In a recent Florida House of Representatives Committee, Representative Plakon (R-Longwood) introduced a bill to remove the ability of the Insurance Consumer Advocate to issue letter grades to insurance companies based on how they treat their customers. Am I missing something?
Continue Reading...A couple of weeks ago, Shaun Marker wrote about a recent insurance appraisal decision out of Florida’s Third District Court of Appeal, Citizens Prop. Ins. Corp. v. Mango Hill Condo. Ass’n 12, Inc., No. 3D10-2014, 2011 WL 613518 (Fla. 3d DCA Feb. 9, 2011). Shaun’s post is over on the Condominium Insurance Law Blog, where he discusses the facts of the case and provides an excellent legal analysis of the holding.
Continue Reading...Supporting and documenting business income claims is never an easy feat.
Continue Reading...The NYDailyNews.com reported homeowners are still waiting to get paid for roof claims caused by a tornado that ripped through Brooklyn, New York. It has been more than five months since the tornado caused the destruction.
Continue Reading...A recent and significant Order by Judge Stanley Mills discussed claims resolved through appraisal and complaints of improper claims conduct made through formal Civil Remedy Notices. The matter involved a sinkhole claim that took nearly three years before full payment was made. The State Farm policyholders spent thousands of dollars on experts and appraisal costs because State Farm did not pay the full amount of the claim.
Continue Reading...Insurance agents are some of the nicest people I have ever met. They are often trained in salesmanship and influence. Many participate in community activities for professional networking reasons. To effectively sell insurance, you better be a swell person and know a lot of people.
Continue Reading...Before the Hurricanes of 2004 and 2005, few people showed up for insurance related legislation and committee hearings. When some suggested I get to the meeting early to make certain I could find a seat, it was obvious that times had changed.
Continue Reading...A recent California decision, Koch v. Markel Insurance Co., 2011 WL 208365 (Cal. Ct. App., 2d Dist., Div. 7 Jan. 25, 2011), highlights the duties insurance agents owe to an insured in California. The case involved a new auto repair shop owner, Blake Koch, who sought to obtain certain insurance from an employee of the Bradford Agency, who was also an agent of Markel Insurance Company.
Continue Reading...This is a common question that policyholders and their representatives have once an insurer demands a recorded statement in the claims process. The short answer to the question is, it depends. As is often the case, there is not a bright line rule regarding whether a policyholder is obligated to give a recorded statement to their insurer once demanded. Some insurers have amended the typical policy forms by endorsement and a review of the specific forms at issue is necessary before giving a certain response.
Continue Reading...This week’s Insurance Law and Litigation Week highlighted the conclusion of a controversial business income that arose in the aftermath of the 2003 blackout. On August 14, 2003, problems with the interconnected North American power system resulted in a four-day electrical blackout over much of the northeastern United States and eastern Canada. Millions of people and businesses were affected by this outage, including Wakefern, a conglomerate group of supermarkets that owns the ShopRite chain. ShopRite suffered losses due to food spoilage during the blackout, in addition to incurring loss of business. Having paid a $5.5 million premium for insurance, covering (among other things) damage due to the loss of electric power, Wakefern turned to their insurer, Liberty Mutual, to pay for their losses.
Continue Reading...For public insurance adjusters, safety should be a top concern when inspecting a loss.
I wanted to remind public adjusters how important it is to be aware of your personal safety when adjusting losses. You are often put in dangerous situations, and it is human nature to take safety and security for granted. Sometimes it takes a close-call to remind us that we need to be more cautious, careful, and calculated in our actions.
In several of my older posts, I wrote about different ways some insurance companies have tried to make a profit by changing the way a claims handling department is operated. The following posts touched upon ways that claims handling employees can be compensated for meeting different types of goals set up by the insurer that, in effect, turn a claims handling department into a profit center: The Big Picture in Discovery of Insurer Claims Practices; Don't Forget to Consider the Severity of Your Claim; Don't Forget to Consider the Severity of Your Claim: Part II; Plaintiffs are Entitled to the Claims File in a Bad Faith Lawsuit. Some insurance companies also determined that they generally pay less on claims when the policyholder or victim is not represented by an attorney. As a result, it has become more appealing to an insurance company to resolve a claim with an unrepresented individual, and some carriers have spent money, time and energy implementing policies or procedures with the goal of dissuading policyholders or victims from hiring an attorney.
Continue Reading...Perry Cone is an attorney with the Gray Robinson law firm. Previously, he was General Counsel to Citizens Property Insurance Corporation. He writes an interesting blog regarding insurance at TallyInsLaw.com.
