Steven Plitt, Expert Witness Steven Plitt, Expert Witness
Insurance Bad Faith Claim Handling Expert Serving Clients Nationwide

January 2018 Archives

Kentucky Supreme Court Establishes Priority of Coverage Positioning for UM Policies

When two or more uninsured motorist policies apply, a question arises as to whether those policies should pro-rate with each other, or one of the policies should be designated as primary, with the other as excess. This issue was addressed by the Kentucky Supreme Court in Countryway Insurance Co. v. United Financial Casualty Insurance Co., 2016 WL 4488306 (Ky. August 25, 2016). Noting the close conjunction between UM coverage and liability coverage, the court found that when a passenger in a vehicle was injured in a collision caused by an uninsured motorist, and the passenger's vehicle as well as the vehicle in which the passenger was riding both had uninsured motorist coverage containing "other insurance" clauses, the policy covering the vehicle in which the passenger was riding provided primary UM coverage.

Wyoming Adopts the Notice-Prejudice Rule

The Wyoming Supreme Court in Century Surety Co. v. Jim Hipner, LLC, 377 P.3d 784 (Wyo. 2016) adopted the notice prejudice rule. The court also found that any policy exclusion that attempted to displace the notice prejudice rule was void.

Montana Supreme Court Determines What Standard to Utilize in Approving Consent Settlement Agreements

Recently, the Montana Supreme Court, in a split decision, found that the trial court must utilize an objective standard in considering the value of the claim and the insured's loss of coverage when it determines the reasonableness of a stipulated settlement entered into by the insured after the insurance company wrongfully denied coverage.

New York Appellate Court Determines Who Bears Responsibility for Orphan Share in Long Latency Continuous Trigger Cases

New York has adopted a pro-rata allocation methodology for continuous and progressive losses where coverage for all triggered policies is determined on a time-on-the-risk basis. Recently, the New York Court of Appeals in Keyspan Gas East Corp. v. Munich Reinsurance America, Inc., 143 A.D.3d 86 (Appellate Division, September 1, 2016), found that insurance companies were not required to indemnify the insured for those periods in the allocative schedule where liability insurance was unavailable in the marketplace. The question before the court was the following: When the reason for the period of no insurance is that the insured could not have obtained insurance even if it had wanted to, is the risk attendant to the unavailability of insurance in the marketplace allocable to the existing, triggered insurance policies or to the insured?" The court found that because the insurance policies did not provide coverage for injury or damage during periods of no insurance, the court would have to rewrite the insurance policies to require insurers to assume the risk for uninsured periods simply because the insured was not to blame for the lack of insurance. The court chose not to rewrite the terms of the policy for equitable reasons. Therefore, allocation of uninsured periods was assessed to the insured in continuous and progressive loss cases.

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