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

(*Note:  This Guest Blog is by Ed Acle, an attorney in the Coral Gables office of Merlin Law Group).

Merlin Law Group often assists commercial policyholders with claims for business interruption insurance. Many policyholders, electing to save as much as they can on their premiums, often forego this type of coverage on their policies. Those that obtain business interruption (or “BI”) insurance often neglect to take full advantage of the full protections afforded by this coverage. This could have grave implications, as the accurate application of BI coverage on a claim can often make the difference between a business’s continued operation or the shuttering of its windows forever.

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Congratulations to Kevin McCarty and Chip Merlin, who were recently honored by the LexisNexis Insurance Law Center‘s Person of the Year Awards. Chip received Honorable Mention in the category of Policyholder Attorney of the Year. Explaining the basis for the award, the Insurance Law Center noted:

“Chip Merlin’s dedicated and ethical work on behalf of policyholders is a true measure of success that merits an honorable mention in this Policyholder Attorney category.”

Kevin M. McCarty, Florida’s Commissioner of Insurance Regulation, won the award for Regulator of the Year. As you might remember from previous blogs (A Fantastic Regulatory Settlement; State Farm's Fitness and Trustworthiness to Conduct Business Questioned), Chip predicted that McCarty would not cow to State Farm and other big insurers. This is one of the reasons Lexis chose to honor McCarty:

“Kevin McCarty’s impact on Florida and the nation’s insurance marketplace is undeniable. He has proven himself as a force to be reckoned with. In his steadfast role as “agitator in chief” of the property and casualty marketplace in the Sunshine State, he has irritated homeowners’ insurance companies for the benefit of consumers to the point where large carriers have threatened to exit the marketplace.”

You can read more in Julie Patel’s article in last Tuesday’s Sun Sentinel.

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(Note:  This Guest Blog is by Frank Chimento, Director of Business Development and Client Services at Merlin Law Group).

I would feel confident making a wager that if Americans were polled on a scale of 1 to 10, with 1 being the least, their level of understanding or interest in insurance matters would be somewhere around 2.5. At least it was for me, until one day at the Almeda Mall in Houston, Texas.

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(*Chip Merlin's Note--Rocco Calaci has been a noted meteorology expert witness in the Katrina Legal Wars. After meeting him at a recent FAPIA Convention, I invited him to write a series of guest blogs. Click here to read Part 1 of this guest blog)

Besides mesocyclones, there were numerous microbursts during Hurricane Ike. A microburst can best be described as strong downward (vertical) winds that result from a strong thunderstorm cell collapsing. The outflowing wind pattern is omni-directional, creating an elongated horizontal vortice along the leading edge of the winds.

This diagram obtained from the Internet (generated by the 45th Weather Squadron, USAF) depicts the wind pattern of a microburst as it hits the ground.

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I’ve been reading an outstanding book by noted author, Charles Swindoll about the life of the Apostle Paul. The book is simply titled, Paul: A Man Of Grace and Grit. While gaining an in depth understanding of the persecution this great man endured while remaining steadfast toward his mission at hand, I was reminded of the resolve of the hurricane victims in Texas.

I remember shortly after Hurricane Ike devastated the Texas coast, Chip Merlin and I were walking along Bolivar Peninsula. I believe we were in Crystal Beach to be precise. Among the heaps of destruction and the busted concrete slabs and the tattered wooden pilings, I remember Chip stopping to point out to me how many United States and Texas state flags were flying high, along with POW and Vietnam Veteran flags as well. I also remember him clearly stating that, “Texans are not going to just lay down over this without a determined fight.” Texans have grit!

On a personal note, I’ve also witnessed the tremendous understanding that Texans have displayed. For example, in talking with literally hundreds of hurricane victims and hearing about even more, I’ve never once heard a policyholder verbalize wanting anything more than what they’re owed contractually from their insurance company. I can’t recall anyone wanting vengeance against TWIA for only receiving an arbitrary 11.2% payment. Instead, I’ve witnessed an outpouring of empathy for fellow storm victims, a spirit of cooperation and a resounding sentiment of not wanting handouts from anyone. Texans exhibit grace!

Hurricane Ike has brought out the best that Texans offer even in the face of unprecedented hardships, insurance claim denials, severe underpayments and political and legal posturing aimed at preventing a timely and full recovery.

