Nebraska Valued Policy Fails Insureds
Barry Zalma
May 23, 2023
Read the full article at https://lnkd.in/gH6NPReP, see the full video at https://lnkd.in/g-fuxbtS and at https://lnkd.in/ghZPfRTQ and at https://zalma.com/blog plus more than 4500 posts.
Mark and Michelle Callahan sued their insurer and its agent, seeking to recover damages after their home was destroyed in a fire. The district court granted summary judgment in favor of the insurer and its agent and the Callahans appealed.
In Mark and Michelle Callahan v. Jeb Brant, an individual, and Shelter Mutual Insurance Company, 314 Neb. 219, No. S-21-1006, Supreme Court of Nebraska (May 12, 2023) the Supreme Court concluded the valued policy statute established the value of the property at the time of a total loss.
FACTUAL BACKGROUND
In 2011, the Callahans purchased a Shelter Mutual Insurance Company (Shelter) homeowners insurance policy through a licensed insurance producer, Jeb Brant. Before the policy was issued, Brant used a reconstruction cost calculator tool to estimate the cost of rebuilding the Callahans’ home, using information obtained from the Callahans and from the Clay County assessor’s website. Brant prepared a report that estimated reconstruction costs at $250,481.
In May 2019, the parties agree the Callahans’ home was totally destroyed by an electrical fire. The Callahans submitted a claim on the policy with Brant’s assistance, and it is undisputed that Shelter subsequently paid the Callahans all amounts due and owing under the policy. The Callahans allege that when they subsequently obtained a quote for the cost of rebuilding their home, they learned “the cost to rebuild was substantially higher than the amount of insurance coverage.”
The Callahans sued Shelter and Brant. They alleged that Brant negligently advised them on the estimated replacement value of their home and negligently misrepresented the adequacy of their policy limits in the event of a total loss.
The declarations page of the policy states the Callahans’ home was insured in the amount of $267,400, and the policy contained a “Valued Policy” provision. Shelter and Brant generally relied on the language of the policy, as well as on Nebraska case law regarding the duty of insureds and insurance agents, to argue that it was the Callahans’ duty to know the value of the property they were insuring and to request the amount of insurance coverage they desired. Shelter and Brant argued that the policy limit on the home was unambiguously stated in the policy and represented the full measure of the Callahans’ damages in the event of a total loss.
The district court granted summary judgment in favor of Shelter and Brant.
ANALYSIS
Nebraska law on this issue is well settled. When an insured asks an insurance agent to procure insurance, it is the duty of the insured to advise the insurance agent as to the desired insurance, including the limits of the policy to be issued. An insurance agent has no duty to anticipate what coverage an insured should have.
The Callahans conceded they never asked Brant to procure coverage in a higher amount on their home. They specifically argued they “would have increased their policy limits if Brant had advised them that they needed more coverage to replace their home in the event of a total loss.”
Nebraska’s valued policy statute conclusively established the true value of the Callahans’ loss in the event the property is wholly destroyed, and it precludes them from offering evidence that the true value was something other than the amount for which the home was insured.
Nebraska’s Valued Policy Statute
Nebraska’s valued policy statute is currently codified at Neb. Rev. Stat. § 44-501.02 (Reissue 2021). The valued policy statute conclusively fixes the true value of insured property at the valuation written in the policy, and when there is a total loss, that sum is the measure of recovery.
The valued policy statute is required to be part of every fire policy issued in this state, and the statutory language was expressly incorporated into the Shelter policy issued to the Callahans.
Neither the language of the valued policy statute, nor the public policy objectives underpinning that statute, provide a principled basis to restrict application of the conclusive determination of true value only to circumstances when an insurer seeks to pay less than the policy limits because of a misrepresentation, and not to circumstances when an insured seeks to recover more than the policy limits because of a misrepresentation. Under either scenario, after a total loss, the valued policy statute conclusively fixes the true value of the insured property at the amount stated in the policy.
