Florida Insurance Claim Lawyer Blog

Buying 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.

Last 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" »

As 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" »

According 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" »

Two 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.

Whenever a small business or individual files an insurance claim, it often turns into a battle between the claimant's adjuster and the insurance company's adjuster. In many ways, it's a fight between David and Goliath due to the difference in resources available to each side. As a result, you would think that our government would do a better job of leveling the playing field. However, whenever David does something wrong he is often punished by state officials. On the other hand, when Goliath mishandles a claim, the chances of a crack down are very slim.

Here is a very telling fact that shows the amount of power insurance companies have in Florida: when there's a complaint against an insurance company's adjuster there's a less than 16 percent chance the adjuster will be disciplined; however, whenever there's a complaint against a public adjuster, representing a home owner, or business owner, there's a 75 percent chance the state will discipline that person.

On both sides there are certainly adjusters that need to be investigated and disciplined. By and large, most adjusters approach their jobs with honesty and complete professionalism. Nevertheless, that doesn't mean you shouldn't be prepared to file a complaint against an insurer's adjuster for mishandling a claim.

During the claims process make sure to request and keep all documents related to the claim. Also, keep a journal noting phone calls and the dates and people you spoke to. Make sure to check the licenses for any adjuster, contractors or roofers helping with your claim. This can be done at www.myfloridacfo.com. Lastly, if you feel that your claim is being mishandled, don't hesitate to immediately contact the Department of Financial Services.

The insurance claim process is often daunting and time-consuming. At Alvarez & Barbara, LLP, we have the resources and expertise to properly help you with your insurance claim especially if your claim is being mishandled by your insurance company, or the adjuster hired by your insurance company.

Continue reading "Adjusters Hired By Insurance Companies are Seldom Disciplined" »

In the past few weeks, we have seen homes destroyed throughout the country due to the recent ravaging rage of tornado strikes.

Unfortunately, many of those homeowners will soon discover that their insurance won't cover all of their rebuilding cost. The good news, however, is that the typical homeowners insurance policy does cover tornado damage. But as will be discussed below, it may not be enough. And that should serve as a cautionary tale for all of us residing in Florida as hurricane season gets under way while also serving as a reminder to check our insurance policy now, while also checking on the financial strength of the insurance company providing insurance coverage.

Other natural disasters, such as slides and earthquakes, are not typically covered under the standard insurance policy. But while 96% of homeowners have insurance, 64% of homes are undervalued for insurance purposes.

Therefore, with hurricane season upon us, it is critical that all homeowners in the state of Florida review their insurance policies for purposes of understanding exactly what coverages they have purchased. A typical homeowners policy will generally provide coverage that falls into the following three categories.

Replacement cost. This covers the cost of repairing or replacing your home, based on a set dollar amount. However, one of the problems with this coverage is that it often times does not reflect the increase in the cost of construction and labor since you took out your policy in your community. If your community is destroyed by a natural disaster, then that means that there could be higher demand for such construction and labor needs, and that will inevitably push up the cost of repairing and replacing your home.

Extended replacement cost. Here, the insurance company agrees to pay a certain percentage above the replacement cost to account for inflation. So, for instance, if your replacement cost coverage is $250,000, extended replacement cost coverage will pay up to 120% of that, or $300,000. However, even with that additional percentage of coverage afforded for purposes of assisting and paying for the replacement cost, if you have not adjusted your numbers in sometime, you may still fall short in the event of a catastrophic disaster.

Guaranteed Replacement Cost. This coverage will pay the total cost of replacing your home no matter how much prices have increased since you took out the insurance policy. However, not only of this type of coverage more expensive, it is also very difficult to fix your from an insurance company. The reason being is that insurance companies want to control their cost, and this type of coverage may permit the cost to spiral out of control. Paying for your lost or damaged items.

Replacing Your Stuff. Most insurance policies cover lost or damaged items. Typical coverage ranges from 50% to 70% of the amount of insurance you have on the structure of your home.

For instance, if your insurance policy provides up to $250,000 to rebuild your home, you can get an additional $125,000-$175,000 to replace your belongings. Moreover, you can also insure your belongings for the actual cash value, or the replacement cost.

The actual cash value coverage means that if you lost your 10 -year-old TV to a natural disaster, then you will be compensated the amount of money that your 10 -year-old TV set is worth today.

