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

Michelle Claverol has been writing a weekly post every Sunday regarding business interruption and extra expense issues. I can tell that weekend posts are not read as often as those published during the workweek. I encourage those involved with commercial claims to go back and review her discussions of this important commercial coverage. She went home to visit with her family this weekend, and her leave provides me an opportunity to address a business income question that is asked of me on a fairly frequent basis:

What happens in the valuation of a business income claim when the business closes or is sold after the loss?

• Email This
• Print
• Comments (4)
• Trackbacks
• Share Link

Risk managers involved with analyzing a corporation's enterprise risk have a myriad of perils to be concerned about. A risk sometimes overlooked from an insurance perspective is brand value and expenses associated with the investment of brand marketing and advertising. An article in the New York Times, Insuring Endorsements Against Athletes’ Scandals, noted that just seven companies that had endorsements from Tiger Woods lost over $12 billion in market value during the month following the announcement of Woods’ troubles.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

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

Since an insured has an obligation to mitigate any damages that occur, one question is who should pay for these efforts? In many instances, there will be specific policy language which states that the insured will be entitled to reimbursement for any temporary repairs or other mitigation efforts which he/she incurs as a result of a covered loss. Similarly, most policies will state whether these expenses will be added against the policy limit or are considered additional coverages. It is important to read and understand the particular language of the policy in order to make this determination, especially with a large loss where the costs to protect the property from future harm can be very expensive.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Julie Patel of the Sun-Sentinel published Battle Brewing Over Public Insurance Adjusters which was preceded by Florida Cabinet Tables Insurance Fee for Hurricane Claims: Fraud Suspected and a St. Petersburg Times article "State Delays Bond Sale for Hurricane Wilma Claims.” In each of these, the message from the insurance industry was clear:

The Florida Insurance Council, Property Casualty Insurers Association of America and the Florida Property Casualty Association issued statements Wednesday backing bills filed this week by Sen. Mike Bennett, R-Bradenton, and Rep. Janet Long, D-Seminole. They say public adjusters -- who represent homeowners in claims disputes with their insurer -- inflate claims, driving up costs for all policyholders.

• Email This
• Print
• Comments (2)
• Trackbacks
• Share Link

(*Chip Merlin's Note: This guest blog is by Frank Artiles, candidate for the Florida State House of Representatives)

“Determine never to be idle…It is wonderful how much may be done if we are always doing.”
      -Thomas Jefferson  

Thank you for hosting a Forum that informs and educates so many regarding insurance industry trends and concerns. I feel privileged to work in a part of the insurance industry dedicated to helping people. I am humbled that you have asked me to write about a topic that is so important and that I feel strongly about.

• Email This
• Print
• Comments (5)
• Trackbacks
• Share Link

Whenever adult relationships end and separation of families begin, insurance contracts may be impacted. These are always sad revelations, but the impact can be even worse when property is damaged and insurance coverage disputes arise because nobody thought about how property insurance is affected. As a practice pointer for those attorneys practicing family or divorce law, insurance issues should be addressed right away and insurance agents consulted immediately regarding how separation or divorce can affect coverage. Insurance agents and brokers should always be aware of and inquire about the family relationship and who is living where because of coverage implications. Unfortunately and understandably, insurance coverage is often the last item on anybody's mind during such emotional turmoil.

• Email This
• Print
• Comments (3)
• Trackbacks
• Share Link

Some public adjusters were calling me asking about the recent proposed legislation of Florida House Bill 1181. This extraordinarily anti-consumer legislation was filed by a Democrat, Janet C. Long. My impression is that this legislation is a potential nuclear bomb for policyholders and public adjusters.

• Email This
• Print
• Comments (12)
• Trackbacks
• Share Link

(Note: this Guest Blog is by Kristin Demers-Crowell, an attorney with Merlin Law Group in the Tampa, Florida, office. This is part of a series that she and fellow attorney Donna DeVaney are writing on sinkhole issues).

Step right up! Step right up! Come one, come all! In our center ring, presenting Florida’s legislative contortionists . . .

