When Senate Bill 408 passed last May, several changes were made to Florida Statute 626.854, which defines public adjusters and limits the profession. Many of these changes and additions went into effect on January 1, 2012.
Continue Reading...Counsel for insurance companies often begin an Examination Under Oath (EUO) by informing the insured that they have a contractual obligation to give an EUO and that it is only necessary so that the insurance company can make an informed decision about the claim. I often have a hard time believing those attorneys, as it seems many EUOs are really used to delay the claim, intimidate the policyholders, and to find reasons to deny the claim. But where does the truth lie? What are the practical reasons insurance companies demand an EUO?
Continue Reading...On January 6, 2012, a trial judge in Hernando County, Florida, held that a specific monetary “cure amount” and specific policy language are not required in a Civil Remedy Notice. The filing of a Civil Remedy Notice is a condition precedent to bringing a statutory bad faith action under Florida Statute 624.155.
Continue Reading...Property Casualty 360 posted a story by the Associated Press, describing the continuing saga of Louisiana Citizens Property Insurance Corporations’ Hurricane Rita and Katrina claims.
Continue Reading...When Hurricane Ike hit Texas in September of 2008, many individuals and business were devastated by the destruction. What they were truly in need of was a swift response from their insurance companies to provide benefits so that they could repair and rebuild. Unfortunately for some like Blum’s Furniture Company, the claim process was anything but quick and efficient.
Continue Reading...For the past 20 months, each Saturday, I have posted on an issue that impacts public insurance adjusters. Many of my past posts have featured great success stories and interesting details of the claims public adjusters are handling nationwide, but so many more public adjuster stories need to be told. One of the best events where public adjusters can share their stories with others and learn how to better handle their claims is the Windstorm Insurance Conference®. This year is no exception.
Continue Reading...Many insurance policies include a section titled "Definitions," which defines certain terms used throughout the policy. The meanings of those terms are frequently the subject of litigation. A perfect example is the case I write about this week. Despite the fact that Actual Cash Value ("ACV") is usually a term that is defined or explained in some way in an insurance policy, this provision is frequently the subject of dispute between homeowners and insurance companies. On occasion, insurance companies do not properly calculate the ACV. The case addressed below reflects a resolution in a jurisdiction where the rulings were not uniform with regard to calculating ACV.
Continue Reading...In my last post, Understanding the Importance of “Replacement Cost Value” Coverage, I explained that insurers are not permitted to withhold any depreciation under replacement cost value coverage for personal property claims. This post highlights a recent change to Florida Statute § 627.7011, which took effect May 17, 2011, and alters the payment of dwelling claims.
Continue Reading...Countless angry and distressed homeowners and business owners contact our firm because they’ve just experienced a property loss and found out they are severely underinsured. Nearly every underinsured policyholder tells a familiar story: “My agent told me I was fully insured and I relied on my agent to tell me if I needed more insurance coverage.” Nearly all underinsured policyholders also ask if they can file claims against their agent for failure to inform them about certain coverages or failure to inform them that their coverage limits are insufficient to rebuild their business property or home. Unfortunately, public perception regarding what services insurance agents perform for customers is often vastly different from what the law actually holds agents responsible for.
Continue Reading...On January 19th, the Florida Supreme Court issued its opinion in Petty v. Florida Insurance Guaranty Association, which decided whether an insured is entitled to recover attorney’s fees from the Florida Insurance Guaranty Association (FIGA). I wrote about the case in October 2010, when it was at the lower appellate level, in The Definition of a "Covered" Claim by the FIGA Act Leads Florida Second and Third District Court of Appeals to Different Results.
Continue Reading...Sometimes we have experiences that give us a better perspective on reality. In this busy world with constant deadlines, stress, and email, it is important to take a step back and remember that life is short and we should be sure to consider our safety and well being as we travel through our busy days.
Continue Reading...In Florida, except under certain circumstances, in an “actual cash value” policy, the carrier withholds depreciation through the indemnification process. For an additional premium amount, policyholders can purchase “replacement cost value” coverage which requires insurance companies to replace the damaged property with the full value of replacement. For example, a television valued at $1,000 is damaged in a windstorm; the life of the television is 10 years, so a five year old television is valued at $500. If the policyholder purchased “replacement cost value” coverage, she would be entitled to $1,000 to purchase a new television, compared to $500 under an “actual cash value” policy.
Continue Reading...“Do I have to answer that?” Occasionally, one of my clients will turn to me during an examination under oath and aks that very question. Almost every time, I answer, “Yes,” or at least 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 there is no benefit to fighting, why fight? If a policyholder refuses to answer a question at EUO, defense counsel immediately suspect fraud, thinking, “Why else would someone refuse to answer questions unless they were hiding something?” But 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...On January 5, 2012, the Ninth Circuit asked the California Supreme Court to decide two insurance law issues that arose in a flood coverage dispute. In the matter of Sierra Pacific Power Company v. Hartford Steam Boiler Inspection and Insurance Company, the Ninth Circuit reached conflicting conclusions on two distinct issues.
Continue Reading...It was about a year ago when I reported that Texas led the nation for highest insurance premiums in 2010. Well, the results are in for 2011 and Texas has once again topped the nation as the state with the highest insurance premiums in the land. Roger Mares of KTXS News reports that Texas homeowners pay an average of $1,511 annually for their home insurance. That’s $50 more than Florida, the state that came in second place.
Continue Reading...Florida Statute § 626.9744(1) requires a Florida homeowner’s property insurance to cover repair or replacement of undamaged property when it is damaged during repair. Specifically, subsection (1) of this statute (2011) states:
Continue Reading...When a loss requires repair or replacement of an item or part, any physical damage incurred in making such repair or replacement which is covered and not otherwise excluded by the policy shall be included in the loss to the extent of any applicable limits. The insured may not be required to pay for betterment required by ordinance or code except for the applicable deductible, unless specifically excluded or limited by the policy.
Next month, the Alabama legislature will reconvene and has the chance to license public insurance adjusters. Currently, Alabama is one of the few states that does not recognize public adjusters. But after the devastation last year, the value of public insurance adjusters is coming to light.
Continue Reading...This week, I am writing about a Memorandum Opinion and Order entered by a federal judge on a bad faith issue. Although I usually blog about a court's reported opinion on a case as a whole, I thought I would take this opportunity to zoom in on a particular ruling in a bad faith case. This focus on a single step in the progression of a lawsuit allows for a more concentrated view of how individual rulings on certain issues throughout the course of litigation come together to create a case that is ready for trial.
Failure by appraisers or umpires to include newly discovered damages during the appraisal process prevents policyholders from obtaining fair payment for a covered loss. Almost every property policy includes an appraisal provision which states that if the insurer and the insured disagree as to “the amount of loss” then either may invoke appraisal and each appoint a disinterested appraiser to determine “the amount of loss.”
Continue Reading...In my November 4, 2011, post titled “Trying to Change the Past: Are the New Sinkhole Laws Retroactive?” I mentioned the sinkhole insurance changes that took affect on May 17, 2011. One of the most detrimental changes made by the Legislature was changing the definition of “structural damage.”
Continue Reading...“The insurance company is demanding that I sit for an EUO! Can they do that?” This is a question I hear often from Public Adjusters and others who would otherwise not be involved in the insurance dispute. To find the answer, we need to look no further than the policy itself….
Continue Reading...On December 13, 2011, The Huffington Post published an article all policyholders should read and heed. It is important to know how the insurance industry is making money by delaying claims and how it has shifted from a service industry to an industry that is driven by profit. It's time for each state’s Department of Insurance to enforce their unfair business practice statutes on insurance carriers that profit by stalling and delaying the claims process to the detriment of the insured. The article is entitled, Insurance Claim Delays Deliver Massive Profits To Industry By Shorting Customers, and reports that since the mid-1990s, "a new profit-hungry model, combined with weak regulation, has upended that ancient social contract" between insurers and their customers.
Continue Reading...Regardless of its source, the insurance industry has become keenly aware of the impact climate change is having on natural disasters. Janet Retloff, of ScienceNews.org, reports that worldwide, “[n]atural disasters in 2011 exerted the costliest toll in history — a whopping $380 billion worth of losses from earthquakes, floods, tornadoes, hurricanes, wildfires, tsunamis and more.” Reloff adds that the most costly event last year was the earthquake/tsunami disaster that hit Japan.
Continue Reading...Recently, a great deal has been written regarding Citizens Property Insurance Corporation’s replacement cost value (RCV) calculation methodology. It seems that, in some cases, Citizens is grossly overestimating the cost to replace a home following a disaster. Consumer advocates decry this practice as nothing more than a backdoor rate increase following the denial of Citizens’ proposed 2000% rate increase a few short months ago. Predictably, insurance industry backers have called these increases necessary and appropriate.
Continue Reading...Recently, the Florida Southern District Court updated its order in Garden-Aire Village South Condo. Assoc., Inc. v. QBE Insurance Corp., No. 10-cv-61985 (S.D. Fla. January 4, 2012). I discussed the Garden-Aire case on April 5, 2011, in Importance Of An Actual Controversy Demonstrated As Southern District Court Of Florida Dismisses And Stays Action Against QBE As Speculative. In March 2011, the Court concluded that the Complaint filed by the association against QBE did not state a claim in which relief could be granted. In its recent opinion from just a few days ago, the same Court granted the condominium association’s request to amend the Complaint, and will presumably allow the case to proceed.
Continue Reading...The Florida Department of Financial Services, Division of Agent and Agency Services, announced several important changes regarding appointments in Florida and its eAppoint system. The changes are expected to take place the evening of January 18, 2012.