Even this weekend, residents on Bolivar Peninsula are getting together to share information about how to rebuild and recover from the storm. One of our Houston based attorneys, Tina Nicholson, is participating in that effort. Two weeks ago, a group of caring citizens banded together and marched on Austin to voice their concern and their expectations. All over the damaged areas of the state, home and business owners are pulling together; single-minded in their mission to hold insurance companies accountable to the promises they made and to rebuild their communities and their lives.

It is true that in times of trials and tribulations our true character emerges and is tested. I find inspiration and hope from the Texans I’ve met. Insurance companies like TWIA should take note that the people who suffered at the hands of Hurricane Ike should not be taken lightly; behind their tremendous grace is unrivaled grit!

http://www.crystalbeachtoday.com/amenities/ for more information on the event this Saturday.

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(*Chip Merlin's Note--Rocco Calaci has been a noted meteorology expert witness in the Katrina Legal Wars. After meeting him at a recent FAPIA Convention, I invited him to write a series of guest blogs. His previous guest blog was, Is The Saffir-Simpson Scale Still Relevant.)

Is a hurricane only wind and water?

I have been collecting and analyzing meteorological data from Hurricane Ike for the past several months. The actual date of my research and analysis began on September 14, 2008, the day after Hurricane Ike hit southeast Texas.

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And you thought your claim with Citizens was a challenge? Hope your insurer never goes insolvent leaving you in the hands of FIGA—the Florida Insurance “Guaranty” Association. FIGA is a legislatively created corporation which handles claims after insurance companies become insolvent. The reality of how FIGA works in the field stands in stark contrast to its stated goal of providing “fast, fair and professional claim service.” In my experience, the only things “guaranteed” with this system are roadblocks and delay. No one is immune. No matter how respectable the insured. No matter how severe the loss.

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(*Note:  This Guest Blog is by Frank Chimento, Director of Business Development and Client Services at Merlin Law Group.)

Recently my Pastor was teaching about how knowledge is often misunderstood, misguided and sometimes misused. He was articulating how the acquisition of knowledge or the possession of knowledge is designed to lead that person to a place of humility -- not superiority. Once we obtain knowledge, we have a responsibility to humbly serve others -- not hold it over them or use it for self-serving purposes.

As I considered the application of this wise counsel for my own life, I couldn’t help but recount some conversations I’ve had regarding why some people hire attorneys quickly after suffering property losses and others tend to wait. I think it really comes down to knowledge and how people use it.

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What if you received an invitation to attend a “hands on” public insurance adjuster seminar where you would be asked to handle a large commercial hurricane claim from start to finish? Experienced public adjusters would give a short lecture and demonstration about each phase of the adjustment process. After each of these presentations, you would be asked to perform that task. This process would be repeated for each phase of a typical claim, including preparation of a scope, estimates, reports, communicating with the insurer, presentation of your claim, settlement negotiations and appraisal. You would be videotaped throughout the entire process. After you complete each step of the process, a panel of 4 to 6 experienced public adjusters would critique your work product. You then would take the video tape to a room and view it with another experienced public adjuster who would review the critique comments with you and discuss ways you may be able to improve your claims handling techniques.

How many of you would take 5 days out of your practice, work from 7 a.m. until 11 p.m. every day preparing and performing, and pay $1,000, plus food and lodging, for the privilege of participating in this process?

That’s exactly what six of the Merlin lawyers will be doing in May. The Trial Lawyers Section of The Florida Bar and the University of Florida College of Law put on an Advanced Trial Advocacy Program in May of each year. I have served on the faculty of the Basic and Advanced Trial Advocacy programs several times in the past and am looking forward to serving again this year.

The participants are provided with court papers, deposition summaries, expert reports, photos, etc., relating to a lawsuit. A faculty of very experienced, Board Certified Civil Trial Lawyers and trial judges give lectures and actual demonstrations of each phase of a trial. The participants then are assigned different roles and, over the course of 5 days, will try the case from jury selection to verdict. Every presentation is video taped and the participant is critiqued by a panel of experienced trial lawyers and trial judges. A mock jury is selected the first day and at the end of the trial actually deliberates until reaching a verdict. The deliberations are video taped and then shown to the participants at the end of the program. The old saying, “you don’t want to watch sausage being made” definitely applies here! The things that jurors find important and their views on lawyers and lawsuits are sometimes shocking, but always educational.

