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Barry Zalma, Inc.
Consultation Regarding
Bad Faith Avoidance
Insurance Coverage
Presentation of Insurance Claims
Defense of Insurance Claims
Insurance Claims Handling
Insurance Bad Faith
Compliance with Fair Claims Regulations
Insurance Policy Wording
Insurance Fraud Investigation and Litigation
Insurance Education & Training
Experts & Consultants For Any Insurance Dispute
ZIC brings Barry Zalma's more than
41 years of practical claims experience and the experience of insurance experts across the U.S., to your insurance problem or lawsuit ZIC will help you resolve every insurance problem faced by you or your clients. The experience and skill of ZIC consultants and expert witnesses can make the difference before a jury or other trier of fact. ZIC will consult with you on any one or more of the following issues that are important to those in the business of insurance and their counsel:
· Bad Faith Avoidance -- Use of an expert from ZIC will help an insurer establish that the claim was denied as a result of a good faith genuine dispute.
· Coverage Problems -- ZIC will give you and your clients advice and counsel concerning the interpretation of insurance coverages, recommend changes in policy wording, and offer solutions to disputes between insureds and their insurers.
· Claims Handling -- As a former claims person, and as an insurance claims educator and author Mr. Zalma and ZIC will consult with you or your clients concerning every aspect of the insurance claims process.
· Good Faith -- ZIC will consult with you or your client to assure that your client can prove that they treated the insured as they are required to do by the contract of insurance or the Fair Claims Practices statutes in your jurisdiction. They will also consult with your client so that any dispute between the insured and the insurer is established to be genuine and reasonable. ZIC will help you or your client establish that the insurer's claims staff met the requirements of the contract, the law, and the Fair Claims Settlement Practices Regulations.
· Insurance Fraud & SIU Investigations --- As an internationally recognized expert and Certified Fraud Examiner Mr. Zalma, and Zalma Insurance Consultants, are ready to consult with insurers who believe they are the victims of an insurance fraud, or individuals or corporations who believe they have been wrongfully accused of insurance fraud. ZIC consultation, opinions and assistance are invaluable in cases where fraud is suspected or accused.
· Training and Education --- Through
the Forensic Expert Witness Association ZIC provides MCLE credit and training for California lawyers. ZIC is also available to teach insurance claims and underwriting personnel about any insurance subject from reading and understanding an insurance policy to fraud investigation techniques.
· Mediation or Arbitration -- Mr. Zalma and Zalma Insurance Consultants also act as mediators or arbitrators for any dispute involving insurance or insurance coverages. Using Zalma Insurance Consultants to mediate or arbitrate an insurance dispute can save an insurer thousands of dollars in unnecessary investigative and legal expenses.
How
to Avoid Charges of Bad Faith
Almost every lawsuit filed
against an insurance company, especially when a claim is denied for fraud, alleges that the insurer acted in bad faith. In the first party context, bad faith claims typically allege that the insurer did not have a reasonable basis to deny coverage, and that the insurer engaged in unfair or deceptive conduct in the process of handling the claim and reaching its conclusions regarding coverage. In the third party context, there is typically an allegation that the insurer failed to timely settle a claim in which liability had become reasonably clear. Insurers, with unfounded courage, deny claims based on the recommendations of a claims handler whose experience may be, and usually is, limited.
The Use of an Expert
A expert qualified to testify concerning the custom and practice of insurers:
Claim handling practices.
Investigation minimum and standards.
Insurance policy interpretation.
Insurance fraud investigation.
Insurance policy interpretation.
and who is able to credibly explain to a trier of fact
in easy to understand language is essential to the defense of an insurer. An
qualified insurance claims handling expert can explain why the insurer
reasonably, prudently and in good faith should, reject an insured's claim. The
testimony of the expert can defuse, if not eliminate, the plaintiff insured's allegations of bad faith. Many legal decisions definitively hold that an insurer's reliance on an expert in making a coverage determination or deciding a third party claim, will defeat a bad faith claim. Insurers who take advantage of the “genuine dispute” doctrine or “fairly debatable” doctrine to protect itself from charges of bad faith will save countless indemnity and defense dollars.
An insurer can successfully oppose bad faith claims by demonstrating it relied upon the expert(s) it retained during the course of the claim investigation to deny coverage." ["Experts in Bad Faith Litigation" by Anthony R. Zelle and John W. Steinmetz, "For The Defense" May 2003.]