There is nothing that irks a policyholder counsel more than when the legislature monkeys with the Rules of Evidence and due process regarding the ability of an insured to collect benefits. The “neutral” evaluation scheme incorporated into Florida’s sinkhole statute, §627.7074, does just that.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

(Note: This Guest Blog is by Tina Nicholson, an attorney with Merlin Law Group in the Houston, Texas, office. This is part of a series she and fellow attorney Javier Delgado will be writing on Texas property insurance issues).

Everyone knows what to do when disaster looms. When the disaster is a hurricane, you gas up the car and buy batteries. When it’s a tornado, you get in the closet with a flashlight and a radio. When a winter storm approaches, you buy food and firewood.

• Email This
• Print
• Comments (3)
• Trackbacks
• Share Link

The Florida Association of Public Insurance Adjusters (FAPIA) is sponsoring a fundraiser for public adjuster Frank Artiles, candidate for the Florida State House of Representatives. The event is being held next Tuesday, March 2nd in Coral Gables at the Anacapri Restaurant. Here is the notice:

• Email This
• Print
• Comments
• Trackbacks
• Share Link

I gave a presentation last week at the American Conference Institute’s 20th National Advanced Forum on Bad Faith Litigation, regarding mediation of claims practice lawsuits. Many of my points were covered in Effective Endgame Communications and Influence And Persuasion, Part 2. A question came up about the effectiveness of insurance company representatives providing apologies. As part of a rambling response, I remarked that from my experience, such apologies are not genuine because many of the wrongful claims practices will not stop. My impression is that the insurance industry is so competitive that many have an incentive to cheat and not fully act in good faith because of competitive reasons. I sometimes view my role of obtaining a bad faith settlement from the insurer as a cop giving a cheap speeding ticket to one out of ten thousand speeders and the driving is not getting any slower. I am certain that my clients view their slow or non-paying insurers as thieves.

• Email This
• Print
• Comments (2)
• Trackbacks
• Share Link

An insurance claims blog, The Claims Spot, sponsored by an insurer claims consulting firm, Lanzko Consulting, made a point that the failure to have specific written claims standards could lead to a claim of bad faith. This is the same finding I suggested in Should Insurance Companies Have Claims Manuals Explaining Procedures and Standards for Adjustment?:

From a policyholder's advocate viewpoint, I think an insurer would be crazy not to have a claims manual or claims procedure guidelines. Most state unfair claims trade practice laws generally require insurers to adopt and implement those standards and procedures.

• Email This
• Print
• Comments (3)
• Trackbacks
• Share Link

(Note: This Guest Blog is by Michelle Claverol, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the part of a series she is writing on business interruption claims).

Most insurance claims practitioners adhere to the general rule of presenting evidence of past business performance to predict the measure of recovery in a business interruption claim. In some cases, however, practitioners should evaluate the business’ post-loss performance to formulate a more precise measure of covered recovery.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

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

One question that generally arises after a loss is what repairs should be made and who will be responsible for paying them. Since most policyholders are not well versed in construction or insurance issues, this question is constantly being asked of adjusters and attorneys alike.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The Westminster Dog Show was this week. I started thinking about pets and policyholder insurance. There is actually coverage for pets, which many people may wish to consider purchasing.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Snow is falling all over the United States. So much that roofs are falling from the weight of snow and ice. Can you imagine the policyholder outrage if the insurance company's engineer says the roof was designed wrong and coverage is denied on that basis?

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

(Note: this Guest Blog is part of a series on sinkhole issues).

Carriers seem to be using the 2005 changes to sinkhole legislation to stack the deck against policyholders who are seeking adequate repairs for their property. There are two statutes at play that have emboldened carriers to force inadequate repairs on the policyholders.

• Email This
• Print
• Comments (4)
• Trackbacks
• Share Link

United Policyholders has a wonderful website. I strongly encourage others to sign up for its emails and newsletters. For example, United Policyholders sends a monthly "Claims Tips" via email which contains useful tips for policyholders.

