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 Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the fifth of a twelve part series he is writing on proof of loss).

Let me begin here by saying that this is only intended to be a general overview of some of the instances where an insurance company may have waived its Proof of Loss requirement. Determining whether a waiver has indeed occurred is usually very fact specific and can vary in different jurisdictions. Proof of Loss requirements under the National Flood Insurance Program, for instance, are very strict and allow waiver only in very limited circumstances. Thus, any waiver questions should be viewed and analyzed on a case by case basis.

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Suppose you knew that your insurance company had started a new claims practice program called “Quantum Leap” to increase corporate practices by making certain no claim was overpaid—would you buy that insurance? Would you feel peace of mine if you knew that secret program was in place and had such a claims philosophy?

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Ever get a job assignment you wish went to anybody other than you? The First Party Claims Conference had one speaker drop out of a presentation, Subrogation Opportunities Do's and Don'ts, for which Jean Niven of our firm was the co-panelist. I had not prepared materials for a presentation nor given a public speech on subrogation topics since 1984, when I was still with Paul Butler representing insurers. While the novel issues concerning my presentation on The Science of Roof Damage Claims excited me, the truth is that claim issues of subrogation can be tedious for all adjusters. It is often an overlooked area of claims handling-especially from the policyholder's perspective.

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It is hard to imagine any Florida property insurers not making a killing in 2009. With no hurricanes or significant tropical storms, the most financially devastating peril was eliminated. Yet, over 100 Florida residential property insurers reported losses.

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(Note: This Guest Blog is by Robert Reynolds, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the sixth of a thirteen part series he is writing on examination under oath). 

“We are here today for your examination under oath. It is being taken subject to the policy’s terms and conditions to illuminate all facts and circumstances surrounding your claim so the insurer may make an informed decision about your claim.” This is the little speech I would give before taking a policyholder’s examination under oath back in the days when I carried the insurers’ water like Gunga Din. Of course, today I often make light of such statements. That is, it seems like the only reasons insurers demand an EUO are: claim delay, intimidation of the policyholder, and looking for reasons to deny the claim. But where does the truth lie? What are the practical reasons insurers demand an examination under oath?

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I wonder how our clients, the Leeds, would feel if they had purchased only catastrophic sinkhole coverage or no sinkhole coverage, rather than the normal sinkhole coverage required when they purchased their "all-risk" insurance policy. Their home slowly but surely cracked, drooped, and sank over several years before it was condemned. If they "saved" money on their premium as Florida Senator Mike Fasano successfully pushed for in legislation, they would have lost the entire investment on their home. They would also still owe money on the mortgage, possibly causing bankruptcy.

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The inaugural First Party Claims Conference in Providence, Rhode Island, has been a success. Over 200 hundred registrants discussing various aspects of first party property insurance claims have made for a very educational adjusting and legal seminar. Since I have been involved in so many disputes involving damage to roofs following hurricanes and tornados, I thought it would be a good learning experience for me to teach a course on the topic, along with an engineer.

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Insurance agents need to do a better job convincing commercial policyholders to purchase business interruption and extra expense coverage. Insurance claims executives need to do a far better job paying those benefits much quicker than they typically do. These two activities would help many more commercial establishments remain in business following a catastrophe.

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(Note: This Guest Blog is by Michelle Claverol, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the first in a series she is writing on valued policy laws).

It’s football season and, despite the generous attempts of my friends to make me understand and enjoy the game, I have found that my brain is simply not wired for it. Instead of giving it one more shot this year, I’ve decided to think and write about insurance valuation issues on Chip’s blog. I will begin my series with a synopsis of the historical purpose of Valued Policy Laws (VPLs), to gradually develop a discussion on modern insurance valuation trends and disputes. Please join me over the next several Sundays to discuss these insurance topics of interest.

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(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the fourth of a twelve part series he is writing on proof of loss).

