Property Insurance Archives - Florida Insurance Claim Lawyer Blog

Jan 08 2016

Consumers Prevail in Fight Over Assignment of Benefits

State lawmakers have been appointed the task of deciding on the controversial issue of what is known as “assignment of benefits.” An appeals court decided that lawmakers rather than the court system would have the ultimate say on this issue. The appeals court also declined to certify the question to the Florida Supreme Court. Consequently, Florida Consumers have prevailed in their fight with insurance companies over assignment of benefits

An “assignment of benefits” involves homeowners signing over their insurance policy benefits to contractors in return for repair services. This comes up a lot in cases which involve water damage, in which contractors fix the homeowners water issue and in turn seek payments from the insurance company.

The insurance industry feels that this practice causes inflated prices and fraud on the part of the contractor. Contractors, on the other hand, feel that the practice helps homeowners in choosing a contractor quicker when in need of emergency repairs.

The three Judge panel in Florida’s First District Court of Appeal concluded that, “it is for the legislative branch to consider this public policy problem, not the courts, at this juncture.” Additionally, Judge Makar wrote, “Legislative review provides a more detailed inquiry into the current situation in the industry and greater flexibility in achieving meaning reforms, if deemed necessary.”

As we previously discussed, earlier court decisions such as in One Call Property Services, Inc. v. Security First Insurance Company, ruled that post-loss assignments of a claim are allowed even when the insureds policy has anti assignment and loss payment clauses. The appeals court in One Call also stated that an insurance policy does not preclude an assignment of post-loss claims even when payment is due. Additionally, standard loss payment provisions merely address the timing of the payment and in fact contemplate a lawsuit before payment is due.

One Call seems to shed light on the First District Court of Appeals ruling. The First District Court of Appeals seems to deal with homeowners assigning over benefits to the contractor upon hiring and before payment is due or services are rendered. One Call has ruled post-loss claim assignment can survive even in opposition to anti-assignment clauses and loss payment clauses. The legislature will likely have to tackle the question of whether or not contractor can get into an assignment of benefits agreement prior to the work being performed or payment being due. It seems as though the court has deemed this as a public policy issue rather than a question for the courts, which will now be in the hands of the legislature.

Dec 12 2014

Insurance Claims: Coverage Defense Waived by the Insurance Company because they Waited too Long to Assert it

Posted by Hugo V. Alvarez |

A Florida appellate court recently concluded an Insurance Company’s coverage defense had been waived because the insurance company waited too long to assert them.

Axis Surplus Insurance Company vs. Caribbean Beach Club Association, Inc., 2014 WL 2900930, (2^nd DCA 2014), involved a fire loss. In April of 2003, a fire swept through the time share condominium in Ft. Myers Beach causing extensive damage to the property. The insured had purchased an insurance policy that included coverage for fire damage. The insured had also purchased Law and Ordinance coverage for an additional premium.

The insured made a claim for fire damage. Both the insurance company and the insured knew that Lee County might enforce the “50% rule” contained in its ordinances. The 50% rule mandates that if a building is more than 50% damaged, any reconstruction or repair must comply with current building codes. If Lee County enforced the 50% rule, the insured would have to raise the entire building to meet existing flood elevation requirements.

Both the insurance company and the insured cooperated in a common goal of repairing, not replacing, the damaged building; they tried to convince Lee County not to enforce the 50% rule. Unfortunately, in November 2004, some nineteen months after the fire, Lee County informed both the insurance company and the insured that it would enforce the 50% rule. Therefore, the insured would be required to replace its building to satisfy current flood elevation codes.

After receipt of this news, the insured continued to cooperate with the insurance company. But things changed some 19 months later when the insurance company, for the first time, informed the insured that it would rely on the two year clause in the Law and Ordinance Coverage endorsement to deny payment for the increased construction cost because the replacement was not completed. Except for the general, non-specific, reservation of rights letter, the insurance company had never raised the two year clause previously with its insured.

Litigation between the insurance company and the insured followed. The trial court granted summary judgment in the insured’s favor, and an appeal followed. On appeal, the appellate court sided with the insured. In so doing, the appellate court reasoned that the insurance company waited too long to assert the coverage defense.