Continue Reading...The Florida legislature and Office of Insurance Regulation should learn from insurance history, recent warnings, and common sense when it comes to building a stable Florida insurance marketplace. Former Florida Insurance Consumer Advocate, and now lawyer in the Merlin Law Group, Sean Shaw highlighted a fundamental flaw in Florida's insurance marketplace in a recent St. Petersburg Times Letter to the Editor. He noted:
Continue Reading...In reality, the lion's share of the blame for the industry's solvency issues falls squarely on its own shoulders. During the current five-year storm-free stretch, the state's insurers have neglected to build their capital reserves to levels that would enable them to withstand the next major disaster. Instead, insurers send as much as 86 cents on the premium dollar overseas to reinsurers who are not obligated to conform to the regulations that act to protect consumers. Florida's undercapitalized and overleveraged insurance companies are essentially slaves to these offshore reinsurers, who often charge five times the actuarial risk of loss simply because they can.
There is another dirty secret that the state's insurance companies don't want you to know. Despite all the self-pity, many Florida companies actually make sizable profits. Nearly every private insurer in the state has divided itself into several separate subsidiary companies that swap money in a veritable shell game to escape regulation.
According reporting by Paige St. John, between 2006 and 2008 Florida property insurers gave out more than $149 million in executive bonuses, perks and dividends to their holding companies while increasing Floridians' rates by an average of 35 percent over the same period.
On January 4, 2011, I discussed the case of Nat’l Fire Ins. Co. of Pittsburgh, PA v. Valero Energy Corp., 777 S.W.2d 501 (Tex.App.—Corpus Christi 1989, writ denied). Nat’l Fire taught us that an otherwise excluded peril could be covered under an insurance policy if the policyholder could demonstrate that the excluded peril itself was caused by a covered peril. However, even if the policyholder can demonstrate that an excluded peril was caused by a covered peril, the policyholder still has work to do: s/he must also show the extent of the damage attributable to the covered peril. But what does that mean? The Texas First District Court of Appeals dealt with this very issue in Travelers Personal Sec. Ins. Co. v. McClelland, 189 S.W.3d 846 (Tex.App.—Houston [1st Dist.] 2006, no pet.).
Continue Reading...“Federal courts are courts of limited subject matter jurisdiction,” is the mantra my Civil Procedure professor impressed upon me on the first day of class. In a nutshell, federal courts won’t hear every case, but only cases that they have jurisdiction to hear. One way to get into federal court is with diversity of citizenship. 28 USC § 1332 grants federal courts jurisdiction to hear cases between parties from different states as long as the amount in controversy exceeds $75,000. If a lawsuit is brought in state court against an out of state defendant, and the amount in controversy is over $75,000, the out of state defendant can have the case removed to federal court. If for some reason the removal was improper, the plaintiff can seek to have the case remanded back to the state court. Over the past few weeks, several hurricane related property insurance lawsuit decisions discussing removal have been published.
Continue Reading...Replacement cost, actual cash value, and total loss valuation payment definitions, procedures and issues are currently being debated before the Florida legislature. In Draconian Property Insurance Bill Filed in Florida Senate, I explained that the pending legislation was against policyholder interests. Our firm has other posts on this debate:
Continue Reading...It is always interesting to read cases where attorneys are parties to a lawsuit. I always expect and anticipate creative arguments and I am rarely disappointed for we are wordsmiths by trade and wizards of logic. I recently came across a business income case where the insured party was a law firm. In Eidelman, et al. v. State Farm Fire and Casualty, No. 10-2578, 2011 BL 14407 (E.D. Pa. Jan. 19, 2011), the insured law office was destroyed in a fire. Seven (7) weeks after the loss, the firm rented a temporary space to resume operations. During the claims process, the parties disagreed on the method of calculating the business income claim.
Continue Reading...One thing is for certain in these changing times, social media is a force that cannot be ignored. In February 2010, Facebook reported that over 175 million users logged in on a daily basis. Social media is fast, user friendly and allows us to mix business and pleasure. A recent post on Sterling McKinley’s blog, “Social Media is Not Going Anywhere,” states that social media is changing the way people communicate. According to Sterling McKinley, Facebook and Twitter mimic real life and are wildly popular because they appeal to the masses.
Continue Reading...Many homeowners, like me, purchase some sort of insurance for their property: coverage for wind/hurricane, homeowner’s and flood. Typically, a homeowner will expect that a flood insurance policy provides coverage for a flood, a wind/hurricane policy provides coverage for a hurricane or other wind damage, and a homeowner’s policy provides coverage for damages resulting from other “sudden” losses or “accidents” such as fire, theft and water damage resulting from something like a burst pipe. It would seem to logically follow, then, that if a homeowner purchases an “All Risk” policy, then all of the risks that a homeowner could insure against would be covered by that policy. That, however, is not usually the case.
Continue Reading...In case you didn’t know, your insurance policy is actually a contract between you and your insurer. If there is a breach of contract, Texas law grants citizens four (4) years after the breach to file a lawsuit. So if you want to sue someone for breach of contract, you have 4 years after the breach to do so. If you fail to file suit within those 4 years, you are out of luck. But that’s not all. Texas courts have stated that parties can agree to a shorter limitations period, as long as that period is not less than two (2) years. With respect to insurance claims, which party benefits the most from a shorter limitations period? That’s right, insurance companies.