Continue Reading...There are many defenses an insurer can assert when faced with a bad faith lawsuit. In the case I write about today, an insurance company claimed it was immune from a bad faith lawsuit because the homeowner obtained her insurance coverage through a non-profit organization established to assist high-risk homeowners.
Continue Reading...Examinations Under Oath (EUOs) are often requested by an insurance company during the investigation of disputed insurance claims. While an EUO is similar to a deposition in many ways, defense attorneys are quick to point out that EUOs are not subject to the rules that govern depositions because they are created by contractual agreement. Because EUOs are not governed by the rules of civil procedure, disputes often arise over simple matters like where an EUO is to take place.
Continue Reading...On December 29, 2011, many policyholders in Allentown, Pennsylvania, were required to evacuate their homes due to a large sinkhole that suddenly opened up in front of their street. This sinkhole is also a risk to a nearby cemetery, threatening hundreds of graves.
Continue Reading...My September 23, 2011 post, Is Scope of Damage or Scope of Repair Subject to Appraisal? examined several recent opinions from around the country which discussed whether insurers may deny policyholders their right to appraisal by simply claiming that scope of damage is not subject to appraisal. Since September, two different Colorado district courts have ruled that scope of damage is indeed subject to appraisal. Hopefully, the holdings discussed below will go up on appeal and become binding law in 2012.
Continue Reading...As California enters the New Year, both Northern and Southern California have experienced problems with wildfires. Of the six fires in the Northern California Region which occurred over the last month, one still remains active and is only 40% contained in Calaveras County.
Continue Reading...It probably won’t surprise you to learn that 2011 was a record year for natural disasters in the U.S. According to the Insurance Information Institute (the “I.I.I.”), insurance companies will pay more than $32 billion in claims to help people rebuild homes and businesses damaged or destroyed by natural disasters in 2011, a record year for federal disaster declarations. Dr. Robert Hartwig, president of the I.I.I., said that “[t]he $32.6 billion figure doesn't even include the significant insured losses which arose after the pre-Halloween snowstorm, which caused enormous damage to multiple states along the Atlantic seaboard. Coupled with other events in 2011’s fourth quarter, direct insured losses could exceed $35 billion this year.”
Continue Reading...How often do insurance companies get it right the first time? If they don’t, whose responsibility is it to correct them and give them a second chance? As demonstrated through litigation on many hurricane claims, the insurance companies may tell you it is the policyholder’s responsibility to notify them of newfound damage after a claim has already been resolved. Recently, Judge Robert N. Scola, Jr., of the United States District Court for the Southern District of Florida, disagreed with that logic, holding that a policyholder did not have to give the insurance company a second chance before suing it.
Continue Reading...Richard Schwartz, a former fire cause and origin investigator, recently shared some of his insight into how insurance carriers evaluate fire losses and the evolution special investigative units have had in the claim process. Richard has vast experience, with more than nineteen years as an insurance company consultant and expert witness.
Continue Reading...Last week my colleague, Denise Sze, wrote about delayed notice in California and did a great job explaining California’s “notice-prejudice rule.” In several states, including California, an insurer cannot deny a claim unless it can demonstrate actual prejudice resulted from delayed notice of a loss.
Continue Reading...One of my favorite Winston Churchill quotes is, “If you are going through hell, keep going.” This continuing review of recent Colorado insurance coverage law is another reminder to policyholders, public adjusters, and plaintiff’s insurance coverage lawyers of the light at the end of the tunnel. (Also, the Broncos’ two losses forced me to change my blog post focus from NFL adrenaline last week, to holiday gifts this week.)
Continue Reading...Merry Christmas, Happy Holidays, and Season’s Greetings! I hope all of you are enjoying some well-deserved time off. And since many of you are on holiday, I’d like to pass along some light insurance reading that may interest you.
Continue Reading...It has been said that genius is the ability to reduce the complicated to the simple. The title of this article is an actual quote from Magistrate Judge Jonathan Goodman in a recent Florida Southern District Court Federal Order. It is not everyday that Judges disclose to us where they find their inspiration, and given the Judge’s musical reference in this order, I could not pass up the opportunity to share it. It is also not everyday that Federal Judges look to Meat Loaf to inspire the creative analogy.
Continue Reading...On January 1, 2012, Florida Statute §626.854 imposes many important changes that all public adjuster in Florida need to be familiar with and implementing into their businesses. Many of the changes relate to the requirements that must be contained in a contract between a public adjuster and policyholder. In the holiday theme, below you will find a summary of some of contract requirements for public adjusters, just sing it to the tune of the 12 days of Christmas:
Continue Reading...Insurance policies are contracts in which insurance companies agree to indemnify policyholders for sudden and accidental covered losses, and insureds agree to pay a premium and comply with the policy’s enumerated post-loss obligations. Examinations under oath are typically one of those post-loss obligations. When a claim is made by a policyholder, the insurer can request that the insured sit for an EUO. The insured must appear at a designated time and place, take an oath to tell the truth, and answer the questions posed by the carrier’s representative while a court reporter writes down every word that is said for the record.
Continue Reading...Florida law is not settled regarding noncompliance with conditions precedent to filing suit under an insurance policy, including whether a policyholder’s failure to submit a proof of loss bars the claim.
Continue Reading...Everyone knows that insurance coverage law us just as exciting, hard-hitting, and adrenaline infused as the NFL. Colorado’s more recent insurance coverage case law is no exception. The insurance industry’s power lineup pitted some of its hardest hitting power houses, including Allstate, State Farm, and American Family, against some of the hardest working grandmas, small business owners, and families that America has to offer. The gut wrenching, mind blowing battles that ensued made Tebow and the Broncos’ win over the Chicago Bears look like child’s play.
Continue Reading...Recently, I had a discussion regarding "inception of the loss" versus "discovery of a loss" to real property and how this may affect or trigger an insured’s timely notice to an insurance carrier. The issue was if a landlord rents a property out to a tenant and does not know there is damage to the building but reports the damage to the carrier and mitigates the damage as soon as he is aware of the problem, will the landlord’s delayed notice to the carrier negatively impact the conditions of insurance coverage under the policy?
Continue Reading...In my experience, an insurer oftentimes acts differently than its lawyers. What I mean is that the way in which an insurance claim is handled changes dramatically once it is handed off to a defense lawyer. Insurance defense lawyers oftentimes argue different reasons for the denial of a claim than its client wrote in its denial letters to my client. This sometimes leads to insurance defense lawyers arguing that a policy provides much less coverage than the insured believed it provided. But in zealously advocating for their client, sometimes insurance defense lawyers go too far, as was the case in RLI Insurance Company v. Willbros Construction (U.S.) L.L.C., et al.
Continue Reading...Two weeks ago, I addressed the notice provision in a property insurance policy, specifically timeliness of notice and what happens if the policyholder is accused of delayed notice. Generally, under Florida law, there is a two step process to determine if delayed notice of a claim precludes payment under an insurance policy: (1) the trier of fact must determine that the notice of loss was too late, and (2) the insurance company must be prejudiced from the delay. If the court answers the first question in the affirmative, the insurance company is entitled to a rebuttable presumption of prejudice. If this presumption is not rebutted, the policyholder may be denied benefits under the policy.
Continue Reading...It’s no secret that insurance companies are in business to make money, but the lengths some insurance companies go to in order to increase profits is alarming. In fact, dozens of posts on this blog have alerted our readers to the improper actions some insurance companies may take to put profit above their policyholders’ interests.
Continue Reading...Two weeks ago, Southern California experienced unusually strong Santa Ana winds which brought gusts up to 140 mph in some places. Southern Californians, particularly in the Pasadena area, were forced to clean up debris left by the storm. A staggering 18,000 tons of debris was cleaned up in Pasadena, which is the city’s normal total for one year. Parts of Pasadena were left without power for seven days; approximately 419,000 customers effected by the outages at one time. The State estimates that the hurricane force winds caused at least $40 million in damage.
Continue Reading...Homeowners policies usually require policyholders to provide information supporting their claims and the amount of the loss, upon the insurer’s request. This document, referred to as a “proof of loss,” may require the policyholder, to set forth under oath the time and cause of the loss, identification of all who have an interest in the property, all the potential insurance that might be implicated from the loss, changes in title or occupancy during the policy’s term, specifications of damaged buildings and detailed repair estimates, an inventory of damaged personal property, and receipts for expenses incurred as a result of the loss. The information required will depend on the type of loss, damage sustained as a result of the loss, and the particular requirements of the policy.
Continue Reading...On December 1, 2011, Steamboat Springs experienced wind speeds equivalent to an F2 tornado or a level three hurricane. Gusts of 123 mph were recorded at ski area peaks. Captured in this video on NBC’s channel 9 local news is the severe roof and window damage the winds caused to the condos in the village.
Continue Reading...Often in insurance cases, a plaintiff may bring a lawsuit against both the insurance company and the insurance agent in the same action. Such was the case in Braziel v. Becton Insurance Agency, Inc., No. 07-11-0134-CV, 2011 WL 5061162 (Texas App. - Amarillo October 25, 2011). The insureds suffered a fire loss to their home. The trial court ruled that the contents of the home were covered under the policy, leading the insurance company to settle the case with the insureds. Of course, the insureds were pleasantly surprised with this turn of events, entered into the settlement, and signed a customary release regarding their claims against the insurance company.
