On May 18th, Wheeler, DiUlio & Barnabei hosted a lunch & learn webinar, Managing Residence Premise Denials, and Insurance Policy Cancellations. Partner Anthony DiUlio discussed how to handle residency premises issues within a policy and policy cancellations that might come up before, during, or after a claim. He answered attendees’ questions live as well.
The webinar also specifically addressed:
- How to handle issues with the residency of a home.
- What to do if the carrier denies a claim based on the residence premises provision.
- What to do about canceled or non-renewed policies from before, during, and after a claim.
What a Policy Typically Says
Words and policies that are bolded within the text or sometimes quoted with quotation marks are generally defined terms under the policy. If you see some bolded or quoted text within the text of the policy that usually means that it’s a defined word, and you can go back to the definition section to find it.
For example, Allstate bolded “residence premises” in a policy. They defined it as “the dwelling, other structures, and land located at the address stated on the policies declaration.” Since dwelling is also bolded, you need to check the definition of that as well. In this case, dwelling means the single-family building structure, identified as the insured property on the policy declarations, where you reside, and which is principally used as a private residence.
Understanding this language and what words need to be further defined will help you to better understand your policy and how you are covered.
Restrictions on How a Policy Can Be Canceled
Policies can’t just be canceled at any time. But there is a difference between a policy canceling and a policy non-renewing. A policy cancellation actually stops the policy mid-contract. That means for one reason or another, they are stopping within your policy period and are stopping your coverage. A policy non-renewal simply means that at the end of your policy period, they not going to give you another new contract.
It is hard to cancel an insurance policy. As long as premiums have been paid, it becomes nearly impossible for an insurance company to cancel a contract short of some showing fraud or misrepresentation. Some examples are: if you’re not paying for the premiums, or fraudulently presented a claim, your policy could be canceled.
What can be done if an insured takes an extended vacation, a pipe breaks, and with proper heat, someone caring for the premises regularly? The carrier denies telling the insured that they abandoned the house.
In this situation, this would not be considered an abandonment of the house. To abandon the property, you would never be doing things like maintaining heat or having people checking on the property regularly. To abandon would literally mean you’re doing nothing more on this property and you’ve removed all of your items. If you show the carrier examples that show the house was not abandoned, and they still were to take this position, then there have been some bad faith findings. There is no basis for them to claim abandonment, simply because of this.
Can an insurance company cancel or non-renew during the middle of a claim?
Canceling a policy in the middle of a claim is going to be hard. The insurance department doesn’t like when carriers do it. Non-renewals are far broader, they can do it for a lot more reasons. However, the insurance department has also stepped in on non-renewals and said that if you’re in the middle of a claim, it is very difficult to get new insurance when you’ve got a pending claim with another carrier.
A mortgage company has lender-placed coverage to protect their interest, the homeowner is not listed as a named or additional insured. They have a loss that is denied. Does the homeowner have any rights?
This entire question all depends on what the policy says. There are policies out there that are lender-placed policies that say the only person that benefits from this policy is the lender (the bank). If they’re the only one that can be paid and benefit from this policy, you’re going to have a really hard time making a claim as a homeowner. But that’s actually rare. More often, we’ve seen policies that are written very similarly to a standard homeowner policy, and it will identify the named insured as the bank. It might identify the borrower on the policy as the property owner.
Join us for our next lunch and learn webinar about Bad Faith Claims: What is Bad Faith and How to Build Your Case on Thursday, June 18th at 12. Click here to register.