On the other hand, replacement coverage, while generally more expensive, is often times worth the additional premium cost. The reason being that if you lost your 10 year old TV then you would be entitled to receive new money today that would allow you to purchase a new TV today.

With hurricane season upon us, it is important to check to 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.

Weiss Ratings, a company which studies the financial strength of property insurers in Florida, released its grades for property and casualty insurers. Weiss rated 29 Florida insurers as having a low financial strength rating. This means that about a quarter of the state's private insures are in danger of being wiped out by a major hurricane.

One of the companies that received a low rating was State Farm Florida Insurance Co. State Farm is the state's second largest insurer with $888 million in homeowner premiums. However, in 2010 it lost $66.2 million. The third-largest insurer, Universal Property and Casualty, was also given a low rating.

Currently, Florida law mandates that property and casualty insurers keep at least $5 million in capital. The recently passed insurance reform law will raise that requirement to $10 million in 2016 and $15 million in 2021.

However, hurricane season has already started. So take the time to 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.

Continue reading "Florida's Property Insurers are on Shaky Financial Ground as Hurricane Season Gets Underway" »

Governor Rick Scott recently 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.

Below is a summary of Senate Bill 408 that was signed into law by Florida's Governor recently.

Time Limits for Claims and Statute of Limitations

The bill places time limits for bringing a hurricane or sinkhole claim and also creates a statute of limitations for bringing a breach of contract property insurance action in court. A claim, supplemental claim, or reopened windstorm or hurricane claim must be given to the insurer within 3 years after the hurricane first makes landfall or the windstorm causes covered damage. An initial, supplemental or reopened sinkhole claim must be given to the insurer within 2 years after the policyholder knew or reasonably should have known about the sinkhole loss. The bill also enacts a 5 year statute of limitations for bringing an action for the breach of a property insurance contract that runs from the date of loss.

Public Adjusters

The bill limits public adjuster fees related to reopened or supplemental claims to a maximum of 20 percent of the reopened or supplemental claim payment. The bill also limits public adjuster fees to 20 percent of an insurance claim payment made by the insurer more than one year after events that are the subject of a declaration of a state of emergency by the governor. A public adjuster fee related to a policy issued by Citizens Property Insurance Corporation may not exceed 10 percent of the additional amount actually paid in excess of the amount originally offered by Citizens on the claim.

Public adjusters are prohibited from making deceptive or misleading advertisements or solicitations. Written solicitations must include a disclaimer notifying the consumer that a solicitation is being made. A public adjuster contract related to a property and casualty insurance claim must contain the full name of the public adjuster and public adjusting firm, the business address, license number, and other specified information.

Public adjusters must give prompt notice of a property loss claim to the insurer and include with the notice the public adjuster's employment contract. The public adjuster must also ensure that the insurer has access to inspect the property, can interview the insured directly about the loss and claim, and allow the insurer to obtain information necessary to investigate and respond to the claim. The insurance company's adjuster or other persons acting on the insurer's behalf must provide at least 48 hours notice before scheduling an inspection of the property or a meeting with the claimant. The insurer also must allow the public adjuster to be present during the insurer's in person meetings with the insured.

The bill requires licensed contractors to be licensed as a public adjuster in order to adjust a claim on behalf of the insured.

Continue reading "Summary of Property Insurance Reform in Florida" »

This legislative session we've been telling you about the bill that would change Florida's property insurance landscape. The proposed bill was pushed through by lawmakers despite the fact that Florida has not been hit by a hurricane since 2005. Well, that bill has now become a law.

Essentially, the new law was created so it could strengthen property insurance companies that cover damages from hurricanes, fires, and other losses. It is also designed to curb a recent surge in sinkhole claims which insurers believe are purely fraudulent. The sponsor of the new law stated it would "promote a competitive market with solvent companies that our policyholders can rely on."

However, the law does have its critics. Detractors of the law state the law would lead to higher premiums for all property owners. Additionally, the law also imposes new restrictions on public adjusters, and sinkhole claims, as well.

Specifically, this law also allows annual rate increases of up to 15 percent to cover higher reinsurance costs. This provides insurance companies with yet another excuse to cash in while making consumers vulnerable to serial premium hikes -- without fixing the underlying problems plaguing Florida's property insurance system.

