Introducing Two New Attorneys

Lether Law Group recently welcomed two new attorneys to our team. Welcome aboard to Dana Mydland and Erik Swedstedt. We look forward to accomplishing great things together.
Dana Mydland grew up in the Pacific Northwest and has remained since. She graduated cum laude from Washington State University, where she received a bachelor’s degree in Political Science and Criminal Justice. Dana received her juris doctorate from Seattle University School of Law, graduating cum laude. She served as Executive Editor of Research and Training for Seattle University Law Review.  Prior to coming to our firm, Dana worked as a judicial law clerk for the Honorable J. Robert Leach at the Washington State Court of Appeals, Division I. Dana enjoys golfing, reading, and hiking around the PNW.
Erik Swedstedt is a Seattle native and graduate of the University of Oregon where he earned a bachelor’s degree in Accounting and a minor in Economics. After obtaining his undergraduate degree, Erik worked for an aviation law firm for three years. Erik gained experience working with C-level executives and assisting with the purchase and sale of corporate aircraft. He subsequently earned his Juris Doctor from Seattle University School of Law where he graduated cum laude. During law school, Erik worked as a legal intern assisting insurance companies with uninsured motorist claims. During his final year of law school, Erik worked as a law clerk for a law firm focused on construction litigation. Erik enjoys attending concerts, golfing, and snowboarding.

Lether Law Supports the 2020 Queen Anne Food Bank

Not since the Great Depression and the Great Recession has America been confronted with such devastating economic conditions. The COVID pandemic has cost America thousands of jobs and placed families around the country in a position of dire need. In the greater Seattle area, which had a booming economy only a year ago, now faces a financial crisis unlike any that it has seen since the 1930s. With thousands that are out of work and families suffering, it is paramount that people contribute this year to the Queen Anne Food Bank.

Lether Law Group is pleased and happy to once again support this outstanding charitable cause. In addition to direct financial support, a food collection station has been set up at Lether Law Group. We are accepting all types of canned and non-perishable food donations. In addition to the food box, there is an envelope accepting financial donations in the form of checks made payable to Queen Anne Food Bank at our front desk. If you have any reason to be in our neighborhood, please feel free to stop by our office and visit. More importantly, stop by and make a donation.

Out of Historic 2020 Wildfires, California and Oregon Adopt New Laws, Regulatory Guidance Impacting Insurers

Over the past several weeks, the fallout from 2020’s historic wildfire season on the West Coast continues to impact the insurance industry and the regulatory environment which insurers face.  More than 6.2 million acres burned across Washington, Oregon, and California in wildfires in 2020, more than 7,500 structures were destroyed, and damages have been calculated in the billions.  State authorities in California and Oregon have moved swiftly to impose new requirements on insurers facing wildfire claims.

On September 29, 2020, California Governor Newsom signed into law a series of bills which affect residential insurance policies and claims:

Effective July 1, 2021, SB 872 will prohibit policies which provide additional living expense (ALE) coverage from limiting a policyholder’s right to recovery if the insured home is rendered uninhabitable by a covered peril during a declared state of emergency, but authorizes insurers to provide a reasonable alternative to ALE that addresses the uninhabitable condition of the covered premises.  SB 872 also requires ALE to be provided for at least two weeks, with additional two-week extensions, in the event of a state of emergency and orders by civil authorities that restrict access to the premises.  SB 872 also prohibits reductions in benefits from what an insured would recover to rebuild at the original location if the insured rebuilds at a new location.  Effective January 1, 2021, SB 872 also requires insurers to provide advance ALE payments, to accept contents inventories in “any reasonable form,” and requires insurers to offer a 60-day grace period for premium payments on premises located within areas defined by declared states of emergency for up to 60 days after the emergency.

Effective July 1, 2021, AB 2756 requires insurers to obtain a signed acknowledgment from residential policy applicants if policies do not provide fire coverage and requires a disclosure of no coverage for fire on the policy’s declarations.  AB 2756 also requires renewal offers that reduce limits or eliminate coverage to identify the specific reductions and eliminations in the renewal offer.  AB 2756 also requires policies which provide replacement-cost coverage to also provide building code upgrade (OL) coverage of no less than 10% of the coverage policy limits as an additional coverage separate from the policy limits, and provides for specific disclosures relating to the inclusion or exclusion of OL coverage in homeowner’s policy declarations.

AB 3012, also includes the ALE provisions and new location benefits provisions of SB 872, and further provides that, for total loss residential claims related to a declared state of emergency, effective July 1, 2021, insurers must provide contents payments of no less than 30% of the structure policy limit, up to a maximum of $250,000, without requiring an itemized claim.  AB 3012 also requires nonrenewal notices for residential property insurance policies to include a specific statement referring policyholders to the Department of Insurance’s Home Insurance Finder on the web and to provide information about California FAIR Plan Association alternative policies.

