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May 19 2014

It is Getting Expensive for Citizens to Continue to Deny Insurance Claims

Posted by Hugo V. Alvarez |

attorney fees.jpgCitizens Property Insurance continues to seek significant increase in their rates on a year by year basis. This causes many to ask the question, “where is all this money going.” Many believe that one of the causes of these annual rate increases is the amount of attorney’s fees Citizens pays each month. Citizen is said to be paying out an estimated $2 million in attorneys’ fees each and every month.

From the beginning of 2011 until about June of 2013, Citizens has spent more than $16 million in lawyers from over 150 firms that have litigated claims on behalf of Citizens’ policyholders. The figure above does not even take into consideration the amount of money Citizens’ spends defending the claims held by various policyholders.

These widespread costs could be reduced if Citizens decided to simply stop denying so many claims and allow more claims to go to mediation.

Policyholders are being subjected to Citizens tactics of rejecting claims and choosing to battle the disputes in court. A Citizens representative says that a large majority of the claims made to Citizens are claims alleging water loss, which are largely denied because Citizens only covers sudden and accidental water damage, not long-term leakage. This is just one of Citizens many defenses as to the number of claims that end up in litigation.

Citizens’ also decides what should be appraised and not the policyholder, which allows Citizens to pick and choose what they are going to be responsible for. Policyholders and their attorneys believe that having the appraisal agreement, where they could choose a third party appraiser would be a lot more efficient. These same people believe that Citizens current policies are being abused by law firms and vendors working for Citizens.

This is a continually evolving problem for the insurance company that insures nearly one-fourth of the property insurance market in the state of Florida. They are known for denying delaying and defending because they can essentially pay out whatever they want to pay. Citizens is continuing to lowball its policyholders because they are a quasi-public corporation, which is not subjected to the laws of bad-faith like those that apply to private insurers.

May 19 2014

Are You Financially Prepared for Hurricane Season?

Posted by Hugo V. Alvarez |

Hurricane.jpgAre You Financially Prepared for Hurricane Season? Here in South Florida we all know the devastation of hurricanes and the destruction they can cause. One of the most expensive things you could lose during a hurricane would be your home. For this reason it is extremely important for homeowners to be prepared financially for hurricane season. It is often the case that many Floridians are not prepared to protect their home or their finances during hurricane season.

The most important thing to do going into hurricane season is making sure that you have hurricane coverage. Check all your insurance policies and if you can not locate your policy don’t hesitate to call your insurer and ask these pressing questions regarding your home. This goes along with making sure you have all sufficient documents needed in the case of a hurricane.

However, hurricane season has already started. So now is the time to take a look at your property insurer to determine whether your insurer is in good financial health. In the event of major storm, you don’t want to be stuck with an insurance company that is going broke as it will negatively impact your claim. Worse, it could leave you in a position where you will be unable to fully recover money for repairs that you are entitled to receive despite the fact that you paid your premiums.

Next you must insure that you have adequate proof of damage. Make sure that you take pictures or videos of the damage immediately after assessing it. Also if any conditions worsen make sure to document them so that your insured will cover all your damages.

So remember heading into hurricane season you must double check your policies to make sure you are fully covered for hurricanes. Once you have done that make sure you have all proper documentation needed to make a claim. And lastly in the event of a hurricane make sure to document all of your damage. These tips should help you to protect your home and your money in the case of a disaster.

May 19 2014

Is Your Business Ready If a Hurricane Strikes?

Posted by Hugo V. Alvarez |

hurricane-recovery.jpgIt is vital for every business owner or professional to have a disaster plan in place that includes knowing how to assess damage, understanding how to properly file an insurance claim, and make the required repairs to get back to work as quickly as possible. Taking the wrong approach, or simply mishandling your potential insurance claim, could cost you a lot of money with respect to any claim that may ultimately be submitted to your insurance company.

In an effort to aid your hurricane season preparation, here are some suggestions that could assist you during this upcoming hurricane season’s adequately prepare.

