We all know that property insurance protects against physical property losses resulting from a covered peril, but what about non-physical damage, such as loss of business income? Is that covered under your policy? For those of you without “Business Interruption” coverage the answer is “no,” and for those of you that do have “Business Interruption” coverage, the answer is “maybe.”
Continue Reading...Surplus insurers in Florida, a/k/a “non-admitted” insurers, have traditionally been exempted from certain regulatory schemes applicable to traditional “admitted” insurers. This was done to persuade these non-admitted carriers to continue to write insurance on risks not as attractive to the admitted carriers. As pointed out by Dick Tutwiler in his comment to my November 1, 2010, post, Eligibility Requirements for Florida Surplus Lines Insurance Carriers, two 2008 court decisions threatened the stability of the surplus lines insurance market in Florida.
Continue Reading...Public adjusters should probably look at Black Friday as a day to work rather than shop since fires tend to spike on Thanksgiving day. Insurance agents could use the holiday season to remind their clients of the need for insurance coverage because the "fear factor" certainly rises when catastrophes occur close to home. In Thanksgiving Day is Number One Fire Insurance Claim Day, I noted that a State Farm study confirmed the increase in residential fires on Thanksgiving day and provided some tips to prevent a common Thanksgiving day fire. A quick search confirmed a number of Thanksgiving day fires as well as a reminder that we all should be thankful.
Continue Reading...In today’s world, business models are limited only by our imagination. Transforming an idea into a business reality is probably one of the most rewarding achievements in our society. However, not all businesses are alike and, as such, not all business interruption claims should be put through the same rigors. While most business income policies contain standardized language, insurers should take into account the atypical nature of a business when necessary so as to never deprive a policyholder of its right to receive the capital needed during the period of restoration to sustain the business while its operations are suspended as a result of damage caused by a covered peril.
Continue Reading...Each week, I post about public adjusting and the trends in the industry. Recently, I learned the background story of public insurance adjuster who, prior to advocating for policyholders as a PA, was a very successful catastrophe adjuster. Mark Goldwich of Gold Star Adjusters, LLC., explains why he left his job at a major insurance company to work as a public adjuster. Mark’s story is published in his book, Uncovered: What Really Happens After the Storm, Flood, Earthquake or Fire.
Continue Reading...A common topic of discussion in my Friday posts is where a policyholder’s attorney should look for information regarding whether an insurance company handled a particular claim in bad faith. One of the considerations that I touched upon in my post titled A Few Unexpected Places Where Valuable Bad Faith Information Might be Located was the possibility that an employee’s personnel information might not all be kept in a single place – not all personnel information on a specific employee is necessarily maintained in what is typically referred to as an employee’s “personnel file.” I also touched upon places where you might find information pertinent to how a claim was handled in places other than what is typically referred to as the “claims file.” This week, I would like to address a few other considerations to keep in mind when seeking information in the insurer’s claims file through discovery in a bad faith lawsuit.
Continue Reading...The Colodny, Fass, Talenfeld, Karlinsky & Abate law firm sent a newsletter regarding Freshman House Representative Frank Artiles' recent teleconference. In "Freshman State Representative Frank Artiles, a Public Adjuster, Meets With Florida Insurance Industry Representatives On Concerns, Commonalities" the lawfirm noted the following:
Continue Reading...Fire insurance claims spike on Thanksgiving Day. I became interested in this fact after viewing the following commercial by Allstate:
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With respect to bad faith claims made in State Farm Fire & Casualty Co. v. Simmons, 963 S.W.2d 42 (Tex. 1998), the Court ruled that an insurer cannot insulate itself from bad faith by conducting a biased or pretextual investigation. The Court also ruled that the scope of the appropriate investigation varies depending upon the claim’s nature, value, and complexity. However, this ruling was not unanimous and there were two dissenting opinions.
