A New York and New Jersey Lawyer Who Represents Policyholders and Beneficiaries in Life Insurance Denial Cases

There were a couple items in this last week’s New York Law Journal that merit being mentioned, and I have boiled them down and summarized them for you, the reader.

The first is an article entitled “Residency Requirement[s] Under Homeowners Insurance.” It reviews a number of cases for the redundant proposition that in order to successfully file a claim under one’s homeowners insurance, one needs to actually reside at the premises. This is a pretty strict requirement, and so if you don’t reside at the subject premises and a loss occurs, your claim may be denied and the policy rescinded.

That said, an exception was carved out by the Court of Appeals in Dean v. Tower Ins. Co. of N.Y. held that where the insured was in the process of repairing the subject premises, with the intent of making it her residence, it raises an “issue of fact” about whether she meets the residency requirement under the policy. The lesson to learn is that if you purchase homeowners insurance, and do not reside at the premises, you should notify your broker and insurance company immediately so that further steps can be taken to protect you.

The second item is a decision from Judge Baer in the Southern District in Maclaren Europe Limited v. Ace American Insurance Company. It discussed how New York Insurance Law section 2121 provides that an insurance company that delivers a policy to an insurance broker, who is acting on behalf of an insured, is deemed to have authorized the broker to receive a premium payment on its behalf that is due at the time of issuance. The Court held: “The rule can be stated as follows: For receipt of a premium by a broker to establish an enforceable policy, there will be an overlapping period of time during which the broker simultaneously acts as a fiduciary for the insured and as an agent of the insurer for the specific policy in question.”

In the insurance context, the concept of who is a fiduciary for whom can become rather fuzzy, i.e. is the attorney for the insured acting on behalf of the insured or the insurance company who pays her bills? I always caution policyholders to be extremely careful in situations where the question of who is a fiduciary to whom is unclear, and to cover their tracks by assiduously documenting events and sending correspondence and other notices to all interested parties.

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