The Appellate court concluded that the insurance company’s conduct had in fact waived the coverage defense it attempted to assert later. It noted that that if an insurance company intends to rely on a reservation of rights, that it should specifically inform the insured of all the valid coverage defenses as soon as practicable. In this instance, the insurance company simply waited too long. In this case, the insurance company’s failure to bring the coverage defense to the insured’s attention, even though the insured expected the entire claim to be paid and the insurance company continued to adjust the entire claim after the two-year expiration, were unequivocal acts inconsistent with invoking the forfeiture. In other words, when an insurance company acquiesces to an insured’s failure to strictly adhere to a timetable of payment or performance, courts are inhospitable to the insurer’s sudden invocation of strict enforcement of forfeiture provisions.

Dec 03 2014

Who Determines if the Examination Under Oath was Meaningful?

Posted by Hugo V. Alvarez |

Examinations Under Oath are an important part of an insurance company’s investigation of an insurance claim. We have previously discussed the importance of EUO’s and how they impact your insurance claim. But who determines if the examination under oath (EUO) was meaningful?

We have previously discussed the importance of not only fully cooperating with an insurance company’s investigation of the claim, but to ensure that you attend an EUO when requested to do so. Indeed, failure to sit for an EUO may result in the denial of the insurance claim. On the other hand, however, EUO’s do have their limits. They are not open ended expeditions for an insurance company to inquire on topics that go beyond the insurance claim at issue.

But what happens when an insured sits for an EUO and the information provided is less than “perfect.” Is an “inadequate” EUO grounds for an insurance company to deny the claim?

That was the issue the issue the Fourth District Court of Appeal was confronted with him in Solano v. State Farm, 2014 WL 1908827 (4th DCA 2014). In Solano, State Farm was initially presented with a Hurricane Wilma claim. State Farm initially agreed to pay Solano for the damage. After the initial payment was made by State Farm, Solano requested that the claim be re-opened in order to seek greater compensation.

Once the claim was re-opened, State Farm requested that Solano appear for an EUO. Solano appeared for the EUO, and answered questions. However, his wife failed to appear for an EUO. State Farm requested that Solano’s public adjuster also appear for an EUO, but the public adjuster took the position that State Farm could not compel him to appear for an EUO.

Solano eventually filed a lawsuit against State Farm. At the trial level, the trial judge granted summary judgment in State Farm’s favor on grounds that the Solano’s wife and public adjuster’s failure to appear for the EUO barred the claim. On appeal, however, the Fourth District Court of Appeal reversed.

The appellate court noted that there was not a total failure to comply with the EUO request made by State Farm. Indeed, Solano had appeared and answered questions during his EUO. The appellate court also noted that State Farm could not demonstrate that it could compel the public adjuster to appear for an EUO. Moreover, the appellate court also noted that while the public adjuster could not be compelled to the EUO, the public adjuster had nonetheless provided documentation to State Farm and even met with State Farm, at the property, to discuss the claim. The appellate court noted that State Farm should have had enough information to either settle this claim with Solano or go to appraisal.

May 19 2014

Is a smaller Citizens Insurance Company better for the Florida Homeowner?

Posted by Hugo V. Alvarez |

Citizens Property Insurance is aggressively downsizing, which has caused many smaller insurers to take on their policies. They have been downsizing because Gov. Scott believes they need to lower risks. To the average person this seems like a good thing as smaller companies will continue to grow. However, the smaller insurers’ success when taking over the insurance policies from Citizens has proved otherwise. The companies who receive these policies from Citizens are considered to be “Takeout” firms.

Takeout firms receive policies from Citizens usually in agreement to receive money along with the policies. Once the policies are removed from citizens then the policy holder’s agent is notified of an offer to accept the takeout deal. If the agent denies the offer then the same offer will be made to the policy holder, who may refuse to allow the policy to be removed from Citizens.

What does all of this mean? Basically Citizens is paying lots of money to relatively new and small insurers who are not always equipped enough to handle this quantity of policies. This is why it is incumbent upon all Florida policy holders to check the financial strength of their insurance company.

For instance, Citizens agreed to pay Heritage Property and Casual Insurance, a nine month old company, $52 million to take over 60,000 policies. As a result of this homeowners will receive letters from Heritage and have 30 days to opt out before they are automatically removed from Citizens.

