Author: Brandon McWherter

Contents coverage, also known as personal property coverage, is insurance for damage or loss to property within a home, apartment, condominium, office, or any building. If property is damaged due to fire, theft, or other causes, the policyholder is entitled to be paid for the amount of the damage to the property – provided the cause is covered by the terms of the policy. Although the coverage is usually of a “blanket” nature with a set limit, many policies also limit coverage for certain types of items, such as artwork, guns, etc. For valuable items like those, it is also often wise to schedule them, meaning that a separate rider is issued to cover those items and then the broader “blanket” policy is left with full limits to cover the remainder.

Contents coverage, depending on how the policy is worded, can also cover damage to items that are damaged when they are taken away from home or are located in outside structures such as gardens and sheds.

Common contents policy concerns

Some of the insurance issues that can be litigated on content policies are:

• The value of the damage. Damage can be valued either by the actual cash value of the item or the replacement value. Actual cash value is calculated by subtracting depreciation (due to age, condition, etc.) from an item’s replacement cost value. Replacement cost value policies typically only truly pay “replacement cost” when damaged items are actually replaced. In fact, until the items are replaced, most insurers are only obligated to pay “actual cash value.” However, some higher end policies offer guaranteed replacement cost coverage with no depreciation at all, even if the damaged items aren’t replaced. This coverage is hard to find and usually expensive, but is certainly something to be considered when shopping insurance.
• The amount of coverage. Coverage can be limited in several ways. The policy may cap the total amount the insurance company will pay for damage to contents. Typically, the amount of the coverage for homeowners is set at a percentage of the coverage on the structure, i.e., 50% or 75% of the structure coverage. However, this can be changed by request, so it is important to have a good handle on the value of your belongings. For a business, it is critical that your business personal property, equipment, and inventory are all appropriately insured. Further, if you are a tenant in a commercial property, your “tenant improvements” will be considered “business personal property” under most policies so you need to account for that as well when selecting your coverage limits.
• Perils covered. The policyholder should review with his/her agent what perils are covered:
  • Damage by fire, theft, accident, windstorms, flood, water, etc. are all common and it is critical that these perils be covered. Some policies are named-risk (meaning all perils are excluded except those that are specifically listed) and some cover all risks (meaning all perils are covered except those that are specifically excluded). All risk policies, also called broad form policies, are clearly superior and should be requested.
  • Consequential damages, such as damage to inventory due to humidity, cold, or heat, should be specifically identified
  • Separate insurance may be needed to cover damage of personal and business possessions due to flooding.

At the Gilbert Firm, our Tennessee insurance dispute attorneys hold insurance companies accountable to pay all the damages that are covered by your insurance policy. To learn if you have a claim, and to speak to an experienced insurance dispute attorney like Brandon McWherter, Clint Scott or Jonathan Bobbitt, please call us 888.996.9731, or fill out our contact form. We have offices are based in Nashville, Chattanooga, Memphis, Jackson, and Knoxville, Tennessee.

Most of the claims that we handle involve disputes about how much is owed. Sometimes it’s if you’re owed anything at all, but most of the time it’s a dispute about how much. And so what we do here at the Gilbert Firm, is we have assembled a team of experts from all over the country, really – roofing experts, engineers, content specialist, accountants, lawyers, my own staff here – but we bring this team together, and we look at the claim as a whole, and we put a package together to make sure that we’re maximizing what you’re entitled to.

We’re not trying to inflate anything; we only want you to get what you’re owed, but we don’t want you to be underpaid. The insurance companies are often doing the exact opposite; they’re trying to pay the bare minimum. So, we are just here to make sure that you get the most possible bang for the claim that you’ve been forced to make because of this catastrophic loss.

The Gilbert Firm represents policyholders, workers, and students throughout Tennessee. To schedule a consultation time with Brandon McWherter, or to speak with a Tennessee insurance dispute lawyer in Nashville, Chattanooga, Memphis, Jackson or Knoxville, please call 888.996.9731, or fill out our contact form.

