Missouri Insurance Lawyer Blog

Last month, Governor Nixon signed two new laws into effect bringing additional insurance protections to consumers affected by damaging storms. The new laws provide consumers with better access to insurers and assign new rules for repair companies to avoid unscrupulous business practices.

Recently, some repair companies have begun calling themselves "insurance claims specialists" in hopes of gaining more business after a damaging storm. These repair companies offer to pay homeowner's deductibles and negotiate with the insurance companies on their behalf. The newly enacted Senate Bill 101 prohibits repair businesses from claiming insurance specialties, paying deductibles and negotiating with insurance companies.

The second new law, Senate Bill 132, guarantees insurance companies' ability to set up a mobile customer service center in storm damaged areas to help consumers get their claims filed faster. Earlier this year, insurance companies seeking to set up temporary centers were required by many cities, counties, and incorporated subdivisions and to purchase business licenses or special permits to set up their mobile centers. Thanks to the new law, Missouri insurance companies can now move quickly to set up mobile service centers wherever they're needed without bureaucratic hindrances.

For more information on these new laws, visit the Missouri Department of Insurance website.

Many Missourians have experienced devastating losses as a result of the storms that have ravaged the southern portion of the state in recent weeks. Thousands of people will be filing insurance claims and we want to help make sure those claims are handled properly by explaining a few situations that could happen with your insurance claims. Here are just a few things to take into consideration:

1. Many insurance companies use a property damage estimating software program called Xactimate. Prices in the program are updated on a quarterly basis. When a large storm strikes it is not uncommon for labor and materials prices in the area of the storm to increase, sometimes rapidly. As a result the prices in the Xactimate program may be outdated at the time of the storm because of the sudden increase in prices. Check with your insurer who uses this or similar programs to determine if they have updated their prices to reflect the increase in the prices immediately following the storm. If not, ask that they do so; otherwise your repair estimate may not accurately reflect the exact cost of repairs.

2. Standard homeowner policies provide that you are entitled to the full replacement cost for the repairs to your home. However, the insurer is only required to pay you the actual cash value of your repairs until you replace or repair your property, and then when that is done you can collect the difference between the replacement cost and the actual cash value. This difference is called the hold back. The hold back is determined by subtracting depreciation from the replacement cost estimate for your repairs. Therefore, if your repairs are estimated at $10,000 for replacement cost value, and the insurer determines that $1,000 depreciation should be subtracted from the replacement cost repair estimate, the insurer will then pay you initially only $9,000 (less your deductible). The $9,000 payment is called the actual cash value payment. Depreciation is determined by considering several factors, such as the wear and tear, age and obsolescence of the item being repaired or replaced. Insurers use a variety of schedules to determine what should be depreciated and for how much. Ask your insurance adjuster how they arrived at the depreciation rate for each item depreciated and what the depreciation rate is based upon to make sure that the appropriate depreciation rate is being applied. Make sure the adjuster is aware of the age of items to be repaired or replaced so that the proper depreciation rate can be applied. For example, the expected age of interior paint may be ten years. If you painted the inside of your house only two years ago, then the depreciation rate that should be applied to the paint job should only be 20%. If the insurer charges a higher rate you should question their depreciation reduction. Also, several items should not be subject to depreciation, such as pure labor items (i.e., remove and replace light fixture to paint room, etc.) or other items (i.e., profit, overhead, and sales tax, etc.) because these items are not subject to wear, tear and obsolescence. Read the insurer's estimate carefully to make sure that such items are not being depreciated.

3. For large losses (anything over $10,000) always get your own estimate from a local licensed general contractor who will commit to doing the work for the amount of his estimate. It is preferable that your contractor prepare an estimate on the same kind of estimating program that the insurer uses so that the two estimates can be easily compared. If there are differences between the insurer's estimate and your contractor's estimate have your contractor meet with the insurer's representative at the house to discuss the differences and have the insurer's representative explain why there are differences. Regardless, once the insurer determines what the repairs are, the insurer must pay you that amount, even though there may still be a disagreement between you and the insurer over any additional amounts that can be owed.

4. If there is a dispute between you and the insurer over the amount of the repairs consider taking advantage of the appraisal provision in the policy which is there to resolve disputes over the amount of the loss. In appraisal, you select a qualified appraiser that you pay, the insurer selects their own appraiser, which they pay, and the two appraisers select an umpire, and you and the insurance company share the cost of the umpire. The appraisal panel then determines the amount of the loss which the insurer must pay. Appraisal has some advantages, in that it can be quicker and less expensive than litigation where there is a dispute over the amount of the loss. Nonetheless, you should be careful in selecting your appraiser, and you should consider getting advice from qualified and experienced attorney on your selection as well as to how best proceed with the appraisal.

Umbrella liability insurance is so named because it acts like an umbrella, sitting on top of your auto and homeowners liability policies to provide extra liability protection for you and your family. Most Americans carry liability coverage on their cars and home that would provide insurance coverage that could be used to pay claims in the event that you or a member of your family negligently caused injury to another person. Umbrella coverage is designed to pay only after your other policies are exhausted.

