Insurance Law/Auto coverage

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Question
I carry comprehensive coverage on my auto policy.  My vehicle caught on fire.  The insurance company is denying the claim stating that there is an exclusion in the policy for "mechanical or electrical breakdown or failure".  Does fire come under this category?  
There is no other mention of fire in the policy.  Thank you

Answer
Patty,

I am sorry to hear about your problem.

"Comprehensive" coverage is also known within the policy as "Other Than Collision" (OTC). In a standard "Personal Auto Policy" (PAP) there is a specific listing of "perils" which ARE covered for OTC and FIRE is a specific peril covered.

The exclusion that the carrier is trying to use states - "We do not pay for: 2. Damage due and confined to: c. mechanical and electrical breakdown." That exclusion is strictly intended to apply to situations where your car just breaks down on the side of the road. Throws a rod, blows a gasket, blows a fuse, etc. That is stuff that insurance is not designed for.

It does NOT apply to situations where an electrical short causes a fire which burns your car up. (It might apply IF the only damage is the electrical short caused the alternator to go out.) That is why the terms "due and confined to" are used.

Most states have a statute regarding "Fair Claims Settlement Practices" and one of the main requirements is that a carrier may NOT mis-represent the policy terms and conditions. They are on very shakey grounds right now if they are trying to deny your claim based on that particular exclusion.

Make sure they send you the reasons for the denial IN WRITING. At that point, you can contest their findings and request a re-consideration by a supervisor. If they continue to deny the claim, then you need to consider retaining an attorney.

Hope this helps.

Kevin Hromas
JD, EGA, RPA, PLCS, HCRI-R/C, CPIU, WINDŽ Umpire
Kevin Hromas & Associates
... A Division of US Insurance Information LLC
www.KevinHromas.com

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Kevin Hromas

Expertise

I am a licensed, executive general adjuster currently holding a Texas resident P&C license (614250), New Mexico non-resident all lines license (248774), Oklahoma non-resident P/F/M license (A299561), Florida non-resident P&C license (E117051) and a National Flood Insurance Program certification (06040100). My areas of expertise involve property and casualty issues in both residential and commercial policies with regards to claims practices and issues. I deal extensively with Lloyd's of London commercial policies and various domestic carriers for residential policies.

Experience

After a 20 year career as a General Contractor, I was employed by Allstate Insurance as an adjuster in Texas, holding various postitions within the property claims department. After leaving Allstate, I specialized in handling losses associated with major catastrophes through-out the country. (Hurricanes Isabel, Charlie, Wilma, Katrina, Ike, etc., hail storms, floods.) I am currently retained as an expert by multiple insurance defense firms in Texas for issues in litigation. I am also a certified Umpire for formal appraisals.

Organizations
Member - Society of Registered Professional Adjusters Fellow - Council on Litigation Management Member - Property and Casualty Association Member - Texas Independent Insurances Adjusters Association Member - National Association of independent Insurance Adjusters Member - Houston Claims Association

Publications
Claims Magazine (www.ClaimsMag.com and then search 'Kevin Hromas' for a full listing of articles and quotes.) www.ClaimsPages.com, www.ProAdjuster.org, www.KevinHromas.com

Education/Credentials
JD - University of Houston Law Center - 1992 BA - Southwest Texas State University - 1980 AA - South Plains College - 1977 PLCS - Personal Lines Coverage Specialist

Past/Present Clients
Certain Underwriters at Lloyd's, London, Fulbright & Jaworski (Law Firm), Bracket & Ellis (Law Firm) Thamm & O'Briant (Law Firm) Sheehy, Ware & Pappas (Law Firm) Walker, Wilcox and Matousek (Law Firm) Financial Guarantee Underwriters

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