Matt Gaetz is running for a seat in the Florida House of Representatives. His chances of getting elected have become better since former Governor Jeb Bush provided his endorsement to Gaetz. Here is Gaetz commenting on the endorsement:
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Florida Supreme Court justices seemed as bewildered as I when policyholder's counsel explained last Thursday that he was not arguing a "bad faith" case. I will be the first to say that a "bad faith" case is really a lack of "good faith" case since the standard is whether the insurance company breached the obligation of good faith and fair dealing. While I understand what the very accomplished appellate attorney, Bruce Rogow, was trying to argue, I wish his argument had been more simple and to the point because he confused me. I am afraid he may have alienated the Court with his very esoteric argument about a good faith breach of contract issue in a first party insurance situation.
Continue Reading...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.
Continue Reading...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.
Continue Reading...(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 attorneys Kristin Demers-Crowell and Amy Boggs will be writing on sinkhole issues).
The last time I wrote, I stressed the importance of maintaining sinkhole coverage on property located in Florida and I explained the very restrictive application of catastrophic ground cover collapse coverage. Now, I want to stress the importance of properly completing the insurance application.
Continue Reading...Texas is where "the game" is being played regarding insurance coverage disputes in 2010. The Windstorm Insurance Network will hold its second Texas Insurance Symposium on May 11, 2010, in Dallas, Texas, where many of the issues related to windstorm coverage will be discussed. Certainly, the coverage issues raised by Hurricane Ike litigation will be highlighted.
Continue Reading...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.
Continue Reading...Departments of Insurance throughout the United States regularly conduct examinations of insurance company claim files. These are known as Market Conduct Examinations. The Claims Spot recently noted in 5 Claims Issues Cited for Non-compliance on Market Conduct Exams & 3 Tools to Avoid Them, recurrent wrongful claims practices by insurance companies since 2006 that are not being corrected by the insurance industry. Those highlighted wrongful practices were listed and then explained to be correctable with "basic" action:
Continue Reading...1. Failure to acknowledge, pay or deny claims within specified time frames
2. Failure to pay claims properly (sales, tax, loss of use)
3. Improper documentation of claim files
4. Failure to communicate a delay in the settlement of claims in writing
5. Use of unlicensed claims adjusters or appraisersAll of these findings could have been avoided with enforcement of best practices and an internal review process. With some basic actions, a company can minimize or eliminate their risk of being out of compliance.
Michelle Claverol has been writing a weekly post every Sunday regarding business interruption and extra expense issues. I can tell that weekend posts are not read as often as those published during the workweek. I encourage those involved with commercial claims to go back and review her discussions of this important commercial coverage. She went home to visit with her family this weekend, and her leave provides me an opportunity to address a business income question that is asked of me on a fairly frequent basis:
Continue Reading...What happens in the valuation of a business income claim when the business closes or is sold after the loss?
Risk managers involved with analyzing a corporation's enterprise risk have a myriad of perils to be concerned about. A risk sometimes overlooked from an insurance perspective is brand value and expenses associated with the investment of brand marketing and advertising. An article in the New York Times, Insuring Endorsements Against Athletes’ Scandals, noted that just seven companies that had endorsements from Tiger Woods lost over $12 billion in market value during the month following the announcement of Woods’ troubles.
Continue Reading...(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is part of a series he is writing on post-loss duties).
Since an insured has an obligation to mitigate any damages that occur, one question is who should pay for these efforts? In many instances, there will be specific policy language which states that the insured will be entitled to reimbursement for any temporary repairs or other mitigation efforts which he/she incurs as a result of a covered loss. Similarly, most policies will state whether these expenses will be added against the policy limit or are considered additional coverages. It is important to read and understand the particular language of the policy in order to make this determination, especially with a large loss where the costs to protect the property from future harm can be very expensive.
Continue Reading...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:
Continue Reading...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.
(*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.
Continue Reading...Whenever adult relationships end and separation of families begin, insurance contracts may be impacted. These are always sad revelations, but the impact can be even worse when property is damaged and insurance coverage disputes arise because nobody thought about how property insurance is affected. As a practice pointer for those attorneys practicing family or divorce law, insurance issues should be addressed right away and insurance agents consulted immediately regarding how separation or divorce can affect coverage. Insurance agents and brokers should always be aware of and inquire about the family relationship and who is living where because of coverage implications. Unfortunately and understandably, insurance coverage is often the last item on anybody's mind during such emotional turmoil.
Continue Reading...Some public adjusters were calling me asking about the recent proposed legislation of Florida House Bill 1181. This extraordinarily anti-consumer legislation was filed by a Democrat, Janet C. Long. My impression is that this legislation is a potential nuclear bomb for policyholders and public adjusters.
Continue Reading...(Note: this Guest Blog is by Kristin Demers-Crowell, an attorney with Merlin Law Group in the Tampa, Florida, office. This is part of a series that she and fellow attorneys Donna DeVaney and Amy Boggs are writing on sinkhole issues).
Step right up! Step right up! Come one, come all! In our center ring, presenting Florida’s legislative contortionists . . .
There is nothing that irks a policyholder counsel more than when the legislature monkeys with the Rules of Evidence and due process regarding the ability of an insured to collect benefits. The “neutral” evaluation scheme incorporated into Florida’s sinkhole statute, §627.7074, does just that.
Continue Reading...(Note: This Guest Blog is by Tina Nicholson, an attorney with Merlin Law Group in the Houston, Texas, office. This is part of a series she and fellow attorney Javier Delgado will be writing on Texas property insurance issues).
Everyone knows what to do when disaster looms. When the disaster is a hurricane, you gas up the car and buy batteries. When it’s a tornado, you get in the closet with a flashlight and a radio. When a winter storm approaches, you buy food and firewood.
Continue Reading...I gave a presentation last week at the American Conference Institute’s 20th National Advanced Forum on Bad Faith Litigation, regarding mediation of claims practice lawsuits. Many of my points were covered in Effective Endgame Communications and Influence And Persuasion, Part 2. A question came up about the effectiveness of insurance company representatives providing apologies. As part of a rambling response, I remarked that from my experience, such apologies are not genuine because many of the wrongful claims practices will not stop. My impression is that the insurance industry is so competitive that many have an incentive to cheat and not fully act in good faith because of competitive reasons. I sometimes view my role of obtaining a bad faith settlement from the insurer as a cop giving a cheap speeding ticket to one out of ten thousand speeders and the driving is not getting any slower. I am certain that my clients view their slow or non-paying insurers as thieves.
Continue Reading...An insurance claims blog, The Claims Spot, sponsored by an insurer claims consulting firm, Lanzko Consulting, made a point that the failure to have specific written claims standards could lead to a claim of bad faith. This is the same finding I suggested in Should Insurance Companies Have Claims Manuals Explaining Procedures and Standards for Adjustment?:
Continue Reading...From a policyholder's advocate viewpoint, I think an insurer would be crazy not to have a claims manual or claims procedure guidelines. Most state unfair claims trade practice laws generally require insurers to adopt and implement those standards and procedures.
(Note: This Guest Blog is by Michelle Claverol, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the part of a series she is writing on business interruption claims).
Most insurance claims practitioners adhere to the general rule of presenting evidence of past business performance to predict the measure of recovery in a business interruption claim. In some cases, however, practitioners should evaluate the business’ post-loss performance to formulate a more precise measure of covered recovery.
Continue Reading...(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is part of a series he is writing on post-loss duties).
One question that generally arises after a loss is what repairs should be made and who will be responsible for paying them. Since most policyholders are not well versed in construction or insurance issues, this question is constantly being asked of adjusters and attorneys alike.
Continue Reading...The Westminster Dog Show was this week. I started thinking about pets and policyholder insurance. There is actually coverage for pets, which many people may wish to consider purchasing.
Continue Reading...Snow is falling all over the United States. So much that roofs are falling from the weight of snow and ice. Can you imagine the policyholder outrage if the insurance company's engineer says the roof was designed wrong and coverage is denied on that basis?
Continue Reading...(Note: this Guest Blog is by Amy Boggs, an attorney with Merlin Law Group in the Tampa, Florida, office. This is a series that she and fellow attorneys Kristin Demers-Crowell and Donna DeVaney will be writing on sinkhole issues).
Carriers seem to be using the 2005 changes to sinkhole legislation to stack the deck against policyholders who are seeking adequate repairs for their property. There are two statutes at play that have emboldened carriers to force inadequate repairs on the policyholders.
Continue Reading...United Policyholders has a wonderful website. I strongly encourage others to sign up for its emails and newsletters. For example, United Policyholders sends a monthly "Claims Tips" via email which contains useful tips for policyholders.
Continue Reading...The answer to this proof of loss question by most adjusters will probably be “no.” But, not so fast my claims handling friends. While I used to say Louisiana was the most liberal state in the Union concerning the requirements of a policyholder to submit a proof of loss, the Supreme Court of Oregon has made a move farther than most experienced adjusters would venture to claim as facts satisfying the post loss requirements for a proof of loss.
Continue Reading...An insurance company adjuster's request for invoices of personal property items can be a trap for otherwise honest policyholders. I have been thinking about this topic as a result of Corey Harris' post, Notifying the Police in the Case of a Theft Loss, and the weekly highlighted fraud case in Claims Magazine, "Fraud of the Week: Suit Yourself." The basic rule for policyholders to remember is that you are under no obligation to give an insurance company what you do not have and never make up a document because the insurance adjuster says you need it to get paid. For policyholder counsel and public adjusters, protect your client and make certain they are not doing this.
Continue Reading...(Note: This Guest Blog is by Michelle Claverol, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the part of a series she is writing on business interruption claims).
Accountants usually define “overhead” as operation costs that are incidental to the production process. Generally, there are three categories of “overhead:”
(1) those directly associated with plant operations such as power, lease costs and insurance;
(2) general selling and administrative costs attendant to the production, sales and delivery of a product; and
(3) costs incurred for the benefit of multiple operating units, including debt service executive management compensation, investor relations costs and corporate advertising (usually larger corporations with individual units or operating entities).
Continue Reading...As you read this post, consider these life lessons:
You can’t always get what you want
But if you try sometimes, well,
You just might find you get what you need
and
Continue Reading...DON QUIXOTE
Hand over that golden helmet!BARBER
But this is a shaving basin!DON QUIXOTE
Shaving basin! Know thou not what this really is?
The Golden Helmet of Mambrino!
When worn by one of noble heart, it renders
him invulnerable to all wounds!
(to the Barber whacking the barrel with his sword)
Hand it over!Thou Golden Helmet of Mambrino,
With so illustrious a past,
Too long hast thou been lost to glory,
Th'art rediscovered now at last!
Golden Helmet of Mambrino
There can be no hat like thee!
Thou and I now, ere I die now,
Will make golden history!BARBER
(aside to Sancho)
I can hear the cuckoo singing
In the cuckooberry tree...
(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is part of a series he is writing on post-loss duties).
Over the past few weeks I have posted on the duty to notify the insurer that a loss has occurred. Having sufficiently beaten that horse into the ground, for the next few weeks I will post on what is generally considered to be the second obligation under a policy: the duty to protect the property from further damages.
Continue Reading...Amy Bach and others with United Policyholders provide a longtime and steadfast consumer protection organization devoted solely to the interests of policyholders. With extensive experience and appreciation of how much legislation can impact insurance coverage and claims, Bach provides a unique perspective with expertise on a national level concerning insurance policy and insurance regulation. Policyholders need more Amy Bachs to counteract the extraordinary coordinated efforts by insurers to make laws and regulations one sided in the insurers favor.
Continue Reading...The Hurricane Katrina insurance coverage litigation along the Mississippi Coast was a once in a lifetime event for most attorneys. For me, it was obvious from the first day we landed at Stennis airport that this was where the Super Bowl of insurance coverage litigation was going to be waged for the next several years. With a lot of help from Florida panhandle trial attorneys Larry Keefe and Sparky Lovelace (Sparky quickly left our venture and started work with his long time friend, Dickie Scruggs), we decided to build two law offices--one in Bay St. Louis and the other in Gulfport. Teenage friends of mine who were local attorneys without law offices as a result of Katrina, Randy SantaCruz and William Weatherly, agreed to sign on with our efforts after Cindy Cady recruited them. With insurance claim denials and low payments running rampant, we were overworked with cases and clients. We already had transferred Jason Ciofalo from Tampa to work full time in Mississippi, and Deborah Trotter was working full time with Randy Santa Cruz out of the Bay St. Louis office.
