The insurer adjustments its place relating to the quantity broken or owed. Does that imply the insurer acted in dangerous religion? The reply is clearly ‘no.’ New info that’s professional could change what’s owed to the policyholder.
A current Colorado case mentioned these points.1 Here are the info recited by the decide:
After the hailstorm, El Dueno submitted a declare for property harm to Mid-Century pursuant to its insurance coverage coverage. In response, Mid-Century assigned a claims adjuster, Maggie Fields, to analyze the roof. Ms. Fields discovered hail harm to sure roof surfaces, which she estimated amounted to roughly $22,000 of injury. Mid-Century paid this quantity, much less the coverage’s deductible and depreciation, to El Dueno. Mid-Century additionally paid El Dueno $2,500 based mostly on an estimate to restore rooftop HVAC equipment.
El Dueno’s contractor, CJ Restoration, quickly thereafter offered a far higher estimate, $343,000, to switch nearly the complete roof. Mid-Century then transferred the declare to a special adjuster, Patrick McCourt, who employed Rimkus Engineering to carry out a further inspection. Rimkus had an engineer, William Templeton, examine the roof. He reported that “[t]he roof coverings, including the granule-surfaced modified bitumen membrane and the concrete roof tiles, were not damaged by hailstone impacts.” He additionally discovered that any harm to the roof was pre-existing or resulted from different causes. His report was peer-reviewed by one other licensed engineer, who concurred with its findings. The Rimkus report didn’t handle the earlier inspection by Ms. Fields.
After receiving the Rimkus report, Mid-Century notified El Dueno that the roof repairs weren’t lined below the insurance coverage coverage, however that Mid-Century wouldn’t search to recoup the funds it had already made in the direction of the repairs. Unsatisfied with this consequence, El Dueno filed this go well with, claiming that Mid-Century unreasonably denied advantages in violation of Colo. Rev. Stat. §§ 10-3-1115–16.
Assuming the knowledgeable is competent, totally knowledgeable of the info, not outcome-oriented, and never biased, most courts will discover that an insurer can depend on an knowledgeable’s opinion, and the courtroom famous the identical:
Multiple courts have held that reliance on an engineering report, ready by certified professionals in keeping with established and dependable strategies, is cheap as a matter of regulation, and can’t be the premise for a nasty religion declare. See Musel Master, LLC v. Am. Fam. Mut. Ins., No. 18-cv-2725-RBJ, 2019 WL 9244886 (D. Colo. June 24, 2019); Avalon Condominium Ass’n, Inc. v. Secura Insurance, 2015 WL 5666628 (D. Colo. Sept. 25, 2015); Bell Advisors, LLC v. American Family, 2018 WL 549962 (Colo. App. Jan. 25, 2018). El Dueno’s makes an attempt to differentiate these instances are unavailing. In every of those instances, the insurer, like Mid-Century, retained an engineering agency that finally discovered insurance coverage advantages weren’t warranted—in Musel Master, additionally like on this case, the engineering report contradicted an earlier declare adjuster’s opinion. The plaintiffs in these instances equally alleged statutory religion. But the courts in every case discovered that reliance on a certified engineer’s report discovering no lined harm was cheap foundation to disclaim insurance coverage advantages.
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El Dueno doesn’t cite a single case supporting its place that favoring a extra certified engineer’s opinion versus an inexperienced declare adjuster is unreasonable. Cf. Musel Master, 2019 WL 9244886 (discovering reliance on engineering report was cheap despite the fact that insurance coverage adjuster had beforehand affirmed protection). Nor is that place logical. The goal of retaining an engineering agency for a second opinion is to evaluate the reason for harm extra reliably. If it have been unreasonable for an insurance coverage firm to vary its protection place based mostly on an engineer’s second opinion, it will render the second opinion ineffective.
This case is presently on enchantment after the policyholder misplaced, however there are classes for insurers and policyholders. First, selections for fee or non-payment relating to coverages owed can at all times be modified based mostly on new info as long as the brand new info is professional and correctly vetted.
I’m conscious that problems with waiver and estoppel could come into play. I’m not delving into these points which can change the result of this put up. But these at all times have to be thought-about on this situation.
Second, accusations of dangerous religion ought to by no means be considered automated when an insurer adjustments place based mostly on professional proof and after a full investigation. People will come to completely different and legit conclusions when new proof or opinions come to gentle.
Of course, is the brand new proof actually professional and pretty thought-about by the insurer? This is the place many dangerous religion instances are received and misplaced. It relies on the proof. The policyholder usually has to show the dangerous religion case. Assumptions and projections with out proof is not going to suffice.
Thought For The Day
It is a capital mistake to theorize earlier than one has knowledge. Insensibly one begins to twist info to go well with theories, as a substitute of theories to go well with info.
—Sherlock Holmes
1 El Dueno v. Mid-Century Ins. Co., No 1:21-cv-01532 (D. Colo. Feb. 23, 2024).