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

Another hurricane season is fast approaching, but, before the storms start brewing, one developer is looking to get a glimpse at what happens when the storms roll in. Darrell Jones has spent years developing a video-recording system that he hopes will withstand a hurricane and capture video images of a hurricane’s wrath. Jones’ goal is to preserve footage taken during the hurricane to help evaluate the most important question in hurricane property damage cases: was the damage caused by wind or flood?

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The recent rash of tornado catastrophes across the country has left a path of obvious destruction. This is an example of the obvious damage:

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Recently, I wrote about insurance agent’s duties in various states. This week, I will stay with the same topic, but move to another jurisdiction – Louisiana.

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It is a little known fact that many – if not all –homeowner’s insurance policies include provisions requiring the policyholder to comply with certain conditions prior to filing suit against the carrier. These requirements typically include submitting documents, submitting proof of other insurance, making your damaged property available for inspection, and submitting to an examination under oath.

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The title to the post may seem rather absurd, but raising insurance rates and mandating less coverage is exactly what Florida's legislators are doing with currently proposed laws. It is not escaping media covering business issues, as shown by Robert Trigaux, of the St. Petersburg Times, in “As state leaders push for higher rates, property insurers enjoy robust year.” In the article he noted:

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When an insurance company wrongfully denies a claim for damages, the injured may bring a lawsuit against the insurance company and seek the determination of a judge or jury that the insurance company should have compensated the insured for the injury. Sometimes an insurance company will admit liability, but will estimate the amount of damages at a sum less than the insured believes it should be. These situations may also give rise to a lawsuit. In these latter situations, the amount the judge or jury will decide is owed to the insured will often depend on the credibility of witnesses. A recent decision from the United States Court of Appeals for the Fifth Circuit, French v. Allstate Indem. Co., No. 09-30209, 2011 WL 1228281 (5th Cir. Apr. 4, 2011), illustrates the importance of the credibility of witnesses.

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Paige St. John reported on another blockbuster insurance story over the weekend in Gov. Scott Quietly Trying to Kill Citizens Insurance. After obtaining internal government documents and emails, St. John reported:

Gov. Rick Scott has secretly pushed to kill Citizens Property Insurance before his first term ends...

In a February meeting with the industry lobbyists writing bills for the upcoming legislative session, documents show Gov. Scott's top staff sought to force the 1.3 million property owners who now have a policy from the state-run carrier back into the private market, "phasing out Citizens completely."

...The gap would force many Florida property owners to turn to the unregulated surplus lines market, where rates are unchecked and policies are not backed by a state guarantee fund.

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The 2nd edition of Business Interruption: Coverage, Claims and Recovery, by Daniel T. Torpey, Daniel G. Lentz & Allen Melton, will be released by the end of this month and I have already pre-ordered my copy. Dan Torpey’s recent interview with Claims Magazine gives us a sneak peek of the topics explored in the book which will help risk managers, claims professionals and attorneys address today’s uncharted issues in business interruption claims.

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The Associated Press reported that more than 60 tornados ripped through the South last Saturday. The violent weather started last Thursday in Oklahoma and took lives in Arkansas, Alabama, Mississippi, North Carolina, and Virginia. The storms are being called one of the largest single-system tornado outbreaks in United States history, and there were confirmed tornadoes across at least 14 states.

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The last two weeks I wrote about the case, Texas Farmers Ins. Co. v. Cameron, 24 S.W.3d 386 (Tex. App. 2000). This week, I am discussing another aspect of the same case. The insureds, Alfred and Cloteal Cameron, filed a bad faith lawsuit against their carrier, Texas Farmers Insurance Company (“Texas Farmers”) in connection with their claim that arose from a fire which destroyed their home. The counts against Texas Farmers included breach of contract, breach of the duty of good faith and fair dealing, violations of the Deceptive Trade Practices Act and violations of the Texas Insurance Code.

