Read all your paperwork, especially the home insurance - TopicsExpress

Read all your paperwork, especially the home insurance documents! In addition to compulsory insurance plans, professionals often take out additional insurance. A recent American case points out the dangers of failing to read and comply with the insurance policy wordings. A class action complaint was made and subsequently settled. One of the insurance carriers, whose portion of a $350-million settlement would have been $20 million, declined coverage under a “claims made and reported” policy. Simply put, it says the claim, once made, must be reported to the insurance company within the policy period so that it can investigate, appoint counsel and set reserves. In this instance, the notice (reporting) provision under the policy “required written notice of a claim to the insurance company’s claims department” in New York. No “notice” was sent in compliance with this term. The court determined that the insured could not simply provide a loss run reflecting the subject matter to the underwriting department – this was held to be insufficient. Often a notice is to be given to the insurance broker or agent under the wording of a policy. If the claim actually comes to the insurance company’s attention “as a claim” in a timely manner by whatever means, the insurance company would be hard-pressed to rely on the technicality in this case. This case involved the insurance company having “no reason to suspect” that its insured made a claim, because the person or department of the insured’s company had not received any notice of a claim. Also, if you have a subscription policy (that means a number of insurance companies taking part in the risk) do not take a chance. Report to each and every one of them. Boilerplate provisions: Recently law professors in the United States and Canada have made extensive comments on boilerplate language in contracts. There is real criticism against boilerplate provisions that attempt to exclude negligence and/or liability being enforced by consumers or others through contractual terms. Take, for example, an older case, Tilden Rent-a-Car, where the procedure was a hurried sign-in/drive-out program. The renter had to sign a contract that he had no chance to read. Buried in that contract was a collision damage waiver that made the contract void if the person who rented the vehicle had any liquor whatsoever in any amount in their system while driving the car. The defendant (who ended up damaging the car) had consumed a drink, but stressed he was not intoxicated. When the car was damaged, the defendant refused to pay damages. Both the trial court and the appeal court dismissed the company’s action as the circumstances did not really involve the customer assenting to the boilerplate provision and therefore the company could not rely on unusual and onerous printed terms in the contract that were not drawn to the customer’s attention. In essence, the courts are looking to the contracting parties assenting to such boilerplate provisions. There must be fairness applied to the “standard form contract”. There must be reasonableness in such all-encompassing contractual exemptions in the contract and they are open to a court’s review and avoidance if the terms are unreasonable, unfair and unexpected. This principle should be at the back of everyone’s mind when drafting a contract to isolate oneself from liability. Going overboard will obviously raise suspicions of taking unfair advantage. Both sides are vulnerable: In a case that confirms that you cannot take advantage of the other side in a sale/purchase unless you yourself are ready to close, a purchaser agreed to buy a condominium unit from the vendor. The purchaser paid a high deposit of $70,000. At the time of closing, the vendors were out of the country. They had a power of attorney but it was defective so the deal could not be registered or closed. The purchaser also admitted that she was not in a financial position to complete the purchase. When the vendor/purchasers sued each other, the issue arose about the deposit. The court confirmed that both parties being in default, time ceased to be of essence, the agreement remained alive and either party had to stipulate a new completion date. However, both vendor and purchasers chose the agreement to be at an end. Because the vendor was in breach at the time it was to close, the vendor was not entitled to retain the deposit of the purchasers. (Malek v. Tanbakookar, 2012 BCSC 1742, available at canlii.org) remonline/legal-issues-read-your-insurance-policy/remonline/legal-issues-read-your-insurance-policy/