The Supreme Court concluded that the “valued policy statute applies to the Callahans’ misrepresentation claim against Shelter and Brant, and it conclusively establishes that the true value of the Callahans’ home is $267,400-the amount for which it was insured. Moreover, it precludes the Callahans from offering evidence that the true value of their home was something other than the amount for which it was insured. And without such evidence, the Callahans cannot prevail on their negligence or negligent misrepresentation claims.”
Nebraska’s valued policy statute conclusively determines that the true value of the insured property is the amount written in the policy. The district court did not err in granting summary judgment in favor of Shelter and Brant, and the judgment was affirmed.
ZALMA OPINION
Setting a replacement value of a home for the purposes of homeowners insurance is – much to the surprise of those insured – the obligation of the person seeking insurance not the insurer or the insurance agent. The Nebraska valued property statute was designed to protect insurers and agents against the type of claim brought by the Callahans’. Every person insured can take their chances and rely on the estimates prepared by the agent or seek the advice of a professional fire reconstruction contractor to provide an estimate. With inflation most estimates made last year are out of date. Be careful.
(c) 2023 Barry Zalma & ClaimSchool, Inc.
Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe.
Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808
Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01
Barry Zalma, Esq., CFE, is available at http://www.zalma.com and [email protected]
Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257
Write to Mr. Zalma at [email protected]; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.
Subscribe to videos limited to subscribers of Excellence in Claims Handling at locals.com https://lnkd.in/gfFKUaTf.
Consider subscribing to my publications at substack at https://lnkd.in/gcZKhG6g
Go to Newsbreak.com https://lnkd.in/g8azKc34
Barry Zalma, Esq., CFE, is available at http://www.zalma.com and [email protected]
Follow me on LinkedIn: https://lnkd.in/guWk7gfM
Go to the Insurance Claims Library – https://lnkd.in/gWVSBde.
Concealing a Weapon Used in a Murder is an Intentional & Criminal Act
Post 5002
Read the full article at https://lnkd.in/gmacf4DK, see the full video at https://lnkd.in/gav3GAA2 and at https://lnkd.in/ggxP49GF and at https://zalma.com/blog plus more than 5000 posts.
In Howard I. Rosenberg; Kimberly L. Rosenberg v. Chubb Indemnity Insurance Company Howard I. Rosenberg; Kimberly L. Rosenberg; Kimberly L. Rosenberg; Howard I. Rosenberg v. Hudson Insurance Company, No. 22-3275, United States Court of Appeals, Third Circuit (February 11, 2025) the Third Circuit resolved whether the insurers owed a defense for murder and acts performed to hide the fact of a murder and the murder weapon.
FACTUAL BACKGROUND
Adam Rosenberg and Christian Moore-Rouse befriended one another while they were students at the Community College of Allegheny County. On December 21, 2019, however, while at his parents’ house, Adam shot twenty-two-year-old Christian in the back of the head with a nine-millimeter Ruger SR9C handgun. Adam then dragged...
Renewal Notices Sent Electronically Are Legal, Approved by the State and Effective
Post 5000
Read the full article at https://lnkd.in/gpJzZrec, see the full video at https://lnkd.in/ggmkJFqD and at https://lnkd.in/gn3EqeVV and at https://zalma.com/blog plus more than 5000 posts.
Washington state law allows insurers to deliver insurance notices and documents electronically if the party has affirmatively consented to that method of delivery and has not withdrawn the consent. The Plaintiffs argued that the terms and conditions statement was not “conspicuous” because it was hidden behind a hyperlink included in a single line of small text. The court found that the statement was sufficiently conspicuous as it was bolded and set off from the surrounding text in bright blue text.
In James Hughes et al. v. American Strategic Insurance Corp et al., No. 3:24-cv-05114-DGE, United States District Court (February 14, 2025) the USDC resolved the dispute.
The court’s reasoning focused on two main points:
1 whether the ...
Rescission in Michigan Requires Preprocurement Fraud
Post 4999
Read the full article at https://lnkd.in/gGCvgBpK, see the full video at https://lnkd.in/gern_JjU and at https://lnkd.in/gTPSmQD6 and at https://zalma.com/blog plus 4999 posts.
