Archives: Property Insurance

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Georgia Diminished Value Putative Class Action: Motion to Dismiss Decision

In prior blog posts, I’ve covered developments in the putative class actions against insurance companies in Georgia involving diminution in value on property insurance claims (see my March 11, 2016 post, for example). These cases stem from a 2012 Georgia Supreme Court decision ruling that diminution in value following completion of repairs was potentially covered … Continue Reading

Depreciation of Labor Costs Class Action: Nebraska Supreme Court Rules In Favor of Insurer

I’ve regularly followed on my blog key developments in the numerous class actions against the insurance industry involving the application of depreciation to the labor cost component of estimated replacement cost value in determining actual cash value under homeowners and commercial property insurance policies. The Nebraska Supreme Court recently addressed this issue on a certified … Continue Reading

Labor Depreciation Class Action Update: Decisions on Class Certification

I have had a busy summer and am overdue in updating readers on recent decisions in class actions against insurers involving the “labor depreciation” issue. The issue involves whether, when insurers estimate the “actual cash value” of damage to real property under a property insurance policy, depreciation is properly applied to the full estimated replacement … Continue Reading

Property Insurance Diminution in Value Class Action: Georgia Federal Court Certifies Class

One of the issues I’ve been covering on this blog is a series of putative class actions in Georgia arising out of a Georgia Supreme Court decision in 2012, which held that diminution in value of real property is potentially covered under a property insurance policy (see my summary of the Georgia Supreme Court decision … Continue Reading

Wilcox v. State Farm: Minnesota Supreme Court Decision In Labor Depreciation Class Action

Today the Minnesota Supreme Court issued its opinion in Wilcox v. State Farm Fire & Casualty Company, a putative class action alleging that State Farm, in estimating the “actual cash value” of property damage under homeowners’ insurance policies, improperly applied depreciation to the labor component of the replacement cost of damaged structures. A question pertaining … Continue Reading

Property Insurance Diminution in Value Class Action: Georgia Federal Court Dismisses Declaratory Judgment Claim

A while back, I wrote about a Georgia Supreme Court decision, Royal Capital Development LLC v. Maryland Casualty Co., that held that diminution in value of real property is potentially covered  under a property insurance policy, in addition to the costs of repairs (see my June 6, 2012 blog post). This was an extension of … Continue Reading

Labor Depreciation Class Action Update

It’s been a while since I updated you on the status of class action litigation regarding the application of depreciation to labor costs on property insurance claims. There have been three decisions since my last update, with sharply conflicting results. So what does this mean? I expect that 2016 will bring a significant number of … Continue Reading

Depreciation of Labor Class Action — Minnesota Supreme Court Oral Argument

I’ve been following closely a series of class actions around the country alleging that, in calculating the “actual cash value” of property damage under a homeowners or commercial property insurance policy, insurance companies should not be applying depreciation to the labor component of the replacement cost of a damaged structure. When insurers estimate “actual cash … Continue Reading

Update on Labor Depreciation Class Action Litigation: Kansas Federal Court Rules for Insurer

As an update to my March 29, 2015 blog post on the status of class actions on the labor depreciation issue, a Kansas federal court recently granted summary judgment in favor of an insurer. In Graves v. American Family Mutual Insurance Company, 2015 WL 4478468 (D. Kan. July 22, 2015), the homeowners’ policy at issue … Continue Reading

Labor Depreciation Class Actions Heating Up Across The Country

Class action litigation is spreading across the country involving the application of depreciation in calculating the actual cash value of property damage under homeowners and commercial property insurance policies. This blog post will be longer than typical, but I think you will find it worth reading. The Issue: For decades, insurers have been using replacement-cost-less-depreciation … Continue Reading

Premium Refund Theory in Insurance Class Action Rejected By Michigan Federal District Court

One theory that has been raised by plaintiffs’ lawyers in some insurance class actions is that policyholders should receive a partial refund of their premiums because they are not receiving the coverage they paid for, or coverage purchased is illusory. A recent Michigan federal district court opinion rejected this theory on the grounds that: (1) … Continue Reading

Class Action Against State Auto Concerning Homeowners’ Policy Limits Is One Worth Watching

Insurers typically adjust (or propose to adjust) the policy limits on a homeowners’ policy every year to take into account changes in the cost of construction. This is intended to help insureds make sure that sufficient coverage is available if there is a total loss. At the same time, this can result in an increase … Continue Reading

Insurance Class Action on Polybutylene (PB) Piping: Magistrate Judge Recommends Denial of Motion to Decertify Class

I’ve written before (see my February 1, 2012 blog post) on a class action pending in the District of Arizona involving repair or replacement of polybutylene (PB) piping on property insurance claims.  The policy language at issue provides that “If loss to covered property is caused by water or steam not otherwise excluded, we will … Continue Reading

Class Action on Depreciation of Labor on Property Insurance Claims: New Arkansas Supreme Court Decision

In a putative class action pending Arkansas federal court, a question of law was certified to the Arkansas Supreme Court regarding whether labor may be depreciated on property insurance claims, if the insurance policy does not define the term “actual cash value” (see my May 8, 2013 blog post on the federal court’s certification of … Continue Reading

Depreciation Class Action: Arkansas Federal Court Certifies Question to Arkansas Supreme Court

In August of 2012, I reported on a newly-filed class action in Arkansas federal court alleging that, in estimates on property insurance claims, application of depreciation to labor costs is improper (see my August 7, 2012 blog post).  As an update on this case, Chief Judge P.K. Holmes, III of the Western District of Arkansas … Continue Reading

Depreciation Class Action: California Superior Court Grants Class Certification

Back in May of 2011, I wrote on this blog about a new class action in California against Farmers involving claims of improper application of depreciation on property insurance claims, allegedly in violation of a California statute and regulation that govern application of depreciation (see my May 17, 2011 blog post).  In a similar case … Continue Reading

Superstorm Sandy and Hurricane Irene Class Action Filed Regarding Flood Insurance Claims

It’s been only about 45 days since Superstorm Sandy struck, and already the first insurance class action has been filed in New Jersey federal court.  In Donnelly v. New Jersey Re-Insurance Company, et al, Case No. 2:33-av-00001 (D.N.J., filed Dec. 13, 2012), the allegations focus on coverage for flood insurance claims made under the federal Standard … Continue Reading

Hurricane Sandy Insurance Claims: How Insurers Can Reduce Class Action and Bad Faith Exposure

Insurers are starting to deploy adjusters to handle claims from Hurricane Sandy.  An article in today’s Wall Street Journal reports that “Disaster-modeling firm AIR Worldwide estimates the industry’s share of losses at $7 billion to $15 billion. At the high end of that range, Sandy would become the third-most expensive storm for insurers in U.S. … Continue Reading

New Class Actions on Depreciation and Subrogation “Made Whole” Doctrine

I recently came across two new class action filings against insurance companies that may be of interest to readers of my blog.  One case involves whether it is appropriate to depreciate labor costs in estimating actual cash value.  Another case involves the application of the “made whole” doctrine, where applicable, to insurers’ handling of subrogation … Continue Reading

Class Action on Preferred Contractor Program Filed Against Allstate

Some insurance companies have preferred contractor programs under which the insurer, or a party they contract with, develops a network of contractors who are available to repair property damage for insureds.  The insurer typically subjects contractors to a background check of some kind before they are included in the network, and may require contractors in … Continue Reading