Zalma on Insurance

By Barry Zalma

Presentation of insurance issues relating to claims handling, insurance coverage, interpretation of insurance policy coverages, insurance fraud, and investigation.... more

· Business

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The podcast currently has 842 episodes available.

Zalma on Insurance episodes:

November 24, 2023 You Win Some & You Lose Some
USDC Should Have Considered the Intentional Act Statute

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9min
November 23, 2023 No Sprinklers No Coverage
Breach of Condition Precedent Defeats Policy
Blog Post 4673
Plaintiff appealed the trial court's order granting summary disposition
in favor of defendant. In 23771 Blackstone, LLC v. Conifer Insurance
Company, No. 364333, Court of Appeals of Michigan (November 16, 2023)
the Plaintiff sought to avoid the fact it breached the material
condition requiring it to maintain a fire sprinkler system as a
protective safeguard.
FACTS
A fire occurred at plaintiff's building in Warren, Michigan. The
building housed a marijuana growing operation. Defendant insured the
property against fire and other hazards under a commercial property
insurance policy that defendant originally issued in 2017 and renewed
annually thereafter. The parties did not dispute that defendant's policy
included a Protective Safeguards Endorsement (PSE), which provided, in
pertinent part that the policy required as a condition precedent that
the insured was "required to maintain the protective devices or services
listed in the Schedule. The protective safeguards to which the
endorsement applied was an Automatic Extinguishing System.
After the fire, plaintiff filed a claim under the policy, but defendant
denied the claim because the property did not have an automatic
extinguishing system (AES).
Plaintiff sued alleging that defendant had repeatedly inspected the
property and "was aware, or should have been aware, from the inspection
and other sources, that the property did not have an automatic sprinkler
system."
The insurer moved for summary disposition arguing that the policy
language was clear and unambiguous, and that because plaintiff did not
have an AES on its property, it was precluded from recovering fire
protection benefits under the terms of the policy.
Plaintiff faced with an obvious failure of a condition responded that
that defendant should be estopped from denying coverage for lack of an
AES because the PSE was ambiguous since it did not actually define the
system.
The trial court ruled that the insurer was entitled to summary
disposition because the policy unambiguously precluded coverage if the
insured property did not have an AES, and it was undisputed that there
was no AES on plaintiff's property.
AMBIGUITY
Initially, plaintiff argued that the language of the policy was
ambiguous and that it should be construed against defendant and in favor
of coverage because an AES is not defined in the PSE. Finding that the
language of the PSE was not ambiguous the Court of Appeals noted that
the PSE refers to a definition of an "automatic sprinkler system,"
stating that it means: “a. any automatic fire protective or
extinguishing system, including connected: (1) Sprinklers and discharge
nozzles; (2) Ducts, pipes, valves, and fittings; (3) Tanks, their
component parts and supports; and (4) Pumps and private fire protection
mains. b. When supplied from an automatic fire protective system; (1)
Non-automatic fire protective systems; and hydrants, standpipes, and
outlets." [Emphasis added.]
Accordingly, the court concluded that the PSE is not ambiguous because
it adequately explained the meaning of an AES.
However, the mere fact that defendant and plaintiff may have been aware
that the property did not have an AES does not establish that the
parties mutually understood and agreed that an AES was not required as a
condition of coverage.
ZALMA OPINION
Insurance policies are contracts. They agree to indemnify an insured
against multiple risks of loss but never every potential risk faced by
the insured. When an insurer requires protective safeguards like fire
sprinklers or burglar alarms it reduces its premium because of the fact
that the risk of loss is lessened by the protective safeguard. Failure
to maintain a protective safeguard, a condition precedent, eliminates
coverage because the risk of loss was not as promised.
(c) 2023 Barry Zalma & ClaimSchool, Inc.