Continue Reading...On February 7, 2011, the Senate Banking and Insurance Committee met in Tallahassee to discuss SB 408. This was supposed to be the meeting at which the full bill would be voted on. However, it soon became clear that the bill was too complicated to make it through this meeting in time. The meeting was scheduled from 10:15am – 12:15pm. When the committee got to the portion of the agenda dealing with SB 408, they began where they left off last week – debating the numerous amendments being offered by Senator Mike Fasano. If you read this blog regularly, you know that Senator Fasano is often a voice in the dark for consumers on this committee. As Fasano began to go through his amendments, it was clear that his pro-consumer amendments were going to fail. In fact, several of the amendments were compromises between the industry and consumer positions. Nevertheless, they were consistently voted down. The St. Petersburg Times describes the testy exchange between Senators Alexander, Fasano and Negron. My favorite part of the meeting:
Continue Reading...Things got testy when Fasano's amendment requiring that homeowners receive an engineer's report after repairs are made came up. Sen. J.D. Alexander argued against the amendment, starting out by speaking broadly about the problems with sinkhole insurance claims and then charging that Fasano's amendment was probably written by a plaintiff's attorney.
Fasano shot back that he didn't need to be lectured on the sinkhole insurance issue, and wondered why nothing benefiting homeowners was included in the bill. "I could easily suggest this whole bill before us was written by the insurance industry," he said.
An “all-risk” insurance policy provides coverage for all fortuitous losses, less enumerated exclusions.Imperial Ins. Co. v. Ellington, 498 S.W. 2d 368, 371 (Tex. App.- San Antonio 1973, writ denied). Generally under an all-risk policy, the insured need only prove a fortuitous event resulted in a loss. Id. at 375. If the all-risk policy excludes coverage, the insurer must prove that the loss is excluded. Texas Ins. Code § 554.002.
Continue Reading...A proposal for settlement in Florida can be filed by a party to a lawsuit pursuant to Florida Statute §768.79. The proposal for settlement, or offer of judgment as it is sometimes called, is different than an informal settlement offer during negotiations. The proposal for settlement can potentially bring consequences to the offeree if it is not accepted. The proposal for settlement is utilized often in litigation by insurers, notably in Hurricane Wilma cases. I wanted to discuss some of the concerns policyholders may have when an insurer files a proposal for settlement in their case.
Continue Reading...Relying on anti-concurrent causation clauses, several insurers have adopted a method of claims adjusting where business income claims are denied in whole if the property suffered damage attributed in part to an excluded cause of loss. In most states, this type of business practice is wrong and contrary to public policy. For an in depth analysis on the legal framework of anti-concurrent clauses, I encourage you to read Chip’s post, Anticoncurrent Causation Clause Explained in Relation to Hurricane Losses.
Continue Reading...Public adjusting firm, Golub & Associates, was successful in its action against State Farm for payment of fees earned in connection with a fire loss claim. Here is a short recitation of the facts:
Continue Reading...Today, I will wrap up my evaluation of a favorable bad faith decision against Safeco. Last week, I began addressing the damages awarded by the court.
The Millers contended that they were entitled to prejudgment interest in the amount of $256,459.92 pursuant to Wis. Stat. § 628.46, which stated:
Continue Reading...Insurance claims shall bear interest at the rate of twelve percent per year if not paid within thirty days after the insurer is furnished written notice of the fact and amount of the covered loss.
The Windstorm Insurance Network® promotes itself as "The Educational Association for Windstorm Claims Industry Professionals."® It will be hosting a regional symposium in Atlanta on May 10, 2011, at the Emory Conference Center.
Continue Reading...In less than a week, the Senate Banking and Insurance committee will vote on SB 408. If the session doesn’t start until March, what type of “vote” is taking place? Although the 2011 Session of the Florida Legislature does not begin until March 8, 2011, various committees of the House and Senate meet throughout the year. For a bill to become law, it must be voted on by the full legislature (usually during Session). However, before the full legislature can vote on a bill, if must be “heard in committee.” Thus, a bill must be heard by multiple committees in both the Senate and House. Then, the full Senate and House will vote on a bill before it can go to the governor for signature.
Continue Reading...In Hartford Lloyd’s Insurance Co. v. Teachworth, 898 F.2d 1058 (5th Cir. 1990), the insured made claims for hurricane and freeze damage under his Texas insurance policy issued by Hartford Lloyd’s. When the insured and Hartford were unable to agree on the damage, the insured invoked the appraisal provision of the policy. The appraiser for the insured estimated the damages at approximately $4,154,681, while Hartford’s appraiser arrived at a figure of about $1,419,951. Pursuant to the policy, the appraisers submitted their differences to an umpire appointed by a Galveston County judge, and the umpire agreed in large part with insured’s appraiser. The appraisal panel rendered a written appraisal award in the amount of $3,770,043.
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