February 2015 Intro Page

 

Dec Page

 

The specter of punitive damages has worked to make multi-millionaires of many insurance criminals who convince insurers to settle rather than take a chance on a trial. Insurers may pay claims they believe they do not owe because they are fearful of being assessed punitive damages in a bad faith action. The article of the month discusses defenses to the tort of bad faith. See Defenses to the Tort of Bad Faith.

 

The court cases for this month's issue come from various courts.

 

The Superior Court of New Jersey, Appellate Division, examined the earth movement exclusion and had to decide if the exclusion encompassed only naturally occurring earth movement. The United States District Court, New Jersey dealt with the question of whether actual physical damage had to occur in order for there to be direct physical loss or damage so as to be covered under the terms of a property policy. The meaning of “residence premises” under a homeowners policy was discussed by the United States Court of Appeals, Seventh Circuit; namely, is the residence premises a building or a location on which there may be multiple buildings? The final case comes from the Oklahoma Supreme Court. That court examined the sewer and drain backup exclusion in the homeowners policy in order to determine if the exclusion was ambiguous.

 

Questions and Answers

 

If damage from the county causes the earth to move, which causes damage to the residence, is there coverage under the Homeowners form? See Blasting and Earth Movement. Does the cancellation of a debt for medical expenses affect payment for such expenses to the claimant? See Cancellation of Debt and Medical Expense Coverage. If a house is a total loss and the insured buys a new house as replacement, are closing costs part of replacement cost? See Closing Costs as Part of Replacement Cost. What exactly constitutes faulty construction? Faulty Construction. When water from broken pipes seeps into the basement, is there coverage? See Water from Broken Pipe Moves through Soil before Causing Damage.

 

Signs Coverage Form

 

The Signs Coverage Form, CM 00 28 01 13, is included in the Insurance Services Office's inland marine program. It affords open perils coverage only for neon, fluorescent, automatic, or mechanical electric signs and lamps. Billboards or ordinary fixed signs, whether or not they are directly illuminated by electric lights are ineligible for coverage.

 

The article has been updated to include changes made in the 2013 revision. See Signs Coverage Form.