Be honest in your proof of loss.

I noticed this recent TN bad faith case.  In short, this is one of those cases where the insured’s property burns down and the insurance company insuring the property calls the fire arson, which is not covered.

Let’s set the stage.  If you have a claim like this, one of the first people out there, other than the property adjuster, is the C & O or Cause and Origin expert.  They are there to try to figure out why this piece building, all of a sudden, decided to increase it’s output of carbon and, consequently, lower its roof line to the ground.  The adjuster is going to have the insured fill out proof of loss statements and that sort of thing.  If the insurance company suspects that the policy holder or insured intentionally set the fire, then the  insured can expect to have to sit for an Examination Under Oath, which is often followed by a denial of coverage.

Well, in this case, the jury found that they believed that the insured had made some misrepresentations as to what they had.  This happens all the time, but the stuff that was misrepresented was no where to be found in the debris. So, the court said “no coverge for you!”

What do we learn from this? Just be honest.  At the end of the day, its only money.  Is your integrity really worth trying to inflate a claim?

This entry was posted on September 24, 2008 at 12:55 pm and is filed under Litigation, Insurance Practices, Insurance Law, Business Law. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.