Federal courts can't abstain from mixed insurance coverage claims, says Fire-Dex v. Admiral Ins. Co.

🛑 “But my house is insured…” Yes, but did you disclose all the material facts? When it comes to insurance, it’s not just about having a policy — it’s about what you told your insurer when you got it. ✅ A material fact is any information that could affect an insurer’s decision to accept your application, calculate your premium, or process a future claim. 🏠 In domestic insurance, examples include: ✅Previous claims made on the property ✅Whether the house is vacant for long periods ✅Use of the property for business ✅Type of roofing or building materials ✅Any renovations or structural changes ✅Lack of proper security systems 👌Why Material Facts Matter in a Claim When a claim is filed, the insurer will investigate whether all relevant facts were disclosed when the policy was taken out. If it’s discovered that a material fact was concealed or misrepresented — whether intentionally or accidentally — the insurer may: 🚫Reject the claim entirely, 🚫Reduce the payout, or 🚫Cancel the policy from inception (as if it never existed). Example: A homeowner insures their property but fails to disclose that the house is under renovation and unoccupied. If a fire occurs, the insurer might argue that this material fact increases the risk of damage and would not have issued the policy under the same terms — leading to a denied claim. “But My House is Insured” — The Common Misconception Many policyholders mistakenly believe that once a policy is issued, all is secure. However, an insurance contract is only valid if full disclosure was made. Simply having an active policy doesn't guarantee a claim will be honored if material facts were not properly disclosed. This is where people often feel let down, not realizing that non-disclosure voids the integrity of the policy. 📌 The Importance of Disclosing Material Facts 1. Avoiding Claim Rejection Disclosing all relevant information ensures that there are no surprises at the time of a claim. Insurers can only make fair decisions when they have complete and accurate information. 2. Maintaining Trust and Legal Standing Insurance contracts are legal agreements. Failing to disclose material facts can be considered fraud or misrepresentation, potentially leading to legal consequences and loss of coverage 3. Better Tailored Coverage Honest disclosure enables insurers to offer products that better match the actual risk, ensuring you get the right protection for your needs. 4. Peace of Mind Knowing you’ve disclosed everything important removes any doubt or stress during the claims process. It builds trust and long-term value between you and your insurer. 🔐 Insurance is built on trust (utmost good faith) . Disclosure is not optional — it’s essential. Let’s educate, inform, and protect ourselves from unnecessary risks. # Materialfacts # Disclosure # TheShieldInvestment

A lot of insurance coverage disputes in Cook County are heard by chancery judges. I remember having several large coverage matters in front of Judge Rochford when she was in Chancery. She now is an Appellate Justice for the 1st Dist. In the following order, Justice Rochford wrote the opinion that the trial court abused its discretion by staying a portion of a class action pending the decision of a related coverage action. The trial court reasoned that a settlement meant the only way the Plaintiffs would recover would be from insurance proceeds it was more efficient to wait to determine whether the insurers had any coverage obligations before moving forward with the underlying action. The 1st Dist. noted that under Peppers a declaratory judgment action should not make determinations of any ultimate fact issues and moreover an insurer can only be determined to have liability if there has been a determination that the insured has incurred underlying liability. As such the 1st Dist. held: Staying any portion of this litigation in favor of first obtaining a determination of coverage in the declaratory judgment action—and perhaps a determination of ultimate facts—runs afoul of these well-recognized principles of law, putting the cart before the horse, and invites substantial prejudice to the parties. As such, this consideration cannot provide a solid justification for the stay ordered by the circuit court, reveals an abuse of discretion, and leads us to conclude that the stay must be vacated. An interesting procedural question for Illinois appellate lawyers: this case was heard after only considering the Plaintiff's brief only. I had never heard of that. Has anyone else evert had a case be briefed by only one side?

