The North Carolina Supreme Court in Accardi v. Hartford Underwriters Ins. Co., 373 N.C. 292, 838 S.E.2d 454 (2020), held that a property insurer was allowed to depreciate the cost of labor in calculating ACV under a policy. In this case, a storm caused damage to the roof of the insured's home, siding, and garage. Under the homeowner's policy, the insurer was obligated to initially pay ACV for the loss, and then once the property was repaired or replaced, the policy obligated the insurer to pay the RCV. The policy contained a separate endorsement limited to roof damage, which was silent on the issue of labor costs. The insurance company argued that its policy language nevertheless unambiguously allowed it to depreciate both the cost of materials and the cost of labor. The insured argued that the insurer was required to separately calculate the materials and labor costs of repairing or replacing the damaged property and depreciate only the material costs and not the labor costs.
In RSUI Indemnity Co. v. New Horizon Kids Quest, Inc., 933 F.3d 960 (8th Cir. 2019), applying Minnesota law, the 8th Circuit held that when an excess insurer had not participated in the insured's defense, that insurer was allowed the opportunity to allocate the jury's verdict between covered and noncovered claims in a subsequent coverage action.
A typical criminal act exclusion states that there is no coverage for bodily injury or property damage arising out of any criminal act. Typically the exclusion applies regardless of whether the insured is actually charged with or convicted of a crime. In Country Mutual Ins. Co. v. Dahms, 2016 IL App. (1st) 141392, 405 Ill.Dec. 311, 58 N.E.3d 118 (2016), the Illinois Court of Appeals held that the insurance company was required to defend its insured during the pendency of both a criminal proceeding and a tort action for bodily injury where the complaint in the tort action contained allegations of negligence as well as criminal activity. The Court found that the insurer was required to defend the insured because there was a potential for a non-criminal finding in the tort action.
The Washington Court of Appeals recently found (Arden v. Forsberg & Umlauf, P.S., 193 Wash.App. 731, 373 P.3d 320 (2016)), on first impression, that insurer retained attorneys (defense attorneys) were not automatically prohibited from representing insureds merely because the defense attorneys had an ongoing relationship with the insurance company where they were receiving defense case assignments as well as coverage assignments. Moreover, the Court found that defense counsel were not required by the duty of loyalty imposed on counsel under Washington law to disclose to the insured the defense attorney's business relationship with the insurer. However, the Court did note that it was "better practice for attorneys handling the reservation of rights (ROR) defense. to inform their clients if they have a long-standing relationship with the insurer and represent the insurer in other cases."
In Shelter Mutual Insurance Co. v. Freudenburg 304 Nebraska 1015, 938 N.W.2d 92 (2020) the insurance company paid insurance policy in question had a sublimit of coverage in cases involving injuries to named insureds or their resident relatives. The sublimit was equal to the Nebraska's minimum financial responsibility limits. In question was Nebraska revised statute 60-310 which stated that no policy of automobile liability insurance was permitted to exclude, limit, reduce, or other otherwise alter policy coverage solely because the injured person was the named insured or a resident of the same household. In this case, the insurance company argued that its household exclusion sublimit should permitted because it did not violate Nebraska statute. The insurance company argued that the statute applied to "automobile liability insurance" which referred to the coverage mandated by the statute and not for amounts of coverage above the minimum statutory limits. The Nebraska Supreme Court invalidated the insurer's "partial" household exclusion after reviewing the legislative history of the statute.
In Valls v. Allstate Ins. Co., 919 F.3d 739 (2nd Cir. 2019) the 2nd Circuit construed the concept of collapse narrowly. The homeowner's insurance policy provided coverage for "the entire collapse" of a building structure, that "must be sudden and accidental" but the policy also excluded "cracking" from the definition of "collapse." Under that policy language the court found that building cracks in a basement's walls of the insured property, which was still standing, would not constitute collapse under the policy.
The 5th Circuit Court of Appeals in Ekhlassi v. National Lloyds Ins. Co., 926 F.3d 130 (5th Cir. 2019) found that a lawsuit brought against a flood insurer was untimely when it was not filed in federal court within one year. In this case, the 5th Circuit Court of Appeals affirmed the District Court's ruling that a plaintiff/insured was required to file his, her suit in federal court within one year following the denial letter even though the suit had been brought in state court. Failure to file in federal court within one year barred the claim.
In State ex rel. Shelter Mut. Ins. Co. v. Wagner, 575 S.W.3d 476 (Mo. Ct. App. 2018), transfer denied (July 31, 2018), reh'g denied (July 31, 2018), the Missouri court held that in a bad faith lawsuit arising from the failure to settle, the insured was not entitled to discovery communications between the insurance company and its attorney who was retained to advise the insurer in the underlying case.
The First Circuit U.S. Court of Appeals recently upheld a district court's ruling that an insurance company's claim administrator's handling of a medical malpractice lawsuit was in conformity with Massachusetts statute regarding reasonable settlement.
In Lamorak Ins. Co. v. Kone, Inc., 2000 Ill. App. (1st) 163398 (Ill. App. May 15, 2018), the Illinois Appellate Court found that in policies containing self-insured retentions, that the SIR was to be treated as a primary policy that had to be exhausted before the insured could tap into the excess layer of coverage.