On Tuesday, July 27, 2010, The SunCoast News ran an article by Carl Orth titled: “Fasano Aide Brings Ideas Back from Sinkhole Conference.” According to the article, issues regarding public adjusters, sinkhole losses, fraud, the rise in sinkhole claims in the downturned economy, and the value of Florida’s Neutral Evaluation program were discussed at the conference.
Continue Reading...The attempts by Mississippi's Gene Taylor to craft an insurance product that fully covers hurricane losses seems to be having trouble, but not because Gene Taylor is not trying. While the House of Representatives passed a bill supported by Taylor which includes coverage for the perils of wind and storm surge into one policy, one Republican Senator offered a compromise bill which does not accomplish that but merely proposes a different method of dispute resolution. As reported in the National Underwriter, both Taylor and the insurance industry think the compromise legislation does not work.
Continue Reading...Over the last few weeks, the Friday blog post has addressed the different approaches that can be used by plaintiff’s attorneys when battling evasive discovery tactics used by insurers in bad faith cases. We discussed the fact that, in a bad faith lawsuit, an insured is entitled to a plethora of information that might not otherwise be discoverable. We’ve also mentioned claims files quite a bit, but I realized that we had not really discussed in detail what should be in an insurer’s claims file, how it can help you in your bad faith lawsuit, and why you may be entitled to it. So, here goes…
Continue Reading...Florida's Third District Court of Appeal, which sits in Miami-Dade County, ruled yesterday that a public adjuster constitutional challenge to the public adjuster fee limitation and solicitation restrictions that was filed in Miami-Dade County should have been filed in Leon County. As noted in Sink Appeals Public Adjuster Suit: Delay Possible For Miami-Dade County Public Adjuster Lawsuit, this venue dispute slowed this lawsuit significantly. In the interim, a similar suit was not ruled on favorably by a Leon County judge, as noted in Public Adjusters Lose 48 Hour Solicitation Ban Case.
Continue Reading...I have previously written about how an insurance company can waive its right to appraisal by taking too long to invoke it, but are there other ways an insurance company can waive its right to an appraisal? For example, does an insurance company waive its right to appraisal when it recognizes some but not all of the damages claimed by the insured? What if the insurer anticipatorily breaches the insurance contract? The United States District Court for the Southern District of Texas recently weighed in on this issue in Boone v. Safeco Ins. Co. of Indiana, No. H-09-1613, 2010 WL 2303311 (S.D. Tex. June 7, 2010).
Continue Reading...Scott Johnson is an excellent leader for the Florida Association of Insurance Agents (FAIA). His father was President of the FAIA for 37 years. Scott Johnson has a keen and unique perspective on insurance in Florida. His views regarding the insurance landscape should be considered and not dismissed without analysis, even by those in strong disagreement.
Continue Reading...Following the passage of a hurricane or tropical storm, policyholders should photograph or video record hurricane-related damage to insured property as soon as possible. The more detail the better. Photographs of the condition of the roof system immediately after a hurricane can be particularly helpful in the insurance claim for damages. The photographs can capture the condition of the damaged property immediately after the storm’s passage and can be used to potentially refute arguments that the hurricane was not the cause of the damage. The importance of the photographic evidence ties in with the discussions that Jeremy Tyler and I have had over the last several weeks in the “Late Notice of the Claim” postings.
Continue Reading...Earlier this week, Chip Merlin posted Does an Insurance Policy Cover only “Loss” or “Damage” to Property? regarding the different interpretations of the proverbial “loss” or “damage” provision in property insurance policies, specifically as applied in anticoncurrent causation analyses.
Continue Reading...The year was 1944. The average price of gas was 15 cents a gallon. The median home price was less than $4,000.00. George Lucas was born. Coppertone Suntan Creme was invented in an attempt to shield the soldiers fighting in the Second World War from harmful rays. This was also the year that Alfred A. Lesser (“Al”) began public insurance adjusting in Florida.
Continue Reading...Guessing where a hurricane is heading is not an exact science. Those predictions are much better today than in the past due to better hurricane modeling. Via television, everybody can get constant updates on The Weather Channel. As Tropical Storm Bonnie approaches the oil drenched areas of the Gulf of Mexico, I wanted to share a few Internet sites I visit to quickly get an idea about what is going on and, if I have time, some fun.
