Florida Insurers : Property Insurance Coverage Law Blog

Posted on August 26, 2010 by Chip Merlin

Sinkhole Investigation Started By Office of Insurance Regulation

The Insurance Commissioner has apparently decided to start calling some of my clients. According to the St. Petersburg Times, his office is trying to find statistical information regarding sinkholes reported between 2006 and 2009. We'll call and try to find out more information so we can help them get accurate answers, but, in "Florida Regulators Investigate Rash of Sinkhole Claims" reporter Jeff Harrington found the following:

Florida Insurance Commissioner Kevin McCarty said Wednesday that he has issued a "data call" to commercial and residential property insurers to collect sinkhole claims information.

Specifically, regulators are seeking details about claims opened anywhere in the state from 2006 to 2010. Included in the report will be the types of claims, testing procedures to determine legitimacy, costs of inspections, locations of claims, legal fees and public adjuster fees, and amount of structural loss.

Tags: Citizens Property Insurance Corporation, Consumer Protection, Florida, Florida Insurers, Insurance, Kevin McCarty, Office of Insurance Regulation, Sinkhole

Posted on August 18, 2010 by Chip Merlin

Claims Deadlines Set for Coral Insurance Company

Coral Insurance Company has been placed in receivership. One aspect of handling claims where the insurer is in receivership is that a statutory time limit exists to file a lawsuit. However, for adjusters and policyholders, before a lawsuit can be filed, a "claim deadline" must first be met. We often get requests shortly before the lawsuit deadline only to find the claim deadline had not been met.

Tags: Consumer Protection, FIGA, Florida, Florida Insurance Guaranty Association, Florida Insurers, Insolvent Insurers, Insurance, Insurance Claim

Posted on August 9, 2010 by Shaun Marker

According To Florida Statute, An Insurer Cannot Apply A Policy Hurricane Deductible More Than Once During A Calendar Year For Personal Lines Residential Claims

As many people are aware, property insurance policies often have a large deductible for hurricane losses. In Florida, the hurricane deductible can be a percentage of the dwelling policy limit: 2%, 5%, or even 10%. These percentage deductibles can be very large on personal lines residential claims where a policyholder’s house may be insured for several hundred thousand dollars. Policyholders must be aware that the Florida legislature has created a statute prohibiting an insurance carrier from applying a policy hurricane deductible more than once during a calendar year for personal lines residential claims.

Tags: Deductible, Florida, Florida Insurers, Insurance, Insurance Claim

Posted on August 6, 2010 by Chip Merlin

Florida Insurance Council Taps Cecil Pearce as its New Leader

The insurance industry never rests when it comes to lobbying and politics. The Florida Insurance Council has a new leader who used to be its old leader. Insurance lobbyist Cecil Pearce has taken over the reigns from Guy Marvin. Here is a little about Pearce from the press release:

Tags: Alex Sink, American Insurance Association, Consumer Protection, Florida, Florida Insurers, Insurance, lobbyist

Posted on June 2, 2010 by Chip Merlin

Crist Vetoes Florida Property Insurance Bill and Keeps True to a Promise He Made Four Years Ago

Politicians who keep their campaign promises should be applauded. They are a special breed, particularly when knowing that such integrity will be criticized. Charlie Crist kept his word to Floridians when he vetoed a property insurance bill that would have allowed insurance companies to raise rates by ten percent each year. His veto is a huge victory for every Floridian who is outraged over the highest property insurance premiums in the country. The insurance industry offered the most illogical of all arguments as to why the proposed law was "consumer friendly:" by allowing rates to go up, insurance premiums would go down. This point was made in Do Florida Legislators Think We Are Stupid?

Tags: Florida, Florida Insurers, Governor Crist, State Legislation

Posted on June 1, 2010 by Chip Merlin

Insurance Lobby Made Property Insurance Bill Which is Awaiting Veto--or No Veto

Today is the day Governor Crist decides the fate of the pending property insurance bill by choosing whether to exercise his veto. Yesterday, investigative journalist Paige St. John's article, Lobby Had a Hand in Insurance Bill, was on the front page of the Sarasota Herald-Tribune. While I was unsuccessfully advocating for policyholders this past legislative session, I observed the insurance lobby, with an army of insurance lawyer lobbyists, seemingly writing most of the proposed laws that eventually passed. Indeed, I have not found one quote from a Florida representative claiming to have stopped any insurance industry sponsored law.

Tags: Consumer Protection, Florida, Florida Insurers, Governor Crist, Insurance, State Legislation, lobbyist

Posted on May 25, 2010 by Chip Merlin

Civil Remedy Notice Requirements for Florida Bad Faith Claims are Tested

Dennis Wall's weekend post, Florida Civil Remedy Notice Insurer Violation Holding: "Sufficiently Specific" Requirement, raises an important issue concerning bad faith cases in Florida. While the Florida Supreme Court ponders common law obligations of good faith in a first party context, as discussed in A Confusing Oral Argument in QBE vs. Chalfonte Baffles the Florida Supreme Court Regarding First Party Bad Faith, a raging legal battle ensues in many statutory bad faith actions because insurance companies complain that civil remedy notice of violation is not sufficient.

Tags: Bad Faith, Civil Remedy Notice, Dennis Wall, Florida, Florida Insurers

Posted on May 24, 2010 by Chip Merlin

Many Questions and the Miami Herald Calls for Veto of Property Insurance Bill

In an editorial, Insurance Bill Needs Improvement, the Miami Herald called on Governor Crist to veto the property insurance bill now sitting on his desk.

Tags: Florida, Florida Insurers, Governor Crist, Public Adjusters, Replacement Cost, State Legislation

Posted on May 21, 2010 by Chip Merlin

Is the Proposed Property Insurance Bill Bad for the Average Florida Insurance Consumer?

Governor Charlie Crist will certainly be asking himself the question whether the property insurance legislation before him is bad for average Florida insurance consumers. Yesterday’s afternoon post, Pay Higher Premiums and Get Less Coverage Legislation -- Can Anybody Explain Why This is Good for Floridians? provided a simple explanation of why many are calling for Governor Crist to veto this legislation. The analysis is not easy because the proposed law was rolled into one massive piece of legislation, some very bad and some good. The media is starting to pick up the overall aspects of the proposed law.

Tags: Consumer Protection, Florida, Florida Insurers, Governor Crist, Julie Patel, Mike Fasano, State Legislation

Posted on May 20, 2010 by Chip Merlin

Pay Higher Premiums and Get Less Coverage Legislation -- Can Anybody Explain Why This is Good for Floridians?

Governor Charlie Crist should veto the property insurance legislation which passed (SB 2044) and has been presented to the Governor. He made a promise not to raise rates when he became governor. Many other politicians made similar claims about standing up to insurance companies, but they seem to have forgotten. These proposed laws not only raise rates, they take away coverage and benefits Floridians have enjoyed for a long time.

Tags: Florida, Florida Insurers, Kevin McCarty, State Legislation

Posted on May 4, 2010 by Guest Blogger

A Guest Letter Calling For a Veto of the Insurance Bill

The Honorable Governor Crist:

I respectfully request that you veto the insurance legislation recently passed in SB 2044. While there are many good provisions in this bill including some of the Public Adjusting proposed changes, other provisions will cause great harm to Florida policyholders particularly when the next big storm or other perils impact already struggling Floridians.

Tags: Adjusters", Consumer Protection, Crist, Florida, Florida Insurers, Replacement Cost, State Legislation, p"Public

Posted on April 29, 2010 by Chip Merlin

Significant Property Insurance Legislation Passes Florida House of Representatives

"Laws are like sausages, it is better not to see them being made."
-Otto von Bismarck

Our law firm's Knowledge Manager, Ruck DeMinico, was commenting to me that the new property insurance bill passed by the Florida House of Representatives yesterday was over a hundred pages long and that it would take a while to read through the entire document and analyze the changes from the last minute amendments. We joked that most of the Florida Representatives who voted on the bill had not yet read the entire bill either. Indeed, if they had read it, most would not understand what they were voting on because the complexity and subtlety of insurance law is not learned over several months.

