Not flood related. Low ball estimates and being "unfair" I can,t comment much.

Posted By Ray Hall on 18 Jun 2009 05:03 PM
Not flood related. Low ball estimates and being "unfair" I can,t comment much.

The Texas IKE lawsuits are not an economic thing, or being driven by "recession". This is a new ball game, treble and punitive damages + attorney fees.

Sadly, many of the claims and resultant suits, demands for appraisal, and other related tactics, are naught but the resurrection
of the 2004-05 debacle, which we experienced in Fl.

Many of the IKE claims were Mal adjusted and many also were the result of the changes made by some of the carriers, one being that of last resort.

It has become well known that the process of review was done by personnel who had little or NO property experience, and also many had never
been in the field.

Having experienced first hand the lack of quality control, the redundant rejections, the dumbing down of the examiners expertize, this comes
as no surprise.

There is one law firm that has over 1000 claims against one (1) Carrier, and the initial findings do not bode well for that carrier.

It is not dissimilar to one carrier admitting recently, in open court, in Mississippi, under oral argument that they purposefully placed wind coverage
unto the backs of the NFIP, which by the way , is paid for by you and I , with tax dollars. ( That notice was posted here on CADO,
in the news section a few weeks ago.

Why is it OK for the carrier to burden the NFIP, and consequently, ourselves, with false claims? Follow the money and all answers are the same, GREED.

The intentional non -payment of just claims is pure and unequivocal fraudulent behavior, In my opinion.

I can only speak for what I have seen, but most of the claims are merely arguments of flood vs. wind. Mostly what it seems to me, is that the TWIA and NFIP are trying to pass their damages onto each other. The loser is of course the consumers., as TWIA is paid for by Texas policyholders and the NFIP is paid for by taxpayers.

An adjuster could work through a career and not come across a situation where the anti-concurrent causation clause applied.

It amazes me that, as applied to the Mississippi Katrina occurrence, experienced adjusters, from mutual insurance companies, denied otherwise covered losses, based on an anti-concurrent causation clause. Clearly the wind loss and the flood loss did not occur at the same instant.

As I have never handled a claim that involved the anti-concurrent causation clause will some one step up to the plate and make an explanation.

Is anti-concurrent cause language 'unethical'?

MAY 2007 | VOLUME 9, ISSUE 5

FEATURE STORIES

Beware of Anticoncurrent Causation
Clauses--They Can Erase Your Property
Insurance Coverage

By Finley Harckham

Before there were viruses that spread over the Internet to corrupt computers and other
data, there were provisions in property insurance policies that have a similar impact.
Known as anti-concurrent causation clauses, they appear in a preamble to the exclusion
section of policies and are intended to bar coverage beyond instances where there is an
excluded cause of loss, to every situation in which an excluded peril is only one cause, or
is even the result of a covered cause of loss. Those provisions lie at the heart of the wind
and rain versus flood debate raging in the Gulf Coast in the wake of Hurricane Katrina,
but their reach goes much further. In fact, if applied as written, some of those clauses can
render most property and business interruption coverage practically illusory.
Policyholders must be alert to the presence of those clauses when buying property
coverage, and aware of how the courts are interpreting them when claims are made.

Anticoncurrent Causation Clauses--The Most Common
to the More Onerous

A number of different anticoncurrent causation clauses are in use today, and some are
more onerous than others. One of the more commonly used clauses is found in the
Insurance Services Office Causes of Loss-Special Form (CP 10 30 04 02). It states:

We will not pay for loss or damage caused directly or indirectly by any of the following.
Such loss or damage is excluded regardless of any other cause or event that contributes
concurrently or in any sequence to the loss.

Following that provision is a list of exclusions. This provision bars coverage whenever an
excluded peril directly or indirectly causes damage. Although this is a very unfavorable
clause for policyholders, unlike other forms at least it is limited in scope to excluded
causes of loss, which in many instances will leave room for argument over whether an
event was a cause or an effect.

