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Did You Receive Notice that Your Insurance Was Cancelled?

insuranceInsurance contracts are agreements between an insurance company and an insured, known as a policy holder, which determines the types of claims an insurance company agrees to either pay, indemnity, or defend.  The policy holder will typically pay the insurance company a premium for that insurance coverage.

For instance, if you want insurance to protect your car, or home, from a loss, one will agree to pay an insurance company a premium in exchange for that protection.

Florida has enacted certain laws governing cancellations of insurance policies.  Insurance companies need to strictly comply with those laws when attempting to cancel an insurance policy.

If your insurance policy was cancelled, it begs the question – did you receive notice that your insurance contract was cancelled?  Our firm has handled improper cancellation claims and if you feel as though your insurance policy was improperly cancelled you should contact us to discuss your claim further.

The Third District Court of Appeal was recently confronted with determining whether or not there was applicable insurance coverage to compensate the Estate of a young man who died in a tragic motorcycle accident.  The issue focused on whether or not the insurance company had properly mailed out its notice of cancellation to the policy holder.

Rodriguez v. Security National Insurance Co., Inc., 2014 WL 1696186 (Fla 3rd DCA 2014) stems from a car accident, which resulted in the death of Mr. Rodriguez’s son.  The accident was caused by a driver insured by Security National Insurance Co (SNIC).

SNIC argued that there was no applicable insurance coverage in place because it had properly cancelled the insurance contract for non-payment.  Rodriguez, on the other hand, argued that that SNIC’s notice was defective.  Specifically, the notice was not mailed to the specific apartment where the policy holder lived as evidenced by the actual notice of cancellation where it was devoid of any apartment number.

The trial judge agreed with SNIC and granted summary judgment in SNIC’s favor and against Mr. Rodriguez for wrongful death, breach of contract, enforcement of judgment, and bad faith in denying coverage. An appeal followed.

On appeal, the appellate court noted that SNIC sent two notices to the insured that his policy was going to expire and also sent a notice to the insured once it had expired.  Rodriguez argues, however, that these notices were never received due to the lack of an apartment number.

The court analyzed Fla. Stat. 627.728 and concluded that the apartment was not listed on the initial application.  Therefore, the insurance company did not have to mail the notice to the apartment since the policy holder never let the insurance company know, during the application process, of his apartment number.

If the policy holder had simply placed his apartment number on the application he would have had coverage.  But since he failed to list his actual apartment number, he jeopardized his insurance coverage since he never received copies of any of the notices of cancellation that SNIC mailed to him.

Failure to Submit Sworn Proof of Loss is not a Bar to an Insurance Claim

We recently discussed the Fifth DCA’s ruling in Whistler Park v. FIGA.  Thereafter, the Fifth DCA issued another ruling relying on Whistler Park.  In sum, and under certain circumstances, one’s failure to submit a sworn proof of loss is not a bar to an insurance claim.

In Hamilton v. State Farm Florida Insurance Company, Florida’s Fifth District Court of Appeal concluded that the facts in the case determined that there was a disputed issue of material fact regarding whether or not State Farm was, in fact, prejudiced by Hamilton’s alleged failure to submit a sworn proof of loss to the insurance company. The Fifth DCA ruled that they would base their findings on Whistler’s Park, Inc. v. Florida Insurance Guaranty Ass’n.

As stated in more detailed in our previous post, the Whistler Park court found that the insurer was not prejudiced by the insured’s failure to comply with conditions precedent prior to filing suit because the insured had expressed a willingness to comply and the insurance company had failed to follow up.

The Fifth DCA seems to be moving in the direction of trying to prevent the “gotcha” litigation tactics that many insurance companies seem to employ.  Indeed, the appellate court, in Whistler Park, observed that many insurance companies have, in Florida, lost sight of the true purpose of the EUO and instead engage in gotcha litigation tactics in order to potentially save themselves from paying on valid insurance claims.  The court went on to comment that litigating cases in this way seems “more about strategy than truth.”

In the Hamilton case nevertheless, the proof of loss was filed seven months after filing suit. In Hamilton, the court granted the motion for rehearing in favor of the Plaintiff and remanded the case to the trial court to determine if the insurer has been prejudiced or not by the Plaintiff’s failure to submit a sworn proof of loss.

Appellate Court Concludes that Failure to Appear for an EUO Does Not Bar an Insurance Claim

Insurance policies often require an insured to comply with certain conditions before a lawsuit can be filed.  Such conditions could include sitting for an examination under oath (EUO) or preparing a sworn proof of loss, among others.  Failure to comply with those conditions prior to the filing of a lawsuit could result in contested litigation for years regardless of how much damage your property has sustained.