Every member of the Merlin Law Group is committed to being the best they can be. We believe that being better trial lawyers makes us better at handling claims and lawsuits even if they do not go to trial. We learn to develop an appreciation for the “equities” of a case – those things that motivate a jury to find in favor of our clients and against an insurer – and to be better focused on the important issues in a case.

The course is intense and involves a lot of hard work, but pays off as the experience makes us better lawyers.

Anyone out there want to start an “Advanced Claims Adjusting” course??

-Woody Isom

(Woody Isom has been a member of The Florida Bar since 1975, a Florida Bar Board Certified Civil Trial Lawyer since 1983 and a National Board of Trial Advocacy Certified Civil Trial Advocate since 1988.)

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*(Note:  This Guest Blog is by Craig Kubiak, an attorney in the Tampa office of Merlin Law Group)

I recently settled an insurance claim for a client here in Florida. Throughout the pendency of the claim, the insurance company’s experts emphatically denied what I believed to be the cause of the damage to my client’s house. I conducted depositions throughout the state of Florida and elsewhere. Lo and behold, after leaving no stone unturned, I found out some very interesting things about the experts used by the opposing party and how the carrier treated my client and handled the claim in this particular matter. Prior settlement negotiations that were left for dead were suddenly resurrected like a phoenix rising up from the ashes. Soon thereafter, the claim resolved confidentially. Suffice it to say, that under the terms and conditions of the agreement, I am only permitted to state that the parties have resolved their differences amicably and that the litigation has now ended.

Who do you imagine requested that this claim be settled confidentially?

Making an offer to the other party in a lawsuit to settle a case confidentially is equally available to both parties. Once agreed to, strict adherence is an absolute requirement. Upon reflection, I cannot think of a single instance in mine, or anybody else’s career, when the party who filed the lawsuit ever requested confidentiality. The offended party in a lawsuit wants the world to know how they have been treated by the offending party. They often think to themselves, “If this happened to me, it can happen to you too.” The offended party is often mad, confused, and even a little scared all at the same time. There have been times at the conclusion of one of my client’s claims, after all the paperwork has been signed and the checks disbursed, when they have said to me, “I still don’t understand why they treated me the way that they did.”

So when do you agree to keeping something confidential? Not every case filed by Merlin Law Group, or any other law firm for that matter, settles confidentially. In fact, most don’t. The facts and circumstances of each claim dictate when and if your claim may be a candidate for such a resolution. Most claims don’t start out with confidential settlements on anybody’s mind. But being extremely thorough and diligent during the discovery phase of a claim can sometimes uncover dirty little secrets that the insurance company doesn’t want the rest of the world to know. Recognizing that the other party does not want certain information to get out to the general public has value. How much value is determined by just how dirty their little secret is.

So, have you figured out yet which party involved in the lawsuit I filed asked for a confidential settlement?

-Craig Kubiak

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(Note: This Guest Blog is by Mary Fortson, Managing Attorney at Merlin Law Group.)

Since Chip is on vacation, I figured it’s time to take the plunge and write on his blog. My initial concern had been whether I’d be able to come up with a topic. Chip is always so creative in his ideas and extremely thorough in his explanations that I imagined I would never be able to follow in his footsteps. However, when I read the blogs Chip had authored recently on TWIA and the concept of “direct physical loss”, ("Physical Direct Loss" Caselaw and TWIA's Roofing Memo; Roof Repair Methods Prove TWIA is Wrongly Denying Roof Claims; The TWIA Roof Damage Memo: Checking Basic References to Resolve Adjustment Questions; Internal Texas Windstorm Roofing Claims Memo Explains Damage is Not Covered), I realized that was a great topic and that I’d like to comment on that concept as well.

Chip’s blogs made me recall a very interesting case that he and I had worked on in Florida several years ago where another well-known insurer, State Farm, had tried to avoid paying on a part of a claim by denying that a “direct physical loss” could be claimed. It’s interesting how creative insurance companies can be when it comes to arguing about whether they should be paying on a loss.

The case was Three Palms Pointe, Inc. v. State Farm Fire & Cas. Co., 250 F. Supp. 2d 1357 (M.D. Fla. 2003), aff’d 362 F.3d 1317 (11th Cir. 2004). In our case, a condominium association had sued State Farm when that insurer had refused to pay the relocation expenses of the condominium residents, even though the process that was necessary to repair the damaged building was so extensive that the residents absolutely needed to move out of their units. In fact, there were life/safety reasons requiring the relocation of the residents that everyone agreed existed. The argument to the federal district court involved several issues, which included the question of whether the concept of a “direct physical loss” had been implicated when considering the resident relocation expenses. State Farm conceded that construction expenses and expenses to move personal property were covered under the condominium association’s property insurance policy, but argued that the relocation of the residents was a “personal and collateral” expense that was not related to a “direct physical loss”.

