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ChuckDeaton
USA
373 Posts |
 Posted - 02/11/2003 : 21:32:22
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| Got any thoughts in general. I particularly interested in how the Arkansas Valued Policy Law might be applied to a blanket policy in Arkansas. |
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CCarr
Canada
1200 Posts |
Posted - 02/11/2003 : 22:03:21
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I don't have the answer Chuck, just a thought.
The statement you are inquiring about, seems to have two very contrasting elements.
'Valued policy' normally is structure specific, while 'blanket insurance' normally combines values per location for more than one structure.
If that is what you are faced with, and with the very limited info available; it will probably be a hell of a mess to sort out. Seems like an underwriter made a mistake or got conned by the agent.
But, I have seen blanket written on one location and meant to combine all values, i.e. building, stock, equipment & fixtures; maybe then the 'valued' aspect could be more focused on the one building insured.
I'd like to hear more about it, so I can chew on it, a/o hear from others. |
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Justin
USA
137 Posts |
Posted - 02/11/2003 : 23:47:17
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| Chuck, are you possibly refering to something like a blanket farm & ranch with scheduled structures? While my Arkansas experience is not extensive, this is something I have not encountered, can you give more information? |
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CCarr
Canada
1200 Posts |
Posted - 02/12/2003 : 09:15:25
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Chuck, I had an awful time finding this thread again this morning, don't know why you didn't put it in "Coverage".
Anyway, I did some more chewing on the limited 'leaf' you provided, went to the Arkansas DOI web site, but could find nothing there.
However, I did review a 'Valued Policy Law' wording, although not from AR, I believe the intent and purpose is the same. That review now allows me to conclude my thoughts and the opinion should be self evident from the following.
If the AR "VPL", has same / similar wording to that as quoted below; then, 'the "VPL" as applied to blanket coverage' is easy to discern.
"VPL" - "(1) .... in the event of a total loss of any building .... insured by an insurer to a covered peril .... the insurer's liability, if any, under the policy for such total loss shall be in the amount of money for which such property was so insured and specified ...."
"(3) .... the provisions of subsection (1) .... do not apply when ...."
"(3b) .... two or more buildings .... are insured under a blanket form for a single amount of insurance".
Hope this helps. If the AR "VPL" wording does not have language as above, you will have to give me more detail to chew on. |
Edited by - CCarr on 02/12/2003 21:51:49 |
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ChuckDeaton
USA
373 Posts |
Posted - 02/12/2003 : 18:33:12
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| Clayton, the only case I can find on the internet that relates involves a farmer that owned three chicken houses. The farmer listed the three houses with seperate values on his application. However, the underwriter insured the three houses on a blanket policy with an aggregate amount. One of the houses burned. In a valued policy state how would you determine the amount owed on the one burned house? |
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CCarr
Canada
1200 Posts |
Posted - 02/12/2003 : 20:05:17
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(* this is an edit of original to clarify & correct data *)
Notwithstanding that case that Jim provided following this post for consideration ....
Well Chuck, I think it is straightforward, but first from an examination of the AR VPL, do you agree that it does not apply based on the wording I supplied?
Once you get past that issue, with the relevant AR VPL wording in your possession, then the "Average Distribution Clause" ('ADC') is operative, you will likely find that clause in the blanket wording, as the 'ADC' is intended to replace (and logically) co-insurance situations where blanket coverage exists.
The 'ADC' apportions the total amount of insurance, when a loss occurs, by the ratio of values of each building, to all buildings.
Lets see if we can create an example, as simple as possible.
3 henhouses insured on blanket for $30K.
For simplicity lets say they are all of same construction style, material, age ... all those things.
1st henhouse 8x20' = 160 sq'
2nd henhouse 12x8' = 96 sq'
3rd henhouse 12x12'= 144 sq'
Each being similar construction etc, the value prior to the loss was established at $80/sq' each. Therefore,
1st henhouse (value prior to loss) = $12800
2nd henhouse (value prior to loss) = $ 7680
3rd henhouse (value prior to loss) = $11520
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total values of blanket property = $32000.
What proportion does each bear to the total?
