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California Court Rejects Another Half-Sold Underinsurance Case – Property Insurance Coverage Law Blog



Like many states, California laws make it difficult to sue for being "underinsured." The law places the main responsibility for ensuring adequate coverage and the right varieties on the insured. An insurance company, agent or broker has no legal obligation to recommend any special coverage or restrictions. However, they are liable if they fail to obtain the agreed coverage, make a false statement as to how the coverage works or fail to fulfill any other "special duty" which they have voluntarily undertaken.

Although these rules are long lasting, policyholders in California have repeatedly become underinsured in their losses. Too often, the insured assume that the insurance company, agent or broker looked after their needs and made sure they had enough insurance.

Unfortunately, a policyholder and their lawyer did not read the law carefully enough, resulting in a clear loss in the latter case. with Vulk v. State Farm . 1

This was not a case worth reviewing in the courts of appeal (or even the courts) as the outcome was predetermined based on existing law.

I Vulk the insured claimed that State Farm was responsible for underinsuring his home. Strangely enough, he rebuilt his exact home for less than his insurance limits, but he still claimed he was underinsured because a public adjuster secured him an estimate over his limits! The insured also signed a written declaration that he had asked his agent for the best insurance and was told that he received the mythical unicorn with "full coverage". In deposit and before the court it was confirmed that the insured never spoke to the representative until after the fire. Anyway, the court saved the insured a little embarrassment by not giving him a loss solely on these issues. However, the court was not so kind as to why the case was apparently statute-barred under well-established California law. his policy that has "full coverage" and that this promise created an obligation for State Farm to ensure that he had sufficient boundaries to rebuild his house. The Court dismissed these facts as insufficient to create a legal obligation, and reiterated long-standing law that "A non-specific request for the" best policy "and a general declaration of" full coverage "are not the same as a specific request for and

On this, the court emphasized that State Farm controlled all normal boxes for a comprehensive underinsurance defense. For example, the insured was a long-term State Farm insured and received all regular mailings with his insurances each year, including his declaration pages. , warnings that State Farm's estimate may not be accurate, and suggestions that he do more to ensure his boundaries were correct. He did not. these facts will not necessarily overcome an actual misrepresentation about blankets or a failure to obtain agreed coverage, they will certainly defeat a case where the insured simply believes that the insurer should have issued better coverage.

For the insured Vulk the court easily dismissed his case because he could not provide any evidence that, if true would support his legal theory. And the part about true is really important, considering that he rebuilt his house for less than his limits!

Thanks to this insured, there is now another published case in the books about how a policyholder has no rights after being underinsured. Although the facts in this case should be distinguished from any underinsurance process that can carry its own weight, the existence of bad law is still just that – bad. It is another trophy for the insurance companies to show in their trophy cases.
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1 Vulk v. State Farm General Ins. Co. (2021) 69 Cal.App.5th 243 [284 Cal.Rptr.3d 360, 372, 69 Cal.App.5th 243].


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