A more problematic clause is found in State Farm property policies. It provides:

We do not insure under any coverage for any loss which would not have occurred in the
absence of one or more of the following excluded events. We do not insure for such
losses regardless of: (a) the cause of the excluded event; or (b) other causes of the loss; or
(c) whether other causes acted concurrently or in any sequence with the excluded event to
produce the loss; or (d) whether the event occurs suddenly or gradually, involves isolated
or widespread damage, arises from natural or external forces, or occurs as a result of any
combination of these.

That clause is followed by a number of exclusions. Unlike most policies, the exclusions
are not limited to "perils," but include "events" that occur along with causes of loss.

The "Purported" Intentions of Anticoncurrent
Causation Clauses

Anticoncurrent causation clauses are so named because they are intended, among other
things, to be a response to the rule in most jurisdictions that in instances of concurrent
causation--where multiple forces independently cause a loss, one of which is a covered
peril and the other is not--the insurance policy must respond. For example, in one case a
policyholder modified a gun to have a hair trigger, and then put the gun in a car which he
drove recklessly. The gun discharged, injuring a passenger. The insured's homeowner's
policy did not cover liability resulting from the use of automobiles. In awarding coverage
under that policy the court reasoned that although "multiple causes may have effectuated
the loss [that] does not negate any single cause"--in that case, the covered negligence in
modifying the gun. See State Farm Mut. v. Partridge, 514 P. 2d at 130-131 (1973). An
anticoncurrent causation clause would reverse the ruling in that case and bar coverage
because an excluded peril, the use of an automobile, was a cause of the loss.

However, at least some anticoncurrent causation clauses are intended to go beyond
reversing the concurrent causation rule, to bar coverage when an excluded event is
merely a consequence of a covered cause of loss, or follows damage caused by an insured
peril. As one court explained in the context of a Hurricane Katrina claim of a family that
had coverage for wind and rain, but not flood, if the anticoncurrent causation clause in
the family's policy was enforced, it "would mean that an insured whose dwelling lost its
roof in high winds and at the same time suffered an incursion of even an inch of water
could recover nothing..." Leonard v. Nationwide Mutual Ins. Co., 438 F. Supp. 2d 684 (S.
D. Miss. 2006).

There are many other scenarios in which coverage could be forfeited under an
anticoncurrent causation clause. For example, when a covered wind and rain event causes
the interior of a building to become damp, and mold develops, if dampness or mold are
excluded, there would be no coverage even though mold was the effect, not the cause, of
loss. Likewise, when a broken water pipe under a home, which is a covered cause of loss,
washes away soil beneath the foundation, the resulting damage would be barred from
coverage if the policy contains an anticoncurrent causation clause and an earth movement
exclusion. See Kula v. State Farm, 628, N.Y. S. 2d 988 (4th Dep't 1995).

The Three Rationales Applied by the Courts

Anticoncurrent causation clauses have been the subject of numerous lawsuits in which
policyholders argue that it would be unfair or unlawful to allow such provisions to
eviscerate their coverage. Some of the clauses have been upheld under the laws of a
number of states, including Alaska, Arizona, New York, Nevada and Utah, and
invalidated under the laws of other states, including California, Mississippi, West
Virginia and Washington. However, most of the cases involve the State Farm provision
quoted above. That provision is broader than the ISO form and some other clauses, so
cases interpreting it may not have wider application. Adding to the uncertainty, in a
number of states there are no cases interpreting any of the clauses.

As a general rule, the courts have applied three rationales when deciding this issue, which
may give some indication of how courts will act in other jurisdictions. First, some states,
including California and Washington, have adopted a statutory or common law rule that
insurance policies must provide coverage if the efficient proximate cause of loss is a
covered peril. Courts in those jurisdictions have held that anticoncurrent causation
clauses violate that rule, and therefore are unenforceable.