Tags: Consumer Protection, Florida, Florida Insurers, Julie Patel, Public Adjusters, State Legislation

Posted on April 28, 2010 by Chip Merlin

Selling Property Insurance as "Replacement Cost Insurance" Should Only Be Allowed If Replacement Value is Paid Immediately

Policyholders know when they have been "ripped off" by the fine print of an insurance policy. The most common "rip off" is when insurance companies sell replacement cost insurance and then do not immediately pay replacement cost value. A number of insurance companies, like Chubb and AMICA do not play this "bait and switch" game in other jurisdictions. However, the insurance industry wants to change Florida law to make it legal in Florida.

Tags: Actual Cash Value, Florida, Florida Insurers, Insurance, Replacement Cost, State Legislation

Posted on April 22, 2010 by Chip Merlin

Property Insurance Legislation on Florida Senate Floor Today

Florida legislators will be debating insurance on the Senate floor today. The Senators are likely to have significant debate because recent indications are that there is extraordinary controversy about how to “fix" all of Florida's property insurance problems.

Tags: Consumer Protection, Florida, Florida Insurers, Insurance, Regulation, State Legislation

Posted on April 7, 2010 by Guest Blogger

A Picture is Worth a Thousand Words - Sinkhole Damage and the Florida Legislature

These are actual photographs of damage to the ceiling and walls of one of my client’s homes. A carrier denied this sinkhole claim based on a report from an engineering firm that opined that the damage wasn’t caused by sinkhole activity. In addition to the numerous 2-4” wide openings to the walls and floors of the home, the floor elevation survey revealed a 7.25 inch floor elevation differential. Note that these photos show only a fraction of the actual damage to the house. Indeed, several veteran attorneys on both sides of the case and a well-respected retired judge who mediated the case all agreed that this was one of the worst sinkhole damage cases that they had come across.

Tags: Consumer Protection, Florida, Florida Insurers, Insurance, Insurance Claim, Sinkhole, State Legislation

Posted on April 5, 2010 by Chip Merlin

Catching Up on Insurance Coverage Posts and Florida Insurance Politics

This Property Insurance Coverage Blog set record visits last month. Thank you! I noticed a significant drop as the Easter weekend started. The Florida legislature took a well deserved breather last week as well. So, it seems like it is a good time to get caught back up.

Tags: Allstate, Consumer Protection, Florida, Florida Insurers, Governor Crist, Insurance, State Farm, State Legislation

Posted on April 1, 2010 by Chip Merlin

"Do Insurers Funnel Florida Funds to Parent Companies While Claiming Need to Raise Rates?"

The question posed in this title was the headline to a post by the St. Petersburg Times columnist, Robert Trigaux. It was pretty harsh against some of our elected representatives who are neither running the insurance companies nor conducting these actions. Still, here are some of the significant observations in his post:

Tags: Consumer Protection, Florida, Florida Insurers, Insurance, State Legislation

Posted on March 16, 2010 by Chip Merlin

Breaking News Story: Florida Insurers Hide Profits While Claiming Losses to Get Rates Raised

The Sarasota Herald-Tribune conducted a year long investigation into the manner Florida insurance companies diverted premiums and monies as expenses and losses to hide actual profits. This revelation is probably shocking to many who have been told repeatedly that the Florida insurance industry is losing money as a result of "unfair" rates and for other claims related reasons.

Tags: Florida, Florida Insurers, Insurance, Julie Patel, Regulation

Posted on March 11, 2010 by Chip Merlin

Are Florida Insurance Companies Really Losing Money? Are Investors Using Management Companies To Take Profits and Leave Little Surplus for Policyholder Claims?

An Order by the Office of Insurance Regulation shows one method some Florida insurers may use to “poor mouth” losses to the public and our legislators in Tallahassee while taking millions home through shell accounting techniques. Many of the smaller insurers operate as three corporations--the insurer, a managing general agent, and a holding company. It does not take a financial genius to figure out that investors and managers can siphon off profits by simply charging excessive fees through the managing general agent. The insurance part of the jointly owned enterprise then claims it cannot make any money for various reasons which we have been hearing about in the press and from some insurance lobbyists looking to raise rates and reduce benefits to policyholders.

Tags: Consumer Protection, Florida, Florida Insurers, Insurance, Office of Insurance Regulation, Regulation

Posted on March 5, 2010 by Chip Merlin

Sinkhole Proposed Law Only Pays Policyholder 25% of Available Coverage--Lessons of How the Insurance Lobby Spins a Message

The poor policyholders whose homes cracked, popped, and dipped as a result of sinkholes induced by citrus farmers spraying their crops to prevent freezing damage should be happy it happened to them this year. Newly proposed anti-consumer sinkhole legislation would limit policyholders to 25% of their coverage limits for the most common sinkhole problems.

Tags: Consumer Protection, Florida, Florida Insurers, Home Owner's Insurance, Insurance, Residential Insurance Claims, Sinkhole, State Legislation

Posted on March 4, 2010 by Chip Merlin

Senators Mike Fasano and Rhonda Storms Come to the Rescue of Policyholders

The Florida Senate Banking and Insurance Committee has a number of very intelligent and very well meaning members. Two of them, Senator Rhonda Storms and Mike Fasano stood up yesterday to the insurance lobbyists who know little about insurance, but a lot about propaganda and politics. Full time and professional insurance lobbyists have one agenda--achieve their clients agenda. They have an army of lawyers, a ton of money, and their message is "spin" at its finest. No wonder so many public servants can get snowed by the misinformation and insurance industry proposed laws.

Tags: Actual Cash Value, Consumer Protection, Florida, Florida Insurers, Insurance, Mike Fasano, Replacement Cost, State Legislation

Posted on March 1, 2010 by Chip Merlin

Proposed New Senate Bill Filed: Policyholders Lose Prompt Replacement Cost Payments and Older Roof Insurance Coverage

If you are a policyholder, don’t expect prompt payment of replacement cost benefits and payments for damage to older roofs if Florida Senate proposed legislation passes. A proposed bill filed as a substitute that will be heard in the Florida Senate and Banking & Insurance this Wednesday was just released this afternoon. I have not had an opportunity to review it in detail, but a number of anti-consumer provisions are contained within this proposed legislation.

Tags: Consumer Protection, Florida, Florida Insurers, Home Owner's Insurance, Insurance, Replacement Cost, State Legislation

Posted on February 26, 2010 by Chip Merlin

The Florida Insurance Lobby Currently Controls the Rhetoric Regarding Public Adjusting in Florida

Julie Patel of the Sun-Sentinel published Battle Brewing Over Public Insurance Adjusters which was preceded by Florida Cabinet Tables Insurance Fee for Hurricane Claims: Fraud Suspected and a St. Petersburg Times article "State Delays Bond Sale for Hurricane Wilma Claims.” In each of these, the message from the insurance industry was clear:

The Florida Insurance Council, Property Casualty Insurers Association of America and the Florida Property Casualty Association issued statements Wednesday backing bills filed this week by Sen. Mike Bennett, R-Bradenton, and Rep. Janet Long, D-Seminole. They say public adjusters -- who represent homeowners in claims disputes with their insurer -- inflate claims, driving up costs for all policyholders.

Tags: Consumer Protection, Florida, Florida Insurers, Insurance, Julie Patel, Public Adjusters, lobbyist

Posted on February 26, 2010 by Guest Blogger

Everyone Must Participate In The Political Process

(*Chip Merlin's Note: This guest blog is by Frank Artiles, candidate for the Florida State House of Representatives)

“Determine never to be idle…It is wonderful how much may be done if we are always doing.”
-Thomas Jefferson

Thank you for hosting a Forum that informs and educates so many regarding insurance industry trends and concerns. I feel privileged to work in a part of the insurance industry dedicated to helping people. I am humbled that you have asked me to write about a topic that is so important and that I feel strongly about.

Tags: Consumer Protection, FAPIA, Florida, Florida Insurers, Frank Artiles, Insurance, Public Adjusters, State Legislation

Posted on February 10, 2010 by Donna DeVaney

Sinkhole and Catastrophic Ground Cover Collapse Insurance in Florida

(Note: this Guest Blog is by Donna DeVaney, an attorney with Merlin Law Group in the Tampa, Florida, office. This is a series that she and fellow attorney Kristin Demers-Crowell are writing on sinkhole issues).

In 2009, the Florida legislature passed a law allowing Florida residents to opt-out of sinkhole coverage. The purpose of the law was to help insureds lower their yearly insurance premiums. The practical effect, however, has been that we now have many in this state who have insurance policies that effectively cover nothing in the event of sinkhole damage.

