Mark Stackhouse
Stackhouse Adjustment
Kevin C. McNamara, Esquire
Thomas, Thomas & Hafer LLP
The Everyday Plays
Waivers
 Reservation of Rights
 Early Expert Retention
 30/45 Day Status
 Non-cooperation

More Everyday Plays
Insured Statements
 Examination Under Oath
 Mortgages
 Proof of Loss

The Claim
Businessowners Policy
Insured Property – Dance Studio with
stucco exterior
 Date of loss reported: 7/4/14
 Loss discovered: 7/7/14 – section of rear
stucco wall fell down; water from storms
entered building and damaged main
studio’s dance floor
 Dance competition the following weekend
can no longer be held at the location at a
loss of at least $15,000


Non Waiver Agreements

When to Use

“The Non Waiver should in no way be construed as a
denial but as an acknowledgment that a question may
exist concerning coverage and that Pick an Insurance
Company will continue to make a good faith effort to
resolve this matter. The document enables this office to
continue to investigate this claim while protecting the
Insured’s rights also. You will note that the Non Waiver
specifically states that no rights of the Insureds are given
up under the agreement.”

“THAT the “Insured” does not waive or surrender any of
his/her/its rights under the policy by the execution of this
agreement”
Non Waiver Agreements
Communicating to the insured
 Policy defense?

Reservation of Rights

When to Use

Policy Basis
 List all items that may apply
 Correct – must review all endorsements and
how they may modify basic policy language

Communicating to the Insured
Example ROR
The reason for this is that the engineer’s
inspection revealed that the wall fell due to the
deterioration of the anchorage system which
was long term and due to the infiltration of
moisture behind the walls over a period of
time.
The involved policy form which is the CP 10 30 contains an
exclusion for certain causes of loss as follows:
B. Exclusions
1. We will not pay for loss or damage caused directly or indirectly
by any of the following. Such loss or damage is excluded
regardless of any other cause or event that contributes
concurrently or in any sequence to the loss:
d. (1) Wear and tear;
(2) Rust or other corrosion, decay, deterioration, hidden or latent
defect or any
quality in property that causes it to damage or destroy itself;
Under 1.d. above, any ensuing loss to property not precluded by
any other provision in this policy is covered.
As there is the possibility that the damage
suffered is due to this excluded cause
and would not be covered, the Company
has instructed me to provide this
Reservation of Rights Letter to you.
This letter should not be construed as a
denial of the claim but notice that the
issue of coverage is unclear at this point
and requires further investigation.
Reservation of Rights
When to Withdraw
 Policy Defense?

Which One Should I Use?

Non-Waiver
Agreement
 Insured Has No
Obligation to Sign

Reservation of
Rights
 Sent to Insured
 Outlines possible
coverage concerns
Early Expert Retention

When to Consider
What Expert Do I Need
Requesting a Report
 Hypothetical Case – result of expert
inspection was partial denial

Status Letters – 30 / 45 Days

Guided in PA by Unfair
Insurance Practices Act
 If the investigation cannot be
completed within 30 days, and
every 45 days thereafter, the
insurer shall provide the
claimant with a reasonable
written explanation for the
delay and state when a
decision on the claim may be
expected.
What does it look like?
This is to advise you that this claim of July 4,
2014 remains open at this time. It is
expected to be concluded upon:
Receipt of your contractor’s estimate for
replacement of the sprung dance floor;
 Documents related to your business
interruption claim as noted in my
correspondence of July 20, 2014;
 A review of these reports, documents and
pertinent policy provisions.

Status Letters

Insured is represented – who do I send
the letter to?

Certified or Regular Mail?

Should I call the insured before
sending?
Other UIPA Communication
Guidelines

New claim – within 10 days insurer must
acknowledge receipt of claim

Pertinent communications – response required within
10 business days to correspondence from claimant
***No private cause of action created, a violation of the Unfair
Insurance Practices Act (UIPA) is not a per se violation of the
bad faith standard. Dinner v. USAA Cas. Ins. Co., 29 Fed.
Appx. 823; 2002 U.S. App. LEXIS 3408 (2002). See also
Parasco v. Pacific Indem. Co., 920 F. Supp. 647, 655 (E.D.
Pa. 1996).
Non-Cooperation Letters
Policy Basis
 When to Use
 Wording
 Policy Defense?

Non-Cooperation Letters

Wording
 Cite to policy – duties after loss
 “Please note that if you do not cooperate in
the efforts of Pick An Insurance Company to
investigate your loss, that your claim may be
denied on the basis of your failure to
cooperate.”

Policy defense?
Insured Statement





Record
Transcribe
Effect on EUO
Legal Requirements
Providing copy to
insured
Examination Under Oath

When to Consider

Strategy / Goals
 Particular area of concern
Examination Under Oath

Who Can Attend
 Check Policy Language
As often as we reasonably require:
 a. Show the damaged proprety;
 b. Provide us with records and documents we
request and permit us to make copies; and
 c. You, any “insured” and any one you hire in
connection with your claim, must:
○ i. Submit to examinations under oath and recorded
statements, while not in the presence of any other
“insured”; and
○ ii. Sign the same.
Examination Under Oath

Related Records Requests
 What do I need
 Estimates you obtained for replacement of the sprung dance




floor;
Payroll records and 1099 forms for the last 12 months through
the present for any individuals who were scheduled to work the
county-wide dance competition;
Records of all payments received related to any county-wide
dance competition hosted at Get Up and Do It Dance Studio in
the last five years;
Documents related to any deposits or other costs associated
with the cancellation of the county-wide dance competition at
your location;
Bank account records from January 2012 to present for Get Up
and Do It Dance Studio.
Examination Under Oath
 Consulting with experts
 Authorizations
Mortgages
Interest under the Policy
 When to Include on Check

Mortgages
Can the Mortgagee Make a Claim
 Consequences of Failing to Include
Mortgagee

Proof of Loss
Why
 When
 Policy Basis
 Can it be Rejected

Proof of Loss

When would a release be more suitable
 Remember - An insurer may not request a
first-party claimant to sign a release that
extends beyond the subject matter that gave
rise to the claim payment