fbpx

Liberty Mutual Cash Value of Labor in Property Claims Class Action

The difficulty in evaluating insurance policies is that you never know how good the company is until you have an actual loss and see how their payment system works. The complaint for this class action alleges that LM Insurance Corporation (Liberty Mutual) does not properly pay for labor, in at least two different ways, in its actual cash value payouts for damages to property.

Two class have been proposed for this action. 

The Steep and High Roof Labor Class is all Liberty Mutual policyholders who made a structural damage claim for property in Tennessee which resulted in an actual cash value payment from which coverage for steep or high roof labor was denied because of Liberty Mutual’s practice of withholding labor costs as “paid when incurred” or by omitting the line for removal labor on steep or high roofs under Xactimate, during the longest limitations period allowed. 

The Labor Depreciation Class is all Liberty Mutual policyholders who made a structural damage claim for property in Tennessee which resulted in an actual cash value payment during the class period from which “non-material depreciation” was withheld, during the longest limitations period allowed. 

Both classes include those whose losses drop below the amount of the deductible because of the withholding or depreciation. Both exclude claims for which the applicable limits of insurance have been exhausted.

Like many insurance companies, Liberty Mutual uses Xactimate software to calculate its actual cash value payments. However, the software can be manipulated so that certain items are removed or not shown to the customer.

Steep or High Roof Labor

When people work on steep or high roofs, they charge extra, because extra safety precautions must be taken. In figuring an insurance payout, two phases of work must be considered: the removal of the old materials and the installation of the new ones. The complaint alleges that Liberty Mutual takes out the labor charges for removal and includes only those for installation. 

Labor Depreciation

Materials depreciate. That is, physical items like roof shingles lose value in the course of use or aging. But labor does not depreciate. The complaint alleges that Liberty Mutual subtracts depreciation from labor costs. However, the complaint says, it does this only when some materials are included as part of the costs. When costs are shown for line items that include labor only, Liberty Mutual does not subtract depreciation. The complaint claims that this is because Liberty Mutual does not want customers to be aware that it subtracts depreciation in its estimates.

Also, the complaint alleges that Liberty wrongly puts some items of labor not into the advance, actual cash value payout but that it counts them as “paid when incurred.”

The complaint claims breach of contract.

Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

Chase Credit Cards No Grace Period for Purchases Complaint

June 3, 2019

Do you have to pay interest on a purchase if you pay it off before the deadline of that billing cycle? Most people would say no. But the complaint for this class action alleges that cardholders with Chase Bank USA, JPMorgan Chase Bank, NA, and JPMorgan Chase & Co. will normally pay an interest charge.

chase_interest_charges_on_paid_transactions_compl.pdf

Case Event History

Chase Credit Cards No Grace Period for Purchases Complaint

June 3, 2019

Do you have to pay interest on a purchase if you pay it off before the deadline of that billing cycle? Most people would say no. But the complaint for this class action alleges that cardholders with Chase Bank USA, JPMorgan Chase Bank, NA, and JPMorgan Chase & Co. will normally pay an interest charge.

chase_interest_charges_on_paid_transactions_compl.pdf
Tags: Breach of Contract, Deceptive Insurance Practices, Incomplete payment of benefits due, Insurance