In analyzing the situation, the district court judge cited Florida case law that recognizes a “direct physical loss” includes losses that are necessarily more extensive than just the damage to the structure or membrane of the building, and can include other, somewhat intangible things. In fact, as recognized by Judge Moody, the concept of a “direct physical loss” is not defined in the insurance policy, and it is necessary for a court, when interpreting what a policy provision means, to give the benefit of the doubt to the insured in such a situation. Ultimately this judge determined that the important question to consider was whether the reasonable and necessary repair costs included the cost to relocate the residents. The district judge answered that question as a definitive “yes”, and entered judgment in favor of the insured condominium association. State Farm was not willing to accept that decision, and ultimately appealed the ruling to the federal appellate court, which also found in favor of the policyholder.

I was very proud to have worked with Chip Merlin on the Three Palms Pointe case, and to have successfully advocated for our policyholder client. It is a shame that insurers still argue the concept of “direct physical loss” as a way to avoid paying the amount owed on a claim. But as the wealth of case law that Chip explained to his readers shows, this insurance policy provision does not offer insurers the “out” they may hope to find. 

-Mary Fortson

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We all know that the insurance industry is one of the biggest lobbyists around. However, as Brian Albright’s recent article, New legislation challenges ‘bad faith’ claims practices, notes, New Jersey, Connecticut and Montana are considering legislation that significantly improves consumers’ legal rights against insurers who act in bad faith. Colorado is considering legislation that could prohibit insurance companies from rewarding employees for making claims determinations against their customers. Let’s hope this is a trend, and that legislators throughout the country find the integrity to enact similar legislation.

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For those of you that read something and you think it is dead wrong, do your eyes squint and head start shaking? Mine did when I first read the internal TWIA roofing memo. As I read it, I was thinking:

"Does the TWIA claims executive who wrote this not understand the basic insurance principle of what constitutes a direct physical loss?"

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Previous posts highlighted TWIA's secret internal memo (Internal Texas Windstorm Roofing Claims Memo Explains Damage is Not Covered and The TWIA Roof Damage Memo: Checking Basic References to Resolve Adjustment Questions) which wrongly orders denial of coverage for roofing damage. In response, we received a technical manufactuer's bulletin from a certified roofing contractor which helps explain why this is factually a covered loss.

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Unlike any other birthday, this one has caused a great deal of reflection for me. I am grateful my job allows me to interact with so many wonderful people. The most pleasurable aspect of this life is spending it with others. Even my opponents who work for the insurance companies provide pleasure--I love the competition. Winning is even better.

I grew up in a Coast Guard family. Travel, being in new far away places, and meeting new friends has always been a constant in my life. Leaving is never fun, but there is always the next adventure and challenge. This type of constant change is what I enjoy about my legal practice. I hope that the stamina required to do this work will not fade too fast. This is fun, and I do not want the music to stop.

My wife Kim planned and executed the perfect surprise birthday party last Saturday night. A biographical video she and Jack Stein made left me in tears. Fifty years of life activities seem to go by in a blink.

Thank you for reading this blog which allows me to share my views and thoughts. I am pretty certain I learn more from writing than you do from reading. .

Kim and I are leaving for two weeks in Italy. We have always talked of going, and this birthday is a great excuse. I am getting deeply involved in Hurricane Ike matters, and this will be a nice break before playing the litigation game as hard as I can in Texas.

I will have posts this afternoon and Friday. Guest Bloggers will post until I return. I invite you to write a Guest Blog regarding any aspect of property insurance. Call Ruck DeMinico at (813) 229-1000, for arrangements if you are interested.

Celebrating my 50th Birthday certainly beats the alternative.

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After finishing yesterday afternoon's post, The TWIA Roof Damage Memo: Checking Basic References to Resolve Adjustment Questions, I recalled an Amicus Brief we filed in the Florida Supreme Court in the case of Fayad v. Clarendon Nat'l Ins. Co., 899 So. 2d 1082 (Fla. 2005). An Amicus Brief is a brief filed by a someone who is not a party to the court action to help the Appellate Court make the right decision. It is supposed to address factors which may not be fully addressed by the parties to the dispute.