Continue Reading...What happens when you have two insurance policies that cover the same risk, do you get to collect twice for the same injury? Most property insurance policies include a provision known as the “Other Insurance” clause. An example reads like this:
Other Insurance
If a loss covered by this policy is also covered by other insurance, we will pay only the proportion of the loss that the Limit of Liability that applies under this policy bears to the total amount of insurance covering the loss.
Business Income policies have multiple coverages that may be all triggered after a single occurrence or event. In these cases, insurers will oft argue that the coverage run concurrently, but depending on the language of the provisions at issue a policyholder should be entitled to “stack” such coverages and recover the full amount owed under each, capped at the amount of the loss.
Continue Reading...Not long ago, I was attending a deposition when the insurance company’s lawyer questioned my client about why he had hired a public adjuster.
The non-verbal reaction of my client spoke volumes. With wide eyes, he leaned closer to the attorney and explained that his world was turned upside down the day of the loss and he was not just completely overwhelmed by the destruction to his home, but, more than that, he was concerned for the wellbeing and care of his family. He knew he needed professional assistance because of the magnitude of the loss and his experience in dealing with his insurance company on a prior loss.
Continue Reading...When an insurance company receives notice of a claim, there are a number of individuals who will ultimately work on or handle the claim in one way or another. Insurance companies, like many other types of corporate entities, typically have a hierarchy of employees. Claims departments, in particular, are made up of a number of different individuals with varying titles and responsibilities. The varying levels of personnel involved with a claim might shed some light on the manner in which the claim was handled and whether it was handled properly. In a bad faith case, a policyholder’s attorney should be aware, not only of the people who handled the claim at issue, but also of the lines of authority and reporting procedures for those claims personnel.
Continue Reading...The Tennessee Insurance Litigation Blog has a post, Should a Deductible Be Subtracted in the Case of a Total Loss?, which raises a point that many adjusters seem to miss. I wrote about this topic in When Calculating Insurance Payments, Take the Deductible From the Repair Value and Not the Policy Limits and noted:
Continue Reading...Hundreds of Ft. Myers, Florida, businesses dependent on natural gas were recently shut down after a construction worker sliced through a natural gas pipe. The importance of proper power outage coverage is usually realized only after these types of events occur.
Continue Reading...I know this may sound like a simple question, but does a policyholder still have a claim against his/her insurer after it has been determined that there is no coverage under the insurance policy? The Texas Court of Appeals in Dallas dealt with this very question in 2001, and their decision may surprise you.
Continue Reading...Texas Judge Susan Criss signed an Order this morning approving the settlement of the slabbed cases from Hurricane Ike. She made the following findings:
Continue Reading...4. The Court finds that the Settlement was negotiated at arm's length by Plaintiffs' counsel and TWIA’s counsel. The Settlement is reasonable in light of the uncertainty as to whether the Class Members could prevail on their causes of action against TWIA, the risks and cost of litigation, and the value of claims foregone. The terms and conditions of Settlement are no less favorable to the Class Members than comparable arms-length terms and conditions that would have been agreed to by unrelated parties under similar circumstances.
In Florida, Statute 627.428 generally provides for attorney's fees to a policyholder who prevails against his or her insurance carrier in litigation related to the claim. Florida Statute 627.428 exists, in theory, to discourage insurers from denying and forcing legitimate claims into litigation. In June of 2009, House Bill 853, regarding Surplus Lines Insurers, became law. Part of that law was 626.913(4), which stated that Chapter 627 does not apply to Florida Surplus Lines Insurers unless Chapter 627 contains provisions that specifically state it applies to Surplus Insurers.
Continue Reading...As a matter of principle, business interruption coverage is supposed to provide the capital needed to sustain a business while its operations are suspended as a result of damage caused by a covered peril. Since business income coverage was designed to keep the money flowing when the operation is out of action, the timing of the payment is, of course, of the essence. Chip’s recent post, AON Warns Agents That Insurance Companies Are Getting Tough on Commercial Claims, is alarming, and I advise everyone to pay attention to any signs of systematic claim delay tactics in the handling of business income claims. These practices should not be allowed.