Tags: Florida, Florida Insurers, Insurance, Sinkhole

Posted on February 4, 2010 by Chip Merlin

A Man of His Word: Unlike Other Flip Flop Politicians on Insurance Rates, Crist Sticks to His Promise

The Florida legislator is full of "flip flop" legislators that are reversing laws made in 2005 and 2006 which supported lower insurance rates and protected insurance consumers from unscrupulous insurers. Governor Charlie Crist ran on a platform of helping Floridians keep insurance rates down and he is sticking to that promise even as other politicians who once voted for such laws are now firmly supporting the opposite measures. These "flip flop" politicians are filing laws that would allow rates to go as high as the insurance industry can make them and laws that take benefits away from consumers following disaster. Crist seems to be standing tall against the insurance industry and for the people, unlike other politicians who are currently getting their responses and "speaking points" from insurance lobbyists.

Tags: Consumer Protection, Florida, Florida Insurers, Governor Crist, Insurance, Mike Fasano, National Underwriter, State Legislation

Posted on February 1, 2010 by Chip Merlin

Consumer Advocates Call "Insurance Choice" Legislation Misleading

Three consumer advocates published a letter, Property Insurance Deregulation Too Costly, which claims that currently proposed Florida legislation calling for no regulation of insurance rates is bad for Floridians "because the average consumer does not have the resources or information to determine when a rate is excessive, the opportunity for the [insurance] company to abuse consumers exists." I agree, and for many more reasons than just that.

Tags: Consumer Protection, Florida, Florida Insurers, Insurance, National Underwriter, Regulation, Sean Shaw, State Legislation

Posted on January 15, 2010 by Chip Merlin

Mediation May Not be the Answer to a Best Alternative Insurance Claim Resolution Process Because it is Subject to Abuse

I appreciate all the comments to posts from readers with various perspectives on insurance coverage and the insurance claims industry. I read them all, try to respond when I can, and honestly consider the viewpoint of those writing. This morning, I came across a comment worthy of consideration by all of us regarding mediation and alternative approaches to insurance claims dispute resolution.

Tags: Alternative Dispute Resolution, Appraisal, Citizens Property Insurance Corporation, Consumer Protection, Florida, Florida Insurers, Insurance, Mediation, State Legislation

Posted on January 11, 2010 by Chip Merlin

Sean Shaw is a Refreshing and Intelligent Advocate for Floridians--We Deserve This Type of Representation

Why do so many of our politicians play to the lobbyists and support laws that harm the average person and voter? This is exactly what has happened with important laws sponsored by the insurance industry lobbyists and then proposed by Florida Senator Mike Bennett of Bradenton and Representative Bill Proctor of St. Augustine. These politicians and other Florida political leaders have sponsored a law that would allow insurance companies to raise the rates of Florida policyholders as much as they want. Indeed, the law they support allows for insurance companies to collude with each other, since it calls for the complete deregulation of rates. As the insurance industry is exempt from anti-trust regulation, based on a bargain it made with the federal government in which it agreed to state regulation of rates, the insurers would be legally exempt from all regulation. Is this stupid or what? Do the Florida political leaders supporting this law think people will be happy when their rates go up 100% in a couple of years, or is this just a payback to the insurance industry and their lobbyists funding certain political action committee dollars? Or, giving them the benefit of the doubt, do they really understand the issue?

Tags: Alex Sink, Consumer Protection, Florida, Florida Insurers, Insurance, Kevin McCarty, Office of Insurance Regulation, Regulation, Sean Shaw, State Legislation

Posted on January 5, 2010 by Chip Merlin

A Method for Keeping the Appraisal Clause in Property Insurance Policies Which Will Satisfy All Concerns

The appraisal clause should not be removed from Florida insurance policies. The concerns of insurers and policyholders can be addressed if we simply do two things:

1. Mandate that the appraisal clause remain in all property insurance policies.

2. Pass legislation which provides the safeguards for a fair procedure while allowing the parties to make the process as formal as they need to insure due process and still reflect the desire to avoid the time and expense of litigation.

Tags: Appraisal, Arbitration, Consumer Protection, Florida, Florida Insurers, Insurance, Office of Insurance Regulation, Sean Shaw, State Legislation, Windstorm Insurance Network

Posted on December 28, 2009 by Chip Merlin

Sean Shaw Has Full 2010 Legislative Agenda--Including Public Adjuster Issues

Miami Herald reporter, Bea Garcia, wrote a very important story, Tackling Contentious Insurance Issues, concerning Insurance Consumer Advocate Sean Shaw. It appears the Roundtable meeting I wrote about in Alternative Resolution Roundtable: Appraisal is the Hot Topic and Is There Any Chance that Appraisal Will Stay the Same in Florida?, is going to be an important last meeting before Shaw takes stances on how Florida legislators should deal with current insurance consumer issues:

Tags: Claims Core Process Redesign, Consumer Protection, Florida, Florida Insurers, Insurance, Kevin McCarty, Sean Shaw, State Legislation

Posted on December 22, 2009 by Chip Merlin

State Farm's Regulatory Resolutions and Concessions

In a post last September, State Farm Agents are Fighting State Farm for Economic Survival, I wrote:

"Again, for many different reasons, I hope McCarty and State Farm can work out a deal."

Tags: Consumer Protection, Florida, Florida Insurers, Insurance, Regulation, State Farm, State Legislation

Posted on December 16, 2009 by Chip Merlin

State Farm Florida Withdraws its Plan to Leave the State and Agrees to Non-Renew no More than 125,000 Residential Property Policies

The Florida Office of Insurance Regulation (OIR) has entered a Consent Order today resolving the attempt by State Farm to leave the Florida property insurance market.

Tags: Consumer Protection, Florida, Florida Insurers, Home Owner's Insurance, Office of Insurance Regulation, State Farm

Posted on December 10, 2009 by Chip Merlin

Do Florida Legislators Think We Are Stupid?

Floridians currently have legislators that are in the pockets of and doing business for insurance companies. Virtually all states regulate insurance rates because insurance companies have been historically notorious for over charging customers following losses, as well as for under charging customers before declaring bankruptcy.

Tags: Consumer Protection, Florida, Florida Insurers, Insurance, State Legislation

Posted on November 20, 2009 by Chip Merlin

While State Farm May Stay in Florida, Appraisals May Go

Julie Patel, of the Sun Sentinel, reported that Florida officials and State Farm appear to be working towards a mutual solution to keep State Farm selling property insurance in Florida:

Insurance Commissioner Kevin McCarty told the Florida Cabinet Tuesday that State Farm may not leave the state's property insurance market as planned and the state is developing a report card on insurers to help consumers and increase competition.

“We’d like them to be a good neighbor so long as they are a fair neighbor," Gov. Charlie Crist said about McCarty's prediction that State Farm will stay in Florida in a smaller form.

Tags: Appraisal, Consumer Protection, Florida, Florida Insurers, Insurance, Julie Patel, Kevin McCarty, State Farm

Posted on November 2, 2009 by Chip Merlin

Florida Rates Are Rising--Not So Fast!

Last week, I made a statement in my post, Are Wind Mititgation Credits Killing Profits of Florida Insurers, that everybody is predicting insurance rates are going up . Then, the St. Petersburg Times ran a story, Citizens Property Rates Headed Up, or Maybe Down, Depending on Where You Live.

Tags: Citizens Property Insurance Corporation, Florida, Florida Insurers, Home Owner's Insurance, Insurance

Posted on October 28, 2009 by Chip Merlin

Are Wind Mitigation Credits Killing Profits of Florida Insurers?

It is hard to imagine any Florida property insurers not making a killing in 2009. With no hurricanes or significant tropical storms, the most financially devastating peril was eliminated. Yet, over 100 Florida residential property insurers reported losses.

Tags: Citizens Property Insurance Corporation Mission Task Force, Florida, Florida Insurers, Home Owner's Insurance, Hurricane Mitigation, Insurance

Posted on October 27, 2009 by Chip Merlin

Senator Fasano Defends His View Regarding Opting Out of Sinkhole Coverages

I wonder how our clients, the Leeds, would feel if they had purchased only catastrophic sinkhole coverage or no sinkhole coverage, rather than the normal sinkhole coverage required when they purchased their "all-risk" insurance policy. Their home slowly but surely cracked, drooped, and sank over several years before it was condemned. If they "saved" money on their premium as Florida Senator Mike Fasano successfully pushed for in legislation, they would have lost the entire investment on their home. They would also still owe money on the mortgage, possibly causing bankruptcy.

