Evidence Establishing Insured Set Fire to Dwelling Avoids Bad Faith
No Bad Faith if Preponderance of Evidence Exists That Insured Was an Arsonist
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A fire at the home of Plaintiff Leo Ly caused extensive property damage. Defendant Universal Property and Casualty Insurance Company denied Plaintiff’s claim under his homeowner’s insurance policy, citing to an exclusion for loss caused intentionally by the insured. Defendant believes that Plaintiff started the fire himself to recover insurance proceeds to aid with his financial distress. In Leo Ly v. Universal Property & Casualty Insurance Company, Civil Action No. 19-1239, United States District Court For The Eastern District Of Pennsylvania (May 7, 2021) Mr. Ly sued for bad faith denial of his claim. The insurer asserted a counterclaim for insurance fraud against Plaintiff.
ZALMA OPINION
Arson-for-Profit is usually proved by circumstantial evidence. Although there existed substantial circumstantial evidence that Ly set the fire because he had a motive, opportunity and ability to set the fire and because there was no accidental cause for the fire. An attempt to defraud an insurer and obtain a few hundred thousand dollars for a fire at a house that cost the insured $1; that he mortgaged for $180,000; coupled with the circumstantial evidence outlined by the court defeated the suit. Mr. Ly should try to find a way to avoid a trial and consider himself lucky that no one has charged him with the crime of arson or insurance fraud.
© 20
21 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.
Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.
Over the last 53 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.
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