Here's an informative article about title insurance.
When my husband and I bought our house, on the advice of our real estate attorney we opted against title insurance. He told us that since the property is registered land, there could be no claim against the title. Not long thereafter I was involved in a case involving title to land and added our lack of title insurance to my list of things to wake up in the middle of the night worrying about. When we refinanced we purchased the insurance. I still don't know whether it's really necessary for registered land, but it sure makes me feel better.
Tuesday, February 15, 2011
Monday, February 7, 2011
Superior Court notes lack of standard for imminent threat of offsite migration of contaminants
From 1853 to 1952 FG&E owned and operated a plant that manufactured gas. The manufacturing process generated hazardous materials at the site.
FG&E filed a lawsuit seeking a declaration that several primary liability policies issued by OneBeacon and Travelers provide coverage for cleanup costs.
The insurers, relying on an owned property exclusion, argued that coverage is triggered for any policy period only if there was off-site property damage during that policy period.
In Fitchburg Gas & Elec. Light Co. v. OneBeacon Am. Ins. Co., 2010 WL 5490148 (Mass. Super.), Judge Neel of the Massachusetts Superior Court noted that under Massachusetts law coverage is triggered for a cleanup designed to prevent further migration of contaminants to off-site property, even when such migration has not yet occurred. However, there is no standard by which such a threat of migration is to be measured.
This case, however, would not set that standard. Noting that there were competing expert affidavits about whether the contaminants have or would migrate offsite, Judge Neel denied summary judgment to both sides.
FG&E filed a lawsuit seeking a declaration that several primary liability policies issued by OneBeacon and Travelers provide coverage for cleanup costs.
The insurers, relying on an owned property exclusion, argued that coverage is triggered for any policy period only if there was off-site property damage during that policy period.
In Fitchburg Gas & Elec. Light Co. v. OneBeacon Am. Ins. Co., 2010 WL 5490148 (Mass. Super.), Judge Neel of the Massachusetts Superior Court noted that under Massachusetts law coverage is triggered for a cleanup designed to prevent further migration of contaminants to off-site property, even when such migration has not yet occurred. However, there is no standard by which such a threat of migration is to be measured.
This case, however, would not set that standard. Noting that there were competing expert affidavits about whether the contaminants have or would migrate offsite, Judge Neel denied summary judgment to both sides.
Tuesday, February 1, 2011
Thoughts on umbrella coverage
Kiplinger, a personal finance magazine, has an interesting article on why people with income of over $100,000 or assets over $1 million should purchase umbrella coverage.
Umbrella coverage is coverage above your regular insurance. For example, you might have an auto policy and a homeowner's policy that each have a limit of $300,000. An umbrella policy would kick in if the damages exceed that amount.
The article states that umbrella insurance will cover your legal fees if you get sued. In most cases that is incorrect. Generally, your primary insurance (such as auto or homeowner's) will cover your legal fees, although there are some rare cases when primary insurance does not apply and umbrella insurance does apply. There are also some primary policies in which legal fees deplete the coverage limit.
Umbrella coverage is coverage above your regular insurance. For example, you might have an auto policy and a homeowner's policy that each have a limit of $300,000. An umbrella policy would kick in if the damages exceed that amount.
The article states that umbrella insurance will cover your legal fees if you get sued. In most cases that is incorrect. Generally, your primary insurance (such as auto or homeowner's) will cover your legal fees, although there are some rare cases when primary insurance does not apply and umbrella insurance does apply. There are also some primary policies in which legal fees deplete the coverage limit.
Friday, January 28, 2011
SJC seeks amicus briefs on MedPay question
The Supreme Judical Court of Massachusetts is seeking amicus briefs in Golchin v. Liberty Mut. Ins. Co., docket no. SJC-10794. According to the SJC's blurb,
This case presents important issues concerning the Commonwealth's coordination of benefits among health insurance, PIP and MedPay: whether the Commissioner of Insurance has properly mandated that insureds claiming MedPay must first make a demand on their health insurers, and may only make demand on MedPay after denial by health insurers, which denial must be provided to the MedPay insurer before any payment.
Wednesday, January 26, 2011
Why gun insurance won't work
The New York Times published an interesting letter to the editor last week.
While it's an interesting idea, I can see a number of problems with mandatory insurance for gun-owners. First, you can't get insurance for intentional acts. That's because insurance insures against risk -- meaning accidents -- while intentional acts are not risks, they are certainties. The standard Massachusetts auto policy, for example, insures only against "accidents," which it defines as as "an unexpected, unintended event." Thus, the insurance will provide coverage if the insured driver skids on ice and injures a pedestrian, but it will not provide coverage if the driver purposefully aims for the pedestrian and runs him down.