• Make sure to copy and safely store your pertinent documents. For instance, make sure you have a copy of your property and casualty, as well as a copy of your business interruption insurance policy, and a copy of your lease agreement. You should maintain hard copies of these important documents in the event of a long-term power outage, but you should also store these documents digitally and off-site in a secure electronic environment. You should also safely store these documents in a manner that will allow you to gain very quick access to them in the event of a catastrophe.

• You should also safely make the appropriate arrangements to have copies of your last four years of income tax returns, and the last six months of your profit and loss statements safely secured. You’ll need the financial data in the event that you have to make a business interruption claim, and you will need physical copies of these documents should you not be able to gain access to them electronically.

• Keep an updated account of your inventory, and print that out as well. Be sure to inventory all of your office supplies such as computers, desk, chairs and paper since you can recover those losses. You should photograph all of these items as well.

• If you rent space, then it is imperative that you keep a copy of your lease agreement in a safe place along with all of the aforementioned other documents.

• Make sure to take photographs and/or video of your entire workspace, including your inventory and office supplies.

• Make sure to collect emergency contact information for all of your employees, suppliers, and vendors.

• Work with your senior staff to prepare a plan for a storm, fire, flood or other emergency. What are the contingencies that will allow you to get back to work quickly, and what are the variables that will prompt a long term shut down. Who will be in charge of getting your network back up? Who will be in charge of contacting your major clients? Who will be in charge of handling your insurance claim? Assigning these responsibilities in a calm environment prior to a storm striking will only aid the smooth transition to get back to work after a storm strikes South Florida.

• If you own the property, hire a licensed inspector or contractor to examine the roof, interior and other structural components in advance to the store. You do not want the insurance company to deny your claim by saying that your property had pre-existing damage. The best way to combat that argument is to conduct the appropriate inspection today.

• Prepare a list of preferred contractors that you can call on for all necessary repairs. Don’t wait for the insurance company to find someone. If the storm was a catastrophe, then that aid will be difficult to come by. Indeed, it will be incumbent upon you to repair your damages, and the best way to do that is to contact a contractor today and make arrangements to insure prompt repairs after a storm strikes out Florida.

• Communication is vital to any recovery. Make sure you have a plan for proper communication and one should anticipate disruptions in communications services, possibly for extended periods of time.
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Consider Your Options. Call Us Today.

Considering the increased odds of South Florida getting hit by a storm you should take the necessary steps to safeguard your property and business. That is particularly true since history suggests that South Florida is due for a hurricane strike. Therefore, this is certainly not the season to take lightly. We’ve been spared the last few years, but this could be the year where we are hit by another hurricane. Hurricanes are a fact of life living in South Florida. Although inevitable, they are not surprises like earthquakes or tsunamis. You can prepare and be ready for a hurricane. Call us today to discuss your hurricane preparation in greater detail.

May 19 2014

Fourth District Court of Appeals–Condo Associations may not rely on Condominium Act for protection

Posted by Hugo V. Alvarez |

6a010534acc2cc970c01156f8e783e970c-800wi.jpgThe Condominium Act in Florida states that insurers must cover damage to the exterior common elements. However, the 4th District Court of Appeal recently held that associations cannot rely on that provision to cover damages to those areas.

In a recent dispute between Citizens and River Manor Condo Association, Inc. (“Ass’n”) in Wilton Manors, the Court reversed $1.24M of a $6M damages awarded to the Ass’n for damages caused by Hurricane Wilma in 2005.

Citizens argued that structures and landscaping separate from the buildings was excluded from coverage. In response the Ass’n cited the section in the Condominium Act that requires coverage for those damages. The Circuit Court Judge found conflict between the policy exclusions and the Act and found for the Ass’n.

The 4th District panel looked at the legislative intent and insisted that the Act was created to regulate associations not insurance companies because a subsection in the Act requires associations to use their “best efforts” to obtain such coverage and if the Act regulated insurers the subsection would be meaningless. However, the panel agreed that the “best efforts” language is ambiguous, and could lead to negative consequences in future application.