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The post from this morning, Internal Texas Windstorm Roofing Claims Memo Explains Damage is Not Covered, raised a number of interesting methods to research this coverage issue. Many risk managers and public adjusters will simply call me to get a quick opinion regarding many day to day coverage issues. I thought it might be interesting to see what adjusters may have in their basic training materials to answer the questions raised in the memo. I have no idea if the TWIA claims executives looked at any reference materials. I hope they authored the claims memo in ignorance, because the opposite poses a different set of problems.

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The independent adjusters for Texas Windstorm Insurance Association may end up being some of the best witnesses for policyholders in the litigation that is starting. The desk TWIA adjusters in Austin are not listening to them and do not trust them to determine what is damage and what is not.

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The LexisNexis Insurance Law Center Advisory Board released finalists for the LexisNexis Insurance Law Center Person of the Year awards for 2008. The Board invites commentary from visitors to their site through March 18, 2009. The list is as follows:

Policyholder Attorney of the Year – the attorney who did the most in 2008 to effectively advance policyholder positions and improve insurance law from the perspective of policyholders.

Ray Cotkin, Cotkin & Collins, Los Angeles.
Mark DeBofsky, Daley DeBofsky and Bryant, Chicago
Robert Horkovich, Anderson Kill, New York
Ernest Martin, Jr., Haynes and Boone, Dallas
William F. Merlin, Jr., Merlin Law Group, Tampa
Kirk Pasich, Dickstein Shapiro, Washington D.C.
Brian S. Sheldon, Phillabaum, Ledlin, Matthews & Sheldon, Spokane, Washington
Roger Simpson, Cotkin & Collins, Los Angeles
Richard C. Trahant, Law Offices of Richard C. Trahant, Metairie, Louisiana
Ray Zuppa , The Zuppa Firm, Brooklyn, New York

Insurer Attorney of the Year -- the attorney who did the most in 2008 to effectively advance insurer positions and improve insurance law from the perspective of insurers.

William S. Berk - Berk, Merchant & Sims, PLC
Stuart Cotton – Mound Cotton Wollan & Greengrass, New York
Gary M. Eldin - Grippo & Elden LLC, Chicago
Lawrence Greengrass -- Mound Cotton Wollan & Greengrass, New York
Lloyd A. Gura -- Mound Cotton Wollan & Greengrass, New York
Rick L. Hammond – Johnson & Bell, Chicago
Laura J. Hanson, Meagher & Geer, Minneapolis
Bradley M. Jones Meagher & Geer, Minneapolis
Leo J. Jordan – Shannon Gracey Ratliff & Miller, Dallas
Peter H. Klee -- Luce Forward, San Diego
Randy Maniloff – White and Williams, Philadelphia
Barry R. Ostrager -- Simpson Thacher & Bartlett, New York
Mark D. Plevin - Crowell & Moring, Washington, D.C.
Francine Semaya -- Nelson Levine de Luca and Horst, LLC
Philip Silverberg -- Mound Cotton Wollan & Greengrass, New York
Chuck Spevacek, Meagher & Geer, Minneapolis
James Veach -- Mound Cotton Wollan & Greengrass, New York

Insurance Regulator of the Year – the international, federal, state, or local regulator who had most impact during 2008.

Eric Dinallo – Superintendent of the New York State Insurance Department
Kevin M. McCarty – Commissioner of the Florida Office of Insurance Regulation

Insurance Jurist of the Year -- the judge or justice whose rulings had the largest impact on insurance law during 2008.

The Honorable Chet C. Taylor – Louisiana Supreme Court, New Orleans
The Texas Supreme Court – Austin, Texas

There are a number of very fine attorneys.

Kevin McCarty is getting my vote for the Regulator of the Year. He finally made Allstate produce the McKinsey & Company Documents so everyone can view them on-line.

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“Don’t complain about the snow on your neighbor’s roof when your own doorstep is unclean.”

Confuscious

 Policyholders guilty of insurance fraud need to be held accountable and pay a penalty. Who disagrees with that?

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Ever since last year, when I accurately predicted the hurricane season, people have been asking me these questions. I even put my money where my mouth is by placing our new office in Houston last June--before the hurricanes. Regarding my powers of prediction, it is better to be lucky than good. And, being in a Wizard's lineage helps. Unfortunately, Chambers of Commerce are not hoping we pick their town for our next office.