Continue Reading...Appraisal in first party property insurance claims is an alternative dispute resolution process designed to help policyholders and insurers resolve their disagreements over the amount of loss for claims. It has been utilized quite often in past years for hurricane claims in Florida. As it is an alternative dispute resolution process, an appraisal proceeding and outcome should not be disturbed by lawyers and courts after the fact, unless there is some unusual circumstance such as fraud or collusion on behalf of the appraisal panel. A Florida appellate court recently rejected an insurer’s request to reduce the amount of an appraisal award in the case First Protective Ins. Co. v. Hess, No. 1D10-6577 (Fla. 1st DCA December 9, 2011).
Continue Reading...Last year, I wrote several posts in a series on Examinations Under Oaths. Last week, I was contacted by a policyholder who had read my posts after he received a letter from an attorney to schedule an examination under oath on his claim for fire damage. This insured, like many others, wanted to understand why the insurance company was demanding his examination.
Continue Reading...The 2012 Legislative session is right around the corner. It’s hard to believe December has already arrived, leaving only one more committee week before session begins on Tuesday, January 10, 2012.
Many bills favored by leadership have already cleared their first major hurdle by navigating through at least one committee.
Continue Reading...Last week, I discussed the gale-force wind gusts that plagued Southern California and how these unusually strong Santa Ana winds brought widespread destruction to property. Unlike Hurricane Alley, Southern California is usually immune to hurricane force winds, and the roofs of most structures in this region are rarely forced to endure this kind of storm.
Continue Reading...Many businesses have commercial liability insurance policies which provide coverage if they ever lose a lawsuit for damages caused by their goods or services. Here’s an overview of how such coverage generally works: (1) the insured is sued for damages stemming from its business operations; (2) the insured loses in court and is ordered to pay a certain amount; (3) the insured makes an insurance claim with its carrier for those parts of the court award for which the policy provides coverage; and (4) the carrier pays those portions of the award covered under the policy. However, in the case of National Union Fire Insurance Company of Pittsburgh, Pennsylvania v. Puget Plastics Corp., the carrier’s denial of coverage rested on the definition of “accident.”
Continue Reading...Is there a specific period of time in which insurance claims must be made before they are barred as a matter of law? In What Has Happened to the Rebuttable Presumption of Prejudice in a Recent Late Notice Case?, Shaun Marker focused on one sentence fragment from the recent Florida case of Kroener v. Florida Ins. Guar. Ass’n, 63 So. 3d 914 (Fla. 4th DCA 2011), which appears to have turned the issue of notice of Florida insurance claims on its ear. That sentence says:
Continue Reading...[A]s a matter of law, notice to the insurer of a claim of loss more than two years and two months after the loss occurred was not prompt notice; the untimely reporting of the loss violated the insurance policy and was sufficient to bar the claim.
The Sheldon family suffered a fire loss to their home in St. Petersburg, Florida, in January, 2011. While their homeowner’s insurance company, Citizens Property Insurance Corporation, has admitted this the loss is covered under the policy, Citizens has failed to properly pay the claim. As a result, this Bay area family will be displaced from their home this holiday season.
Continue Reading...Yesterday, Los Angeles residents awoke to massive power outages, downed trees and extensive roof damage. Beginning on late Wednesday afternoon, a powerful windstorm with gale-force gusts began ripping through the region, with some gusts over 70 mph. The wind blew power lines down and more than 350,000 customers were without power.
Continue Reading...Hardworking, dedicated employees are important to any business. While most of us are still stumbling out of our Thanksgiving turkey comas or gearing up for the remainder of the holiday season, I had the privilege of traveling to the greater Phoenix area, where I visited a client’s commercial properties. One of those properties suffered severe fire damage, forcing the company to move its production approximately 70 miles away.
Continue Reading...Property insurance claims litigation often requires hiring several experts. Policyholders may need to retain a construction cost expert and engineer to give opinions on property damage, a bad faith expert regarding claims handling practices, and an accountant regarding business income losses. Depending on the case, the list can quickly grow to include an architect, a hygienist, and many more.
Continue Reading...Many losses are a result of a chain of events. Some claims have one or two causes, others have many more. The important question to determine whether a loss is covered by a particular policy is what set the chain of events in motion. When analyzing a chain of events fact pattern, courts look at whether the initial event that started the chain is covered under the policy.
Continue Reading...Last week, many families in the Reno, Nevada, area were unable to celebrate Thanksgiving in their homes due to the epic wildfire which raged through Caughlin Ranch the week prior. News reports stated that the fire was the “perfect storm” of conditions where wind gusts up to 70 miles per hour resulted in flames up to 100 feet tall, which burnt through nearly 2,000 acres and destroyed 32 homes.
Senate Bill 425 was passed this past legislative term, adding a new chapter to the Texas Insurance Code. The new law requires the Texas Department of Insurance to approve certificates of insurance provided in connection with casualty and property policies. This new bill went into effect on September 1, 2011, and applies to certificates of insurance issued on or after January 1, 2012.
Continue Reading...Homeowners and businesses must be reminded that flood insurance is important, but excluded under most standard homeowners and commercial policies. This was demonstrated in a recent case from the Third District Court of Appeals, Intrepid Ins. Co. v. Prestige Imports, Inc., 2011 WL 4808798 (Fla. 3d DCA October 12, 2011). While the case did not involve a hurricane wind event, it presented a problem that policyholders sometimes face in windstorm claims. Did an excluded “flood” cause the damages, or any portion of the damages?
Continue Reading...The Windstorm Insurance Network’s 13th Annual Conference is set for January 30 to February 2, 2012, at the beautiful Buena Vista Palace Hotel in Orlando, Florida. WIND® recently posted the schedule, and, as you can see, there are educational opportunities for every adjuster, novice or highly experienced, to learn and better their skills. Adjusters, agents, and attorneys can earn continuing education credit in an affordable and engaging seminar.
Continue Reading...The battle between policyholders and their insurance companies has been going on for many, many years. The 1972 case of Hanover Insurance Company v. Hallford is a finding of bad faith arising from a windstorm claim. In the underlying lawsuit, Mr. Hallford filed an insurance claim with his carrier, Hanover Insurance Company, for windstorm damage to his home. When the claim could not be resolved, Mr. Halford filed a lawsuit for the benefits for the damage to his home and personal property, additional living expense and he alleged bad faith. Although Mr. Hallford indicated that he was seeking damages in the total amount of $15,000, no other specified amounts were itemized in the complaint. Hanover defended the allegations, stating that Mr. Hallford had not given notice of the loss, had not filed a windstorm claim with Hanover before filing suit, and that Mr. Hanover breached the policy by failing to comply with policy provisions that required him to give immediate written notice of the loss and a submit a sworn proof of loss within 60 days of the date of the loss.
Continue Reading...Thanksgiving is officially here, and that means that millions of Americans will soon be gathering with their loved ones to the simple pleasures that accompany time spent together over a home-cooked meal. For many Americans, a juicy, fried turkey will be the centerpiece of this feast – but too often, carelessness turns a joyous celebration of thanks into a heartbreaking tragedy.
Continue Reading...The recent wild fires in Reno, Nevada, caused tragic losses of many homes and extensive loss to business property and business income. Commercial property policies with business interruption coverage vary widely with regard to coverage of business income loss due to order of civil authorities.
Continue Reading...California is prone to natural disasters. Just this last Sunday, Southern California was pummeled with rainstorms that drenched the area with intense downpours throughout the day. In Los Angeles County, evidence of this is all over as the affluent neighborhood of Hancock Park found itself underwater in various residential pockets. Even boutique stores along the famous Melrose Strip were flooded.
Continue Reading...Every policyholder’s first question after a loss is: does my insurance policy cover this? Some policyholders have a named peril policy insuring against certain risks that are enumerated within the policy itself. Others have an all-risk policy that insures against every peril that is not specifically excluded under the terms of the policy. Regardless of which policy you currently hold, the first step in determining whether coverage exists is determining the cause and origin of the damages.
Continue Reading...Florida Statutes authorize a civil lawsuit against an insurer when it does not attempt “in good faith to settle claims [and] it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests.” Fla. Stat. § 624.155(1)(b)(1) (2011). In general terms, under Florida law, this “bad faith” lawsuit is not ripe for litigation until the insurance company is first held liable for benefits under the policy. Does this mean that a policyholder can’t sue for breach of contract and bad faith in the same lawsuit? Not necessarily, according to an opinion issued last week by Florida’s Fourth District Court of Appeal.
Continue Reading...Everybody at the Merlin Law Group has been blessed to have Kelly Kubiak working with them for ten years. Every policyholder she has represented has been fortunate she decided to take their case. Insurance companies are the worse for it.
Handling a property damage insurance claim can be complex, time consuming and can turn your hair gray. For many, presenting a property damage claim is not something done on a regular basis. When faced with a claim, policyholders in most states have the right to hire a public insurance adjuster.
Continue Reading...It’s no secret that Citizens Property Insurance Corporation routinely treats policyholders like numbers on a page. Despite its title as the state’s largest property insurer, Citizens consistently gets the most complaints from policyholders, earning a reputation as the worst property insurance company in the state -- and in a state like Florida, that’s really saying something.
Continue Reading...This winter, the 2012 AAJ Winter Convention will be held at the Arizona Biltmore Resort and Spa, February 11–15, 2012. If you have not been to the Winter Convention before or have and are seeking a respite from dreary winter weather, this Convention is the place to learn from some of the best trial lawyers in the country. And, you can earn a year’s CLE credits.