• Email This
• Print
• Comments (3)
• Trackbacks
• Share Link

The answer to this proof of loss question by most adjusters will probably be “no.” But, not so fast my claims handling friends. While I used to say Louisiana was the most liberal state in the Union concerning the requirements of a policyholder to submit a proof of loss, the Supreme Court of Oregon has made a move farther than most experienced adjusters would venture to claim as facts satisfying the post loss requirements for a proof of loss.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

An insurance company adjuster's request for invoices of personal property items can be a trap for otherwise honest policyholders. I have been thinking about this topic as a result of Corey Harris' post, Notifying the Police in the Case of a Theft Loss, and the weekly highlighted fraud case in Claims Magazine, "Fraud of the Week: Suit Yourself." The basic rule for policyholders to remember is that you are under no obligation to give an insurance company what you do not have and never make up a document because the insurance adjuster says you need it to get paid. For policyholder counsel and public adjusters, protect your client and make certain they are not doing this.

• Email This
• Print
• Comments (2)
• Trackbacks
• Share Link

(Note: This Guest Blog is by Michelle Claverol, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the part of a series she is writing on business interruption claims).

Accountants usually define “overhead” as operation costs that are incidental to the production process. Generally, there are three categories of “overhead:”

(1) those directly associated with plant operations such as power, lease costs and insurance;

(2) general selling and administrative costs attendant to the production, sales and delivery of a product; and

(3) costs incurred for the benefit of multiple operating units, including debt service executive management compensation, investor relations costs and corporate advertising (usually larger corporations with individual units or operating entities). 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

As you read this post, consider these life lessons:

You can’t always get what you want
But if you try sometimes, well,
You just might find you get what you need

and

DON QUIXOTE
Hand over that golden helmet!

BARBER
But this is a shaving basin!

DON QUIXOTE
Shaving basin! Know thou not what this really is?
The Golden Helmet of Mambrino!
When worn by one of noble heart, it renders
him invulnerable to all wounds!
(to the Barber whacking the barrel with his sword)
Hand it over!

Thou Golden Helmet of Mambrino,
With so illustrious a past,
Too long hast thou been lost to glory,
Th'art rediscovered now at last!
Golden Helmet of Mambrino
There can be no hat like thee!
Thou and I now, ere I die now,
Will make golden history!

BARBER
(aside to Sancho)
I can hear the cuckoo singing
In the cuckooberry tree...

• Email This
• Print
• Comments (4)
• Trackbacks
• Share Link

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

Over the past few weeks I have posted on the duty to notify the insurer that a loss has occurred. Having sufficiently beaten that horse into the ground, for the next few weeks I will post on what is generally considered to be the second obligation under a policy: the duty to protect the property from further damages.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Amy Bach and others with United Policyholders provide a longtime and steadfast consumer protection organization devoted solely to the interests of policyholders. With extensive experience and appreciation of how much legislation can impact insurance coverage and claims, Bach provides a unique perspective with expertise on a national level concerning insurance policy and insurance regulation. Policyholders need more Amy Bachs to counteract the extraordinary coordinated efforts by insurers to make laws and regulations one sided in the insurers favor.

• Email This
• Print
• Comments (6)
• Trackbacks
• Share Link

The Hurricane Katrina insurance coverage litigation along the Mississippi Coast was a once in a lifetime event for most attorneys. For me, it was obvious from the first day we landed at Stennis airport that this was where the Super Bowl of insurance coverage litigation was going to be waged for the next several years. With a lot of help from Florida panhandle trial attorneys Larry Keefe and Sparky Lovelace (Sparky quickly left our venture and started work with his long time friend, Dickie Scruggs), we decided to build two law offices--one in Bay St. Louis and the other in Gulfport. Teenage friends of mine who were local attorneys without law offices as a result of Katrina, Randy SantaCruz and William Weatherly, agreed to sign on with our efforts after Cindy Cady recruited them. With insurance claim denials and low payments running rampant, we were overworked with cases and clients. We already had transferred Jason Ciofalo from Tampa to work full time in Mississippi, and Deborah Trotter was working full time with Randy Santa Cruz out of the Bay St. Louis office.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

All adjusters, whether company, independent, or public, have significant ethical obligations in Florida. Indeed, these adjusters even have an obligation to turn each other into the Department of Financial Services. The failure to do so is, by itself, a breach of the adjuster’s ethical obligations:

(g) An adjuster shall promptly report to the Department any conduct by any licensed insurance representative of this state which violates any provision of the Insurance Code or Department rule or order.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

(Note: this Guest Blog is by Donna DeVaney, an attorney with Merlin Law Group in the Tampa, Florida, office. This is a series that she and fellow attorney Kristin Demers-Crowell are writing on sinkhole issues).