Second, under the law of many states, an insurance policy must be interpreted in a
manner that is consistent with the reasonable expectations of the policyholder. This
doctrine is intended to compensate for the fact that most insurance policies are contracts
of adhesion, drafted by the insurer and sold on a take it or leave it basis. Some courts,
such as those in Mississippi, have concluded that anticoncurrent causation clauses are
unenforceable because they defeat the policyholder's reasonable expectations of coverage
when a covered peril is the proximate cause of loss. However, other courts, including
those in Alaska, have found the clauses to be enforceable under the reasonable
expectations doctrine. Those courts have concluded that the clauses are clear and
unambiguous, and therefore policyholders could not reasonably expect coverage for risks
excluded by them.

Third, other courts which enforce these clauses do so under the laws of states which lack
a proximate causation rule and which reject the reasonable expectations doctrine in favor
of a rule that insurance policies are to be interpreted under the same rules as all other
contracts. To these courts, anticoncurrent causation clauses are enforceable because they
are clear and unambiguous, and entered into by parties who are free to contract as they
wish.

Not all property policies contain anticoncurrent causation clauses. Avoiding those
provisions should be a high priority when selecting coverage.

Conclusion

When a loss occurs, policyholders should keep two things in mind when evaluating
coverage in light of an anticoncurrent causation clause. First, the different clauses in use

may lead to different results depending upon the facts of a claim. So, do not assume that
just because a court has enforced one clause it would hold that another clause bars
coverage. Second, not all courts will enforce these clauses. Moreover, in many instances
more than one state's law is potentially applicable to a loss. So, the policyholder should
examine the laws of all states which might be applied to determine whether a viable
claim exists. For example, a policyholder headquartered in California might get the
benefit of that state's law rejecting the enforceability of anticoncurrent causation clauses
for a loss suffered at a facility in Arizona. Policyholders must be as resourceful in
securing coverage as insurance companies are in denying it.

ABOUT THE AUTHOR

Finley Harckham is a senior shareholder in the New York office of Anderson Kill &
Olick, P.C. Mr. Harckham is also the president of Anderson Kill Insurance Services
(AKIS), a non-legal subsidiary of AKO which assists clients with risk management
services, and Anderson Kill Loss Advisors (AKLA), a non-legal subsidiary of AKIS
which assists policyholders with property loss and business interruption claims.

Reprinted with permission from the March/April 2007 issue of Policyholder Advisor,
published by Anderson Kill & Olick, P.C.

Posted By Ray Hall on 22 Jun 2009 10:45 AM
The Texas IKE lawsuits are not an economic thing, or being driven by "recession". This is a new ball game, treble and punitive damages + attorney fees.

National Insurance Crime Bureau Data Shows Increase in Fraudulent Claims Linked to Poor Economy

Suspicious car fires up 27 percent, slip and falls up 77 percent and hail damage claims soar 407 percent

 

DES PLAINES, Ill., April 28 /PRNewswire-USNewswire/ -- Is the poor economy driving people to commit insurance fraud? While there has been considerable speculation within the insurance industry, law enforcement and the news media that money woes have forced some people to break the law in order to collect on insurance policies, to date, there has been no solid statistical evidence to back up that speculation.

 But a new report by the National Insurance Crime Bureau (NICB) clearly shows an increase in the number of questionable claims (QCs) related to possible cases of insurance fraud during the past year as the economy continued its downward spiral. An analysis of QCs submitted by the more than 1,000 NICB members companies in the first quarter of 2009, versus the first quarter of 2008, shows a definite increase in claims related to what is termed "opportunistic fraud."

 AND

 

Bad Economy Means Higher Insurance Claims

Coincidence Or Fraud? Industry Suspects Rip-Offs

By Tyler Lopez, 7NEWS Reporter

POSTED: 12:51 pm MDT April 28, 2009

UPDATED: 4:52 pm MDT April 28, 2009

 DENVER -- As things get tight at home, one industry fears some people may be trying to wring every last dime from their last resort against unexpected loss: the insurance company.

 Insurance hail claims saw the biggest spike, jumping an incredible 407 percent in the first quarter of 2009 versus 2008. According to the report by the National Insurance Crime Bureau released Tuesday, the number of questionable claims that could indicate insurance fraud skyrocketed across the United States as the economy tanked.

