Fire Insurance Exchange HO Claims Denial Upheld Based On Failure To Cooperate

Abdelhamid v. Fire Insurance Exchange, No. C059098 (February 22; ordered published March 9), is a decision from the Third Appellate District upholding a summary judgment in favor of Fire Insurance Exchange after its denial of a homeowners’В  insurance claim after fire destroyed Abdelhamid’s home.В  Fire Insurance Exchange’s denial was based on plaintiff’s failure to produce requested documentation, failure to answer material questions when examined under oath, failure to submit a completed proof of loss with necessary documentation, and failure to cooperate in the processing of the claim.В  After summary judgment was granted Fire Insurance Exchange, plaintiff appealed.

The Court of Appeal affirmed.В  The Court cited Brizuela v. CalFarm Insurance Co. (2004) 116 Cal. App. 4th 578, 587 (citing Hickman v. London Assurance Corp. (1920) 184 Cal. 524, 534) for the proposition that “[a]n insured’s compliance with a policy requirement to submit to an examination under oath is a prerequisite to the right to receive benefits under the policy.”В  The insured here claimed her refusal to answer questions was based on the advice of counsel.В  Since counsel purportedly providing such advice did not appear at the examination where the plaintiff was represented by a public insurance adjuster, the Court indicated some question about the underlying legitimacy of that claim.

The Court then noted that, in Hickman, the insured was being prosecuted for arson, claimed that providing documents to his insurer would violate his Fifth Amendment privilege against self-incrimination, and the Supreme Court had still held that requiring the insured’s cooperation was an enforceable condition precedent to receiving benefits under a policy.В  While it found no case directly on point with the precise argument made here, the appellate court determined that California case law strongly supports cooperation clauses such as were at issue herein and further noted that the standard fire insurance policy, including such provisions, has been prescribed by the legislature.В  Its language, the Court went on, allows insureds to object to questions asked in such examinations, but also specifically references the fact that they can be advised coverage may thereby be affected.

February 22, 2010   Posted in: Blog