Was it a valid use of analysis and contractual interpretation in coming up with a fair insurance payment to a policyholder or, rather, disingenuous sleight-of-hand geared toward purposefully undercutting that individual when paying out on a fire-related property loss?
Paraphrased somewhat for purposes of this blog, that was the core question considered recently by one federal court evaluating a dispute between a national insurer and an aggrieved policyholder. A commercial building that insured party owns in San Francisco suffered extensive loss several years ago.
In paying the claim, Hartford Casualty Insurance Co. opted to exercise its "actual cost value" option in the policy to pay for the loss. In doing so, the company estimated repair costs while configuring an amount that was "fair and reasonable" for depreciating involved assets.
And that is where it cheated, contended the plaintiff. In fact, noted the litigant, Hartford brazenly violated state insurance law by depreciating components "without regard to whether [they] were normally subject to repair and replacement" during the useful life of the destroyed structure.
And that, he argued, yielded an insubstantial check to pay for the loss.
Unsurprisingly, the insurer disagreed with that analysis, stating that, because it paid the property owner more than what was owed under his policy, he could not establish an injury in fact.
Clearly, the court was not impressed by that argument, stating in its ruling that Hartford "assumes it own conclusions."
And those conclusions can only be arrived at, noted the tribunal, through further court proceedings.
In denying Hartford's request to dismiss the case, the court additionally found that other litigants might reasonably step forward with similar concerns ("common questions"). Given that likelihood, the court certified the matter as a class action, meaning that parties from across the country (including in Oklahoma) could conceivably join the litigation as class members.