Many believe that companies such as Heritage are not capable of taking on such policies, especially in the event of a hurricane. There is evidence to back this belief as many companies who have taken over policies from Citizens have become insolvent.

The negative effective of these companies becoming insolvent is tax payers coming out of pocket for more then $400 million. This is not a good sign as Citizens is starting to intensify its effort to turn over policies to smaller insurers.

It seems as though Citizens intended purpose of lowering risk by removing these policies is actually causing more risk as smaller firms are becoming insolvent and tax payers are taking on the cost.

May 19 2014

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

Posted by Hugo V. Alvarez |

The 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

Insurance Premiums are Poised to Increase Again Despite Florida Not Being Hit Again by any Major Storms

Posted by Hugo V. Alvarez |

Many Florida policyholders can expect to see yet another spike in their already high insurance rates at their next renewal. This rate increase is expected to take place even though a major hurricane hasn’t made a direct hit with the state in over seven years.

Yet despite our good fortune, statistics show the average Florida homeowner is paying twice the rates they were charged six years ago, and some are paying even more than that. Many in the industry place the blame on the number of claims submitted to the insurance companies; claims are up 17% over the past ten years, most due to non-catastrophic water damage like leaky toilets, and broken water heaters.

Others are blaming the increase on a lack of competition in the insurance business in Florida. The largest provider in the state, Citizens Property Insurance Corporation is often the only option for many homeowners who can’t obtain policies through private companies.

Citizen’s policyholders have seen an increase of 8.1% statewide in their rates over the last four years, and that trend doesn’t seem to be ending anytime soon.

Yet others argue simple greed is the root of the problem.

Some argue that insurance companies are all to quick to accept insurance premiums, but often times they are just as quick to deny legitimate claims in an effort to potentially maximize profits.

Citizen’s new President argues the company would have to increase rates on all its products by 16.4% to be comparable with the market rates a private company would charge. One Citizens’ board member blames the number of policies and the low rates, calling it a “competitive drag” for the state. Governor Scott agrees that more private companies may be willing to provide coverage if Citizens was reduced in size. Because private companies know they can’t compete with government, no matter what they’re selling. Even so, many homeowners currently insured by Citizens are being shifted to private companies as the corporation attempts to downsize, and many are left to wonder what kind of coverage they can expect from these private companies.

However, rates and coverage don’t seem to be the only issues. Some Citizen’s policyholders are apprehensive about switching to a private company because they believe that there’s more money available to Citizens so they’re more likely to receive a payout if a claim is necessary.

Until there is real meaningful reform this problem will continue to exist in Florida. And Floridians may not be so lucky when the next “big one” hits Florida. Please read our proposed list of reforms that we feel will only help to strengthen the insurance market as a whole.

May 19 2014

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

Posted by Hugo V. Alvarez |

In 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 |

It 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

Time to Reform the Homeowners Insurance Market to Make Purchasing Insurance More Transparent and Encourage More Insurance Companies to Enter the Market

Posted by Hugo V. Alvarez |

With the 2013 Florida legislative session about to begin, it is time to start talking about potential reforms to help consumers understand what home insurance products they are in fact purchasing. Florida continues to be plagued by scandal to Citizens insurance, coupled with sky rocketing insurance rates. Not only that, but too often Florida homeowners are not properly advised of the scope of insurance coverages that they are in fact purchasing.

As we head into the next legislative session, here are some thoughts on how we can help make the insurance market more transparent for both insurance companies and homeowners alike:

(1) Push for a single policy that serves as a minimum baseline of coverage. Too often we see insurance companies writing different coverages and different exclusions. Here is a NY Times article discussing this very issue in great detail. Promulgate a single policy that everyone must use and adopt, and this will make it much easier for everyone to understand exactly what is being purchased.

(2) For a consumer to understand what they are buying they really need to rely on their insurance agent. The insurance agent needs to understand the difference between say an HO3 policy v. a HO6 policy. And if they do understand the difference, the actual coverage purchased may be watered down by certain exclusion or cap on damages (see no. 1 above). To correct this issue, Florida should adopt some type of graph that makes it easy for the consumer to grasp what they are in fact purchasing. A “nutritional label” or pyramid scheme of coverages would help the unsuspecting consumer understand what they are purchasing. So we should not only make the policies consistent, but we should make it easier for the consumer to understand what they are purchasing too by providing some form of graph or pyramid so they could actually see the scope of coverages being provided.