1st = 40%
2nd = 24%
3rd = 36%
1st henhouse destroyed, you have 40% of your $32K value, or $12K as the amount of insurance for this structure.
According to 'ADC' wording, the insured would receive the least of;
(a) ACV (value prior to loss = $12800)
(b) the interest of the insured in the property ($12800)
(c) the amount of insurance (apportioned amount = $12000)
Therefore, the insured would receive $12000.
That, if you are allowed in AR, to follow the VPL wording, that says it would not be effective in blanket insurance instances; is how I would handle this. |
Edited by - CCarr on 02/12/2003 22:09:41 |
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JimF
USA
1014 Posts |
Posted - 02/12/2003 : 21:34:42
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Here is a portion of a decision handed down by the Supreme Court of Arkansas on June 7, 2001. While the case is not completely 'on point' it is nevertheless instructive and amazingly, almost unbelievable in conclusion.
I'll leave it to readers to read and then draw their own conclusions. A weblink to the complete Arkansas Supreme Court decision in this case appears at the end of this post.
ST PAUL REINSURANCE CO., Inc.
v. Cheryl IRONS, Individually,
and d/b/a Riverfront Phase II
00-1478 ___ S.W.3d ___
(Questions before the court) (My wording)
Insurance -- valued-policy statute -- purpose. -- The underlying purpose of Ark. Code Ann. § 23-88-101 (Repl. 1999) is to protect an insured faced with the total destruction of his or her property; statutes of this sort are passed for the purpose of avoiding the uncertainty of determining the value after the loss; the manifest policy of the statute is to guard against over-insurance of the property.
6. Insurance -- valued-policy statute -- becomes a part of every policy on real property. -- The valued-policy statute becomes a part of every policy of insurance on real property in this State, the same as if it were actually written in the policy; the provisions of the valued-policy statute may not be avoided by contrary policy stipulations; in cases where a total loss is involved, a clause that diminishes recovery to less than the full amountstated in the policy is void; an insurer may not go behind the policy and show that the insured's interest is worth less than the amount of the policy; thus, under the valued-policy statute, even an insured who has a limited interest in the insurable property is entitled to recover the full face value of a policy.
7. Insurance -- valued-policy statute -- order granting appellee summary judgment affirmed where appellant's attempt to limit appellee's recovery was in direct conflict with valued-policy exception. -- Under the valued-policy statute, it is irrelevant who applies for the coverage or who recovers under the policy in the event of a total loss; rejecting appellant's reliance on a federal decision, the supreme court emphasized that any objections to the valued-policy statute should be taken up by the General Assembly, and not by the courts; appellant's attempt to go behind its policy and limit appellee's recovery to a pro rata portion of that policy was in direct conflict with the valued-policy statute; accordingly, the supreme court affirmed the trial court's order granting appellee's motion for summary judgment. [wbj]
(Findings of the Arkansas Supreme Court) (My wording)
Donald L. Corbin, Justice. This case is before us on a petition for review from the Arkansas Court of Appeals. At issue, is whether an insurer is required to pay the full face value of an insurance policy, as provided under Arkansas's valued-policy statute, codified at Ark. Code Ann. § 23-88-101 (Repl. 1999), where the insured obtained two separate insurance policies for one insurable interest. We agree with the court of appeals that this is an issue of first impression; as such, initial jurisdiction was proper in this court pursuant to Ark. Sup. Ct. R. 1-2(b)(1). We affirm.
Appellee Cheryl Irons owned a business that was a combination bar and grill and arcade in Arkansas City. She obtained insurance on her business from Appellant St. Paul Reinsurance Co., Inc., on June 26, 1995. The policy, which was to be in effect until June 26, 1996, provided $105,000 in insurance coverage for the building and $25,000 for its contents. On or about July 12, 1995, Appelleerenewed her previous insurance coverage with General Star Indemnity Company ("General Star") in the amount of $80,000 on the building. A fire completely destroyed Appellee's business on October 25, 1995. After detecting the presence of diesel fuel in the building, investigators determined that the fire was the result of arson. No arrests were ever made in connection with the fire.