Continue Reading...Most of you are familiar with the concept of reserves. How many of you are familiar with the role of reserves in a bad faith case? Is this type of information even discoverable? Although it might not sound terribly significant, it is an important factor that should be evaluated and which many attorneys may overlook.
Continue Reading...While writing last week's post, Texas Windstorm Insurer Settles 2,400 Hurricane Ike Slab Claims, I almost quoted Texas attorney Steve Mostyn, who explained that Texas law really left no other rational choice. Burdens of proof are crucial when it comes to close cases, and Texas places a unique and difficult coverage burden on policyholders. An article in the Houston Chronicle titled Windstorm Insurer to Settle Some Ike Cases quoted Mostyn:
Continue Reading...Property insurance policies are written in complex language. The fact that there are so many different interpretations and disputes about the language by some very bright people is probably enough evidence to prove that point. David Rossmiller wrote a post, Corban v. USAA: A few (more) words about anti-concurrent causation, which had me thinking about words used in an insurance policy and what a policy covers. He stated:
Continue Reading...Mississippi Representative Gene Taylor successfully placed language into House Bill H.R. 1264—“the Multiple Peril Insurance Act”— which would require "Write Your Own" insurers participating in the National Flood Program to remove anti-concurrent causation language from their all risk insurance policies. Taylor's house was destroyed in Hurricane Katrina. Many of his neighbors’ insurance claims were denied based on the continuing wind versus flood insurance coverage controversy which I noted recently in Texas Windstorm Insurer Settles 2,400 Hurricane Ike Slab Claims.
Continue Reading...The Statute of Limitations is defined as the time period within which you must file a lawsuit. Unsurprisingly, there appears to be some confusion over when the statute of limitations runs out against the victims of Hurricane Ike, and public adjusters are not the only ones confused – many lawyers are unsure as well. There is one thing that lawyers are sure about, though: it’s better to be safe rather than sorry!
Continue Reading...The tone policyholder attorneys use to explain issues and facts to others is important. Insurance coverage issues can be complex and difficult to understand by those of us who work in this business on a full time basis. The longer I do this, the better I understand that attorneys do not have license to talk down or demean anybody. Attorneys are fortunate to be of service to others and sometimes get paid handsomely for it.
Continue Reading...I hesitated to write more on late notice of claims, but the issue just keeps coming up. In my research this week, I came across a recent case from the United States District Court for the Southern District of Florida that I thought I would share: Vision I Homeowners Ass'n, Inc. v. Aspen Specialty Ins. Co., 674 F. Supp. 2d 1333 (S.D. Fla. 2009).
Continue Reading...The insured’s duty to mitigate its damages after a loss is a well-recognized principle in property insurance law. In business interruption claims insureds are required to take affirmative steps to reduce their loss of earnings after a loss. While an actual business loss occurs only where the insured is unable to reduce or eliminate lost profits, insureds are not necessarily required to engage in super-heroic-acts to mitigate their business interruption loss.
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One of the questions I hear most often from policyholders is, “why is the insurance company handling my claim in an inadequate fashion?” Often, the policyholders are confident that if they could just explain the situation and get someone’s attention at the insurer’s main office, their claim would be resolved. Many of my clients and former clients explained they tried to get the corporate office’s attention—and to no avail. This is usually the point where conversations start with a neighbor or co-worker about what to do; late night internet searches are done, and the insureds realize they need to start keeping a tally on just how poorly the claim is being handled. This is when public insurance adjusters are often hired. A client explained to me that she was happy to pay someone 10% of her claim so she could carry on with her everyday life and pass the burden on to a professional. She explained that dealing with the insurance company forced her to take time away from her job, and that if she spent any more time on the phone with the insurance company between 9-5, she was sure she was going to be in trouble with her boss. Now, the same client has also hired a lawyer to get the insurance company’s attention and to get the claim resolved.
Claims practice experts can help explain why the conduct of an insurer is tantamount to "bad faith." As explained by Vivian Persand in Getting the Inside Scoop on Insurance Company Claims Practices, a good claims practice expert can help a policyholder attorney. Eventually, the same expert will write a report containing the findings and opinions regarding the claims activities and whether the insurer breached its obligation of "good faith." Whether that so called "bad faith" expert will be allowed to testify at trial is another matter altogether.
