Self-appointed insurance coverage business spokesperson, the very succesful lawyer Steve Badger, made the next remark about Monday’s Colorado Supreme Courtroom choice:
A really unlucky outcome-oriented choice at this time out of the Colorado Supreme Courtroom making use of the notice-prejudice rule to property insurance coverage insurance policies regardless of the insurance policies having a one yr discover of declare requirement. Confronted with such a easy and clear coverage requirement, the courtroom needed to interact in some fairly strenuous psychological gymnastics — together with equating owners with hail claims to tort victims and utterly conflating legal responsibility protection rules with property protection rules — to get to its desired consequence. A robust dissent will get it proper. The contract must be utilized as written and agreed. In Texas, we’ve robust Fifth Circuit choice that will get it proper — a one yr discover of declare requirement establishes a particular deadline for discover. Interval. Finish of the evaluation.
Sadly, this choice will simply result in extra trolling by Colorado roofing contractors lengthy after a storm has handed searching for potential claims involving roofs that probably weren’t even within the path of the storm. With such conduct elevating the likelihood, because the dissent correctly predicted, of ‘destabilizing Colorado insurance coverage markets.’ Notably, the choice was restricted solely to residential claims. A robust argument could be made that the coverage causes supporting the courtroom’s choice don’t apply within the business insurance coverage context.
I used to be involved that Steve was truly “unhappy” about this predictable consequence since it’s how most states view the authorized late discover subject. So, I researched the non-public subject and located this:
Badgers are intently associated to weasel personalities and share the identical vary as their cousins the skunks. What distinguishes badgers from their kin is their extraordinary bodily and emotional energy and tenacious lifestyle’s challenges. Good wanting, small to medium sized people, they stroll and discuss as in the event that they personal the world and their powerfully constructed our bodies and dominating personalities again down for none, even for the a lot bigger persona of the lion. Badgers will confidently enter the territory of others and woe betide anybody who blocks their path.1
Looks as if the proper description of my “good wanting” and “dominating” persona opposing colleague. He’s simply not going to surrender after dropping. He’s additional suggesting that when John Jones, the home-owner, goes into his enterprise, John turns into immediately subtle. These badgers ought to know that their skunk cousins don’t turn into extra subtle simply because they’re referred to as by a special identify after they go away dwelling.
For many who are usually not conscious of the authorized subject, I counsel you learn Matt Stalcup and Jon Bukowski’s article, Colorado Supreme Courtroom: Late Discover, No Prejudice, No Drawback, which summarized the Colorado holding:
[T]he Colorado Supreme Courtroom prolonged the notice-prejudice rule to occurrence-based, first-party home-owner property insurance coverage insurance policies. This opinion now requires Colorado insurers to indicate precise prejudice from delayed discover earlier than denying protection. Now not can Colorado insurance coverage carriers deny protection for claims primarily based solely on a policyholder’s failure to offer well timed discover with out demonstrating that the delay prejudiced the insurer’s capability to analyze or defend towards the declare.
Three years in the past, I wrote, “Ought to Late Discover of Windstorm and Hail Claims Be a Legitimate Protection When the Insurer Is Not Prejudiced?” The article famous that the Arkansas Division of Insurance coverage place is {that a} wind and hail declare reported later than one year after the date of loss could be denied primarily based on a coverage provision that requires a declare be reported inside such time however that the policyholder should be offered the chance to rebut the denial by displaying that there was good trigger for the delay in reporting. I made up this frequent state of affairs, which is repeated 1000’s of instances to insurance coverage firms with hail injury allegedly reported late:
Adjuster—“Woman, why did you wait 20 months to report your hail injury?”
Policyholder—“I didn’t know that hail broken my roof.”
Adjuster—“Do you know there was a hailstorm?”
Policyholder—“You hear and see hail every time, however how are you aware it triggered any injury? It’s not like an airplane smashed via my lounge, leaving a gap within the roof that anyone may see.”
Adjuster—-“So, how are you aware this specific hailstorm triggered the injury? May it have occurred three years in the past?”
Policyholder—“Properly, I noticed that my neighbors began getting roofing firms on their roofs all about the identical time slightly greater than a yr in the past or so. Considered one of them on the procuring heart informed me hail had broken her roof. That’s the reason I referred to as my insurance coverage agent.”
Adjuster—“So, you observed your neighbors getting work on their roofs, however you by no means inspected your personal roof?
Policyholder—“How would you anticipate me to try this? And why would I? It was not leaking!”
Adjuster—“So it’s not leaking now?”
Policyholder—“No, you moron. If it had been leaking, I’d have informed you that was the explanation I reported the declare to the agent. Anyone may have put two and two collectively and figured that the hail broken my roof on the identical time my neighbors had been getting their roofs mounted and paid for by their insurance coverage firms. I informed you my neighbors all had their roofs getting mounted, and anyone may determine that hail doesn’t occur at only one home like a fireplace; it spreads over a neighborhood. I’m 67 years previous and don’t climb a ladder inspecting something. I’ve by no means been on prime of a home and by no means on a roof in my life. I may fall off and kill myself. Simply because I’m older doesn’t imply I’m silly. You by no means ask me all these questions once I pay my premiums. Why don’t you get your butt up there and have a look at my roof?”
Adjuster—“Sorry, I didn’t imply to make you offended. I’ll ship out an skilled roof engineer from HAAG or Rimkus instantly. They may know simply what to do.”
These of us within the policyholder illustration enterprise and in Steve Badger’s insurance coverage protection enterprise know that HAAG and Rimkus ought to get circumstances of champagne from us at Christmastime. They all the time discover causes for the insurance coverage firm to disclaim the declare and begin litigation. Good ole Steve Badger and Zelle Legislation are crying with a smile all the best way to the financial institution after the ruling from the Colorado Supreme Courtroom.
I do know a few of you might be questioning what the heck the title of this put up means. “The Doom and Gloom Assumes a Costume of Plume” metaphorically means that what begins as a troublesome, maybe disheartening scenario (doom and gloom), transforms into one thing to be pleased with, signifying success, achievement, or a optimistic decision (costume of plume). Within the context of insurance coverage and authorized disputes, this phrase must be interpreted to imply that even essentially the most difficult or hopeless circumstances could be rotated, resulting in outcomes that aren’t solely favorable but in addition worthy of celebration and satisfaction. Our agency is consistently on this scenario when first introduced circumstances from purchasers. My hope is that Steve Badger and his pals within the insurance coverage business will see that the woman in my hypothetical state of affairs receives what she ought to have been entitled to if she reported the loss instantly. That’s the reason this Colorado case was determined appropriately.
There may be one other facet of the case that may result in wrongful gamesmanship, which I’ll describe in an upcoming put up.
Thought For The Day
Success, failure, and alter are inevitable in life. It’s how we deal with it, how we study from it, and the way we transfer ahead that issues.
—Elizabeth Gilbert