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Four Named Storms in the Last Week; Risk Managers say Florida’s costliest October Hurricanes formed in Similarly Busy Years

News Channel 7 in Panama City is marking the 15-year anniversary of Hurricane Opal this week — the storm blasted that area in October of 1995, causing nearly $3 billion worth of damage.

Our Miami storm damage attorneys continue to report that the area remains at high risk for tropical storms and hurricanes through October and November. We reported recently on our Florida Insurance Claim Lawyer Blog that nearly half of the state’s hurricanes occur after Sept. 21, the official mid-point of South Florida hurricane season.
Risk Management Solutions, a risk modeler used by the insurance industry, notes that the most recent October hurricane was Hurricane Wilma, which struck Florida in October 2005 and caused 11.3 billion in damages, making it the fourth-costliest storm in U.S. history.

RMS notes that both Opal and Wilma occurred during the only two other hurricane seasons that had as much storm activity as we have seen thus far this year.

Most recently, ABC25 in Palm Beach Gardens reports that Tropical Storm Otto has formed in the Atlantic. A week ago, we were dealing with the threat of Tropic Storm Lisa. The alphabetical list of this year’s storms means 4 named storms have formed in the Atlantic in the last week. The storm could become a hurricane by the weekend. While it is expected to stay well away from South Florida, heavy rainfall and high winds are possible in the northern Leeward Islands, Puerto Rico and the Virgin Islands.

The hurricane season officially ends on November 30.
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If you are facing a dispute over an insurance claim in Florida, contact Alvarez & Barbara, LLP toll free at 866-518-2913 for a free and confidential consultation to discuss your rights.

Insurers tightening guidelines on homeowner’s discounts in South Florida

An article in the TC Palm tells only part of the story regarding hundreds of thousands of dollars in discounts on homeowner’s insurance that are apparently disappearing.
The Palm reports that the state required insurers to offer double discounts for hurricane-safe structures after Wilma battered the area in 2005. And that the law changed after 2008 and 2009 to stem fraud and standardize the state’s home insurance discount guidelines. The paper said hundreds of thousands of homeowners hired inspectors to see if they qualified for discounts and after several years of hefty discounts, insurers reported that premiums were no longer keeping up with costs.

In reality, what happened is that the discounts being pushed by the state did prompt homeowners to hire inspectors. But what really drove the discounts was the fact that many insurers wrote policies that, by default, did not provide discounts for very standard features in most newer Florida homes, including fortified roof trusses. As inspection reports began trickling in, newspapers, including The News-Press in Fort Myers, began reporting that insurance premiums were being cut in half in some cases, thereby causing a flood of homeowners to seek inspections and apply for the discounts.

So the glut of discounts was not driven by the state’s double-discount after Wilma. But that did prompt inspections, which revealed that many homeowner’s policies were being written as if the homes were built in the 50s and 60s. In reality, most Florida homes are less than 20 years old and were eligible for many of the storm-resistant discounts that are almost standard with modern construction.

Having been caught at their own game, insurers began howling that homeowners with the tenacity to apply for the discounts for which they had always been eligible, were now cutting into profits.

In other cases, insurers were claiming that homeowners were fraudulently claiming improvements for discounts. Changes this year make it a crime for inspectors to provide false information about upgrades and require inspectors to include photographs of each qualifying upgrade and the signature of a licensed engineer, architect or contractor to verify accuracy.

The paper reports that other insurers have started going back to verity discounts are legitimate and, in some cases, removing discounts. Our Miami insurance claims attorneys find it ironic that insurers routinely point to staffing issues as the primary reason for lengthy claims resolutions. But now apparently have the staff to sort through thousands of discount claims that they have been forced to deal with by virtue of not notifying homeowners of their eligibility for discounts in the first place.
If you are facing a dispute over an insurance claim in Florida, contact Alvarez & Barbara, LLP toll free at 866-518-2913 for a free and confidential consultation to discuss your rights.

Florida Gubernatorial Candidates Discuss Private Property Insurance Reform

palm trees.jpgRick Scott, the current Republican candidate for Florida Governor, has released his position on the state’s insurance company, according to the Miami Herald. Scott is calling for the government run program to be “actuarially sound.” He is also declaring that Citizens should be turned into the insurer of last resort in the state and for further deregulation of Florida’s insurance markets.

Alex Sink, Scott’s opponent, and current Democrat candidate for Florida Governor, also believes that Citizens needs to become financially sound and should also become the insurer of last resort.