Continue Reading...The Galveston Island and Bolivar Peninsula slab cases are settling. There was an agreement between the Texas attorneys that nothing would come out in the press until the clients signed the agreements. Since even the Texas Windstorm Insurance Association (TWIA) participated with a press release, I assume that the gentlemen's confidentiality agreement to wait on telling everybody publicly that a settlement has been reached, even before clients have signed the releases, no longer applies. The vast majority of my clients have only received letters from our firm, and I am awaiting final figures from TWIA so that we can consummate the deal. I hope everybody is not optimistically jumping the gun.
Continue Reading...*(Note: Bob Glasser is a managing director at BDO Consulting, a division of BDO and Seidman, LLP, in the New York office. Mr. Glasser is a certified public accountant, a certified fraud examiner and a certified insolvency reorganization accountant, with more than thirty years of diverse financial management and accounting experience at public and private companies. Mr. Glasser leads the firm’s New York Insurance Claim Services practice).
Most CFOs and risk managers have an understanding of their property and liability insurance needs and dollar limits and are comfortable purchasing coverage that protects their companies from a loss due to an insured peril. However, it has been my experience that their comfort level drops dramatically when it comes to business interruption coverage and limits. The uncertainty surrounding business interruption coverage, extensions of coverage and respective limits of that coverage consistently results in many middle-market organizations finding themselves underinsured and short of cash when faced with a major loss. Even the fortunate CFOs and risk managers who have not experienced a major loss may eventually discover that they have been significantly overinsured for business interruption losses and paying unnecessarily higher premiums for their coverage. Of course, the more devastating situation is finding out after a shutdown of operations from a loss that company management has not mitigated the company’s risk of lost profits and now has insufficient coverage to protect profits and cash flow during a potentially long period of restoration.
Continue Reading...Last week I wrote about insurance policies concerning vandalism and theft. In a similar vein, this week I discuss another case involving theft; only this time the thief was no stranger to the insured.
Continue Reading...Insurance adjusters and their attorneys should demand examinations under oath on a timely basis. Prompt adjustment requires it. However, the current technique and growing practice by many insurers is to request an examination months and even years after the loss. Sometimes, the demands are made after suit has been filed. This is a wrongful delay tactic that needs to stop.
Continue Reading...As previously noted in the first four posts of the Hurricane Law series discussing Late Notice of Claims, in Florida, if a policyholder does not timely report an insurance claim to the insurance carrier, prejudice to the insurer will be presumed. This presumption may be rebutted by a showing that the insurer was not prejudiced by the late notice. Bankers Ins. Co. v. Macias, 475 So.2d 1216 (Fla. 1985). If an insurance carrier claims a policyholder breached a cooperation clause however, the insurance carrier “must show a material failure to cooperate which substantially prejudiced the insurer.”
Continue Reading...Yesterday, Rocco Calaci posted a blog entry announcing that La Niña conditions are already being observed. While I dare not attempt to explain the mechanics of these conditions, it is generally understood that La Niña is a climate phenomenon that is marked by an unusual cooling of the sea surface in the Pacific Ocean, which in turn affects wind and weather patterns globally. It is also generally said that these conditions foster more frequent and stronger storms in the Atlantic Ocean and the Gulf of Mexico. As a result, NOAA has forecasted 14 to 23 named storms, of which 8 to 14 are expected to be hurricanes and 3 to 7 major hurricanes during this season.
Continue Reading...This week, I had the opportunity to discuss trends in public adjusting with a very seasoned and humble second-generation public adjuster, Leonard "Len" Theran, located in Massachusetts. His public adjusting firm, Professional Loss Adjusters, Inc., employs seven public adjusters, who adjust claims in Massachusetts, Connecticut, Rhode Island, Vermont, Maine, New Hampshire, Texas, Louisiana, Mississippi, Florida, North Carolina, South Carolina, Minnesota and Michigan. Professional Loss adjusters has been helping insureds since 1894.
Continue Reading...(*Chip Merlin's Note--Rocco Calaci has been a noted meteorology expert witness in the Katrina Legal Wars. Click here to read his previous guest blogs)
In late April and May 2010, I wrote about the La Niña situation in the eastern Pacific Ocean, how it would develop, and its impact on the 2010 Atlantic hurricane season. One reason the forecast numbers for potential hurricanes is above average is due to the expected La Niña.
Continue Reading...Remember back in the day when an insurance adjuster arrived at your house to inspect the damage and the adjuster wrote you a check on the spot? Some of you may, but most do not because it probably rarely happened. There may have been a day when most insurance companies paid claims immediately and in a manner respectful of the policyholder. Many claims departments required adjusters to help the insured find coverage. But, this is rarely the case today. Chip Merlin has even written about one insurance company currently calling out its competitors for not properly servicing policies in Chubb Calls Competitors Cheap And Unfair.
