Dec Page

The question of the month pertains to the Unfair Claims Settlement Practices Act. This act was created by the National Association of Insurance Commissioners to set forth standards for the investigation and disposition of claims arising under policies or certificates.

But, what is known about the act? How does it operate? How many states have adopted the act or passed legislation similar to it? What claims practices are deemed unfair and are prohibited by the act? For the answers to these questions and for state-by-state information on the act, link onto the designated article in the FC&S Bulletins.

Uninsured motorists coverage in Georgia is the subject of one of the court cases reported in the Dec Page. This case deals with the issue of whether, under Georgia law, uninsured motorists coverage can be paid for the death of a nonresident relative. The pollution exclusion is the subject of other cases noted in the Dec Page. These two cases are from California and they show that the pollution exclusion continues to be at the core of coverage disputes despite the fact that most courts today have upheld the provisions of the exclusion. The last court case discussed is a recent one on the issue of credit scoring, a tool used by some insurers to underwrite risks.

The United States Court of Appeals for the Ninth Circuit reviewed the practice of credit scoring in accordance with the provisions of the Fair Credit Reporting Act and issued a ruling that can affect how insurers use credit scoring and what responsibilities insurers have if that scoring is used to establish premiums for insureds.

Blanket Insurance

Blanket coverage is one of two basic methods used to insure commercial property. Its main advantage lies in the fact that, in event of a covered loss, the insured will probably not find him or herself in the position of not having enough insurance to cover the loss. However, there are disadvantages. The rate can be steep, and the amount of coinsurance required (usually 90 percent) does not receive a credit.

This month we discuss the insurance—both pros and cons—and conclude with a review of how different courts have viewed the coverage, particularly when the “other insurance” condition is invoked. See Blanket Coverage Discussed.

Questions and Answers

Some umbrella forms promise to indemnify the insured, while others promise to pay on behalf of the insured for a covered loss. What is the difference? See Indemnity Versus Pay-on-Behalf of Language. What kind of electronic equipment is covered by the BAP? See Auto Equipment Coverage. Golf carts are used for maintenance and to transport tenants in a large apartment complex. Does the CGL cover their use? See Golf Carts as Mobile Equipment.

Sinkhole Collapse and Mine Subsidence

The ISO homeowners forms commonly exclude coverage for loss caused by mine subsidence. Some states offer coverage, either through a state fund or by endorsement to the homeowners policy. See Sinkhole Collapse and Mine Subsidence.

Apartment Building Owners

ISO has developed a market segments program providing specialized coverages for certain insurance markets. The apartment building owners market segments program provides property and liability coverage for that particular segment of the market. This article offers a description of the apartment building owners program and the endorsements that accompany it. See Apartment Building Owners.