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This blog does not create an attorney-client relationship. You should not rely upon this blog for legal advice, but instead should consult an attorney experienced in your area of concern.

Insurance Bad Faith Hits Poor Families the Hardest

Our firm has litigated numerous insurance bad faith cases representing clients across the board.  In terms of property claims, these cases have ranged from multi-million dollar losses to corporate buildings, to million dollar losses to large wealthy homes, to minor losses to small private homes.  Invariably, however, the smaller losses to indigent families are the most troubling.

Bottom line, insurance companies make money by denying claims or limiting payment on claims.  For large companies and wealthy individuals, a denied insurance claim can be just a small headache.  But for a single parent with two jobs whose roof is leaking and plumbing is not operational, the headache can turn into a debilitating nightmare.

If your insurance claim is denied or payment is minimal, it is important to have an attorney review your insurance contract and any communications from your insurance company regarding the denial.  If the damage to your home is a covered loss, depending on your type of coverage, you are entitled to either the actual cash value of the damage or replacement value.

Additionally, Chapter 58 of the North Carolina General Statutes requires that all insurance companies operate in good faith with respect to claims made by their insureds.  This includes requirements such as: affirming or denying coverage in a prompt manner; promptly investigating your claim; not denying a claim for an improper purpose; not providing justification as basis for denial of a claim, etc.

Do your homework any time you make an insurance claim.  Insurance companies have a duty to their insured and the laws of North Carolina interpret insurance contracts in favor of the insured and in favor of coverage.  


This blog does not create an attorney-client relationship. You should not rely upon this blog for legal advice, but instead should consult an attorney experienced in your area of concern.

Does a builder have insurance if a building has defects? Beware builders and owners!

Most builders or contractors have a commercial general liability ("CGL") insurance policy for a particular project.  It is often required by the construction lender.  However, whether this policy actually affords any meaningful insurance to either the contractor or the owner is another question.

Much to the surprise of builders and owners, construction defects are generally NOT covered by either a CGL policy or the owner's homeowners policy (or business policy).  The example we often give clients is that if your roof leaked as a result of a construction defect, the insurance company might pay for the damage the leak caused, but not the cost of repairing the leak.

Reduced to the most basic terms, a CGL policy will only cover losses caused by an "occurrence" not a defect.  An occurrence could be a fire or storm, for example, that occurs while the builder is working on the project.  It would also likely cover personal injuries suffered by third parties on the job.

Several years ago, CGL policies provided additional insurance for subcontractors on the job.  Under these older policies, if a contractor was negligent, it might be covered under the policy.  However, in more recent years that coverage has been written out of the policy and can only be acquired by purchasing a separate endorsement from the insurance company.

For builders who find themselves without coverage and facing a substantial claim - bankruptcy may be the only alternative which is terrible news for both the contractor and the owner.

Email me if you have other questions.

This blog does not create an attorney-client relationship. You should not rely upon this blog for legal advice, but instead should consult an attorney experienced in your area of concern.

Make sure that your automobile insurance policy has underinsurance coverage in the event of an automobile accident.

Did you know that in North Carolina, a person is only required to have $30,000 in automobile liability insurance coverage?  With the rising cost of health care and mandatory diagnostic medical procedures, a person seriously injured in an automobile accident may face medical expenses in excess of $30,000 in a matter of a day or two. That is why it is imperative that your insurance policy contain underinsurance coverage, sometimes called UIM.

UIM coverage means that if the person who caused the accident does not have enough insurance to pay you for your medical bills, pain and suffering, lost wages, disability, etc., then your policy will provide you with additional coverage - up to a million dollars.

Buy UIM is not required in North Carolina and there is an additional premium to have it included in your policy.  However, the increased premium is well worth it.  Furthermore, if you make make a UIM claim, it will not increase your premium or affect your insurance in any way.

In making a UIM claim, one must be very careful.  Oftentimes the injured party will mistakenly give a release to the insurance company that insured the person that caused the wreck. When this occurs,  your right to make a UIM claim may be lost.

If you have questions about this, email me at Fred DeVore visit us at DeVore, Acton & Stafford, Attorneys at Law.

This blog does not create an attorney-client relationship. You should not rely upon this blog for legal advice, but instead should consult an attorney experienced in your area of concern.

Insurance Bad Faith

This blog does not create an attorney-client relationship. You should not rely upon this blog for legal advice, but instead should consult an attorney experienced in your area of concern.

Chapter 58 of the North Carolina General Statues prohibits an insurance company from doing certain wrongful acts.  More specifically, the statute is called the Unfair Claim Settlement Practices

N.C. Gen. Stat. Ann. § 58-63-15. 

Unfortunately, these claims cannot be brought against someone else's insurance company, but only your insurance company.  If there is a single violation of the Act, the insured is entitled to recover treble damages and attorney fees under Unfair and Deceptive Trade Practices Act (Chapter 75 of the North Carolina General Statutes).  