Lie About Where Vehicle Was Garaged After Policy Inception Not Basis for Rescission
This appeal turns on whether fraud occurred in relation to an April 26, 2018 renewal contract for a policy of insurance under the no-fault act issued by plaintiff, Encompass Indemnity Company (“Encompass”).
In Samuel Tourkow, by David Tourkow v. Michael Thomas Fox, and Sweet Insurance Agency, formerly known as Verbiest Insurance Agency, Inc., Third-Party Defendant-Appellee. Encompass Indemnity Company, et al, Nos. 367494, 367512, Court of Appeals of Michigan (February 12, 2025) resolved the claims.
The plaintiff, Encompass Indemnity Company, issued a no-fault insurance policy to Jon and Joyce Fox, with Michael Fox added as an additional insured. The dispute centers on whether fraud occurred in...
Insurance Fraud Leads to Violent Crime
Post 4990
Read the full article at https://lnkd.in/gDdKMN29, see the full video at https://lnkd.in/gKKeHSQg and at https://lnkd.in/gvUU_a-8 and at https://zalma.com/blog plus more than 4950 posts.
CRIMINAL CONDUCT NEVER GETS BETTER
In The People v. Dennis Lee Givens, B330497, California Court of Appeals, Second District, Eighth Division (February 3, 2025) Givens appealed to reverse his conviction for human trafficking and sought an order for a new trial.
FACTS
In September 2020, Givens matched with J.C. on the dating app “Tagged.” J.C., who was 20 years old at the time, had known Givens since childhood because their mothers were best friends. After matching, J.C. and Givens saw each other daily, and J.C. began working as a prostitute under Givens’s direction.
Givens set quotas for J.C., took her earnings, and threatened her when she failed to meet his demands. In February 2022, J.C. confided in her mother who then contacted the Los Angeles Police Department. The police ...
Police Officer’s Involvement in Insurance Fraud Results in Jail
Post 4989
Read the full article at https://lnkd.in/gr_w5vcC, see the full video at https://lnkd.in/ggs7dVfg and https://lnkd.in/gK3--Kad and at https://zalma.com/blog plus more than 4900 posts.
Von Harris was convicted of bribery, forgery, and insurance fraud. He appealed his conviction and sentence. His appeal was denied, and the Court of Appeals upheld the conviction.
In State Of Ohio v. Von Harris, 2025-Ohio-279, No. 113618, Court of Appeals of Ohio, Eighth District (January 30, 2025) the Court of Appeals affirmed the conviction.
FACTUAL BACKGROUND
On January 23, 2024, the trial court sentenced Harris. The trial court sentenced Harris to six months in the county jail on Count 15; 12 months in prison on Counts 6, 8, 11, and 13; and 24 months in prison on Counts 5 and 10, with all counts running concurrent to one another for a total of 24 months in prison. The jury found Harris guilty based on his involvement in facilitating payments to an East Cleveland ...
Read the full article at https://lnkd.in/gRyw5QKG, see the full video at https://lnkd.in/gtNWJs95 and at https://lnkd.in/g4c9QCu3, and at https://zalma.com/blog.
To Dispute an Arbitration Finding Party Must File Dispute Within 20 Days
Post 4988
EXCUSABLE NEGLECT SUFFICIENT TO DISPUTE ARBITRATION LATE
In Howard Roy Housen and Valerie Housen v. Universal Property & Casualty Insurance Company, No. 4D2023-2720, Florida Court of Appeals, Fourth District (January 22, 2025) the Housens appealed a final judgment in their breach of contract action.
FACTS
The Housens filed an insurance claim with Universal, which was denied, leading them to file a breach of contract action. The parties agreed to non-binding arbitration which resulted in an award not
favorable to the Housens. However, the Housens failed to file a notice of rejection of the arbitration decision within the required 20 days. Instead, they filed a motion for a new trial 29 days after the arbitrator’s decision, citing a clerical error for the delay.
The circuit court ...