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8min
November 23, 2023 I AM THANKFUL
My Family and I are Thankful to Share This Thanksgiving with You
My family and I have much to be thankful for this year, not the least of which are the care provided by my daughter, Stephanie, who cares 24/7 for my wife and her mother, Thea who continues to recover her memory. I am personally in good health, walking four to five miles a day, with the assistance of my new aortic heart valve that was inserted with a
transcatheter heart valve (TVR).
I am thankful for you, my friends, clients and readers of “Zalma’s
Insurance Fraud Letter,” my blog “Zalma on Insurance,” my Substack
publications, my videos on Rumble.com and YouTube.com and my books and other writing including the new Third Edition of the ten volumes of my treatise, “Zalma on Insurance Claims.”
Please allow me this opportunity to explain to you all the things I, and my family, can give thanks for:
1. I have loved my wife of 55 years since we first met when she was nine and I was twelve.
2. I am thankful that she still loves me and lets me make clear every
day that I love her more now than I did when she ignored me when I was 12.
3. My three adult children who are successes in their own right.
4. That my three children, my almost seven-year-old granddaughter live nearby, put up with my wife and I, and are healthy, successful, and mostly happy in what they do.
5. That my grandson graduated from Puget Sound University in Washington state and is now working full time for a major business in Los Angeles.
6. My clients who, for the more than 55 years have allowed me to earn a living doing what I love: practicing law until I let my license go inactive, acting as a consultant, testifying as an expert witness,
writing materials to help others provide excellence in claims services and creating videos to help every member of the insurance profession learn more about insurance and insurance claims handling.
7. My publishers the American Bar Association, Full Court Press,
Fastcase.com, Thomson Reuters and Amazon.com.
8. My dearly departed parents and grandparents for having the good sense
to leave the Ottoman Empire at the beginning of the 20th Century so we
could avoid the Holocaust and I could be born American.
9. My country for giving me a place to live and work in peace and
complain about it without fear.
10. The state of California, where I was born, and have lived for 81
years, for allowing me to have my home and grow my family, and the
ability to pay the high taxes for the privilege.
11. Those of you who read what I write and gain something from it.
12. Eighty one years of mostly good health, but for a small heart
attack, clogged arteries and a deteriorated aortic heart valve, that
gave me the ability to continue to work – albeit at a reduced rate
because of the skills of my cardiologists and the St. John’s hospital in
Santa Monica.
13. Allowing me the health and ambition to avoid my cardiologist by
walking every day and working on my garden and bonsai.
14. The hundreds of friends I have never met but with whom the Internet
has allowed me to communicate in parts of the world I have never
visited.
15. The wonder of the Internet that allows me to publish E-books,
Zalma’s Insurance Fraud Letter (ZIFL) and my blog instantly on line.
16. That my family can get together to express our thanks for each other
and our happiness this year again without a need for anything but
enjoying each other’s company.
17. That most of you who I know only by my publications can also gather
with your families to express your thanks.
18. To those friends I meet almost every day as I walk along the Ballona Creek bike path.
I hope, on this Thanksgiving weekend, that you can join my family and me remembering that it is more important to think about our blessings and those things that we have to be thankful for than to get in line for “Black Friday” to buy an inexpensive flat screen t.v. or tablet.
Enjoy the holiday and your family as I will.
(c) 2023 Barry Zalma

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16min
November 22, 2023 "Personal Injury" Coverage Exclusion Eliminates Coverage
Speculation About Extraneous Facts Does Not Trigger Duty to Defend
AutoDistributors, Inc. and Steven Schneider (collectively
"AutoDistributors") appealed the district court's order granting
judgment on the pleadings in favor of Scottsdale Insurance Company,
Nationwide E&S Specialty, Scottsdale Indemnity Company, and National
Casualty Company (collectively "Defendants"). In Autodistributors, Inc.
et al v. Nationwide E&S Specialty; et al., No. 22-16445, United
States Court of Appeals, Ninth Circuit (November 17, 2023) the Ninth
Circuit interpreted the insurance policy.
Go to the Insurance Claims Library –
http://zalma.com/blog/insurance-claims-library.

