3 Specific Claims Issues From 2020

Named Insureds

I failed to list all of my entities as named insureds on all of my policies. I thought it was automatic.

? Policies do not automatically pick up related names.

? There is no forgiveness for not getting it right.

? Do an inventory of all of your past and present entities.

? Verify with state authorities that each of the current entities is a valid entity.

? Make a policy grid and mark an “X” where an entity is listed.

? If the entities listed are not consistent, ask for endorsements adding the missing names.

? If the entity is not listed, it is not covered automatically (except for a limited number of days for some new entities) even if it is a subsidiary of a stated entity.

Policy Conditions

The adjuster denied my loss because I had a driver with a recent drunk driving offense. I did not include this driver on my list of drivers because it would have resulted in a higher premium.

? You violated the concealment, misrepresentation or fraud clause.

? A claim can be denied as a result of concealment, misrepresentation or fraud.

? The following is the standard policy language:

A. CONCEALMENT, MISREPRESENTATION OR FRAUD

This Coverage Part is void in any case of fraud by you as it relates to this Coverage Part at any time. It is also void if you or any other insured, at any time, intentionally conceal or misrepresent a material fact concerning:

1. This Coverage Part;

2. The Covered Property;

3. Your interest in the Covered Property; or

4. A claim under this Coverage Part.

? Note that it applies before and after a claim. It applies “at any time.”

? Note that it applies to all insureds in a multiple named insured policy. If any one named insured is involved in the misrepresentation, all insureds will be affected.

Code Issues

My insurance company will not pay for upgrades in reconstruction costs required by building code changes. Where did I go wrong? You need to add an ordinance or law endorsement to your policy. This covers:

? The increased cost of reconstruction because of building code changes.

? The demolition cost of portions of the building required by building code changes or the demolition of the undamaged portion of the building because it can no longer be used as a result of the loss of grandfathering under building codes.

? The value of the undamaged portion of the building that must be torn down because of a loss of grandfathering. Policyholders need to be alert to these insurance issues before a loss occurs.