Hunton Insurance Recovery Blog

Last week, just before Hurricane Milton made landfall, Florida state officials issued an emergency decree to all licensed insurance adjusters in the state to protect homeowners against “unfair and deceptive acts” and “post-storm fraud” by insurance carriers. According to The Washington Post, the Florida Department of Financial Services is requiring that all claim adjusters provide an explanation for each change they make to a consumer’s loss estimate, document those changes, and retain all versions of the estimate and identify who made those revisions. When processing claims, adjusters must also use an electronic estimating system that provides an itemized report of all damage, as well as labor, materials, equipment and supplies. Those costs should be consistent with what a contractor or a repair company in that particular area would charge.

In Universal Prop. & Cas. Ins. Co. v. Qureshi, Florida’s Fourth District Court of Appeals recently ruled that the lower court mistakenly allowed the jury to consider evidence of repair estimates in a claim for replacement cost value benefits where repairs were not actually completed. 2024 WL 3514542, at 1 (Fla. 4th DCA 2024).

The Los Angeles Superior Court recently gave the production companies that produced the Netflix series “House of Cards” their “maybe” by allowing the plaintiffs’ coverage suit against Firemans Fund Insurance Company to proceed. The court held that allegations in the third amended complaint facially satisfied the policy’s insuring agreement by alleging that House of Cards’ lead actor, Kevin Spacey, was “necessarily prevented” from continuing or completing his duties under his contract and that his sickness was the direct and sole cause of the plaintiffs’ claimed loss. The court dismissed the plaintiffs’ bad faith claim, effectively ending the plaintiffs’ campaign to recover punitive damages.

Timely notice is an important first step in a successful insurance recovery.  But insurance policies are not always straightforward in identifying how, when, and to whom notice must be provided.  Some states may also impose additional procedural hurdles, including requiring policyholders to contact their insurers before filing suit (the idea behind this requirement is that it may avoid litigation).  Failing to comply with pre-suit requirements can hurt the policyholder’s recovery, as illustrated in a recent decision from the Northern District of Texas. 

Sanctions are an extreme remedy; frequently sought, but seldom granted.  Such was the case in Hunton Andrews Kurth LLP’s action on behalf of hotel and casino, Treasure Island, LLC (“Treasure Island”), against Affiliated FM Insurance Company (“AFM”) in federal court in Nevada, where AFM “hid” documents which refute the insurer’s defense on the central disputed issue in Treasure Island’s case—and many more actions seeking insurance coverage for losses arising from the COVID-19 pandemic.  A copy of the sanctions order can be found here.

In Philadelphia Indemnity Insurance Co. v. BAS Holding Corp., the Court of Appeals for the First Circuit rejected an insurer’s “insupportable” defense that the insured company had breached its duty to cooperate by refusing the insurer’s request for an examination under oath of the company’s president. The decision is a reminder that, while examinations under oath can be effective tools to allow the insurer to properly investigate a claim, an insured’s duty to cooperate is not boundless and does not demand attendance at examinations that are not reasonably requested.