Megyn Kelly, of FoxNews interviewed me last Friday. The topic was "Who Will Take the Lead in Deficit Debate." She appropriately raised the important issue whether our political leaders have the courage to change spending and tax policy to prevent government bankruptcy. Here is the Interview:
Continue Reading...My past few hurricane blog posts have been discussions of the issues raised in the recent Florida state court case of Citizens Property Ins. Corp. v. Ashe, No. 1D09-1546, 2010 WL 4628915 (Fla. 1st DCA Nov. 17, 2010). To refresh your recollection, Ashe was a case in which a homeowner’s property was damaged by a hurricane, the homeowner was paid policy limits by his flood insurer, and a dispute arose as to entitlement to benefits under his wind policy. Another case in that same vein was recently before a Mississippi federal court in Penthouse Owners Assoc., Inc. v. Certain Underwriters at Lloyd's, London, No. 1:07CV568-HSO-RHW, 2011 WL 96514 (S.D. Miss. Jan. 11, 2011).
Continue Reading...Maximizing recovery after a catastrophic loss requires expertise in preparing hospitality business interruption claims, combined with a thorough understanding of the hotel's unique market and operation.
Continue Reading...This week, I attended the Twelfth Annual WINSTORM Insurance Conference in Houston, Texas. This year’s conference was held at the perfect location in Houston- the Hilton Americans. The Tort Trial and Insurance Practice Section of the American Bar was the co-sponsor and continuing education credits were offered to adjusters and attorneys in various states. This is only the second time the Conference was held outside of Florida, but nearly 1000 people registered as attendees and the number of exhibitor booths set a new record.
Continue Reading...I am picking up were I left off last week in my post titled A Wisconsin Policyholder's Success in a Bad Faith Lawsuit Against Safeco, Part III, discussing a favorable bad faith decision against Safeco. My posts over the course of the last few weeks addressed the grounds upon which Safeco denied the Millers’ claim and the analysis applied by the Wisconsin federal Court when finding in favor of the Millers. This will be my second to last post on this decision, and I would like to start discussing the damages that were awarded.
Continue Reading...In a few hours, I will become the President of the Windstorm Insurance Network. The 12th Annual Windstorm Conference has provided some impressions and reminded me of the silent majority of insurance adjusters who go about their jobs providing peace of mind and certainly overpaying parts of claims.
Continue Reading...Florida Senator Mike Fasano is not afraid to talk about the elephant in the room. Yesterday, he called the proposed insurance bill "scary." A blog in the Miami Herald, Fasano: Why debate sinkhole coverage if no one will provide it anymore? reported:
Continue Reading...As many of you know, an insurer has an obligation to deal with its insureds in a fair manner and in good faith. Many insurance policies detail these obligations, leading many to believe that an insurer’s good faith duties arise through the underlying insurance policy. However, as the Texas Supreme Court noted in the case below, the insurer’s duty of good faith and fair dealing does not arise from the underlying contract – i.e. the insurance policy.
Continue Reading...Whether a policyholder’s lawsuit against an insurer was necessary to resolve a first party claims dispute can be an important question for Florida courts in determining an insured right to attorney’s fees pursuant to Florida Statute 627.428. Florida Statute 627.428 is intended to encourage insurers to pay policyholders the claim proceeds they are entitled to without the need for litigation. If a policyholder has to file a lawsuit to recover claim proceeds, then the insurer may be responsible for the policyholder’s attorney’s fees in the litigation. Florida case law has traditionally held that when an insurer pays additional policy proceeds after a lawsuit is filed, the insurer “has, in effect, declined to defend its position in the pending suit. Thus the payment of the claim is, indeed, the functional equivalent of a confession of judgment or a verdict in favor of the insured.” Wollard v. Lloyd’s and Companies of Lloyd’s, 439 So.2d 217 (Fla. 1983).
Continue Reading...A very fine insurance defense attorney, Brian Hunter, made a comment to yesterday’s post, Do Insurance Companies Overpay Claims? with the following observation:
Continue Reading..."Second, not only can claims be overpaid, they can be underpaid...."
Assuming this is true, and it probably is based on the law of averages, how can we have any meaningful data? What is the standard against which a claim is judged over- or underpaid? Is it the proof of loss, or the public adjuster's estimate, or the appraisal award, or something else? Even if we use the most presumably objective of these, i.e., an appraisal umpire's award, as a standard, then a good many claims I have seen resolved in that manner have been simultaneously underpaid by insurers and grossly inflated by the insured and/or public adjuster.