The Court interpreted the statute to mean that an association should use its best efforts to obtain insurance that covers the exterior elements of common areas but implicitly recognizes that due to market constraints this may be impossible. This means that insurance policy exclusions strictly construe the coverage of the association’s property and the association may not rely on the section of the Condo Act to “extend” coverage to those areas.

May 19 2014

Don’t Delay in Reporting Your Insurance Claims

Posted by Hugo V. Alvarez |

insurance_claim_form-resized-600.pngWe have previously discussed the frequent litigation of late notice claims and their impact on property owners. Florida court decisions indicate that the best way to place your claim in the best possible light with the insurance company is to immediately notify them of your loss.

However, and for a number of different reasons, “immediate” notice is not always possible. Therefore, and in situations where “immediate” notice is not provided, insurance companies all too often take the position that they have been “prejudiced” by the insured’s failure to provide “immediate” or “prompt” notice of the claim. The nature of that “prejudice” is often the source of much contention in litigation.

Florida courts have been churning out decisions on “late notice” claims as of late. Part of the reason for the decisions that have been issued is in large part a corrective response to the erroneously decided decision in Kroner v. FIGA, which incorrectly suggested that all claims not reported within two years were barred as a matter of law. The appellate decisions decided since then discussing “late notice” claims have all concluded that each case must be evaluated on its own merits and they have all receded from the Kroner conclusion that such claims are barred as a “matter of law” if not filed within two years.

The newest pronouncement of that analysis is a case decided by the Third District Court of Appeal. In 1500 Coral Towers Condominium Ass’n, Inc. v. Citizens, Feb. 6, 2013 WL 440554, the Condo Ass’n notified Citizens of damage to the property five years after the damage was sustained to the property during Hurricane Wilma. The Ass’n was unsure whether the damage sustained would exceed their deductible, and waited to fully assess the damages before notifying their insurers.

The court concluded that a two-step analysis was required. The Court had to determine: (1) if the Ass’n gave timely notice of the damage; and (2) whether Citizens was prejudiced by the late notice. In 1500 Coral Towers, the Court of Appeals agreed that the Ass’n failed to give timely notice. However, they disagreed with the trial court’s decision to grant the summary judgment in favor of Citizens, and sent the case back to the trial court for further proceedings.

The appellate court reasoned that whether or not a delay in the filing of timely notice prejudiced Citizens’ ability to appropriately investigate the claim was a factual question, and was therefore inappropriate for summary judgment. The reason being is that all factual questions are left to a jury to determine. Therefore Citizens was not entitled to a judgment as a matter of law while factual questions remained unanswered.
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While this is no doubt a victory for the Ass’n, it is also reminds us that when in doubt report the claim. While the Ass’n may have been attempting to be prudent, their prudence may still end up costing them a lot of money. Even though the appellate court remanded the case back to the trial court for further proceedings, there is no guarantee that a jury will agree with their position that the insurance company was NOT prejudiced with their delayed reporting.

Consequently, you should always promptly notify your insurance company immediately of any damage that you feel may be covered under your insurance policy in order to protect yourself from losing available insurance coverage by waiting too long to report the loss because the insurance company will invariably use that delay to your detriment. When in doubt – don’t delay.

Please do not hesitate to contact our office to discuss your insurance claim needs.

May 19 2014

Insurance Company Gets Sanctioned and Admonished for Pursing a Frivolous Defense

Posted by Hugo V. Alvarez |

Jury verdict.jpgFoolhardy conduct never pays. But every now and again insurance companies truly lose sight of their objectives. A recent case llustrates how unnecessarily difficult insurance companies can make the claims process. In that case, the insurance company ended up paying much more in the long run than it needed to pay if it only handled the claims process in good faith from the outset.

In Albelo v. Southern Oak Insurance Company, the insurance company was sanctioned for its egregious conduct in trying to force a disabled person into probate before it would even consider the claim. Fortunately, the appellate court concluded that the insurance company’s requirement that an insured who suffered from age related cognitive disabilities seek the appointment of a guardian for herself as a condition of maintaining her claim for damages to her home was frivolous, and warranted sanctions against the insurance company. If you find yourself in a situation where the insurance company is giving you the unnecessary run around regarding your insurance claim then please contact us today to discuss further.