In addition to the above bills, California Insurance Commissioner Ricardo Lara has issued a notice requesting that residential property insurers provide up to 100% of contents coverage limits without requiring a detailed inventory for total loss claims arising from the recent wildfires, and that they adopt the up to 30% of the structure policy limits, up to a maximum of $250,000 (mirroring the provisions of AB 3012, which does not take effect until July 2021).  The Commissioner has asked insurers to respond by October 23rd, 2020 whether they will comply and with what percentage of total contents coverage they will provide without a detailed inventory.

In Oregon, the Oregon Division of Financial Regulation (DFR) (which oversees insurers operating in Oregon) issued a 30-day emergency order due to the recent wildfires.  The emergency order requires insurers handling claims in designated affected ZIP codes to:

  • Extend all deadlines for policyholders to report claims or submit other communications related to claims;
  • Take all practicable steps to provide opportunities for policyholders to report claims or to provide required communications related to claims;
  • Immediately institute a grace period for premium payments for all insurance policies issued, delivered, or covering a risk in the affected areas through the effective period of the order;
  • Suspend cancellations and nonrenewals through the effective period of the order.

Additionally, DFR has issued a bulletin encouraging insurers to take the following measures for policyholders affected by the wildfires:

  • Adopting a standard ALE advance payment of at least four months for policyholders with total loss claims or whose properties are uninhabitable, and to take into account adverse circumstances requiring ALE benefit extensions for policyholders whose property remains inaccessible due to wildfire damage even after the lifting of evacuation orders;
  • In areas where property access is restricted, not terminating ALE benefits until properties are accessible and deemed habitable;
  • Expediting comprehensive auto property damage claims upon satisfaction of proof, including rental vehicle or other benefits within the policy, for insureds who are unable to access their property or to provide proper documentation for verification due to wildfires;
  • Allowing and accepting any inventory form that contains similar information to what would be reported on company-specific inventory forms;
  • Accepting inventory forms that include groupings of categories of items of property that would be impractical to list separately
  • Expediting payment of business interruption claims related to wildfires upon satisfaction of proof of a total loss or inaccessibility of the affected business.

As a result of the large number of losses and requests to expedite adjustment, the threat of inflated and/or fraudulent claims is increased. Therefore, it is important that insurers proactively investigate, adjust, and seek consultation from appropriate professionals as early as possible in the claims process. This includes retaining and seeking opinions from construction/remediation professionals, cause and origin professionals, financial/accounting experts, and, when necessary, legal advice from coverage counsel whenever concerns arise.

Lether Law Group has been handling large first-party property losses for over 32 years. This includes large fire loss and wildfire claims. If you would like to discuss these recent developments or any other matters, please feel free to contact us at any time.

The above article is an opinion based on various resources such as industry knowledge and is not to be construed as legal advice or to be used as such. If you require legal advice or would like to inquire further about the information contained in this article, please feel free to contact our office directly.

COVID-19 Litigation Update

As we have recently reported, the clear trend in the United States Courts is towards finding that the typical Business Interruption (BI) coverages in U.S. commercial property policies will not be triggered by the COVID-19 pandemic.  Thus far, the majority of the decisions on this coverage issue have gone in favor of the insurance industry.

Interestingly, on Tuesday, September 15, 2020, the High Court of Justice for the Business and Property Courts in Great Britain issued a ruling in a “test case” relating to 370,000 British BI claims.  In a lengthy opinion authored by Lord Justice Flaux (pictured below in the traditional attire of the Queen’s Bench), the High Court found that the policy forms at issue extended BI coverage for losses related to the COVID-19 pandemic.

Fortunately, this ruling from across the pond is unlikely to have much impact on the ongoing litigation of this dispute in the U.S.  That is because the policy forms that the industry presented to the High Court in the “test case” included a coverage for losses related to the spread of infectious disease.  Lord Flaux found that most – though not all – of the policy forms would provide coverage.  Because it was a “test case” there was not any specific finding of coverage for any individual insured.  Rather, the decision provides the manner in which insureds should present their claims depending on the forms or combination of forms in each policy.

Perhaps the most interesting aspect of this ruling is the contrast in how the U.S. and U.K. markets reacted to the early 2010’s SARS outbreak.  In the more risk-averse U.S. market, the industry response to SARS was to quickly adopt virus exclusions.  In the handful of rulings on COVID-19-related BI coverage that we have seen to date, it appears that the courts in the U.S. will enforce that exclusion.