Florida's property insurance system has been an almost annual legislative headache since shortly after Hurricane Andrew struck South Florida in 1992 -- the Category 5 storm killed caused about $16 billion in insured damage. Indeed, former Gov. Charlie Crist last year vetoed a bill that was similar except for the sinkhole provisions. However, back in 2007 legislators tried to protect consumers from crippling rate increases, thinking that was the best way to go. But the law signed by Gov. Scott did away with many of those consumer friendly protections and enhanced the insurance companies to ability to fight against insurance claims.

The law signed by Gov. Scott will also allow insurance companies to justify a new round of rate hikes for all of the hard working Floridians. This is so because the higher reinsurance rates will be an invitation to let insurance companies raise rates.

The new law also tightens restrictions on sinkhole claims, which the insurance companies say are costing them $500 million annually, and allows insurers to hold back part of a claims settlement until repairs are completed.

But that is not all that this law does. The law caps public adjuster compensation to 20 percent of the claim payment (10 percent for Citizens claims). The law also requires public adjusters to provide additional disclosure statements and notices.

These changes come as no surprise as the insurance lobby was able to convince our elected representatives that public adjusters spearhead the filing of allegedly fraudulent claims such as sinkhole claims. However, any move that restricts public adjusters is a restriction on the average Floridian because these individuals represent people who are having difficulties with their insurance claims. Their role is vital to a fair claims system as they have the knowledge and experience to navigate the complex claims process.

Insurers have become stronger. Accordingly, the public has become weaker. This fact highlights the reason why its important to hire a firm with the experience necessary to compete against Goliath insurance companies. At Alvarez & Barbara, LLP, we have this experience and the proven track record to compete in this new climate. Contact us today to discuss your claim.

The legislative session in Tallahassee has ended. During this past legislative session lawmakers in Tallahassee had an objective of reforming Florida's property insurance system. Consequently, property insurance was a big priority during the legislative session. Unfortunately, insurance companies, and not policyholders, are the big winners.

Our lawmakers passed Senate Bill 408 and now its up to Governor Rick Scott to decide whether the bill should become law.

Senate Bill 408, virtually guarantees a 15 percent premium "reinsurance" increase for Florida policyholders who have no choice but to buy property insurance on their homes if they have an outstanding mortgage. This is a backdoor tax and fee increase that will hurt most homeowners, consumers and small business owners at a time with very high foreclosure and unemployment rates, and a fragile economic recovery under way.

Moreover, homeowners who have no choice but to buy property insurance from Citizens Property Insurance Corp. will likely get the annual 10 percent increase, which continues to be authorized by law.

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.

Senate Bill 408 also contains many other provisions that are anti-consumer as well. The reason being is that, for instance, the insurance lobby was able to convince our lawmakers that they needed to shorten the time in which hurricane and sinkhole claims could be brought. Insurers have been dealing with a large amount of claims that date back as far as 2005 in the aftermath of Wilma and also a recent rise in sinkhole claims. Instead of five years to file a windstorm claim, the bill proposes a 3 year limitation.

If this bill becomes law, policyholders are certainly going to be affected. Not only will their insurance rates go up, but many legitimate claims are going to be denied because of this restrictive time period. Water and mold damage often take a few years to present itself. Under the new law, someone who notices mold damage 3.5 years after the date of loss is out of luck. This provision does not take into account the fact that it can some time for damages to become evident. According to insurers, this provision is needed to curb fraud.

The bill also allows insurers to provide "additional or supplementary" information to the state without requiring top officers to certify that the data backing up their claim for a rate increase is truthful. Basically, this provision enables insurance companies to freely commit a fraud while they argue that time periods need to be shortened because of fraud. This is certainly a double standard.

Another troublesome provision of this bill is the fact that for people who pay for replacement cost insurance, in cases of hurricane repairs, homeowners will have to pay for some repairs in advance and hope to be reimbursed by the insurance companies. Many families simply can't afford this burden, or wait for the insurance companies to "drag their feet" to pay these claims.

Times are tough enough as it is for many in Florida. This bill only makes it tougher on all hard working Floridians and helps insurance companies raise are rates without any oversight and with reckless abandon to Florida as a whole.

