Insurance companies have an obligation to immediately examine the coverage and evaluate the damages when adjusting a first-party property insurance. When an insurer does not do this, it has failed to act in good faith. A federal court in Washington recently found the same thing as a matter of law. 1
The case should be read as an example of how not to adjust a fire claim with mitigating costs, reconstruction costs and lost revenue. The delay was pervasive and without explanation. In its judgment, the court found:
The unconverted evidence unequivocally establishes that the defendant violated WAC-284-330 (7). On December 3, 2019, less than one month after Lee's property was damaged by the fire, the defendant was notified that Lee had a claim for lost rental income…. Within six weeks of the fire, the defendant had copies of the lease for the five units affected by the fire… .EMA ̵1; the company hired by the defendant to investigate Lee's claims – sent the defendant a report each month thereafter outlining Lee's lost rental income and recommended payment. Lee himself sent e-mails to the defendant several times and asked why the claim for loss of rental income had not been paid and explained how important the income is to him … Ex. March 28, 2020, email (& # 39; As you know, rental income is my main source of income. My lost rent is a major issue now. Need [sic] help from your business. Thank you. & # 39;) … Ex. 29 emails dated March 23, 2020 (& # 39; Tell me the status of my claim. I have over 4 months of lost rent that must be paid [sic] and all recycling bills. Please reply ASAP. Thank you.) … Ex. . 16 emails dated April 22, 2020 (& # 39; I'm a retired person. Rental income is my main source of income. I really need the money. Please speed up the process. & # 39;) … Ex. 30 email dated May 1, 2020 (& # 39; Any update on my claim? Thank you. & # 39;).
Defendant flatly ignored the payment requests until July 27, 2020 – eight months after the fire – when it finally retained the accounting firm, TD Davidson, to review Lee's statement. On September 10, 2020, T.D. Davidson that Lee's lost rental income was $ 7,425 per month ( ie ., The same number that the EMA reported to the defendant seven months earlier) and recommended that the defendant pay Lee $ 83,540. Defendant still refused to pay the claim, so Lee had to bring this lawsuit. Finally, five months after Lee filed this lawsuit and seventeen months after the fire on April 21, 2021, the defendant paid the plaintiff $ 118,000 on the lost rental income the defendant … to the above evidence? Nothing. Much as the defendant failed to respond to the many inquiries from Lee (and others) regarding the loss of rental income, the defendant does not respond – at all – to Lee's claim that the defendant's late payment of the claim constitutes bad faith. Thus, the defendant acknowledges the argument and Lee is entitled to a summary judgment in this matter.
The defendant's conduct (or lack thereof) also violates WAC-284-330 (2), which requires an insurer " act reasonably ". immediately after communication in respect of claims arising under insurance. " Lee presents extensive evidence showing that the defendant failed to respond to dozens and dozens of phone calls, emails, reports and letters from multiple entities regarding his insurance claims. The defendant claims that it did not violate [ sic ] WAC-284-330 (2) because it identifies two occasions when it responded to communications from Lee within 3 or 4 days. This argument borders on the frivolous. To be clear, this is not a simple matter of delayed replies; on the contrary, the defendant failed to respond – at all – to repeated messages regarding Lee's allegations. That the defendant considers this to be an appropriate way to treat his insured is frightening; that the defendant chooses to defend his actions on the basis that he has managed to respond to two emails is the definition of hubris.
The insurance company in question states this on its website:
FAST, FAIR, AND EFFECTIVE .
] At Berkshire Hathaway GUARD, we pride ourselves on fast, fair and efficient complaint handling. Our goal is to help each of our clients in a crisis situation and to be responsive when you need us.
In many states where insurance companies delay claims settlement and payment, policyholders have valuable rights and should seek legal advice from experienced policyholder attorneys. Policyholders deserve to have the peace of mind they buy and are promised by their insurance companies.
Thought for the day
Justice is what justice really is.  —Potter Stewart
1 Lee v. AmGuard Ins. Co. 3: 20-cv-1634, 2021 WL 5447919 (W.D. Wash. 22 November 2021).