In the U.K., the market responded to SARS by offering infectious disease coverage.  The insurers offering that coverage have obviously had a decade to collect the premiums that go with it.  However, according to the ruling of the High Court, it appears that those insurers will now be required to pay the claims of a broad cross-section of British businesses.  Only time will tell which market had the better strategy for dealing with coverage issues associated with the current global pandemic.

As always, if you would like to discuss the issues in this newsletter or any other matter, please feel free to contact Lether Law Group at any time.

The above article is an opinion based on various resources such as industry knowledge and is not to be construed as legal advice or to be used as such. If you require legal advice or would like to inquire further about the information contained in this article, please feel free to contact our office directly.

Insurers Face Increased Pressure to Expedite Wildfire Claims Due to Notice from Insurance Commissioner

 

While we all continue to deal with the effects and impacts of the COVID-19 pandemic, the western part of our country is now experiencing almost unprecedented wildfires. Over the last two weeks, the west coast has been devastated by wildfires with more than 4.7 million acres burned. Given the widespread devastation losses will likely be in the billions. The large scope of damages will have a drastic impact on insurers both from a potential loss perspective and from substantially increased demand on insurers to adjust claims within statutory time limits for each state.

The anticipated demands on insurers to quickly and efficiently process wildfire claims is exacerbated by a recent emergency notice from the California Insurance Commissioner. On August 26, 2020, the California Insurance Commissioner issued an emergency notice urging insurers to expedite handling of wildfire loss claims and to provide greater flexibility in the handling of claims including the following:

  • Provide a minimum four-month advance payment of Loss of Use, Fair Rental Value, or Additional Living Expense.
  • Allow a minimum 60-day billing grace period to allow for any lost or destroyed renewal notices.
  • Advance payment of at least 35% of limits for personal property without the need to complete an inventory,
  • Accept an inventory on non-company specific forms as long as it contains substantially the same information as the company form.
  • Expedite payment of vehicle damage claims covered under comprehensive loss coverage.
  • Cooperate with consolidated removal efforts coordinated through city, country, and state agencies unless the insurer can provide debris removal more rapidly.
Given the scope of the known and anticipated losses in California, this emergency notice will put additional pressure on the already strained resources that insurers are faced with in light of the COVID-19 pandemic. While not a requirement, this emergency notice may also have the effect of increasing the likelihood of inflated and/or fraudulent claims. The notice provides almost identically to legislation currently on the California Governor’s desk. SB-872 (residential property insurance: state of emergency), which is intended to go into effect in January 2021 for all fire loss claims where a state of emergency is declared. This proposed legislation also raises several issues that insurers need to be aware of. Importantly, with respect to land value, current California law provides that policy holders have the right to buy or rebuild a total loss at a different location. Because insurers do not insure land value, some insurers have read this law to allow for the deduction of land value. This new law expressly prohibits that practice.

It is likely that Washington and Oregon will issue similar notices in the near future in light of the similar scope of losses in those states. Regardless, we anticipate another substantial round of Business Interruption claims as a result of the wildfires. In light of the fact that hundreds of people have been forced into shelters due to evacuations, there also is likely to be an increase in COVID-19 related claims. More importantly, the present impacts of the COVID-19 pandemic will necessarily impact the adjustment and resolution of wildfire claims as resources and necessary activities are all still curtailed in the current environment.

As a result of the large number of losses and requests to expedite adjustment, the threat of inflated and/or fraudulent claims is increased. Therefore, it is important that insurers proactively investigate, adjust, and seek consultation from appropriate professionals as early as possible in the claims process. This includes retaining and seeking opinions from construction/remediation professionals, cause and origin professionals, financial/accounting experts, and, when necessary, legal advice from coverage counsel whenever concerns arise.

Lether Law Group has been handling large first-party property losses for over 32 years. This includes large fire loss and wildfire claims. If you would like to discuss these recent developments or any other matters, please feel free to contact us at any time.

The above article is an opinion based on various resources such as industry knowledge and is not to be construed as legal advice or to be used as such. If you require legal advice or would like to inquire further about the information contained in this article, please feel free to contact our office directly.

Remembering Victims and Survivors

On the anniversary of September 11, 2001, we at Lether Law Group stand united in remembering the victims and survivors of the attacks on New York and Washington, D.C. In light of those events, and the challenges still present today, we especially give thanks for our first responders and the heroes who so bravely honored, and continue to honor, our country.

Lether Law Group is fully staffed and available to our clients during the current health crisis. We are working remotely with secure technology to ensure we can continue to provide you with the highest level of service.

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