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Insurance companies that engage in unfair claims practices are always concerned that somebody may “blow the whistle” and tell of dirty claims secrets designed to add profits at the policyholder’s loss. A new website, WikiClaimLeaks, is designed to do provide a safe forum for disclosure by insurance company whistleblowers about those outrageous claims practices.

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Over the course of two years, Sarasota Herald-Tribune reporter Paige St. John meticulously examined Florida's property insurers, compiling mountains of data by digging into financial records and chasing industry executives to far away places like Bermuda and Monte Carlo. St. John’s work exposed Florida insurers’ clandestine web of offshore accounts and shell corporations, which allow them to hide massive profits while leaving Floridians exposed to substantial risk.

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The Texas Association of Public Insurance Adjusters (TAPIA) is holding their Spring Conference tomorrow in Houston. This is a chance for all Texas public adjusters to come together and have a good time while learning from others in the profession and earning four hours of continuing education.

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Florida needs a hero. In the midst of a crushing national recession, State Farm Florida, the state’s largest property insurer, has received permission to raise its rates by an average of 18%.

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Currently, many people may be focused on Spring-break vacations and thinking about the start of summer being right around the corner. There are some experts who are focused on another thing -- predicting Hurricane activity for the 2011 Hurricane season. The official start of the hurricane season is June 1st in the Atlantic Basin. This is just over six weeks away and the 2011 Hurricane predictions are in from the Colorado State University forecast team. While they slightly reduced their prediction from the one issued in December 2010, the forecast team is calling for an active season for 2011.

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Many insurance company adjusters like to pull the “speculative” card under the consequential (or remote) loss exclusion to deny, disclaim or reduce the amount of a business interruption claim when they do not feel that a claim has been “adequately” supported. The adjuster’s judgment call can, however, be called into question, depending on the facts or circumstances of the claim.

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The CEO and President of Occupational Athletics, Inc., Mark Everest, has announced that public adjuster safety and wellness will be the topic for his new book and audio production. Everest, in conjunction with Occupational Athletes, Inc., is developing an interactive daily system that will help public adjusters gain the knowledge and tools necessary to lead happier, more productive, and safer lives. Occupational Athletes, Inc., has provided systems for other occupations to help individuals stay safe. Everest explained that the new system for public adjusters will be an integrated lifestyle management system that will center on the safety of insurance claims adjusting and help provide a plan for keeping mentally and physically well for the long run.

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Last week in my post titled Can a Bad Faith Claim Include a Claim for Mental Anguish in Texas?, I addressed Texas Farmers Ins. Co. v. Cameron, 24 S.W.3d 386 (Tex. App. 2000). The portion of the case that I wrote about specifically addressed an insured’s success against an insurance company when pursuing a claim for mental anguish as part of the bad faith lawsuit. This week, I am discussing another aspect of the case.

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My post on Tuesday, Establishing Duty is the Key to Agent Negligence Case, was inspired by an insurance agent negligence case I am involved in out of Ft. Smith, Arkansas. I have the pleasure of representing a hotel management company and owners of a hotel resort with a claim against their former insurance agent. The insurance agent is from Iowa. While researching for a follow-up to that post, I came across articles written by an attorney who represents insurance agents and brokers in errors and omission cases. Surprisingly, our thoughts are similar.

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Dennis Wall is a veteran commentator on various claims practice issues and on advice to avoid bad faith accusations. In Hurricane Report: Acting in Good Faith,I found his point regarding what every insurance company should do when faced with partial payment situations following catastrophes to be dead-on:

The clear lesson from these recently enacted and revised state laws is this: Good faith claim handling -- particularly of claims for policy benefits and proceeds in the aftermath of a hurricane or another catastrophe -- requires prompt payment for any part of a claim that is reasonably covered.