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9min
November 22, 2023 Bad Faith Judgements & Settlements are Punishment not Damages
Florida Refuses to Offset Tort Damages with Bad Faith Damages from an
Underinsured Motorist Insurer
The Florida Supreme Court was asked to resolve a certified question from
a lower court about whether a personal injury damages award must be
reduced by a payment the plaintiff received to settle a bad faith claim
against his uninsured motorist insurance carrier.
In Alberta S. Ellison v. Randy Willoughby, No. SC2021-1580, Supreme
Court of Florida (November 2, 2023) the Supreme Court answered the
questions posed.
FACTS
Respondent/plaintiff Randy Willoughby was badly injured in a car crash.
After the accident, he sued Petitioner/defendant Alberta Ellison,
bringing a vicarious liability claim based on Ellison's co-ownership of
the other car in the crash. Willoughby also sued his own uninsured
motorist insurance carrier to recover policy benefits and for statutory
bad faith damages. Willoughby and his insurer settled before trial for
$4 million. The subsequent trial against Ellison resulted in a $30
million jury verdict for Willoughby. Ellison then asked the trial court
to set off the $4 million insurance settlement against the damages
award, but the court denied the motion.
The Second District Court of Appeal affirmed the denial of the set off
request. It also certified this two-part question as one of great public
importance.
Is a settlement payment made by an uninsured motorist insurer to settle a
first-party bad faith claim subject to set off under section 768.041(2)
or
a collateral source within the meaning of section 768.76?
The court answered no to both parts of the question, holding that
neither statute authorized a set off in this case. The Second District
explained that, writing on a blank slate, it would have found Ellison
entitled to a set off under section 768.041(2), but it decided that the
Supreme Court's case law precluded that result.
Based on the parties' arguments and the Supreme Court's review of the
record, the Supreme Court determined that Ellison did not ask the trial
court for a set off under section 768.041(2) and refused to consider the
issue.
The Supreme Court rephrased the question posed to it to read: “Is a
settlement payment made by an uninsured motorist insurer to settle a
first-party bad faith claim a collateral source within the meaning of
section 768.76(2)(a)2.?”
Although Willoughby sued his uninsured motorist insurance carrier both
for the $10,000 limit allowed under his policy and for bad faith
damages, his $4 million insurance settlement was undifferentiated (as to
claims and categories of damages). Subject to certain exceptions,
section 768.76(1) mandates damage award reductions for sums that the
plaintiff has received from "collateral sources."
The Supreme Court noted that bad faith damages are not "benefits" for
purposes of the collateral source definition in section 768.76(2)(a)2.
First-party bad faith claims like Willoughby's are a creature of
statute, not of the underlying insurance contract between the parties.
In particular, the damages recoverable in an uninsured motorist
insurance bad faith claim are set out in a statute to be "the total
amount of the claimant's damages, including the amount in excess of the
policy limits, any interest on unpaid benefits, reasonable attorney's
fees and costs, and any damages caused by a violation of a law of this
state."
The Florida Supreme Court characterized statutory bad faith damages as a
penalty. By "extracontractual," the Supreme Court meant that
first-party bad faith damages are over and above the amount owed
pursuant to the express terms and conditions of the policy after all of
the conditions precedent of the insurance policy in respect to payment
are fulfilled.
The Supreme Court answered its rephrased question with a "no"
ZALMA OPINION
The $30 Million verdict was not offset by the $4 Million bad faith
(c) 2023 Barry Zalma & ClaimSchool, Inc.

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8min
November 22, 2023 I AM THANKFUL
My Family and I are Thankful to Share This Thanksgiving with You
My family and I have much to be thankful for this year, not the least of
which are the care provided by my daughter, Stephanie, who cares 24/7
for my wife and her mother, Thea who continues to recover her memory. I
am personally in good health, walking four to five miles a day, with the
assistance of my new aortic heart valve that was inserted with a
transcatheter heart valve (TVR). In my semi-retirement I continue
working only six to eight hours a day doing what I love the most,
writing about insurance, insurance claims, insurance law and acting as
an insurance claims consultant and expert witness.
As a first generation American I am honored to join with all Americans the ability to celebrate Thanksgiving that started when the United States was a dream and just a colony of Great Britain to give thanks for the good things in life at least once a year. It took Abraham Lincoln, our greatest President, to make it an official holiday.
Please allow me this opportunity to explain to you all the things I, and
my family, can give thanks for:
1. I have loved my wife of 55 years since we first met when she was nine
and I was twelve.
2. I am thankful that she still loves me and lets me make clear every
day that I love her more now than I did when she ignored me when I was
12.
3. My three adult children who are successes in their own right.
4. That my three children, my almost seven-year-old granddaughter live
nearby, put up with my wife and I, and are healthy, successful, and
mostly happy in what they do.
5. That my grandson graduated from Puget Sound University in Washington
state and is now working full time for a major business in Los Angeles.
6. My clients who, for the more than 55 years have allowed me to earn a
living doing what I love: practicing law until I let my license go
inactive, acting as a consultant, testifying as an expert witness,
writing materials to help others provide excellence in claims services
and creating videos to help every member of the insurance profession
learn more about insurance and insurance claims handling.
7. My publishers the American Bar Association, Full Court Press,
Fastcase.com, Thomson Reuters and Amazon.com.
8. My dearly departed parents and grandparents for having the good sense
to leave the Ottoman Empire at the beginning of the 20th Century so we
could avoid the Holocaust and I could be born American.
9. My country for giving me a place to live and work in peace and
complain about it without fear.
10. The state of California, where I was born, and have lived for 81
years, for allowing me to have my home and grow my family, and the
ability to pay the high taxes for the privilege.
11. Those of you who read what I write and gain something from it.
12. Eighty one years of mostly good health, but for a small heart
attack, clogged arteries and a deteriorated aortic heart valve, that
gave me the ability to continue to work – albeit at a reduced rate
because of the skills of my cardiologists and the St. John’s hospital in
Santa Monica.
13. Allowing me the health and ambition to avoid my cardiologist by
walking every day and working on my garden and bonsai.
14. The hundreds of friends I have never met but with whom the Internet
has allowed me to communicate in parts of the world I have never
visited.
15. The wonder of the Internet that allows me to publish E-books,
Zalma’s Insurance Fraud Letter (ZIFL) and my blog instantly on line.
16. That my family can get together to express our thanks for each other
and our happiness this year again without a need for anything but
enjoying each other’s company.
17. That most of you who I know only by my publications can also gather
with your families to express your thanks.
h.
Enjoy the holiday and your family as I will.
(c) 2023 Barry Zalma

