Like USAA and others, Tower Hill took an aggressive, poorly planned strategy in evaluating its claims after last years overhaul of most sinkhole insurance laws. While Senate Bill 408 was signed into law on May 17, 2011, Tower Hill Select denied dozens (if not hundreds) of sinkhole claims, as it attempted to "retroactively" deny insurance benefits. Under established constitutional principles, no party to a contract can seek to force new terms and conditions after the contract (here, that's the policy) commenced.
But, for reasons we are just starting to understand, Tower Hill Select took a position based upon a theory that the changes to the new law were meant to be "procedural" in nature, and not intended to cause substantive changes in an insured's coverage. Forget that under the new law, what had originally been considered covered was now excluded, which certainly appear to be substantive to me. At the same time, when working with Tower Hill Select insureds, we have been told by the long list of law firms that Tower Hill Select and its related companies are "in for the long hall," with the intention of "killing the sinkhole beast and waiting out the policyholder firms." Sometimes being right isn't enough, but must also consider the possibility of an insurer who is willing to throw millions of dollars at costs and fees to deter valid claims.
Our dillegence appears to be working. Yesterday, I received call a Tower Hill Select defense attorney who conceded that Tower Hill Select had not properly evaluated the mandates of the law and its policies, and was blown out by a decision rendered in December 2011 on this issue by Judge Whittemore (see earlier post on the Bay Farms decision). In true form, however, while this firm is telling us Tower Hill Select is having a change of heart, many other lawyers on several other cases remain quiet, hoping that maybe will go away (trust me, we aren't).
For those of you who are on staff at Tower Hill Select, I hope you reconsider your position, stop delaying your payments, and are preparing for your depositions in the multiparty, bad faith suit we are going to file against your company.
See you soon, Tower Hill Select. Get some rest, as you are going to need it. TC