Continue Reading...Insurance companies and insurance industry advocates consistently point to insurance fraud as a reason for higher insurance premiums. But, if insurance fraud is such a problem, why are property insurers still reaping massive profits? With profits like these, is there really justification for consistently raising premiums?
|
|
Revenues |
Profits |
||||
|
Rank |
Company |
Fortune 500 rank |
$ millions |
% change from 2009 |
$ millions |
% change from 2009 |
|
(mutual) |
37 |
63,176.7 |
2.8 |
1,762.8 |
129.9 |
|
|
(stock) |
7 |
136,185.0 |
21.1 |
12,967.0 |
61.0 |
|
|
17 |
104,417.0 |
1.2 |
7,786.0 |
N.A. |
||
|
82 |
33,193.0 |
6.8 |
1,678.0 |
64.0 |
||
|
89 |
31,400.0 |
-1.9 |
928.0 |
8.7 |
||
|
106 |
25,112.0 |
1.8 |
3,216.0 |
-11.2 |
||
|
117 |
22,383.0 |
-9.4 |
1,680.0 |
N.A. |
||
|
127 |
20,265.0 |
-2.3 |
959.0 |
33.9 |
||
|
145 |
17,946.1 |
2.2 |
2,637.4 |
-12.7 |
||
|
164 |
14,963.3 |
2.7 |
1,068.3 |
1.0 |
||
|
168 |
14,621.0 |
3.5 |
1,288.0 |
128.4 |
||
|
185 |
13,319.0 |
2.3 |
2,174.0 |
-0.4 |
||
|
285 |
8,527.7 |
-2.0 |
279.2 |
-35.2 |
||
|
358 |
6,491.8 |
0.6 |
487.1 |
89.6 |
||
Closely related to the fortuity doctrine, are the doctrines of known loss or loss in progress. Known loss is fairly simple and can often lead to allegations of fraud by the insured. If an insured knows of a loss and then procures insurance to cover it by concealing material information from the insurance company, the insurance company likely can raise the defense of fraud stemming from the insured’s concealment.
Continue Reading...Property policies usually include a mold exclusion. Water damage, however, is a commonly covered “cause of loss.” Mold growth and water infiltration have a close causal tie, and there has been a raging dispute in the industry over whether property policies respond to mold losses when water infiltration, a covered cause of loss, caused or contributed to the mold. The debate is complicated by fairly common exclusionary language that incorporates an “ensuing loss” exception:.
Continue Reading...We do not cover loss caused by:
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(2) rust, rot, mold or other fungi. …***
We do cover ensuing loss caused by collapse of the building or any part of the building, water damage, or breakage of glass which is part of the building if the loss would otherwise be covered under this policy.
Recently I’ve been approached by several public adjusters regarding coverage limit and underinsured issues with their clients’ insurance policies after a loss. Specifically, I’ve been asked if an insured has any recourse when the insured’s policy falls short, leaving the insured effectively underinsured.
Continue Reading...As Chip Merlin wrote in his June 3, 2011, post Mediation Notice Lapse Prevents Appraisal Process, “insurers should follow Florida statutes and regulations. . . . Without accountability and consequences, laws are meaningless.” Florida’s Fourth District Court of Appeal recently held State Farm accountable for failing to comply with its statutory and administrative duties to inform its policyholder of an alternative mediation process. The consequence for State Farm was that it could not force its policyholder into the appraisal process. Gassman v. State Farm Florida Ins. Co., No. 4D11–360 (Fla. 4th DCA November 2, 2011).
Continue Reading...Today, November 12, 2011, marks seven years since the passing of the lovingly remembered Katrina “Katie” Froeschle. Earlier this week, the American Association of Public Insurance Adjusters sent a call out to remember Katie Froeschle and support her foundation:
Continue Reading...When fortuity issues arise in insurance disputes, courts make a determination about the fortuity of the loss (as I wrote about in my previous post) and look to see how much control the insured had over the loss or damage. As one might expect, the general rule is the more control the insured has over the loss or damage, the less likely it is that a court will find coverage. In other words, if the insured makes every reasonable attempt to prevent a loss, but that loss ultimately still occurs, the loss is likely fortuitous.
Continue Reading...Cases around the country discuss property loss resulting from collapse. The issue is often litigated because collapse is usually a process that occurs over time and to various degrees. See Sherman v. Safeco Ins. Co. of Am., Inc., 716 P.2d 475, 476 (Colo. App. 1986) (where masonry work supporting the sill plate had cracked causing complete release of the sill plate, roof had fallen more than two and one-half feet producing a marked sag in the roof line, upper tiers of bricks on the two supporting walls had fallen out and the walls were bowed out, the condition was, as a matter of law, a “collapse” within the meaning of that term in the insurance policy).
Continue Reading...To make a claim for hurricane damage to property, you must first notify the insurance carrier of the damage. Most policies require the policyholder to provide this notice with some degree of expediency, usually “prompt” notice. Unfortunately, most policies do not define the term “prompt” and different circumstances could lead to varying interpretations of what “prompt” means. When disputes arise over whether notice was prompt, courts are often left to determine what the term means, again with varying results.
Continue Reading...Stephen Hadhazi has a website devoted to sharing his knowledge regarding vandalism losses with policyholders who have suffered losses. A licensed public adjuster in Texas, Florida, Hawaii, and Oklahoma, Stephen got his start working in the construction industry. Stephen explains,
Continue Reading...Like so many public adjusters, I began as a general contractor and an roofing contractor who performed work primarily on homes damaged by hail, wind, hurricanes, etc. In the course of doing business with adjusters from the insurance carriers over the years it was kind of a natural progression to eventually move into full time Public Adjusting. I suppose my passion for helping others in just natural. It is sort of who I am.
Many, if not all, policyholders’ advocates are aware of the recent legislative changes to Florida’s sinkhole statutes. One of our greatest concerns is the definitional change of the term “structural damage” and whether this change can be applied retroactively. Chip Merlin’s July 7, 2011, post highlighted a recent circuit court’s decision finding the new law’s definition of “structural damage” inapplicable to previous policies of insurance. On the very next day, July 8, 2011, the Florida Supreme Court addressed a similar retroactivity issue in Optical Corporation v. Spiewak.
Continue Reading...Wildfire insurance claims are raging in Texas. The Texas Association of Public Insurance Adjusters will talk about wildfire claims at its Fall Conference in Dallas on November 16 and 17. The speaker presenting this topic promises that the discussion will be practical, guaranteed not to put you to sleep, and worth hundreds of thousands of dollars in excess of the price of admission.
Continue Reading...California’s unfair competition or unfair business statute is found in Business & Professions Code section 17200 (the “Unfair Competition Law” or “UCL”). The UCL protects consumers and businesses from unfair competition described in Section 17200 as: “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by Chapter 1 (commencing with Section 17500) of Part 3 of Division 7 of the Business and Professions Code.”
Continue Reading...In a recent case, a Louisiana Court of Appeal decided, among other issues, what damages policyholders were entitled to in a Hurricane Katrina claim. That sounds like a typical scenario, however to add some spice to the mix, the policyholders had sold the property following the loss. The case is Jouve v. State Farm Fire & Cas. Co., 2011 WL 3611800 (La. App. 4th Cir.).
Continue Reading...In Cherry v. Audubon Insurance Company, the Court awarded bad faith penalties against the carrier because it failed to timely pay a covered claim. In that case, Ms. Reilly was insured with Audubon Insurance Company when part of her home caught fire on May 4, 2002. Within a few days of the loss, Ms. Reilly submitted a proof of loss to Audubon that included part of her contents claim. Ms. Reilly then hired Carr & Associates to prepared a dwelling estimate of $149,589.50 and a $196,229.14 contents estimate. Both estimates were provided to Audubon on October 10, 2002. When Audubon finally paid the $40,000 policy limit on contents, almost five (5) months had passed since Ms. Reilly had submitted her proof of loss.
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Nicole will be back next week posting on her series regarding issues relating to public insurance adjusting. This weekend, Nicole and Merlin Law Group’s Sandy Baldinelli are walking in
Over the last few years, I noticed a growing trend among my California clients. More insured clients who suffered a property loss are finding that they need to retain attorneys at an earlier stage in the claims process. Instead of seeking the advice of an attorney after their claims are denied, they need the help of an attorney at an earlier stage, just to prove to the insurance company that they suffered a loss. Clients are voicing their opinions that insurance companies are investigating losses more aggressively, and sometimes, these insureds are vexed and outraged when conditions on coverage are imposed.
Continue Reading...Let’s say you are at your friend’s housewarming party, celebrating a big moment in your friend’s life. You go up to the second floor balcony and have a drink or two with your friends. At one point, you lean on the balcony’s railing, fall two stories, and injure yourself because the railing was not secure. You’re then rushed to the hospital and incur over $50,000 in medical bills. Who’s responsible?
Continue Reading...An insurer’s duty of good faith and fair dealing to its insured continues even after litigation is filed against the insurer. Colorado recognizes that an insurer’s litigation tactics may be considered by the jury in determining unreasonableness and punitive damages. See Tait ex rel. Tait v. Hartford Underwriters Ins. Co., 49 P.3d 337 (2001) (trial court increased punitive damages because during litigation the insurer committed discovery violations and delegated to counsel many of its continuing obligations to the insured despite insurer’s ongoing duty to insured pursuant to Southerland v. Argonaut Insurance Co., 794 P.2d 1102 (Colo. App. 1990); Dale v. Guaranty National Insurance Co., 948 P.2d 545 (Colo. 1997) (an insurer’s conduct even after an arbitration proceeding is relevant to a claim of bad faith breach of an insurance contract); and Coors v. Security Life of Denver Ins. Co., 112 P.3d 59 (2005) (Supreme Court upheld punitive damages award because insurer’s bad faith conduct continued after the lawsuit was filed).