The bottom line is that one should timely comply with all requests submitted by insurance companies prior to filing suit.  But what is one to do if they make every possible effort to comply with those requests, but the insurance company does very little to actually obtain the information being requested?

A Florida Appellate Court concluded that the insured’s failure to appear for an EUO did not bar the insurance claim.

In Whistler’s Park v. FIGA, the appellate court asked if the true purpose had been lost in the recent cottage industry of EUO litigation in Florida courts.  That court answered that question by stating many insurance companies have, in fact, lost sight of the true purpose of the EUO and instead engaged in gotcha litigation tactics in order to potentially save themselves from paying on valid insurance claims.  The court went on to comment that litigating cases in this way seems “more about strategy than truth.”

In Whistler’s Park, the insurance company had requested an EUO.  But the EUO was never in fact scheduled prior to the filing of suit.  Nonetheless, the trial court granted summary judgment in favor of the insurance company because the EUO never took place.  However, the appellate court reversed that ruling.  In vacating the trial’s court ruling, the appellate court concluded that the insurance company was never in fact prejudiced by the insured’s failure to attend the unscheduled EUO.  The appellate court concluded that the insurer was not prejudiced in this case because the insured expressed a willingness to comply, but the insurer failed to set up a time and place.



Florida’s Valued Policy Law and Its Impact on a Total Loss Claim – Changes in the Law, the Battle of Causation, and Its Impact on My Claim? Part 2

Mentioning laws the insured’s property suffered extensive wind and flood damage caused by Hurricane Irene. The insured had separate insurance policies provided by different insurance companies. They had one policy that covered wind damage, and another policy that covered flood damage. However, the wind damage policy specifically excluded any and all damage not caused by wind.

After Hurricane Irene, the property at issue was rendered a constructive total loss. As a result, the insured brought suit against the insurance company claiming that Florida’s valued policy required that the windstorm insurer tender the full policy limits due under the policy. The insurance company, however, argued that it was only liable for its pro rata share of the damage caused since flooding had also caused some damage to the property.

The Fourth District Court of Appeal agreed with the insured and ruled that the insurance company must pay the face value of the policy regardless of its pro rata share of the damage. The court opined that the meaning of the valued policy law to be “simple and straightforward.” The court reasoned that two elements were necessary to apply Florida’s valued policy law. First, the property must be insured by an insurer as to a covered peril. Second, the building must be a total loss.

The court reasoned that if both of those elements were present, then the valued policy law applied without regard to any other fact that may be present in the case.

The ruling resulted in Florida’s legislature making a significant change to Florida’s valued policy law shortly after the Mierzwa case was decided. Florida’s valued policy law was amended to state that “when a loss is covered by a peril and in part by a noncovered peril … the insurer’s loss shall be limited to the amount of the loss caused by the covered peril.”

This change is potentially problematic for Florida homeowners. As we saw with the widespread litigation in the Gulf states following Hurricane Katrina, insurance companies in Florida are now free to limit their payouts in the event of a total loss if they are able to prove that some pro rata portion of the loss was caused by a non-covered peril. In other words, insurance companies will now attempt to minimize their payouts in total loss claims, or even deny them outright, when a loss is caused by an excluded event (flood), regardless of whether a covered peril also contributed to the same loss (wind.)

Florida’s Valued Policy Law and Its Impact on a Total Loss Claim – What Is It and What is Covered? Part 1

As Stated the purpose of Florida’s Valued Policy is to fix the measure of damages in the event of a total loss.

The rationale for doing so is to facilitate prompt settlement of claims after a total loss by making it unnecessary for the insured to prove the value of the property.

The benefit of the “valued” policy is to eliminate the guesswork associated with trying to ascertain the value of the loss since that amount has been pre-determined and agreed upon.

To accomplish the objective of facilitating prompt settlement of claims the insurer must ascertain the insurable value of the property at the time of writing the policy – and before the loss occurs. In other words, the insurance company is agreeing to pay the agreed upon face value of the policy in the event of a total loss. serves to “remove what would otherwise be a very troublesome and difficult issue to resolve either between parties by negotiation by courts in litigation.”

Consequently, Florida’s valued policy law requires insurance companies to pay the policy limits in the event of a “total loss” caused by a covered peril, even though the insurance company could rebuild for less. What constitutes will be the subject of a separate blog post.

But Florida’s valued policy law has two essential requirements. First, the damage sustained to the insured property must have resulted from a covered peril. Second, that the building be a total loss. If these two elements are satisfied by the insured, then the insurance company who chooses not to repair is mandated to pay policy limits for the face amount of the policy no matter what other factors may exist as to the cost of repairs or replacement.