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On Friday, one hundred and forty-eight Texas public insurance adjusters attended a seminar our law firm sponsored in Houston. I am pretty sure it was the largest ever gathering in Texas of people dedicating themselves to the study of helping property insurance policyholders. It was thrilling, exciting, and taxing for me. I loved every minute of it, and several public adjusters have asked us to hold another seminar this summer.

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A new client informed me last week that his wife was going to protest against the Texas Windstorm Insurance Association (TWIA) in Austin, Texas. From what I hear, she is going to have quite a few neighbors with her as they commemorate the sixth month anniversary of Hurricane Ike by creating a storm of controversy as they march to TWIA headquarters. Power to the People!

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Some in the insurance industry may read my blog and believe that I am on a crusade against the insurance industry. That is absolutely false. I love insurance. I get upset when insurers violate their good faith duties to customers--probably the vast majority from any perspective do too.

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If you want to find a bunch of irate policyholders with plenty of stories to tell, hang out with Tina Nicholson and Javier Delgado in our Houston office. Commercial and residential policyholders have had enough frustration trying to do it themselves and are seeking legal counsel to fight the delays and denials from their insurance carriers. Anger at the insurance company and the adjusters working their claim is the prevalent emotion. Over the next several weeks, I plan to write much more on Texas property insurance law and protection it provides because Texas is the hottest new venue in the insurance litigation war. We are in the middle of it.

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Formal discovery in insurance lawsuits is replete with protracted discovery battles, insurers motions for protective orders, and evasive responses from insurers trying to avoid turning over information damaging to their case. Historically, some of our biggest breakthroughs have come from "alternative" sources and by organizing other policyholder attorneys with similar cases against the same insurance company. The value to policyholder attorneys networking to uncover the motives of an insurer seemingly engaged in repeated denials of meritorious claims cannot be overstated.

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The best way to prepare for an insurance settlement is to prepare the case for trial. Trying to predict what would probably happen at trial is a great way to gauge the value of an insurance dispute.

I am writing this while flying to New Orleans for a mediation tomorrow morning. This blog post may be removed if the matter settles--so read quickly.

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Mark Phillips recently posted a comment in Surplus Lines Insurers, Sinkholes, and the Law of Mars, which would probably terminate his employment as an adjuster for telling the truth if he were still an Independent Adjuster:

"I handled numerous loss adjustments for a South Florida MGA broker who had arranged his own "excess surplus lines" authority overseas. Due to this flexible "hand-shake" authority and with his own customized and approved manuscripted policy designs, he was actually controlling the underwriting data and policy issuance. He was bold and daring enough to "check off" certain boxes misrepresenting building characteristics and histories inaccurately on applications, so that, at time of loss investigation he could promptly deny coverage when it was noted in the adjusting routine that certain building events and maintenances had not occurred as were required to be validated in order to acquire the policy coverage and issuance. He could thus accurately void the contract on grounds of misrepresentation, and have the underwriting questionnaire in the file to back up the denial. His incentive was of course to sustain his flexible contract arrangement and limit his loss ratios, thus enriching his commission contingencies. Worth noting is that many of the insureds represented a class of Hispanic consumers who had no ability to know what was authentically being stated on their final application and were thus caught by surprise when struggling to communicate in English, back to me the adjuster, that they had not confirmed certain property realities that had been "checked off" on their application.

Another compromised policyholder left at the curb." 

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The National Association of Insurance Commissioners released its Top Insurance Complaints for 2008. Poor claims service is the primary reason customers complain about their insurance companies. More than half of all complaints about the service or actions of an insurance company concern claims issues.

Here are the top five reasons with percentage to total complaints:

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Fonte vs Audubon Insurance Company, is an important win for policyholders against the arbitrary adjustment of insurance claims. The following is significant language pertaining to the wrongful claims practice to which the policyholders were subjected:

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An article in the Insurance Journal, National Flood Insurance Program Set to Expire Tomorrow, caught my eye. I think the threat of expiration is political gamesmanship, as indicated in the piece: 

“John Prible, government affairs for the Independent Insurance Agents and Brokers of America, says the omnibus bill funding is currently being debated in the Senate but there's "a little game of chicken" happening between the House and Senate on any changes that may be made to the omnibus bill in the Senate. The debate could potentially derail the bill, he said.”