Continue Reading...(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 attorneys Kristin Demers-Crowell and Amy Boggs will be 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.
Continue Reading...(Note: This Guest Blog is by Javier Delgado, an attorney with Merlin Law Group in the Houston, Texas, office. This is the eighth in a series he and fellow attorney Tina Nicholson will be writing on Texas property insurance issues).
The ideal inspection process would have both the carrier’s adjuster and the public adjuster respect each others responsibilities and agree to jointly inspect and evaluate the damages resulting in a fair and equitable estimate documenting the damages resulting from a covered peril under the subject insurance policy, but many times this is not the case.
Continue Reading...September 1970 was a time of big personal change for me. We were living outside Washington, D.C. and my father had just received orders to the National Data Buoy Project at NASA’s Mississippi Test Facility, now known as the Stennis Space Center. My mother, who grew up in Philadelphia, Pennsylvania, was in tears wondering how her children were ever going to get an education in Hancock County, Mississippi. Three years later, she was crying as we left for Southern California. Rather than follow my father right away, we stayed an extra year, using an excuse that my father would be gone for nine months on a Coast Guard icebreaker. The best education and lessons I have ever had were from brothers of the Sacred Heart at Saint Stanislaus during seventh and eighth grades. Drew Brees had it right when he spoke of how much the New Orleans Saints football team means to New Orleans and the Mississippi Gulf Coast Region.
Continue Reading...There are two active lawsuits with very good attorneys representing public adjusters who are challenging the 48 hour solicitation ban and the fee caps. The first one was filed in Miami-Dade County, as I reported in Florida Public Adjusters File Lawsuit to Overturn 48 Hour Solicitation Ban and Fee Caps. The second lawsuit challenging only the solicitation ban was filed in Leon County, as I reported in Second Public Adjuster Constitutional Solicitation Ban Challenge Filed. The later filed lawsuit seems to be moving along quicker; the first lawsuit has been delayed by a fight about venue.
Continue Reading...(Note: This Guest Blog is by Michelle Claverol, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the seventh part in a series she is writing on business interruption claims).
The Saputo Cheese USA Plant in Hinesburg, Vermont, was a successful mozzarella cheese enterprise until a catastrophic fire destroyed its facility. According to claimsjournal.com, Saputo Cheese was receiving about a million pounds of milk a day from 88 dairy farmers in Vermont and New York, which totaled 10-12 percent of Vermont’s entire milk production. Each of the 88 dairy farmers, on average, supplied Saputo Cheese with more than 11,300 pounds of milk every day. Saputo Cheese announced its closure about a month after the fire; the 88 dairy farmers were frantic to say the least. Unless alternate buyers could be found, the dairy farmers would lose a major source of income for months. The dairy farmers were at a loss.
Continue Reading...(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the seventh part in a series he is writing on post-loss duties).
Most policies have specific conditions that apply to theft losses. The most common is the duty of a policyholder to notify the police, as well as the insurer, of the theft. While this may seem like common sense, there may be a variety of instances where the policyholder fails to notify the police, and this could cause problems in getting the claim paid.
Continue Reading...Every now and then, bizarre losses are reported in the news that start me wondering whether there is any insurance coverage for the poor souls suffering through a disaster. An article, "What One Homeowner Learned from 15,000 Gallons of Raw Sewage" points out just how illusory the hope of "full coverage" is under the modern all risk insurance policy.
Continue Reading...I represented a Houston based hotel management company last spring regarding Hurricane Ike insurance claim disputes with eleven hotels they owned or managed in Texas. Some cases simply go right, and this one settled after two months. My client’s owners went out of their way to call to my attention that managers in the hospitality and real estate management business needed to be taught about the insurance claim game. The next thing I knew, they were putting a phone to my ear and I was talking to Stephen Barth of HospitalityLawyer.com.
Continue Reading...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.
Continue Reading...(Note: this Guest Blog is by Kristin Demers-Crowell, an attorney with Merlin Law Group in the Tampa, Florida, office. This is a series that she and fellow attorneys Donna DeVaney and Amy Boggs will be writing on sinkhole issues).
When I took Geology to satisfy my science requirement in college I never dreamed a future legal career would lead me to spend so much time on the subject. Anyone with the misfortune of having a sinkhole claim soon learns that “Rocks for Jocks” is not as straightforward as that moniker suggests.
Continue Reading...Sinkhole loss and coverage issues are commonplace in areas of karst activity. We are plagued with it in many areas of Florida. Today we are beginning a series of sinkhole posts detailing many complex issues. The sinkhole posts will be released each Wednesday for the next several weeks. Kristin Demers-Crowell, Amy Boggs, and Donna DeVaney will author these posts starting later today.
Continue Reading...Vacancy problems are becoming widespread as the economy and real estate market deteriorate. The FC&S Bulletin recently published an article, Active Occupancy: Elucidating the Vacancy Exclusion, which ran in the January edition of Claims Magazine. The article discussed this troubling clause which is becoming more commonplace. I suggest that all claims and coverage professionals subscribe to these publications because they usually have relevant discussions of claims issues such as this exclusionary clause.
Continue Reading...(Note: This Guest Blog is by Tina Nicholson, an attorney with Merlin Law Group in the Houston, Texas, office. This is the seventh in a series she and fellow attorney Javier Delgado will be writing on Texas property insurance issues).
Since the Texas Supreme Court rendered its opinion in last summer’s landmark decision regarding insurance appraisals --- State Farm Lloyds v. Johnson --- the appraisal process has been in the legal spotlight. Last week, the United States District Court for the Southern District of Texas (Houston Division), interpreting Texas law, issued an opinion which outlined the factors that should be considered when deciding whether an insurer has waived its right to demand appraisal. In the case of Sanchez v. Property and Casualty Insurance Company of Hartford, 2010 U.S.Dist. LEXIS 6295 (Jan.27, 2010), the homeowner opposed the insurer’s invocation of the appraisal clause, asserting that the insurer had waived its right to appraisal.
Continue Reading...This question was the topic of an article in Claims Magazine, Putting Procedures in Writing: Is a Claim Manual an Asset or a Liability? From a policyholder's advocate viewpoint, I think an insurer would be crazy not to have a claims manual or claims procedure guidelines. Most state unfair claims trade practice laws generally require insurers to adopt and implement those standards and procedures. Still, I can appreciate an insurer's claims management wondering whether such procedures, if violated or followed, could give rise to liability. I found the article to be thought provoking and worth consideration by many of the readers of this blog who represent insurer interests.
Continue Reading...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.
Continue Reading...(Note: This Guest Blog is by Michelle Claverol, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the sixth part in a series she is writing on business interruption claims).
A very insightful reader posted this comment to my blog last week, Understanding Business Interruption Claims, Part 5:
Continue Reading...I'd guess that many small businesses, such as mom and pop stores, independent contractors, sales agents etc might not be able to benefit from this ruling if they don't project forward. Many small business owners are not trained in business management, and might not be aware of techniques they can use to plan their business success.
Could the small business owner therefore have difficulty making a claim for projected earnings and expenses if they don't have a business plan?
(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the sixth part in a series he is writing on post-loss duties).
In Florida, as in other states, failure to give an insurer timely notice of a loss can provide an insurer with a potential basis for denying a valid claim. Ideal Mut. Ins. Co. v. Waldrep, 400 So.2d 782, 785 (Fla. 3d DCA 1981). This can be a harsh result for policyholders, but, as I mentioned last week, some jurisdictions such as Florida hold that the late notice must prejudice the insurer as well.
Continue Reading...Risk & Insurance® recently ran an article, Paving the Potholes of Big Property Claims (updated), about large losses indicating that the claims process is anything other than perfect. Harvey Goodman, a public adjuster I mentioned in this morning's post, was quoted in that article. I first met Harvey Goodman at the Annual Convention of the National Association of Public Insurance Adjusters (NAPIA) at Carmel, California in 1985. I gave a speech about Proofs of Loss and Examinations Under Oath. Harvey is one of those people in the audience who raises his hand, often. He asks the tough questions with unique facts that are often situations he faces. Harvey is a past president of NAPIA and one of the finest public adjusters.
Continue Reading...My post, Appraiser Disinterest and Impartiality California Style, lead to a number of comments and opinions about the topic. Yesterday morning Terry Butler, Senior Legal Counsel to the Florida Insurance Consumer Advocate, reported on the various views concerning appraisal at the final session of the Windstorm Conference. Butler sat next to me at the January 6 Alternative Dispute Resolution Roundtable. I previously posted on that meeting in Impressions Following the Alternative Dispute Resolution Roundtable.
Continue Reading...Adjusters hate to listen to lawyers pontificate about case law. I know because of surveys we have done asking adjusters what they want to get out of presentations and how they best can learn. Instead, adjusters want lawyers that are making presentations to explain the practical implications of how they can better do their job.
Continue Reading...The Windstorm Conference is in full swing. I was introduced to an engineer, Bruce Holmes. He told me that he was very upset with his colleagues and others in the insurance industry. He asked if I could refer others to his website where he has a proposal for change and action.
Continue Reading...(Note: This Guest Blog is by Javier Delgado, an attorney with Merlin Law Group in the Houston, Texas, office. This is the sixth in a series he and fellow attorney Tina Nicholson will be writing on Texas property insurance issues).
Insurance adjusters will never tell you that
[p]roperty damage estimates may look very rigorous, systematic, and scientific, yet these estimates reflect assumptions about how much labor time and expense is required to do certain work and how much material will cost. These assumptions can be wrong or inappropriate in any given case.
James J. Markham, Kevin M. Quinley & Layne S. Thompson, The Claims Environment, 1st ed. (Insurance institute of America, 1993) p. 176.
However, adjusters are trained to acknowledge this and are encouraged to work with the homeowner or homeowner’s representative to adjust the loss.
Continue Reading...(*Chip Merlin's Note: This guest blog is by John Nixon, President and founder of Asperta, Ltd., an independent consulting firm focused on improving the quality of property insurance decisions by policy holders, agents, brokers, underwriters, reinsurers and investors.)
I’d like to offer your audience my perspective on Citizens’ proposed changes to their appraisal standards, which were released last week. These important changes are intended to address an increase in quality issues identified when appraisals are submitted as supporting documentation in underwriting applications. These proposed changes are in the consumers’ best interest.
Continue Reading...Winter and early spring storms often bring violent tornadoes into the south. A recent article highlighted how even insurance company adjusters know that many damages from tornadoes are often overlooked.
Continue Reading...(Note: This Guest Blog is by Michelle Claverol, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the fifth part in a series she is writing on business interruption claims).
As a matter of general practice in business interruption claims, the insured's books and records are admissible and its accounting practices are to be considered in determining the actual loss sustained. However, the “books” are not necessarily controlling in the valuation determination. The valuation should be determined in a practical way, with regard to the nature of the business and the methods employed in its operation, giving practical effect to the intentions of the parties and the purpose of the insurance as evidenced by the terms, conditions, and provisions of the policy. AmJur Insurance, § 1533 (2010).
Continue Reading...The Windstorm Conference starts tomorrow in Jacksonville. If you represent policyholders or insurers with hurricane claims, you have to be there, since hurricanes are the largest windstorms. It provides an opportunity to learn from those actively engaged in all aspects of the hurricane insurance claim experience.
Continue Reading...(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the fifth part in a series he is writing on post-loss duties).
With the prevalence of supplemental claims, especially in Florida, one issue that has been coming up recently is the requirement that the insurer receive timely notice of a loss. Many times, these supplemental claims are made years after the occurrence (Hurricane Wilma for instance), and some insurers are denying coverage for the damages and refusing to participate in the appraisal process. Their argument is that they did not receive timely notice of the damages and the length of time has substantially prejudiced their investigation of the claim.
Continue Reading...The FC&S Bulletins should be subscribed to by all insurance adjusters and agents. It recently issued a strong suggestion that insurance agents, brokers and risk managers review Earth Movement and Earthquake insurance clauses.
Continue Reading...Water pipe breaks arise from all kinds of situations. Following Hurricane Hugo in South Carolina, I represented a number of hotels that were being repaired and then had significant water damage caused by a freeze before the heat could be restored. This winter's cold weather reminded me of these losses, and I came across a couple of articles explaining the severity of them and suggestions to prevent the occurrence.
Continue Reading...The Merlin Law Group will host a fundraising event next Tuesday night to help Frank Artiles in his campaign for a seat in Florida’s House of Representatives. The fundraising reception will be held at the Hyatt Regency Jacksonville Riverfront Presidential Suite 1830 from 10:30 P.M. to 1:30 A.M. It is intended to be after the Windstorm Conference events and dinner, when some may be looking for late night fun.