Continue Reading...Recently, Kevin Healey continued his series on Deconstructing the All-Risk Policy and discussed the importance of the fortuity doctrine.
Continue Reading...The National Flood Insurance Program (NFIP) is a federal insurance program that offers flood insurance and is administered by the Federal Emergency Management Agency (FEMA). Although it is a federal government program, the insurance is actually purchased and serviced through private insurance companies and agents. Because the service is typically provided through private insurers, claims against the federal government may be limited if a problem arises under one of these flood programs.
Continue Reading...In a recent decision, Florida’s Third District Court of Appeal granted a directed verdict in favor of United Property and Casualty Insurance Company and reversed a trial court’s summary judgment ruling for the policyholders.
Continue Reading...Just last week, Florida’s Fourth District Court of Appeals held that the Florida Insurance Guaranty Association (“FIGA”) wrongly denied a policyholder’s claim and was obligated to pay attorney’s fees and costs. In Rahabi v. FIGA, the appellate court distinguished the holding from its earlier case, FIGA v. Ehrlich, which was just decided in May of this year. I wrote about Ehrlich in my May 9, 2011 post titled Recent Ruling Concerning Attorney’s Fees And The Florida Insurance Guaranty Association. In Ehrlich, the Court held that FIGA was not responsible for attorney’s fees since it did not deny the policyholder’s claim by affirmative action. In Ehrlich, the trial court had ordered FIGA to answer the complaint in the lawsuit, and pursuant to that order, FIGA raised affirmative defenses.
Continue Reading...I did not think of the title to this post. It was written in an opinion from Florida’s Third District Court of Appeal. In reviewing the transcript of an examination under oath in Jose De Leon vs. Great American Assurance Company, 3D09-646, --- So. 3d --- (Fla. 3d DCA October 12, 2011), the Court noted that “the carrier apparently decided to use the usual policy provision requiring a sworn statement as a license to make unwarranted and intrusive inquiries into the personal life of any insured who has the temerity to make a claim against it.”
Continue Reading...Floridians are still awaiting a ruling from the Florida Supreme Court in Jeffery H. Atwater v. Frederick W. Kortum. The Court will decide whether the “48 hour rule,” the statute that bars public adjusters from soliciting policyholders until 48 hours after the loss, is a violation of commercial free speech under Article I, § 4, of the Florida Constitution.
Continue Reading...There were many insurance claims filed after the 2005 hurricanes that devastated Florida, Louisiana and Mississippi. Although many different legal issues arose in the ensuing insurance litigation, a bad faith case in Louisiana revolved around the issue of whether the insurance company applied the correct deductible. This week I will explain the Fifth District Court of Appeals’ March 2011 holding in SEACOR Holdings, Inc. v. Commonwealth Insurance Company.
Continue Reading...The 2012 session of the Florida Legislature will occur January 10, 2012, through March 7, 2012. Usually, the legislative session takes place from March to May, but since the Legislature is redistricting this year, the schedule has been moved up.
Continue Reading...Last week, in continuing my deconstruction of the all-risk policy, I wrote about the fortuity doctrine. This week, I want to begin looking at how courts apply the fortuity doctrine in certain circumstances.
Continue Reading...In the hospitality business, property loss can be financially difficult. Property loss combined with complete or even partial shutdown of hotel operations can be devastating. For these reasons, most standard hotel property polices include business interruption coverage. Business interruption coverage is intended to provide money to sustain a business while its operations are suspended or partially suspended due to damage to the insured property by a covered cause of loss (e.g., fire, tornado, hurricane). Business interruption coverage benefits are usually estimated by calculating a business’ pre-tax net profit that would have been earned had the loss not occurred, plus the normal operating expenses and payroll that continue during the period of restoration to the damaged property.
Continue Reading...Television Station KXAN of Austin, Texas, reported recently that the Texas Forest Service will be creating a system, the Texas Wildfire Risk Assessment Portal, to pinpoint wildfire damage anywhere in Texas. The Texas Wildfire Risk Assessment Portal is an online mapping tool that the Texas Forest Service will used to send risk information and create awareness about wildfires in the state. The system is set to launch in November or December.
Continue Reading...In yet another “which came first, the wind or the water” debate over hurricane damage, the Fifth Circuit Court of Appeals recently analyzed whether so called “self-serving” affidavits could be used to get the case past summary judgment and on to the jury.
Continue Reading...Adjusters International is a major disaster recovery consulting organization focused on the principles of maximizing and expediting their clients’ financial recovery from insurance and FEMA claims. AI helps policyholders by providing public adjusting services and also guides FEMA grantees and applicants through the FEMA public assistance program. Adjusters International is comprised of more than 35 offices. Many are family-owned firms, handed down from generation to generation, working to help their communities recovery after disasters. Many of the regional firms that are part of the Adjusters International family have kept their family name but have added Adjusters International to their titles. This team of disaster recovery consultants has helped after every major disaster in the United States for the past 25 years.
Continue Reading...Last week in my post titled Carrier's Motion for Partial Summary Judgment in Bad Faith Action Denied, I wrote about a court in Ohio that denied a carrier’s motion for summary judgment. In that case, the carrier asked the Court to find that it did not act in bad faith when using fraud as a basis to deny coverage for a fire loss. This week, I am writing about a case in South Carolina where another insurance company’s motion for summary judgment was also denied.
Continue Reading...In my last post, I mentioned that the fortuity doctrine creates many legal issues. Before going into those legal issues, it is important to understand exactly what the fortuity doctrine is.
Continue Reading...Last week, I wrote about insurance coverage and bad faith cases where public adjusters may need to be designated as experts at trial. Accordingly, a public adjuster’s expertise must be thoroughly considered by the insured’s lawyer when it comes time for designation of experts. Problems may arise, however, if the public adjuster is to offer expert opinion and the public adjuster has a contingency fee contract with the insured.
Continue Reading...Last week, I wrote about the devastating fires that ravaged central Texas last month. You or someone you know might have experienced fire damage to your home or business and are now wondering what to expect from the insurance claim process. If you read my post last week, you know that if you suffered a total loss to your home or business, your insurer should pay you at or near your policy limits. Some of you may be concerned about making a full claim for your policy limits because you may be in violation of a provision of your policy. You may think that if your insurer learns about your violation, it will somehow void your policy. But what does Texas law have to say about this issue?
Continue Reading...In litigation, insurers often try to exclude or limit policyholders’ experts’ testimony. This can be an aggressive tactic aimed to take the wind out of the policyholders’ sails, since it is difficult to refute insurers’ expert conclusions without your own.
Continue Reading...When it comes to damage, few things are more expensive to replace than windows and sliding glass door systems. Almost every condominium unit has at least one sliding glass door system, and most have more than one. Widespread damage from earthquakes or hurricanes can prove extremely costly for an association and lead to substantial assessments if not properly insured.
Continue Reading...The American Association of Public Insurance Adjusters is busy getting the word out about how hiring a public insurance adjuster can add value to a policyholder’s insurance claim. AAPIA prides itself on being a professional organization representing public adjusters from all over the United States. AAPIA sponsors educational, social, and networking programs throughout the year.
Continue Reading...In Belsito v. Allstate Property & Casualty Insurance Company, the U.S. District Court for the Northern District of Ohio denied the carrier’s motion for summary judgment that it did not act in bad faith when using fraud as a basis to deny coverage for a fire loss.
Continue Reading...Many insurance policies contain coinsurance clauses which require policyholders to purchase an amount of insurance that accurately reflects the value of their insured property. If less than a certain percentage of the accurate value is purchased, policyholders may not be able to fully recover in the event of a loss..
Coinsurance clauses can be confusing and often leave policyholders in distress. The good news for policyholders is that a little education can go a long way in this area of insurance law. If you understand the basic principle that you must maintain insurance on a certain percentage of the value of your property, then you will be fully insured when disaster strikes.
Continue Reading...I wanted to take a moment to thank all who participated in the movement against Citizens' proposed rate hikes. All of your hard work advocating on behalf of policyholders across the state truly made a difference. Thanks to you, Floridians were saved from one of the largest insurance rate hikes this state has ever seen. You should be proud!
Continue Reading...Public Insurance Adjusters often have backgrounds and expertise in fields other than insurance claim adjustment. Their skill may include experience or expertise in accounting, construction, roofing, engineering, and estimating, in addition to insurance adjusting. Public adjusters are often involved in claims from day one of the loss, or early in the adjusting and investigation claims process. In many cases, the public adjuster has developed the claim, gathered evidence and financial documentation, and compiled a file of materials essential to the lawyer if the insured’s claim requires litigation against the insurer. For these reasons, public adjusters should always be aware of the basis for their findings and conclusions, and retain documentation that supports these findings and conclusions.
Continue Reading...Many of you are aware of the devastating fires that severely damaged central Texas during the past few months. In Bastrop County alone, the fires consumed 34,000 acres and 1,600 homes, according to an investigation released by the Texas Forest Service. If you are one of the thousands who has suffered fire damage, you may be wondering what to expect with your insurance claim. Over the course of the next few weeks, I will be writing exclusively about how Texas law deals with fire losses. Today, I will focus on total losses.