When an insurer is faced with a complex, difficult or fraudulent claim that it believes should be denied, the insurer should provide a complete copy of the file materials, to a ZIC claims handling
expert that support what that the insurer believes is a defense as well and those that support the claim of the insured.
If retained before the claim is denied the expert should be asked for his or her advice on how to resolve the claim. The expert should not be told the insurer’s position. The insurer should
advise the expert only that the insurer desires his or her expert opinion with regard to the resolution of the claim.
Case law makes it clear that obtaining the advice of an independent expert and consultant will make it possible to defeat a bad faith claim. Every insurer should understand that expert witnesses and consultants can significantly strengthen an insurer's defenses against claims of bad faith.
The Genuine Dispute Doctrine
If the insurer's personnel did their work properly before denying a claim the insurer should never be held liable for breach of the covenant of good faith and fair dealing. Tort and punitive damages should be eliminated as a matter of law. The Genuine Dispute Doctrine, sometimes called the “fairly debatable” test, establishes the defense.
It is now settled law in California that an insurer denying or delaying the payment of policy benefits, due to the existence of a genuine dispute with its insured, as to the existence of coverage liability or the amount of the insured's coverage claim is not liable in bad faith even though it might be liable for breach of contract. (Fraley v. Allstate Ins. Co. (2000) 81 Cal.App.4th 1282, 1292.)
The California Court of Appeals, in Chateau Chambrey Homeowners Association v. Associated International Insurance Company, 90 Cal.App.4th 335, 108 Cal.Rptr.2d 776 (2001) extended the “genuine dispute doctrine” to a factual claims dispute. Fraud, by definition, is a factual dispute. The insured claims that he had a covered loss, while the insurer from investigation believed they established that the claim presented by the insured was false and fraudulent.
It is the duty of a claims person who decides that a loss or defense must be denied to collect sufficient evidence tol establish that the denial of the claim was “fairly debatable.” The evidence must be clear and unambiguous so that a trier of fact (a judge or jury) would conclude that a reasonable and prudent insurer would have made the same decision. If the claims person consults with an independent expert who reaches the same conclusion, a finding of “genuine dispute” or “fairly debatable” will be almost certain.
Establishing the Genuine Dispute
Insurers must recognize that trial courts review the actions of an insurer with 20/20 hindsight when deciding a bad faith
suit. This makes the evidence available to the insurer to call into play the “fairly debatable” measure of good faith or the “genuine dispute doctrine” overwhelming. Use of a claims handling expert is the key to the presentation of overwhelming evidence that the decision of the insurer was made in good faith and that there was a genuine dispute between the insurer and the insured.
An insurer’s Special Fraud Investigation Unit (SIU)
and an insurer's claims department must be trained to thoroughly, fairly, and intelligently investigate every potentially fraudulent claim. The SIU’s investigation must be well documented and the decision to deny must be made in good faith with the advice and counsel of an experienced coverage lawyer. If the investigation is thorough, in good faith, and survives the analysis of an experienced ZIC claims consultant the genuine dispute doctrine should defeat any suit for bad faith.
Every file where a claim is denied should, to establish that the “genuine dispute” or “fairly debatable” standard was complied with by the insurer, include the following:
1. The loss notice.
2. The wording of the policy.
3. A detailed recorded statement of:
a. The insured.
b. If a third party claim, the claimant(s).
c. Every independent witness to the events.
d. The insurance agent or broker who placed the insurance.
e. If a coverage issue is involved, the underwriter who made the decision to insure or not insure.
4. All available documentary evidence including, as needed, accounting documents, tax returns, medical reports, police reports, fire reports, deeds, trust deeds, bankruptcy filings, and any other relevant document.
5. Detailed photographs of the scene.
6. The advice and counsel of independent experts whose expertise relates to the facts of the loss.
7. The advice and counsel of an independent claims handling expert.
8. The advice and counsel of an experienced insurance coverage lawyer or a ZIC consultant experienced in the issues raised by the claim.