Scott’s campaign stated that because Citizens is currently on shaky financial ground, a major disaster would place taxpayers at financial risk. However, putting Citizens on solid financial ground may require policy holders to pay greater premiums. Senator Mike Fasano, R-New Port Richey, says he was informed back in 2009 that rates would triple for Citizens’ policy holders if the State decided to charge actuarially sound rates.

Sen. Fasano also brought to light a major side effect of making Citizens’ financially sound. Foreclosures are likely to increase with higher insurance premiums, especially in this current real estate climate.

Both Scott and Sink each want to reduce insurance fraud. Specific proposals address insurance fraud issues such as programs designed to provide homeowners with incentives for hurricane-proofing improvements.

Scott’s plan does have its detractors. Democrats argue that his plan is a giveaway to the insurance industry and that Republican contentions that raising insurance rates will ultimately lead to lower rates is ludicrous.

Ultimately, the system does need some sort of change because a major hurricane could have a devastating effect on not only Citizens insurance, but Florida as a whole.
If you are facing a dispute over an insurance claim in Florida, contact Alvarez & Barbara, LLP toll free at 866-518-2913 for a free and confidential consultation to discuss your rights.

Florida Hurricane Damages Costs Millions of Dollars to Insurance Companies

hurricane damage.jpgThe USA TODAY reports that if a major hurricane were to hit coastal communities, its devastating financial effects could reach far beyond those who actually incur damages.

After Hurricane Katrina, private insurers fled coastal areas, including Florida, which caused many states to expand their own insurance companies. For instance, in Florida we have seen the recent expansion of Citizens Insurance despite the legislative’s mandate that it be the insurer of last resort. Nonetheless, much of the legislation that either created or expanded these state-owned insurance companies, such as Citizens herein Florida, contain provisions allowing states to enforce large surcharges on other insurance companies and on other policyholders.

But why would the State of Florida need to enforce such a surcharge? Here are some facts: Citizens, Florida’s insurance plan, currently insures property worth $433 billion. However, Citizens only has $10.5 billion in cash reserves and reinsurance, which in simple terms is insurance for insurance companies whenever they have to make a big payout.

Simple math tells us Florida’s insurance plan is vastly underfunded. If a large hurricane were to hit Florida, surcharges are almost a certainty. Plus, these surcharges can be levied on almost any insurance policy, including auto, property, and liability insurance.

According to FEMA Administrator, Craig Fugate, “If [Florida] [has] a major hurricane such as Andrew, they’re going to be in a lot of trouble.”

Therefore, it is important that you check the financial strength of your insurance companies, especially now during the height of hurricane season.
If you are facing a dispute over an insurance claim in Florida, contact Alvarez & Barbara, LLP toll free at 866-518-2913 for a free and confidential consultation to discuss your rights.

A Thousand Miles Away; Hurricane Igor will Make Beachgoing a Contact Sport in South Florida

Hurricane Igor is expected to make it a bad weekend at the beach, according to the Fort Lauderdale Sun-Sentinel.

As our Miami storm damage lawyers have been reporting, South Floridians are well served to be vigilant through the remainder of the busy Atlantic hurricane season. A listing of this year’s named storms on our Florida Insurance Lawyer Blog makes Igor the season’s 9th major storm. Experts expect 14 to 20 named storms by the time the 2010 hurricane season ends in November. Eight to 12 could reach hurricane strength, with 4 to 6 becoming major hurricanes.
While Igor is expected to remain well clear of Florida, large swells and dangerous rip currents are likely along the east coast. Storm conditions are expected to begin Friday and last through the middle of next week. Palm Beach County is expected to see the worst weather, although deteriorating conditions are likely in Broward and Miami-Dade counties as well.

It is not unusual for hurricanes to create havoc in South Florida from hundreds of miles away. High winds, flooding, heavy rain and tornadoes are all frequent consequences of passing storms.

Rip current can be especially dangerous to swimmers; caused by water crashing ashore and then racing back to sea through smaller channels, a rip current can quickly pull someone dangerously far from shore. Swimmers caught in a rip current should swim parallel to the shoreline until they have escaped the current’s pull.

Red flags on the beach mean only expert swimmers should attempt to enter the water (think Michael Phelps … maybe). Beachgoers are also encouraged to remain near lifeguard stands and to keep children close at all times.

Igor’s enormous circulation pattern should pull poor weather, rip currents and big waves ashore through the middle of next week. The storm is projected to be about 1,000 miles off the east coast on Saturday at its closest point to South Florida.
If you are facing a dispute over an insurance claim in Florida, contact Alvarez & Barbara, LLP toll free at 866-518-2913 for a free and confidential consultation to discuss your rights.

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