(3) Everyone likes disclosure. And with insurance, the old adage is important – you don’t need it until you need it. But too often there are some insurance companies that are simply too quick to deny a claim. But those are often the insurance companies that offer the best rates. So consumers should understand what they are purchasing, and from whom. The consumer should be provided with the variables regarding that insurance company. In other words, the consumer should not only be provided with information regarding the financial strength of the company in the event of a catastrophic loss, but the consumer should also be provided information regarding information pertaining to (a) the percentage of claims denied, (b) the average time within which claims are paid, and (c) the frequency of non-renewal or cancellation within a year of a claim being submitted.

(4) In an effort to promote more competition in the market, and encourage more insurers to enter the market, there should be goals that are established that would permit the complete abandonment (or loosening) of price regulation designed to suppress insurance rates so long as a certain number of companies are in the state of Florida providing insurance coverage. By the same token, extreme pressure should be put on those companies that want to offer insurance for all of our cars (and boats) to make sure that they also offer homeowners policies too. Possibly providing some form of financial incentives to enter the market may also be useful to get the insurance companies to do this too.

(5) Insurance agents should receive the same amount of compensation regardless of the carrier with which they place consumers. Too often insurance agents may attempt to steer a consumer to insurance company A because the financial incentives may be better than if insurance company B were selected by the consumer. But that also assumes that there is/was a choice for the homeowner/consumer – something many of us don’t have given how restrictive the market is currently.

May 19 2014

What are the Insurance Companies Doing with your Money – State Farm is Under Criminal Investigation While Citizens Spends Lavishly on Themselves Even as They Pleaded Poverty and Raised Rates for Florida Homeowners

Posted by Hugo V. Alvarez |

We often hear how about all the problems facing insurance companies despite the fact that Florida went a record 6 straight years without getting hit by a hurricane.

Yet despite that amazing streak of good fortune for all of Florida, insurance companies are still raking in huge profits while increasing the premiums we Floridians have to pay on insurance.

What are the insurance companies doing with those premiums? According to the Miami Herald, high ranking officials at Citizens enjoyed lavish dinners and outings at our expense.

How lavish? Citizens executives spent nearly $9,200, including two nights in a boutique hotel and a $234.91 dinner for three at an award-winning French restaurant. Other instances of financial abuse included traveling executives often staying in luxury hotels costing as much as $600 a night even when less expensive accommodations were available nearby. Many Citizens executives dined at fancy restaurants and repeatedly spent more than $50 per person on such fare as rack of venison, sea bass and dungeness crab.

If those financial abuses were not enough, State Farm is under even greater scrutiny. State Farm Insurance, the nation’s largest home insurer, is currently addressing an ongoing criminal investigation related to how it handled potentially tens of thousands of hurricane claims.

State Farm’s internal documents reveal a clear corporate policy of intentionally denying consumer claims for roof damage originating from wind storms. The systematic denial of those types of claims may have quietly saved State Farm close to $1 billion.

State Farm documents reveal an attempt by State Farm managers to hide the company’s policy of non-payment from state insurance regulators.

Our storm damage attorneys are not surprised at the insurance companies conduct. If you have sustained property damage then contact us today to discuss your rights.

Call Us Today

Consumers Prevail in Fight Over Assignment of Benefits

Insurance Claims: Coverage Defense Waived by the Insurance Company because they Waited too Long to Assert it

Who Determines if the Examination Under Oath was Meaningful?

Is a smaller Citizens Insurance Company better for the Florida Homeowner?

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

Insurance Premiums are Poised to Increase Again Despite Florida Not Being Hit Again by any Major Storms

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

Insurance Company Discrimination Leads to Lowball Settlement Offer and a Lawsuit

Time to Reform the Homeowners Insurance Market to Make Purchasing Insurance More Transparent and Encourage More Insurance Companies to Enter the Market

What are the Insurance Companies Doing with your Money – State Farm is Under Criminal Investigation While Citizens Spends Lavishly on Themselves Even as They Pleaded Poverty and Raised Rates for Florida Homeowners

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