“Policyholder wins round one” – Anita Lee reports on “Coastal Hardware v Underwriters at Lloyd’s…”

Once again, Anita Lee comes through for the SLABBED – this time with news about Katrina litigation still active in State court.  Hancock County Circuit Court Judge Lisa Dodson (Corban v USAA) issued an Order Concerning Summary Judgments with Findings of Fact and Conclusions of Law in Coastal Hardware and Rental, Co. v Underwriters at Lloyd’s, Statewide Insurance Services, Estate of Dan McManus, and John Does 1-25:

Coastal Hardware and Rental Co. has been fighting almost five years now to have its Katrina wind damage covered under a policy issued by Underwriters at Lloyds.

The case was headed to trial in Hancock County Circuit Court, after Judge Lisa Dodson issued a ruling that denied Lloyd’s motion to dismiss the case. The British insurer claimed its policy excluded wind coverage.

Dodson pointed out the policy had not arrived when Katrina hit. Under that circumstance, the policyholder rightly relied on a binder issued before the policy was mailed. Under exclusions, the binder listed only earthquake and mold.  Further, an e-mail from Lloyds to the agent selling the policy said, “Please sell it based on the fact it is now All Risk coverage including Theft excluding Flood and Earthquake . . . “

Coastal canceled a separate policy with wind coverage based on assurances,the lawsuit says, that wind would be included in the Lloyd’s renewal policy.

Since Katrina, any number of policyholders have cited “assurances” about the all-risk policies as the reason for dropping other coverage only to later find they had all risk and no coverage.  Anita’s post explains what makes the “assurances” provided Coastal different from most:

Dodson did not buy Lloyd’s argument that the policy superceded the binder. First, she said, the policy never arrived. Second, it included ambiguous language. Where ambiguity exists in an insurance policy, the benefit of the doubt goes to the policyholder.

A jury must now determine how much damage Coastal suffered from the storm. The company had $600,000 in structural coverage, $600,000 in contents coverage and $200,000 for business interruption.
Attorneys for Coastal, Tim Matusheski of Hattiesburg and former U.S. Attorney Brad Pigott of Jackson, also are asking that Lloyd’s pay punitive damages, but Dodson will decide only after actual damages are determined whether punitive damages should be considered.
Thanks, Anita!

4 thoughts on ““Policyholder wins round one” – Anita Lee reports on “Coastal Hardware v Underwriters at Lloyd’s…””

  1. That is a correct ruling, regardless of one’s stripes. Do you know if there were any depos taken of the Lloyd’s claims people in the case?

  2. Agree with you that ruling is correct, Sock, but do not know if any depos were taken of Lloyd’s claims people. I saw a Statewide 30(b)(6) representative quoted and a also references to the testimony of a James Hulen, the agent representing Lloyd’s and issuing both policies.

    Although our State courts are in the process of going on-line, Hancock is not among the few (three) counties that have the system up and running.

  3. I have read Rising from Katrina and ground zero. Now I have a question for Mississippi as I had with Louisiana. Who prepared the FEMA maps and what epic of vertical control was used to make the surveys and furnish the maps?

    Telling someone they didn’t need flood Insurance, when in fact the maps were completely outdated, is malfeasence. Those you assured were not in danger of flooding due to these flood plain maps shold be reimbersed by Either FEMA are those that prepared these maps.

    The Federal Government seems to be above law, when it is not. They should be attached to any lawsuit that involves anyone who did not have flood insurance because of these maps.

    Louisiana had the same problem as the COE surveyed and prepared the maps but knowing these maps were wrong and refunding people for their loses also fell off the table.

  4. All true Wayne. People were compensated though via homeowner grants.

    The maps were outdated. Insurance agents did tell people they did not have to buy flood insurance – I was told that and it was true based on them faulty maps. I bought it anyway. Many folks listened to their agent and didn’t.

    Lloyds has a slight problem here IMHO.

    sop

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