Mansell, Engel & Cole

Recurrent question: What losses will insurance protect against?

We spotlighted the instantly scary word “temblor” in a recent Mansell, Engel & Cole blog post. We noted in our August 23 entry that temblors -- those earthquake-defining ground shakes that are never forgotten once experienced – are “top tier events that always command attention and dominate the news.”

They are also relatively common occurrences across Oklahoma, with the potential in any given instance to wreak devastation and nearly incalculable losses.

Are the losses they inflict covered in insurance policies? That is, does a policyholder have a reasonable expectation that an insurer will act with dispatch and good faith to compensate quake-linked property damage?

Coverage providers are often (and unsurprisingly) quick to push back against earthquake-tied claims when claimants pursue them pursuant to general homeowners insurance policies. That turns out to be a different story when an individual or family is covered by insurance that specifically addresses earthquakes.

Even with the latter scenario, though, policyholders often encounter some degree of insurer blowback and tactics that are clearly aimed at payment delay, underpayment or outright denial. We note on the website of our long-established pro-policyholders’ insurance law firm that “too many homeowners find themselves trapped in a stalemate with their insurance companies” following property damage to their homes and/or businesses.

Candidly, it is often a slog for insureds going it alone without legal help to push through and successfully obtain all the benefits they are entitled to under their policies. Insurers frequently argue that root causes of damage are exceptions to covered events and thus excuse contractual performance.

That is often a bogus and even bad-faith argument.

We’ll take a closer look at insurer conduct and policyholder expectations following a natural disaster in our next blog post.

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