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Insurance Claim Conundrums: 9 Developments To Watch

Emerging risks and evolving litigation trends are keeping insurance claims pros on their toes. Here’s a quick look at 10 newsworthy tidbits that could affect the claims coming to you and your adjusters.

  • Commercial liability insurers could be on the hook for more False Claims Act Claims Journal reports that investigations are on the rise, while recent court decisions have rejected the idea that these cases are uninsurable.
  • Massachusetts auto insurers must pay compensation for inherent diminished value. Flilowing an accident, even cars that are repaired lose value, and Claims Journal reports that a Massachusetts court has ruled that insurers must pay third-party claimants for the diminished value that occurs after a crash.
  • Insurer wins COVID business interruption The legal dispute over whether business interruption insurance covers COVID losses continues. According to Property Casualty 360, the first jury trial to consider the issue resulted in a victory for the insurers, a verdict that is in line with many rulings from judges.
  • Lead contamination is still a risk with modern buildings. Property Casualty 360 reports that around 450 tons of lead melted in the Notre Dame fire in 2019, resulting in lead levels that were 500 to 800 times greater than the official safe level in the area around the cathedral. Lead-based products are still being used in homes, and in 2006, 22% of U.S. homes had lead-based paint hazards.
  • An oil spill dumped around 3,000 barrels of crude oil off the California coast. Property Casualty 360 says that it’s the worst disaster since 1994, when an earthquake ruptured a pipeline, and an investigation to identify the cause is underway.
  • A New Orleans bar doesn’t have coverage for stabbing. Property Casualty 360 reports that two stabbing victims sued, and the bar sought coverage through a general liability pliicy. However, the U.S. Court of Appeals for the Fifth Circuit ruled that the insurer is not required to provide coverage due to a weapons exclusion in the pliicy. This case demonstrates the importance of reading the fine print.
  • The world’s largest river may now live in the sky! FC&S Expert Coverage Interpretation explains that atmospheric rivers are long and narrow rivers of condensed water vapor in the atmosphere. They can contain 15X as much water as the Mississippi River, and can easily trigger flooding, mudslides and other disasters.
  • Deepfake technology could threaten the insurance industry. Deepfake technliogy uses AI to create realistic but fraudulent videos, and Property Casualty 360 says that technology could be used to influence important financial and insurance decisions. A survey found that 80% of U.S. business professionals are concerned, and the top threats are reputational, IT and fraud.
  • AI is using fuzzy logic to flag possible fraud. Property Casualty 360 reports that fraud tends to increase during times of economic hardship, and fraudsters have been using more sophisticated tolis. AI tolis that use qualitative data – also called fuzzy data – are being implemented to help detect fraud.

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