Following the fire, Appellee attempted to collect on both insurance policies.1 Appellant and General Star each agreed to pay a pro-rata share of the larger of the two policies, relying on identical provisions in each policy that governed in cases of other insurance. The clauses provided as follows:
1. You may have other insurance subject to the same plan, terms, conditions and provisions as the insurance under this Coverage Part. If you do, we will pay our share of the covered loss or damage. Our share is the proportion that the applicable Limit of Insurance under this Coverage Part bears to the Limits of Insurance of all insurance covering on the same basis.
2. If there is other insurance covering the same loss or damage, other than that described in 1. above, we will pay only for the amount of covered loss or damage in excess of the amount due from that other insurance, whether you can collect it or not. But we will not pay more than the applicable Limit of Insurance.
Appellant paid Appellee a total of $59,594.59, while General Star paid her $45,405.41, for a total payout of $105,000. After the insurance companies failed to pay the full policy values, Appellee filed suit against General Star in 1997, alleging that General Star owed her the remaining balance of the face value of its policy under the valued-policy statute. The trial court agreed and granted Appellee's motion for summary judgment. General Star paid the remaining amount owed to Appellee, without appealing the trial court's order.
Appellee then filed suit against Appellant on February 23, 1999, again alleging that the existence of other insurance did not prevent Appellant from being obligated for the full value of the insurance policy under Arkansas's valued-policy statute. On December 20, 1999, the trial court granted Appellee's motion for summary judgment, thus ordering Appellant to pay $45,405.41, the face amount of the policy, plus prejudgment interest at six percent per annum, in the amount of $10,897.30, and court costs of $125.00. In addition, the trial court ordered Appellant to pay a statutory twelve-percent penalty in the amount of $5,448.65 and attorney's fees in the amount of $15,135.14. Appellant appealed this decision to the court of appeals, who affirmed the order of the trial court on December 13, 2000. This court granted Appellant's petition forreview on January 25, 2001.
This court recently set forth the standard of review appropriate in summary-judgment cases in Worth v. City of Rogers, 341 Ark. 12, 14 S.W.3d 471 (2000):
We have repeatedly held that summary judgment is to be granted by a trial court only when it is clear that there are no genuine issues of material fact to be litigated, and the party is entitled to judgment as a matter of law. George v. Jefferson Hosp. Ass'n, Inc., 337 Ark. 206, 987 S.W.2d 710 (1999); Pugh v. Griggs, 327 Ark. 577, 940 S.W.2d 445 (1997). Once the moving party has established a prima facie entitlement to summary judgment, the opposing party must meet proof with proof and demonstrate the existence of a material issue of fact. Id. On appellate review, we determine if summary judgment was appropriate based on whether the evidentiary items presented by the moving party in support of its motion leave a material fact unanswered. Id. This court views the evidence in a light most favorable to the party against whom the motion was filed, resolving all doubts and inferences against the moving party. Adams v. Arthur, 333 Ark. 53, 969 S.W.2d 598 (1998); Pugh, 327 Ark. 577, 940 S.W.2d 445. Our review is not limited to the pleadings, as we also focus on the affidavits and other documents filed by the parties. Wallace v. Boyles, 331 Ark. 58, 961 S.W.2d 712 (1998); Angle v. Alexander, 328 Ark. 714, 945 S.W.2d 933 (1997). After reviewing undisputed facts, summary judgment should be denied if, under the evidence, reasonable men might reach different conclusions from those undisputed facts. George, 337 Ark. 206, 987 S.W.2d 710.
Id. at 20, 14 S.W.3d at 475.
Section 23-88-101(a) provides:
In case of a total loss by fire or natural disaster of the [real] property insured, a property insurance policy other than for flood and earthquake insuranceshall be held and considered to be a liquidated demand against the company taking the risk for the full amount stated in the policy or the full amount upon which the company charges, collects, or receives a premium.
Appellant's sole argument on appeal is that despite the language of the valued-policy statute, it would be against public policy to allow an insured to receive a double recovery by insuring property with multiple policies. Appellee counters that there is no authority in Arkansas to support the view that the valued-policy statute is suspended in cases of concurrent insurance policies covering the same insurable interest. We agree with Appellee.