Continue Reading...A Hurricane Ivan claim that involved flood and sewer back up was not excluded because of the anticoncurrent causation clause in Bishops, Inc. v. Penn National Ins., Case Nos. 2275 WDA 2007, 35 WDA 2008 (Pa. Super. Nov. 24, 2009). The important aspect of this case is how an endorsement purchased to cover sewer back up rendered the anticoncurrent cause clause ineffective for sewer back up as well as income and extra expense coverage. Some decisions are quite easy to analyze, while others make you read portions of a court's reasoning two or three times. This case is the latter. My tip for policyholders from this case is to always review your endorsements to see if additional coverage is provided.
Continue Reading...Bill Berk called me yesterday regarding the upcoming Windstorm Conference next week. During our discussion, he mentioned that his partner, Evelyn Mercahant, won a trial for QBE against a condominium association represented by a very good trial attorney, Daniel Rosenbaum. The Association was seeking millions, but the jury awarded zero.
Continue Reading...QBE Insurance Company is becoming quite prevalent in the news and legal case decisions in Florida. While reviewing other blogs, I came across Dennis Wall’s two blogs, Insurance Claims Issues and Insurance Claims Bad Faith, to which I suggest that many readers of my blog subscribe. While my feeling is that much of what he writes is a viewpoint of insurance that slightly favors excuses for denials and delay of claims, it is an excellent source worthy of reflection. His recent post, Collateral Source Rule Held No Bar to "Other Insurance" Policy Evidence, helps demonstrate both points.
Continue Reading...Dr. Martin Luther King, Jr., is one of my modern-day heroes. I can still remember the night of his death when we lived outside of Washington, D.C. My father returned home early from Coast Guard headquarters and remarked that the burning and riots in downtown were exactly the opposite of what Dr. King stood for. His leadership of significant social change in such a courageous manner is why, in part, we celebrate today.
Continue Reading...Imagine the same magnitude earthquake that pummeled Haiti striking greater Los Angeles, San Francisco, Portland or Seattle. Are enough people insured for this event? Are there enough skilled adjusters ready for the valuation issues specific to earthquake damage? While there is almost no private insurance in Haiti providing a financial buffer from its earthquake disaster, many along our Western coast do not appear willing to insure for this peril.
Continue Reading...(Note: This Guest Blog is by Michelle Claverol, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the fourth part in a series she is writing on business interruption claims).
Assume you own a hotel at a fabulous location on South Beach. The hotel has two suite-towers and a swanky three-star Michelin restaurant in the hotel lobby. One day, the fine restaurant was consumed in flames and the hotel sustained a significant decrease in room occupancy after the fire. Can the hotel claim business interruption benefits as a result of the fire in the restaurant? Maybe.
Continue Reading...(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the fourth part in a series he is writing on post-loss duties).
Last week, I received a great question regarding my post, Who Can Accept My Notice of Loss. The entire question and my response are rather long to re-post, but the gist of the question was:
Continue Reading...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.
Continue Reading...I love insurance agents. In my view, along with a good banker, lawyer, accountant and doctor, the next trusted person for business and personal matters that one should have a long term relationship with is an insurance agent. Unfortunately, many insurance company cost cutters, probably the types I mentioned yesterday in Don't Forget Visa at the Winter Olympics and Expect it, Rather Than Cash, From Your Insurer, want to save on agent costs and now suggest customers shop and learn about insurance purely online. This method of insurance selection is akin to representing yourself in court or self diagnosis of major medical symptoms with just as devastating financial and personal consequences. Learn about insurance on the internet, but buy through a knowledgeable and reputable insurance agent is my strong advice.
Continue Reading...I wonder whether the water fountains at some insurance companies are spiked. Certainly, it must be some pretty potent stuff where the employees who came up with this cost saving gimmick work. I mention this because of a story, P&C Insurers Can Pay Claims With Prepaid Visa, N.Y. Rules, in the National Underwriter which noted:
Continue Reading...The 2010 Windstorm Conference is quickly approaching. I noted in my earlier post, The 2010 Windstorm Insurance Conference, the following:
Continue Reading...(Note: This Guest Blog is by Javier Delgado, an attorney with Merlin Law Group in the Houston, Texas, office. This is the fifth in a series he and fellow attorney Tina Nicholson will be writing on Texas property insurance issues).
Yesterday, Michelle Claverol and I had the honor and privilege to speak before a large crowd of public adjusters at the Florida Association of Public Insurance Adjusters (FAPIA) Winter Conference. As Michelle and I were preparing for the presentation, “Tales From the Dark Side,” it occurred to me how difficult and challenging the job of an insurance adjuster is, whether representing the insurance company or the insured. I had felt this way before, about 15 years ago, while sitting in my cubicle working as an adjuster for Crawford & Company out of the Miami office. It’s been nine years now that I have been practicing law as both a defense and plaintiffs attorney, and in those nine years, I had not taken the time to reflect on my life as an adjuster until three days ago.
Continue Reading...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?
Continue Reading...(Note: This Guest Blog is by Michelle Claverol, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the third part in a series she is writing on business interruption claims).
In simple terms, business interruption insurance is intended to return to the insured's business the amount of profit it would have earned, had there been no interruption of the business or suspension of its operations as a result of a covered loss. However, as with all property insurance claims, causation is a crucial element of the claim and all coverage issues should be addressed at the outset.
Continue Reading...The Florida Association of Public Insurance Adjusters’ (FAPIA) winter conference starts today. On its website is a link to a summary judgment motion filed in a lawsuit I noted in Second Public Adjuster Constitutional Solicitation Ban Challenge Filed. In the summary judgment was an amazing statistic that, if true, would certainly indicate that policyholders need professional help when dealing with their insurance claims:
Continue Reading...The editors of Slabbed deserve some type of honor. What do they get for all the education about events of the day they provide? My hat is off to them. All of us are the better for it.
Continue Reading...(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the third part in a series he is writing on post-loss duties).
While speaking to a potential client about a agent negligence claim, she told me that the individual she believed to be her agent for the past three years had turned out to be the real agent’s secretary. This struck me as extremely odd, especially since the woman had referred to the secretary as her agent in the secretary’s presence and had never been corrected. While this situation likely seldom arises, it does highlight a very important point, mainly, that most individuals are not very familiar with their insurance company and the hierarchy of employees and agents.
Continue Reading...Barry Zalma writes some interesting and worthwhile property insurance coverage articles. While most of his work centers on insurance fraud, his recent article, "When is An Appraiser Disinterested?" has implications for consideration in Florida as well.
Continue Reading...The Fire Casualty, & Surety Bulletins (FC&S Bulletins) had a simple vandalism claim that highlights a major difference between all risk coverage versus named peril coverage. Here is the coverage question posted with the significant language of the question bolded:
Continue Reading...There are times when I am troubled about what I write on this blog. This is one of them. I know that many people are going to read this who have very different viewpoints. When a number of people tell you in advance that they look forward to what you are going to write, there is some tendency to write for the readers rather than having the courage to just place what is in your heart on paper. There is no way I can write about all my thoughts, but I will share points.
Continue Reading...In a widely read previous post, Florida Public Adjusters File Lawsuit to Overturn 48 Hour Solicitation Ban and Fee Caps, I noted how a lawsuit in Miami-Dade County challenged the fee cap and solicitation ban on public adjusters. The State challenged venue, and in a recent order, the trial court denied the change of venue.
Continue Reading...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.
Continue Reading...(Note: This Guest Blog is by Tina Nicholson, an attorney with Merlin Law Group in the Houston, Texas, office. This is the fourth in a series she and fellow attorney Javier Delgado will be writing on Texas property insurance issues).
Most Texas policyholders do not know what the law requires of insurance companies in regard to responding to a claim. The “Prompt Payment of Insurance Claims” statute in Chapter 542 of the Texas Insurance Code imposes certain deadlines on insurers for responding to, investigating, and accepting or rejecting claims. An insurer that violates the statute must pay, in addition to the amount owed on the claim, the insured’s attorney fees as well as “damages” of 18% per annum. In order to recover attorney fees and the 18% interest, the policyholder must show that (1) the policyholder had a claim under the policy; (2) the insurer is liable for the claim; and (3) the insurer failed to comply with a requirement of the statute. The purpose of the statute is to “promote the prompt payment of insurance claims pursuant to policies of insurance.” Tex. Ins. Code Ann. §542.054.
Continue Reading...This Wednesday will be the Roundtable discussion regarding appraisal. It will be significant and I urge anybody with an opinion or interest to write to Sean Shaw, the Insurance Consumer Advocate. You can also watch the roundtable at WFSU Florida Channel and call into the conference at 1-888-808-6959 Code: 4132880.
Continue Reading...Gary Rowland made a comment to my post, The End of a Year, an Eight Year Bad Faith Case and People Whose Lives We Touch, which made me appreciate that some of what we write is helpful to others. Frankly, I am fairly certain that we get a lot more out of what we learn from writing than what you may gain from reading. I am often in awe of the number of very bright and very capable people in this business that have unique expertise on some very isolated issues. The learning never stops.
Continue Reading...(Note: This Guest Blog is by Michelle Claverol, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the second part in a series she is writing on business interruption claims).
If you are reading this entry, you are probably familiar with the loss adjustment process of a claim. It is the period of time an insurance carrier has to investigate a claim, make a coverage determination, set its reserves and value the claim that was presented by its policyholder. The loss adjustment process is a necessary evil. The world would certainly be a happier place if insurance companies wrote checks for the full amount claimed immediately after a loss. However, I would not be writing this entry today, and insurance companies would not be executing their fiduciary and statutory duty of investigating claims to prevent wasteful spending of their premiums.
Continue Reading...(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the second part in a series he is writing on post-loss duties).
Normally, the first post-loss obligation that a policyholder encounters is the duty to provide an insurer with notice that a loss has occurred. While policies and the statutes of the particular jurisdiction vary, both tend to spell out the procedure by which notice should be delivered. Both are important sources of information and it is necessary to read and understand them.
Continue Reading...Insurance advertisements have never been more entertaining. While perusing the net for information regarding Safeco and Liberty Mutual, I came across a number of insurance company television advertisements. We often use ad firms to find and pull the ads of some of our opponent insurers. It can be done cheaply through YouTube.
Continue Reading...I am writing this flying back to Tampa from Indianapolis following an arduously long and contentious bad faith case that our firm has been involved in for eight years. It is cold and snowing in Indianapolis as we leave. Our clients, co-counsel, opposing counsel, judge, special master, and opposing insurance claims managers are all smiling despite one side paying more than what could have settled the matter long ago and our side wondering if we settled for far too little. Such is the nature of insurance bad faith lawsuit resolution.
Continue Reading...Dan Luby of the Florida Insurance News forwarded an article to me, "United Property & Casualty Insurance Company Appraisal Clause." Dan does a fantastic job on relevant insurance news events in Florida and his piece today demonstrates the ongoing trend of appraisal clauses being removed from property insurance policies.
Continue Reading...The issue in this case was whether the amended sections of Florida Statute sections 627.7065, 627.7072, and 627.7073 (2005), which affected database information, testing standards, and reporting requirements for sinkhole claims, created a presumption that shifted the burden of proof to the homeowner to disprove an insurer’s expert’s opinion that damage was not caused by a sinkhole or whether it created a presumption that vanished once a homeowner produced evidence that a sinkhole damaged his or her property.
Continue Reading...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:
Continue Reading...(Note: This Guest Blog is by Michelle Claverol, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the tenth and final part in a series she is writing on valued policy laws).
In general, business interruption coverage is supposed to provide the capital needed to sustain a business while its operations are suspended as a result of damage caused by a covered peril.
Continue Reading...(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the first part of a serieshe is writing on post-loss duties).
When dealing with insurance claims, it is important for there to be ongoing communication and cooperation between the policyholder and the insurer. This relationship is generally to share and obtain information necessary for the insurer to make a fair and prompt determination of whether coverage exists. In the context of a first party claim, the insurer needs information relating to the circumstances of the loss as well as the amount claimed. Similarly, the policyholder needs to know the status of the claim and what he or she could do to help the insurer’s investigation. There are a number of post-loss duties which are necessary to foster this cooperation between the insurer and policyholder.
Continue Reading...Imagine if you were a corporate Risk Manager that selected Liberty Mutual or Safeco and the insurer did not pay fully or promptly on a claim. What would you say to your CEO after that happened? Your job should be at risk if you could not answer that question.
