Couple insured by Lloyd’s of London receives claim denial letter

A couple who lost their home in Leilani Estates due to the Kilauea eruption received a claim denial letter a day after they sued their insurer for allegedly acting in bad faith, according to their attorney.

Jeffrey Foster, who represents Philip and Lanell Haysmer, said the letter was sent via fax from an adjuster in Little Rock, Ark., who is handling the claim for Lloyd’s of London.

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The couple is suing underwriters at Lloyd’s and others for allegedly not being responsive to their claim, filed two months ago.

Foster said the denial was based on a lava exclusion clause in the policy. He said the loss of the home should be covered as a fire peril.

Foster said it doesn’t appear that the adjuster did an inspection of the property.

He said Lloyd’s shouldn’t be offering these policies without being licensed in the state.

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The state Insurance Commission has referred to Lloyd’s as a “surplus line” insurer. Foster questioned whether the policy meets that definition.

He said the lawsuit will continue in Hilo Circuit Court, and others will be filed this week and next week.

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