There is no dispute that the underlying purpose of section 23-88-101 is to protect an insured faced with the total destruction of his or her property. In Tedford v. Security State Fire Ins. Co., 224 Ark. 1047, 278 S.W.2d 89 (1955), this court stated:
Statutes of this sort are passed for the purpose of avoiding the uncertainty of determining the value after the fire. The manifest policy of the statute is to guard against over-insurance of the property. The agents of the company have the opportunity to inspect the property fully before taking the insurance and fixing the amount of the premiums. It is the valuation fixed in advance by the parties by way of liquidated damages in case of a total loss by fire of the property insured without the fault of the insurer.
Id. at 1049, 278 S.W.2d at 91 (quoting Farmers' Home Mut. Fire Ass'n v. McAlister, 171 Ark. 574, 285 S.W.5 (1926)).
This court has held that the "valued policy statute `becomesa part of every policy of insurance on real property in this State, the same as if it were actually written in the policy.'" Id. at 1049, 278 S.W.2d at 90-91 (quoting E.O. Barnett Bros. v. Western Assur. Co., 143 Ark. 358, 220 S.W. 465 (1920)); Sphere Drake Ins. Co. v. Bank of Wilson, 312 Ark. 540, 851 S.W.2d 430 (1993). Our case law is clear that the provisions of our valued-policy statute may not be avoided by contrary policy stipulations. Tedford, 224 Ark. 1047, 278 S.W.2d 89; Thurston Nat'l Ins. Co. v. Dowling, 259 Ark. 597, 535 S.W.2d 63 (1976). In cases where a total loss is involved, a clause that diminishes recovery to less than the full amount stated in the policy is void. Id. More specifically, this court has held that a policy provision limiting an insurance company's liability to a pro-rata share of the insurance in force was void where the dwelling was totally destroyed by fire. See Interstate Fire Ins. Co. v. James, 252 Ark. 638, 480 S.W.2d 341 (1972). Furthermore, an "insurer may not go behind the policy and show that the insured's interest is worth less than the amount of the policy." Tedford, 224 Ark. at 1050, 278 S.W.2d at 91 (citing 29 Am. Jur. Insurance § 1196). Thus, under the valued-policy statute, even an insured who has a limited interest in the insurable property is entitled to recover the full face value of a policy. Id.; see also Gravning v. American Druggists' Ins. Co. 259Ark. 523, 534 Ark. 754 (1976).
While our case law is clear in the above-enumerated respects, a case involving one insured obtaining multiple coverage on a single insurable interest has not previously been decided by our court. A federal court in this state has considered such an issue in Underwriters at Lloyd's, London v. Pike, 812 F. Supp. 146 (W.D. Ark. 1993). In Pike, the insured obtained insurance coverage for two poultry houses and their contents in the amount of $60,000 from Farmers Mutual Insurance Company. One year later, the insured obtained a second policy for the same property in the amount of $102,000 from Lloyd's of London. A month after the insured obtained the second policy, the covered property was totally destroyed by a fire. Each policy contained an escape clause avoiding liability for a loss if there was other insurance covering the poultry houses. The Eighth Circuit Court of Appeals determined that the escape clauses were mutually repugnant and remanded the matter to the district court, ordering it to prorate the loss between the two policies. The district court then determined the amount to be prorated was to be "no less than the greater of the face amounts of the two insurance policies in effect at the time of the loss." Id. at 151.
Appellant now urges this court to adopt the reasoning of thecourt in Pike, wherein the district court distinguished state court cases interpreting the valued-policy statute:
In spite of what those cases say, the court notes from a careful reading of them that they are not on point because none of them involve the insuring with more than one policy one insurable interest by one insured. Instead, in each of those cases, the property owner or one of several property owners, had insured his or her insurable interest in the property and had obtained an insurance policy to cover that interest, and then another individual or entity with a separate insurable interest had also obtained a policy of insurance insuring that different interest. In spite of the all-inclusive language of those cases, this court doubts that the Arkansas Supreme Court, when squarely faced with this issue, would allow what is clearly and blatantly a double recovery of the loss of one insurable interest. To do so would be to allow something akin to a lottery or wager. One property owner with one insurable interest could obtain multiple policies insuring the property at its full value and then wait for (and perhaps hope for) a fire, with all of the attendant temptation to "help the odds."