As I was watching one of the countless news reports detailing the current mortgage crisis and its effects on homeowners, I began to think of the insurance consequences of homeowners being forced to give up and hand over the keys to their houses. What would happen, I wondered, if a homeowner was to have a covered loss but fail to submit a proof of loss because of a pending foreclosure?

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Can you imagine a business that is afraid of its own customers? Imagine a business on trial in front of it own customers who were going to judge its products or services and that business was certain those customers would not judge them favorably. What kind of product or service would you think that business produced? Pretty bad, right?

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My appointment by Florida's Governor Charlie Crist to the Citizens Mission Review Task Force afforded me the opportunity to learn about and have a small voice in the Florida insurance marketplace. At War With the Weather: Managing Large-Scale Risks in a New Era of Catastrophes is a significant academic work which our regulators and legislators must read and understand to fully appreciate the complexity of the property insurance issues in Florida and elsewhere. I wish it had been published while I was serving on that Committee. The historic lessons and current conclusions contained in this book are important to everybody living and working along Coastal areas.

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Florida Senator Mike Fasano, a public servant ever vigilant about consumers of regulated industries getting ripped by the amounts they have to pay for mandated services and products, forwarded a recent news article, “Group Backs Florida Property Insurance Rate Hike.” When the Florida legislators and Governor were concerned about the severe escalation of property insurance premiums following the 2004 and 2005 storm seasons, they froze the rates charged by Citizens Property Insurance Corporation. Governor Charlie Crist ran for elected office on a platform of preventing the severe escalation of such prices. At that time, many of Florida’s legislators ran their political campaigns suggesting they were no friend of the insurance industry that was raising rates in an extraordinary manner. While Governor Crist proved he is a man of his word by vetoing legislation which would have allowed major insurers to charge whatever they want, only a few elected legislators seem to remember the promises they made to their electorate. Associated Industries supports those politicians that are more concerned about insurers profits than the promises to their constituents—except when elections are around the corner.

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(Note: This Guest Blog is the fifth of a thirteen part series on examination under oath).

“Do I have to answer that?” Occasionally, one of my clients will turn to me during an examination under oath and query that very question. In turn, 999 times out of a 1000, I answer, “Yes,” or have the questioner clarify a poorly-worded question. The reason I usually counsel clients to answer has several elements, but most importantly: if a fight may be easily avoided and you are conferred no benefit by fighting, why fight? That is, I know if the policyholder refuses to answer a question at EUO, defense counsel will immediately suspect fraud, thinking, “Why else would someone refuse to answer questions unless they were hiding something?” But further, and, more importantly, I know defense counsel’s eyes will start rolling around like a slot machine until they land on DENIAL because they believe they have right to ask anything and the insured has to answer, otherwise the policyholder is violating the policy’s duty to cooperate. Is this true? May defense counsel ask the policyholder literally anything at an examination? Must the insured answer or risk violating the cooperation clause?

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Yesterday's post, "A Law Professor Asks: Is The Reasonable Expectations Doctrine Dead?," may have reached a conclusion too quickly. A recent article in the American Bar Association's journal, Coverage, from the Committee on Insurance Coverage Litigation has an excellent article suggesting that the reasonable expectations doctrine still has life.

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Law Professor, Jeffrey E. Thomas, has posed a question that has been in the back of my mind for some time: Is The Reasonable Expectations Doctrine Dead? The topic and question has a very personal impact upon me. In 1982, I wrote my doctoral thesis on this insurance coverage theory. I wrote about "The Innocent Co-Insured: A Calling for Reasonable Expectations." I will see if I can find it somewhere and post it for those who may want to get some deep slumber.

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Tragedy is sometimes followed by emotional and heartwarming stories overcoming the consequences of the initial disaster. In my line of work, I have seen survivors embrace each other, genuinely surprised each made it through a life threatening disaster. I have witnessed the compassion and caring that otherwise strangers show to their fellow brother and sister in time of need. Yesterday, I attended a wedding of two that only occurred because Hurricane Katrina brought them together.

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(Note: This Guest Blog is by Ruck DeMinico, Knowledge Manager with Merlin Law Group).  