I wonder whether Mississippi Congressman Gene Taylor will try to use this opportunity to get the Multiple Peril Insurance Act of 2009, into law. I am not holding my breath, but stranger things have happened in the political arena lately. Taylor’s website has a summary of what he hopes his proposed legislation will accomplish: 

“The Multiple Peril Insurance Act would allow coastal homeowners to buy comprehensive insurance and know that hurricane damage will be covered without lengthy legal disputes over how much damage was caused by wind and how much was caused by flooding.

After Hurricane Katrina, insurance companies overbilled taxpayers and underpaid homeowners by blaming flooding for some damage that had been caused by hurricane winds and wind-driven debris.

The bill will reduce future property damage by requiring participating communities to adopt International Building Codes.”

I recommend Slabbed’s excellent article, HR 1264 - One policy. One premium. One claims adjuster. Protecting America’s home & business owner. Protecting America’s taxpayers, which explains Taylor’s Bill.

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In our attempt to be Fair and Balanced, we wanted to give CompuWeather the ability to respond to Insurance Company Experts Are Often Biased and Outcome Oriented.

Here is their response, with a sample report:

 Chip:

CompuWeather is the number one provider of site specific past weather documentation for plaintiff's attorneys across the country. These attorneys come back to us for one simple reason, they consistently win more of their weather related cases using our reports.

With this in mind I've attached a sample flood report, as well as background material on CompuWeather, for your review. I look forward to speaking with you, and working with you and your firm in the future.

-Craig A. Weiss

I do not  thing they should count on our firm calling anytime soon.

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Coordination between litigants following catastrophic losses is becoming increasingly frequent. This is good if the result speeds the resolution of claims and reduces the expenditures to policyholders and insurance companies. However, the Devil is in The Details, as with most things in life.

It is not uncommon for insurance companies to try to get an advantage through case management and discovery orders applicable to all cases. I imagine insurance defense lawyers are thinking the same skeptical thoughts about policyholders’ attorneys.

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My good buddy, Tom Grail, told me the parable of Hurricane Ike Insurance Claims. To appreciate this, one must first understand that the total loss structures in Galveston and Bolivar receive uniform estimates of wind damage from the Texas Windstorm Insurance Association (TWIA). The amount of damage caused by wind for nearly every structure is approximately 11%. The reports are virtually identical for every total loss structure, despite differences in the age of the structure and quality of construction.

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Recently, our firm has been questioned about the appraisal of Hurricane Ike claims. Appraisal is an informal process which determines the monetary amount of disputed damage claimed under a property insurance policy. Questions have come from policyholders and public adjusters regarding a variety of issues.

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LexisNexis is sponsoring an award for the Insurance Persons of the Year for 2008. Here are the categories:

Policyholder Attorney of the Year – the attorney who did the most in 2008 to effectively advance policyholder positions and improve insurance law from the perspective of policyholders.

Insurer Attorney of the Year -- the attorney who did the most in 2008 to effectively advance insurer positions and improve insurance law from the perspective of insurers.

Insurance Regulator of the Year – the international, federal, state, or local regulator who had most impact during 2008.

Insurance Jurist of the Year -- the judge or justice whose rulings had the largest impact on insurance law during 2008.

We are nominating Kevin McCarty as the Regulator of the Year.

I cannot imagine who would want to win the Insurer Attorney of the Year. Such an award would publicly label you as “The Grinch.”

Nominations have to be in by this Friday. They should be sent to karen.yotis@lexisnexis.com.

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Nowdoucit from Slabbed wrote a comment to my post, Surplus Lines Insurers, Sinkholes, and the Law of Mars, concerning the selection of lawyers:

"The more cases I read, the more convinced I become of the importance of retaining an attorney experienced in insurance claims litigation - better yet, experienced and successful.

The case you cited, Chip, is a different but compelling example of the difference that can make."

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I have often said that insurance companies have an economic incentive to hold claim money as long as possible, play this "float," and profit from it. Skeptics and attorneys who represent insurance companies always ask for me to provide proof of this allegation. While there are numerous examples, the quote from Warren Buffett in his 2009 annual letter proves the point:

"As predicted in last year’s report, the exceptional underwriting profits that our insurance businesses realized in 2007 were not repeated in 2008. Nevertheless, the insurance group delivered an underwriting gain for the sixth consecutive year. This means that our $58.5 billion of insurance “float” – money that doesn’t belong to us but that we hold and invest for our own benefit – cost us less than zero. In fact, we were paid $2.8 billion to hold our float during 2008. Charlie and I find this enjoyable.

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