Morrison Mahoney Partner Cara Joyce recently argued successfully at the Connecticut Supreme Court, prevailing on behalf of her insurance agency client. Cara had previously obtained summary judgment at the trial court stage and prevailed before the Appellate Court in relation to this matter as well. Plaintiffs’ homeowner’s insurance claim was denied by the insurer after a house fire because their policy had non-renewed days prior when they failed to replace a portion of missing siding on the house that was identified in an inspection. The insurance company had notified the agency of the inspection results and asked the agency to pass the information about the needed repairs on to the plaintiffs. The agency sent the plaintiffs a certified letter informing them of this, per Connecticut’s statutory requirements. Plaintiffs never claimed the letter, the policy non-renewed, and ~10 days later, their house burned down in an accidental fire. The insurance company declined to cover the claim, as the policy had non-renewed. Plaintiffs claimed they were never informed of the inspection results by the agency. They sued the insurance company and the insurance agency, claiming that the insurance agency had a duty to inform them of the impending non-renewal. All defendants obtained summary judgment, which was affirmed on appeal. The Appellate Court concluded that most of the plaintiffs’ claims were unpreserved and affirmed the trial court that the insurance agency had no duty to inform them of the non-renewal. The Supreme Court granted certification to the insurance agency only, and in a 4-2 decision with two judges dissenting, the Supreme Court affirmed the lower courts’ rulings in favor of the insurance agency defendant. The Supreme Court agreed that the plaintiffs’ claims of a long-standing relationship with the insurance agency did not provide an exception to the general principle that an insurance agency’s duty ends when they have procured the policy they were requested to procure. This win limits our client’s duty and confirms that they have no ongoing duty unless special circumstances exist. Great work, Cara! Read more here: https://lnkd.in/eP8fBtTj

Insurance and Legal Reforms Work! A new report from reinsurance giant Gallagher Re confirms that recent legislative and legal reforms are successfully reversing Florida’s insurance crisis, bringing much-needed market stability. Check out the facts: • Litigation Drops: The number of property claims lawsuits against carriers has dropped significantly (to 2018 levels). • More Capacity: 14 new insurance companies have entered the Florida market since the reforms. • Costs Down: Reinsurance prices have fallen, including a risk-adjusted reduction in the latest renewals. • Market Health: Policies with the state insurer, Citizens Property Insurance Corp., have dropped sharply as business moves back to the private sector. The results are clear: reforms work to attract capital and stabilize the market. Go deeper:

Almost all insurers provide management and professional liability insurance coverage on a claims-made basis. Therefore, timely claim notice to the carrier by the insured is of utmost importance. This article explores some of the inherent difficulties your insureds (and your agents when giving reporting advice) will face when deciding what constitutes a claim that requires reporting. The goal of this article is to help avoid a late notice claim denial.

As a leading insurance claim appraisal company within the state of Texas, My Claim Appraisal has provided our recommendations to the Texas Department of Insurance regarding the recent legislative changes involving the insurance claim appraisal process. Specifically, 28 TAC 5.9800, .9801, .9802, .9803, .9804, .9805. At My Claim Appraisal, our core perspective is that claim appraisal, when structured efficiently and correctly, serves as the most effective tool for Texas consumers, particularly the working class, to achieve the proper identification of their damage and the cost to repair those damages after they have submitted an insurance claim. By utilizing impartial parties, it is intended to be a faster and less expensive alternative dispute resolution mechanism than hiring a Public Adjuster or Attorney. The focus should be on ensuring this mechanism is functional, fast, and affordable, as intended by the Texas legislature. Attached is our recommendation to the Texas Department of Insurance surrounding the Residential Property Appraisal Process, sent by one of our Founders who is also a Texas resident and insurance policyholder. As with every recommendation we make as a company, our focus will always be on the policyholder, and what is best for the policyholder. Although some critics may disagree with our timeline recommendation, based on our company’s results, we know these timelines are achievable when the proper practices and processes are in place by companies and individuals that choose to be involved with the claim appraisal process. Our recommended timeline will directly benefit the policyholder by bringing a quick conclusion to a disruptive and stressful time of their lives. 