Continue Reading...Sinkhole claim information was collected from 215 insurance companies and the results were reported on November 8, 2010. Chip Merlin posted about the report and the absence of fraudulent sinkhole claims in his post, Florida 2010 Sinkhole Report Findings Published -- Where's the Fraud? A few other interesting points in the report also stand out and raise some interesting discussion topics.
Continue Reading...Sinkholes are a problem in Florida. The Florida Office of Insurance Regulation conducted a data call study from insurers regarding the insurance issues created by this peril. One significant finding was the extremely low reported cases of fraud. Here is what the report said on that issue:
Continue Reading...From 2006 through 2010, only 203 claims were reported to the Department of Financial Services Division of Insurance Fraud—less than 1% of the total claims reported. The number of alleged fraudulent claims peaked at just over 2% of the total claims reported in 2007.
In Plaintiffs are Entitled to the Claims File in a Bad Faith Lawsuit, The Big Picture in Discovery of Insurer Claims Practices, Overcoming Work Product Objections that Relate to an Insurer's Claims Investigation, and Reserves Are Important in Insurance Coverage and Bad Faith Claim Disputes, I addressed different kinds of documents that policyholders’ attorneys should seek from an insurance company in a bad faith action. Documents that are frequently the subject of heated discovery battles in bad faith actions include, among other things, an insurance company’s claims file and training manuals and documents regarding employee performance evaluations and incentives. Insurance companies typically prepare these manuals to train their employees to make certain that they are complying with the carrier’s business goals, as well as with applicable statutes and regulations. Similarly, some insurers also prepare manuals to assist their agents and provide guidance as to how the insurer wants things done.
Continue Reading...Dan Luby, of the Florida Insurance News, does a fantastic job tracking down timely articles involving insurance. He linked Taylor Heads to Supreme Court to Get TWIA Documents, which involves a Texas legislator trying to obtain confidential resolutions and settlement information from the Texas Windstorm Insurance Association (TWIA).
Continue Reading...I will be speaking in an upcoming live web seminar entitled "Insurance Subrogation Challenges for Insurers and Policyholders" scheduled for Tuesday, November 16, 1:00pm-2:30pm EST. The scope of an insurer's subrogation rights, generally a matter of state law, may be expanded or contracted depending on the language of the underlying policy. Understanding the interplay between subrogation law and policy language is critical--especially for policyholders who want to preserve and maximize their rights for recovery against third parties.
Continue Reading...An insurance industry article yesterday, Aon Voices Concerns Over Business Interruption Coverage, confirms that businesses cannot trust insurance companies to timely pay claims.
Continue Reading...Some of you have had the experience of going through the appraisal process with your insurer. Most insurance companies include a provision in their insurance policies stating that if the parties disagree as to the amount of damages, either party can demand an appraisal. But are the resulting appraisal awards legally binding? As the policyholder discovered in Franco v. Slavonic Mut. Fire Ins. Assoc., 154 S.W.3d 777 (Tex.App.—Houston [14th] 2004, no pet.), appraisal awards are typically upheld by Texas courts.
Continue Reading...Frederick Kortum vs. Alex Sink will be argued before Florida's First District Court of Appeal this afternoon, sometime after 2 p.m. In Public Adjusters Lose 48 Hour Solicitation Ban Case and Public Adjuster Lawsuits Move to Appellate Courts, I discussed this important appeal which concerns the constitutional rights of public adjusters to solicit following a loss.
Continue Reading...Florida public adjusters have an excellent educational and networking opportunity at the National Association of Public Insurance Adjusters Mid-Year Meeting, which will be held at the Ritz Carlton in Miami Beach from December 9-11, 2010. This is a great conference because the insurance claims business is becoming more national in scope. Insurance claim issues in one state impact other states. Public adjusters need to realize that their trade is not isolated by geographic boundaries and that opportunities exist through associated networking with others in diverse geographic regions. It is obvious that more public adjusters than ever are responding to catastrophes far removed from their home and original offices.