Tags: Florida, Florida Insurers, Home Owner's Insurance, Insurance, Insurance Claim, Mike Fasano, Sinkhole, State Legislation

Posted on October 21, 2009 by Chip Merlin

Associated Industries and Private Insurers Want Florida Policyholders to Pay as Much as Possible for Property Insurance

Florida Senator Mike Fasano, a public servant ever vigilant about consumers of regulated industries getting ripped by the amounts they have to pay for mandated services and products, forwarded a recent news article, “Group Backs Florida Property Insurance Rate Hike.” When the Florida legislators and Governor were concerned about the severe escalation of property insurance premiums following the 2004 and 2005 storm seasons, they froze the rates charged by Citizens Property Insurance Corporation. Governor Charlie Crist ran for elected office on a platform of preventing the severe escalation of such prices. At that time, many of Florida’s legislators ran their political campaigns suggesting they were no friend of the insurance industry that was raising rates in an extraordinary manner. While Governor Crist proved he is a man of his word by vetoing legislation which would have allowed major insurers to charge whatever they want, only a few elected legislators seem to remember the promises they made to their electorate. Associated Industries supports those politicians that are more concerned about insurers profits than the promises to their constituents—except when elections are around the corner.

Tags: Citizens Property Insurance Corporation, Citizens Property Insurance Corporation Mission Task Force, Consumer Protection, Florida, Florida Insurers, Insurance, Mike Fasano, United Policyholders

Posted on October 8, 2009 by Chip Merlin

Nationwide Continues its Removal From Florida Property Insurance Marketplace

The exodus of the larger national multiline carriers along coastal areas continues. Nationwide has reportedly filed a plan to non-renew 60,000 property insurance policies in Florida starting next July. Unlike State Farm, however, Nationwide Insurance Company has made arrangements with Tower Hill Insurance Group out of Gainesville, Florida, to accept all 60,000 policies.

Tags: Florida Insurers, Insurance, National Association of Insurance Commisioners, Nationwide, Policy Language, Wind Versus Water

Posted on September 30, 2009 by Chip Merlin

Florida Insurance News Reports on State Farms Slow March to Leaving

Yesterday, Chad Hemenway, associate editor of BestWeek, reported that State Farm and Florida’s Office of Insurance Regulation jointly moved to delay the administrative hearing that will address State Farm’s move to leave Florida’s property insurance market. The saga continues....

Tags: Citizens Property Insurance Corporation, Consumer Protection, Florida, Florida Insurers, Home Owner's Insurance, Insurance, Kevin McCarty, Office of Insurance Regulation, State Farm

Posted on September 21, 2009 by Chip Merlin

Cooperation Clause Does Not Require the Policyholder's Slavish Obedience

It is curious how some insurance company claims managers allow their insurance defense counsel to treat their customers with an arrogant, demeaning tone, along with long requests for largely irrelevant lists of information following a loss. Any objection to the treatment is usually met with a threat the claim will be turned down for a failure to cooperate. The “threat” letter is usually in a similar tone requiring the policyholder to obey…or else. For insurance adjusters that do not act this way or allow their insurance defense counsel to do so, this treatment may shock you. Yet, many policyholder representatives see this as a growing trend in claims treatment following a loss.

Tags: Claims Handling, Claims Management, Cooperation Clause, Court Opinion, Florida, Florida Insurers, Insurance, Insurance Claim, Lexington Insurance Company, Policy Language

Posted on September 20, 2009 by Ruck DeMinico

Florida Insurers Have A Strong Financial Incentive To Delay, Rather Than Deny, Claims

(Note: This Guest Blog is by Ruck DeMinico, Knowledge Manager with Merlin Law Group).

The recent case of North Pointe Insurance Company v. Tomas, No. 3D08-2245, 2009 Fla. App. LEXIS 12505 (Fla. 3d DCA August 26, 2009), illustrates why many insurers who wrongfully fail to pay a claim choose to unnecessarily delay payment rather than out right deny them.

Tags: Court Opinion, Florida, Florida Insurers, Insurance, Prejudgment Interest

Posted on September 19, 2009 by Kelly Kubiak

Federated's Claims Handling Problems

(Note: This Guest Blog is by Kelly Kubiak, an attorney with Merlin Law Group in the Tampa, Florida, Office).

Some insurance companies feel that although they may not have investigated a Florida loss promptly during the time period Florida suffered successive hurricanes, the companies have an excuse due to the vast amount of claims.

Tags: Bad Faith, Claims Handling, Florida, Florida Insurers, Insurance, Kelly Kubiak

Posted on August 27, 2009 by Chip Merlin

The Florida Insurance Industry Flexes Its Muscle

Where are our insurance consumer advocates? Are they publicly wanting to appear one way to get their constituents’ votes, but then voting another way behind closed doors? This is my concern, because otherwise the last bill placed before Governor Crist would never have appeared. My powerful, worthy, much richer, and able State Farm lobbyist, Mark Delegal and other similarly powerful interested insurance industry lawyers show how the insurance industry has already set out its agenda on the insurance consumers of Florida in a recent article:

Tags: American Association for Justice, Consumer Protection, Florida, Florida Insurers, Insurance, State Legislation, United Policyholders

Posted on August 12, 2009 by Chip Merlin

Is Florida's Chief Insurance Regulator, Kevin McCarty, at Odds with Florida's Chief Financial Officer and Possible Next Governor?

Dan Luby of the Florida Insurance News forwarded a Blog, Alex Sink's Cold War with the Insurance Commissioner, by Gary Fine regarding a possible “riff” between Alex Sink and Kevin McCarty. I find this curious because the two of them are leading consumer advocates for policyholders. I have never found Bill McCollum, Sink’s opponent for Florida Governor next year to be a supporter of policyholders. He is clearly the insurance industry’s candidate. Yet, the Blog noted:

“Interestingly enough, Attorney General Bill McCollum - and Sink's likely rival for the governor's office in 2010 - praised McCarty's report, saying that Floridians should be "very pleased" with the amount of surplus lines coverage since it has helped decrease the need to have commercial coverage picked up by state-created insurers.”

Tags: Alex Sink, Consumer Protection, Florida, Florida Insurers, Insurance, Kevin McCarty, Office of Insurance Regulation, Regulation, State Legislation, Surplus Lines

Posted on August 9, 2009 by Chip Merlin

Protective Safeguard and State Farm Discounts Disappearing: The Fleeting Loyalty of Insurers to Customers

Two significant pieces of information show a continued trend in the property insurance business and suggests that insurance customers should not rely on the loyalty of their insurance companies. An article by Bea Garcia in the Miami Herald, Florida May Gut Discounts for Hurricane Shutters highlights the industry wide issues raised by State Farm’s requests to eliminate discounts and “recalibrate” the terms of previously granted discounts for measures taken to protect structures from hurricane damage.

Tags: Citizens Property Insurance Corporation, Consumer Protection, Florida, Florida Insurers, Insurance, Mike Fasano, Regulation, State Farm

Posted on July 31, 2009 by Chip Merlin

Catastrophic Sinkhole Coverage and the Problems of the New 2009 Florida Legislation

"Cheaper" insurance rates often mean far less coverage. In this world, you often get what you pay for. If there is ever a lesson to be learned about that, just ask those that live in the "Sinkhole Capital of the World," Pasco County, Florida. They can elect to get "Catastrophic Sinkhole Coverage" as ordinary coverage or get "Sinkhole Coverage" which is every bit as catastrophic where it counts--the ability to get back to where you started from--but covers damage from a slow moving sinkhole. The latter optional coverage is very expensive and covers Floridians from loss caused by most of the sinkholes that occur. The other coverage, which is much less costly, covers only very quick and substantial collapse sinkholes which happen once in a gazillion years to the properties owned by anybody. Guess which form the insurance industry wants to insure? BINGO!

Tags: Coverage, Florida, Florida Insurers, Home Owner's Insurance, Insurance, Sinkhole, State Legislation

Posted on July 30, 2009 by Chip Merlin

State Farm Criticized by News Leaders Regarding New Rate Increases

State Farm is a tenacious opponent. "If you at first you don't succeed, try, try again" is a motto which must be emblazoned in bold letters somewhere in its Bloomington, Illinois, headquarters. But, down in the Sunshine State, some are criticizing State Farm for its creative methods of raising rates.