Gun insurance might provide coverage for a hunting accident, but it wouldn't provide coverage for intentionally shooting someone.
Even if there could be gun insurance for intentional assaults, the administration of it would be quite difficult. Would the insurance be purchased annually, like car insurance, as long as the person owned the gun? What about the large percentage of gun crimes that are committed with stolen guns? Would the original owner -- or the gun store -- be responsible for insurance ad infinitum after the gun was stolen?
Thanks to my friend Nomi Herbstrom for bringing the letter to my attention.
To the Editor:
In “How Many Deaths Are Enough?” (column, Jan. 18), Bob Herbert recommends stricter licensing and registration of guns, more vigorous background checks and a ban on assault weapons. I agree.
And I have another suggestion: gun insurance. Mandatory liability insurance for gun owners sounds to me like an idea whose time has come. With this approach, we can respect what many interpret as a constitutional right to bear arms, while at the same time making those who possess and use weapons pay for the risk that they pose to the rest of us.
Caroline Herzenberg
Chicago, Jan. 18, 2011
While it's an interesting idea, I can see a number of problems with mandatory insurance for gun-owners. First, you can't get insurance for intentional acts. That's because insurance insures against risk -- meaning accidents -- while intentional acts are not risks, they are certainties. The standard Massachusetts auto policy, for example, insures only against "accidents," which it defines as as "an unexpected, unintended event." Thus, the insurance will provide coverage if the insured driver skids on ice and injures a pedestrian, but it will not provide coverage if the driver purposefully aims for the pedestrian and runs him down.
Gun insurance might provide coverage for a hunting accident, but it wouldn't provide coverage for intentionally shooting someone.
Even if there could be gun insurance for intentional assaults, the administration of it would be quite difficult. Would the insurance be purchased annually, like car insurance, as long as the person owned the gun? What about the large percentage of gun crimes that are committed with stolen guns? Would the original owner -- or the gun store -- be responsible for insurance ad infinitum after the gun was stolen?
Thanks to my friend Nomi Herbstrom for bringing the letter to my attention.
Wednesday, January 19, 2011
Appeals Court holds arbitrator exceeded authority in ruling underinsurance claim premature until third-party claim resolved
In 2001 Dorcas Weiner was involved in two separate car accidents. She sought underinsured motorist coverage from Commerce for both accidents. Those claims were consolidated and went to arbitration as required by the standard Massachusetts automobile insurance policy.
The arbitrator held that the compensation Weiner received from the other driver in the first accident was sufficient to cover her losses from that accident. He held that arbitration was premature as to the second accident because the claim against the other driver in that accident had not been resolved.
Weiner and her husband won a motion in Superior Court to vacate the arbitration award, on the ground that the arbitrator had exceeded his authority in deciding that arbitration for the second accident was premature.
The case was arbitrated again with a new arbitrator. The second arbitrator awarded damages for both accidents, and that award was confirmed by the Superior Court. Commerce appealed, arguing that the first arbitration award should not have been vacated and that the matter should have been submitted for reconsideration to the first arbitrator.
In Weiner v. Commerce Ins. Co., 78 Mass. App. Ct. 563 (2011), the Appeals Court affirmed.
The court held that the first arbitrator plainly erred when he concluded that the claim for the second accident was premature, because it is well settled that an insurer must arbitrate an underinsurance claim regardless of the pendency of a third-party claim. The arbitrator made clear an intention to rely on the damages award in the third-party claim, but the policy required damages to be determined by the arbitrator. He thereby exceeded his authority.
The Appeals Court also held that the Superior Court judge was allowed by statute to appoint the second arbitrator to determine the claim.
The arbitrator held that the compensation Weiner received from the other driver in the first accident was sufficient to cover her losses from that accident. He held that arbitration was premature as to the second accident because the claim against the other driver in that accident had not been resolved.
Weiner and her husband won a motion in Superior Court to vacate the arbitration award, on the ground that the arbitrator had exceeded his authority in deciding that arbitration for the second accident was premature.
The case was arbitrated again with a new arbitrator. The second arbitrator awarded damages for both accidents, and that award was confirmed by the Superior Court. Commerce appealed, arguing that the first arbitration award should not have been vacated and that the matter should have been submitted for reconsideration to the first arbitrator.
