The "Farmers Insurance News-Alert" website is dedicated to providing the consumer and general public with detailed information concerning the Farmers Insurance Group. This includes fraud reports, consumer complaints, lawsuit's and other legal actions taken against this company. All information contained herein is for educational purposes only. Original sources, when known are sited.
The Known Prior Acts Exclusions
Like many conditions and exclusions buried in the fine print of a liability insurance policy, the Known Prior Acts exclusion is a provision most policyholders probably know nothing about until their insurance company uses it to deny a claim. With the Known Prior Acts exclusion, this situation is even more likely given that the exclusion has little to do with knowledge of prior "acts."
One version of the exclusion states:
The "Post-Loss Underwriting" Exclusion
When, however, a significant claim comes in, the insurance company claims adjuster can search far and wide to find any facts which indicate that the newly acquired company could have foreseen the claim would be made prior to the date of acquisition. The insurance company, with the benefit of hindsight, might try to add its own spin to the facts to convince itselfthe policyholder and a jurythat the claim was "bound" to be made. The exclusion almost is an open invitation for insurance companies to engage in "post-loss underwriting," that is, the practice of foregoing any serious underwriting investigation of a policyholder or its acquisitions until after a claim has been made.
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