Comparing Rotten Apples and Oranges

By: williamjones
August 1, 2009

By: Bill Wilson

You’ve seen the commercials: “Call now and save 15% or more on your car insurance.” Unfortunately, when someone is selling substandard coverage or service, the only marketing ploy is price. Consequently, advertising campaigns lead consumers to believe the only difference between insurance companies is price. Worse, the save 15% mantra implies the agent is totally worthless in the transaction and disregards exorbitant advertising budgets. Here’s proof that you can’t compare apples to oranges, particularly when the apples are rotten.

An agent wrote an insured’s HO policy, but his car was insured with a “save 15%” company. Here’s the claim: “Our insured’s car was stolen and destroyed. The carrier denied the claim because his keys were in the car and there was no sign of forced entry. According to the adjuster, the policy does not cover theft without evidence of forcible entry.”

The ISO PAP has no such prerequisite for theft coverage. However, this carrier’s policy did require evidence of forcible entry in order to trigger coverage. Sadly, it appears the insured is out almost $20,000, but he did (allegedly) save 15%! The moral of the story…read the policy! You might save 15%…unless you have a claim. To read more, click here.

Warehouse Conversion Claims

You insure a mini-storage warehouse owner. The rental/lease contract stipulates that the owner can sell any property stored by a renter/lessee if they fail to pay. Your insured sells the property of a delinquent tenant and is then sued. In addition, he mistakenly sells property of a tenant who had paid on time. Does the CGL or a BOP cover these types of claims? If not, how do you insure them?

For coverage to apply there must first be an occurrence, then an absence of an applicable exclusion. Does this type of loss constitute an “occurrence” as defined by the policy? Might the “care, custody or control” exclusion apply?

For the answers to these questions and more information, click here.

Intra-Family Lawsuits

If a family member does something negligent that injures another family member, can the injured party file a liability claim under their common policy? It depends on the type of policy and/or statutes in the state of jurisdiction.

The ISO homeowners policies have a clear exclusion for liability claims or lawsuits by an insured. The ISO personal auto policy doesn’t have a similar exclusion, though there is an endorsement that accomplishes the same goal.

This type of exclusion has been upheld by courts in a number of states, though in at least one state, when the exclusion was upheld for liability coverage under a PAP, coverage was found under the uninsured motorists section of the policy. For more information on intra-family lawsuit coverage, click here.

Bill Wilson (bill.wilson@iiaba.net) is Big “I” director of the Virtual University, an online learning center for agents and brokers.