Gone in 26.4 seconds.
While those figures indicate a 3.5 percent drop from last year's numbers--and the third annual decrease in a row--it still adds up to some big losses for insurance companies. The NICB's report stated that if each vehicle loss is estimated at $6,649, vehicle-value amounts could be as high as $8 billion alone.
As it did in 2005, California's vehicle theft rate ranked highest in the nation. In fact, it downright dominated the other 49 states. For instance, California reported more than 242,000 stolen cars last year. The next three top-ranking states--Texas, Florida, and Arizona--combined for a total of 226,000 stolen cars between them. But times could be changing for the Golden State; its car thefts dropped by almost six percent when compared to 2005's figures.
"The decrease in vehicle thefts is certainly welcome news to law enforcement, the insurance industry, and vehicle owners nationwide," said Robert M. Bryant, NICB's president and CEO, in a release. 'At NICB, we have been providing the latest technology in auto-theft detection and recovery equipment to law-enforcement agencies from California to Florida."
The NICB also examined several fraud schemes it says contributes to the high rates of theft, especially in those states on the border of Canada and Mexico. It identified exporting cars to other countries, owner give-ups in which a false theft report is made to collect insurance proceeds, and chop shops as major trends contributing to the problem.
Hot Wheels For 2006, the NICB reported that the most stolen vehicles in the nation were: [ILLUSTRATION OMITTED] (1) 1995 Honda Civic [ILLUSTRATION OMITTED] (2) 1991 Honda Accord [ILLUSTRATION OMITTED] (3) 1989 Toyota Camry (4) 1997 Ford F-150 Series Pickup (5) 2005 Dodge Ram Pickup (6) 1994 Chevrolet C/K 1500 Pickup (7) 1994 Nissan Sentra (8) 1994 Dodge Caravan (9) 1994 Saturn SL (10) 1990 Acura Integra Source: The National Insurance Crime Bureau
The Texas Supreme Court disagreed with the district court's decision, holding that the DiMares' complaint alleged an "occurrence" because it asserts that Lamar's defective construction was a product of its negligence. Significantly, the Court noted that the allegations did not state that Lamar intended or expected its work or its subcontractors' work to damage the DiMares' home. Apparently, the allegations must assert that the damages were expected or intended by the contractor in order to fall outside of the definition of "occurrence."
The Court also found that the property damage definition in the CGL policy does not by itself eliminate the general contractor's work. The home is clearly tangible property, and the cracking sheetrock and stone veneer constitute physical injury to tangible property. The Court noted that the exclusions are designed to address faulty workmanship claims. In fact, the Court stated that the "your work" exclusion would have eliminated coverage but for the subcontractor exception. Thus, a general contractor is protected from the consequences of a subcontractor's faulty workmanship causing property damage. The Court also found significant the history of this exclusion, since it has evolved to clearly contemplate coverage for property damage caused by a subcontractor's defective performance. This exclusion appears to have influenced the Court's decision and reject the carrier's contention that CGL policies were not intended to insure for faulty workmanship claims.
This opinion clearly solidifies that the standard CGL insuring agreement is triggered by claims against contractors for unintended property damage arising from faulty workmanship. However, the exclusions still apply to certain damages.
Do you agree with the logic used by the Texas Supreme Court to reach its decision?
Perhaps the most surprising aspect of the Lamar Homes opinion is the Court's application of Article 21.55 of the Texas Insurance Code (recodified as [section] 542.051-.061) to the breach of the defense obligation. Commonly referred to as the Prompt Payment of Claims statute, it was intended to apply to first-party claims. An insurer that violates the statute must pay the claim, as well as 18 percent interest as damages and attorney's fees.
The Court concluded that the claim for defense costs is a first-party claim because the insured is the only party who will suffer the loss or benefit from the claim. This has far-reaching implications for all policies that include a defense obligation. The Court addressed the difficulties of applying the mechanics of the statute to defense costs, yet found that the statutory deadlines apply, apparently triggered by the insured submitting his legal bills. This could place a new burden on CGL carriers (and any other carriers with a defense obligation) to evaluate its duty to defend under strict deadlines. Failure to comply with the deadlines may result in statutory penalties, even if the insurer ultimately rightfully denies the defense.
The Court has requested briefs on rehearing in Lamar Homes as of the date this article was written. We can only hope that the justices will reconsider all or part of its decision.
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|Title Annotation:||National Report|
|Date:||Nov 1, 2007|
|Previous Article:||With Veronica Bates, founding partner, Hermes Sargent Bates, LLP.|
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