Tags: Consumer Protection, Florida, Florida Insurers, Insurance, Kevin McCarty, Regulation, Slabbed, State Farm

Posted on June 24, 2009 by Chip Merlin

Crist Makes the Correct "Consumer Choice"

Governor Charlie Crist just vetoed HB 1171, which was euphemistically titled the "Consumer Choice Bill."

Tags: Florida, Florida Insurers, Governor Crist, Insurance, State Farm, State Legislation

Posted on June 23, 2009 by Chip Merlin

State Farm Tells Governor Crist It Will Not Leave Florida If Bailout Bill Is Signed

I do not know why the State Farm Florida President would write a letter to Governor Crist telling him State Farm will remain in Florida if Crist signs the bailout bill. Of course it would. What a competitive advantage a few large insurers would have over the rest of the domestic competition.

Tags: Florida, Florida Insurers, Governor Crist, Insurance, State Farm, State Legislation

Posted on June 16, 2009 by Chip Merlin

Insurance Industry Does Not Agree on State Farm Bailout Law

The Insurance Journal ran an article, Florida Domestic Insurers Urge Veto of 'Dangerous' Deregulation Bill, which indicates a significant portion of Florida's insurance industry opposes State Farm, State Farm agents, and the other big insurers trying to get a competitive advantage from this legislation. The article outlined many of the competing views and stated in part:

Tags: Consumer Protection, Florida, Florida Insurers, Home Owner's Insurance, Insurance, Regulation, State Legislation

Posted on June 13, 2009 by Chip Merlin

The Big Insurance Industry Propagandists Support the State Farm Bailout Bill

I received an email from a right wing group that has ties to the insurance industry. It is a call to lobby Governor Crist to support State Farm's bailout legislation. Every consumer group I know of has called the bailout another giveaway to the insurance industry at our expense. But the insurance propagandists are still pushing their illogical arguments.

Tags: Florida, Florida Insurers, Insurance, State Farm, State Legislation

Posted on June 5, 2009 by Chip Merlin

Common Law Good Faith Duty Before Florida Supreme Court

The issue whether Florida will join the majority of states recognizing an insurer's duty of good faith at common law is squarely before the Florida Supreme Court. In Citizens Property Ins. Co. vs. Louis Bertot, the Third District Court of Appeal noted the issue before it:

Tags: Bad Faith, Citizens Property Insurance Corporation, Consumer Protection, Court Opinion, Florida, Florida Insurers, Good Faith Duty, Insurance, QBE

Posted on June 4, 2009 by Chip Merlin

Proposed Law Drops Sinkhole Coverage

One way to get cheaper rates is to buy an insurance policy that covers nothing. An article shows this is how the Florida legislature is tackling the insurance rate problem:

Tags: Florida, Florida Insurers, Governor Crist, Home Owner's Insurance, Insurance, Residential Insurance Claims, Sinkhole, State Legislation

Posted on June 3, 2009 by Chip Merlin

Texas TWIA Bill Passes with Consumer Protections and Crist has Surplus Lines Bill

The Texas Windstorm Insurance Association (TWIA) has a new operations plan and laws that affect it, assuming Governor Perry signs the legislation. The good news for TWIA policyholders is that the consumer protections of Chapter 541 are still in place. The bad news is that I predict rates are going to increase substantially.

Tags: Consumer Protection, Florida, Florida Insurers, Governor Crist, Insurance, Regulation, State Legislation, TWIA, Texas, Texas Department of Insurance, Texas Insurers, Texas Windstorm Insurance Association

Posted on June 2, 2009 by Chip Merlin

Brad Ashwell States the Case to Veto the State Farm Bailout Bill

The Consumer Advocate for the Florida Public Interest Research Group, Brad Ashwell, wrote a letter published in the Gainesville Sun calling on consumers to urge Governor Crist to veto the State Farm bailout legislation. He clearly explained how the bill will harm Floridians:

"The problem is that this bill would remove consumer protections by no longer allowing the OIR to protect Floridians from excessive or discriminatory rate hikes as Kevin McCarty and his office have successfully done time and time again.

If HB 1171 becomes law, major insurance carriers would not only be able to charge whatever they like, they would also be able to game the system by manipulating rates, quoting excessive premiums to coastal homeowners, then dropping those policies if they choose to so they can maintain and grow inland policies where there is less exposure. The lack of predictability this would create is exactly what we don’t need in a state with an already fragile and overstrained property insurance market.

And perhaps the most troublesome provision is that the bill would help further grow the surpluses of these larger insurers while preventing small Florida-based carriers from doing the same. In this way the bill aims to provide an unfair competitive advantage to larger companies by discouraging across the board competition with smaller carriers. This would ultimately harm consumers and businesses by fostering an insurance market offering fewer choices in terms of dependable insurers. It’s also important to recognize that there’s no guarantee these large companies will continue writing policies in Florida.

Rather than deregulating the market, which hasn’t worked out in the past, we should be working on policy goals that support a more competitive insurance market that provides consumers with more affordable options. In short, we need more Florida-based companies competing, not fewer large insurers who dominate the market, essentially holding homeowners hostage, charging any rate they choose."

He is right, and nobody disputes his facts. Proponents of the bill argue it gives consumers the “choice” to pay excessive rates if they want. The legislators who voted for the bill did so because of political pressure, without understanding the consequences, or because they like the incentives offered by insurance companies for their votes. Either way, the “choice” is just a way to justify this bad legislation.

Tags: Consumer Protection, Florida, Florida Insurers, Insurance, Insurance Rate Increases, Kevin McCarty, Office of Insurance Regulation, Regulation, State Farm, State Legislation

Posted on May 30, 2009 by Chip Merlin

The Politics of Insurance: Dinallo Resigns, Crist Hints of Veto and Texas TWIA Bill in Limbo

What happened to the time when a significant insurance coverage decision arrived and everybody in my line of work analyzed that topic for several years? Now, the insurance industry is writing so many new and differently worded forms, it is hard to rely upon case decisions as being of widespread significance. If a case decision is made which insurance companies want to avoid, they re-write the policy or the insurance industry lobbies legislators to change the statutory law "gaming" the insurance business to outcomes predetermined in the insurer's favor. Accordingly, I spend more time researching trends of politics. I also review insurance trade journals to contemplate how my policyholder clients may be impacted.

Tags: Consumer Protection, Federal Legislation, Florida, Florida Insurers, Governor Crist, Insurance, Regulation, State Legislation, TWIA, Texas, Texas Department of Insurance, Texas Insurers, Texas Windstorm Insurance Association

Posted on May 26, 2009 by Chip Merlin

A Big Week for Texas and Florida Politics of Insurance

The Texas legislature has its hands full this week with an omnibus biill regarding TWIA. Florida Governor Charlie Crist has to decide whether to veto various measures regarding insurance legislation. Additionally, three federal bills were just filed which may impact the landscape of how insurance is made available and sold.

Tags: Consumer Protection, Federal Legislation, Florida, Florida Insurers, Insurance, Regulation, State Legislation, Surplus Lines, TWIA, Texas, Texas Insurers, Texas Windstorm Insurance Association

Posted on May 23, 2009 by Chip Merlin

Fasano and Crist Support Insurance Commissioner McCarty from Attack by Senator Mike Bennett

The politics of insurance is tough for consumer champions. The insurance lobby has many faces and methods of forcing its position. In Florida, the dirty campaign against those governmental officials who stand up to State Farm and the big insurance industry has begun in earnest. Florida has one of the most respected insurance commissioners in the country, Kevin McCarty. Mike Bennett, a relatively unknown state Senator, is attacking McCarty simply because McCarty voiced the opinion that Bennett’s insurance “choice” bill would hurt Floridians.

Tags: Consumer Protection, Florida, Florida Insurers, Governor Crist, Insurance, Kevin McCarty, Office of Insurance Regulation, Regulation, State Farm, State Legislation

Posted on May 15, 2009 by Chip Merlin

No Federal Wind, Hunter Proposes Limited Federal Insurance Oversight, Florida Agents Criticize Proposed Law, State Farm and OIR in Cease-Fire

Imagine – all kinds of legislation, hand in hand with lobbying and political positioning, just in time for the start of hurricane season on June 1. A couple of recent news stories point out the possible direction that several key measures may be heading.