Of course, in most cases, an appraisal award is a legal fiction that may or may not bear a rational relationship to the amount necessary to repair the property; but it is certainly and merely an estimate. Frequently, the umpire's award is an average of two competing estimates. Regrettably, few court-appointed umpires have any specialized training in the construction fields, and many have never written an estimate of their own nor done any kind of construction work. Maybe a better standard is needed.
What we do not have is reliable data in Florida during the past several years comparing claim payments with amounts spent by policyholders to actually accomplish like kind and quality repairs. (If I am wrong, I would love to see a source.) Changing the law to require insurers to pay actual expenditures, and not mere estimates of replacement cost (some honest, some not, all estimates nevertheless), would bring greater certainty to all the parties, I think. Yet this is opposed by the same folks, i.e. public adjusters, bemoaning the lack of accuracy in claim adjustment.
Coverage that excludes electronic data serves very little purpose in today’s business world. Many businesses have abandoned physical storefronts and the familiarity of face-to-face transactions and operate exclusively in the cyber world. Even businesses that operate out of physical buildings or structures no longer store information in filing cabinets, but in servers and electronic files that contain crucial and often irreplaceable information. I can’t imagine anything more frustrating than having to tell an impatient customer that you cannot fulfill their needs because your computers are down. With respect to the products offered, the insurance industry has done little to keep with the times. Smaller businesses are often forced to choose generic first-party ISO forms that exclude coverage for damage to electronic data (caused by e-perils) because such coverage is simply unaffordable.
Continue Reading...Chances are when you take a look at the photo below, you will remember seeing this imagine after Hurricane Ike. Texas Bolivar Peninsula residents, Warren and Pam Adams, evacuated for Hurricane Ike, and returned to their home the only one standing amid massive devastation. Various news reports featured their property and the Adams residence came to be known as the “Last House Standing.”
For the last two weeks, I have been writing about a bad faith decision that was favorable to a Safeco policyholder. I would like to pick up where I left off last week.
Continue Reading...A blog, Overpaying Insurance Claims, caught my attention. The premise was described as follows:
Continue Reading...I recently began questioning how much money insurers hand out needlessly because their adjusters don't have enough training or are so overloaded with work that they can't possibly handle all of the files they are assigned due in part to a claim a family member recently made.
A few months back, my sister's dishwasher piping burst, which flooded her finished basement and the kitchen sub floor. She filed a claim and received immediate action because the loss was deemed an "emergency" by her insurance company's claims triage unit. The field adjuster came out, estimated the damage, and made arrangement for repairs under the company's preferred contractor program.
The glitch arose when she decided to replace the floor in the basement bath/laundry room with ceramic tile instead of the linoleum that existed before. Being the most honest person on the face of the earth, she was willing to pay the difference on the upgrade.
That's where the insurance company lost out.
The repairs were made to everyone's satisfaction and the contractor was paid. My sister called the adjuster and the claims office a number of times to ask how much she had to repay. After a number of excuses — waiting for paper work, too many other emergencies, “we'll get back to you,” the adjuster is over booked — she resigned herself to accepting more than she felt entitled to.
The New Year brings new opportunities and new challenges. Unfortunately, this year brings more challenges than opportunities for policyholders in Florida. Charlie Crist no longer wields the veto pen that struck down anti-consumer legislation in the past. Instead, he has been replaced with a Governor who campaigned on a very pro-industry platform. In addition, the Florida Legislature may have become even more pro-industry than before. These circumstances have created an atmosphere in Tallahassee whereby the industry is in a position to get a lot of the changes it has previously lobbied for.
Continue Reading...Jeremy Tyler's post yesterday, More on the Collateral Source Rule, reminded me of a recent Florida federal court case with similar facts, Florida Farm Bureau General Insurance Company v. Jernigan, 2010 WL 3927816 (N.D. Fla. September 30, 2010).
