“Since Insurance is solely a guarantee against loss, it can never be made a source of profit for the insured.” Burns v. California Fair Plan (2007).
The insurance coverage and bad faith practice group of McFarlin & Geurts,
LLP handles all types of insurance coverage problems and bad faith litigation
relating to our insurance clients.
Our experience and expertise in California insurance defense and coverage issues
extends to commercial, life, homeowners, automobile, health and numerous
specialty policies. We defend insurers in bad faith actions filed by insureds
and third parties. Our attorneys also advise clients on policy formation
and modifications to keep pace with changing California insurance defense
statutes, regulations and case law. Our insurance defense litigation department
represents clients in state and federal Courts.
According to industry estimates, fraudulent claims comprise roughly 10% of
every premium dollar paid by policyholders. This translates into the shocking
sum of approximately $30,000,000,000 annually. These fraudulent claims include
not only classic schemes such as staged auto accidents, but more subtle fraudulent
claims such as inappropriate and excess medical treatment, false claims and
inflated claims. Our experienced California insurance defense attorneys and
staff can help identify, and vigorously litigate, any such fraudulent claims.
McFarlin & Geurts attorneys have a comprehensive understanding
of the insurance industry through experience both litigating and advising our
clients. We represent our insurance defense clients through direct representation,
representation of their customers, and by serving as counsel before California
state regulators and legislators. We are always receptive to the needs of our
California insurance defense clients and we stay current on new developments
in the insurance defense field of law to be able to properly advise our valued
clients on the issues affecting them.
Our lawyers have developed a reputation as seasoned and dedicated insurance
defense advocates. Our California insurance defense clients may retain us
to represent their customers in litigation so as to avoid unnecessary third-party
complications. In these cases, it is essential that the insurance company
and our clients, the insured party, understand that we represent the interests
of the insured. We carefully balance the parties interests and protect what’s
best for our clients by aggressively advocating on their behalf.
The conflicts which lead to California insurance defense litigation can be
simple car accidents or collisions, or they can be premises liability, or
general negligence in another situation. We have experience representing
defendants being sued for negligence in any number of cases. We have expertise
in insurance coverage disputes and have defended a variety of individual
and corporate defendants. Our attorneys have experience settling and litigating
these matters.
Efficient, reasonable, and knowledgeable representation can be hard to find.
Our dedication to California insurance defense allows us to accommodate a
variety of clients and to work quickly to find a resolution to issues related
to insurance defense.
McFarlin & Geurts provides the following general information
about California Insurance Defense, if you would like a free consultation with
one of our California Insurance Defense attorneys, please call (949) 544-2640.
Insurance has been defined as “a contract whereby one undertakes to indemnify
another against loss, damage, or liability arising from a contingent or unknown
event.”
Insurance Policy as Contract: “An insurance policy is, fundamentally, a contract
between the insurer and the insured.” Stein v. International Ins. Co. (1990)
217 CA3d 609, 613, 266 CR 72, 74
It is “an agreement by which one person for a consideration promises to pay
money or its equivalent ... on the destruction, death, loss, or injury of
someone or something by specified perils.” California Physicians' Serv. v.
Garrison (1946) 28 C2d 790, 803–804, 172 P2d 4, 12.
Insurance is subject to the same principles of interpretation as any other
contract, and as such, is often the subject matter of litigation.
Oral vs. written contracts: An insurance policy is a written instrument (California
Insurance Code § 380), but oral contracts to insure may also be valid in
some instances.
Insurance policy vs. certificate of insurance: An insurer may sometimes issue
a “certificate of insurance” in addition to, or in conjunction with, an insurance
policy. This is common, for example, when employees insured under a group
health insurance policy issued to their employer receive only a “certificate
of insurance” from the insurer rather than the policy, which was issued to
the employer directly.
Insurer's obligations not transferable without policyholders' consent: An insurer
may not, even through a business reorganization, transfer its liability to
another company and force its policyholders to accept the new company as their
insurer. California Civil Code § 1457—burden of obligation may not be transferred
without consent of party entitled to its benefit.
Elements of “Insurance”:
Insurance typically requires two elements:
(1) a risk of loss to which one party is subject and a shifting of that risk
to another party; and
(2) distribution of that risk among similarly situated persons.” Metropolitan
Life Ins. Co. v. State Bd. of Equalization (1982) 32 C3d 649, 654, 186 CR
578, 580
Shifting of risk of loss: “Essential to insurance is the element of shifting
of the risk of loss, subject to contingent or future events, by legally binding
agreement.” Richardson v. GAB Business Services, Inc. (1984) 161 CA3d 519,
523, 207 CR 519, 521.
However, the mere fact that a contract contains these two elements (shifting
of risk and distribution of the risk of loss) does not necessarily mean the
agreement constitutes an “insurance” contract for regulatory purposes.
Contingent or Unknown Risks: Insurance is designed to protect against conditional
or unknown risks of harm, not risks that are certain or expected or harms
that have already occurred: “The concept of ‘fortuity’ is basic to insurance
law.” Chu v. Canadian Indem. Co. (1990) 224 CA3d 86, 94–95, 274
CR 20, 25.
Past or future: By statute, “any contingent or unknown event, whether past
or future, which may damnify a person having an insurable interest, or create
a liability against him, may be insured against...” California Insurance
Code § 250
Known vs. unknown risks: Generally, no one can insure against a risk that is
known or apparent (e.g., settling of residence after earth movement has begun).
Prudential-LMI Commercial Ins. v. Sup.Ct. (Lundberg) (1990) 51 C3d 674, 695, 274 CR 387, 400–401] (This is the “loss in progress” or “known loss” rule.) However, prior to manifestation of the damage, an unknown loss is still a “contingency” and may be compensable under the policy.
Immaterial that loss “inevitable”: An unknown risk is insurable even though
it is later learned that the loss was inevitable when the policy took effect.
Sabella v. Wisler (1963) 59 C2d 21, 34, 27 CR 689, 697.
Illegal Contracts: Agreements for certain types of “insurance” are illegal
and unenforceable, including insurance for unlawful acts, willful injury,
and treble damages.
Hopefully the general information regarding California Insurance Defense Attorneys
was is helpful, please contact McFarlin & Geurts
for additional information at (949) 544-2640.