In 2009, the Florida legislature passed a law allowing Florida residents to opt-out of sinkhole coverage. The purpose of the law was to help insureds lower their yearly insurance premiums. The practical effect, however, has been that we now have many in this state who have insurance policies that effectively cover nothing in the event of sinkhole damage.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

(Note: This Guest Blog is by Javier Delgado, an attorney with Merlin Law Group in the Houston, Texas, office. This is the eighth in a series he and fellow attorney Tina Nicholson will be writing on Texas property insurance issues).

The ideal inspection process would have both the carrier’s adjuster and the public adjuster respect each others responsibilities and agree to jointly inspect and evaluate the damages resulting in a fair and equitable estimate documenting the damages resulting from a covered peril under the subject insurance policy, but many times this is not the case.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

September 1970 was a time of big personal change for me. We were living outside Washington, D.C. and my father had just received orders to the National Data Buoy Project at NASA’s Mississippi Test Facility, now known as the Stennis Space Center. My mother, who grew up in Philadelphia, Pennsylvania, was in tears wondering how her children were ever going to get an education in Hancock County, Mississippi. Three years later, she was crying as we left for Southern California. Rather than follow my father right away, we stayed an extra year, using an excuse that my father would be gone for nine months on a Coast Guard icebreaker. The best education and lessons I have ever had were from brothers of the Sacred Heart at Saint Stanislaus during seventh and eighth grades. Drew Brees had it right when he spoke of how much the New Orleans Saints football team means to New Orleans and the Mississippi Gulf Coast Region.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

There are two active lawsuits with very good attorneys representing public adjusters who are challenging the 48 hour solicitation ban and the fee caps. The first one was filed in Miami-Dade County, as I reported in Florida Public Adjusters File Lawsuit to Overturn 48 Hour Solicitation Ban and Fee Caps. The second lawsuit challenging only the solicitation ban was filed in Leon County, as I reported in Second Public Adjuster Constitutional Solicitation Ban Challenge Filed. The later filed lawsuit seems to be moving along quicker; the first lawsuit has been delayed by a fight about venue.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

(Note: This Guest Blog is by Michelle Claverol, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the seventh part in a series she is writing on business interruption claims).

The Saputo Cheese USA Plant in Hinesburg, Vermont, was a successful mozzarella cheese enterprise until a catastrophic fire destroyed its facility. According to claimsjournal.com, Saputo Cheese was receiving about a million pounds of milk a day from 88 dairy farmers in Vermont and New York, which totaled 10-12 percent of Vermont’s entire milk production. Each of the 88 dairy farmers, on average, supplied Saputo Cheese with more than 11,300 pounds of milk every day. Saputo Cheese announced its closure about a month after the fire; the 88 dairy farmers were frantic to say the least. Unless alternate buyers could be found, the dairy farmers would lose a major source of income for months. The dairy farmers were at a loss.

• Email This
• Print
• Comments (3)
• Trackbacks
• Share Link

(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the seventh part in a series he is writing on post-loss duties).

Most policies have specific conditions that apply to theft losses. The most common is the duty of a policyholder to notify the police, as well as the insurer, of the theft. While this may seem like common sense, there may be a variety of instances where the policyholder fails to notify the police, and this could cause problems in getting the claim paid.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Every now and then, bizarre losses are reported in the news that start me wondering whether there is any insurance coverage for the poor souls suffering through a disaster. An article, "What One Homeowner Learned from 15,000 Gallons of Raw Sewage" points out just how illusory the hope of "full coverage" is under the modern all risk insurance policy.

