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Thursday, July 2, 2009

Disaster Inventory - Insurance Bad Faith

Disaster Inventory - Reducing The Risks Of Insurance Bad Faith

Disaster Inventory - The Recording & Documentation Of Property, After A Disaster Event.

Why Would You Need A Disaster Inventory?

The prime reason for a Disaster Inventory is to record the damage at the time of, or soon after an event. If the Disaster Event is community wide, it may be weeks before you are even paid a visit by an Insurance Representative. Having to rely on local Emergency Services for repairs, may be your only choice!

Issues may arise where repairs are only allowed by the Insurance Companies approved contractors, who may be addressing a large Disaster Area. During this time, damage may be increasing to the home. Therefore a record of the damage at the time of the event, easily shows and proves the differences between, the event time and when the contractor arrives.

The Disaster Inventory can also record such unwanted damage as:

  • Water flowing down the inner walls of the home!
  • Mould / damp growing in the internal parts of the home!
  • Damage to floor coverings.
  • Bad repairs.
  • Structural damage.

It all sounds to horrendous! No-one wants it happens to their home! The reality is, it can happen!

We would like to point out that the idea of a Disaster Inventory, was primarily born after looking at various cases of damage to homes, after a Natural Disaster Event. Where homes were left open to the weather for weeks, even for months, whilst the Insurance Company, 'got around' to taking action on the repairs. In fact what starts off as a small damage bill, can easily be escalated into the $10000's, due to a lack of action. It is at times like this, where you would have to ask whether there is any Good Faith, left in the Insurance Agreement!

We would all like to think, that reputable Insurance Companies, would be taking care of our homes, our investments asap after a Disaster. Especially when we may have been a client with them for years.


You may conclude that there is a question, as to whether an Insurance Supplier has the client's best interests at heart, when the home is further damaged! Normally one would have thought the Insurance Agreement would offer service and protection. This is not necessarily the case! The reality is in countries such as the US, there is a large arsenal of lawyers and attorneys, fighting against the large Insurance Companies on behalf of the client, focussing on what they call:


So What Is This Bad Faith Insurance?

  • According to Wikipedia - Insurance Bad Faith is a legal term of art, that describes a tort claim that an insured person may have against an Insurance Company for its Bad Acts. Under the law of most jurisdictions in the United States, Insurance Companies owe a duty of Good Faith & Fair Dealing to the persons they insure. This duty is often referred to as the "implied covenant of good faith and fair dealing" which automatically exists by operation of law in every insurance contract.
  • If an Insurance Company violates that covenant, the insured person (or "policyholder") may sue the company on a tort claim in addition to a standard breach of contract claim. The contract-tort distinction is significant because as a matter of public policy, punitive or exemplary damages are unavailable for contract claims, but are available for tort claims. The end result is that a plaintiff in an Insurance Bad Faith case, may be able to recover an amount larger than the original face value of the policy, if the insurance company's conduct was particularly egregious.

Whilst cases in court, are more prominent in the US, there are still many cases of 'Insurance Bad Faith' here in Australia. Cases may not end up in court, due to the current state of the law. The home owner is being placed in a situation that should not be happening! Legal agreements are being intentionally broken and in some cases it would appear being supported by Legal Protection Services that are there to protect the client.

Let us take a look at a case which has full documentation, supporting the case online. The case in question revolves around an Insurance Company not taking care of adequate repairs after a Disaster. The end result being the home owner and family not living in the home 18 months later! In fact the only option for the home, could be to demolish it and start again.

This is the story of Reny Dener V NRMA. Documentation is supplied by Reny Dener which appears to prove his case. You make up you own mind on who is to blame for the current situation.

It has always been the case that records and documentation of property, help with Disaster Recovery, Proving Ownership and Theft recovery. After all is that why the Police & Insurance Companies recommend it?

Quite ironic that the Home Inventory now has another good use for the householder. To prove the state of damage shortly after the Disaster event and from thereon. In cases such as that of Reny Dener, where the documentation he provides, clearly shows damage being caused to his home, due to slow, poor repairs. Surley this is a case of a large Insurance Company showing NO GOOD FAITH - IRONIC YES! - Show your support for Reny Deren visit his site mynrma.info.

Reny Deren V NRMA is posted on our new blog focusing on Insurance Claim Bad Faith.

If you have a story of Insurance Bad Faith we would love to hear about it. With your permission we will add it to our blog, or link to your information.

Create Your Inventory Using The Home Inventory Software We Use


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