Before commenting on the case, a little background is necessary regarding estate planning. As you age you may find it necessary and prudent to execute what is called a Durable Power of Attorney (POA). By doing so you choose who you would like to make decisions for you, and you decide how much authority they have if you’re ever unable to make those decisions for yourself. If you find yourself incapacitated, for instance, later on then the person you elect has the legal authority to make those decisions for you and their actions are as good as if you had acted for yourself.

On the other hand, should you decide not to execute a POA, and you find yourself incapacitated and involved with the court system, then the court will step in and appoint a Guardian for you. A Guardian acts just like the appointed POA. However, you usually don’t get the choice in selecting the court appointed Guardian.

Typically if there’s a valid POA there’s no need for a Guardian if the POA gives the person all the legal rights necessary to act on your behalf. But if you don’t have a POA, then you could find yourself in a situation where drawn out legal battles ensues such as what occurred in the Albelo case discussed in greater detail herein, or worse, what played out nationally with the Teri Schiavo case right here in Florida.

Nonetheless, the 3rd District Court of Appeals recent ruling in Albelo v. Southern Oak makes it clear that some insurance companies don’t seem to understand those distinctions even when they should.
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Ms. Albelo, at the time she executed a POA appointing her son, was 78 years old and had all of her mental capacities intact. Only about a month after the POA was executed she found herself the unfortunate victim of a home burglary and a year later she informed her insurance company, Southern Oak Insurance, about the burglary. Despite the time lapse, and purported late notice of the claim, the company acknowledged the loss and cut her a check for $1,690.00. However, a few months after reporting the loss to the company Ms. Albelo submitted a proof of loss form indicating that her damages totaled $57,760.66. Southern Oak argued that Ms. Albelo didn’t initiate the claim, but that it was fraudulently brought by her son. It is undisputed that Ms. Albelo now suffers from age-related cognitive disabilities, hence the POA which provided her son could continue making decisions for her despite any future incapacity.

Southern Oak argued that the claim was fraudulently induced by Ms. Albelo’s son and was not the product of her own capacity. Now, remember, she’s incapacitated and the insurance company knows this. Still Southern Oak pushes the issue of her incapacity, repeatedly stating that Ms. Albelo had to appoint a guardian for her in order to bring the suit. The company didn’t attack the validity of the executed POA nor did they argue that the POA was invalid because Ms. Albelo was incompetent when she executed it; the insurance company simply said that because she was incompetent a guardian had to be appointed for her to sue.

Fortunately for Ms. Albelo, the Appellate Court was so disgusted with the frivolous defense asserted by the insurance company that they issued an opinion solely to explain how ridiculous the insurance company’s actions were and then sanctioned the insurance company accordingly.

May 19 2014

Florida Supreme Court Ruling Obliterates Common Law Bad Faith Claims

Posted by Hugo V. Alvarez |

badfaith.jpgThe Florida Supreme Court recently eradicated some significant protections for Floridians in a case involving damage from Hurricane Wilma and dissatisfaction with QBE Insurance Corp.’s handling of the claim and its investigation. In that case Florida’s high court addressed several issues of significant import.

The first issue addressed by the Florida Supreme Court was whether Florida law recognizes a first-party claim for breach of implied warranty of good faith and fair dealing if an insurance company fails to investigate and assess the claim within a reasonable time? The court answered that no such claim existed in Florida.

In reaching its conclusion, the court reasoned that the legislative history indicates that there is no common law first-party bad-faith action in Florida, and limited insured parties to the statutory remedy of filing a bad faith claim. While Florida’s high court acknowledged that several Florida courts have concluded that such claims are permissible, the Court went on to reason that those courts misapplied Florida law. In other words, Florida’s Supreme Court concluded that insureds may only file a claim for bad faith and may not assert a separate claim for breach of the implied warranty of good faith and fair dealing under a first-party insurance claim.