A simple illustration of how the valued policy works is as follows: an insured owns a property and the insurance company agrees that the property is valued at $100,000. The insured purchases a “valued” insurance policy from that insurance company for $100,000 of coverage. The insured suffers a total loss from a covered peril. The insurance company is therefore obligated to pay the pre-determined agreed upon amount of $100,000.

Florida’s valued policy law only covers real property. It does not cover personal property. It also typically does not apply to appurtenant or additional structures on the property (typically referred to as Coverage B structures.) This would include buildings like sheds, cottages, and detached garages. The primary reason why these items are not covered is because they do not have a stated value in the policy.

In future posts, we will discuss what constitutes a total loss, and pertinent amendments and Florida case authority guiding Florida’s valued policy law.

Regulators Attempt to Stop the Excessive Costs Associated with Forced Placed Insurance While Banks Continue to Get Sued Over the Practice

Force-placed insurance policies have become a hot topic of litigation especially in Florida. Florida accounts for more that thirty percent (30%) of force-placed insurance policies throughout the nation. These policies are placed by a bank or mortgage servicer on a home when the homeowners’ property insurance is deemed insufficient by the bank or the policy has lapsed. Many mortgages allow for these policies to be taken out when the homeowner fails to maintain adequate insurance and/or replace the insurance that has lapsed.

The problem here is that many of the banks are working with the insurance companies and buying insurance at much higher premiums than in the regular market. What does all of this mean for the consumer one might ask.

This means that in the case of foreclosure the bank will ask for what is left on the property plus the insurance cost which comes out to be much higher than if you had purchased the insurance on your own. Banks along with insurance companies are obtaining huge payouts due to these force-placed insurance policies.

Federal Housing Finance Agency (“FHFA”) directed Fannie Mae and Freddie Mac to prohibit mortgage servicers from being reimbursed for expenses associated with captive reinsurance arrangements</a>. These arrangements as mentioned above have caused growing concerns for both Fannie Mae and Freddie Mac as they are paying substantial fees on the force-placed insurance policies in foreclosure. These practices are also a major concern as they would make an already unsteady reputation worse as it relates to consumers and secondary mortgage buyers. This new restriction in the market makes it evident that servicers can no longer collect commissions from insurance carriers, which affords more protection to consumers.

Currently there is an enormous amount of litigation dealing with the practice of force placed insurance</a>. This litigation hopefully will help to close the current loophole that still allows insurers to provide value to banks that refer them business. The new restraints mainly affect companies like QBE and Assurant, while banks in-house insurance companies may benefit by less competition.

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

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

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

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

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

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

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

Appellate Court Rules that the Presumption of Prejudice Analysis Applies when Failing to Timely Submit a Sworn Proof of Loss

sworn proof of loss 001.jpgIn Allstate v. Farmer, the Fifth District Court of Appeal decided a case against Allstate Insurance Company. In that case, Allstate was able to prove that their insured, the Farmers, failed to comply with the “proof of loss” provision in the insurance policy. The Farmers home was struck by lightning causing damage to different areas of their home, and a little while later were also victims to a car theft in front of their home. Due to these incidents they filed claims for each separate occurrence with Allstate. However, Allstate suspected fraud and proceeded to investigate this claims.

During Allstate’s investigation, the Farmers cooperated by giving recorded statements, provided requested documentation, obtained appraisals, and submited to examinations under oath, all prior to the commencement of litigation. The only thing that the Farmers failed to do was give a signed and sworn proof of loss form to Allstate, which they claim they sent, but Allstate claims they never received.

At the initial trial the jury found that the Farmers breached the proof of loss provision in the policy, but this breach was not material and did not prejudice Allstate in anyway regarding the claims made. Allstate then filed an appeal.

On appeal, Allstate argued that the jury was not permitted to decide whether they were prejudiced by any breach of the proof of loss provision or whether the Farmers substantially complied with the proof of loss provision. Allstate claimed that the Farmers did not substantially comply with the proof of loss provision in the policy.

The Appeals court found that the trial court was correct and there was not material breach of the contract, because Allstate was not prejudiced in anyway. The Fifth District Court of Appeal agreed with the trial court and did not reverse the ruling on appeal.

The significance of this ruling is that it extends Florida’s presumption of prejudice rule to cases involving the failure to submit a timely sworn proof of loss prior to filing suit.
The reason neither the trial court, or appellate court, found Allstate to be prejudiced by the Farmers failure to submit a proof of loss provision, was because the Farmers cooperated with Allstate’s request regarding their claims. They submitted multiple itemized lists of losses, gave recorded statements, obtained appraisals, and took examinations under oath.