Continue Reading...A governmental entity is fictional in the sense it is a creature created by law. Corporations are similar, but they may act for personal gain, whereas governmental entities are supposed to act "for the people." Citizens Property Insurance Corporation appears to claim in court arguments that it is a governmental entity. Yet, when it comes to acting as an insurer, it certainly wants to be free of governmental constraints.
Continue Reading...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."
Continue Reading...Over the past several weeks I have had a number of public and private discussions with attorneys and public adjusters about the appraisal process. My post last week, Alternative Resolution Roundtable: Appraisal is the Hot Topic, had a comment from Mike Rump that I thought was worth sharing as this debate rages on:
Continue Reading...(Note: This Guest Blog is by Michelle Claverol, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the ninth in a series she is writing on valued policy laws).
Sometimes, if not most of the time, a covered peril will only cause partial damage to a structure. For example, let’s pretend an insured inadvertently drops an object on his tile floor and the object cracks a single tile. For the sake of argument, let’s assume that the policyholder has continuous tile throughout the house, and that due to the age and style of construction, a matching tile is no longer available on the market.
Continue Reading...(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the twelfth of a twelve part series he is writing on proof of loss).
Over the last twelve weeks I have covered many of the issues regarding Proofs of Loss, and I wanted to end the series by covering some of the common mistakes and thoughts for avoiding them.
Continue Reading...In a blow to policyholders, Florida’s Fifth District Court of Appeals found that Citizens is not subject to bad faith lawsuits. The Court concluded:
Continue Reading...In summary, we hold that Citizens is immune from first-party bad faith claims pursuant to section 627.351(6)(r)1. Likewise, we hold that Citizens is not subject to bad faith liability under section 624.155(1)(b)(1), as that statute is not applicable to it.
I have been asked to participate in a roundtable discussion regarding alternative dispute resolution processes by Sean Shaw, the Florida Consumer Advocate.
Continue Reading...(Note: This Guest Blog is by Robert Reynolds, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the thirteenth of a thirteen part series he is writing on examination under oath).
“You know the insurance company is going to cut the estimate in half, so you have to pump it up.”
I can’t tell you how many public adjusters have expounded this philosophy to me. As I tell them all: do not go down that road, as it is a slippery slope. First, if the estimate is significantly higher than the carrier’s evaluation of the claim, SIU (Special Investigative Unit, the fraud division) becomes involved. This will now offer your client the unique opportunity to undergo a fraud investigation. What will this entail? Well, the policyholder is guaranteed to be asked to sit for examination under oath and all of the fun that goes along with that endeavor. So, this begs the question: what may the policyholder expect at the EUO of a suspected inflated claim?
Continue Reading...(Note: This Guest Blog is by Javier Delgado, an attorney with Merlin Law Group in the Houston, Texas, office. This is the third in a series he and fellow attorney Tina Nicholson will be writing on Texas property insurance issues).
In the last blog I posted regarding our litigation against Texas Windstorm Insurance Association (TWIA) and the exchange of documents, Current Status of TWIA Discovery for Hurricane Ike Claims in Galveston County, I briefly explained the discovery process in a first party litigation case. In the usual order of discovery, documents are exchanged and then the attorneys take depositions of each party. Due to the thousands of cases filed against TWIA, it was necessary to coordinate these depositions much in the same way that it was necessary to exchange discovery documents.
Continue Reading...Why should any United States citizen be deprived of the ability to work any where in the Union? Our founding fathers asked the same question and made such state laws unconstitutional.
Continue Reading...(Note: This Guest Blog is by Michelle Claverol, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the eighth in a series she is writing on valued policy laws).
Whether selling a commercial, homeowner, marine or other insurance rider, most insurance agents spend their days advocating the importance of insuring property with replacement cost coverage. Although this type of coverage is at times pricier than its “market value” counter part, replacement cost coverage will protect the property’s value against the dreaded depreciation due to the passage of time. However, sometimes the replacement cost option (new for old) is not the best choice for certain types of property.
Continue Reading...(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the eleventh of a twelve part series he is writing on proof of loss).
Recently, I was handling a case where I felt the insurer had waived its right to a Proof of Loss. In this particular case, the insurer initially demanded a Proof but when the policyholder contacted the adjuster to inquire about the specific requirements, the adjuster specifically told the client the obligation was being waived. Furthermore, the insurer had made a partial payment before the Proof was requested (which can be considered waiver under Florida law), and continued to negotiate the claim after the timeframe for filing the Proof expired.
Continue Reading...Charles Miller is a respected insurance claims expert whom I have retained as a consultant and testifying expert on various matters over the past decade. I enjoy debating and discussing various insurance claims and coverage issues with him.
Continue Reading...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.
Continue Reading...(Note: This Guest Blog is by Robert Reynolds, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the twelfth of a thirteen part series he is writing on examination under oath).
Yesterday I had a meeting with a public adjuster who was referring me a theft loss. As we discussed the claim’s facts and circumstances, I became very skeptical. According to the PA, the policyholder had some health issues and went to the hospital for a few days only to return home to find he had been burglarized. Unfortunately, a good portion of the tale did not make a whole lot of sense. The insured claimed that the thieves stole furniture and power tools, but not the cases for the power tools. This just does not add up. That is, most burglars are petty criminals or drug addicts looking to pilfer items they can fence for quick cash: jewelry, electronics, etc. What is a filch going to do with a table and chairs? Trust me, furniture is not readily pawned; nor, for that matter, is it easily and stealthily removed from a residence. As it turned out, the policyholder did not show up for the meeting, so I did not have the opportunity to ask questions. This begs the questions: what should an attorney or PA ask the potential client about a suspicious theft loss and what should they expect at the examination under oath (EUO), which will inevitably be requested by the insurance company?
Continue Reading...Note: This Guest Blog is by Tina Nicholson, an attorney with Merlin Law Group in the Houston, Texas, office. This is the second in a series she and fellow attorney Javier Delgado will be writing on Texas property insurance issues).
“You have to learn the rules of the game. Then you have to play better than anyone else.”
--- Albert Einstein
There are, obviously, many more than five rules for achieving success when representing a policyholder on an insurance claim. Dedicated insurance professionals, such as the lawyers in our firm, can spend their entire careers learning this area of the law.
Sometimes, however, people become consumed in the details and neglect essential principles. It is a good idea, from time to time, to check that we have touched all the bases. Accordingly, here is a quick review of five important principles.
Continue Reading...I am always looking for "an edge." Just something to get a better chance of winning for my client--like all good litigators. This morning's post, Chinese Drywall Losses Covered Under First Party Property Insurance Policy, mentioned how going to a NAPIA Conference can give a policyholder's advocate that type of "edge." Let me explain how a few lessons by Ed Eshoo's lecture can help everybody making arguments for disputed coverage claims.
Continue Reading...A guest lecturer at the National Association of Public Insurance Adjusters Mid-Year Meeting last Friday predicted that courts will find at least some of the damage caused by Chinese drywall to be covered under a first party property insurance policy. Ed Eshoo gave the lecture, "First Party Property Insurance--Chinese Drywall Claims."
Continue Reading...(Note: This Guest Blog is by Michelle Claverol, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the seventh in a series she is writing on valued policy laws).
When a building has been damaged or destroyed by a covered peril, a policyholder may face an additional loss because building laws and ordinances governing the repair, reconstruction, or demolition of the insured property can significantly increase the costs. In most instances, these laws and ordinances will require that the repairs or reconstruction of a damaged structure comply with current building codes.
Continue Reading...(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the tenth of a twelve part series he is writing on proof of loss).
As discussed briefly in my previous blog, (What Happens if a Proof of Loss is not Submitted, is Incomplete, or is Inadequate?), when an insurer receives a Proof of Loss it must either accept or reject the Proof. Initially, the insurer has the right to review a submitted Proof of Loss and make its own determination as to the submission’s sufficiency under the policy. However if the sufficiency is disputed, the final determination will be a question for the court to decide. It is important to note, however, that the insurer should only reject a Proof of Loss for technical reasons and not simply because it disagrees with the amounts being claimed. These technical errors usually include failing to sign or notarize the Proof and/or failing to provide proper supporting documentation.
Continue Reading...Our firm is currently running a survey of all Liberty Mutual advertising in Texas since Hurricane Ike struck as part of litigation we have against it and Safeco. Modern insurance companies compete for customers through advertising. Many make some pretty bold statements in the advertisements to win our hearts and minds.
Continue Reading...(Note: This Guest Blog is by Robert Reynolds, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the eleventh of a thirteen part series he is writing on examination under oath).
Back in the days of yore when, in true Gunga Din fashion, I hauled the man’s water defending insurance companies I was a fraud specialist. Every claim I handled had some indicia of fraud. And, believe me, if you or your client walked into the room for an examination under oath and I was conducting that day’s EUO, you were in for a long, difficult ordeal. I would move heaven and Earth to prove the fraud. But on the occasion when the facts bore out that there either was no fraud or there was no evidence to prove the fraud by clear and convincing evidence (the burden the carrier must establish in court to uphold a fraud denial, which is a higher standard than the normal preponderance of the evidence in civil court) I would actually tell the carrier to –please be seated before reading this next line— PAY THE CLAIM. Imagine that. Unfortunately, in today’s climate all too often when a claim comes across the inside examiner’s desk it seems the only tool provided by the carrier to evaluate the claim is a rubber stamp with the word “DENIED” and a red ink pad. With that being said, what should public adjusters expect when a claim is being investigated for fraud? Specifically, carriers love to shake the fraud stick at fire claims. What questions may be anticipated at an examination under oath of a suspicious fire claim?
Continue Reading...(Note: This Guest Blog is by Javier Delgado, an attorney with Merlin Law Group in the Houston, Texas, office. This is the first in a series he and fellow attorney Tina Nicholson will be writing on Texas property insurance issues).
“WHAT DO YOU MEAN YOU CAN’T TELL ME EVERYTHING THAT YOU HAVE LEARNED ABOUT TWIA?”
No, this is not a typographical error. There are many things that we have learned about Texas Windstorm Insurance Association (TWIA) and many things that we cannot openly discuss.
Continue Reading...I have known John Pappas since 1980. We were classmates in law school. I think I helped get him the job at the 100-plus person insurance defense law firm that now bears his name. Because we have been bitter adversaries on a number of cases, most people find it surprising that he was the best man at my marriage.
Continue Reading...(Note: This Guest Blog is by Michelle Claverol, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the sixth in a series she is writing on valued policy laws).
Recently, Chip shared some insightful practice pointers on this blog about how to maximize replacement cost benefits. The blog made me wonder whether an insured would be entitled to replacement cost benefits if his claim is denied and the insured cannot afford to repair or replace to comply with the replacement cost provision?
Continue Reading...(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the ninth of a twelve part series he is writing on proof of loss).
I have spent the last few weeks writing about everything from what a Proof of Loss is to when one must be filed. As I was deciding on a topic for this week, I realized that while I had spent weeks talking about Proofs, I had yet to post an example. Since a picture is worth a thousand words, this week I am posting an example of a common Proof of Loss form.
Continue Reading...Adjusters sometimes mistakenly undervalue unique or high value items by placing a "functional equivalent" value rather than a replacement value upon the item. The most common situation is paying the lower cost of drywall when the interior of a structure is made from plaster. Absent a special statute, state law, or policy provision, the policyholder is ordinarily entitled to the replacement cost, less depreciation, as an actual cash value payment. Some state statutes and some policy forms require payment for the replacement cost immediately.
Continue Reading...(Note: This Guest Blog is by Robert Reynolds, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the tenth of a thirteen part series he is writing on examination under oath).
“How did I do?” and “What happens next?” are the two predominant questions posed to me after my clients finish examinations under oath. Both are very good questions. In fact, what does happen with the claim after an EUO? What actions should policyholders and public adjusters take after an EUO? First, oftentimes during the examination, information such as the names and numbers of handymen or documentation, like an invoice for a handyman, is brought up for the first time. In that case, the public adjuster’s and policyholder's task is the same: gather the information or documents and forward to defense counsel immediately! And I can not stress this enough: PAs should consider it one of their primary responsibilities to navigate through the post-loss obligations as quickly as possible. For in order to get a claim paid, invoke appraisal, or file a lawsuit, there must be an adequate exchange of information through the post-loss obligations for the carrier to make an independent assessment of the loss. Hence, wading through the quagmire of post-loss requirements is of utmost importance.