Next, the Court determined if an insured party may bring a claim against the insurer for failure to comply with the statutory language and font-size requirements. QBE partially failed to comply with the notice requirements under the statute. QBE’s Hurricane Deductible notice contained the word “windstorm” instead of hurricane and the font-size was 16.5 instead of the required 18 point. The Court needed to determine if the failure to comply opened QBE up to liability to its insured.

Because the plain language of the statute does not prescribe a penalty for failure to comply with the word-choice and font-size requirements the Court next had to look at whether they would imply one. Looking at the legislative intent when the statute was enacted was important to the Court’s determination. Because the Legislature had provided, in other sections, liabilities for failure to abide by the statutes the Court reasoned that it was clear that it was not the legislature’s intent to impose harsh penalties on insurers who failed to comply with this particular section. The underlying purpose for notice requirements was part of a larger design to provide access to affordable housing insurance in the state through higher hurricane deductibles; the Legislature was not intending to create another avenue for insured parties to sue.

In addition, the notice requirement was created to make certain that the insured was aware of the deductible, and the Plaintiff here, did not argue they weren’t aware of the deductible only that the notice didn’t comply with statute requirements. The Court determined QBE could not be held civilly liable for the failure to comply with the statute requirements and that the judgment was reduced by the policy’s deductible.

The final issued the Court addressed revolved around policy language requiring QBE to remit payments upon a “final judgment.” The plaintiff argued that QBE failed to remit payment within 30 days following the trial court’s final judgment and therefore QBE waived its right to a stay of execution by procuring a bond. The Court disagreed determining that the words “final judgment” would not supersede the ability of a party to obtain a stay of execution by bond and that the “final judgment” wording included any appeal period thereafter.

May 19 2014

Exceptions to Exclusions: Am I Covered or Not? Even the Insurance Company May Be Confused.

Posted by Hugo V. Alvarez |

Thumbnail image for insurance policy.jpgIn those pages and pages of insurance documents explaining the coverage of your policy you’ll find exclusions that are not covered, but surprisingly, there might be some exceptions to those exclusions. Even the insurers did not seem to understand the headache of their own policy provisions in a case litigated in the United States District Court for the Northern District of Florida.

That case centered on a dispute between an apartment complex and several insurance carriers. The dispute stemmed from water damage caused by faulty workmanship in the construction of the building. The apartment building was covered by primary coverage and three additional layers of excess coverage under what’s called all-risk insurance.

So they should be covered for just about everything right? Not so fast. All of the policies had long and confusing list of coverage, and all the policies excluded coverage for faulty workmanship. However, the policy contained an ensuing loss exception, which had the potential to bring excluded losses back under coverage.

The exception language stated that if “loss or damage by a Covered Loss results, we will pay for that resulting loss or damage.”

While the apartment owners acknowledge that costs to repair the faulty workmanship itself are not covered, the water (a Covered Loss) that infiltrated and damaged the building should be covered because of the exception.

Not surprisingly, the insurers did not agree. The companies argued that the ensuing loss exception did not apply if the losses (the water damage) were directly related to the original excluded risk (the faulty workmanship). To support their argument the insurers cited several Florida cases where courts sided with companies regarding ensuing loss exceptions.

However, the Court could not support the argument because these cases were distinguishable from the facts before them. The other policies contained very specific language prohibiting excluded losses from being brought back within coverage through the ensuing loss exception. Because of that specific language those courts required a break in proximate cause. Meaning, the exception only covered damage that was not a foreseeable result of the original excluded cause.

Here, however, the policy offers no such terms, and the Court refused to change the meaning of the plain language of the policy.

This case illustrates just how important every word in a policy is, and how even slight deviations can drastically change the coverage.

May 19 2014

Insurance Company Discrimination Leads to Lowball Settlement Offer and a Lawsuit

Posted by Hugo V. Alvarez |

insurance-claims.jpgIt should come as no surprise that adjusters for insurance companies are often scrutinized and criticized for a variety of reasons. Most of this scrutiny and criticism stems from their decisions to deny claims outright or low ball settlement offers. Yet they are seldom disciplined for their poor claims handling.

