Recently in Property Insurance Category

June 6, 2013

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

Ins Image.pngCitizens 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 6, 2013

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

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.

February 1, 2013

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

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.

January 15, 2013

Insurance Company Discrimination Leads to Lowball Settlement Offer and a Lawsuit

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.

December 21, 2012

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

homeowners-insurance.jpgWith 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.

September 10, 2012

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

insurance_fraud_photo_three.jpgWe 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.

August 27, 2012

The Aftermath of Tropical Storm Isaac in South Florida - What Do You Do If Your Property Was Damaged or Flooded? What About Your Business?

tropical_storm_issac,_generic_medium.jpgTens of thousands of homes and businesses remained without power Monday across South Florida as the remnants of Tropical Storm Isaac continue to wreak havoc for South Florida residents and businesses alike.

Heavy rains, and hail, have caused wide spread flooding and property damage. Strong wind gusts has caused trees to fall which has resulted in extensive property damage throughout South Florida.

Our storm damage attorneys stand prepared to assist you during this time of heavy rain and chaos. But now is also the time to ensure that you remain pro-active to protect yourself, your property and your business.

This significant weather event may have caused damage to your home, your property, or even your business. It is of critical importance that your damage be properly documented.

Start by taking photographs of the damages and properly inventorying your damage. Damage to your personal contents is of particular importance since it could be both time consuming and emotional to document.

Also, please take the necessary efforts to stop any further damage with your property as a result of the wind and rain coming from Tropical Storm Isaac. Keep all receipts and paperwork associated with such efforts and any emergency repairs you may need to take.

It will also be critical to determine whether or not your claim is a result of flooding, or wind. This distinction is critical to understand and in assessing your rights and applicable coverage available to you as a result of the damage sustained thanks to Tropical Storm Isaac.

What about your business? Well, if you have a business interruption policy then you may have coverage available to you as a result of Miami-Dade County Mayor's decision to issue an evacuation order for people living in mobile home parks, unsafe structures, and areas prone to flooding. He also closed the Port of Miami.

As a result of this Order, businesses have been ordered to close until further notice. Such an order is commonplace when a natural disaster threatens, like Tropical Storm Isaac.

If your business purchased standard business income coverage then it is likely that your policy provides coverage for any loss of income caused by the Mayor's decision to issue an evacuation order and close the Port of Miami.

Our firm stands ready to assist with your property damage needs and to battle with your insurance company to ensure proper compensation for your insurance claim. Whether you are a resident with damaged property, or a business owner who has sustained an interruption to your business as a result of Tropical Storm Isaac, call us today for a free consultation.

July 7, 2012

Alberto? Beryl? Chris? Debby? Our Firm Stands Ready to Help Miami Homeowners if a Named Storm Strikes South Florida

So far this year there have been four named storms, including one hurricane and three tropical storms. Any of these storms are strong enough to do significant damage. However, none of them reached South Florida.

Tropical depressions are storms with winds of up to 38 mph and are identified only by numbers; tropical storms are given names and have winds form 39 to 73 mph and hurricanes have winds above 74 mph.
569818_tormenta_tropical.jpg
Storms so far in 2012 have included:
-Tropical Storm Alberto: Reached speeds of 60 mph and one of the earliest named storms in recent history having formed before the official start of hurricane season.
-Tropical Storm Beryl: Speeds of 70 mph. Beryl made landfall in Jacksonville Beach, Florida. It was the strongest landfall in the United States for any pre-season Atlantic tropical cyclone on record.
-Hurricane Chris: The first hurricane of the season reaching strength of 75 mph.
-Tropical Storm Debby: Reached speeds of 60 mph and dumped a ton of rain on Tampa and Jacksonville.

Our Miami hurricane damage lawyers urge you to take the South Florida hurricane season seriously and properly prepare for the safety of you and your family. Our staff will be available around the clock in the event of a serious storm and can assist you in filing claims or handling disputes with your insurance carrier.

Storms are named in order of the alphabet each year, except for the letters q, u, x, y, and z, which are omitted. Whenever a storm causes serious damage, like Wilma or Katrina, the name is retired and replaced.

