Like it wasn’t bad enough for residents of the area having to deal with erupting volcano(es) and liquid hot magma — I know, it’s called lava when it’s on the surface, but I was using my Dr. Evil voice — but now they have to deal with “I thought everyone had full coverage since the Insurance Commissioner said so … wait, now we’re not sure?”
Anyone know if the insurance commissioner can have an estoppel claim filed against him if someone repaired their home or took other financial action thinking there’d be coverage, prior to when the Commissioner made his second clarifying statement?
No that’s the burning question on everyone’s mind. I’m sure they’re going to hot foot it to the courthouse to file their lawsuits and strike while the iron’s hot.
The lava flows are still active… I don’t anyone with an affected house is allowed home yet let alone starting repairs. As Jack Handley once said “If you ever drop your keys in a river of lava, just forget about them… because man they’re gone.”
Not sure if HI uses the ISO HO3, but I do see some room for confusion. We know HO3’s are open peril policies which must specifically exclude a peril to warrant a denial, but does it??
Section 1 – Coverage A & B – We do not insure, however, for loss: (3)(5) (5) Discharge, dispersal, seepage, migration, release or escape of pollutants unless the discharge, dispersal, seepage, migration, release or escape is itself caused by a Peril Insured Against under Coverage C of this policy. Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes mate-rials to be recycled, reconditioned or re-claimed;
Could a shady carrier try to pinch a penny here and try to argue volcanoes spew irritants, pollutants, contaminants, smoke, vapor and fumes and argue that’s excluded?
Separately, we know any damage resulting from an earthquake that occurred due to a volcano would definitely be denied: Section 1 Exclusions – (1)(b) b. Earth Movement, meaning earthquake including land shock waves or tremors before, during or after a volcanic eruption; landslide; mine subsidence; mudflow; earth sinking, rising or shifting; unless direct loss by Fire; Explosion…
My point is – it’s a gray area, and if someone took reasonable and prudent measures to mitigate the damage, presuming the loss would be covered because the insurance commissioner said it would be, could that expose the comissh to an estoppel claim if the carrier ultimately denies coverage? Who knows? Not me … that’s why I’m here asking about it :)
From an earlier article; by either statue or rule Hawaii has declared that damage from a lava flow is considered a fire peril in the state. That clears up a lot of gray area… for standard/filed policies like a HO2 or HO3 or similar that all admitted carriers would use. However, like a lot of insurance, it is more nuanced in this situation because this current eruption is actually a flair up of a continual eruption that has been happening (I believe) since the early 1990s.
Because of that, those houses in the danger zone have been in a known extremely high hazard area. No standard/admitted carrier would insure those properties and agents had to place their clients on the surplus market which uses unfilled forms and can vary wildly.
As for suing the commissioner, almost 100% of the time government officials are protected. The more common situation after a natural disaster is for the state to make money available for those with uncovered property losses.
Oh my — my comment got removed?? All I did was thank CO_Yeti for the information and said it was helpful. I didn’t post anything political, off-topic, insulting, or derogatory. Why would you remove a comment simply thanking another user for their insurance-related input? That is absurd!!!!!
So — again — thank you for that information, CO_yeti. I really appreciate it. I hope this post stays up long enough for you to see it.
Good to know a NAIC officer has such a great grasp of the insurance industry that he feels able to make incredible boneheaded blanket statements to the public. Does he even know what a surplus lines policy is?
Erroneous statements from insurance departments is nothing new. One state’s commissioner made a blanket statement that if you don’t have comprehensive auto coverage, deer collisions aren’t covered. Another said renting your home out during the Obama inauguration wasn’t covered. Another said losses arising from fireworks isn’t covered. The list goes on.
could someone make the argument that the insurance commissioner originally said their claim was covered if their claim is denied? I’ve heard of cases where a claim ended up being paid because an underwriter said it would be covered in an email, even though the policy language actually didn’t say this.
Even a Basic Perils form specifically names “Volcanic Action” as a covered peril. I guess if these homes were in a known active volcanic area, it would make sense that this peril would be excluded…
Just bringing some levity to the circumstances. I do truly feel awful for anyone impacted by this disaster. I cannot fathom what it must be like to see a wall of lava flowing towards your home.
Hey – stop copying me! :D “Like it wasn’t bad enough for residents of the area having to deal with erupting volcano(es) and liquid hot magma — I know, it’s called lava when it’s on the surface, but I was using my Dr. Evil voice”
You would think we would live in a world where an insurance agent of 10 years would know if a filed claim would be approved or not without any doubt before he or she filed the claim. I guess we don’t live in that kind of world.
Its going to be interesting to see insurance companies try and prove a house was destroyed by lava and not fire, seeing it will start on fire before lava touches it. So yes, if you had fire insurance you should be covered. If not, the insurance company should be out of business.
Many policies were written that made it clear in a ‘Lava Exclusion,’ If your home or proerty is damaged or burned ‘as a result’ of lava, it will not be covered.” Obviously, if the house catches fire when lava is nearby, the fire was directly caused from the hot lava.
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Like it wasn’t bad enough for residents of the area having to deal with erupting volcano(es) and liquid hot magma — I know, it’s called lava when it’s on the surface, but I was using my Dr. Evil voice — but now they have to deal with “I thought everyone had full coverage since the Insurance Commissioner said so … wait, now we’re not sure?”