Id. at 150.
The district court specifically distinguished the cases of Mann v. Charter Oak Fire Ins. Co., 196 F. Supp. 604 (E.D. Ark. 1961), aff'd 304 F.2d 166 (8th Cir. 1962), and Hensley v. Farm Bur. Mut. Ins. Co., 243 Ark. 408, 420 S.W.2d 76 (1967). In Mann, the plaintiff homeowners insured their home for $15,000 and First Federal Savings and Loan, as mortgagee, obtained coverage of $8,000, the principal amount of the loan, from Charter Oak Insurance Company. When the plaintiffs' house was destroyed byfire, they recovered the $15,000 in proceeds from their insurance policy, paid off their debt to First Federal, and then sued to recover the $8,000 policy amount from Charter Oak. In allowing the plaintiffs to recover under both policies, this court stated that Arkansas's valued-policy statute was applicable, and the measure of the loss was the aggregate of the concurrent policies in force, with each insurer being liable for the full amount of its policy.
Similarly, in Hensley, 243 Ark. 408, 420 S.W.2d 76, two different insurance policies covered the same insurable risk, a rent house. The owners of the home insured it with Farm Bureau Mutual Insurance Company in the amount of $2,000. They subsequently entered into a sales contract with a third party, agreeing to sell the house to him for $2,000. Thereafter, the buyer, without the knowledge of the sellers, obtained insurance on the home in the amount of $2,000 from Glen Falls Insurance Company. The house was then completely destroyed by fire. Glen Falls paid the $2,000 face amount of the policy to the buyer, who, in turn, paid the balance due on the sales contract to the sellers. The sellers then attempted to recover under their insurance policy with Farm Bureau, who denied payment on the basis that the property was covered by other insurance. This court held that Farm Bureau wasrequired to pay the face value of its policy under Arkansas's valued-policy statute. In reaching this conclusion, this court relied on the decision in Mann, noting that each insured had a separate insurable interest for the full amount of each policy.
The court in Pike, 812 F. Supp. 146, found Mann and Hensley to be distinguishable because neither case involved one insured insuring one insurable interest with multiple policies. While this may be true, such a distinction fails to recognize that in each of those cases, as well as in the instant matter, there was a single piece of property insured by multiple policies. Under the valued-policy statute, it is irrelevant who applies for the coverage or who recovers under the policy in the event of a total loss. Any objections to the valued-policy statute should be taken up by the General Assembly, and not by the courts. Appellant's attempt to go behind its policy and limit Appellee's recovery to a pro-rata portion of that policy is in direct conflict with our valued-policy statute. Accordingly, we affirm the trial court's order granting Appellee's motion for summary judgment.
Glaze, J., concurs.
Tom Glaze, Justice, concurring. St. Paul Reinsurance Co., Inc. argues the federal district court decision of Underwriters at Loyds, London v. Pike, 812 F. Supp. 146 (W.D. Ark. 1993), presentsa situation identical to the one now before us, and our court should follow it. Here, as was the case in Pike, the insurer argues that the insured obtained two separate valued policies on the same property, and because the insurable interest is the same in both policies, the insured is able to receive a double recovery or "windfall," which exceeds the total value of the insurable interest. St. Paul urges there is an inherent risk in overinsuring property, and further suggests that such added risk and possible double recovery can be removed if the insured's recovery in these circumstances is limited to receiving a pro rata amount from each insurer. Cf. Underwriters at Lloyd's, London v. Pike, 977 F.2d 1278 (8th Cir. 1992). The insured, Cheryl Irons, on the other hand, counters that she is in no way enriched by the receipt of monies to which she is entitled, and in paying premiums for the two valued policies, insurers St. Paul and Gold Star were being paid for the risk they underwrote.
