The insurer modifications its place concerning the quantity broken or owed. Does that imply the insurer acted in dangerous religion? The reply is clearly ‘no.’ New data that’s legit might change what’s owed to the policyholder.

A latest Colorado case mentioned these points.¹ Listed below are the info recited by the decide:

After the hailstorm, El Dueno submitted a declare for property harm to Mid-Century pursuant to its insurance coverage coverage. In response, Mid-Century assigned a claims adjuster, Maggie Fields, to research the roof. Ms. Fields discovered hail harm to sure roof surfaces, which she estimated amounted to roughly $22,000 of harm. Mid-Century paid this quantity, much less the coverage’s deductible and depreciation, to El Dueno. Mid-Century additionally paid El Dueno $2,500 based mostly on an estimate to restore rooftop HVAC equipment.

El Dueno’s contractor, CJ Restoration, quickly thereafter supplied a far better estimate, $343,000, to interchange virtually the complete roof. Mid-Century then transferred the declare to a distinct adjuster, Patrick McCourt, who employed Rimkus Engineering to carry out a further inspection. Rimkus had an engineer, William Templeton, examine the roof. He reported that “[t]he roof coverings, together with the granule-surfaced modified bitumen membrane and the concrete roof tiles, weren’t broken by hailstone impacts.” He additionally discovered that any harm to the roof was pre-existing or resulted from different causes. His report was peer-reviewed by one other licensed engineer, who concurred with its findings. The Rimkus report didn’t handle the earlier inspection by Ms. Fields.

After receiving the Rimkus report, Mid-Century notified El Dueno that the roof repairs weren’t lined beneath the insurance coverage coverage, however that Mid-Century wouldn’t search to recoup the funds it had already made in direction of the repairs. Unhappy with this consequence, El Dueno filed this swimsuit, claiming that Mid-Century unreasonably denied advantages in violation of Colo. Rev. Stat. §§ 10-3-1115–16.

Assuming the professional is competent, totally knowledgeable of the info, not outcome-oriented, and never biased, most courts will discover that an insurer can depend on an professional’s opinion, and the courtroom famous the identical:

A number of courts have held that reliance on an engineering report, ready by certified professionals based on established and dependable strategies, is cheap as a matter of legislation, and can’t be the premise for a nasty religion declare. See Musel Grasp, LLC v. Am. Fam. Mut. Ins., No. 18-cv-2725-RBJ, 2019 WL 9244886 (D. Colo. June 24, 2019); Avalon Condominium Ass’n, Inc. v. Secura Insurance coverage, 2015 WL 5666628 (D. Colo. Sept. 25, 2015); Bell Advisors, LLC v. American Household, 2018 WL 549962 (Colo. App. Jan. 25, 2018). El Dueno’s makes an attempt to differentiate these circumstances are unavailing. In every of those circumstances, the insurer, like Mid-Century, retained an engineering agency that in the end discovered insurance coverage advantages weren’t warranted—in Musel Grasp, additionally like on this case, the engineering report contradicted an earlier declare adjuster’s opinion. The plaintiffs in these circumstances equally alleged statutory religion. However the courts in every case discovered that reliance on a certified engineer’s report discovering no lined harm was affordable foundation to disclaim insurance coverage advantages.

…

El Dueno doesn’t cite a single case supporting its place that favoring a extra certified engineer’s opinion versus an inexperienced declare adjuster is unreasonable. Cf. Musel Grasp, 2019 WL 9244886 (discovering reliance on engineering report was affordable although insurance coverage adjuster had beforehand affirmed protection). Neither is that place logical. The aim of retaining an engineering agency for a second opinion is to evaluate the reason for harm extra reliably. If it had been unreasonable for an insurance coverage firm to vary its protection place based mostly on an engineer’s second opinion, it might render the second opinion ineffective.

This case is at present on enchantment after the policyholder misplaced, however there are classes for insurers and policyholders. First, selections for cost or non-payment concerning coverages owed can all the time be modified based mostly on new data as long as the brand new data is legit and correctly vetted.

I’m aware that problems with waiver and estoppel might come into play. I’m not delving into these points which can change the result of this publish. However these all the time have to be thought of on this state of affairs.

Second, accusations of dangerous religion ought to by no means be regarded as automated when an insurer modifications place based mostly on legit proof and after a full investigation. Folks will come to completely different and bonafide conclusions when new proof or opinions come to gentle.

In fact, is the brand new proof actually legit and pretty thought of by the insurer? That is the place many dangerous religion circumstances are gained and misplaced. It is dependent upon the proof. The policyholder usually has to show the dangerous religion case. Assumptions and projections with out proof won’t suffice.

Thought For The Day

It’s a capital mistake to theorize earlier than one has information. Insensibly one begins to twist info to swimsuit theories, as an alternative of theories to swimsuit info.
—Sherlock Holmes

¹ El Dueno v. Mid-Century Ins. Co., No 1:21-cv-01532 (D. Colo. Feb. 23, 2024).