What constitutes "prompt" payment? It may vary from place to place, depending upon the local law, but the same concept still holds true. A claim should be paid within either a reasonable amount of time or within a specific time period dictated by local laws -- usually 30 days -- of that portion of any claim that is reasonably proven as covered by the proof-of-loss statements. (emphasis added)

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In the insurance claims environment, there is a picture I have used in a presentation, Why Can't We All Just Get Along? to show how opposing individuals often react to each other:

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In what is being called the second largest land buyout in U.S. history, Galveston County has already bought out over 300 properties, and it hopes to buy 300 more by the end of the year. According to the video below, Galveston County has already spent over $100,000,000 to purchase properties, and Galveston County used FEMA. money to do it.

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Insurance agents provide extraordinarily important services to policyholders. Without the service they provide, consumers would have a difficult time finding the proper coverage at the best available price. Insurance policies are complex, and insurance agents explain the coverages available and why consumers need certain products, so customers can make informed choices and purchase the insurance products that best fit their needs. An agent’s skill, knowledge, advice and service are often overlooked by customers who focus on price alone.

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A couple of weeks ago, in Choose Your Hurricane Protection and Installers Wisely, I discussed the importance of proper hurricane preparation and mitigation when choosing window protection and installers. Hurricane window coverings help to protect your property during a hurricane, and can also help protect your wallet during quiet times because many property insurers offer significant discounts for hurricane mitigation.

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Slabbed brought to my attention that U.S. District Judge Senter was retiring in Federal Judge L.T. Senter is Retiring. Ex Rel Rigsby to be Transfered to Another Judge. An unsung hero in the Katrina litigation, Sun-Herald investigative reporter Anita Lee, broke the story of Judge Senter's retirement in U.S. District Judge Retiring and provided a brief biography of his legal career:

Senter, a University of Mississippi Law School graduate, served as a circuit judge before he was appointed to the federal bench by President Jimmy Carter in 1979.

He worked from 1980 to 1982 as a federal judge in Mississippi’s Northern District, then as the district’s chief judge from 1982 to 1998. He took senior status in 1998, and began traveling to the Coast in 2000 to help out with the caseload.

He moved to the Coast in 2002. After Katrina hit, he agreed to take on the insurance cases with the assistance of U.S. Magistrate Judge Robert H. Walker. Other judges had to recuse themselves from the cases because their homes suffered hurricane damage.

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Aunt Sally’s Praline Shop, Inc. (Aunt Sally’s) is in the business of manufacturing and selling pralines made of sugar, cream, butter and pecans. The company had several facilities in New Orleans which suffered extensive damage when Hurricane Katrina devastated the region. Aunt Sally’s facilities were insured with United Fire & Casualty Company. United Fire initially denied all the claims, but Aunt Sally’s was able to negotiate payment for some of its claims. Aunt Sally’s filed a lawsuit to recover the underpaid insurance benefits. After two (2) favorable jury verdicts and one (1) appeal, Aunt Sally’s will finally collect its hard fought insurance benefits.

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Based out of Chicago since 1916, Carter J. Auslander and Associates is a licensed and credentialed public adjusting firm. This family owned business takes great pride in the four generations of claims processing skill and expertise. Mr. Carter J. Auslander began his work at Hoffberg, Spak & Associates in 1980. The firm later became known as Theodore Spak & Associates, and is now known as Carter J. Auslander and Associates. Using extra care and dedication, Carter and his son, Russ Auslander, have helped policyholders throughout the United States with various types of losses.

Carter Auslander paid great attention to detail and thoroughly investigated the damage to adjust the Hurricane Katrina damage at the historic Latrobe building.

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The legal precedent on bad faith claims across the country reflects a variety of allegations against insurance companies regarding the improper handling of insurance claims. Improperly denying a claim, not paying enough and delaying payment are probably the allegations that first come to mind. There are, however, other allegations that have been asserted against insurers in the context of bad faith that might not come up as often as others. The Court of Appeals in Texas addressed, among other things, a claim of mental anguish against an insurance company in Texas Farmers Ins. Co. v. Cameron, 24 S.W.3d 386 (Tex. App. 2000).