Continue Reading...Hurricanes are known for outrageously destructive forces that can reduce manmade structures to rubble in the blink of an eye. If man can build a structure once, man can rebuild it or repair it after a hurricane damages it. When repairing or rebuilding, it is important to keep track of the construction, especially if insurance is paying for those repairs. Records of what was damaged, what was not, what has been repaired, and what still needs to be repaired will help a property owner avoid complications if the owner changes insurance companies or if another hurricane hits. Unfortunately for the property owner, in Landmark Am. Ins. Co. v. Moulton Properties, Inc., 09-15396, 2011 WL 3962636 (11th Cir. Sept. 8, 2011), a second hurricane hit and it had just changed insurance companies.
Continue Reading...Buz Livingston is a certified financial planner who works to enrich the quality of his clients' lives by improving their financial awareness and increasing their financial knowledge by providing his clients with professional, unbiased, and objective financial planning and investment management.
Continue Reading...Most property insurance policies include an appraisal provision that may be invoked by either the insurer or the insured to determine the value of a loss. Courts generally agree that “valuation” is the task of an appraisal panel, and “coverage determinations” are the province of courts. However, courts are inconsistent as to whether the scope of damage falls under “valuation” (which may be decided by appraisal) or falls under “coverage determination” (which must be decided by a court).
Continue Reading...After spending the past several weeks looking at common exclusions to the all-risk policy, this week’s blog will focus on more basic requirements that must be met in order for coverage to exist. Some will seem very straightforward, but others actually raise interesting legal issues when the right circumstances arise.
Continue Reading...In 1999, Brae Burn Construction Company (“Brae Burn”) was hired to build a nursing home for Concierge Care Nursing Centers (“Concierge”). Brae Burn subcontracted with four vendors, each individually and independently insured by their respective insurance carriers. In August 2000, Brae Burn issued a Certificate of Substantial Completion, indicating that the building was complete. After Brae Burn issued the certificate, Concierge took possession and control of the newly-constructed nursing home.
Continue Reading...Some insurance policies contain water exclusions or limitations of coverage to the interior of the building, or the property contained in the interior of the building, unless a windstorm damages the exterior roof or walls of the structure through which the water enters. This policy limitation/exclusion is often referred to as the wind-driven rain exclusion. It is important for insureds to be aware of this common provision when reporting claims to their insurers or giving statements about the details of a loss. This is particularly important for the many policyholders along the East Coast who were affected by Hurricane Irene.
Continue Reading...Julie Patel of the Sun-Sentinel continues her dedicated investigative reporting series looking into insurance issues in her recent article, Expect low and slow claims payments if your insurer folds.
Continue Reading...Many cases settle in mediation because of costs associated with trial and the inherent unpredictability of a jury panel. Mediation is a very common alternative dispute resolution process used by policyholders in obtaining owed insurance benefits from their carriers. In mediation, the parties frequently agree to a settlement amount in exchange for a release of claims under the insurance policy. It is important to understand what needs to be included in a “Release” and just as pertinent, what is not to be included. Many insurance companies incorrectly consider “Release” synonymous with “Indemnification.” The distinction is critical because the terms result in different outcomes for the policyholder.
Continue Reading...This week’s review of common exclusions found within all-risk insurance policies focuses on the latent defect or inherent vice exclusion. While other exclusions are somewhat more straightforward – we all may have a good idea of what mold is – this exclusion first raises the question: What is a latent defect or inherent vice?
Continue Reading...At roughly 3:30 p.m. yesterday, hundreds of folks from Pasco and Hernando County descended on downtown Tampa for one purpose. They were fighting for their financial future; they were fighting to keep their homes.
While I am in Houston working on Hurricane Ike litigation, the view from my Tampa office overlooking the Tampa Convention Center will demonstrate that organized policyholders can make a difference in Florida's insurance landscape. As Tampa Tribune reporter Catherine Whittenburg reported in Citizens to Phase in Sinkhole Hikes - First Year at 50 Percent:
Continue Reading...Fasano said that he and Policyholders of Florida, a consumer advocacy group headed by former state Insurance Consumer Advocate Sean Shaw, are loading up 150-200 consumers on three buses to attend today's hearing, which will be held at 4 p.m. in Ballroom D at the Tampa Convention Center, 333 South Franklin St.
Last November, in A House on the Beach, Literally, I wrote about the Texas Supreme Court decision in Severance v. Patterson, 09-0387, 2010 WL 4371438 (Tex. 2010), reh'g granted (Mar. 11, 2011), in which the Texas Supreme Court held that public beach rights could not “roll” up over private property rights when a hurricane or other force changes the vegetation line on a Texas public beach. Normally, a decision by a state court’s highest tribunal ends the dispute, however, this case was procedurally different from a traditional state court action. In Severance, the plaintiff sued Texas state officials in federal court. When the federal court had questions regarding the correct interpretation of Texas law, it certified those questions to the Texas Supreme Court. The Supreme Court then provided answers to the federal court so it could resolve the federal lawsuit. After providing its decision to the federal court, the Texas Supreme Court granted a rehearing on the merits of its decision, which could potentially change it.
Continue Reading...Yesterday, the Florida Supreme Court heard oral arguments in Jeffery H. Atwater v. Frederick W. Kortum. Our prior posts detailed this case as it made its way through trial and the First District Court of Appeals. But if you are not yet acquainted with the case, the “48 hour rule” restricted public adjusters from soliciting insureds for 48 hours after a loss. Fred Kortum argued the ban violated his commercial free speech under Article I, § 4, of the Florida Constitution. The Supreme Court heard from both sides.
Continue Reading...Last week, I wrote about whether a tarp constitutes a part of the structure during repairs. In response, Jeff Petrucci of Bloomfield Construction, posted a very interesting question which lead to this week’s topic: Whether roof damage caused by a raccoon is covered under an insurance policy?
Continue Reading...Herb Albert and the Tijuana Brass produced an album, Whipped Cream and Other Delights, which has been on my mind lately. While a number of my less academic colleagues would simply be interested in the album cover and the music--
--my insurance coverage nerd personality drove me to research insurance coverage cases involving whipped cream or honey.
Continue Reading...Florida’s new Insurance Consumer Advocate, Robin Smith Westcott, emailed a press release to the media highlighting her attendance at our Policyholders of Florida rally in Tampa, where we protested Citizens’ massive proposed sinkhole coverage rate hikes. After this rally, when Westcott heard firsthand from policyholders, she accepted our argument that 2000% rate hikes just don’t make sense and are dangerous to our state’s economy.
Continue Reading...Last week, I discussed a common discovery battle in bad faith insurance litigation—the battle for the attorney’s files in cases where the attorney acted as an adjuster on the claim. Policyholders prevented from obtaining discovery of these adjustment activities should, at a minimum, motion the court and ask that the file be subject to an in camera review to determine which portions of the attorney’s file are business records of the insurer or reflect any information that is relevant to the policyholder’s bad faith and statutory claims, including all documents that indicate how thoroughly the claim was considered and why the company took the action it did.
Continue Reading...On September 1, 2011, the Fifth Circuit delivered an opinion which should remind everyone to renew their insurance policies if they expired or are about to expire.
Continue Reading...The Southern District Court of Florida recently issued an opinion discussing the amount of detail required to state a claim for breach of contract in Florida in a Hurricane Wilma claim. Galison v. Fireman’s Fund Ins. Co., No. 10-81522, 2011 WL 3419620 (S.D. Fla. August 4, 2011). The insurer in the case filed a motion to dismiss, claiming that the insured’s complaint was too vague and ambiguous for it to respond or bring a defense.
Continue Reading...Last weekend, all eyes were focused on Hurricane Irene. Now, concerns are being raised about the potential damage, destruction, and deluge that could result from Tropical Storm Lee and Hurricane Katia.
Continue Reading...In my last post titled Does an Insured Have to Wait to Pursue Bad Faith? Part II, I analyzed the issues addressed in Brethorst v. Allstate Property and Casualty Insurance Company. This week I will continue an evaluation of this case.
Continue Reading...Many policyholders use tarp as a temporary roof while performing improvements or construction, but are policyholders protected when a storm blows off the tarp, allowing wind driven rain to enter a structure and damage personal property?
Continue Reading...Last week I wrote about the smog, smoke, vapor, or gas exclusion and gave an example of how some courts hold that invisible vapors are not included in the common definition of “smoke.” As promised, this week’s post illustrates that other courts feel invisible vapors are included in the definition of “smoke.”
Continue Reading...In nearly every bad faith case filed against an insurance company, the policyholder serves the insurer with discovery requests demanding a copy of the claims adjustment file. Often, the insurer’s lawyers produce some of the claims file, but object to disclosure of any documents, emails, etc., that were sent to or from an attorney. In many cases, insurers hire attorneys to perform portions of the investigation and adjustment, so they can argue that they do not have to disclose these claims file documents. However, Colorado courts have held that no work product or attorney client privilege applies where a lawyer performs adjustment activities related to the policyholder’s claim.
Continue Reading...The East Coast has been hit hard over the last week. Within the one week, Virginia was hit with a 5.8 magnitude quake and Hurricane Irene. Although the Virginia-based earthquake may seem small to those who reside on the West Coast, its mere occurrence should be a reminder to those living on the West Coast that unexpected earthquakes can happen at any time and that earthquake preparedness is a necessity. The East Coast earthquake has and should raise awareness for home and business owners alike. It’s time to assess our needs and make sure there’s adequate insurance.
Continue Reading...Earlier I wrote a post about the Texas Windstorm Insurance Association (“TWIA”) considering raising rates by 5%. Well, TWIA made it official: rates will go up 5% next year for thousands of homeowners covered by the state’s storm insurer of last resort.