In Florida Farm Bureau, the insurer, as a Write-Your-Own Program Carrier participating in the National Flood Insurance Program (“NFIP”), issued a Standard Flood Insurance Policy (“SFIP”) covering the defendant’s property. The insured’s home was destroyed during Hurricane Ivan, and Farm Bureau tendered policy limits for the dwelling and contents. Farm Bureau also issued the insured a separate homeowner’s policy for $138,500 in coverage for damage due to a covered peril, which included wind but excluded flood. After receiving the policy limits from the SFIP, the insured filed a claim under the homeowners policy. That claim went to trial, the jury found the property was a total loss as a result of wind damage, and the insured was awarded the policy limits.
Continue Reading...As promised, here is a review of Judge Van Nortwick’s dissent in the case of Citizens Property Ins. Corp. v. Ashe, No. 1D09-1546, 2010 WL 4628915 (Fla. 1st DCA Nov. 17, 2010). If you recall, Ashe involved a homeowner’s hurricane claim in which the homeowner had applied to both his flood and wind insurance for benefits. The flood insurer paid policy limits, but a dispute remained as to how much the wind insurer owed, if anything, under the policy and circumstances where the flood insurer had paid policy limits. As discussed in “The Collateral Source Rule,” the Florida First District Court of Appeal held that the collateral source rule would only restrict evidence of the dollar amount of payments that the homeowner received from his flood insurer, but all other evidence of insurance payments would be admissible in the trial court. The First DCA also opined that the better view might be to not apply the collateral source rule in contract actions at all. Judge Van Nortwick concurred in part with the majority opinion, but dissented on the collateral source rule issue.
Continue Reading...Insurers are often quick to call foul while handling business income claims. I found an interesting article in the FC&S Bulletin that illustrates the riddles a business income claim may present and how an insurer can avoid unnecessary disputes with a more thoughtful approach in its claims handling practices.
Continue Reading...Continuing last week’s post, in addition to concerns by homeowners that the carriers aren’t paying the full damages in Fourmile fire claims, additional concerns are being raised about the coverage purchased from various carriers. The silent problem of “Underinsurance” seems to be hurting those in the Fourmile area.
Continue Reading...Last week in my post titled A Wisconsin Policyholder's Success in a Bad Faith Lawsuit Against Safeco, I began addressing a decision of a Wisconsin federal court that is favorable to the policyholder. I would like to pick up where I left off…
Continue Reading...Senate Bill 408 proposes new Florida insurance laws that harm all policyholders. Florida businesses and homeowners will receive fewer benefits, and insurers will be encouraged to delay, deny and defend claims if this bill becomes law. It takes away a lot of financial peace of mind that insurance currently provides.
Continue Reading...Gene Veno, President of the American Association of Public Insurance Adjusters, forwarded to me a new law governing public adjusters in New Jersey. The primary items of interest in the revised New Jersey statute concern public adjuster solicitation and continuing education.
Continue Reading...Claims Magazine is a publication everybody in the insurance claims business should subscribe to and routinely read. The January issue has an article, Speaking Of: WIND 2011, about the upcoming 12th Annual Windstorm Insurance Conference, to be held in Houston, January 24-27.
Continue Reading...When people think of prompt payment laws, they tend to believe those laws were put in place to punish “bad” insurance companies that needlessly delayed paying claims. However, the Texas Court of Appeals for the Fort Worth District has a different opinion: those laws exist not to punish the insurer, but to ensure that the policyholder gets paid in a timely manner.
Continue Reading...The insured in Hadden v. State Farm Fire & Cas. Co., 37 So. 3d 918 (Fla. 5th DCA 2010), filed a lawsuit on September 18, 2006, for breach of contract against State Farm for property damage sustained from Hurricane Charley in August 2004. Unknown to his lawyer, the insured had already filed a petition to declare bankruptcy in Federal Court on September 12, 2006. He filed the bankruptcy petition pro se, meaning on his own behalf without the assistance of counsel. State Farm raised an affirmative defense of judicial estoppel to the breach of contract case. The Court in Hadden described judicial estoppel as an “equitable doctrine that is used to prevent litigants from taking totally inconsistent positions in separate judicial proceedings.”
Continue Reading...The issue of whether a total cessation or a mere slowdown in productivity is required to trigger business interruption coverage is one of those questions that will most likely be defined in the policy. If not, courts will be given an opportunity to answer the question, which could lead to undesired results for either party. While many carriers require a “total cessation” in order to trigger coverage under a business income provision (not extra expense), some courts have disagreed with this “all or nothing” approach, depending on the language of the policy in question.