At Alvarez & Barbara, LLP, we have considerable experience dealing with insurance companies and claims. If you're having difficulty with an insurance claim, contact Alvarez & Barbara, LLP to discuss your claim in greater detail today.

As we have discussed previously on this blog, State Farm Florida Insurance, the state's largest private property insurer, wants to raise rates by a statewide average of 28 percent.

Although Florida has dodged a direct hit by hurricanes the past five years, State Farm claims that the increase is required to cover rising losses for claims unrelated to storms such as sinkholes. The increase comes after the company received approval in 2009 to raise average statewide rates by 28 percent and approval in November to raise them again by 6.6 percent.

State Farm had 678,849 residential property insurance policies in the state as of late last year, including 128,506 in Broward, Palm Beach and Miami-Dade counties and 175,084 in the Orlando area.

Some perspective based on the numbers....

Let's say that the average homeowner's insurance policy premium each month in Florida is $128/month.

State Farm has 678,849 residential property insurance policies.

That equals about $86,892,672.00 that State Farm collects each month in Florida from homeowners.

That is $1,042,712,064.00 that State Farm collects for the year.

Rather than pumping that money out of the country to overseas reinsurers to help them pay for opulent conferences in Monte Carlo, let's say State Farm opted invest that money. And with that investment let's say State Farm secures a modest average return of 10% per year (the stock market average return is 12% in the long run). This means that State Farm makes $104,271,206.40.

Keep in mind that insurance companies are required to keep reserves which they invest. These reserves are in the BILLIONS of dollars. However, forget about that now and focus solely on what State Farm receives in premiums from homeowners.

State Farm claims that they need to increase rates because of an increase in sinkhole hole claims over the past few years that are related to the recent rise in housing starts and the real estate meltdown. The recent rise in sinkhole claims is due in large part to the recent explosion in real estate development throughout Florida, and especially in South Florida. Over development has left the ground susceptible to sinkholes. Plus, while sinkholes occur in other U.S. states, Florida is more prone to sinkhole related problems because of underground limestone that dissolves under certain conditions, especially in areas that have been over developed, according to many leading geologists.

Nonetheless, let's do some math. State Farm's spokesman claims that sinkholes were responsible for State Farm spending $351 million over the last three years. That is $117 million for one year.

If State Farm gets a 10% return from the investment of the money it receives from homeowners insurance premiums, then they will only be short $12,728,794.00 for the year. Now, remember the BILLIONS of dollars that State Farm is required to hold in reserves and think about the money received on the investment of those reserves. $12 million is pocket change to State Farm, and they aren't really losing anything. Especially if you consider all the money that is shipped overseas by State Farm and others.

However, if State Farm increases rates by 28%, then the average premium in Florida goes from $128/month to $163.84/month. That's an extra $291,959,377.92 that State Farm will receive when they claim only "need" an extra $12,728,794.00.

It sure sounds, and looks, like State Farm is trying to take many hard working Floridians for granted.

Continue reading "State Farm's Request for a Rate Increase Does Not Add Up for Hard Working Floridians" »

An annual insurance company gathering at Monte Carlo is funded by Florida's extensive spending on insurance and reinsurance. This expensive gathering is paid by the two thirds of property insurance premiums that now leave Florida as unregulated payments to largely offshore companies that sell hurricane protection to insurers and that operate without rate control or consumer oversight.

These unregulated companies determine how much Floridians must pay for property insurance, and whether property insurance is available at all in Florida.

Florida's increased reliance on this unregulated market is eroding the industry's ability to withstand the inevitable disaster that a major hurricane will inflict on Florida.

Meanwhile, Florida's insurance companies are pleading poverty today despite the fact that Florida has not been hit by a major hurricane in 5 years. This costly dependence on reinsurers will only hurt Florida especially since the reinsurers only play by the rules established on Wall Street and fail to play any role in insuring the risk here in Florida.

Indeed, former Gov. Jeb Bush set aside his free market ideology to conclude that Florida could not "be at the mercy of people who hope for catastrophes to keep their rates high" purely for profit and to the detriment of all Floridians.

This problem is highlighted by the fact that from 2004 to 2009, Florida carriers' reinsurance bill nearly tripled, from $1.4 billion a year to more than $4 billion.