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16min
November 21, 2023 You Only Get What You Pay For
, a large barn with an adjacent milk house, several sheds or smaller
barns, and a small country church.
The underlying case arises from a fire on Scafella's real property. The
insurance claims Scafella made following that fire loss did not provide
the result he desired and litigation followed.
THE POLICY
The property was insured under a homeowner's policy of insurance issued
by Erie, identified as the "ErieSecure Home Insurance Policy"
("policy"). The policy contained a standard business pursuits exclusion,
which excluded loss to property “1. used in whole or in part for
"business" purposes …; or 2. used to store "business" property.”
It was undisputed that Mr. Scafella's then fiance (Ms. Lisa Smith),
obtained two insurance quotes from Erie for the property, one including
an incidental farming endorsement and one without the endorsement.
Ultimately, Mr. Scafella chose the insurance quote that did not include
the incidental farming endorsement, a less costly option.
Despite indicating to the contrary in his application for insurance, a
business, Olivia's, LLC ("Olivia's"), was a retail store selling meat,
cheese, and sandwiches.
There is no question that the February 2, 2019, fire caused significant
structural damage to the large barn and resulted in the loss of numerous
items of Mr. Scafella's personal property.
THE CLAIMS
Shortly after the fire loss, Mr. Scafella filed an insurance claim with
Erie for that loss. Ms. Smith who, during a recorded statement taken by
Mr. Geho, described Olivia's as being "in a different part of the [barn]
building," but "in the barn itself."
Erie denied the portion of the fire loss claim for the structure of the
large barn, under the business pursuits exclusion of the Other
Structures provision of the policy, as Mr. Scafella was operating a
business (Olivia's) out of the structure.
The circuit court found that the "milk house and the barn are one
structure" and the court concluded that the evidence on the record did
not support Mr. Scafella's claims.
DISCUSSION
The Court of Appeals concluded that Mr. Scafella failed to meet his
burden to establish waiver, the court of appeals found no error in the
circuit court's award of summary judgment to Erie and Mr. Geho.
Other Structures Provision
The Court of Appeals concluded that the large barn area where the fire
occurred and the milk house (where Mr. Scafella operated Olivia's) are
the same structure. In fact, when providing a recorded statement to Erie
after the fire loss, Ms. Smith identified the barn and the milk house
as being part of one building.
Claw-Back Provision
Here, Mr. Scafella represented that the property within the large barn
was his personal property to collect $67,640.80 under the personal
property coverage in his Erie policy, possibly to avoid the $2,500.00
limit to "business" personal property under the SPECIAL LIMITS -
Personal Property Coverage section of policy.
The Court of Appeals concluded that to permit Mr. Scafella to change his
classification of the property at issue to recover under corresponding
portions of the policy is impermissible and would permit him a windfall
and coverage for which he did not pay. Finding no error the trial
court's decision was affirmed.
ZALMA OPINION
When a person is given a choice of available coverages and chooses the
one less expensive he or she is gambling that the loss will fit within
the lesser coverages, and misrepresents the facts at the site of loss to
obtain the less expensive coverage the insured is committing fraud.
After the loss Scafella attempted to change the policy he purchased into
the policy he refused to pay for, with multiple legal machinations that
the courts of West Virginia refused to honor. The moral: always tell
the truth to your prospective insurer and never buy a policy that does
not provide coverage for the risks the property faces.