Why do you need umbrella liability insurance? Accidents can happen to all of us. If we cause injury to another person, the law holds us responsible for the injury and damages caused to the other person. For instance, your inattention caused a serious automobile accident in which someone was seriously injured or killed; or you failed to property maintain the brakes on your farm truck and an employee was unable to stop in time to prevent a terrible accident. Often, we do not carry enough automobile insurance or homeowner's coverage to pay for the damages that we may cause.

Unfortunately, home owner's insurance or automobile coverage may not be enough to protect your assets in the event of a serious injury or death. If your negligence results in damages to another person in an amount that exceeds your insurance limits, how and where would you get the money to pay the debt? Your assets, including your home or your investments could be at risk. If you have accumulated even a modest amount of assets or if your travel habits or business pursuits put you at risk, you should consider purchasing umbrella liability coverage as part of your financial planning strategy.

Umbrella liability insurance is relatively affordable, and can be easily coordinated with your existing insurance policies. Usually, there is a substantial discount in the insurance premium if you purchase your umbrella liability coverage, homeowners and automobile policies from the same company.

Continue reading "Why Do I Need Umbrella Insurance Coverage?" »

Most homeowners understanding that if someone comes onto their property as a guest and they are injured because of a defect in your home or the land that you can be held civilly liable for the guests' injuries. To be liable you would have to be found to be negligent by a judge or jury and the standard for negligent acts differ from state to state according to specific laws. However, generally the law requires that people who are invited to your home be treated with reasonable care and that you maintain your property and warn guests of any hazards. You would have a responsibility to be aware of hazards on your property. If you have pets, which harm a person on your property, you may have liability to that person as a result of your pet's acts.

If someone is injured while on your property or at your home, you should contact medical authorities to get assistance for the injured guests. You should also contact your homeowners insurance company to report the incident by phone and follow up with a written report.

Continue reading "Liability For Injuries To Your Guests" »

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If your home is damaged you have certain responsibilities under a standard homeowners policy. Following these 9 steps will help you in making your claim and collecting for covered losses under your policy. First you should takes steps to prevent any damage such as calling the fire department or the police. Second, you should notify your insurance company of the loss. Third, you should protect the property from further damage if you can do so safely. Fourth, you should make reasonable and necessary repairs to protect the property if you have the ability to do so and it can be done safely. Five, you should identify damage to real and personal property including documentation of any property you must throw out or dispose of before an insurance company representative arrives. Taking pictures is an excellent way to document what had to be disposed. Six, fill out a claim form with accurate and truthful information. Do not exaggerate your losses, nor should you understate your losses. Seven, keep accurate records of all repairs and costs. Eight, document the cause of the loss, and obtain reports to support your claim. Nine file your claim promptly after you have gathered the above information.
Following these simple steps will help you collect what you are owed for your insured property from your insurance company.
The law firm of Tatlow, Gump, Faiella & Wheelan, LLC may be able to help if you are having a problem with your insurance company. To learn more about our law practice visit our website.

If your house is destroyed by a catastrophe or if your possessions are stolen from your home, you don't want to suddenly find out that the home owners insurance policy that you purchased pays less than you thought it would.
To avoid being underinsured, you should consider the following tips.
If you already have homeowners insurance, speak with your agent or company to make sure you have enough. Most insurance companies recommend that you insure your home for 100% of the cost of rebuilding the home. Very few homes are totally destroyed but yours could be one of those homes that is totally destroyed. If your home is insured for less than 100% of the rebuilding cost, you have assumed the risk of not having enough money to replace it with one of similar size and quality. In addition, in a rising real estate market, the cost of rebuilding your home may be outstripped during the time of the catastrophe and the time it takes to actually begin and complete construction. Make sure your agent knows about any improvements, or additions to your home since you last obtained your insurance policy. If you do not regularly increase your limits to cover the cost of rebuilding, the additions or improvements you have made to your home may not be able to be rebuilt in the event of a catastrophe.
To assess your cost of rebuilding have an appraisal done.
The amount of insurance you buy should be based on actual rebuilding costs not the market price of your home. Market prices of homes fluctuate both up and down and at any particular time your home is damage it may be higher or lower than the original purchase price. However, the cost of rebuilding your house rarely goes down as generally speaking wages, materials and other costs tend to rise over time with inflation. You can contact an appraiser through recommendations from your local real estate agent, insurance agent or by consulting the phone book. The true cost of rebuilding your house is based on local construction costs, the type and size of house you own, including the level of construction, the style and amenities. For instance, if your home is a solid brick exterior, it would obviously cost more than one that has vinyl siding. So to insure that you have adequate insurance get an appraisal of the rebuilding costs. Some insurance companies offer a service which calculates the approximate cost of rebuilding which can also serve as an aid in selecting the amount of coverage to rebuild your home.
Purchase riders that increase your coverage to keep up with local building cost inflation. If the limits of your policy haven't changed since you bought your home, then you're probably underinsured. Many insurance companies offer an "inflation guard clause" that automatically adjusts the dwelling limit when you renew your policy to reflect the current constructions costs in the local area.

Homeowners insurance is an important part of protecting your family. This interview from National Public Radio, provides some information for policyholders to consider. Remember that homeowners not only protects you home from damage but includes liability coverage for lawsuit. Get enough to protect you home and your other assets.

Homeowners Insurance: How Much Do You Need? : NPR.