Names for 2012 are:

• Alberto
• Beryl
• Chris
• Debby
• Ernesto
• Florence
• Gordon
• Helene
• Isaac
• Joyce
• Kirk
• Leslie
• Michael
• Nadine
• Oscar
• Patty
• Rafael
• Sandy
• Tony
• Valerie
• William

May 18, 2012

Are Insurance Companies Only Insuring You As Long As Nothing Happens? Insurers Go Missing After Catastrophic Losses

hurricane damage to homes.jpgInsurance companies often advertise how easy it is to become an insurance company's customer. But they seldom, if ever, advertise how difficult it is to get an insurance company to pay for a claim, especially if the claim is after a catastrophic loss such as say a Hurricane.

Insurance companies have significantly and methodically decreased their financial responsibility for weather catastrophes like hurricanes and floods in recent years. Indeed, and after an extraordinary year last year for natural disasters, many insurance companies took steps to leave weather challenged states like Florida.

For instance, Allstate informed many of its North Carolina policy holders that would not renew homeowner policies that were not bundled with auto policies. Alfa Mutual Group announced that it would not renew 73,000 Alabama policy holders after tornadoes caused $11 billion dollars of property damage in Alabama last year.

Yet Florida is probably in the worst shape of any state in the country as it is the midst of an on going insurance crises in light of the fact that insurers have been dropping coverage since Hurricane Andrew in 1992. As a result, Florida's premiums average $1,460 per home. That trails only the state of Texas for the average cost of insurance premiums. As a result, the state backed Citiznes Insurance Company has had to step in to cover some 1.5 million property via its publicly funded insurance company as insurers drop more and more homes each and every year. State Farm, for example, stopped writing new homeowner policies in Florida back in 2007.

Today, insurance companies are also offering less insurance coverage for more money. In other words, many policy holders are paying more money for less coverage. While rates have been increasing dramatically, coverages have been hallowed out.

With hurricane season upon us, it is important to check the financial strength of your property insurer. The reason for that is because a major storm could wipe out more than your home - it could wipe out an insurance company too. Not only should you check the financial strength of your insurance company, but you should also check, and understand, the scope of coverages you have purchased.

Continue reading "Are Insurance Companies Only Insuring You As Long As Nothing Happens? Insurers Go Missing After Catastrophic Losses" »

March 9, 2012

Your Insurance Company Denied Your Claim, and You're Mad - Is It Time to Sue Them in Court?

insurance-claim-denied.jpgYou come home one day from your 14 day vacation in Europe only to discover that your septic tank ruptured. The mess is everywhere, and that rare China your Grandmother gave you on your wedding is smashed as a result of your frustration.

You immediately get on the phone with your insurance agent and your insurance company. But yet they inexplicably deny your claim.

You want to sue the insurance company, and you want justice.

But before you commit to taking your case to court, make sure this is a battle for which you're truly prepared.

Lawsuits can be very costly in terms of time and energy, and they will also take an emotional toll too. So don't enter into litigation lightly. If there is a chance of resolving the dispute amicably, consider that option.

You may never have gone to court before, but insurance companies do it all the time. Their lawyers know the ins and outs of the legal system. So it is important that you do wish to file suit, that you hire an attorney that is familiar with the courthouse and with battling insurance companies on a daily basis.

Here are steps you can take before resting your fate on the scales of justice.

1. Understand your duties and obligations as set forth in your insurance policy.

How do you do that exactly? Well, it may sound so obvious, but the first thing you need to do is to read and completely understand your insurance policy.

Often times insurance companies aggressively defend lawsuits not on the actual merits of the loss, but rather on conditions and obligations that the insured failed to do. It would be very unfortunate to be in such a situation. Especially when you consider that an insurance policy is a contractual relationship that binds both parties to certain obligations.

It is therefore critical that you, the insured, understand each and every one of those conditions. It doesn't matter what your agent told you or what you heard on TV; the rules that must be followed are contained and found within the document you signed and in the insurance policy. And if you failed to follow those rules, and conditions, your lawsuit will likely fail.

If you don't have a copy of your insurance policy, contact your agent. If you don't understand your insurance policy, contact your agent or an attorney to help explain it to you.