Even if the decision made by the insurer is wrong, with a thorough and complete investigation, the advice and counsel of ZIC expert consultants and/or lawyers familiar with the subject matter, the insured
should be unable to establish a bad faith cause of action. The “fairly debatable” or “genuine dispute” standard is merely a means of objectively establishing that the insurer treated the insured fairly and in good faith. The insurer with a well trained, intelligent, and thorough claims department or SIU, will avoid charges of bad faith, and even when charged, will defeat the charges by proving beyond a preponderance of the available evidence the claim denial was based upon a well reasoned decision where the insurer is allowed to dispute and debate a genuine dispute between it and the insured as to the applicability of coverage. Indispensable Advice
As a claims person and claims attorney for more than 35 years, Barry Zalma has represented insurers, advised insurers on claims handling, interpreted coverages, and testified as an insurance coverage, insurance fraud, insurance bad faith and insurance claims handling expert. Zalma has written insurance policies for insurers and is the author of books used daily by working claims professionals.
Mr. Zalma has joined with other insurance experts across the United States as Zalma Insurance Consultants. With ZIC as your consultant you get the expert advice and counsel many insurers have found indispensable. Consultation from Zalma Insurance Consultants can save you and your counsel or client hundreds of hours of investigative and legal work.
Take advantage of Mr. Zalma's more than 35 years of claims experience and the hundreds of collective years of experience that Zalma Insurance Consultants' possess. Allow ZIC's experience to find a resolution to your insurance dispute that is fair, intelligent, and beneficial to your client. Consultation from Mr. Zalma can save you or your client thousands of dollars in the prosecution or defense of an insurance dispute.
Instant Response
Counsel and clients, in a shortsighted effort to save expenses, often wait until the last moment to retain an expert or consultant. Expert consultants like Zalma Insurance Consultants can save an insurer,
insured, or the defense or plaintiff's attorney considerable time and expense if retained early. If you elect to retain your consultant or expert at the designation deadline ZIC and Mr. Zalma can be a solution. Because Mr. Zalma declines all litigation assignments and keeps his caseload low, he can completely control his calendar and can respond to your request for advice and counsel promptly. Usually within no more than five working days, regardless of the total volume of the file materials, he will be ready to consult with you or testify on your client's behalf. If he cannot personally deal with your claim, Mr. Zalma will refer you to one of his experienced Zalma Insurance Consultants colleagues.
Mr. Zalma recommends that counsel retain the services of Zalma Insurance Consultants early and avoid wasting time and money pursuing a suit or defense that can be circumvented with his assistance. Zalma Insurance Consultants will promptly review file materials and advise you about the viability of your defense. He can also help you narrow the scope of discovery. No other insurance consultant or expert witness can offer such prompt, credible, and authoritative advice on insurance, insurance coverage, insurance fraud or insurance claims handling questions.
For details and a complete copy of his C.V. direct your browser to
http://www.zalma.com or E-Mail Mr. Zalma at zalma@zalma.com or call Mr. Zalma at 310-390-4455.
Services
Mr. Zalma, or one of ZIC's other insurance consultants will do any one, or more, of the following for its clients:
Review of claims files to determine if there is a reasonable basis for denial and to avoid charges of bad faith.
Analysis of insurance litigation for the insurer and advice concerning:
Defenses available to the insurer
Errors or omissions made by the claims department.
Errors or omissions made by the insurance agent or broker.
Errors or omissions made by the underwriter.
Scope of discovery including depositions, interrogatories, and document requests needed.
Investigation needed.
Experts needed.
Preparation and testimony as an expert on behalf of the client.
Consultation with insurers on methods to avoid charges of bad faith.
Consultation with insurers on methods to comply with the Fair Claims Practices Acts and Regulations.
Consultation with insurers on compliance with mandatory Special Investigation Unit (SIU) laws and Regulations.
Consultations with insurers on operating effective SIU investigations.
Training on insurance and insurance law for SIU investigators.
Training for claims people on the need to recognize the "Red Flags": of Insurance Fraud.
Claims file review to help insurers set up systems to avoid insurance litigation.
Claims file review to help insurers avoid allegations of bad faith.
Analysis of claims file material before a decision to deny is made to establish and document a genuine dispute concerning insurance coverage between insured and insurer.
Claims training for adjusters, supervisors and counsel.
Acting as mediator to help resolve insurance claims short of litigation.
Training for insurance management on claims law.
Recommendation of individuals to act as appraiser in appraisal proceedings.
Last Updated June 2, 2008