Continue Reading...While reading Michelle Claverol’s post yesterday, Understanding Replacement Cost Coverage: Valuation Issues in Florida, Part 5, I had some personal thoughts on two cases she discussed. I also want to emphasize a very significant case we noted last week in Court Finds State Farm Cannot Withhold Money After Appraisal Award for Sinkhole Remediation. There are some very practical practice pointers for all involved in insurance coverage from these three cases.
Continue Reading...(Note: This Guest Blog is by Michelle Claverol, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the fifth in a series she is writing on valued policy laws).
Let’s pretend you own a widget and that your widget is insured. Unfortunately, your widget was destroyed in a catastrophic fire. Let’s also pretend that your widget was worth $1,000.00, that it had a 10 year “life expectancy,” and that you owned it for 5 years before the fire. As discussed last week, under the Actual Cash Value (ACV) computation, an insurance carrier will pay you $500 and it will hold back the depreciation value ($500) until you send an invoice showing that you replaced the widget. The insurance carrier will then pay the out of pocket expenses you incurred to replace the widget--up to the amount held back. Do note that under an ACV computation, the replacement or repair must take place in order to trigger entitlement to payment of the withheld depreciation.
Continue Reading...(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the eigth of a twelve part series he is writing on proof of loss).
Normally I have steered away from giving certain answers when it comes to the requirements of submitting a Proof of Loss. Most of the topics I have discussed thus far have a myriad of exceptions which might provide coverage even if the terms of the policy have not been completely complied with. While these possibilities do exist in many homeowners policies, the one place you can count on a mistake serving as a basis for denying your claim is when you are dealing with s National Flood Insurance Policy. The requirements of the Standard Flood Policy are pretty clear and failing to follow them to the letter can be devastating.
Continue Reading...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:
Continue Reading...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.
In this case, several policyholders brought suit after State Farm refused to pay damages awarded for subsurface sinkhole repairs. The policyholders each received appraisal awards that separately listed the amount of above ground and subsurface damages caused by sinkholes. State Farm promptly paid the amounts designated for above ground damage but withheld the amounts designated for subsurface damage, arguing that Florida Statute 627.707(5)(b) (2007) authorized it to withhold the funds until the homeowners had contracted for the repairs.
Continue Reading...(Note: This Guest Blog is by Robert Reynolds, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the ninth of a thirteen part series he is writing on examination under oath).
“What should I say to a client before an EUO?”
This question is often posed to me by public adjusters. First, I always tell them to have the policyholder hire an attorney, as I can not stress enough that an examination under oath is a very critical point in the proceedings. Insureds may be easily tripped up by a savvy defense attorney, placing their claim in jeopardy. With that being said, there are several forms of review by which a PA may assist his/her policyholder in preparing for an EUO.
Continue Reading...Allstate Insurance Company lost a bench trial involving the claims practices employed in its Claims Core Process Redesign program first implemented in the 1990’s. The findings by the trial court are significant because the Court indicated that those claims practices violate standards which are routinely violative of unfair trade and claims practices in most of the states. The findings indicate these were done as a general business practice.
Continue Reading...While taking the deposition last week of a Pilot Catastrophe flood adjuster that was a former State Farm claims representative, I was thinking about some recent good news for State Farm. The first had to do with a Palm Beach Post report concerning State Farm possibly continuing to write insurance in Florida. The second had to do with a Hurricane Katrina jury verdict in Gulfport, Mississippi.
Continue Reading...(Note: This Guest Blog is by Michelle Claverol, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the fourth in a series she is writing on valued policy laws).
“Actual Cash Value = Replacement Cost – Depreciation” is one of the most common insurance valuation mantras. However, when dealing with Actual Cash Value (ACV) provisions, insurance professionals should keep in mind that that, in Florida, this formula is more fluid and lenient than it sounds.
Continue Reading...(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the seventh of a twelve part series he is writing on proof of loss).
The last two weeks I have discussed some of the basic aspects of an insurer’s ability to expressly or impliedly waive its right to a Proof of Loss. While it is important to note that an insured’s post loss obligations can be waived, it is equally important to know and understand who has the authority to bind the insurer with their words and/or actions. Therefore, I will finish up my discussion of waiver by discussing some of the individuals who may have the ability to waive the Proof requirement. Please note that in this post when I refer to an insurer’s “agent” I am not necessarily referring to an “insurance agent.” Instead I am referring to anyone who is acting on behalf of the insurer in dealing with the claim.
Continue Reading...This case came before the United States District Court for the Northern District of Florida on a motion for summary judgment on the pleadings. Therefore, the Court did not weigh the evidence to determine the truth of the matter; the Court simply determined whether there were genuine issues of fact for trial. This decision was fact-specific, so a detailed explanation of the facts is necessary.
Continue Reading...Does anybody think that TWIA is doing a "good job" of adjusting hurricane claims other than the private member insurance companies on TWIA's Board of Directors? In a prior post, TWIA Insurance Claims Under Investigation by Regulators and Media, I noted that the Texas Department of Insurance attorneys are conducting an investigation into activities of TWIA's claims conduct. The Houston Chronicle’s Purva Patel has been doing her own outstanding investigative reporting which is providing shocking and needed transparency into the real world activities that have gone on in the field concerning TWIA's claims conduct and the motives behind it.
Continue Reading...(Note: This Guest Blog is by Robert Reynolds, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the eighth of a thirteen part series he is writing on examination under oath).
“I’ve never taken a deposition, what kinds of questions are they going to ask me?”
This is a question posed to me most often by policyholders when they receive that dreaded notice for an examination under oath. As most people have never had the pleasure of sitting under a bare bulb being browbeaten by an overzealous insurance defense attorney, insureds usually have no idea what is in store for them at an EUO. First, as I usually explain EUOs are NOT depositions. As the court distinguished in Goldman vs. State Farm, 660 So2d 300 ( Fla. 4th DCA 1995), depositions are products of law suits, inherently adversarial, while EUOs are part of the policy’s post-loss obligations, where the policyholder has a duty to cooperate and assist the insurer in their investigation and evaluation of the claim. Therefore, as the insured has a duty to cooperate, yet most have never been involved in the EUO process, how should a policyholder prepare for an EUO?
Nancy and Anthony Podorski hired On Target, Inc., a leak detection service, to locate a leak under the floor of their home. The On Target technician who responded presented Mr. Podorski with a two-page form titled “Customer Information Card and authorization to proceed with the work.” The Customer Information Card authorized On Target to find the leak, provided general information about the nature and extent of the services provided by On Target, and the indemnification provision at issue in this case:
Continue Reading...No hurricanes all summer. The water is cooling. People are preparing for Thanksgiving and muttering about retail shops putting up holiday lights in the first week of November. And out of the blue comes Hurricane Ida.
Continue Reading...(Note: This Guest Blog is by Michelle Claverol, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the third in a series she is writing on valued policy laws).
Valued Policy Laws (VPLs) are relatively easy to define as those that require payment of policy limits in the event of a “total loss” caused by a covered peril, even though the insurance carrier could rebuild the property for less. To therefore speak in terms of a VPL, the loss in question must be deemed total.
Continue Reading...(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the sixth of a twelve part series he is writing on proof of loss).
As was discussed in my last post, Proof of Loss: Waiver, Part I, if possible you should file a Proof of Loss in the applicable timeframe. Not doing so can cause a myriad of problems and under some policies, National Flood Insurance, for example, can provide the insurer an excuse for denying the claim all together. As previously discussed, however, there are some circumstances in which an insurer may waive the requirement of filing a Proof of Loss. Last week we discussed that express waiver occurs when an insurer explicitly states, either orally or in writing, that the filing of a Proof will not be required. This week we will focus on implied waiver, or waiver which occurs as a result of the actions and/or conduct of the insurer.
Continue Reading...Lately, there has been quite a bit of discussion about insurance industry immunity under the antitrust laws. The most recent discussion has been about health insurance. I have mentioned it somewhat in a past post, Where is the Antitrust Enforcement Anyway?
Continue Reading...Houston Chronicle reporter, Purva Patel, filed an article, "They Want ‘Profits' of Ike," noting that Hurricane Ike policyholders who have wrongfully been denied payments for expected costs of general contractor overhead and profit are bringing their actions in class action lawsuits. Our law firm has filed some of these cases with Javier Delgado taking the lead. Javier was noted in the article:
Continue Reading...(Note: This Guest Blog is by Robert Reynolds, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the seventh of a thirteen part series he is writing on examination under oath).
Two weeks ago the issue of a policyholder refusing to answer questions was discussed in this blog. Hand-in-hand with that topic is: What if an insured renders an inaccurate answer during an examination under oath? This analysis should begin with the policy language. Every insurance policy I have ever read includes a fraud, misrepresentation, and concealment provision. Fraud is the willful intent to deceive. Misrepresentation is the willful act of presenting knowingly incorrect information. Concealment is the willful act of hiding facts or circumstances. The one common thread to this unholy trinity is that all three acts must be willful. That is, the policyholder must be participating in these acts intentionally. To be clear, over time just about everyone’s memory tends to fade. Hurricane Wilma occurred just over 4 years ago, and I’m quite sure a policyholder misremembering some of the facts of a claim that happened over 4 years ago will not lead to denial.
Continue Reading...The Bolivar Peninsula TWIA policyholders have had the most frustrating insurance claim experience of any group in recent memory. While we have been having success with other Hurricane Ike claims, the Slabbers claims resolutions have proven difficult. They have not just back and taken this abuse either as I noted in Texas Windstorm "Slabbers" and Policyholders March on Austin.
Continue Reading...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.
Continue Reading...(Note: This Guest Blog is by Michelle Claverol, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the second in a series she is writing on valued policy laws).
Floridians are very lucky. They have great weather, beautiful beaches and a Valued Policy Law (VPL) that requires insurers to pay the face value of a policy in the event of a total loss, without regard to the value of the property at the time of the loss. Only a third of the States have VPLs in effect, and many of those VPLs are only applicable to fire losses. In Florida, the provisions of its Valued Policy Law will be triggered in the event of a total loss caused by any covered peril, including hurricanes.
Continue Reading...(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the fifth of a twelve part series he is writing on proof of loss).
Let me begin here by saying that this is only intended to be a general overview of some of the instances where an insurance company may have waived its Proof of Loss requirement. Determining whether a waiver has indeed occurred is usually very fact specific and can vary in different jurisdictions. Proof of Loss requirements under the National Flood Insurance Program, for instance, are very strict and allow waiver only in very limited circumstances. Thus, any waiver questions should be viewed and analyzed on a case by case basis.
Continue Reading...Suppose you knew that your insurance company had started a new claims practice program called “Quantum Leap” to increase corporate practices by making certain no claim was overpaid—would you buy that insurance? Would you feel peace of mine if you knew that secret program was in place and had such a claims philosophy?
Continue Reading...Ever get a job assignment you wish went to anybody other than you? The First Party Claims Conference had one speaker drop out of a presentation, Subrogation Opportunities Do's and Don'ts, for which Jean Niven of our firm was the co-panelist. I had not prepared materials for a presentation nor given a public speech on subrogation topics since 1984, when I was still with Paul Butler representing insurers. While the novel issues concerning my presentation on The Science of Roof Damage Claims excited me, the truth is that claim issues of subrogation can be tedious for all adjusters. It is often an overlooked area of claims handling-especially from the policyholder's perspective.
Continue Reading...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.
Continue Reading...(Note: This Guest Blog is by Robert Reynolds, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the sixth of a thirteen part series he is writing on examination under oath).
“We are here today for your examination under oath. It is being taken subject to the policy’s terms and conditions to illuminate all facts and circumstances surrounding your claim so the insurer may make an informed decision about your claim.” This is the little speech I would give before taking a policyholder’s examination under oath back in the days when I carried the insurers’ water like Gunga Din. Of course, today I often make light of such statements. That is, it seems like the only reasons insurers demand an EUO are: claim delay, intimidation of the policyholder, and looking for reasons to deny the claim. But where does the truth lie? What are the practical reasons insurers demand an examination under oath?
Continue Reading...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.
Continue Reading...The inaugural First Party Claims Conference in Providence, Rhode Island, has been a success. Over 200 hundred registrants discussing various aspects of first party property insurance claims have made for a very educational adjusting and legal seminar. Since I have been involved in so many disputes involving damage to roofs following hurricanes and tornados, I thought it would be a good learning experience for me to teach a course on the topic, along with an engineer.
Continue Reading...Insurance agents need to do a better job convincing commercial policyholders to purchase business interruption and extra expense coverage. Insurance claims executives need to do a far better job paying those benefits much quicker than they typically do. These two activities would help many more commercial establishments remain in business following a catastrophe.