There are options other than filing a lawsuit. Oftentimes, when we get involved in a claim, we will present the claim, negotiate with the adjuster, negotiate with the opposing attorney, and try to get something worked out that’s satisfactory to the client before we even file a lawsuit. Sometimes we can avoid a lawsuit by going through what’s known as the appraisal process, which is a three person panel that is in most insurance policies, that allows that panel to set the amount of a loss, how much is owed. Sometimes we do file a lawsuit, but we don’t go to trial. Sometimes we mediate disputes; we have arbitration. There’s a variety of alternative dispute resolution procedures that we can look at to give consumers options – those that are perhaps scared of a trial, scared of that judge. We try to make it as easy on them as possible.

The Gilbert Firm represents policyholders throughout Tennessee. To learn more about the firm’s services, or to schedule an appointment with Brandon McWherter, please call 888.996.9731, or fill out our contact form. We have offices in Nashville, Chattanooga, Memphis, Jackson and Knoxville for your convenience.

One item of particular interest to contractors is the inclusion of overhead and profit in insurers’ payment of insurance losses. In Tennessee and in many other states, the general standard is that insurance companies must include overhead and profit in their calculation of the amount of loss when the job is of a type that a person would reasonably be expected to utilize the services of a contractor. Although many insurers have adopted a custom or practice of limiting the payment of overhead and profit to jobs involving three trades or more, there is no such requirement in the law.

For example, in a commercial roofing project that involves only one trade (roofing), it seems obvious that a reasonable property owner would be expected to hire a properly licensed and bonded general contractor to perform the work. Safety, supervision, accuracy, and timeliness are critical, and it is also crucial that the contractor performing the work be properly insured as required by the contractor licensing statutes and regulations. When a non-licensed contractor is hired to perform the work, the owner puts all of this risk.

In our view, ten percent overhead and ten percent profit is the minimum amount due. This is just made a part of the underlying replacement cash value of the loss, and courts have clarified that overhead and profit must be considered when calculating actual cash value of the loss as well.

Another factor relevant to overhead and profit are state licensing laws. For example, in Tennessee, the Contractors Licensing Act requires that any person performing work above $25,000 (with certain limited exceptions) be licensed as a contractor. Accordingly, because the law requires a contractor’s license to perform work over $25,000 and because overhead and profit must be paid when it is reasonably expected that the owner would utilize the services of a contractor, then of course it necessarily follows that overhead and profit is due and owing by the insurance company in claims exceeding that amount. In fact, our firm is presently involved in a class action against a major insurer in Tennessee regarding this very issue.

At the Gilbert Firm, our Tennessee insurance lawyers fight to show that your loss is covered and to maximize the amount of the recovery. We are experienced insurance and trial litigators. To talk with a skilled insurance conflict lawyer like Brandon McWherter, Jonathan Bobbitt or Clint Scott, please phone us at 888.996.9731 or use our contact form. We have offices based in Nashville, Chattanooga, Memphis, Jackson, and Knoxville.

All I do are insurance claims. I work for the policyholder: for the person who suffered a loss, who’s not being paid enough, who’s not being paid at all, whose claim has not been denied. That’s all we do. We handle property claims primarily: homeowners, commercial, industrial, churches, non-profits – the whole gamut. From the small $25,000 house that the elderly lady lives in that’s had a fire loss that’s really struggling, to the multi-million-dollar condominium complexes.

And we help people present their claim. We help people litigate their claim if necessary, but we just try to get them to the result that serves the basis for them even having insurance in the first place: to put them back where they were prior to the loss event. Sometimes it’s hail, sometimes it’s fire, sometimes it’s wind, sometimes it’s a collapse. It can be a variety of things, but that’s what we do: help people who have suffered a loss to get what they deserve.

The Gilbert Firm represents policyholders throughout Tennessee. To learn more about the Firm’s services, or to schedule an appointment with Brandon McWherter, please call 888.996.9731, or fill out our contact form. We have offices in Nashville, Chattanooga, Memphis, Jackson and Knoxville for your convenience.

Let’s say that your home is damaged in a storm. You need to replace a part of your roof as well as a section of vinyl siding. The company which originally manufactured these products is no longer in business, or has discontinued the line – which means that the front of your home will feature two different shades of siding, and your roof might end up looking like a chess board.

Or, at least, it could have, had the Tennessee Commissioner of Insurance not confirmed, in new Rules which go into effect October 9, 2017, that insurers must pay for matching when it comes to replacing your damaged property. The Rule says:

“When the policy provides for the adjustment and settlement of first party losses based on replacement cost, the following shall apply:

. . .

