of bad faith. And when they are, you do have legal remedies at your disposal to help you. If you wish to avoid these potential problems altogether, you should make sure that you understand all questions on your insurance application and that you are as accurate as possible. Also, don’t sign an insurance application without thoroughly reading and analyzing each question. If you have questions, meet with your agent and go over them with him/her, as they should be able to assist you through the document. Taking notes of your conversation with your agent may be helpful down the road if an issue arises.

The Gilbert Firm assists policyholders throughout Tennessee whose insurers are acting in bad faith. We invite you to contact us to speak to Brandon McWherter or Clint Scott about your experiences. We have offices in Nashville, Chattanooga, Memphis and Jackson to better serve our clients throughout the region.

When you work in a brick-and-mortar shop – a retail outlet, a trading company, a restaurant – and catastrophe hits, you can put a claim in for business interruption. (In case you’re new to the insurance claim game, “business interruption” claims are claims for the money you lost while your business could not proceed, more or less.) If there is a fire or a flood in your building, for example, and you lose some of your goods, your supplies or even your building because of the damage, you can make a claim for compensation for your lost revenue and products as a result of the stoppage of your normal business operation.

But what happens when your business exists solely online? Cyber companies face a different set of legal challenges for business interruptions claims because most general liability policies require some proof that you lost property. In cases where your loss was the result of a data breach or hack, there is no physical property loss: there is only lost data, despite how that data affects your business.

Your next steps

There are some courts which may interpret your policy outside of what constitutes “physical loss:” after all, Amazon.com posted a loss of around $66,000 per minute when its site went down in 2013, and no one questioned whether or not a downed site would harm their business. One smart option that any business – on-line or on the street – should take is to purchase additional cyber insurance, which protects you in cases of a breach or a hack (and which Amazon.com certainly had). This type of insurance could cover business interruption caused by:

• System failures, whether they are a result of human error or an outage
• Third-party failures, such as when the company which hosts your website goes offline
• Security failures
• Security breaches, specifically Distributed Denial of Service or “DDoS” attacks

The policy may also cover the same losses you could expect under a more general policy: the cost of wages paid out while no income was coming in, the cost of your operating expenses (such as any supplies or goods your purchase, or the cost of the rent of your building), and the cost of outside, applicable insurance policies (workers’ compensation, for example). All of these expenses must continue to be paid even if your company is not currently bringing in any revenue. You may also incur additional expenses determining how to best get your business back up and running, or through marketing efforts to ensure your client base that they are safe, and to explain what happened.

The insurance dispute lawyers of the Gilbert Firm represent policyholders throughout the state of Tennessee. To reserve a consultation time with Brandon McWherter, Clint Scott or Jonathan Bobbitt, please contact us. We maintain offices in Nashville, Chattanooga, Memphis and Jackson to better serve our clients throughout the state.