Continue Reading...(Note: This Guest Blog is by Michelle Claverol, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the first in a series she is writing on valued policy laws).
It’s football season and, despite the generous attempts of my friends to make me understand and enjoy the game, I have found that my brain is simply not wired for it. Instead of giving it one more shot this year, I’ve decided to think and write about insurance valuation issues on Chip’s blog. I will begin my series with a synopsis of the historical purpose of Valued Policy Laws (VPLs), to gradually develop a discussion on modern insurance valuation trends and disputes. Please join me over the next several Sundays to discuss these insurance topics of interest.
Continue Reading...(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the fourth of a twelve part series he is writing on proof of loss).
As I was watching one of the countless news reports detailing the current mortgage crisis and its effects on homeowners, I began to think of the insurance consequences of homeowners being forced to give up and hand over the keys to their houses. What would happen, I wondered, if a homeowner was to have a covered loss but fail to submit a proof of loss because of a pending foreclosure?
Continue Reading...Can you imagine a business that is afraid of its own customers? Imagine a business on trial in front of it own customers who were going to judge its products or services and that business was certain those customers would not judge them favorably. What kind of product or service would you think that business produced? Pretty bad, right?
Continue Reading...My appointment by Florida's Governor Charlie Crist to the Citizens Mission Review Task Force afforded me the opportunity to learn about and have a small voice in the Florida insurance marketplace. At War With the Weather: Managing Large-Scale Risks in a New Era of Catastrophes is a significant academic work which our regulators and legislators must read and understand to fully appreciate the complexity of the property insurance issues in Florida and elsewhere. I wish it had been published while I was serving on that Committee. The historic lessons and current conclusions contained in this book are important to everybody living and working along Coastal areas.
Continue Reading...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.
Continue Reading...(Note: This Guest Blog is by Robert Reynolds, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the fifth of a thirteen part series he is writing on examination under oath).
“Do I have to answer that?” Occasionally, one of my clients will turn to me during an examination under oath and query that very question. In turn, 999 times out of a 1000, I answer, “Yes,” or have the questioner clarify a poorly-worded question. The reason I usually counsel clients to answer has several elements, but most importantly: if a fight may be easily avoided and you are conferred no benefit by fighting, why fight? That is, I know if the policyholder refuses to answer a question at EUO, defense counsel will immediately suspect fraud, thinking, “Why else would someone refuse to answer questions unless they were hiding something?” But further, and, more importantly, I know defense counsel’s eyes will start rolling around like a slot machine until they land on DENIAL because they believe they have right to ask anything and the insured has to answer, otherwise the policyholder is violating the policy’s duty to cooperate. Is this true? May defense counsel ask the policyholder literally anything at an examination? Must the insured answer or risk violating the cooperation clause?
Continue Reading...Yesterday's post, "A Law Professor Asks: Is The Reasonable Expectations Doctrine Dead?," may have reached a conclusion too quickly. A recent article in the American Bar Association's journal, Coverage, from the Committee on Insurance Coverage Litigation has an excellent article suggesting that the reasonable expectations doctrine still has life.
Continue Reading...Law Professor, Jeffrey E. Thomas, has posed a question that has been in the back of my mind for some time: Is The Reasonable Expectations Doctrine Dead? The topic and question has a very personal impact upon me. In 1982, I wrote my doctoral thesis on this insurance coverage theory. I wrote about "The Innocent Co-Insured: A Calling for Reasonable Expectations." I will see if I can find it somewhere and post it for those who may want to get some deep slumber.
Continue Reading...Tragedy is sometimes followed by emotional and heartwarming stories overcoming the consequences of the initial disaster. In my line of work, I have seen survivors embrace each other, genuinely surprised each made it through a life threatening disaster. I have witnessed the compassion and caring that otherwise strangers show to their fellow brother and sister in time of need. Yesterday, I attended a wedding of two that only occurred because Hurricane Katrina brought them together.
Continue Reading...(Note: This Guest Blog is by Ruck DeMinico, Knowledge Manager with Merlin Law Group).
In State Farm Florida Ins. Co. v. Seville Place Condominium Ass'n, Inc., No. 3D08-2538, ___ So. 3d ___ (Fla. 3rd DCA, October 14, 2009) Florida’s Third District Court of Appeal held that an insured could amend their complaint to add a bad faith claim after coverage was admitted by the insurer and an appraisal award had been entered, but before final judgment.
Continue Reading...(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the third of a twelve part series he is writing on proof of loss).
As I have stated in past installments, the language and terms of insurance policies can differ in a variety of ways. Therefore, it is extremely important to know and understand the terms of the policy when making a claim. A great example of this is the terms of the policy that control who may submit a Proof of Loss and how that submission must take place.
Continue Reading...The Texas Association of Public Insurance Adjusters (TAPIA) held its first meeting in Houston, Texas, yesterday. I was happy to see that the organization has dedicated itself to a mission of protecting policyholders. I was also happy that Mary Fortson, of our firm, was selected as its General Counsel.
Continue Reading...Ever since we opened our Houston office in June 2008, I have been astounded by the nuances of Texas insurance law. Texas insurance law is just a little different than everywhere else which makes me find the subtle twists in it novel and fun. Yesterday’s post, Replacement Cost Implications by Replacing at Another Location: Answering the Question if You Have to Repair or Replace at the Same Premises to Obtain the Holdback of Full Replacement Cost Benefits, has a Texas twist when you consider Fitzhugh 25 Partners v. Kiln Syndicate KLN 501, 261 S.W. 3d 861 (Tex App. 2008).
Continue Reading...Replacement at the same location or repairing the same premises has been a frequent question posed by a number of clients. In many situations, clients of older structures in areas where it is not economically feasible to rebuild wish to replace in another location. They want to know if they can replace or repair with another structure at another location and whether they can obtain the holdback of the replacement cost benefits since the insurer generally pays only the actual cash value until the replacement is incurred. Fortunately, the FC&S Bulletins has the right answer to those questions and a Florida case provides a good example of the general law to this topic.
Continue Reading...Corey Harris is writing an excellent series on Proofs of Loss Issues. He is primarily focusing on the basic workings of Proofs of Loss. The point of this post is to remind everybody that there are little exceptions that vary from jurisdiction to jurisdiction regarding the filing of proofs of loss. Any public adjuster, attorney or policyholder faced with preparing and submitting paperwork needed for a proof of loss should be very familiar with the laws in the jurisdiction which is applicable.
Continue Reading...The following coverage case note summarizes a decision rendered last week in Florida. Even for a practitioner constantly involved with insurance coverage disputes, it is hard to follow the entire logic of the Court’s reasoning. I doubt those outside the law will find the decision very helpful, unless they want to become brained tired and desire sleep.
What is apparent to one reading all risk policies for nearly three decades is the ever changing language drafted by insurers which increasingly limits coverage through broadening exclusionary language. Early all risk policies would have covered most of Ms. Liebel’s damage. As indicated here, only part of the damage is covered.
Continue Reading...The response by Robert Hartwig of the Insurance Information Institute to the landmark Corban decision typifies how executives at many insurance companies feel about their customers. If not, Hartwick would be out of a job. Here is his quote taken from Anita Lee’s article:
Continue Reading...(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the second of a twelve part series he is writing on proof of loss).
So here you are, only a short time after your home or business has been destroyed by a hurricane, wildfire, or some other form of Mother Nature’s wrath. You have spent countless hours meeting with your adjuster, insurance company, and various contractors, attempting to pick up the pieces and move forward. Things seemingly could not get any worse, until you received that letter from your insurance company requesting that you submit a Proof of Loss. So what now? Do you really have to put in the time and effort necessary to submit a proper Proof?
Continue Reading...A lawsuit was filed in Leon County Circuit Court yesterday challenging the 48 hour solicitation ban on public adjusters. Last month, we posted Florida Public Adjusters File Lawsuit to Overturn 48 Hour Solicitation Ban and Fee Caps, reporting on the first of these two similar lawsuits. The second lawsuit is different in that it focuses solely on the 48 Hour Ban on solicitation, where the first challenges the fee caps enacted by the Florida legislature.
Continue Reading...My initial and simple impression posted in Corban Mississippi Supreme Court Case Decided, Part 2 stands. My emotions and thoughts during my three readings of this decision kept reminding me of people I have met, represented, debated and lived out this saga with in Mississippi since the fall of 2005.
Continue Reading...My initial impression is that this is a huge win for policyholders because the decision correctly defines the burdens of proof in an all-risk insurance situation. The Court correctly noted what I have been advocating regarding the burden of proof since the date I first landed at Stennis Airport outside Waveland a week after Hurricane Katrina:
Continue Reading...Details in the morning. Here is the decision.
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.
Continue Reading...(Note: This Guest Blog is by Robert Reynolds, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the fourth of a thirteen part series he is writing on examination under oath).
“The insurance company is demanding that I sit for an EUO. Can they do that Bob?” This is a common question I often hear from Public Adjusters. So what is the answer? To find the answer, we need to look no further than the policy itself...
Continue Reading...David Pettinato has been having a tremendous professional year. He was elected to national office of the American Association for Justice as an officer of the Insurance Section. He also was re-elected as the Co-Chair of the Bad Faith Litigation Group. In what must be a record “partial” settlement for a sinkhole loss, David received an $8.1 million dollar recovery for a client. The bulk of the amount claimed in that case is still at issue. And, he was recently published in Trial Magazine.
Continue Reading...Public Adjuster Jim Beneke sent out the following invitation to over four hundred licensed public adjusters in Texas:
Continue Reading...Property insurance coverage law involves more than a thorough understanding of insurance policies and insurance law. To be valuable to the policyholder, the insurance coverage practitioner must understand property construction and repair methodologies as applied to the issue at hand. One reason that I am teaching a seminar, “The Science of Roof Damage Claims” with Tim Marshall at the First Party Claims Conference is to make myself better at the recurrent disputes of roof claims.
Continue Reading...The Minnesota Attorney General had enough of insurance companies failing to live up to the promise of putting policyholders back into the same position they were before the loss. Currently, the situation is the same throughout the nation, where insurers say they will do one thing, but have their attorneys argue out of the bargain based on obscure policy wording. Matching the damaged portion of the structure to the remaining parts of a structure is one such issue, and we literally tracked down this State action by the Minnesota Attorney General because we feel the issue is that important.
Continue Reading...(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the first of a twelve part series he is writing on proof of loss).
“You can’t do anything until you learn the basics!” Growing up, I remember countless teachers, coaches, and instructors pounding that phrase into my head. Whether it was a golf instructor desperately hoping that my next swing would send the ball into the fairway and not the neighboring house’s living room, or a wrestling coach wielding a plastic whiffleball bat as a constant reminder to stay in a good stance even when we were exhausted, this lesson has been engrained in me for as long as I can remember. I guess it should come as no surprise then, that when I expressed an interest in having some time on this blog, Chip Merlin, my current coach and mentor, wanted me to write about, what else, the basics! Therefore, for the next twelve weeks, we will be delving into one of the most basic, but important, post-loss obligations: “The Proof of Loss.”
Continue Reading...Some insurance policies have small print that can provide significant business income benefits under "dependent properties" that usually go unnoticed following a widespread catastrophe. I would encourage Nationwide and Nationwide agents to write, advertise and call their Hurricane Ike and other commercial policyholder customers about these valuable benefits because it is obvious to me that their adjusters have no clue about what this benefit means and are ignorant to advise their own policyholders about it.
Continue Reading...If you are involved in hurricane claims in any manner, you need to register and go to the 2010 Windstorm Insurance Conference. It will be held from January 25 through 28, at the Hyatt Regency Riverfront in Jacksonville, Florida. It is the only Conference devoted soley to windstorm insurance issues.
Continue Reading...Yesterday, Chad Hemenway, associate editor of BestWeek, reported that State Farm and
A recent Louisiana decision, Isidore Newman School v. J. Everett Eaves Inc., No. 2008-1368, 2009 La. App LEXIS 1469 (La. App. 4 Cir., Aug 5, 2009), underscores the need for insurance agents and policyholders to fully discuss insurance needs when selecting types and amounts of coverage. Insurance agents generally have a duty to exercise reasonable care and competence in obtaining and communicating information to policyholders. Interestingly, this case also demonstrates that business policyholders have a similar duty as well.
Continue Reading...Claims expert Charles Miller reminded me that the First Party Claims Conference is only three weeks away. Most claims conferences involve third party, worker compensation, medical and automobile claims. Few are devoted to first party property insurance claims and coverage issues.