The Framers continued cooperation with Allstate, was deemed to be enough for Allstate to satisfy their duties under the contract in which they failed to do. Allstate also tried to claim that they had multiple itemized lists with the same items, to which they failed to provide evidence of fraud.

The Appeal’s court found that the prejudice presumption rule was properly applied in the trial court, and that Allstate was in no way prejudiced by the Farmers failure to comply with the proof of loss provision.

The Farmers relied on Bankers Ins. Co. v. Macias, 475 So. 2d 1216 (Fla. 1985) in support of their position that an insured’s claim is not barred for failing to submit a sworn proof of loss upon demonstrating that the insurer was not prejudiced by the breach. The 5th DCA agreed with that position, and concluded that Macias is applicable to breaches of proof of loss conditions.

To support that conclusion, the 5th DCA cited to several recent 4th DCA cases that applied the prejudice presumption rule where an insured failed to provide both notice and proof of loss. Soronson v. State Farm Fla. Ins. Co. 96 So.3d 949 Fla. 4th DCA 2012); Kramer v. State Farm Fla. Ins. Co., 95 So. 3d 303 (Fla. 4th DCA 2012).

In sum, the 5th DCA in Allstate v. Farmer extended Florida’s presumption of prejudice rule to cases involving the failure to submit a timely sworn proof of loss prior to filing suit.

Citizens Homeowners Rates are Going to Increase by 6.3%

ins rates go up.jpgFlorida homeowners insured by Citizens will see their premiums increase. Citizens Homeowners rates are going to increase by 6.3%. State regulators approved an increase in homeowner’s rates that followed the statewide average. Homeowners with multiperil policies will see a 4.4% increase, which amount to around one hundred and eleven dollars ($111) per policy. Those homeowners that have wind-only policies will see a 10.5% increase on average, which amount to around two-hundred and sixty-five dollars ($265) per policy holder.

Citizens maintained that exposure to hurricanes and sinkholes were the “major drivers” behind the need for the rate hikes this year.

These rate changes will take effect in January, 2014, although the wind-only policy homeowner’s rates will change come February, 2014. These rates are increasing for the fourth consecutive year.

The good news for some homeowners with regards to higher rates is that your policy may never see the rate increase. By the end of November, which also happens to be the end of hurricane season Citizens will remove 400,000 policies to ten different insurers. On top of these 400,000 policy holders, Citizens is now in the process of getting rid of another 200,000 policy holders this December between eight separate insurers. This means that 600,000 policies will be unloaded before the New Year, and the policy holders will not be affected by the rate increase to these homeowner’s policies.

On top of all these changes, Citizens is establishing a clearinghouse, which will allow for policies to be shopped to the private market rather than given away like they are now. This is supposed to be better for homeowners as it will allow them a chance to pick which private insurance company they choose. This is in the hopes that Citizens will be able to unload a more significant amount of policies in their attempt to downsize. All homeowners with a Citizens policy should be aware of the ongoing changes with Citizens and be on the look out for all notices regarding your home insurance policy.
Please do not hesitate to contact our office to discuss your insurance claim needs.

Flood Claims – It is Imperative to Submit a Timely Sworn Proof of Loss

flood.jpgOne of the most important components of any flood claim is to ensure the timely submission of a sworn proof of loss. Flood policies typically impose a strict requirement that any sworn proof of loss must provided within 60 days. Therefore, it should not come as a surprise that most litigation involving flood claims centers on whether or not the insured complied with the time requirements to submit a sworn proof of loss timely. Courts across the nation have uniformly concluded that an insured’s failure to comply with the conditions precedent to filing suit, such as the timely submission of a sworn proof of loss, will bar an insured’s ability to make a financial recovery under the policy. In other words, even though the insured paid thousands of dollars to buy a flood policy, if the insured fails to submit a timely sworn proof of loss, recovery will be barred. Moreover, an important component of the proof of loss requirements is that the insured is also required to furnish certain information to the flood carrier in support of the insured’s proof of loss. The documentation provided must strictly comply with the flood policy in order for the insured to make a financial recovery. Simply put, the insured must provide the insurance company with some means by which to verify the amounts claimed in the insured’s sworn proof of loss. And that documentation must also be provided timely, and at the time the sworn proof of loss is filed with the insurance carrier. With that said, the sworn proof of loss requirement has tripped up an astonishing number of claimants attempting to compensation for their loss. If suit is filed then the insurance company will file a motion for summary judgment arguing that the insured failed to comply with the policy terms. And more often than not, the insurance company will prevail at that motion for summary judgment thereby precluding recovery for the insured. With that said, contact us today to discuss your flood claim. —– EXTENDED BODY: 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. Call us today toll free at 1-866-518-2913 or at 305-263-7700.

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