Good News for State Farm--Maybe
While taking the deposition last week of a Pilot Catastrophe flood adjuster that was a former State Farm claims representative, I was thinking about some recent good news for State Farm. The first had to do with a Palm Beach Post report concerning State Farm possibly continuing to write insurance in Florida. The second had to do with a Hurricane Katrina jury verdict in Gulfport, Mississippi.
Dan Luby forwarded me an article, “State Farm Will Continue Homeowners Insurance in Florida, Insurance Commissioner Predicts,” which indicated that:
State Farm might not pull out of Florida's homeowners insurance market after all, Florida Insurance Commissioner Kevin McCarty said…
McCarty said he's "cautiously optimistic" that State Farm will keep at least some of its homeowners policyholders in Florida. Bloomington, Ill.-based State Farm is Florida's largest private insurer of homes, and it said in January that it would stop writing property policies in Florida, where it covers 700,000 homes.
"We've really been having intense negotiations with the company at very high levels," McCarty said.
This morning, the St. Petersburg Times similarly reported the findings in “State Farm May Stay for Florida Homeowners.” The on-line article provided some plausible reasons for the change:
State Farm's threat to pull out came after the state rejected its request for an average rate increase of 47 percent. Since then:
Insurance regulators have approved numerous homeowners rate increases across the state. Universal Property and Casualty, the second-biggest private insurer behind State Farm, got the green light for an average 14.6 percent increase.
Citizens Property Insurance, the state-run insurer for those who cannot find coverage in the open market, was approved for an average 5.4 percent rate hike for its base homeowners' policies and has a pending request for an average 7.7 percent increase for high-risk properties.
Regulators said State Farm Florida could eliminate or reduce some discounts it offers its policyholders, effectively increasing premiums for homeowners as much as 28.4 percent. The decision will bring in $278 million in additional premiums for the company after all policies come up for renewals starting Dec. 1.
There's a growing backlash against state-mandated mitigation credits that property insurers must give to those who take steps to shore up their homes against potential hurricane damage.
Insurers have criticized the program for depleting their premiums and say it is susceptible to fraud. Citizens Property recently approved a controversial $60 million "emergency plan" to inspect for cases of fraud among 400,000 policyholders who have received credits.
Arguably one of the most significant changes: Regulators have toned down their rhetoric against State Farm and other insurers. Despite another mild hurricane season, McCarty recently said he is sympathetic that property insurers deserve increases because they are receiving less in premiums and paying more for reinsurance.
State Farm spokesman Chris Neal said his company appreciates the attitude change.
"The tone has changed from last January when we filed our withdrawal," he said. "At least we're talking.
As I indicated awhile ago, State Farm Must Love the Clash because of its indecision regarding this matter. It is obvious that State Farm was bullying Florida’s government into giving higher rate hikes. It is also obvious that this has been a bluff game for a long time where a corporation of immense wealth wants to continue in Florida but not lose face in compromising its position. The recent newpaper articles seem to confirm my September post, McCarty Claims State Farm Trying to Work Out Deal and Expects Property Insurance Rates to Go Up. I hope they can work something out.
The good litigation news last week for State Farm was the verdict of zero punitive damages in the Bossier vs. State Farm Katrina case. I would not equate the verdict with indicating that State Farm did nothing wrong—it underpaid its policyholder’s contents claim and forced a lawsuit for those benefits to get paid. The jury did rule that no further dwelling benefits were to be paid. Slabbed reported on this case in “While today’s Bossier verdict is still a rumor, chew on this!” and “Slabbed Scoops the News: Bossier gets nothing in Phase 2.”
I was aware of the case before the trial started and we provided the Bossiers’ very able counsel, Judy Guice, with some information and depositions in other matters. Certainly, we will talk with Judy and study the case. We will try to determine where arguments and evidence can be presented in a different manner to help provide a different result. We were pleased that Judge Senter allowed the issue of punitive damages to be presented to the jury.
I was thinking about these two different matters during the deposition because the catastrophe adjuster said that she could recall seeing only one structure in Mississippi that had any wind damage---even inland structures. She testified that she was instructed to determine the amount of pre-existing wind damage by going to the wind data for Bay St. Louis and Waveland to see if there were any strong gusts. She said she found no such data that suggested such strong wind speeds. So, she simply paid everything on flood claim which is under the National Flood Program and nothing for damage under the all-risk policy issued by State Farm.
Sounds crazy, right? Just about as crazy as thinking that State Farm really wanted to bankrupt its agents and stop doing business in Florida? I guess that reading about beating a customer’s punitive damage insurance claim in court and getting approval to raise customer rates in the newspapers is “good news” in the eyes of State Farm. And to most of us, I bet that sounds a little crazy as well.
State Farm has Invested heavily over the years trying to create the same image as USAA, they have Members , Not Insureds.
