Picture Credit: JOHN BURNETT/Tribune-Herald
Leilani insurance lawsuit hits court
News Source: West Hawaii Today
The Haysmers, an elderly couple from Leilani Estates, filed a lawsuit against John Mullen and Co., Arm Claims Inc., and Specialty Group LLC, among others, alleging that their insurer, Lloyd’s of London, acted in bad faith by not approving their claim after their home was destroyed during the Kilauea volcano eruption. The couple’s policy covered fire damage but had a lava inundation exclusion. The defendants’ attorney argued that claims of bad faith against non-insurer defendants should be dismissed, citing previous legal precedents.
Jeffrey Foster, the Haysmers’ attorney, argued that the couple believed they were insured by Lloyd’s of London but were unaware of the involvement of other entities such as John Mullen, Monarch, and Arm. Foster claimed that the Haysmers’ claim was mischaracterized by the adjuster as a lava claim instead of a fire claim, despite evidence showing the home was destroyed by fire. He also criticized the lack of inspection by the adjusters and their denial of the claim based on a property they never visited.
The judge, Henry Nakamoto, said he would consider the motion to dismiss and provide a written decision later. Foster expressed concern that the denial of the Haysmers’ claim was based on the lava exclusion despite their coverage for fire. He mentioned plans to file similar suits and noted a second civil complaint filed on behalf of other plaintiffs whose claims were also denied due to a lava flow exemption, despite their policies not containing such an exclusion.
The lawsuit highlights the challenges faced by residents in lower Puna whose homes were destroyed during the eruption. It raises questions about insurance coverage and the handling of claims by adjusters, especially regarding the interpretation of policy exclusions. The outcome of the case could have implications for other homeowners affected by natural disasters and their ability to receive fair treatment from insurers.