Is An Insurance Claim Property In Family Law?
Q: Is an insurance claim ‘property’ in family law?
A: The short answer is yes, it can be. An insurance claim is money that can be recovered and although not strictly ‘property’ it is treated in the same manner. An insurance claim is a right to sue. Often the trouble with a right to sue is that the amount or value has not crystalised so it can be unknown. If it has not crystalised on a practical level it can be difficult to assess how it should be brought into the matrimonial property pool available for distribution.
A recent matrimonial property settlement case looked at an insurance claim that had not been finalised. The former matrimonial home had been severely damaged by an explosion and fire. The husband had engaged an expert to provide a valuation of the remedial work needed to repair the damage. The expert determined that approximately $230,000 would be required. The wife utilised the experts report in her negotiations with the home insurance company. She had conditionally accepted the insurance company’s offer of settlement of approximately $214,000.
Whilst the amount had not been finally accepted and payment received the judge still treated the conditional, pending amount as property. He also reimbursed the husband for his payment to the expert, given the concession made by the wife that the experts report was used in negotiations with the insurance company.
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