LevonP
05-16-2008, 06:02 PM
This article was extracted from International Real Estate Digest and was written by Stuart Lieberman, Esq.
Every property owner or homeowner has insurance these days. This is essential because of the heavy potential for being sued by somebody, seemingly at any time. Insurance is designed to minimize one's personal exposure in case somebody or someone gets hurt on your property or from your property.
Whenever someone or thing is harmed, the normal response is to file a claim with your insurance company. Once the claim is filed, the carrier will process the claim and then make a decision as to whether or not there is coverage. You will either receive a notice that the claim has been approved, or you will receive a claim denial.
When insurance companies deny claims, they must do so for reasons that relate to the insurance policy. Insurance policies are written contracts between the insurance company, also known as the insurer, and the policyholder, also called the insured. If a claim occurs that is covered under the terms of the insurance policy, the carrier must provide coverage.
It is always wrong for an insurance company to deny coverage when no reason exists for denying coverage. When you feel that your insurance company has wrongfully denied your claim, you may have to sue your insurance company. This type of lawsuit is called a declaratory judgment action. You are asking the Court to declare that there is coverage and to order the carrier to pay all necessary costs.
In certain instances, if an insurance company really misbehaves, Courts will allow cases to proceed seeking punitive damages against the insurer even when it ultimately is determined that there is no right to coverage. In these cases, Courts have generally held that insurance companies have a duty to deal with their insureds fairly and in good faith.
This duty of good faith and fair dealing comes from a recognition that insurance companies have a special relationship with their policyholders. Policyholders purchase insurance so that they know that in a time of need, an insurance carrier will be standing next to them. When an insurance company intentionally avoids its obligations by acting in bad faith, this leaves the policyholder in an even worse situation then he/she should be in.
Not uncommonly, insurance issues arise in the context of environmental problems. Homeowners often have contamination from underground storage tanks, such as heating oil tanks. There may also be claims relating to lead from lead pipes, asbestos exposure, and even sink holes caused by subsurface movement of buried construction debris underneath a house.
Likewise, commercial property owners are frequently compelled to file insurance claims as a result of environmental problems. Many property owners have been targeted in Superfund lawsuits concerning shipped hazardous materials. And property owners are often alleged to either have polluted their own property, or to have polluted property owned by a third party. In each instance, there is a need to file an insurance claim and to be treated fairly.
It is incumbent upon the insurance carrier to act fairly and in good faith. The carrier must make a decision based on the language in the contract and the carrier needs to remember that it enjoys a special relationship with the policyholder, one based on trust, and sold on this notion of trust. We all know that we are told that we are in "good hands" with one insurance company and another acts like a "good neighbor.
"
In fact, many companies are responsible. But when policyholders are mistreated, they need to remember that a statute of limitations may require that litigation be filed by a certain date or the right will be lost. In such cases, policyholders should promptly seek out the services of experienced legal counsel.
Insurance companies have many lawyers who work for them and protect them. More often than not, they treat their policyholders fairly and with dignity. But in the rare instance when a carrier act badly, you should even the sides by retaining competent professional assistance.
Every property owner or homeowner has insurance these days. This is essential because of the heavy potential for being sued by somebody, seemingly at any time. Insurance is designed to minimize one's personal exposure in case somebody or someone gets hurt on your property or from your property.
Whenever someone or thing is harmed, the normal response is to file a claim with your insurance company. Once the claim is filed, the carrier will process the claim and then make a decision as to whether or not there is coverage. You will either receive a notice that the claim has been approved, or you will receive a claim denial.
When insurance companies deny claims, they must do so for reasons that relate to the insurance policy. Insurance policies are written contracts between the insurance company, also known as the insurer, and the policyholder, also called the insured. If a claim occurs that is covered under the terms of the insurance policy, the carrier must provide coverage.
It is always wrong for an insurance company to deny coverage when no reason exists for denying coverage. When you feel that your insurance company has wrongfully denied your claim, you may have to sue your insurance company. This type of lawsuit is called a declaratory judgment action. You are asking the Court to declare that there is coverage and to order the carrier to pay all necessary costs.
In certain instances, if an insurance company really misbehaves, Courts will allow cases to proceed seeking punitive damages against the insurer even when it ultimately is determined that there is no right to coverage. In these cases, Courts have generally held that insurance companies have a duty to deal with their insureds fairly and in good faith.
This duty of good faith and fair dealing comes from a recognition that insurance companies have a special relationship with their policyholders. Policyholders purchase insurance so that they know that in a time of need, an insurance carrier will be standing next to them. When an insurance company intentionally avoids its obligations by acting in bad faith, this leaves the policyholder in an even worse situation then he/she should be in.
Not uncommonly, insurance issues arise in the context of environmental problems. Homeowners often have contamination from underground storage tanks, such as heating oil tanks. There may also be claims relating to lead from lead pipes, asbestos exposure, and even sink holes caused by subsurface movement of buried construction debris underneath a house.
Likewise, commercial property owners are frequently compelled to file insurance claims as a result of environmental problems. Many property owners have been targeted in Superfund lawsuits concerning shipped hazardous materials. And property owners are often alleged to either have polluted their own property, or to have polluted property owned by a third party. In each instance, there is a need to file an insurance claim and to be treated fairly.
It is incumbent upon the insurance carrier to act fairly and in good faith. The carrier must make a decision based on the language in the contract and the carrier needs to remember that it enjoys a special relationship with the policyholder, one based on trust, and sold on this notion of trust. We all know that we are told that we are in "good hands" with one insurance company and another acts like a "good neighbor.
"
In fact, many companies are responsible. But when policyholders are mistreated, they need to remember that a statute of limitations may require that litigation be filed by a certain date or the right will be lost. In such cases, policyholders should promptly seek out the services of experienced legal counsel.
Insurance companies have many lawyers who work for them and protect them. More often than not, they treat their policyholders fairly and with dignity. But in the rare instance when a carrier act badly, you should even the sides by retaining competent professional assistance.