Tags: Federal Charter, Federal Legislation, Florida Insurers, Insurance, Kevin McCarty, Office of Insurance Regulation, Regulation, State Farm, State Legislation

Posted on May 3, 2009 by Chip Merlin

Florida Insurance Legislation is Over for 2009--Maybe

Numerous newspaper articles have discussed this session’s bills which impact the insurance industry. The anti-consumer bill, which provides for deregulation of insurance rates, passed. I expect Governor Crist will veto that bill as was previously reported.

Tags: Citizens Property Insurance Corporation Mission Task Force, Consumer Protection, Florida, Florida Insurers, Insurance, Kevin McCarty, Office of Insurance Regulation, Regulation, State Legislation

Posted on May 1, 2009 by Chip Merlin

Kevin McCarty Battles for Consumers and Against Higher Rates

Florida Insurance Commissioner Kevin McCarty is working tirelessly for fair treatment of insurance consumers. It is amusing that the Florida legislature may give into State Farm's bullying and even allow higher insurance rates, which McCarty says are unnecessary. Some of our legislators are pandering to State Farm and the Florida insurance industry by using the usual "word spin" games. Deregulating rates under the guise of "consumer choice" will simply lead to higher premiums.

Tags: Consumer Protection, Florida, Florida Insurers, Insurance, Julie Patel, Kevin McCarty, Office of Insurance Regulation, Regulation, State Farm, State Legislation

Posted on April 29, 2009 by Chip Merlin

Surplus Lines Bill Moving Through the Florida Legislature

I wrote about surplus lines insurance companies in an earlier post, Surplus Lines Insurers, Sinkholes, and the Law of Mars. I explained how an attorney in our firm, Donna DeVaney, was able to get a favorable ruling in a sinkhole case involving a surplus lines policy due to a recent Florida Supreme Court case, Essex Ins. Co. v. Zota, 985 So. 2d 1036 (Fla. 2008).

Tags: Consumer Protection, Court Opinion, Florida, Florida Insurers, Insurance, State Legislation, Surplus Lines

Posted on April 26, 2009 by Chip Merlin

Kevin McCarty and Chip Merlin Honored by The Insurance Law Center's Person of the Year Awards

Policyholder Attorney of the Year 2008 - Honorable Mention

Congratulations to Kevin McCarty and Chip Merlin, who were recently honored by the LexisNexis Insurance Law Center‘s Person of the Year Awards. Chip received Honorable Mention in the category of Policyholder Attorney of the Year. Explaining the basis for the award, the Insurance Law Center noted:

“Chip Merlin’s dedicated and ethical work on behalf of policyholders is a true measure of success that merits an honorable mention in this Policyholder Attorney category.”

Kevin M. McCarty, Florida’s Commissioner of Insurance Regulation, won the award for Regulator of the Year. As you might remember from previous blogs (A Fantastic Regulatory Settlement; State Farm's Fitness and Trustworthiness to Conduct Business Questioned), Chip predicted that McCarty would not cow to State Farm and other big insurers. This is one of the reasons Lexis chose to honor McCarty:

“Kevin McCarty’s impact on Florida and the nation’s insurance marketplace is undeniable. He has proven himself as a force to be reckoned with. In his steadfast role as “agitator in chief” of the property and casualty marketplace in the Sunshine State, he has irritated homeowners’ insurance companies for the benefit of consumers to the point where large carriers have threatened to exit the marketplace.”

You can read more in Julie Patel’s article in last Tuesday’s Sun Sentinel.

Tags: Consumer Protection, Florida Insurers, Insurance, Julie Patel, Kevin McCarty

Posted on February 28, 2009 by Chip Merlin

State Farm's Departure is Problematic--What it Wants is Unclear

The Tampa Tribune ran a story, State Farm’s Exit From Florida Proving to Be a Problem for Some, which demonstrates problems consumers will have obtaining new coverage. The on-line edition of the story is somewhat entertaining because the comments show the disparate results of consumers who are shopping for insurance and confusion about underwriting. What is still unclear and troubling is exactly what State Farm hopes to gain from its announcement that it is leaving Florida. Certainly, it is losing revenue and access to a very large insurance market.

Tags: Catastrophe Fund, Citizens Property Insurance Corporation, Florida Insurers, Home Owner's Insurance, Insurance, Kevin McCarty, Office of Insurance Regulation, State Farm

Posted on February 22, 2009 by Chip Merlin

Florida State Farm Agents and Employees

I wonder how State Farm’s agents and employees really feel about the officers and managers in Bloomington, Illinois. My bet is not much different than the remaining State Farm policyholders--although State Farm agents and employees are probably not going to say much about it until they get a better job.

While I have my differences regarding what they are taught, State Farm employees and agents are probably the most thoroughly trained in the insurance industry. State Farm has operational guidelines regarding every aspect of company activity. Even agent involvement in the political process is outlined in detail for agents to help the company press its agenda.

Accordingly, the front page story in BestWeek, State Farm Florida Customers Survey Property Market, did not surprise me. Jim Graganella, the CEO of a State Farm competitor, said the remaining State Farm policyholders represent the "cream" of State Farm's book of business. He also highly praised State Farm's Florida underwriters and agents, referring to them as "topnotch." This has been my impression of the agents in Florida for a long time. One of them is my insurance agent.

Locke Burt, an insurance executive and a colleague of mine on the Citizens Mission Review Task Force, was quoted as saying about long time State Farm customers, "A lot of customers are shopping. They are mad."

I wonder what we are going to learn from State Farm’s agents, adjusters and other employees as they start shopping and find work with other insurance carriers looking for "top notch" help. My experience is that there will be more transparency about State Farm's motives and operations once its former employees are free to speak their mind.

Tags: Florida Insurers, Insurance, State Farm

Posted on February 17, 2009 by Chip Merlin

Competing Insurers Want State Farm's Business

State Farm has a market share in the property insurance business that its competitors envy. These competitors are taking advantage of State Farm's announcement that it intends to leave Florida’s property insurance market.

Tags: Florida Insurers, Office of Insurance Regulation, People's Trust Insurance Company, State Farm

Posted on February 7, 2009 by Chip Merlin

State Farm Small Competitors

Americans love to root for underdogs. It is part of our value system that anybody can become successful in this Country through hard, honest work and perseverance. Floridians are rooting for the small competitors of State Farm since State Farm's announcement that it is leaving Florida's property insurance market.

The St Petersburg Times noted that such a small competitor, Security First Insurance, has announced it will take 50,000 State Farm policies. Security First is run by former Florida State Senator Locke Burt, a fellow member of the Citizens Mission Review Task Force, .

Burt is one of the most knowledgeable individuals of the Florida insurance market, with a historical perspective. He was a politician in the 90's when the insurance problems following Hurricane Andrew first arose. During the Task Force meetings, I listened carefully to him for an understanding of tried and failed attempts to correct the insurance problems which still plague Floridians. I also watched out for his attempts to suggest obvious pro-insurer legislation--he runs an insurance company.

While I have a great deal of respect for Locke Burt and wish his company great success, I quite often found myself at odds with him during debates of the Task Force. He was the one that pushed for a suggested law that would have eliminated sinkhole coverage. At one point during the last meeting, I made a rather pointed comment to Burt which suggested that he wanted to pass such legislation so his company and all other insurers never paid claims and would just collect premiums.

The bottom line is that for property coverage to exist in Florida, we need the smaller companies to succeed. I wish Security First great financial success. I also hope that they provide coverages Floridians need and that they manage their customers’ policies and claims with the highest degree of integrity. As I have said in the past, it does not take a rocket scientist to figure out that it is far more profitable to take premiums and not pay fully and promptly, than to do otherwise.

Tags: Citizens Mission Review Task Force, Florida Insurers, Insurance, Locke Burt, State Farm

Posted on January 19, 2009 by Chip Merlin

Responding to the Media About The Insurance Financial Crisis

The Tampa Tribune ran an editorial on January 12th regarding the Citizens Mission Review Task Force. As usual, I had something to say about their opinion, and wrote the the following reply, which was published in Sunday's paper:

Florida Dangerously Vulnerable

This is in response to the Jan. 12 editorial, "New Ideas Could Bring Sound Hurricane Coverage."

You raise some important points regarding the safety net of property insurance, and the Citizens Mission Review Task Force meetings also revealed issues that all Floridians must be made aware of.

First, dried up credit markets have left our current system dangerously vulnerable. In the event of a major hurricane season, it is unlikely that Florida would be able to raise the money needed to cover the debts of Citizens through bond sales.