There is no dispute in the instant case that the premiums being paid by the insured, Cheryl Irons, for the two fire insurance policies in issue were based on the policies' valued amounts, $105,000 (St. Paul) and $80,000 (Gold Star). There is no issue orquestion raised concerning the value of Irons's property;2 nor is there any suggestion that fraud played a part in Irons's loss or claim. At this point, it also seems fair to say that valued policies, such as the ones held by Irons, are issued primarily to avoid potential disputes regarding the value of covered losses. Because Arkansas' valued-policy statute authorizes a liquidated demand against the insurer who takes the risk for the full amount stated in the policy, I agree with the majority opinion that the statute requires full payment under both St. Paul's and Gold Star's policies. See 12 Lee R. Russ, Couch on Insurance § 175:106 (3d ed. 1995) ("[u]nder a `valued-policy law' which is meant to fix the measure of damages in case of loss, the aggregate amount of insurance written is conclusive as to the value of the property and if there are multiple insurers, each is liable to the full amount of the policy").
If an insurer is concerned that an insured's recovery under two or more policies could lead to abuses where double recovery might result, nothing precludes an insurer from asking the applicant seeking fire insurance whether the insured has (or intends to obtain) other insurance coverage on the same insurablerisk. Cf. Pike, 977 F.2d at 1279. Moreover, when such insurance is renewed, it is a simple matter to again inquire of the insured if he or she has obtained (or intends to obtain) other insurance. Obviously, if the insured answers yes, the insurer can then decide if it still wishes to underwrite the insured's property risk. If an insured answers no, but later is shown to have acquired a second policy, the insurer can deny coverage and payment because of the insured's misrepresentation.
In short, I fail to see the potential abuses foreseen by the federal district court in Pike and now forecast by the insurer St. Paul. As far as the interplay between the valued-policy law and a pro rata clause in a fire policy, the stated valuation in the policy controls in the absence of a showing of fraud, misrepresentation, collusion, mistake or criminal conduct on the insured's part. See Tedford v. Security State Farm Ins. Co., 224 Ark. 1047, 278 S.W.2d 89 (1955); see also 12 Lee R. Russ, Couch on Insurance § 175:106 (3d ed. 1995) ("an exception to the valued-policy law applies, and the insurers are entitled to prorate payment under the policies' `other insurance' clauses, where the policies have been purchased from separate companies and the existence of such purchase was not disclosed to the insurers issuing such policies"). In any event, the remedy St. Paul nowseeks from this court is clearly not one that may be extended and can only be authorized by the General Assembly. Id. at 1050-1051.
1 Appellee only attempted to collect on the proceeds for the building itself. She never filed a claim to recover the $25,000 in proceeds for the building's contents.
2 The record reflects an appraisal letter indicating the total loss amounted to $92,983.29.
http://courts.state.ar.us/opinions/2001a/20010607/00-1478.html
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Edited by - JimF on 02/12/2003 21:37:48 |
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JimF
USA
1014 Posts |
Posted - 02/12/2003 : 21:49:08
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Clayton, who would ever believe that your chicken house scenario has also be adjudicated (somewhat) by the U.S. District Court in Arkansas.
In a story entitled,
Insurance Policy Application Ruled Not Part of Policy
The National AgLaw Reporter writes:
The United States District Court for the Western District of Arkansas has granted an insurer's motion for summary judgment and denied the insureds' motion for summary judgment in an action brought by the insureds seeking recovery for losses they suffered when one of their poultry houses was destroyed by fire. Forrest v. Northland Cas. Co., 213 F.Supp.2d 1023, 1023-24 (W.D. Ark. 2002). The court ruled that the plaintiffs' insurance policy application, including all of the property valuations contained in that application, did not become a part of the insurance policy, and therefore the Arkansas valued policy law, Ark. Code Ann. § 23-88-101, did not apply. Id. at 1024-25.
Read the entire story here:
http://www.nationalaglawcenter.org/news/cases/forrest.htm |
Edited by - JimF on 02/12/2003 21:51:43 |
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JimF
USA
1014 Posts |
Posted - 02/12/2003 : 22:05:45
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For information purposes, 18 states have some form of 'valued policy law.'
