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Posted by tonyb on September 20, 1999 at 17:13:23:
In Reply to: Boat Fire - Insurance posted by Nicole on September 19, 1999 at 17:01:34:
Most property insurance policies give insurance the right to make repair after giving the policyholder proper notice. However, most adjusters hesitate to enforce the right without the authorization of the policyholder. Here are some of the reasons why: when the insurance company assumes the role of guarantor (when one party promises to make another secure in the possession, continued enjoyment, or the like, of something), it runs the risk and burden of policyholder satisfaction. The complaint of dissatisfaction is with the insurance company, instead of with the repair firm had the company settled directly with the policyholder. If the policyholder at that point decides not to be satisfied, how does the company ever convince the policyholder of satisfaction? Does the company's right to possession wipe out the rights to ownership if the policyholder wants to keep the policyholder's own property (what is left of it) and is willing to pay for the salvage? If the policyholder does not have the right to abandon the property, and does not have the right to keep the property, at what price insurance?
Where a loss occurs and the insurance company authorizes repairs, the contract to pay the loss is superseded by the contract to repair, and the one year time limit for the policyholder to sue the insurance company would not apply: Lee v. Safeco Insurance Co., 241 S.E. 2d 627 Ga. Ct. App., 1978.
The policyholder's lawsuit against the insurance company for fraud, conspiracy to defraud, bad faith, and intentional infliction of emotional distress based upon the insurance company's representation that certain individuals were competent to preserve and repair the policyholder's property, when, in fact, these individuals were not competent, causing more damage, was not subject to the one year time limit to sue: Murphy v. Allstate Insurance Co., 83 Cal. App. 3d 38, 147 Cal. Rptr. 565 Cal. Ct. App., 1979.
On the matter of salvage (that which is saved): One of the most important principles of salvage is that until and unless the policyholder agrees to give up ownership of the property, it remains the policyholder's property. Policyholders often relinquish this right unknowingly. The insurance company has the option to take all, or any part, of the property at the agreed appraised value. However, if the claim is for total loss of the property, but salvage value has been deducted from the claim (allowing credit for the salvaged property's value), the insurance company may find it a problem taking property that is not part of a claim.
Remember, it is your claim.
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