Second, as you noted, Citizens rates are currently lower than being actuarial sound. Yet everybody wants rates to remain affordable. The task force recommended responsible, capped increases to prevent wallet shock.

Third, encouraging a private insurance market to replace those carriers that find Florida too risky is a viable long-term solution. The Legislature passed laws aiding and regulating these companies that often provide coverage at rates lower than Citizens, especially for policyholders who take advantage of the My Safe Florida Home program.

Finally, the best long-term solution is to harden structures. Yes, it is costly but offering premium discounts to homeowners who make improvements has to be encouraged, even if it takes a state and federal tax relief program too beneficial to pass up. That is something our federal and state leaders can start working on now.

We cannot afford to put our heads in the sand and hope Mother Nature will spare us for another season. We must act now for the long-term because there is no easy short-term solution to the very difficult situation we all face.

WILLIAM F. "CHIP" MERLIN

Tampa

The writer is founder of the Merlin Law Group and was appointed to the Citizens Property Insurance Mission Review Task Force by Gov. Charlie Crist in 2008.

The final meeting of the Task Force is scheduled in Jacksonville on Thursday, January 22nd. Our Report is due to the Florida Legislature by January 31.

Tags: Citizens Mission Review Task Force, Florida, Florida Insurers, Home Owner's Insurance, Hurricane Mitigation, Insurance, My Safe Florida Home, State Legislation

Posted on January 8, 2009 by Chip Merlin

The Only Thing We Have to Fear Is...

Every now and then, I come across something in the media that is simply wrong and feel compelled to do something about it. I recently came across an editorial in the Bradenton Herald, linked below, which is simply fear mongering. Accordingly, I responded with my opinion for all to contemplate on this very important issue in Florida:

Tags: Citizen's Property, Citizens Mission Review Task Force, Florida Insurers, Insurance

Posted on December 15, 2008 by Chip Merlin

The Ongoing Work Of The Citizens Task Force

The Governor, Charlie Crist, who appointed me to the Citizens Mission Review Task Force has gotten married to a beautiful woman. While I am certain he was planning their honeymoon this past week, I was pouring over insurance rate data, market share analysis, and a reinsurance presentation regarding Citizens Property Insurance Corporation. I bet his work was a whole lot more fun.

Tags: Citizens Mission Review Task Force, Citizens Property Insurance Corporation Mission Task Force, Florida Insurers, Insurance

Posted on July 25, 2008 by Chip Merlin

Tampa Tribune Calls For Explanation Regarding State Farm

The Tampa Tribune ran an editorial in today's paper regarding the forty-seven percent average rate increase request made by State Farm. Many editorials are not very helpful. This one is on point and I hope that our government leaders are paying attention. Here is the editorial in its entirety:

Tags: Citizen's Property, Florida, Florida Insurers, Insurance, State Farm

Posted on July 19, 2008 by Chip Merlin

Snookered Again

When will our legislature learn not to trust insurance executives and, especially, their lobbyists? Maybe when we vote insurance-beholden legislators out of office. The Tampa Tribune, St. Petersburg Times and Miami Herald ran front page stories regarding State Farm's administrative request for an average rate increase of 47%. At first I thought it was a mistake, until all three papers reported the same increase and the St. Petersburg Times indicated that some increases for existing rates could be 91%.

Tags: Florida, Florida Insurers, Insurance, State Farm

Posted on June 17, 2008 by Chip Merlin

Large Insurers Continue To Withdraw From The Risk Business

Best is reporting that State Farm continues to retreat from the insurance business in Mississippi. The headline suggests that State Farm merely canceled policies, but the article reveals that State Farm canceled 900 policies, and changed the terms of 5,000 more customers by refusing to insure for wind peril. As I have explained, our largest insurance carriers are getting out of the risk business.

Tags: Allstate, Florida Insurers, Insurance, Nationwide, State Farm

Posted on June 5, 2008 by Chip Merlin

100,000 Policies Move Out of Citizens

Kevin McCatry, of the Office of Insurance Regulation, announced that six fairly obscure insurance companies have taken the insurance for 100,000 risks which were previously underwritten by Citizens Property Insurance Corporation. The good news for consumers is that their new insurance carriers are insuring them for the same or better coverage and for the same or better price. What a deal!! Or is it?

Tags: Citizen's Property, Florida, Florida Insurers, Insurance

Posted on May 29, 2008 by Chip Merlin

New Insurance Companies Founded in Florida

Capitalism and economic venture are alive and well in the Florida insurance market. The Florida Underwriter reported this month that over 1.7 million policies have been written by new insurance companies since the 2004 hurricane season. As Allstate, State Farm and Nationwide retreat from the Florida property insurance market, these new insurance companies are accepting risks that would otherwise end up with Citizens Property Insurance Corporation.

Tags: Allstate, Citizen's Property, Florida, Florida Insurers, Insurance, Nationwide, State Farm, State Legislation

Posted on March 15, 2008 by Chip Merlin

Florida Senate Requires Fairness from Insurers

Florida newspapers (Tampa Tribune, St. Petersberg Times, Sun- Sentinel) reported on the recommendations of the Florida Senate Select Committee on Property Insurance Accountability, a committee formed in response to the insurance industry misleading Governor Crist and the Legislature about rates during last years legislative session. Because of these misrepresentations Florida provided under-market prices for reinsurance and assumed greater risk in the event of a hurricane in return for lower rates. The insurance industry then raised rates after getting the favorable legislation. The letter from the Committee to Senate President Ken Pruitt contains significant and progressive recommendations to help consumers. A memorandum also indicated that the work of the Committee was not done and that the Select staff would be working with standing committees to help shape legislation protecting consumers. Finally, there appear to be some serious and well conceived changes to help insurance consumers. The big insurance lobbyists were not pleased, and that is usually a sign that something has been done to help the insurance customers -- all most large insurers seem to care about is return on investment, even dishonorably like they did last year. Even our governmental representatives have learned that you cannot trust big insurance.

Tags: Florida, Florida Insurers, Insurance, State Legislation

Posted on February 25, 2008 by Chip Merlin

Florida Reducing Hurricane Exposure

A year after the Florida Legislature and Governor Crist were duped by the insurance industry, legislation aimed at lowering the financial catastrophe of a major hurricane has been introduced to correct last year's mistake. See HB 983. Last fall, I spoke with Alex Sink regarding her concern that the collapsing bond markets could make it difficult for Florida to quickly raise money to pay for Catastrophe Fund obligations in the event of a hurricane. Given the decrease in statewide tax revenues and the ever increasing credit strains caused in part by the sub-prime mortgage crisis, she has acted very prudently by supporting this legislation. Obviously, if the state is picking up less of the insurance payments caused by a natural catastrophe, the insurance industry is picking up more. Rates have to go up. The question is: How much? The second question in an election year is: If they go up a lot, are voters going to retaliate at the polls this fall? Of course, the State has an "out": Citizens Property Insurance Corporations. Citizens is a governmental entity "competing" against private insurers. If it continues to charge lower rates, many policyholders and voters will be spared the increase. Indeed, if the rates are limited to a 2 percent increase as reported in the Palm Beach Post, voter dissatisfaction probably won't materialize. Nevertheless, the action by Sink and the Legislature was a step in the right direction. We were a Katrina away from a major financial catastrophe, and this is a prudent step in the right direction.

Tags: Citizen's Property, Florida, Florida Hurricane Catastrophe Fund, Florida Insurers, Insurance, State Legislation

Posted on February 11, 2008 by Chip Merlin

The U.S. House Gets Its Turn with Big Insurance

Last week the Florida Senate grilled insurance executives regarding promised rate reductions that never materialized. The news reports unanimously found that the insurance executives failed to fully and honestly answer questions put to them by the Senators ("In Insurance Talks, Beware The Jabberwock"; "Allstate Defends Rising Rates"; "Frustration at Insurance Rate Hearing"; "Keep the grill fired up for insurance companies"). This week, the U.S. House of Representatives Financial Services Subcommittee on Oversight and Investigations follows this inquiry. Unless something drastic happens, the result is going to be the same---a lot of ducking of completely honest answers. Florida legislators are not used to this treatment from corporate citizens and they know something needs to be done.