Continue Reading...Many mortgage contracts include provisions that permit the lender to purchase insurance to cover the mortgaged property at the borrower’s expense if the borrower fails to obtain their own insurance on the property. This lender-placed insurance is often colloquially referred to as “force place” or “force placed” insurance. Aside from common questions regarding the usually high cost of lender-placed insurance, a question that often arises under these policies is who is entitled to receive policy benefits if there is a covered loss? In Barrios v. Great American Assurance Co., No. H–10–3511, 2011 WL 3608510 (S.D. Tex. Aug. 16, 2011), the property owners found out the hard way that they were not entitled to policy benefits.
Continue Reading...Hurricane Irene insurance claims will be the talk of the insurance adjusting community for awhile. Ruck Deminico, the Merlin Law Group Knowledge Manager has put together our first Merlin Guide for public adjusters in North Carolina which is available here.
We will have more information regarding insurance claims handling along the eastern seaboard and specific information regarding National Flood Insurance claims.
Many policyholders are surprised to find out they are without coverage after a loss because of a condition that existed at the time the insurance contract was formed. Insurance companies have many claims personnel that may overlook a pertinent issue during the application process and others take the premiums knowing a claim can be denied based on that condition. The doctrines of waiver and estoppel may be able to afford coverage in those circumstances and rectify a truly inequitable result.
Continue Reading...I always find it fascinating when the business interests in this state complain about increased taxes and fees and then turn around and attempt to impose the same on their customers. Though I understand why trade groups like the Florida Chamber of Commerce and the Associated Industries of Florida put the interests of businesses above those of consumers, I do not understand how they can, in good faith, offer arguments so rife with hypocrisy.
Continue Reading...Continuing my breakdown of common all-risk insurance policy exclusions, I turn this week, to the smog, smoke, vapor or gas exclusion. While one might think that this type of exclusion would apply only to industrial or commercial properties, it can apply to homeowners’ claims as well, and it is important for all policyholders to understand.
Continue Reading...Damage to or loss of a home is a devastating experience for policyholders. The stress, time and expense in preparing the insurance claim and attempting to negotiate with an insurance adjuster can be overwhelming. Homeowners who have suffered a large loss spend significant time away from work, family and other commitments—dedicating that time instead to attempting to provide the insurer with the extensive documentation it requires before payment of policy benefits. This is especially true when the insurance company is disputing some aspect of coverage, disputing the value of lost personal property, or denying payment of additional living expenses.
Continue Reading...Gene Veno forwarded two videos made by roofing contractors and asked us to comment on them. The roofing contractors are advertising their services for insurance claims. Here they are:
Continue Reading...We live in a very interdependent world. Even manmade or natural disasters which happen far away from us geographically can cause economic disasters at home. In both business and social settings, the world is a much smaller place than it was ten years ago. We must now take this into account when preparing for disasters so that the impact is mitigated.
Continue Reading...Andy Rooney once said that “nothing in fine print is ever good news.” At times we are held accountable to what is stated within fine print, and we cannot claim that we did not read it as a defense. Citizens Property Insurance Corp. v. European Woodcraft & Mica Design, Inc., a recent Florida case involving a limitation on an insurance agent’s authority to bind coverage for the insurer, demonstrates this harsh reality.
Continue Reading...Last week, I posted the case of White v. State Farm fire & Casualty Company. In this Michigan case, the appellate court ruled that a public adjuster can be an independent appraiser pursuant to the Michigan Insurance Code.
Continue Reading...In last week’s post titled Does an Insured Have to Wait to Pursue Bad Faith? I explained the facts of Brethorst v. Allstate Property and Casualty Insurance Company. This week I will begin a discussion of the legal issues in this case.
Continue Reading...The mark of any good legislator is that he or she understands the problems facing their constituents and has the inclination to do something about it. Our latest installment of Tallahassee Spotlight led us to Representative Frank Artiles (R – Miami), who comes from a district where few issues are more salient than those involving the complicated property insurance market. Given his intimate knowledge of public adjusting, Representative Artiles lends a refreshing perspective on these issues in a legislature filled with folks who have had little interaction with policyholders in their hour of need. This unique background has served him well in his short time in Tallahassee.
Continue Reading...Ferocious hurricanes most often strike the United States in late August and September. Tropical waves and weather disturbances are commonplace this time of the year. Each could potentially become dangerous and threaten the United States. People should check their hurricane preparedness plans for last minute preparation. The way I look at the weather map, there could be hurricanes on the way in the next eight days, if not sooner.
Continue Reading...Courts are often confronted with the question of what constitutes a “vacant” or “unoccupied” building within the meaning of an exclusionary provision in an insurance policy. To answer this question, courts compare the term “vacant” with the terms “occupied” or “unoccupied” as they are used in the exclusionary provision.
Continue Reading...The third annual First Party Claims Conference is coming soon. Its website notes:
Continue Reading...FPCC is a dynamic two-day educational event for professionals from all aspects of the first party property insurance claims community. Offering 40 nationally recognized speakers, sponsors and exhibitors, and a minimum of 12 continuing education credits, FPCC provides high-quality education sessions and valuable networking opportunities for a reasonable cost to the first party claims community. Nearly 250 insurance professionals attended FPCC 2010, and attendance at FPCC 2011 is expected to be even greater!
Tuesday afternoon, I joined 250 fellow Floridians in the bright sunshine protesting against extraordinary rate hikes allowed by Florida’s most recent insurance legislation. Here is a picture of me with Florida Representative Richard Corcoran at the protest:
Recently, I wrapped up the discourse of mold exclusions commonly found in all-risk policies. This week I am writing about another extremely common exclusion: the “wear and tear” exclusion.
Continue Reading...Scott Johnson, Executive Director of the Florida Association of Insurance Agents, has called me out for allegedly being on the wrong side of an insurance issue. In his post, CITIZENS SINKHOLES…Yet Another Look!, he stated in part:
Continue Reading...And so I’ve made overtures to my friend Chip Merlin, the founder of the Florida Association of Public Insurance Adjusters (FAPIA). He also employs Sean Shaw, who has gone from advocating for consumers to advocating for public adjusters.
I know this is a challenge; after all, public adjusters are the only real winners in this deal. But, my prayer is that Chip will do as he’s done when we’ve worked together in the past; simply examine the evidence a little more closely to see if there’s room for a different conclusion. Maybe ask a few questions. Seek a few clarifications. Try to find out, as I have, what’s best for the majority of consumers.
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While we wait to see if Chip Merlin’s mind is made up or not, and thus whether Sean Shaw may rethink his stance as well here, again, is the exchange between myself and Ms. Stevak.
Texas has good consumer protection statutes. The problem is that Texas case law makes it difficult to enforce many of them or delays the protections they offer. A recent case, In Re Loya Insurance Company, No. 01-10-1054 (Tex. App. - Houston [1st Dist.] August 11, 2011), provides an example.
Continue Reading...Most property insurance policies include provisions that void coverage if the policyholder commits fraud or some form of misrepresentation regarding the insurance. In each jurisdiction, there is typically a body of case law that further defines when misrepresentations or fraud will void coverage. For example, some states require an intentional misrepresentation, while others consider an innocent mistake sufficient.
Continue Reading...In June of 2008, Steven and Gail White’s Farmington Hills, Michigan, home was severely damaged by fire. The White’s insurance company, State Farm, performed a valuation of the fire damages, but there was a disagreement between State Farm and the Whites regarding the amount of the loss. The policyholders hired Jeffery Moss, of Associated Adjusters Inc., as their public insurance adjuster. When the parties could not agree on the amount of loss, the claim was put into appraisal. Each party was to name an appraiser to work on the panel with an umpire to determine the amount of the claim. Jeffery Moss was named as the homeowners’ appraiser, but State Farm objected to Moss and refused to go through the process with him. According to the court opinion, the Insurance Code details the appraisal process in Michigan, but the portion of State Farm’s policy which outlined the appraisal process was not inline with the insurance code.
Continue Reading...Who needs an insurance agent when a car manufacturer will give you auto insurance for free? Washington and Oregon insurance regulators have approved General Motors’ sales promotion which offers "free auto insurance." General Motors is hoping to lure buyers by offering a free one-year policy to customers who purchase or lease new cars before September 6, 2011. Purchasers who decide not to accept the "free auto insurance" and find their own policy get no discount for doing so.
Continue Reading...On April 19, 2011, I wrote a blog asking Chief Financial Officer Jeff Atwater to take a stand on Senate Bill 408. Unfortunately, we didn’t hear much from CFO Atwater’s office during the debate on 408. In fact, the little we did hear appeared to be regurgitation of industry talking points about “fraud” and “cost drivers.” When SB 408 was finally signed into law in May 2011, the CFO remained silent as to the potential impacts on consumers and industry. In June, we heard nothing – in July, still nothing. However, on August 2, 2011, we finally heard from the CFO’s office. During a cabinet meeting, CFO Atwater asked the following question, "There is the reality [that] there are mortgage players who want sinkhole coverage…How does a Floridian go from paying $350, $450 a year to $3,000, $4,000 a year?"
Continue Reading...Before August 2008, property policyholders in Colorado who were wrongfully denied insurance benefits largely relied on lawsuits alleging claims for breach of contract, breach of the covenant of good faith and fair dealing (the common law tort of bad faith), and requests for exemplary damages as a means of redress against their insurance companies. In August 2008, Colorado House Bill 08-1407 became effective. The Prompt Payment statutes are codified at CRS §§ 10-3-1115 and -1116 and provide remedies to certain first-party insurance claimants, including recovery of two times the covered benefit, attorney fees, and court costs.