In Weiner v. Commerce Ins. Co., 78 Mass. App. Ct. 563 (2011), the Appeals Court affirmed.
The court held that the first arbitrator plainly erred when he concluded that the claim for the second accident was premature, because it is well settled that an insurer must arbitrate an underinsurance claim regardless of the pendency of a third-party claim. The arbitrator made clear an intention to rely on the damages award in the third-party claim, but the policy required damages to be determined by the arbitrator. He thereby exceeded his authority.
The Appeals Court also held that the Superior Court judge was allowed by statute to appoint the second arbitrator to determine the claim.
Wednesday, January 12, 2011
Superior court holds that insurer's mistaken belief that one policy period applies does not estop it from recovery under the correct policy period
Jacob Hanks suffered brain damage as a result of complications during his birth at UMass Medical Memorial Center, an affiliate of UMMHC. For some reason his parents filed three separate actions against UMMHC personnel in three different years. Those claims settled for $4.9 million. Defense costs totalled $1,034,140.
UMMHC had claims-made insurance policies. Its primary provider was CPAC, a captive insurer of UMMHC. UMHHC's excess policies were with other carriers.
In a claims made policy the policy providing coverage is the one in effect when the insurer was notified of the claim. (This is in contrast to an occurrence policy, in which the policy providing coverage is the one in effect when the underlying incident occurred.)
While the lawsuits were pending, UMMHC believed it had given notice of the claim to the excess insurers during the 2003-2004 policy period, when the CPAC policy had a limit of $5 million. It later came to light that the excess carriers may have been notified in the 2001-2002 policy period, when the policy limit was $2.5 million.
UMMHC then sued the excess carriers to recover the additional $2.5 million, the difference between the underlying limits of the two policy years.
In UMass Memorial Health Care, Inc. v. Lexington Ins. Co., 2010 WL 5071868 (Mass. Super.) the Massachusetts Superior Court ruled on the motion for summary judgment of excess carrier First Specialty.
First Specialty argued that UMMHC had suffered no loss within the meaning of the policies because between CPAC and the excess carriers it actually received more than the loss amount.
UMMHC responded that amounts paid by CPAC are not a recovery by UMMHC, because UMMHC funds CPAC itself and is essentially self-insured.
The court held that under the language of the policy, whether loss below the excess policy was paid by a captive insurer, self-insurance, or a regular insurer was irrelevant.
The court held, however, that indemnity under an underlying policy is not a recovery for the purposes of determining UMMHC's loss, because doing so would count the same amount twice -- first as the underlying policy limit and then as a recovery.
It also held that UMMHC did not "elect" to use the later policy period; it merely made a claim under the policy it believed applied. In fact, the earlier policy applied, and First Specialty's obligations needed to be determined under that policy.
UMMHC had claims-made insurance policies. Its primary provider was CPAC, a captive insurer of UMMHC. UMHHC's excess policies were with other carriers.
In a claims made policy the policy providing coverage is the one in effect when the insurer was notified of the claim. (This is in contrast to an occurrence policy, in which the policy providing coverage is the one in effect when the underlying incident occurred.)
While the lawsuits were pending, UMMHC believed it had given notice of the claim to the excess insurers during the 2003-2004 policy period, when the CPAC policy had a limit of $5 million. It later came to light that the excess carriers may have been notified in the 2001-2002 policy period, when the policy limit was $2.5 million.
UMMHC then sued the excess carriers to recover the additional $2.5 million, the difference between the underlying limits of the two policy years.
In UMass Memorial Health Care, Inc. v. Lexington Ins. Co., 2010 WL 5071868 (Mass. Super.) the Massachusetts Superior Court ruled on the motion for summary judgment of excess carrier First Specialty.
First Specialty argued that UMMHC had suffered no loss within the meaning of the policies because between CPAC and the excess carriers it actually received more than the loss amount.
UMMHC responded that amounts paid by CPAC are not a recovery by UMMHC, because UMMHC funds CPAC itself and is essentially self-insured.
The court held that under the language of the policy, whether loss below the excess policy was paid by a captive insurer, self-insurance, or a regular insurer was irrelevant.
The court held, however, that indemnity under an underlying policy is not a recovery for the purposes of determining UMMHC's loss, because doing so would count the same amount twice -- first as the underlying policy limit and then as a recovery.
It also held that UMMHC did not "elect" to use the later policy period; it merely made a claim under the policy it believed applied. In fact, the earlier policy applied, and First Specialty's obligations needed to be determined under that policy.
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