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As reported in Wind® Regional Symposium in Atlanta May 10, 2011, the Windstorm Insurance Network® is sponsoring a Regional Symposium in Georgia regarding windstorm claims,  Given the recent tornados and severe windstorm destruction, this conference is extraordinarily timely for adjusters who are addressing these issues.

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Adjuster Lisa sent me a video from The Incredibles which demonstrates a far too common occurrence at some insurance companies:

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Most policyholders understand that if their insured property suffers damage as a result of a peril covered under their insurance policy, their insurance carrier will pay for that damage. Simple, right? Well, if it was really that simple, I probably wouldn’t be writing this post. Interestingly, there are various theories regarding what “triggers” insurance coverage. In Texas, several theories exist, including the manifestation trigger, the exposure trigger, the continuous trigger, and the injury-in-fact trigger. Today, I will discuss the manifestation trigger.

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You can tell it is not an election year when consumers lose valuable rights because politicians, who promised to serve them, vote against consumer interests. Yesterday, I wrote a post, Good Guys Prevail Over Insurance Lobby, about a pro-consumer victory in the Florida House of Representatives. The loss was in the Florida Senate, where the insurance industry is supported by many key Florida Senators.

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As noted by Aaron Deslatte in 'Bad faith' Bill Gets a Bad Start in House Committee, the proposed legislation I commented on at length yesterday in A Terrible Proposed Law Which Could Harm All Floridians is Up For Consideration Today failed. This is a win for the Good Guys. There is no uncertainty that the Bad Guys, the insurance lobby, support these draconian changes to longstanding laws that protect policyholders.

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The Southern District Court of Florida recently dismissed a policyholder’s case against QBE and granted a stay of the action in a lawsuit stemming from Hurricane Wilma. Garden-Aire Village South Condo. Assoc., Inc. v. QBE Insurance Corp., No. 10–61985, 2011 WL 1184737 (S.D. Fla. March 31, 2011). The policyholder filed the lawsuit against QBE on October 18, 2010, alleging that Hurricane Wilma damaged its windows and sliding glass doors, and that the policyholder notified QBE of the loss. The policyholder asserted that QBE failed to determine the amount of its loss from Hurricane Wilma and that there was an actual and present need for various declarations by the Court concerning the parties’ rights and obligations under a policy of insurance.

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A proposed change to the Civil Remedy Law is coming up for vote today. This post will only comment about the impact it will have on first-party property insurance claims. The Bill is bad for homeowners, condominium owners, business policyholders and condominium associations. I am addressing practical aspects of how this law is harmful to policyholders with these types of claims that follow hurricanes, tornados, fires, floods and other disasters. If you are ever involved in an accident that results in a third-party claim against your insurer, this bill also changes existing law and the changes could make you liable for excess judgments that are essentially caused by your insurer’s failure to act in good faith to settle the claim.

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Look around you. Unless you live on a deserted island, you should find at least one item manufactured in Japan. If you are planning on purchasing a car or an electronic item within the next 12 months, you may find that some of these items are perhaps more expensive due to a shortage in the supply line.

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Last week, my post discussed Chinese Drywall litigation specific to policyholders seeking coverage for their damages under residential policies of insurance. This week, I continue to discuss the case of Walker v. Teachers Insurance Company, which is currently pending in the Thirteenth Judicial Circuit, Hillsborough County, Florida, Civil Trial Division. Most recently, Judge Robert Foster granted the Plaintiffs’ Motion for Partial Summary Judgment for Coverage under the insurance policy.

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A couple of weeks ago, the Louisiana Supreme Court addressed the issue of whether an insured can recover damages for mental anguish caused by an insurer’s breach of its statutory duty of good faith and fair dealing. Wegner v. Lafayette Insurance Company, Nos. 2010-C-0810, 2010-C-0811 (March 15, 2011)

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