2. What are the Odds that you Can Actually Beat the Insurance Company in Court?

Like with every important decision you ever make, you need to balance the pros and cons and perform a cost benefit analysis.

Never go to court unless you believe you have a very good chance of winning. The legal process is too costly to use merely to prove a point or assert your rights. If you file a suit to punish your insurer for things that went wrong during the claims process, you may end up being the one who is punished by wasting time and money.

3. Work with, not against, your insurance company during the claims process.

If your insurance company calls you, call them back. If your insurance company wants to inspect the property, let them do so. If your insurance company wants you to give a sworn statement, hire a lawyer and then make sure to appear for the sworn statement.

And even if you do everything the insurance company asks of you, it is possible that the insurance company will still deny your claim. But if they do, try to resolve the claim one more time before filing suit.

Litigation should be a tool of last resort, not first. Explore all potential settlement options prior to filing suit.

4. Find a lawyer that has experience fighting the insurance companies.

If you decide to go forward with your lawsuit, you may need to find an attorney who will work on a contingency basis, taking his or her pay out of any settlement you win. If you agree to pay your lawyer this way, the fee will be a percentage of whatever is awarded. In highly adversarial insurance disputes, lawsuits can drag on for years, however.

Find an advocate who isn't afraid to go up against the big guys. You need someone who has a track record fighting and winning against the insurance companies.

5. Be patient, lawsuits take time.

Lawsuits often become waiting games. It easily can take a year or more to resolve a case. Attorneys representing insurance companies sometimes use delaying tactics to throw their opponents off their game or build up their own hourly fees. Expect these kinds of legal maneuvers and don't let them shake you.

Continue reading "Your Insurance Company Denied Your Claim, and You're Mad - Is It Time to Sue Them in Court? " »

January 17, 2012

Tips to Restore Your Hurricane Insurance Discounts

Alvarez & Barbara, LLP - Panels.jpgBuying and owning a home, for many of us, is the most significant investment we will make in our lives. It will likely also be one of the costliest ones too.

Therefore, when we make that investment we want to make sure that the investment won't turn sour. It is of paramount importance that the home we purchased is strong and sturdy enough to protect us from a significant hurricane.

South Florida's building codes were significantly re-vamped following Hurricane Andrew in 1992 and tweaked again following the active hurricane seasons in 2004 and 2005. The local building codes were revised to ensure that our homes would remain standing in the event of a hurricane strike.

But these building code advancements did not come without added costs to our homes. In fact, some of the advancements added to the costs of building a home to withstand a hurricane.

As such, our Florida legislators devised a statutory scheme that would permit a home owner to secure discounts for their homeowners insurance coverage if they home met certain criteria.

Indeed, our legislators enacted Florida Statute § 627.711 which requires property insurers to clearly identify and explain discounts available on the policies they sell if a property meets hurricane mitigation requirements.

The State of Florida, however, has discontinued the popular program that aided property owners to secure discounts on their homeowners insurance policy. But many homeowners may still qualify for the discounts even without the state's assistance.

Here are some tips to follow if you think your insurance company revoked legitimate discounts for strengthening your home against hurricanes.

1. Compare Forms. If your first inspection was done prior to 2009, and the second one was done after 2009, then that will likely explain the issue. The forms recently changed.

2. Keep Documentation. Keep copies of all documentation regarding any and all work performed.

3. Contact the Original Inspector. The inspector that performed the original inspection may be able to assist you in securing the discount today.

4. Use a licensed contractor to perform any work required to strengthen your home.

These tips will help you in making your home stronger. This will help you in the event of a significant hurricane striking Florida. If the work is done properly, it may even qualify you for additional insurance discounts on your insurance premium.

So be sure to check with your insurance company and ask them what discounts are applied and how you can go about securing those discounts.

December 29, 2011

Lawsuit Filed Challenging the Constitutionality of Laws Passed by Florida Legislators that Help Insurance Companies Raise the Rates of Homeowners Insurance While Preventing Small Businesses from Competing in the Marketplace to Aid Homeowners in Need

lawsuit.jpgLast year our Florida legislators decided to restrict the ability of many small businesses in the State of Florida from earning a decent wage, and restricting their ability to market their services. Our legislators sided with the insurance companies over hard working Floridians still feeling the effects of the worst recession of our generation.