Continue Reading...Last September, a devastating fire roared through Boulder County, Colorado. The 7000 acre blaze devastated the area and many properties were damaged or destroyed. One policyholder recently expressed his frustrations with the insurance claim for his fire damage to reporter Dayle Cedars with 7News in Denver. Although spared from losing his home, Joshua Onysko, has not been made whole. Farmers Insurance Company did issue a payment to Onysko, but the amount was insufficient to fix the property. The homeowner hired licensed public adjuster Scott deLuise, of Matrix Business Consulting, to assist with the claim.
Continue Reading...A few months ago in my post titled "Going through the Motions" Is Usually Not Enough to Compel Bad Faith Discovery From an Insurer, I wrote about a particular policyholder’s attorney and his experience with discovery in a case against Safeco. The attorney researched extensively until he found a case compelling an insurer to produce the kind of materials he needed in his case. The opinion he found included details of the specific discovery requests at issue, so he modeled his own discovery requests after those in the opinion. After serving his discovery requests, Safeco served its responses and objections, which included the usual work product and attorney client objections, along with a few others that a policyholder’s attorney can expect to see when an insurer responds to bad faith discovery. Our colleague then filed his Motion to Compel citing, as persuasive authority (and among other things), the case upon which he had modeled his discovery requests. His “merely persuasive” authority consisted of facts and issues so similar to those in his case and presented an analysis so precise that the Judge ordered Safeco to produce a complete and un-redacted portion of its claims file. That case ultimately had a happy ending – well, at least for the policyholder. Because the United States District Court for the Eastern District of Wisconsin’s Decision and Order is thorough, I will write about it over the course of the next 2-3 weeks.
Continue Reading...The Florida Supreme Court has made it clear that insurers cannot condition settlement offers on the mutual acceptance of joint insureds.
Continue Reading...The fix appears to be in for sinkhole losses. The insurance industry and lobby worked hard to set the rhetoric in its favor. Florida's Insurance Commissioner seems to now be more concerned about appeasing the insurance industry to keep his job rather than taking on an industry he used to battle. Many policyholders with property in sinkhole prone areas of Florida will financially be doomed given the scenario painted in the Florida Senate Committee on Banking and Insurance Interim Report, "Issues Relating to Sinkhole Insurance."
Continue Reading...The law of comparative causation under property insurance policies is reasonably settled in Texas. If there is a loss as a result of two concurring perils, one insured and one not, the loss is covered only to the extent it can be traced to the covered peril. However, what happens when a peril which is not covered is caused by a peril which is covered? As the Plaintiffs learned in National Fire Ins. Co. of Pittsburgh, PA v. Valero Energy Corp., 777 S.W.2d 501 (Tex.App.—Corpus Christi 1989, writ denied), there is still no coverage unless the terms of the policy allow coverage where an otherwise excluded peril is itself caused by a covered peril.
Continue Reading...Brenda Cannon Henley has written a delightful book, Winds Over Bolivar, cataloguing the individual and community struggles of those from the Bolivar Peninsula following Hurricane Ike. Ms. Henley asked me to write an introduction to her work:
Continue Reading...When one thinks of hurricane related property damage, the most obvious cause of damage seems to be wind and water. A recent appellate decision from Louisiana dealt with a different kind of hurricane related damage: looting.
Continue Reading...Many clients and claim professionals often have questions about their deductible responsibility toward their business income claim. Typically, if the property has sustained physical loss or damage, the insured will be required satisfy the applicable peril-deductible to receive benefits to repair or replace the damaged property and trigger the business income coverage. However, insureds should keep in mind that while there may not be an additional monetary deductible to trigger business income coverage, their business income claim will probably be subject to a waiting period of 24-72-hours, which often is the most crucial period of time after the loss. This waiting period is supposed to encourage the insured to take prompt and adequate repair measures to mitigate the business losses. However, any lost profits during this waiting period are not recoverable, and many consider this waiting period a “time deductible.”
Continue Reading...Today is the first day of the year 2011. New laws will soon follow the new year. Insurance regulation will likely be a hot topic in many areas of the country as leaders get together for new sessions. Recently, I had the opportunity to speak with Michael C. Bayer, of North East Adjustment Company, Inc. Mike is the co-chair for the legislative committee of CAPIA, the recently formed Connecticut Association of Public Insurance Adjusters.
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