In some instances, these low-ball offers or denials could be as simple as the software insurance adjusters use to evaluate the claims. These programs incorporate a large number of statistical data to evaluate claims and do not take into account the unusual circumstances of the policy holder, which leaves them with little to no money to make repairs.

On other, rarer occasions, adjusters engage in discriminatory practices when coming up with a figure to settle first-party insurance claims. News 4 in Jacksonville Florida recently reported allegations that an insurance adjuster for Florida Peninsula lowballed a couple’s claim based on their sexual orientation.

You should contact us today if you feel as though your insurance company is giving you the run around regarding your insurance claim.

According to the News 4 report, the life partners sustained water damage to their Florida home as a result of Tropical Storm Beryl and Debbie. After first reporting their claim, the insurance company hired Belfor Property to make temporary repairs to mitigate the damages.

An employee for Belfor at the time, Andy Boswell, experienced firsthand the discriminatory views of the adjuster Florida Peninsula hired to oversee the claim. “‘From the very beginning of it, he [Mark Jager] said ‘I am not going to bother with these people. I am going to deny their claim,'” Boswell said of Jager’s attitude. Boswell then said the conversation got worse. He said the adjuster told them he did not want to be here, “that these people disgust me.'”

Fortunately for the homeowners, they did not hear the hurtful and degrading comments Jager made. It was only made aware to them when Boswell called to apologize and reveal the true nature of Peninsula’s troubled adjuster.

After demanding a new adjuster based on the revelation above, the couple filed suit against Florida Peninsula, Jager, and the group he works for, Crawford and Company.

Florida Peninsula refused to provide specific information about the claim but released a statement that said, among other things, that “the alleged conduct had no impact on Florida Peninsula’s claim decision.”

The couple disagrees and will soon have their day in court.

May 19 2014

Are Your Valuables Properly Protected and Insured? Do You Have a Plan to Protect Your Artwork, Exotic Cars, Jewelry, Precious Metals in the Event of a Significant Weather Event?

Posted by Hugo V. Alvarez |

insurnace image.jpgWhen was the last time you checked your insurance policy to determine how much coverage you have for your artwork, jewelry, precious metals, and other items of value? If you have a standard homeowners policy then odds are that expensive diamond wedding ring, or Rolex given to you by your father likely exceed the amount of available coverage available in your policy.

Such a result could be terrible given that you likely spend thousands of dollars every year on insurance coverage thinking that your valuables are in fact covered. So you could come home one day to find that your house has been burglarized only to be further insulted to learn that you don’t have enough insurance coverage to help you replace your stolen valuables. So to repeat, it is of paramount importance to understand your scope of available insurance coverage in the event of a loss.

Moreover, it is also of paramount importance to take extra precautions to protect expensive artwork, jewelry, exotic cars and other valuables in the event of a hurricane in south Florida.

The need has even led to something of a growth industry: Just as the need for extra space led to the boom of the self-storage industry in the 1960s, so has the need to protect exotic valuables from storm damage led to businesses like Museo Vault, a business aimed at protecting high-priced assets like artwork or cars.

Our Miami insurance dispute attorneys encourage you to determine the coverage needs for expensive items in your home and take steps to make sure that you are properly covered in the event of a hurricane. If your jewelry is stolen during a home invasion, and you have not taken steps to ensure that all of your jewelry is insured, then odds are you will likely not recover the full value of your valuables. Conversely, if you are dealing with an insurance company that refuses to pay a legitimate claim to which you are entitled, then contact our office today to discuss your rights.

Moreover, Miami’s booming art reputation has led to a cottage industry of art galleries and other businesses that specialize in handling, shipping and storing art. The idea for Museo Vault came after the busy 2005 hurricane season.” The topic of conversation was how to keep artwork safe in this environment where we have five or six months of terrible hurricane storms that come through,” said owner David Lombardi.

Art collectors also know that a solid hurricane protection plan can be required by insurance companies. But they should also ensure that they have secured enough insurance coverage for all other causes of losses in the event of a loss.
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If you are facing a dispute over an insurance claim in Florida, contact Alvarez & Barbara, LLP toll free at 866-518-2913 for a free and confidential consultation to discuss your rights.

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