 The acts that are prohibited include:

a. Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue;

b. Failing to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies;

c. Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies;

d. Refusing to pay claims without conducting a reasonable investigation based upon all available information;

e. Failing to affirm or deny coverage of claims within a reasonable time after proof-of-loss statements have been completed;

f. Not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear;

g. Compelling the insured to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by such insured;

h. Attempting to settle a claim for less than the amount to which a reasonable man would have believed he was entitled;

i. Attempting to settle claims on the basis of an application which was altered without notice to, or knowledge or consent of, the insured;

j. Making claims payments to insureds or beneficiaries not accompanied by a statement setting forth the coverage under which the payments are being made;

k. Making known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration;

l. Delaying the investigation or payment of claims by requiring an insured claimant, or the physician, of or either,¹ to submit a preliminary claim report and then requiring the subsequent submission of formal proof-of-loss forms, both of which submissions contain substantially the same information;

m. Failing to promptly settle claims where liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage; and

n. Failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement.

N.C. Gen. Stat. Ann. § 58-63-15 (West)

Avoid pitfalls of the insurance application and claims process

Our firm recently litigated a case where a warehouse was damaged by a tornado.  The damage was estimated to be around $1 Million.  During the course of the investigation of the claim, the insurance company sought certain information from the insured and the insurance agent that procured the policy.  The insurance company then denied coverage after it determined that the information contained in the application was false.

What transpired was a year-long court battle in which the insurance company, insurance agent, and insured argued over which party was at fault in issuing the policy and in completing the application.

It is important that any time you sign an insurance application that you read it carefully.  Even if an agent completes the application, by signing you are attesting to the truthfulness of its contents.  This is vital to any insurance policy because insurance companies can avoid paying a claim if they later determine that the application was incorrect.  Particularly in large loss claims, insurance companies will comb over every piece of your application.

However, because you sign an incorrect application does not mean you have no legal remedy.  First, an insurance company may not be able to void a policy if it issued the policy prior to you signing an application.  Secondly, an insurance agent may also have a duty to assist you in acquiring insurance and in filing a claim.  If the agent is found to have breached his/her fiduciary duty to you in failing to obtain insurance or in presenting false information to the insurer during the investigation of the claim, he/she can be held liable.

Still, you want to avoid lengthy court battles by reading any insurance application before signing and hiring an insurance agent that you trust.


This blog does not create an attorney-client relationship. You should not rely upon this blog for legal advice, but instead should consult an attorney experienced in your area of concern.

Handling Auto Accidents & Insurance Companies

 If you have had the unfortunate experience of being in an automobile accident, you have likely also suffered the uncomfortable and painstaking task of dealing with an insurance company.  And depending on the at-fault party's insurance policy limits, you may find yourself dealing with more than one insurance company.  Often times, your own insurance policy provides coverage for Uninsured Motorists (UM) and Underinsured Motorists (UIM).  This means that if you suffer property damages, medical expenses, and personal injuries beyond the at-fault party's policy limits, your own insurance company is responsibly for paying the excess.

However, it is important that you know that your own insurance company becomes an adverse party in that instant.  Though they have a duty to evaluate and adjust your claim fairly, they do not have to pay what they disagree is owed.  Unfortunately, disagreements seem to be the norm rather than the exception.  Therefore, you may be forced to hire an attorney to initiate litigation to recover for your damages and injuries.  Disagreements on property damage and personal injuries must be resolved by a jury and an experienced litigation team is vital to maximizing a jury award. 


This blog does not create an attorney-client relationship. You should not rely upon this blog for legal advice, but instead should consult an attorney experienced in your area of concern.

Insurance Information for Tornado Victims

From the deep south, through the midwest, and even into the Carolinas, recent bad weather has spawned multiple deadly tornadoes. While we grieve for the lives lost, many are faced with the task of rebuilding.

Undoubtedly, most of you affected will file insurance claims to compensate you for your losses and assist you in restarting your lives. It is important that you read your policy carefully to understand your rights.

In general, insurance policies compensate you in one of two ways: 1) actual cash value, which gives you the appraised value of your property at the time of the damage and incorporates a depreciation deduction, or 2) replacement value, which gives you the value of new items of like quality. Replacement value coverage is usually an insurance add-on that requires a higher premium. When compensating for replacement value, the insurance company will initially pay the actual cash value while withholding the depreciation until repairs are complete, thereby forcing you to front some of the costs. So, though replacement coverage gives you a larger recovery than actual cash value, the burden on you is still great.

Regardless of your policy, you do not have to accept what the insurance company offers. They have appraisers that represent their interests - so should you. Virtually every insurance policy has a quasi-arbitration provision that enables you to hire your own appraiser - the insurance company must comply. Your appraiser and the insurance company's will select a third-party umpire to determine the amount of your claim.

Additionally, insurance companies have a duty to handle your claim in good faith, without delay, and with the intent to fully compensate you for your loss. Having a knowledgeable attorney in your corner can help expedite the claims process and increase your recovery.

As we enter the turbulent spring months, and while we hope and pray that the devastation of this past year will not repeat itself, it is important to be prepared if and when you face the task of rebuilding.


This blog does not create an attorney-client relationship. You should not rely upon this blog for legal advice, but instead should consult an attorney experienced in your area of concern.