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11min
November 15, 2023 Zalma’s Insurance Fraud Letter – November 15, 2023
ZIFL – Volume 27 Issue 22
The Resource for the Insurance Claims and Insurance Fraud Professionals
This, the 22nd issue of the 27th Year of ZIFL includes articles and
reports relating to insurance fraud, including:
Insurance Fraud is a Violent Crime
Plea of Guilty of Murder for Insurance Cannot Be Withdrawn
In State of Ohio v. Darin Brusiter, No. 112410, 2023-Ohio-3794, Court of
Appeals of Ohio, Eighth District, Cuyahoga (October 19, 2023) Darin
Burster (“Brusiter”) appealed for the third time from the trial court’s
denial of his post-sentence motion to withdraw his guilty plea.
FACTS
In April 2011, Brusiter was charged with two counts of aggravated
murder, with murder-for-hire and firearm specifications, kidnapping,
insurance fraud, and tampering with evidence in relation to the killing
of Asia Harris (“Harris”). Harris’s husband Samuel Wilson was also
charged in the same indictment.
Brusiter filed a motion to suppress the statements he made to the police
as being in violation of Miranda v. Arizona, 384 U.S. 436, 86 S.Ct.
1602, 16 L.Ed.2d 694 (1966). On May 2, 2012, the court denied Brusiter’s
motion and that same day he pled guilty to one count each of aggravated
murder, kidnapping, insurance fraud, and tampering with evidence. The
court sentenced Brusiter to an agreed term of “33 years to life” in
prison.
Read the full article and the full issue of ZIFL at
http://zalma.com/blog/wp-content/uploads/2023/11/ZIFL-11-15-2023.pdf
More McClenny Moseley & Associates Issues
This is ZIFL’s eighteenth installment of the saga of McClenny, Moseley
& Associates and its problems with the federal courts in the State
of Louisiana and what appears to be an effort to profit from damage to
the public of the state of Louisiana.
February 14, 2023
Looking back in time, attorney William P. Gibbens, representing MMA
advised USDC Judge Michael B. North, that McClenny, Moseley &
Associates admits to instances where MMA told Carriers they represented
the insured when they in fact represented Apex Roofing &
Restoration.
MMA’s Counsel William P. Gibbens admits MMA told insurers that they
represent the homeowner, when they actually represent Apex Roofing. They
also admit to receiving funds from carriers after making these false
statements.
November 7, 2023
Louisiana State Police Investigators Told WWL-TV They Are Starting Their
Investigation with Five St. Tammany Parish Cases and Expanding From
There.
Read the full article and the full issue of ZIFL at
http://zalma.com/blog/wp-content/uploads/2023/11/ZIFL-11-15-2023.pdf
How an Agent Defrauded the Insurer She Represented
In Destiney Kashia Xiong v. Security National Life Insurance Company,
No. 2019AP2320, Court of Appeals of Wisconsin, District III (February
22, 2022) the Court of Appeal resolved the issues raised and allowed the
case to go to trial with the insurer asserting a fraud defense.
Read the full article and the full issue of ZIFL at
http://zalma.com/blog/wp-content/uploads/2023/11/ZIFL-11-15-2023.pdf
Health Insurance Fraud Convictions
Addiction Treatment Center Supervisor Admits to Participating in a
Scheme to Defraud Federal, State, and Private Health Care Insurers
Recovery Connections Centers of America Social Worker Admits to
Leadership Role In Scheme To Bill Insurers For More Full Client Sessions
Than Could Be Provided In A 24-Hour Day
Mi Ok Song Bruining, 63, of Warwick, RI, a clinical social worker on
November 9, 2023, admitted to a federal judge that she helped devise and
execute a scheme that shortchanged Rhode Island and Massachusetts
substance abuse disorder patients out of counseling.
Read the full article and reports of dozens of convictions and the full
issue of ZIFL at
http://zalma.com/blog/wp-content/uploads/2023/11/ZIFL-11-15-2023.pdf
Insurance Fraudster Was a Very Bad Man
Insurance Fraudsters Convicted of Other Crimes
In my experience those who commit property or casualty insurance fraud
are seldom arrested.

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11min
November 15, 2023 No Written Agreement Ends Claim as an Additional Insured
Failing to Understand the Contract it Wrote Cost the White Sox

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7min
November 15, 2023 No Written Agreement Ends Claim as an Additional Insured
Failing to Understand the Contract it Wrote Cost the White Sox

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8min

FAQs about Zalma on Insurance:

How many episodes does Zalma on Insurance have?

The podcast currently has 842 episodes available.