On the other hand, our legislators made it easier for insurance companies to raise the rates of your homeowners policy despite the unprecedented run of 6 straight years without a hurricane strike in the State of Florida. Indeed, insurance rates are going up for Floridians despite a record 6 Hurricane free years.

Insurance companies are raising rates, and our legislators have made it easier for them to raise rates, because insurance companies have complained for years that public adjusters are simply getting too much money from the insurance companies when they submit a claim as opposed to what they pay when a homeowner submits a claim without the assistance of a public adjuster.

As part of a sweeping law that Florida's legislators passed, public adjusters who represent Citizens policy holders are prohibited from getting paid for their services until Citizens actually makes an offer. The law also limits what public adjusters can charge after that initial offered is received.

Public adjusters are hired by policyholders to prepare, file or complete claims. The new law restricts fees for public adjusters representing Citizens policyholders to 10 percent over the original amount the insurer offered for a claim.

A lawsuit was recently filed challenging that law. One of the reasons for the challenge is that the law in question is vague. It is vague because the law does not define an "original offer." However, Citizens has apparently taken the position it is a written offer after the insurer has adjusted and investigated the claim.

In other words, the law does not permit public adjusters to get paid for performing inherent and necessary tasks until Citizens has made a nebulous, vague and undefined "original offer."

The same law also restricts and caps the fees a public adjuster can charge for their services on claims involving Citizens. But those restrictions on fees do not apply to claims against other insurance companies.

Continue reading "Lawsuit Filed Challenging the Constitutionality of Laws Passed by Florida Legislators that Help Insurance Companies Raise the Rates of Homeowners Insurance While Preventing Small Businesses from Competing in the Marketplace to Aid Homeowners in Need" »

December 8, 2011

Home Insurance Rates are Rising Despite a Record 6 Hurricane Free Years and Recently Enacted Legislation that was Supposed to Make Insurance More Affordable for Floridians

Landlord-Insurance-Florida.jpgAs we noted in this blog, Governor Rick Scott signed into law a piece of legislation that changes many aspects of property damage claims, and that also makes it easier for insurance companies to raise your property insurance rates in the years to come.

Well, the time has come. Insurance companies are raising your rates.

The rates are going up despite the insurance companies getting their wish list enacted by an insurance friendly Governor to help them make consumer claims more difficult to make, but yet those same insurance companies reap the benefits of higher insurance premiums.

State insurance regulators approved more than two dozen home insurance rate hikes ranging from 6 to 34 percent.

American Integrity Insurance Co. of Florida, which has 102,091 home insurance policies statewide and 13,575 in Broward, Palm Beach and Miami-Dade counties, received 14 percent increases for two types of homeowner insurance policies it offers. Security First Insurance, with 119,205 policies statewide and 21,025 in South Florida, received a 9 percent increase for its homeowners multi-peril policies. And Universal Insurance Co. of North America, which has 81,834 policies statewide and 11,420 in South Florida, received a 12 percent increase for its homeowner property insurance policies.

And then there is Citizens. The sate's insurer of last resort. State regulators approved an average 6 percent statewide rate hike for Citizens Property Insurance's homeowners policies - which include coverage for homes, condominiums and renters - and 9 percent for rental and vacation home policies.

Premiums for most parts of South Florida will increase next year by up to 10 percent. Fortunately, this is significantly lower than the proposed 25% rate increase Citizens was hoping to get.

Why Are Insurance Rates Going Up?

Despite a record 6 straight years without a hurricane strike in Florida, and the passing of sweeping insurance reforms, insurance companies are still raising rates at a blistering pace.

Insurance companies are of course companies driven by profit. They also have to manage their books to ensure that enough money is in reserve in the event a major hurricane does strike Florida.

However, regulators and consumer advocates have said that Florida insurers could bolster their claims-paying reserves during hurricane-free years if they spent less of the premiums they collect on contractors, sometimes affiliated companies, to manage daily operations; if they lowered other overhead costs such as advertising; or issued smaller dividends.