Anyone know if the insurance commissioner can have an estoppel claim filed against him if someone repaired their home or took other financial action thinking there’d be coverage, prior to when the Commissioner made his second clarifying statement?
No that’s the burning question on everyone’s mind. I’m sure they’re going to hot foot it to the courthouse to file their lawsuits and strike while the iron’s hot.
The lava flows are still active… I don’t anyone with an affected house is allowed home yet let alone starting repairs. As Jack Handley once said “If you ever drop your keys in a river of lava, just forget about them… because man they’re gone.”
Not that you needed my $0.02, but that’s definitely a valid point.
I thought “volcanic eruption” was a covered cause of loss ever since Mt. St. Helen’s blew.
Not sure if HI uses the ISO HO3, but I do see some room for confusion. We know HO3’s are open peril policies which must specifically exclude a peril to warrant a denial, but does it??
Section 1 – Coverage A & B – We do not insure, however, for loss: (3)(5) (5) Discharge, dispersal, seepage, migration, release or escape of pollutants unless the discharge, dispersal, seepage, migration, release or escape is itself caused by a Peril Insured Against under Coverage C of this policy. Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes mate-rials to be recycled, reconditioned or re-claimed;
Could a shady carrier try to pinch a penny here and try to argue volcanoes spew irritants, pollutants, contaminants, smoke, vapor and fumes and argue that’s excluded?
Separately, we know any damage resulting from an earthquake that occurred due to a volcano would definitely be denied: Section 1 Exclusions – (1)(b) b. Earth Movement, meaning earthquake including land shock waves or tremors before, during or after a volcanic eruption; landslide; mine subsidence; mudflow; earth sinking, rising or shifting; unless direct loss by Fire; Explosion…
My point is – it’s a gray area, and if someone took reasonable and prudent measures to mitigate the damage, presuming the loss would be covered because the insurance commissioner said it would be, could that expose the comissh to an estoppel claim if the carrier ultimately denies coverage? Who knows? Not me … that’s why I’m here asking about it :)
From an earlier article; by either statue or rule Hawaii has declared that damage from a lava flow is considered a fire peril in the state. That clears up a lot of gray area… for standard/filed policies like a HO2 or HO3 or similar that all admitted carriers would use. However, like a lot of insurance, it is more nuanced in this situation because this current eruption is actually a flair up of a continual eruption that has been happening (I believe) since the early 1990s.
Because of that, those houses in the danger zone have been in a known extremely high hazard area. No standard/admitted carrier would insure those properties and agents had to place their clients on the surplus market which uses unfilled forms and can vary wildly.
As for suing the commissioner, almost 100% of the time government officials are protected. The more common situation after a natural disaster is for the state to make money available for those with uncovered property losses.
Oh my — my comment got removed?? All I did was thank CO_Yeti for the information and said it was helpful. I didn’t post anything political, off-topic, insulting, or derogatory. Why would you remove a comment simply thanking another user for their insurance-related input? That is absurd!!!!!
So — again — thank you for that information, CO_yeti. I really appreciate it. I hope this post stays up long enough for you to see it.
Good to know a NAIC officer has such a great grasp of the insurance industry that he feels able to make incredible boneheaded blanket statements to the public. Does he even know what a surplus lines policy is?
Erroneous statements from insurance departments is nothing new. One state’s commissioner made a blanket statement that if you don’t have comprehensive auto coverage, deer collisions aren’t covered. Another said renting your home out during the Obama inauguration wasn’t covered. Another said losses arising from fireworks isn’t covered. The list goes on.
could someone make the argument that the insurance commissioner originally said their claim was covered if their claim is denied? I’ve heard of cases where a claim ended up being paid because an underwriter said it would be covered in an email, even though the policy language actually didn’t say this.
Even a Basic Perils form specifically names “Volcanic Action” as a covered peril. I guess if these homes were in a known active volcanic area, it would make sense that this peril would be excluded…
Just bringing some levity to the circumstances. I do truly feel awful for anyone impacted by this disaster. I cannot fathom what it must be like to see a wall of lava flowing towards your home.
https://www.youtube.com/watch?v=yVo1S52xdpI
Hey – stop copying me! :D “Like it wasn’t bad enough for residents of the area having to deal with erupting volcano(es) and liquid hot magma — I know, it’s called lava when it’s on the surface, but I was using my Dr. Evil voice”
Sorry Rosenblatt, I missed that.
All good. Just having fun. It is a perfect reference for this article :)
You would think we would live in a world where an insurance agent of 10 years would know if a filed claim would be approved or not without any doubt before he or she filed the claim. I guess we don’t live in that kind of world.
Its going to be interesting to see insurance companies try and prove a house was destroyed by lava and not fire, seeing it will start on fire before lava touches it. So yes, if you had fire insurance you should be covered. If not, the insurance company should be out of business.
Many policies were written that made it clear in a ‘Lava Exclusion,’ If your home or proerty is damaged or burned ‘as a result’ of lava, it will not be covered.” Obviously, if the house catches fire when lava is nearby, the fire was directly caused from the hot lava.