The 18 states are:
Arkansas
Florida
Georgia
Kansas
Louisiana
Minnesota
Mississippi
Missouri
Montana
Nebraska
New Hampshire
North Dakota
Ohio
South Carolina
South Dakota
Texas
West Virginia
Wisconsin
(Source: General Cologne Re)
For more information and a state by state comparison of valued policy laws, follow this link to the General Cologne Re website on valued policy laws:
http://www.gcr.com/sharedfile/pdf/InsIssuesMay2002ValuedPolicyLaws.pdf
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ChuckDeaton
USA
373 Posts |
Posted - 02/13/2003 : 06:53:21
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Just for the record, Jim and Clayton, I was involved in the Cheryl Irons case. I replaced another independent. I don't remember the exact date of loss but it took this case about 6 years to wind its way thru the Arkansas court system. By the way, Bill Holloway and Roy Gene Sanders are, in my opinion, two of best attorneys in this part of the world. Bill for the plaintiff and Roy Gene for the defense. When I have more time I will tell the tale as an accumulation of adjuster and agent errors coupled with arson produced this court case.
It seems incongruent that the State Court System and the Federal Court system would view the issue of concurrent policies and a Valued Policy Law from different angles resulting in different application of the same laws.
I had hoped that one of the two of you or someone else would discover something or say something that would spark my thoughts and help me forge a path thru the situation I am facing claimwise at the moment. Perhaps once we are out the other side I can share decisions made and the results. The story will be illuminating and would assist others in handling large claims. At the moment my client has a million plus on the line and I best play my cards close to my vest.
Kudos to Roy for creating and maintaining this website. |
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JimF
USA
1014 Posts |
Posted - 02/13/2003 : 07:12:36
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Chuck, your ability to provide the 'inside scoop' on the Cheryl Irons case should be most interesting and instructive for all of us, and I cannot wait to hear your story.
From what I read last night from the General Cologne Re Insurance Issues article, it would appear that only 5 of the 18 valued policy states have had any litigation and/or case law on the issue of blanket policy and the valued policy. From their article, which was researched and written by the national law firm of Grotefeld & Denenberg, L.L.C., the article 'suggests' that of the 5 states which have litigated this issue, in all cases the state courts 'suspended' the valued policy state statutes.
There is contact information contained within that article for those who have further questions, or want more information, including copies of any of the 18 state's valued policy laws.
One of the reasons I posted both the state and federal cases, was to contrast how two similarly sited courts could produce the two very different results from a review of the same statute under different situations with somwhat similar concurrent issues.
Hope this helps, and I look forward to your sharing of the inside story on Irons. |
Edited by - JimF on 02/13/2003 07:39:07 |
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ChuckDeaton
USA
373 Posts |
Posted - 02/13/2003 : 07:31:23
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| Jim, you have hit on my current dilema. One point that can be made in relation to the Irons case is that the Federal decision was handed down prior to the Irons case. State case law was not on point. My memory is not good enough to remember why the decision was made to try it in Federal court, it may not have been our decision, Bill Holloway may have beaten us on some point of law that forced us to roll the dice in state court, but St Paul was confident that the state courts would follow the federal court line. As you noted above the state court did not follow the federal line. |
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JimF
USA
1014 Posts |
Posted - 02/13/2003 : 07:38:07
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| Chuck, sounds like you're going to get some new judge made law down there! |
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ChuckDeaton
USA
373 Posts |
Posted - 02/14/2003 : 07:38:36
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The current situation is a total loss to the building and contents by fire. The contents are not covered by the valued policy law. The building may be covered. The coverage is a blanket with stated values for each building. The stated values are a part of the policy and premium is charged on the stated value. This may bring the coverage on the building under the valued policy law.
Considering that the valued policy law does apply is the loss the stated amount shown in the policy? Or is the loss the determined replacement cost of the building and if the loss is the determined replacement cost of the building what happens if the determined replacement cost is less than the stated value? Does the stated value form a floor, a minimum amount payable?
Any opinions? |
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Valued Policy Law as applied to blanket coverage
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