Continue reading "Home Insurance Rates are Rising Despite a Record 6 Hurricane Free Years and Recently Enacted Legislation that was Supposed to Make Insurance More Affordable for Floridians" »

October 12, 2011

Thirty Five Florida Property Insurers are Given a Low Grade as Insurance Rates Continue to Increase

images.jpgAccording to recent news reports, the number of troubled property and casualty insurers in Florida is growing.

Thirty Five (35) insurers in Florida were given a grade of D or F. That is up from 29 with poor grades on December 31. And one of those companies - Argus Fire and Casualty Insurance Company - has since closed its doors for business by Florida regulators.

Surprisingly, State Farm Florida Insurance Company had a D rating. It is surprising because State Farm is one of the largest insurers in the State of Florida. Also, and despite not having a storm hit Florida in over 5 years, and having $221 million in net premiums, State Farm lost $27 million.

Universal Property & Casualty Insurance was the largest insurer rated E+. It had $18.1 million in net premiums in the second quarter and earned $3.4 million. Meanwhile, Sunshine State Insurance Company was the only insurer in Florida that earned an E rating.

On the other end of the spectrum, Citizens earned an A+ rating. American Family Home Insurance Company and American Strategic Insurance Co. each earned B+ ratings.

These figures are surprising since Florida has not experienced a direct hit by a hurricane in years, and Florida has dodged a major loss event in the past few years as well. Yet despite years of dodging a major hurricane, few insurance companies have managed to build up sizeable reserves.

It is very concerning that in the wake of record increases to homeowners's insurance rates throughout the State of Florida, coupled with the lack of a significant event in the past several years, that so many insurance companies are still not financially healthy. Indeed, Allstate was requesting rate hikes in excess of 30%. Should Florida be hit with a major storm it may result in many insurance companies going out of business.

Additionally, the many changes that were recently passed into law with the promise of lowering insurance rates and strengthening the insurance companies have not come to fruition.

Continue reading "Thirty Five Florida Property Insurers are Given a Low Grade as Insurance Rates Continue to Increase" »

July 26, 2011

Allstate Proposes Rate Increase in Excess of 30% for Florida Homeowners Insurance Polices

61841920_25ce9a2deb.jpgTwo Florida insurance companies are seeking large rate increases for many already cash strapped Florida homeowners. Allstate's Castle Key Insurance Company is seeking to raise insurance rates by as much as 31% for Florida homeowners, while its sister company, Castle Key Indemnity is seeking a rate increase as high as 36%.

Castle Key Insurance has close to 140,000 insurance policies statewide as of the end of last year, including close to 32,000 in Broward, Palm Beach and Miami Dade County. Castle Key indemnity has close to 126,000 insurance policies, including 21,000 in South Florida.

While the two companies have close to the same number of policies, Castle Key Insurance reported a claim paying reserve of 136 million at the end of last year while Castle Key Indemnity reported less than 15 million.

The insurance companies claim that the cost of reinsurance is rapidly rising and its losses and expenses have so far exceeded the premiums it collects and that it's projected to increase with out a rate hike.

State regulators have until August to reject the increase, approve it, or approve a smaller increase.

This premium increase comes after six years of no hurricanes and when the property and casualty insurance industry has record profits. Profits for U.S. property and casualty insurers rose 63 percent to $27 billion for the first nine months of 2010.

Consider Your Options. Contact Us Today.

Before opening our law firm in 2006, our attorneys worked for some of the state's, and nation's, largest law firms, and worked representing the insurance companies for years. Our attorneys are now uniquely positioned to use that experience to assist individuals and businesses alike throughout Florida with their insurance claims. As a result, our attorneys are well versed in the impact insurance has on businesses, condominiums, and individuals alike. Our insurance litigation practice group is prepared to tackle your insurance claim.

Given our extensive experience litigating for, and against, insurance companies, our insurance litigation practice group is prepared to provide aggressive, efficient and effective representation on a broad spectrum of insurance claims in Florida for local, national, and international clients. We are prepared to advocate insurance claims at the pre-suit stage, trial, appellate and arbitration levels.

If you are facing a dispute over an insurance claim in Florida, contact Alvarez & Barbara, LLP, for a free and confidential consultation to discuss your rights.

Call us today toll free at 1-866-518-2913 or at 305-263-7700.