The Risk Manager, Winter 1999

by Bob Breetz, Claims Counsel

Fire Policies—Don’t get burned!

Lawyers Mutual has had several claims involving attorneys who mishandled claims against fire policies. Not only did the client's home or business burn, the lawyers got burned when they had to pay their deductibles. We believe these claims were avoidable if the lawyers had only taken the time to read their clients' insurance policies.

Quite often insurance policies contain a provision limiting the time to bring suit to less than the 15-year general statute of limitations on written contracts. A typical fire insurance policy imposes a one-year period of limitations. These contractually shortened periods have been upheld in Kentucky courts at least since 1944. Johnson v. Calvert Fire Insurance Company, 298 Ky. 669, 183 S.W. 2d 941 (1944).

Equally enforceable are contractual provisions requiring the insured to give sworn statements to the carrier. The carrier is not required to accept a deposition in litigation in lieu of a sworn pre-litigation statement. The refusal to give a sworn statement to his uninsured motorist carrier cost Mr. Temple his UM claim. Temple v. State Farm Mutual Insurance Company, Ky., 548 S.W. 2d 838 (1977). A similar refusal to a fire insurance carrier has twice cost a Lawyers Mutual insured a deductible and placed Lawyers Mutual in the fire insurance business.

Walk carefully through probate.
The staid world of probate has presented us with two problems worth bringing to your attention concerning the renunciation statute, KRS 392.080.

• That statute requires the renunciation either to be “acknowledged before and left for record with the county clerk or his authorized deputy” or “acknowledged before a subscribing witness and proved before and left with the county clerk or his authorized deputy.”  Two circuit courts have held a simple acknowledgment before a notary public without “proving” the acknowledgment before the county clerk will not get the job done.
• An attorney instructing a paralegal to prepare a document failed to differentiate between a renunciation under KRS 392.080 and a disclaimer under KRS 394.610.  That was a costly mistake.

Why wait?

What rule of law requires an attorney to wait until the last minute to file a date sensitive document? Missed deadlines continue to be a problem for far too many of our insureds. As Pete Reiser said "It doesn't take talent to be on time." Calendar all time sensitive matters (not just litigation) with adequate lead time to meet deadlines. Have two back up systems to make sure you don't forget. Your personal calendar, your secretary's calendar, and a periodic computer calendar printout will work for solos.