Continue Reading...If you build a house on a public beach, you might expect the state to remove it for you, but what happens if a hurricane builds a public beach on your house? Last Friday, the Texas Supreme Court answered that question in Severance v. Patterson, No. 09-0387, 2010 WL 4371438 (Tex. Nov. 5, 2010). The actual question certified to the Texas Supreme Court by the Fifth Circuit Court of Appeals was, “does Texas recognize a ‘rolling’ public beachfront access easement?”
Continue Reading...Every day, businesses develop and thrive on symbiotic relationships, where the entities rely on the continued operational viability of each other (or even exclusively beneficial relationships). Few businesses, however, consider the risk and exposure of losing that relationship due to an unexpected calamity. Businesses that are dependent on a non-related entity’s operations should talk to their agents about attaching “dependent business interruption” endorsements to avoid costly surprises.
Continue Reading...Last month, I attended the First Party Claims Conference in Warwick, Rhode Island. Chip Merlin posted from the conference in Jay Feinman Interview at First Party Claims Conference. If you are not familiar with the FPCC, I highly recommend this annual conference to public adjusters nationwide. The conference is open to public, independent, and company insurance adjusters and attorneys who handle first-party property insurance cases. This conference was jam packed with CE credits for the adjusters and there was no shortage of great information shared by all.
Continue Reading...As happy as I was to report A Public Adjuster Wins a Seat in the Florida House of Representatives, I was saddened to learn of Gene Taylor's defeat. Slabbed reported the story in Election 2010 Fallout: Media From Across the Country Weigh in on Gene Taylor’s Election Loss.
Continue Reading...Recently, I spent a few weeks reviewing court decisions which analyzed discovery requests geared toward obtaining documents and information regarding an insured’s prior claims and an insurer’s handling of other insureds’ similar claims. I came across another decision by a County Court in Ohio and found the Court’s evaluation interesting. Although Owens-Corning Fiberglas Corporation v. Allstate Insurance Company is not a bad faith case, the court’s analysis of the discovery issues caught my attention due to my recent posts.
Continue Reading...The recent election results clearly showed that people were upset with those running government—especially those in the Democratic camp.
Continue Reading...I recently read an article that discussed how many Texas policyholders want to see some form of insurance reform in their state. Texas Watch – a consumer advocacy group – stated that a statewide survey showed that about 74 percent of voters are likely to vote for those candidates who favor home insurance reforms. Among the survey results, Texas Watch found the following:
Continue Reading...Insurance lobbyists are going to be called out by one new member of the Florida House of Representatives. Frank Artilles won his campaign despite the insurance industry making an all-out effort to defeat a Republican candidate. It is difficult enough to win an election. It is nearly a miracle when the insurance industry uses its muscle and money to target a campaign.
Continue Reading...Policyholders with flood and all risk policies usually do not have as many problems collecting benefits following a hurricane where wind and flood damaged a structure. Those with only one policy are not so fortunate. When the combination of payments from both policies is less than the cost to repair or when delays in payments occur, numerous issues arise.
Continue Reading...Surplus lines insurance is intended to provide coverage that cannot be easily procured in the conventional insurance marketplace. Traditional insurance companies must file their premium rates and policy forms with state regulatory agencies. The rates and forms must be approved prior to any insurance policies being offered for sale to consumers within the state. Generally speaking, surplus lines insurance is that which is not readily available through traditional means. These are generally unusual risks that require specialized insurance policies or risks that have very poor loss experience and are unattractive to conventional insurers. Surplus insurers have written hurricane coverage in Florida and compete for these risks, although generally there has been a decline in such policies since the active hurricane season of 2005. In 2005, the Florida Surplus Lines Service Office (“FSLSO”), processed about 112,000 policies written in the homeowners market compared with about 53,000 policies in 2009.
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