Legal Group Unveils Guidelines for First-Party Insurance Disaster Claims

A national legal group has developed new, streamlined protocols designed to promote a more efficient exchange of information in first-party insurance claims cases stemming from manmade and natural disasters.

The Institute for the Advancement of the American Legal System (IAALS) developed the protocols, backed by a grant from The Foundation of the American College of Trial Lawyers. Plaintiff and defense attorneys, the Federal Emergency Management Agency, the Texas U.S. Attorney’s office and state federal judges all took part.

The effort standardizes the definition of things including claimed loss, documents, events, insureds and insurers, property, and what would constitute a disaster event. There are also guidelines on materials needed for court action, timelines to produce documentation, and suggested filing requirements for both private and National Flood Insurance Program claims. As well, the protocols include standardized legal documents for both sides.

Steven Badger, a partner in the Dallas office of the law firm Zelle LLP, said that the new protocols should help both carriers and claims officials do their jobs better in disaster situations.

“Knowing what will have to be produced by both sides early in the litigation process should help carriers and their claims teams in the prompt evaluation and resolution of disputed disaster claims,” Badger told Carrier Management via email.

IAALS said that insurers and the courts all have a stake in efficiently addressing first-party property damage insurance disputes in a fair, efficient and cost-effective way. The new protocols will address these areas, it said.

“We’re pleased to play a role in bringing all sides to the table to develop this agreed upon framework for streamlining discovery in disaster cases,” Brittany Kauffman, IAALS senior director, said in prepared remarks. “This is an area where there is an opportunity for greatly improving the process, and we look forward to sharing these protocols widely and supporting their use on the ground. It is our hope that they will make the process fairer and more effective for all parties.”

The dynamics of major disasters can make it difficult to address claims smoothly, Badger said, adding that this reality gave IAALS a sense of opportunity.

“Insurance companies and their insureds don’t always agree on the cost to repair damaged property. As a result, after major disaster events, a significant influx of lawsuits can always be expected in the local court systems. This creates a major burden on the courts,” Badger said. “IAALS saw a need for the court system to improve the handling of these lawsuits [and] brought together a group of judges and lawyers with experience in disaster litigation to develop a mutually fair and expeditious process for engaging in the early exchange between the parties of the most important documents and information needed to evaluate the disputes.”

The protocols are voluntary, but Badger said the hope is that they’ll be widely used.

“Local federal and state courts can decide whether to adopt them,” Badger said. “It is hoped that both federal and state courts facing large numbers of lawsuits after a hurricane or other disaster event will adopt the protocols as a standing order applicable to all matters.”

By doing so, Badger said, “the parties and their lawyers will know right away what documents and information they will need to immediately produce in the lawsuit” and lead to early mediations and settlements.

“That’s good for everyone,” Badger said.

Source: IAALS