In State Farm Florida Ins. Co. v. Seville Place Condominium Ass'n, Inc., No. 3D08-2538, ___ So. 3d ___ (Fla. 3rd DCA, October 14, 2009) Florida’s Third District Court of Appeal held that an insured could amend their complaint to add a bad faith claim after coverage was admitted by the insurer and an appraisal award had been entered, but before final judgment. 

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(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the third of a twelve part series he is writing on proof of loss).

As I have stated in past installments, the language and terms of insurance policies can differ in a variety of ways. Therefore, it is extremely important to know and understand the terms of the policy when making a claim. A great example of this is the terms of the policy that control who may submit a Proof of Loss and how that submission must take place.

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The Texas Association of Public Insurance Adjusters (TAPIA) held its first meeting in Houston, Texas, yesterday. I was happy to see that the organization has dedicated itself to a mission of protecting policyholders. I was also happy that Mary Fortson, of our firm, was selected as its General Counsel.

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Ever since we opened our Houston office in June 2008, I have been astounded by the nuances of Texas insurance law. Texas insurance law is just a little different than everywhere else which makes me find the subtle twists in it novel and fun. Yesterday’s post, Replacement Cost Implications by Replacing at Another Location: Answering the Question if You Have to Repair or Replace at the Same Premises to Obtain the Holdback of Full Replacement Cost Benefits, has a Texas twist when you consider Fitzhugh 25 Partners v. Kiln Syndicate KLN 501, 261 S.W. 3d 861 (Tex App. 2008).

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Replacement at the same location or repairing the same premises has been a frequent question posed by a number of clients. In many situations, clients of older structures in areas where it is not economically feasible to rebuild wish to replace in another location. They want to know if they can replace or repair with another structure at another location and whether they can obtain the holdback of the replacement cost benefits since the insurer generally pays only the actual cash value until the replacement is incurred. Fortunately, the FC&S Bulletins has the right answer to those questions and a Florida case provides a good example of the general law to this topic.

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Corey Harris is writing an excellent series on Proofs of Loss Issues. He is primarily focusing on the basic workings of Proofs of Loss. The point of this post is to remind everybody that there are little exceptions that vary from jurisdiction to jurisdiction regarding the filing of proofs of loss. Any public adjuster, attorney or policyholder faced with preparing and submitting paperwork needed for a proof of loss should be very familiar with the laws in the jurisdiction which is applicable.

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The following coverage case note summarizes a decision rendered last week in Florida. Even for a practitioner constantly involved with insurance coverage disputes, it is hard to follow the entire logic of the Court’s reasoning. I doubt those outside the law will find the decision very helpful, unless they want to become brained tired and desire sleep.

What is apparent to one reading all risk policies for nearly three decades is the ever changing language drafted by insurers which increasingly limits coverage through broadening exclusionary language. Early all risk policies would have covered most of Ms. Liebel’s damage. As indicated here, only part of the damage is covered.

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The response by Robert Hartwig of the Insurance Information Institute to the landmark Corban decision typifies how executives at many insurance companies feel about their customers. If not, Hartwick would be out of a job. Here is his quote taken from Anita Lee’s article:

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(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the second of a twelve part series he is writing on proof of loss).

So here you are, only a short time after your home or business has been destroyed by a hurricane, wildfire, or some other form of Mother Nature’s wrath. You have spent countless hours meeting with your adjuster, insurance company, and various contractors, attempting to pick up the pieces and move forward. Things seemingly could not get any worse, until you received that letter from your insurance company requesting that you submit a Proof of Loss. So what now? Do you really have to put in the time and effort necessary to submit a proper Proof?

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A lawsuit was filed in Leon County Circuit Court yesterday challenging the 48 hour solicitation ban on public adjusters. Last month, we posted Florida Public Adjusters File Lawsuit to Overturn 48 Hour Solicitation Ban and Fee Caps, reporting on the first of these two similar lawsuits. The second lawsuit is different in that it focuses solely on the 48 Hour Ban on solicitation, where the first challenges the fee caps enacted by the Florida legislature.

