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Vol. 3, Iss. 6
April 1, 2014

Article: “The Ten Habits of Highly Effective Coverage Adjusters”

Kevin Quinley, of Quinley Risk Associates LLC, a claims consultant, trainer and expert witness, published “The Ten Habits of Highly Effective Coverage Adjusters” in the December 2013 issue of the CPCU Society’s Claims Quorum. It is a very worthwhile read. Check it out (republished here with the permission of The CPCU Society).Click Here

Court Holds That State Farm’s “Good Neighbor” Slogan Is Just Opinion Or Puffery

You gotta do what you gotta do to try to win a coverage case. But in Broadway v. State Farm, No. 13-628 (M.D. Ala. Mar. 19, 2014) an insured pushed it too hard. The court was woefully unimpressed with the insured’s efforts, even going so far as to say: “If arguments had feelings, this one would be embarrassed to be here.”

Joe Broadway [man what a cool name] attempted to bring a fraud claim against State Farm on the basis that the company advertises itself to its customers and potential customers as a “Good Neighbor.” Broadway Joe asserted that State Farm’s advertising slogan, “Like a good neighbor, State Farm is there,” induced him to purchase an auto insurance policy through State Farm. He alleged that the Good Neighbor slogan was a representation that State Farm treats its customers with respect to their insurance claims on a fair, reasonable and good faith basis. This, he alleged, did not happen with respect to State Farm not paying the limit of his UIM benefit.

The court was not persuaded, to say the least, holding: “The Court need go no further in its analysis of Broadway’s fraud claim because he can prove no set of facts in support of his claim that State Farm’s ‘Good Neighbor’ slogan is anything other than mere opinion or puffery, and, hence, not a statement of material fact.” In reaching this conclusion, the court cited to the Connecticut federal court’s 2010 decision in Loubier v. Allstate Ins. Co., where the court held that “any fraud claim premised on Allstate’s ‘good hands’ advertising slogan must be dismissed.” Really, I didn’t make that last part up.

Salisbury’s Blog Post: Alabama Supreme Court Joins The List Of High Courts To Re-think Construction Defect Coverage

On March 28, the Alabama Supreme Court addressed coverage for construction defects in Owner’s Ins. Co. v. Jim Carr Homebuilders. The court withdrew its September 20, 2013 opinion in the case and substituted its new one.

Here’s how Carl Salisbury described the Jim Carr Homebuilders II decision in his immediately posted entry on the Kilpatrick Townsend “Global Insurance Recovery Blog:” “The Alabama Supreme Court left the ranks of the outlier courts on Friday, holding that faulty workmanship can be a covered ‘occurrence’ under Commercial General Liability insurance policies.  And it did so by the method that so many other courts used during the past twelve months to reach the same conclusion: It reconsidered and reversed a recent prior decision that had reached the opposite result.  Is the trend among State Supreme Courts on this issue now officially a movement?”

I don’t know how Carl is doing in his NCAA Tournament pool, but he got this prediction right in the January 8, 2014 issue of Coverage Opinions, where he stated: “It is hard to remember the last time four state high courts reached the same conclusion on the same contentious question in four months -- doubly so when three of them overruled prior decisions to get there. The willingness of so many state Supreme Courts to revisit what was, for them, a settled issue, and to reverse themselves on the strength of the majority decisions of their sister courts, suggests that the remaining outliers – those courts that cling to the minority view that faulty workmanship can never be accidental – may yet see their own way clear to correcting prior erroneous precedent on this issue.”

Check out Carl post on his firm’s “Global Insurance Recovery Blog.”

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