Continue Reading...Texas hurricane claims are being resolved in a number of ways. Simple adjustment, mediation, litigation, and appraisal are the primary means to do so. Any TWIA policyholder thinking of invoking the administrative process should first consult an attorney as we warned in An Example of Why You Need to be Careful in Choosing How To Challenge TWIA. My perception is that many public adjusters are advising their clients (which is probably the unauthorized practice of law) to choose appraisal and entering the unknown post-State Farm v. Johnson era of Texas appraisals, as discussed in Appraisal in Texas is Still Going to be Debated and Part of the Wild West of Insurance Coverage Disputes.
Continue Reading...Jewelry is something most adults purchase and accumulate and for which the value is far in excess of what standard policies cover. I thought about this after coming across a post, What Does it Mean to "Replace" a Lost Diamond Bracelet Under State Farm's Homeowner's Policy, by Mark Nation. Insurance agents study what their clients may need for insurance purposes. They should strongly urge that most of their clients schedule jewelry items because, chances are, policyholders are otherwise underinsured under most standard forms. Further, the perils to jewelry are extraordinarily limited under the standard form, so agents should be making certain that their clients are aware of and purchase the proper coverage for jewelry items that are valuable and emotionally important.
Continue Reading...Claims management and operational review for claims efficiency are truly sciences. The study and management of these are becoming increasingly computerized and intertwined with analytical data mining. I had dinner with a public and independent adjuster this week, where we discussed the process of litigation case handling and standards within my own law firm. As we were analyzing my operation, I kept imagining how much more difficult and complicated it would be to manage an insurance claims organization, and how computers were changing the claims organization.
Continue Reading...Bob Reynolds’ recent post, Where Do and Can Examinations Under Oath Be Held? Does a Policyholder Have to go to Timbuktu? is an excellent discussion on the state of Florida law on the subject. Bob has represented more policyholders in examinations under oath over the past twelve months than any attorney I know. He is also one of the best advocates I know at hearings before judges. I am happy that he is with us rather than doing insurance defense, which he did before he came to our firm.
Continue Reading...Imagine if we had truly knowledgeable advocates for insurance consumers in our legislatures. Many politicians advertise they are for policyholders as election day approaches, but they refuse to push any agenda other than the insurance industry’s the rest of the time. In Florida’s past legislative session, Florida Senator Don Gaetz, sponsored three significant pieces of insurance consumer legislation protecting the rights of policyholders regarding the fair treatment of claims. The person helping to write that legislation, his son Matt Gaetz, is now running for the Florida House of Representatives and he deserves support from those who want strong laws protecting Floridians from slow, frustrating, and wrongful insurance claim handling.
Continue Reading...Kelly and Craig Kubiak successfully presented a case to a jury this week involving a dispute with a long time USAA policyholder following a denial of her property insurance claim. The $245,000 jury verdict came after lengthy and contentious litigation with USAA. The opposing counsel and his law firm are one of the most successful in Florida. The most USAA ever offered in settlement to our client was fifty thousand dollars, so our client was thrilled and in tears following the jury’s verdict.
Continue Reading...(Note: This Guest Blog is by Robert Reynolds, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the third of a thirteen part series he is writing on examination under oath).
“Sunshine State hereby requests you to submit to an examination under oath which will be held at the residence premises of the insured.” This is a common request to policyholders by Sunshine State. Of course, as a former insurance defense attorney I know that the carrier’s intention is to turn the EUO into a dog and pony show. That is, they will have the policyholder take defense counsel on a guided tour of the damage to the property, and if the policyholder fails to point out any of the covered loss, the carrier will hold that against the policyholder as if it were an intentional act of concealment.
Continue Reading...I enjoy good lawyering. Corporate America has the best lawyers defending their actions and figuring out how they can be unaccountable for their bad acts. A formidable New York Ivy League trained lawyer, Sheila Birnbaum, is one of those lawyers. I give her, Corporate America, and especially State Farm, all the credit they deserve for showing that they can beat State Farm’s customers and their attorneys in the appellate courts of America. Birnbaum implied that large corporations have greater influence over federal courts of appeal in her webinar with the Washington Legal Foundation last year.
Continue Reading...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.
Continue Reading...(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.
Continue Reading...(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.
Continue Reading...Back in April, an attorney in our Houston, Texas, office, Javier Delgado, wrote a post for this blog warning TWIA policyholders to be careful when choosing how to challenge a TWIA determination of damage to property (Don't Be Fooled By Texas Windstorm Insurance Association's Misleading Letter).
Continue Reading...State Farm has a tremendous agent organization. Some of the best trained and motivated personal lines agents are found at State Farm. Amy Bach, of United Policyholders, sent a comment to yesterday afternoon's post, McCarty Claims State Farm Trying to Work Out Deal and Expects Property Insurance Rates to Go Up, which asked:
Continue Reading...Will more State Farm agents start diverging from the company line a la United Farmers Agents Association?
I would pay to be a fly on the wall during the discussions the Florida Office of Insurance Regulation is having with State Farm regarding its withdrawal from the Florida property insurance market. As I noted in State Farm Must Love the Clash, many of us suspect that State Farm’s bullying and threatening tactics demonstrate that it does not want to leave Florida, but uses such tactics to get what it wants from Florida’s politicians and regulators.
Continue Reading...(Note: This Guest Blog is by Robert Reynolds, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the second of a thirteen part series he is writing on examination under oath).
“I don’t want to sit for an examination under oath…” If I had a nickel for every time a client said that to me, I’d probably own my own plane. For policyholders who have never been involved in a deposition or EUO, the proposition of sitting in a room, swearing an oath to tell the truth, and being questioned by an attorney while a court reporter writes down every word can be very daunting. So this begs the question—“Is it possible to avoid an EUO?”
Continue Reading...I received a comment to my post, Cosmetic Damage is "Physical Damage" and Recoverable Under a Property Insurance Policy, asking the following:
Continue Reading...What about matching of the roof tiles or shingles?
The new ones are always going to be different. But, the insurance companies are not paying for the entire roof.
In this case the purpose of insurance of "to put the insured in the same position they were before the loss" is not true as long as the insurance companies continue to pay part of the roof.
Your opinion, please.
Thank you.
Yesterday’s post, Physical Damage is Needed to Collect for Loss of Warranty, may lead some to think that property insurance policies require “structural” or a “functional” destruction before coverage is not afforded. This simply is not true. Alterations to the physical appearance of a structure or personal property are covered so long as the cause is a covered peril.
Continue Reading...I was asked twice on Friday at our seminar in Houston whether a policyholder could collect for the loss of their roof warranty. I felt the questions were valid because Hurricane Ike has caused many to lose warranties on their roofs as a result of wind speeds being in excess of allowable warranty requirements. In essence, policyholders suffer financial damage because they no longer have warranties on roofs due to the physical wind speed event of an act of God, Hurricane Ike.
Continue Reading...The seminar our firm hosted for public adjusters went extremely well, with very practical information exchanged between adjusters, engineers, and attorneys. The Texas Department of Insurance had an attorney from its enforcement division attend. I felt it was a significant learning experience for her as well. Most people do not understand how complicated evaluating damage and investigating coverage matters can be. I am certain anybody not familiar with claims handling who attends one our claims seminars quickly appreciates that insurance adjusting is a demanding job....if done correctly and ensuring that full benefits are paid promptly.
Continue Reading...A Texas Department of Insurance (TDI) attorney familiar with the ongoing investigation will be at the Public Adjuster Seminar we are hosting tomorrow in Houston.
Continue Reading...I sometimes get unique ideas from public adjusters. Today, I received one regarding the website, UmpireBook.com, that I want to share with you. Here is the email:
Continue Reading...As a follow-up to my post on Saturday, TWIA Insurance Claims Under Investigation by Regulators and Media--An Invite to TWIA Claims Executives to a Public Meeting in Houston Next Friday Regarding Those Accusations, where I extended an open invitation to Texas Windstorm Insurance Association (TWIA) executives and claims managers to attend the seminar my firm is presenting this Friday in Houston, I sent a letter to Jim Oliver, General Manager at TWIA.
Continue Reading...(Note: This Guest Blog is by Robert Reynolds, an attorney with Merlin Law Group in the Coral Gables, Florida, office. This is the first of a thirteen part series he is writing on examination under oath).
“The insurer has requested that you submit to today’s Examination Under Oath in order to assist them in illuminating all facts and circumstances involved in this claim so that they may make an informed assessment of your loss.”
Before I was struck from my horse by a white light and a booming voice demanding, “Bob! Bob! Why do you persecute the policyholders?” thus facilitating my shift to the path of righteousness, that was the line I used to give policyholders at the beginning of the record for every EUO I’ve ever conducted when I used to represent the insurance companies. Back then I was a fraud specialist, so most claims I handled for the insurers involved the taking of EUOs. But, to be candid, I had never given much thought about the legal basis of EUOs, nor the basis of the carriers’ right to take such examinations.
Continue Reading...I get asked that question quite often. Doing what I do for a living, given my last name, and having proven my prognostication prowess (with money backing up my opinion) by opening our Texas office BEFORE the first of two major hurricanes to hit Texas, I can understand why many come to me for that answer rather than professional meteorologists and psychics. I am not betting on any “major” hurricanes this year. El Niño seems to be preventing tropical storms from making the trek across the Atlantic Ocean. Upper level wind shear has been destroying the movement towards the coastal United States and Gulf regions. Let’s hope it stays that way. And, as I suggested in May with a post, Weak El Nino and Cooler Tropical Waters Lead to Predictions of Fewer Hurricanes, who really knows?
Continue Reading...The Houston Chronicle ran an article by Purva Patel today, See what blew in with Ike: a battle, which explains the lifted shingle issue at the heart of numerous Hurricane Ike Claims. It is not clear at this time how Texas Insurance Commissioner Mike Geeslin will resolve the issue, but consumer advocates hope Geeslin will prove to take a stand for his constituents, as did his counterpart in Florida, Kevin McCarty.
Continue Reading...This post is a result of three different ideas that have been swirling as I imagine different methods to re-invent myself and my law firm’s efficiency. Our seventeen lawyer firm will hold a meeting in early October where these issues will be discussed in depth. First, I have been frustrated by one corporate client simply not using my talents and experience to quickly add value to their situation. Their executives seem to believe they know it all and are better than the hired help. This is not uncommon in some corporate environments. Second, there is one person with a very small claim who obviously wants to be a client of our firm. We keep turning her down or sending her to other firms that take smaller cases but settle for pennies on the dollar rather than fight for maximum value. Third, I keep thinking about a remarkable speech by Barry Schwartz entitled, Talks “Barry Schwartz on Our Loss of Wisdom.” If you think this post does not apply to you, do yourself a favor and click to Schwartz—it is very meaningful. As a matter of fact, to shorten this post, everybody should click on Schwartz and then come back to here.
Continue Reading...I have been involved in a lot of disputed property insurance claims in many venues over the past twenty-five years where emotions run high, but the Texas Windstorm Insurance Association (TWIA) is the blue ribbon winner in Texas for policyholders that hate how they have been treated. And, it is not just limited to the customers of TWIA. A number of independent adjusters representing TWIA are ready and willing whistleblowers in lawsuits against TWIA regarding these practices. They are upset as well.
Continue Reading...Seems like yesterday when my son, Chase, was swinging on jungle gyms. It is hard to imagine that this day is finally here when he is off to college. With all the little odds and ends to take care of, I wondered whether all his electronic gadgets are covered under my homeowner’s policy. After doing some reading, I am calling my agent and reading my policy when I get home from Philadelphia.
As usual, I like to check the FC&S Bulletins for some general information with these practical questions. While I have suggested that all policyholder attorneys and public adjusters subscribe to this publication, insurance agents and brokers can get some great ideas as well because the coverage topics are very “main street” rather than some of the exotic situations my clients bring to our firm.
Continue Reading...A lawsuit was filed by three public adjusting firms seeking to enjoin the State of Florida from enforcing the 48 hour solicitation ban and the fee caps public adjusters may charge to policyholders. The mastermind behind the lawsuit is lawyer turned public adjuster, Pat Catania of East Coast Public Adjusters. The lawsuit is not a surprise. Many public adjusters have been complaining that their business has been significantly impacted by these laws as insurance restoration companies act as surrogate public adjusters since the 48 Hour Ban does not prohibit insurance contractors from actively soliciting work from policyholders immediately after a loss.