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My initial and simple impression posted in Corban Mississippi Supreme Court Case Decided, Part 2 stands. My emotions and thoughts during my three readings of this decision kept reminding me of people I have met, represented, debated and lived out this saga with in Mississippi since the fall of 2005.

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My initial impression is that this is a huge win for policyholders because the decision correctly defines the burdens of proof in an all-risk insurance situation. The Court correctly noted what I have been advocating regarding the burden of proof since the date I first landed at Stennis Airport outside Waveland a week after Hurricane Katrina:

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Details in the morning. Here is the decision.

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The exodus of the larger national multiline carriers along coastal areas continues. Nationwide has reportedly filed a plan to non-renew 60,000 property insurance policies in Florida starting next July. Unlike State Farm, however, Nationwide Insurance Company has made arrangements with Tower Hill Insurance Group out of Gainesville, Florida, to accept all 60,000 policies.

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(Note: This Guest Blog is by Robert Reynolds, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the fourth of a thirteen part series he is writing on examination under oath).

“The insurance company is demanding that I sit for an EUO. Can they do that Bob?” This is a common question I often hear from Public Adjusters. So what is the answer? To find the answer, we need to look no further than the policy itself...

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David Pettinato has been having a tremendous professional year. He was elected to national office of the American Association for Justice as an officer of the Insurance Section. He also was re-elected as the Co-Chair of the Bad Faith Litigation Group. In what must be a record “partial” settlement for a sinkhole loss, David received an $8.1 million dollar recovery for a client. The bulk of the amount claimed in that case is still at issue. And, he was recently published in Trial Magazine.

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Public Adjuster Jim Beneke sent out the following invitation to over four hundred licensed public adjusters in Texas:

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Property insurance coverage law involves more than a thorough understanding of insurance policies and insurance law. To be valuable to the policyholder, the insurance coverage practitioner must understand property construction and repair methodologies as applied to the issue at hand. One reason that I am teaching a seminar, “The Science of Roof Damage Claims” with Tim Marshall at the First Party Claims Conference is to make myself better at the recurrent disputes of roof claims.

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The Minnesota Attorney General had enough of insurance companies failing to live up to the promise of putting policyholders back into the same position they were before the loss. Currently, the situation is the same throughout the nation, where insurers say they will do one thing, but have their attorneys argue out of the bargain based on obscure policy wording. Matching the damaged portion of the structure to the remaining parts of a structure is one such issue, and we literally tracked down this State action by the Minnesota Attorney General because we feel the issue is that important.

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(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the first of a twelve part series he is writing on proof of loss).

“You can’t do anything until you learn the basics!” Growing up, I remember countless teachers, coaches, and instructors pounding that phrase into my head. Whether it was a golf instructor desperately hoping that my next swing would send the ball into the fairway and not the neighboring house’s living room, or a wrestling coach wielding a plastic whiffleball bat as a constant reminder to stay in a good stance even when we were exhausted, this lesson has been engrained in me for as long as I can remember. I guess it should come as no surprise then, that when I expressed an interest in having some time on this blog, Chip Merlin, my current coach and mentor, wanted me to write about, what else, the basics! Therefore, for the next twelve weeks, we will be delving into one of the most basic, but important, post-loss obligations: “The Proof of Loss.”

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Some insurance policies have small print that can provide significant business income benefits under "dependent properties" that usually go unnoticed following a widespread catastrophe. I would encourage Nationwide and Nationwide agents to write, advertise and call their Hurricane Ike and other commercial policyholder customers about these valuable benefits because it is obvious to me that their adjusters have no clue about what this benefit means and are ignorant to advise their own policyholders about it.

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If you are involved in hurricane claims in any manner, you need to register and go to the 2010 Windstorm Insurance Conference. It will be held from January 25 through 28, at the Hyatt Regency Riverfront in Jacksonville, Florida. It is the only Conference devoted soley to windstorm insurance issues.

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