Continue Reading...Safeco Insurance Company and its subsidiaries are certainly getting headlines regarding claims practice controversies and bad faith lawsuits. I discussed a Texas Safeco appraisal dispute in Litigation Discovery Continues During Appraisal of Damages in Texas Federal Court earlier this week. A recent case from the U.S. District Court for the Southern District of Florida, Magaldi v. Safeco Ins. Co. of Am., No. 10-80280, 2010 U.S. Dist. LEXIS 62085 (S.D. Fla. June 22, 2010), provides significant instruction for attorneys where there are allegations of slow and wrongful claims handling in the adjustment and appraisal.
Continue Reading...It’s a sad truth that building owners have to worry about burglars breaking into their buildings to steal copper wire and pipes. Many insurance companies don’t cover damage as a result of theft, but a lot of them do cover any damage related to burglars breaking in and exiting a building. However, a recent case from the Texas Court of Appeals demonstrates that you may not be covered for everything you thought you were.
Continue Reading...American Economy Insurance Company, a Safeco subsidiary, takes different positions on appraisal and litigation in Texas. While American Economy refused to abate discovery in a matter I am litigating, it unsuccessfully argued to abate formal litigation discovery in another case, Tran v. Am. Econ. Ins. Co., 2010 U.S. Dist. LEXIS 66283 (S.D. Tex. July 2, 2010).
Continue Reading...I often get questions about Citizens Property Insurance Corporation and what to do about its controversial claims activities which harm policyholders. A former Citizens claims adjuster told an audience of some of these activities at last week’s FAPIA annual convention. Following this presentation, some called upon me to file bad faith suits against Citizens for wrongful delay or denial of claims. While some of the activities may give rise to class action lawsuits, Citizens has immunity for bad faith claims conduct.
Continue Reading...Continuing on with last week’s post on late notice claims, this week I want to expand on Shaun’s post from last week about the difference between supplemental and reopen claims. Blurring the distinction between the two is an easy way to confuse the issues that may result in the denial of an otherwise valid claim. That is why it is so important to keep the two separate.
Continue Reading...The Fifth Circuit Court of Appeals recently issued an opinion in the case of WMS Industries v. Federal Insurance Co., affirming the U.S District Court for the Southern District of Mississippi’s ruling in favor of the carrier in a business interruption/extra expense coverage dispute that arose in the aftermath of Hurricane Katrina, which struck the Mississippi Gulf Coast on August 29, 2005.
Continue Reading...Public adjusting is considerably a young occupation in the United States. Last week, I had the opportunity to meet with Norman Lesser, a public adjuster who has one of the original public adjusting licenses in Florida. His public adjusting firm was established in 1958. The information Mr. Lesser shared with me was priceless for so many reasons. One reason is what I like to call the History Channel effect. I am sure most of you reading this are familiar with the History Channel. You either have a favorite program on it, find yourself watching it without intention because it draws you in, or you never have to change the channel because it is all you watch! Sure, “History” may have been boring for most in school, but the stories and the history behind something you are attached to or vested in is often very fascinating and helpful
Continue Reading...This week, I have another example of how a properly drafted Motion to Compel can make a world of a difference in the progress of your case. In a case against Safeco, a plaintiff’s attorney included the following argument in his motion:
Continue Reading...These discovery requests seek documents aimed at Safeco’s attempts to institutionally turn claim handling practices into profit producers….The discovery requests also seek the personnel files of the claim handlers involved in the handling of the claims at issue in this case. These files should reveal, among other things, the training of the various claim handlers and whether they received incentives or reprimands for their claims handling.
(Chip’s Note: With hurricane season only a month old and one hurricane making landfall, this guest post is a reminder that wind isn't always damaging; it can be harnessed for good purpose as an alternative energy source. Wind energy is more relevant and necessary now, in light of the environmental catastrophe caused by BP's Gulf Oil spill. The following is a guest post by Mary Jones).
Wind is caused by the uneven heating of the Earth by the sun and the fact temperatures are always trying to reach an equilibrium (heat is definitely moving to a cooler area). With the rising price of energy and the damage to the environment from non-renewable fuels, it has become cost efficient to harvest this renewable resource.
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