• Email This
• Print
• Comments (2)
• Trackbacks
• Share Link

I represented a Houston based hotel management company last spring regarding Hurricane Ike insurance claim disputes with eleven hotels they owned or managed in Texas. Some cases simply go right, and this one settled after two months. My client’s owners went out of their way to call to my attention that managers in the hospitality and real estate management business needed to be taught about the insurance claim game. The next thing I knew, they were putting a phone to my ear and I was talking to Stephen Barth of HospitalityLawyer.com.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

The Florida legislator is full of "flip flop" legislators that are reversing laws made in 2005 and 2006 which supported lower insurance rates and protected insurance consumers from unscrupulous insurers. Governor Charlie Crist ran on a platform of helping Floridians keep insurance rates down and he is sticking to that promise even as other politicians who once voted for such laws are now firmly supporting the opposite measures. These "flip flop" politicians are filing laws that would allow rates to go as high as the insurance industry can make them and laws that take benefits away from consumers following disaster. Crist seems to be standing tall against the insurance industry and for the people, unlike other politicians who are currently getting their responses and "speaking points" from insurance lobbyists.

• Email This
• Print
• Comments (2)
• Trackbacks
• Share Link

(Note: this Guest Blog is by Kristin Demers-Crowell, an attorney with Merlin Law Group in the Tampa, Florida, office. This is a series that she and fellow attorney Donna DeVaney will be writing on sinkhole issues).

When I took Geology to satisfy my science requirement in college I never dreamed a future legal career would lead me to spend so much time on the subject. Anyone with the misfortune of having a sinkhole claim soon learns that “Rocks for Jocks” is not as straightforward as that moniker suggests.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Sinkhole loss and coverage issues are commonplace in areas of karst activity. We are plagued with it in many areas of Florida. Today we are beginning a series of sinkhole posts detailing many complex issues. The sinkhole posts will be released each Wednesday for the next several weeks. Kristin Demers-Crowell,and Donna DeVaney will author these posts starting later today.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

Vacancy problems are becoming widespread as the economy and real estate market deteriorate. The FC&S Bulletin recently published an article, Active Occupancy: Elucidating the Vacancy Exclusion, which ran in the January edition of Claims Magazine. The article discussed this troubling clause which is becoming more commonplace. I suggest that all claims and coverage professionals subscribe to these publications because they usually have relevant discussions of claims issues such as this exclusionary clause.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

(Note: This Guest Blog is by Tina Nicholson, an attorney with Merlin Law Group in the Houston, Texas, office. This is the seventh in a series she and fellow attorney Javier Delgado will be writing on Texas property insurance issues).

Since the Texas Supreme Court rendered its opinion in last summer’s landmark decision regarding insurance appraisals --- State Farm Lloyds v. Johnson --- the appraisal process has been in the legal spotlight. Last week, the United States District Court for the Southern District of Texas (Houston Division), interpreting Texas law, issued an opinion which outlined the factors that should be considered when deciding whether an insurer has waived its right to demand appraisal. In the case of Sanchez v. Property and Casualty Insurance Company of Hartford, 2010 U.S.Dist. LEXIS 6295 (Jan.27, 2010), the homeowner opposed the insurer’s invocation of the appraisal clause, asserting that the insurer had waived its right to appraisal.

• Email This
• Print
• Comments (2)
• Trackbacks
• Share Link

This question was the topic of an article in Claims Magazine, Putting Procedures in Writing: Is a Claim Manual an Asset or a Liability?  From a policyholder's advocate viewpoint, I think an insurer would be crazy not to have a claims manual or claims procedure guidelines. Most state unfair claims trade practice laws generally require insurers to adopt and implement those standards and procedures. Still, I can appreciate an insurer's claims management wondering whether such procedures, if violated or followed, could give rise to liability. I found the article to be thought provoking and worth consideration by many of the readers of this blog who represent insurer interests.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

Three consumer advocates published a letter, Property Insurance Deregulation Too Costly, which claims that currently proposed Florida legislation calling for no regulation of insurance rates is bad for Floridians "because the average consumer does not have the resources or information to determine when a rate is excessive, the opportunity for the [insurance] company to abuse consumers exists." I agree, and for many more reasons than just that.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link