Two Years After Florida’s Insurance Reforms, the report card and stats are as follows: 🔹 More Denials – In 2024, insurers closed nearly 47% of claims with no payment, up from 40% in 2022. 🔹 Premium Pressure – Average homeowners’ costs remain 2–5x the national average ($4,300–$15,460 in Florida vs. ~$2,000 nationwide). 🔹 Mixed Results on Litigation – Lawsuits ticked up slightly on denied claims (12.9% vs. 12.4%). In short: carriers are scrutinizing more claims, while homeowners still face steep costs. One of the reform's stated intent was to reduce litigation, but it appears that is not successful. Is the reform merely emboldening the carriers, or, is it allowing the carriers to dismiss the frivolous claims? Regardless of the answer, the bar has been raised. Working the claims process with professionals that have the experience and know how to comply is as important as ever. At All Claims Repairs, we’ve seen firsthand how policyholders, adjusters, and agents can succeed in this tougher environment. Our latest blog breaks down best practices, including: ✅ Timely action (file and document damage quickly) ✅ AOB compliance (clear disclosures + detailed estimates) ✅ Collaboration (keep all parties aligned from the start) ✅ Expertise (lean on experienced Florida professionals) 👉 Read the full article here: https://lnkd.in/gNaxfS2A What’s your experience since the reforms? Have you noticed more denials or higher premiums? Share your perspective in the comments. #FloridaInsurance #PropertyRestoration #ClaimsManagement #InsuranceReforms #HomeownersTips

When Does a Restoration Contractor Become an Adjuster? Lessons from Wisconsin’s $6,000 Wake-Up Call The Wisconsin Office of the Commissioner of Insurance recently issued a final decision that should be read by all my friends in the insurance restoration contractor industry so this does not happen to you. The case involved a contractor who crossed the bright line between repair work and insurance claim negotiation and it ended with a $6,000 forfeiture, a public reprimand, and a clear message from regulators. The order tells a story that’s become all too common. An insurance restoration contractor, eager to “help” a homeowner, included an assignment of benefits clause in his contracts, advertised claim assistance, and even spoke directly with the insurer about claim amounts. In doing so, he wasn’t just fixing property but was adjusting a claim without a license. Worse, during a heated negotiation, he falsely claimed that the Insurance Commissioner had told him the insurer was “playing by its own rules.” That statement, deemed a fraudulent misrepresentation, earned him a $5,000 penalty by itself. This decision cuts deeper than a single case. It reminds us that adjusting a porperty insurance claim is not a casual act of customer service. Instead, it’s a regulated profession with defined boundaries. Insruance restoration contractors who insert themselves into claim negotiations risk more than fines; they undermine their credibility and expose themselves to penalties that could jeopardize your contractor license. I have long said that property insurance claims handling is not just about numbers. It’s about integrity and all of us in this field have to respect our legal lane. Whether you wear the hat of a contractor or a public adjuster, you must know where your role ends and where another begins. The Wisconsin Commissioner’s order is more than a penalty; it’s a warning shot to everyone in the claims business to respect the boundaries of our professions and the trust that comes with them.

*An Insurance company cannot reject a claim for the breach of an "impossible" condition,* says the Supreme Court. An insurance company cannot reject a claim for breach of an "impossible" condition because it is legally unfair and contrary to the purpose of an insurance contract, which is to provide protection, not to trap policyholders with unfulfillable terms. The Indian Supreme Court has ruled that such conditions defeat the policy's intent by making coverage unattainable. Enforcing an impossible condition would be unreasonable and exploitative, ensuring insurers must act responsibly and can't use technicalities to deny valid claims. Why an insurer cannot reject a claim for an impossible condition: Defeats the Policy's Purpose: The core purpose of an insurance contract is to provide coverage and a safety net, especially for foreseeable risks. An impossible condition undermines this purpose by making the coverage practically useless. Unfair and Exploitative: Insisting on a condition that cannot be met is considered unfair and can be used as an unfair technicality to deny valid claims. Insurance contracts must have terms that are fair, transparent, and practically enforceable. Legal Precedent: The Supreme Court of India, in the case of Sohom Shipping Pvt Ltd v M/S New India Assurance Co Ltd, established that an insurer cannot deny a claim on the grounds of breaching a condition that was impossible or had become impossible to perform. Frustration of Purpose: If a condition becomes impossible to fulfill due to events like the onset of monsoon, the purpose of the insurance contract—to cover risks during foul weather—would be defeated if the claim were denied for that reason. How this works in practice: Focus on the Contract's Intent: Courts will look at the overarching intent of the policy rather than just strict adherence to an impossible clause. Protecting Policyholders: This ruling protects policyholders by ensuring that insurers are not allowed to hide behind technically unfulfillable conditions to avoid paying out legitimate claims. Remands for Compensation: In cases where a claim is denied based on an impossible condition, the Supreme Court has directed that the matter be sent back to the appropriate commission to determine the compensation payable to the insured, reinforcing the idea that the claim should be covered.