Tags: Florida Insurers, Insurance

Posted on January 23, 2008 by Chip Merlin

Insurance Industry Claims And Rate Practices Come Under Public Scrutiny

Tuesday was a rather interesting day. Our firm helped win a $4.6 million dollar judgment for a panhandle Condominium Association last year. Citizens Property Insurance Corporation did not pay, as usual, but appealed. I argued the case [Citizens Property Ins. Corp. vs. East Pass Towers II Condominium, No. 1D07-2727 (Fla. Dist. Ct. App. oral argument Jan. 22, 2008)] for our client in Tallahassee, met with the Association representatives, and then made my way up the hill to the State Capitol where the Select Committee on Property Insurance Accountability was meeting. One of firm's lobbyists briefed me on the schedule and introduced me to some of the panel members I had not previously met. We wondered if the media attention and articles (Tom Zucco, No Auto for Allstate, St. Petersburg Times, January 17, 2008, at A1; Jerome R. Stockfisch, State Bans Allstate From writing any New Policies, January 17, 2008, Tampa Tribune) following last week's 0ffice of Insurance Regulation hearing would cause more attention to be focused on these proceedings.

Tags: Allstate, Citizen's Property, Florida Insurers, Insurance, Nationwide, State Legislation

Posted on January 18, 2008 by Chip Merlin

Department of Insurance Gets Nothing from Allstate

Allstate and other insurers are notorious for not complying with discovery seeking internal corporate documents which would expose corporate culture in bad faith cases. From the news yesterday and today, it appears the Florida Department of Financial Services has learned the same lesson most policyholder attorneys have known for quite some time.

Tags: Allstate, Florida, Florida Insurers, State Farm

Posted on October 30, 2007 by Chip Merlin

Citizens Changes Course....Again

In January 2007 Governor Charlie Crist announced that Citizens was going to compete with private insurance companies. More recently however Citizens announced that it plans to give away a huge book (173,000 customers) of its business to other insurance companies; this seems a strange method of competing.

Tags: Citizen's Property, Florida, Florida Insurers, Insurance

Posted on September 19, 2007 by Chip Merlin

Jeb Speech on Florida Insurance Too Little, Too Late

Playing before, and up to, an insurance industry crowd, former Florida governor Jeb Bush lobbed criticism at a solution to a problem he helped create. The problem is high insurance premiums and Florida's vulnerability to financial calamity if confronted with a Katrina type of event. It seems ironic that he can make money giving speeches about a mess he let come about. It seems even more ironic that the group he gave the speech to, the National Association of Mutual Insurance Companies (State Farm is a mutual insurance company), would give its "State Legislator of the Year" award to one of the most prolific anti-consumer legislators in Florida, Don Brown.Let's set the record straight, the hurricanes of 2004 and 2005 occurred while Jeb Bush was the Governor of Florida. He and the leadership of Florida allowed insurance companies to cancel and non-renew insurance policies at an escalating rate prior to Hurricane Charley.

Tags: Florida, Florida Insurers, Insurance

Posted on August 13, 2007 by Chip Merlin

Insurance reform flops: What now, start from scratch or mend fences?

In an interview with Victoria Langley, Alex Sink, Florida's Chief Financial Officer, weighed in on what she believes went wrong with Florida's insurance reform plans. Part of the reform involved lawmakers putting an additional $12 billion dollars of taxpayers' money into the states Catastrophe fund. This was supposed to allow insurance companies to reduce rates; however, we're not seeing any real significant rate decreases. As a matter of fact, many companies have filed for rate increases.

Tags: Florida, Florida Insurers, Insurance

Posted on July 20, 2007 by Chip Merlin

Florida officials are gambling with citizens' money

CFO Alex Sink and Governor Charlie Crist are still new to their elected jobs; this was obvious from statements made by Sink in her interview with the Miami Herald. In one statement, she astonishingly relates that it wasn't until last month, while driving along Ft. Lauderdale's Condo Canyons, that she realized how vulnerable Citizens Property Insurance Corporation and its insureds are in the event of a significant hurricane. She and Crist, among others, are clearly annoyed that the hopes for lower insurance rates have not materialized and are calling for an explanation and investigation.

Tags: Florida, Florida Insurers, Insurance, State Legislation

Posted on July 17, 2007 by Chip Merlin

State CFO Alex Sink discusses Florida's property insurance plan

Two weeks after Alex Sink was sworn into office as Florida's new chief financial officer, lawmakers embarked on a 10-day special session to come up with ways of lowering insurance rates and providing some respite for the state's beleaguered homeowners. "I was still trying to find the ladies room," recalled Sink during an interview with the Miami Herald last week. The end result of the special session was the expansion of the Florida Hurricane Catastrophe Fund to $28 billion, allowing insurers to buy less expensive back-up insurance. This special session, in conjunction with more recently passed insurance legislation expanding Citizens, came with promises of savings to policyholders, with rate cuts averaging 20 percent or so. Six months later, the promised savings have not materialized -- as a matter of fact in recent weeks atleast five homeowner insurance groups have filed requests for rate increases. With more requests for rate increases inevitable, Sink, Crist, and other state officials are left questioning the viability of Florida's plan to reduce property insurance premiums.

Tags: Florida, Florida Insurers, Insurance, State Legislation

Posted on July 2, 2007 by Chip Merlin

Insurers rate hike requests not surprising

Florida newspaper stories exposing the recent insurance rate hike requests should not come as a surprise to anyone. This is just the latest example of why the public needs regulation of the insurance industry. It is a business built upon future promises that are routinely broken when the return performance is due. Why the Florida legislature seemed convinced that by shifting the risk of catastrophic loss to its citizens would actually result in lower premiums is bewildering. It is an unrealistic to expect that an industry, which lives by the sharp letter of the law and fineprint of contract, will follow through on promised rate reductions in the absence of legal or contractual enforcement; this laissez-faire approach suggests that the industry still has a strong lobby in Tallahassee.

Tags: Allstate, Florida Insurers, Regulation

Posted on June 8, 2007 by Chip Merlin

Florida Supreme Court hears oral arguments in VPL case

Florida Farm Bureau Casualty Insurance Co. issued a homeowners insurance policy to the Coxes. The policy excluded any losses caused, either directly or indirectly, by flood or water damage of any kind. The Coxes' home sustained extensive damage caused by Hurricane Ivan and was determined to be a total loss due in large part to flood damage and in lesser part to wind damage. The Coxes demanded coverage, and Florida Farm tendered $12,000 for the windstorm damage. The Coxes declined the payment.

Tags: Florida, Florida Insurers, Insurance, State Legislation

Posted on June 6, 2007 by Chip Merlin

Citizens ask for time limit on claim disputes

Facing criticism for thousands of 2004 and 2005 hurricane claims still open, Citizens Property Insurance seeks to rein in the lawyers and freelance adjusters it alleges are whipping up disputes in order to pocket large fees. Chip Merlin, of the Merlin Law Group, warned against limiting the rights of homeowners to contend with what he said are ''statistical issues'' at the state's largest property insurer. Read more... Is this part of Citizen's ongoing effort to improve policyholder and applicant services?

Tags: Citizen's Property, Florida, Florida Insurers, Insurance

Posted on June 4, 2007 by Chip Merlin

Claims practices--what really concerns insurance companies

Insurance is a business based on trust. If the public does not trust that you will pay claims promptly and for what is owed, your business will flounder. Fair value assessments and prompt payments aren't just expected by policyholders - they are required by every State insurance code. How this is going to happen is rarely open for public debate. Until now. Citizens Property Insurance Corporation is no longer an insurance company under Florida law. It acts like one, is subject to most of the insurance code, but it is the creation of the government and is the government....whatever that means.

Tags: Citizen's Property, Florida, Florida Insurers

Posted on May 30, 2007 by Chip Merlin

How are Florida industry officials responding to Gov. Crist's criticism?

Florida Gov. Charlie Crist has not been gentle in his criticsm of insurers, so how are industry officials responding? Well the answer is, it depends on who you talk to. Here are two very different responses according to Steve Tuckey of the National Underwriter:

Cecil Pearce, American Insurance Association vice president says he understands the pressure Florida's elected officials are under to ameliorate the effects of high insurance prices on residents, "and we want to work cooperatively with the governor and other elected officials on a long-term solution that all parties can support Robert P. Hartwig, president of the Insurance Information Institute was less diplomatic; he says "The governor's feistiness seems to have morphed into an unwarranted cockiness that he will soon regret." While the governor is bashing insurance companies, "Mother Nature is prepared to deliver a financial comeuppance to the state."

Tags: Florida Insurers