They obstruct the claim reporting procedure deliberately,
Their Skill is having branded themselves as a "Rolls Royce" of Insurers.
Their members live in fear of Lesser cover from anyone else. They need to be destroyed and thrown out of Florida.
Chip is the guy to do it .
Bob
State Farm and Allstate supporters still need to address why they, like TWIA supporters, pretended to claimants that wind delaminated shingle damage was not material damage, after hurricane Rita, throughout SE Texas.
Per many years of observing their antics I do not feel that many care for their clients/neighbors, but rather that most just care for their money.
That is a sad path that history dictates is a dead end.
Chip,
I personally know the Bossiers. They are friends. I had spoken with them about my knowledge of a State Farm engineer report that reported winds of 130 mph plus in their neighborhood. I had a copy of this report. I wish this information had been given to Judy Guice. Perhaps it would have made a difference. Makes me think that setting up a Plaintiff databank might be a good idea the next go around if it could be protected from the defense.
Thanks,
Tammie
Dear Chip:
So your deponent "...said she found no such data that suggested such strong wind speeds. So, she simply paid everything on [sic] flood claim which is under the National Flood Program and nothing for damage under the all-risk policy issued by State Farm...."
WHICH IN PLAIN ENGLISH MEANS that the clm. was paid by the U.S. Federal Govt. (from taxes that I and every other hard working American has paid into the "system" decade after decade - and that even includes you Chip!. It's glaringly obvious that State Farm paid NOTHING for dmgs. out of their "all-risk" policy. Gee, I wonder why? Not that it even matters. You know as well as I do that it REALLY DOES MATTER - especially in MS!!
Indeed, if the MS Plaintiff's Bar was not incensed w/anger before at this kind of "biased treatment" of plaintiffs during trial, they ought to be now! And if that's "par for the course" (i.e., trying a bad faith case IMMEDIATELY following the underlying action, with no preparation time, with the same jury(!) - with no retained experts and/or consultants even on "stand-by" - and a host of other things), THEY OUGHT TO BE OUTRAGED AND MAD NOW!!
Regarding the Bossier -0- bad faith verdict, it's repulsive, ludicrous, unjustifiable, crazy - I don't know where to begin. I just can't believe that in MS their system is "set up" where - immediately after winning the underlying contractual claim -that counsel for both sides has to "gear up" for the bad faith trial!!! All in what? The span of a day?
You write:
We were pleased that Judge Senter allowed the issue
of punitive damages to be presented to the
jury.
Really? I'm not pleased that Your Honor gave Mr. & Mrs. Bossier a nanosecond to "present the bad faith portion of their trial" to the SAME jury under the SAME CASE #. Other than maybe setting precedent (which that and major laws and procedures need to be changed in this regard), I bet the plaintiffs weren't so pleased - especially w/their bad faith result(?). Other than believing relieved that they're not going to get stuck w/the taxable costs, attorney's fees, etc., oh yeah, and that measly $52,000+ verdict, they're probably relieved to "GET AWAY FROM THE SYSTEM THAT'S SUPPOSED TO SERVE THEM."
Sure, they won their $52,000+ amount in the underlying jury trial (along with the amounts sprinkled to them along the way - during litigation - by State Farm). It reminds me of a scientist training a hamster - as long as the little guy runs around in his little ferris wheel circle toy, I'll give him a treat (i.e., in this case, checks rightfully owed them from the GET GO).
I really feel sorry for the people in MS who are stuck with this "system" of having to conduct their bad faith case IMMEDIATELY after their Breach of Contract lawsuit without:
1. The opportunity of filing a bad faith lawsuit
(and attaching EXTREMELY IMPORTANT DOCUMENTS as
EXHIBITS and PROOF)and "spelling it all
out" for their new jury (under a NEW CASE #)as to
how their insurance company, specifically
State Farm, perpetrated fraud upon them, lowballed
them, stonewalled them, acted with a
blatant disregard for their interests, but not
STATE FARM'S interests, etc., etc.
Oh, and let's not forget the neglected "bad faith
discovery" afforded w/a new case # and a whole
new round of discovery (same loss date, just
different "agenda") that was denied to the
Bossiers.
Boy, this sure makes me glad to be a resident of the State of Florida where our bad faith system is FAR DIFFERENT than that of MS, however, it also makes me want to do whatever I can to help the citizens of MS have the same rights as Floridians do - we should all have the same rights in EVERY COURT ROOM !!
SHIRLEY HEFLIN
You're right about entities and people only caring about the money, Roger, no doubt about that.
I like your ending quote:
"That is a sad path that history dictates is a dead end."
There's so many "dead ends" associated with narcissistical, egotistical, selfish and greedy behavior that I believe that's the reason karma was "invented." (ha ha)
SHIRLEY HEFLIN