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 The broader category of catastrophe -- including tornado, hail, wind and fire -- saw a 463 percent spike.  A homeowner with relatively minor hail damage may now be trying to stick the insurance company for an entirely new roof, for example. Suspicious disappearance or loss of jewelry was up 39 percent. Slip and fall claims were up 60 percent. Suspicious vehicle fires jumped 27 percent.  Material misrepresentations in depositions or recorded interviews was up 55 percent.  “Desperate times sometimes cause people to take desperate measures,” said Joe Wehrle, NICB’s President and Chief Executive Officer. “Unfortunately, committing insurance fraud is not the solution to anyone’s problems, it only leads to more problems if you’re caught."

 Some people think it is ok to cheat an insurance company, but the fact is, they are breaking the law, risking jail time, and causing everyone else to pay more for their insurance coverage,” he said. The NICB, based in Des Plaines, Ill, said the numbers back up what insurance agents have been saying for months: that the recession has turned typical claims into larger ones or even caused some to try and cash out of a high car payment.

 The report covers claims that were previously reviewed by the more than 1,000 individual insurance companies and self-insured groups and classified as possibly fraudulent. According to the Rocky Mountain Insurance Information Association, Colorado is one of only four states where fraud is not a specific crime. "So we don't have conviction stats specific to fraud in Colorado. Fraud is often considered a victimless crime but we all pay for it through higher insurance rates," said Carole Walker, Executive Director of the RMIIA. "People should also be aware that companies have special investigators dedicated to fraud and they work in cooperation with law enforcement."

 

Ike was no Diffrent! The Path of IKE on up to Columbus and the great Lakes all States has experienced Higher Claim Settgelments, and Much Higher Litigation. No Doubt Lawyers have something to do with it all, but the economy I feel contributes a great deal! Just My opinion

My question regarding the anti-concurrent causation clause is day to day. Wind is a covered peril and wind blows the roofing off. Once the roofing is off, water leaks into the risk and causes mold, which is excluded, by endorsement. Does the anti-concurrent causation clause kick in? Should the loss be denied, wind and mold?

Posted By ChuckDeaton on 23 Jun 2009 07:55 PM
My question regarding the anti-concurrent causation clause is day to day. Wind is a covered peril and wind blows the roofing off. Once the roofing is off, water leaks into the risk and causes mold, which is excluded, by endorsement. Does the anti-concurrent causation clause kick in? Should the loss be denied, wind and mold?

Because I have not read a State Farm or Nationwide policy in some time, I will not speak to those. For the last year and a half I have been dealing exclusively with commercial policies that have a CP 1030 04 02 Special Causes of Loss form attached. The "anti-concurrent cause" language of that policy states:

"1. We will not pay for loss or damage caused directly or indirectly by any of the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss."

Following this are the list of exclusions. The article Tom copied above sounds like plaintiff counsel propaganda. The clause is very easily interpreted to mean we will not pay for damage due to an excluded cause of loss even if there is also present damage from a covered cause of loss. This clause was made necessary by decisions such as those in Florida and other jurisdictions that might require the wind carrier to buy the whole claim if even one roof shingle was blown off, but flood waters 18 feet deep inundated the house. Like many clauses of the policy (Case in point, the $15,000 mold remediation sublimit) this language was not inserted into the policy in order to cheat or defraud anyone. It was written into the policy to keep the courts from capriciously granting excessive coverage for losses the carriers never intended to cover, risks that would have needed a much higher premium if the carrier had known they would be required to cover them. It was court decisions that made this language necessary, not the other way around.

The intention of the anti-concurrent clause is not to take away coverage for covered causes of loss or coverage for losses that are in an unbroken chain of events originating with a covered cause of loss and proceeding directly from that cause of loss. It was intended to prevent payment of non-covered losses just because there happens to also be a covered loss that occurs at the same time or virtually the same time.

Can someone tell me how long we are obligated to keep file records pertaining to Ike losses. I'm being asked for records eight years old.