Property Insurance Coverage Law Blog : Florida Insurance Lawyer & Attorney : Merlin Law Group Law Firm : Tampa, Houston, Coral Gables, Gulfport

For years, a colleague of mine, Eugene Anderson has questioned whether the insurance industry is involved in a conspiracy against its own customers by claiming that a sizable portion of them are involved in insurance fraud. The  insurance associations claim an enormous amount of insurance fraud is committed every year.  For example, the Insurance Information Institute  says that ten percent of all property and casualty losses, totalling $30 billion, is the result of insurance fraud.  An insurance fraud investigation firm, D.M. Disney, claims on its website that fraud cost the insurance industry $96.2 billion in 1999, and cost the average American household more than $5,000 in higher premiums in 2001.  The last figure seems absurd since the median household income in 2007 was just over $50,000.  Anderson and I question the veracity of these claims and wonder what they are based upon.

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On Tuesday, we filed an amicus brief in the Corban v. USAA case. A copy of it is here for anyone to view. This case is important because the Mississippi Supreme Court is going to rule on how anti-concurrent causation language is interpreted. Previously, only federal courts have made such rulings. Mississippi Court's ruling is binding on federal courts and can overrule the Fifth Circuit's poorly reasoned decisions in Broussard and Leonard.  Judy Guice represents Dr. Corban. Judy is an excellent attorney and I have enjoyed her collegiality for the past several years. Her appellate brief is great and I look forward to seeing her argue this very important case.  The only problem is that the Mississippi Supreme Court should have expedited this matter. Indeed, the Fifth Circuit should have sent these issues to the Supreme Court two years ago when Dick Scruggs requested it in the Leonard case. Since Hurricane Katrina three years ago, we have all been guessing at what the Mississippi Court will decide. It is about time Mississippi judges ruled on these matters.

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One of the most disconcerting people I have ever crossed paths with seems to have met a tragic end. I meet all kinds of people in my line of work, and sometimes, a person's story just doesn't seem right. This is a saga about one of those people.

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As the New York Times explained, mobile homes burn easily. Governor Arnold Schwarzenegger called for a review of building standards following the complete destruction of 500 manufactured homes in the Oakridge Mobile Home Park. California building officials have noted that building regulations must be strengthened to account for the wildfire hazards in California. Regulators asking for tougher building codes to prevent widespread catastrophe are nothing new and, in the long term, are generally good for society and insurance companies.

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As a member of the Citizens Task Force, I am charged with trying to find suggestions for Citizens to become less competitive with private industry. At the end of the first meeting, one obvious, but possibly not appreciated answer, is to raise rates. Charging more money for the same product and service would be less competitive. I felt there had to be more we could do than reach that obvious conclusion. Another method to become less competitive is to do exactly what Citizens is doing---giving the business away to their competitors. On Thursday, Florida newspapers reported that Citizens was doing just that. Citizens gave over 100,000 policies away to private carriers. I guess the two "easy" suggestions are taken. I hope the Task Force can find something else to report to the legislature; if these two methods are it, the taxpayers received nothing for their money. I hope the small private carriers continue to grow, expand services, stay profitable and start to compete with the large personal lines carriers that left Florida and its policyholders without insurance. I hope they can accomplish this with relatively low rates because the person that appointed me to the Task Force, Governor Crist, demands that insurance rates are as low as possible. I do not think the future is going to be that easy. It never is.

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Reporter Robert Stanton ran a story in last Thursday's Houston Chronicle about his non-medical diagnosis of "Post Ike Stress Syndrome."  While he noted that Ike was not the first Galveston storm he has been through, he wrote that significant visual reminders of "lives torn asunder" were beginning to take their toll on the most steadfast of Texans. He expressed concern for his community and the history of Galveston being "pushed away" as the coastal area tries to recover. I share his concern.

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In my previous blog post I wrote about a couple of allegedly bad public insurance adjusters.  The truth is that the vast majority of public adjusters help policyholders get benefits they are owed but would otherwise not be paid by the insurance company if they were not retained. The Orlando Sentinel just ran a story illustrating a typical situation where a "ripped off" policyholder was helped by a public insurance adjuster.  I was pleased that the story highlighted David Beasley.  David is a leader in FAPIA (Florida Association of Public Insurance Adjusters) and a great guy. My impression is that he represents the majority of public adjusters available for hire by policyholders. For those considering hiring an attorney or a public adjuster, please check references for experience and background. The best public insurance adjusters are members of NAPIA and the local state associations, such as FAPIA in Florida or TAPIA in Texas.

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Public insurance adjusters are hated by most insurance companies. Many insurance claim executives and adjusters have told me in candid moments they believe that many public adjusters engage in borderline, if not outright, fraudulent activity to increase the amount of the claim. Those same claims executives and adjusters are upset when we prove their insurance company representatives improperly handled a claim. Still, there are instances where public insurance adjusters act improperly and illegally.

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Federal Code and Regulations typically require that Proofs of Loss for National Flood Insurance claims be filed within 60 days following the loss.  They have to be done completely and on time. The only exception is a written waiver from the Administrator of the National Flood Insurance Program.  Please find the written extension here.  Our offices had numerous phone calls regarding the written extension. Everybody said they heard of one, but finding it proved to be difficult.  I called a National Flood Official that I had litigated with following Hurricane Opal, and he guided me to a rather arcane Internet address that had the written 120 day extension.  The Federal deadline should be longer. Notice of the loss should be prompt, but the Proof requirements should be at least 180 days. Currently, those provisions can act as a bar to recovery to otherwise legitimate claims. We intend to lobby Congress for this extended period.

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Every now and then, the happenstance of your name can draw some attention.  I was shown the following cartoon on Election Day:

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The Florida Legislature passed a law in 1982 that provides for a Policyholder Remedy when an insurer fails to act in good faith and causes damage to the policyholder.  As a result, insurers could be held accountable to their policyholders under a "good faith" duty and standard of conduct similar to the "good faith" duties other states recognized through judicial common law. The legislation was necessary because conservative Florida judges refused to accept a common law "good faith" standard and the legislature had to step in and do something about the problem of insurer wrongdoing. See Allstate Indemnity Co. v. Ruiz, 899 So. 2d 1121 (Fla. 2005). Why should the largest property insurance company in Florida not have to comply with this law or be held accountable for the damages it causes?

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The Mississippi Department of Insurance finally issued its report regarding State Farm's claims handling following Hurricane Katrina. The findings were long and will undoubtedly be subject to criticism and interpretation. I am certain State Farm publicists will try to undermine the Rigsby sisters' claims even more since the report essentially concluded that their assertions were unsubstantiated. State Farm will also point to the findings that no penalties were warranted. Those same State Farm publicists will NOT point out that the investigation found State Farm employees were not forthright in their interviews. State Farm attorneys will certainly not tell judges or others that State Farm employees had various and contradictory explanations as to what the anti-concurrent language means and how it worked in the adjustment of claims in Mississippi.

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