Continue Reading...Mary Fortson has been quite busy working with Jim Beneke and Art Jansen reinstating the non-profit and corporate status of TAPIA for the past several months. With that accomplished, there will be an introductory meeting to which all licensed Texas public insurance adjusters are welcome and encouraged to attend immediately following the Merlin Law Group Hurricane Ike--What a Difference a Year Makes Seminar on September 11, 2009.
Continue Reading...Starting next Wednesday, Bob Reynolds an attorney in our Coral Gables office will start a weekly series regarding examinations under oath which are sometimes called sworn statements under oath. Reynolds used to represent insurance companies and routinely took examinations under oath while defending the rights of insurance carriers.
Continue Reading...Insurance claim denials and disputes involving “matching” are frequent. I received this recent comment on the topic of matching:
Continue Reading...Hey Chip
Back on 5/17/09, Cat adjuster posted a comment regarding matching of aged paneling and tile floors. You advised that maybe the adjusters were relying on Texas Case Law regarding causation. In my experience, the adjusters and appraisers I am dealing with in Texas simply don't feel they owe for match. For instance, I am dealing with an adjuster who agrees that the siding on this Galveston Home was discontinued in the 1930's and is obviously unavailable and can not be matched. He agrees to replacement of the two damaged sides, but insists the carrier does not owe for match of the two remaining sides.
I have argued that failure to replace all 4 sides will not completely indemnify the Insured. He is not moving at all. I have not found any case law or statutes dealing directly with this issue.
Any thoughts??
Why has there been an explosion of contractors specializing in insurance disasters and losses over the past fifteen years? Most would probably say that the motivation to enter that trade is very profitable. My experience from depositions and discussions of those in the business has been that it is. Often, profits range from forty to fifty percent of the total billed. I have been legal counsel to numerous policyholders caught in the middle where the retained insurance contractor is in a dispute with the insurer over the scope and amount of billing for work allegedly performed. I am concerned about situations where an insurance restoration company is hired without competing bids from other contractors; it is often nothing other than a losing proposition for the insurer and the policyholder.
Continue Reading...When somebody starts talking with you over dinner about which part of the brain makes you worry that something bad may happen to you and talks with sentences that seem to have "cognition" interspersed frequently with "cortex," you know to skip cocktails. The person speaking with me was Alaska attorney, Don Bauermeister. He is a person of study and reflective brilliance. We discussed how the techniques of insurance claim settlement and trial presentation can be studied and implemented for the purpose of helping our policyholder clients.
Continue Reading...Insurance defense attorneys argue the exclusionary language of the anti-concurrent causation clause should be broadly interpreted because they have to get their insurance company clients “off the hook” for making wrong coverage interpretations. It is important for those attorneys representing policyholders to have a full library to combat these arguments. One such source is the FC&S publications. Those clever defense counsel are sometimes out of luck, despite their ingenious arguments, when insurance industry sources indicate that they are wrong.
Continue Reading...Why do insurance companies get to play the float in some jurisdictions? After all, most regulations and good faith duties require prompt payment. Without penalties or awards of prejudgment interest, rules of promptness become meaningless because there is no accountability for claim delay.
Continue Reading...After my presentation this morning at the National Institute of Insurance Bad Faith, some attorneys in the audience asked that I publish the "simple steps" I gave them. Here they are for all policyholder attorneys to consider and use to help their clients:
Continue Reading...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:
Continue Reading...The longtime spokesperson of the Insurance Information Institute and advocate for the insurance industry, Bill Bailey, recently passed following a fight with cancer. Bill Bailey was a keynote speaker and supporter of the Windstorm Network. He participated in field observations and discussions regarding every major hurricane since Hurricane Andrew. He raised awareness regarding the social importance of insurance and need for better communications between all following major disasters.
Continue Reading...Imagine a situation where a butcher sliced some meat you ordered, weighed your cut, and then told you that you owed $43.79—but refused to tell you how he calculated the price. Would you simply agree and pay the butcher? Of course not. But this is what happens all the time when insurers refuse to turn over engineering reports or honestly explain how evaluations of damage were arrived.
Continue Reading...Insurance defense attorneys will not agree with this post. However, they fear the argument enough to falsely argue in some cases that a hurricane is not a “windstorm,” in order to avoid policy language that may provide coverage for total losses where wind and water combine to destroy a structure. As promised in yesterday morning’s post, The Insurance Industry Recognizes Hurricanes are "Windstorms"--An Important Admission, I am providing legal suggestions to help TWIA policyholders and others “slabbed” to obtain full coverage for their losses. Randy Santa Cruz, William Weatherly, and I came up with this idea while working in Mississippi following the devastation of Hurricane Katrina. I've attached a draft memorandum of law so others may use this argument with their own facts and policy language.
Continue Reading...Zurich Insurance Company has a new web site, Zurich HelpPoint Windstorm. Zurich’s risk engineering and claims groups recently unveiled a micro-web site which provides Zurich customers and distributors with tools and information to help them prepare for, and recover from, “windstorm” events in North America. Some insurance company attorneys have been arguing that a “windstorm” is only the “wind” part of a hurricane and not the entire tropical cyclone that has wind, storm surge, and everything else that causes damage from a tropical windstorm. Their clients know better, but it does not prevent defense attorneys from arguing this unsupported bad faith position.
Continue Reading...Where would I be if insurance companies paid claims fully and promptly or if those smart insurance defense attorneys were not scheming ways to protect their clients when they failed to do so? That answer this Sunday afternoon is probably with my sailing buddies, and not editing a complaint and researching the concept of “materiality” of insurance contract performance. This question and answer also leads to where would Ali be without Frazier? Namath without the Colts? The Yankees without those loathsome Red Sox? The Parks Chastain’s of the insurance defense world without the Chip Merlin’s of the policyholder world???
Continue Reading...Last week’s post, What does a Property Insurance Coverage Policyholder Lawyer Think About the Day After a Def Leppard Concert?, should have had this title. But while writing that blog, I was not focusing as completely as a I should have been on this exciting area of insurance coverage law. Slabbed paid me some compliments in its post, We will not now allow defendant to raise as a defense plaintiff’s failure to perform an act which defendant itself greatly hindered plaintiff from performing…, and suggested that others in Mississippi cite to the cases noted in my post. So, to prove that there is a little more legal support than just two cases and that maybe Mississippi jurists have been a little too lenient letting State Farm and other insurers escape replacement cost obligations through their failure to fully or timely pay actual cash value benefits, I am following up with this post.
Continue Reading...Imagine a government could make arbitrary decisions about your rights without question. Do you think that would happen in China or the United States? Well, if it involves your national flood insurance policy, it has been happening in the United States for a long time. One federal judge has seen through the unfairness and called a halt to this practice in the recent case of Thomas L. Moffett v. Computer Sciences Corp., et al,. Civil No. 05-1547 (Md. D. Ct., July 6, 2009).
Continue Reading...Why do insurance company attorneys tell their insurance company clients that they can abuse their policyholders with legal immunity? In my opinion, that is exactly what Parks Chastain has done in his post, Advances - Common Misconceptions. In his post, Chastain claims the following:
Continue Reading...A recent consumer interest article written by Elizabeth O’Brien in SmartMoney, Could Insurance Reform Lower Your Premium? highlights another insurance crisis involving the disappearing availability of insurance in disaster prone areas. I recall a lengthy interview with O’Brien. I do not recall the following highlighted quote noted in the article, although I do not deny saying it:
Continue Reading...“Although rates have leveled somewhat in recent years, it hasn’t gotten much easier to insure a home in the hurricane zones from Florida to New Jersey. New this year, Florida’s state-owned insurer Citizens is telling some policyholders to make costly repairs to their roofs or to add storm shutters or risk losing coverage. The insurance issues aren’t unique to hurricane-prone states. Homeowners who live along the New Madrid fault that runs through parts of Missouri, Tennessee and other states have trouble securing affordable coverage because of their perceived earthquake risk. “Insurance companies are a strange breed,” says Chip Merlin, an attorney who represents policyholders in Tampa, Fla. “It’s amazing how they try to avoid writing insurance in places where the risk could happen.”
Following yesterday’s post, What is a Bad Faith Claim? Or, When Does an Insurance Claim Wrongfully Handled Become a Bad Faith Claim?, there were a couple of posts suggesting that class action lawsuits were the answer to wrongful claims practices. Frankly, most policyholders are more successful financially with individual cases than through class action cases in insurance matters. Many class settlements are nothing other than the insurer buying its way out of a bigger mess and paying off attorneys looking for a big payday. Our firm is very selective about class matters because of the “good for the attorney’s pocket versus bad for the client’s pocket” conflict.
Continue Reading...I was asked this question by a public insurance adjuster after a "top secret" settlement conference with a major insurer in Houston last night. It is an excellent question, and I will give some general guidance.
Continue Reading...Merlin Law Group will host a seminar in Houston, Texas, for public insurance adjusters close to the anniversary of Hurricane Ike. I promise that this will be dedicated to a "lay of the land" regarding tips and strategies for public insurance adjusters to service policyholders with quicker and fuller resolutions. Appraisal and the processes and techniques to obtain a better recovery will be taught and a special analysis regarding TWIA practices will be provided.
Continue Reading...One of the more successful professional organizations that I have been involved with over the past decade is the Windstorm Network. Insurance defense attorney, Janet Brown, conceived the idea. It has an Umpire Program that provides classes for certification for the appraisal of property insurance disputes, an Umpire Directory, and a Code of Ethics, which has been approved by the general membership of the Windstorm Network.
Continue Reading...Michael Jackson’s event cancellation policy has a bit of history and is still very much in play according to a couple of news articles that have been forwarded to me. Last March, The UK Guardian ran a story, Michael Jackson Promoters Struggle to Find Farewell Tour Insurance, depicting problems with Jackson and his promoters finding event cancellation coverage:
Continue Reading...AEG Live, the promoters behind the concerts, are "still negotiating" with insurers, they said this week. While AEG were able to insure the initial 10-day run – worth about £80m – insurers are less enthusiastic about covering seven months of dates stretching from July 2009 to February 2010. Fifty concerts would require around £300m in cover.
The insurers' reluctance is easy to understand. The longest O2 arena residency has been taken out by a 50-year-old who has not toured in 12 years, was rumoured to be dying last year, and is nicknamed, well, Wacko Jacko.
But Randy Phillips, chief executive at AEG Live, reassured sceptics. "He's in great shape," Phillips told the Telegraph. "The insurance brokers sent doctors and they spent five hours with him, taking blood tests."
AEG Live are prepared "to self-insure to make up the dates", Phillips emphasised. "It's a risk we're willing to take to bring the King of Pop to his fans."
"He's a vegetarian," Phillips said. "They're healthy, right?"
Following up on yesterday’s post, What does a Property Insurance Coverage Policyholder Lawyer Think About the Day After a Def Leppard Concert?, there has been some debate in the insurance press regarding the 2009 Michael Jackson Tour. Phil Gusman has three articles in the National Underwriter Property & Casualty on the topic: Will Insurers Pay For Jackson’s Concerts?; Michael Jackson’s Death Raises Event Cancellation Issues; and Insurers Could Question Jackson Pre-Concert Physical Results. Based on the articles, Jackson would have had a physical examination as a requirement of the insurance.
Continue Reading...How about, “Where’s the Advil?” My wife commented Friday night that all my “edgy” friends must also enjoy this genre of rock because the concert was sold out. Just as she made that remark, a thunderstorm struck. Being the nerdy insurance coverage lawyer that I am, and even though my thoughts were straying just a little at the time with the rather bizarre visuals that accompany a Def Leppard concert, I thought, “if the power cut off and the concert cancelled, would there somehow be coverage afforded under an insurance policy?”
Continue Reading...I was forwarded a lawsuit by Art Newman, who is the current president of the Windstorm Network. The suit is regarding activities that Newman conducted as an Umpire to an appraisal. A policyholder that was not pleased with the appraisal award sued Citizens Property Insurance Corporation and Art Newman.
Continue Reading...I once told an Allstate Insurance Company adjuster that if forced, I was going to sue over a very small matter, less than a thousand dollars, because it simply was not right that Allstate was taking “betterment” deductions on the adjustment of an automobile comprehensive coverage loss to a friend of mine. This small county court case eventually resulted in a significant class action settlement in Florida in excess of $20 million dollars. I have no idea why some insurance companies do not try to settle earlier and would rather wait until the information uncovered results in a bad situation getting worse. Unfortunately, unless the litigation fortunes of one public adjusting company changes dramatically on appeal, a seven thousand dollar fee dispute could cost many public adjusters millions in class action lawsuits.
Continue Reading...