Last week Florida Peninsula announced to its policyholders that all renewal policies on or after July 1, 2016, will include new language regarding water losses:

  • Out-of-pocket insurance expenses incurred by you will be limited to $3,000 or 1% of Coverage A, whichever is greater for the first 72 hours on all water mitigation services.
  • No further money will be paid for out-of-pocket expenses until 72 hours after the claim is reported to Florida Peninsula Insurance.
  • The above amount may only be exceeded with carrier approval. The limit can be exceeded if we fail to respond within 48 hours.

These policy changes are in response to assignment of benefits claims. Insurance industry conferences have discussed the rise in assignment of benefits for the last several years. These policy changes appear to be Florida Peninsula’s attempt to combat assignment of benefits. I don’t know whether other carriers are taking similar actions at this time.

An initial concern is that most policyholders do not read their policies in detail and will miss these changes. This will likely result in a denial or reduction in coverage for many claims.

What are your thoughts about these new policy requirements?