The portion of homeowners' premium devoted to reinsurance in that time increased from 37 percent to 64 percent, according to an analysis conducted of 70 Florida-only property insurers. The national average is only 19 percent.

That in turn drove up the cost of coverage for all of Florida's homeowners. Quarterly premium reports show the average Florida homeowner pays 72 percent more today than in 2003. The average premium has nearly doubled or more in nine coastal counties.

And despite all of this, the State of Florida is nonetheless poised to aid these insurance companies to the detriment of Floridians across our great state.

Continue reading "Stop the Madness - Overseas Companies are Profiting from Florida's Property Insurers But Yet Florida's Property Insurers are Still Seeking to Increase Rates that Hard Working Floridians Pay to Insure Their Property" »

This past week Florida state legislators turned their attention to a problem that is becoming increasingly more expensive: questionable sinkhole claims. These claims are purportedly driving up the costs of insurance premiums for Florida homeowners.

The Senate Banking and Insurance Committee heard testimony, but did not take action on the bill which is similar to one that was vetoed by Charlie Crist last year. The bill is aimed at making homeowners' policies more affordable by establishing a more competitive private insurance market.

Senator Garret Richter of Naples stated that all he was trying to do was let the marketplace work and proposes that the bill would allow consumers to choose the product and insurer they want. Sen. Richter was the legislator who steered the previous insurance bill through the halls of the Florida legislature. Former Gov. Charlie Crist stated he vetoed that bill because it was "not consumer-friendly enough".

The last major hurricane to hit Florida was in 2005. Since then, sinkhole claims have exponentially increased. In the past three years sinkhole claims have totaled $2 billion. Also, premiums for sinkhole claims have tripled in the last three years for homeowners across the state. However, two-thirds of claims arise from Hernando, Hillsborough, and Pasco Counties.

Some amendments to the bill were challenged because legislators felt they were too favorable to the insurance industry. Senator Mike Fasano of New Port Richey believes that if the reins are loosened too much, insurers will have the ability to refuse to provide sinkhole coverage.

Although the committee adjourned before finishing work on the bill, they plan on starting back up again.

Continue reading "Sinkhole Claims are Driving Property Insurance Reform" »

One of the main objectives of the newly elected Governor, and many legislators, is to re-visit a property insurance bill that was vetoed by Governor Crist last year. The vetoed bill was supported by the insurance industry, but Governor Crist vetoed the bill and called it "anti-consumer" and stated that it was wrong to allow the insurance companies to raise insurance rates during these very tough economic times.

Newly elected Florida legislators are intent on re-visiting this issue as soon as possible. Indeed, an ambitious re-write of the bill that was vetoed by Governor Crist will get its first public hearing this week as many lawmakers grapple with again trying to reduce costs for the industry.

This new bill (SB 408), sponsored by Sen. Garrett Richter, R-Naples, will make it harder for public adjusters to re-open old claims to holdbacks of payouts pending proof of repairs.

Among other provisions found in the bill include the following:

• Allowing insurance companies to hold back a portion of claims payments until the policyholder shows proof that repairs and replacements are indeed taking place. Insurers have argued that Florida is one of the few states that requires insurers to pay claims up front and does not require proof that claims are not simply being pocketed.

• Reducing to three years the length of time a policyholder can re-file a claim, down from the five year window now on the books.

• Shifting the burden of proof in contested sinkhole cases from an insurance company burden to prove damage wasn't caused by a sinkhole to a policyholder burden to prove it was. It also would require sinkhole work to be under contract before full payment is made.

• Placing restrictions on public adjuster advertising and capping commissions public adjusters can take on re-opened claims.

• Allowing an insurer to cancel a policy within 45 days if state regulators determine the cancellation serves the public or policyholder's interest.

This legislation would be a major win for insurance companies and a major slap in the face for homeowners. As our Miami insurance dispute attorneys have reported, property insurance companies are already pushing double-digit increases past regulators, despite no major storm damage in the last five years and plummeting property values. Still, companies are claiming rates are not high enough to match risk and pay claims.

Continue reading "Florida Legislators Begin to Tackle Property Insurance Legislation that Will Hurt Florida Consumers and May Lead to Higher Insurance Rates and Fewer Payouts to Floridians" »