(b) When a loss requires replacement of items and the replaced items do not match in quality, color or size, the insurer shall replace items so as to confirm to a reasonably uniform appearance according to the applicable policy provisions.  This applies to interior and exterior losses. The insured shall not bear any cost over the applicable deductible, if any.”

0780-01-05-.10(1)(b)

In layman’s terms, the Rule confirms our previous assessment of the law – if the replacement “parts” do not match in color, size or quality, then the whole must be replaced. To use our earlier example, then, the insurance company would have to pay for a brand-new roof or siding in its entirety, with no additional costs to the policyholder (outside of the cost of the deductible).

If matching was the law, then why pass a new Rule?

So why pass a new Rule if this was already the practice? Because the practice wasn’t uniformly followed. Generally speaking, insurers had no difficulties matching to replace losses inside the home, like replacing the entire carpet in a room when only a section was damaged. However, the cost of re-carpeting a 11’ x 12’ room is significantly lower than the cost of replacing an entire roof, and insurers often disputed claims for more expensive replacements.

The new Rule uses the word “shall,” which is clearer. It also specifies that the Rule applies to both interior and exterior losses, which helps policyholders, too. For those who might think the “reasonably uniform appearance” clause is still ambiguous, rest assured: the Rule only applies to replacements, not repairs, so there should be no outstanding arguments.

If, however, a dispute does arise, you may need the help of a skilled Tennessee insurance dispute attorney. The Gilbert Firm represents policyholders throughout the region who have had their claims unfairly denied or disputed by insurers. To work with an experienced lawyer such as Brandon McWherter, Jonathan Bobbitt or Clint Scott, please call 888.996.9731, or fill out our contact form. We maintain offices in Nashville, Chattanooga, Memphis, Jackson and Knoxville.

In a recent appellate case, Freeze v. Tenn. Farmers Mut. Ins. Co., the Tennessee Court of Appeals again analyzed the effect of misrepresentations in applications for insurance. The Court began by referencing Tenn. Code Ann § 56-7-103), which provides that misrepresentations on an application will not void the policy unless the misrepresentation is made with actual intent to deceive, or unless the matter represented increases the risk of loss. The latter, whether the misrepresentations increases the risk of loss, was the focus of the Freeze court.

Tennessee courts have previously noted that a misrepresentation in the application increases the risk of loss “when it is of such importance that it naturally and reasonably influences the judgment of the insurer in making the contract.”

In other words, if the insurance carrier had known the truth, would it have decided that the risk of having to pay for an insurance loss was too great to offer coverage?

In ruling that the insureds’ insurance policy was void as a result of misrepresentations, the Freeze court made three findings that essentially affirm dozens of prior appellate cases:

• First, it determined that whether the misrepresentation increased the risk of loss was a question of law (not fact) for the Court to decide.
• Second, whether the applicant actually read the application before it was signed was not determinative. If the applicant signed the application, he/she is presumed to have read it.
• That misrepresentations of any of the following did “increase the risk of loss.”
  • Are there any pending legal actions?
  • Has the applicant been charged or convicted of felony crimes?
  • Has the applicant been charged or convicted of arson, fraud, theft, or drug related crimes?

Although there is certainly nothing earth-shaking about the Freeze opinion, there are a couple of things that are worth noting. First, just because the insured is presumed to have read an application, the policyholder may still have options for recovering against an insurance agent if the agent caused the application to be incorrect. For example, if the agent told the applicant that he did not have to disclose a pending legal action and the applicant relied on that advice, then the agent is exposed to liability if a claim is later denied. Further, an agent’s knowledge is imputed to the insurance company. Second, not every felony or other crime is “material.” For example, if a 55-year-old applicant was charged with theft when he or she was 18, then a court might determine that such was not “material.” In the Freeze case, neither of these nuances were present as the insured had numerous criminal charges that were very recent and even some that were actively pending, none of which were disclosed.

Insurance companies will try every argument they can to defeat your claim. The Gilbert Firm understands the law and keeps current with the most recent court decisions. Our Tennessee insurance dispute attorneys help policyholders contest improper denials, and work to get our clients the benefits to which they are entitled. For help with your insurance policy claim, please call 888.996.9731, or use our contact form to get answers and strong representation from Brandon McWherter, Clint Scott or Jonathan Bobbitt. We have offices in Nashville, Chattanooga, Memphis, Jackson and Knoxville.