Continue Reading...Insurance carriers issue countless policies ranging from car insurance for an individual all the way to insurance for business interruption for large corporations. When policyholders purchase their policies, they typically go through an insurance broker, who may shop for a policy amongst different carriers, or through an insurance agent, who works for a specific carrier. Typically, policyholders find that brokers can be beneficial, as a broker may "shop for the best price" amongst a sea of varied policies. Ultimately, when shopping for a policy, many clients rely on a broker’s expertise and opinion not only to find the best price, but for advice as to the appropriate policy to cover their needs.
Continue Reading...For many commercial policyholders, a binder is issued by the insurance carrier before the actual policy is sent. This binder typically includes information such as the policy number, coverage limits, deductible amounts, and some of the applicable endorsements and exclusions. But what legal weight do these binders carry, if any? The Court of Appeals for the First District of Texas issued a ruling on August 4, 2011, that shed some light on this question.
Continue Reading...The chicken or the egg causality dilemma is commonly stated as “which came first, the chicken or the egg?” To ancient philosophers, the question about the first chicken or egg also evoked questions of how life and the universe began. Similarly, yet minus the philosophical dilemma, in first party property insurance policy interpretation, parties are often confronted with a causality question of which came first, the windstorm event or some other cause?
Continue Reading...Public, independent, and company adjusters in Florida must all follow the Adjuster Code of Ethics. The Code is the rules adjusters must follow when adjusting claims. The Code includes additional, specific rules that that apply to public insurance adjusters in Florida.
Continue Reading...The title to this blog post was the question asked of me yesterday by a Houston insurance defense attorney. The path of Tropical Strom Emily may give you an idea of my answer to that question.
For this installment of Tallahassee Spotlight, we focus on a House member at the center of all property insurance discussions in the Florida Legislature -- Bryan Nelson, a Republican insurance agent from Fort Myers. Like Senator Garrett Richter, who was profiled last week, Representative Nelson chairs his chamber’s committee on insurance – the Insurance & Banking subcommittee. That committee is charged with reviewing all insurance legislation passing through the state House.
Continue Reading...After writing about mold exclusions the past two weeks, I intended to move on to a different topic. However, a discussion I had this past week with an insurance defense attorney convinced me that the mold exclusion deserved one last post.
Continue Reading...Long ago, when you filled out your property insurance application, you probably included some personal information you normally do not share with others: criminal records, social security numbers, past experiences with other insurance companies, etc. Insurance companies routinely ask for this type of information to assess whether or not they want to provide insurance for you. You may think that concealing some information may improve your chances to obtain insurance, and you may be right. But doing so might place you in a bad position if and when you file a claim. And the recent decision in Texas Farm Bureau v. Rogers explains why.
Continue Reading...In Chubb Calls Competitors Cheap And Unfair, I congratulated Chubb for pointing out claims handling problems within the insurance industry. Anybody can advertise in a certain way to make profits. Who knows the truth?
Continue Reading...A few weeks back in Insurer Post-Loss Obligations and Appraisal - The Other Side of Romay, I wrote about compliance with post-loss obligations as preconditions to a demand for appraisal under a property insurance policy in Florida. In 200 Leslie Condo. Ass’n, Inc. v. QBE Ins. Corp., No. 10-61984, 2011 WL 2470344 (S.D. Fla. June 21, 2011), a Florida federal court held that under Florida law, an insurer must investigate to determine whether it disagrees with the insured’s valuation before appraisal can be triggered. Just a few weeks later, in EDM Office Services, Inc. v. Hartford Lloyds Ins. Co., No. 10-3754, 2011 WL 2619069 (S.D. Tex. July 1, 2011), a Texas federal court held that under Texas law an insurer does not have this same requirement.
Continue Reading...The Bradenton Times recently reported that skyrocketing insurance rates may be the result of a cozy relationship between Florida's legislators, governing officials and the insurance industry. In Which Citizens Are They Working For?, the article concluded:
Continue Reading...Frustrated consumers are baffled by skyrocketing costs across so-called regulated industries that continue to grossly outpace flat wages and wonder how regulators can justify such massive increases for hugely profitable corporations.
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Judging from the campaign disclosures, it is clear that these industries have been supportive of government. It might be time for taxpayers to ask whether government is being too considerate of them, while forgetting who they truly work for.
Next Friday, the California Association of Public Adjusters will celebrate with founder Stan Kaufman, at their bi-monthly luncheon in Simi Valley. But it is Robin Kaufman, Stan’s daughter, who is making headlines. On July 7, the California Insurance Commisioner held a press conference. In the press conference, Insurance Commissioner Dave Jones advised California insureds to be prepared with evacuation plans and an inventory of personal belongings in case a wildfire should erupt. Jones warned that homeowners needed to be extra vigilant and make sure there is defensible space around their homes and property.
Continue Reading...It appears that insurance consumers are about to feel the first results of Senate Bill 408. News outlets are reporting that sinkhole insurance rates will skyrocket if Citizens Property Insurance Corporation rate hikes are approved.
Continue Reading...In many states that have addressed the issue, an insurance company is obligated to pay contractor overhead and profit as part of replacement cost coverage, regardless of whether the insured hires a contractor or pays overhead and profit to a contractor. In Mee v. Safeco Ins. Co. of America, 908 A.2d 344 (Pa. Super. 2006), policyholders brought an action against their insurer for bad faith breach of the insurance contract because the insurer failed to pay overhead and profit related to the insureds’ repair to their house. The insurer refused to issue payment for contractor overhead and profit without proof that the insured had actually hired a contractor. The Superior Court of Pennsylvania held, as a matter of law, that repair and replacement costs include overhead and profit where use of a contractor would be reasonably likely, and that the insured is entitled to payment for those items even if no contractor is used.
Continue Reading...Last week’s post introduced the mold exclusion commonly found in many all-risk policies. While last weeks post focused on a situation where mold damage was excluded, this week I am writing about a case where mold damage was covered, even though the policy at issue had a mold exclusion.
Continue Reading...Insurance contractors who write estimates for insurance companies with which they have close relationships have a conflict of interest. When contractors are not in league with insurers and they are making truly independent estimates they expect to complete without change orders, I find that the estimates are much higher and more liberal than when a contractor does not expect to do the repair job or knows he can write change orders at a later date.
Continue Reading...The statute of limitations issue arises in property insurance disputes from time to time, and was a particularly common issue resulting from the 2004 and 2005 hurricanes in South Florida. If parties disagree on the date the statute of limitations runs under a policy, policyholders may file an action seeking a declaration from a court. The Florida statute of limitations applicable to the 2004 and 2005 hurricanes is sometimes difficult to determine since it begins to run five years from the date of breach of contract by the insurer.
Continue Reading...California is a beautiful state. Unfortunately, it is plagued with many natural disasters. As a result, property insurance is an important and often used product.
Continue Reading...Last week, Julie Patel, of the Sun-Sentinel, continued her investigative reporting into insurance adjuster complaints in Florida. In the article, State seldom cracks down on insurance companies and their adjusters, Patel gives readers an inside look on the discrepancies between complaints against insurance companies and their adjusters and complaints against public insurance adjusters. The complaints discussed in the article were filed online with the Florida Department of Financial Services, which investigates the complaints.
Continue Reading...The Florida Insurance Consumer Advocate represents the public in a wide range of public forums that include health care panels, public hearings, rate filings, National Association of Insurance Commissioners (NAIC) Working Groups, and statutorily appointed boards or task forces. A long term government attorney, Robin Westcott, has been named as Florida's new Insurance Consumer Advocate. The Florida Department of Financial Services noted Ms. Wescott’s experience in a press release when she was named as Executive Director of the Medicaid and Public Assistance Fraud Strike Force:
Continue Reading...Ms. Westcott began her legal career in 1993 with the Florida Department of Insurance, Division of Rehabilitation and Liquidation. Robin served with the department until 2001 when she entered private practice. Robin returned to the public sector in 2002 with the Florida Agency for Workforce Innovation where she served as Assistant General Counsel and Counsel to the Florida Partnership for School Readiness. In 2004, Robin returned to the Office of Insurance Regulation where she is currently serving as the Acting Deputy Commissioner of Property and Casualty.
For this installment of Tallahassee Spotlight, we focus on a Senate member at the center of all property insurance discussions in the Florida Legislature. Senator Richter is the Chairman of the Senate Banking and Insurance Committee. All property insurance legislation must come through his committee at some point. In addition to serving as Chairman, Senator Richter has personally sponsored the most significant property insurance bills over the last few years:
Beginning July 29, 2010, the Crown Fire near Palmdale, California, raged for more than five days, burning brush of approximately 14,000 square acres. Although approximately 2,300 structures were threatened, luckily, only four homes and five outbuildings were completely destroyed by the fire.
Continue Reading...When Lamar Advertising Company suffered damage from Hurricanes Ike and Gustav, it did what any business would do and filed a claim with its insurance company, Liberty Mutual. A significant part of Lamar’s claimed damages were to outdoor advertising signs, or billboards, that were scattered throughout the country. While Liberty Mutual admitted that losses from Hurricanes Ike and Gustav were covered under the policy, Liberty Mutual denied Lamar’s claim for billboard damage on the basis that the billboards were located at “unscheduled locations” that had not been properly reported to the insurance company. Just this month a federal court in Louisiana agreed with Liberty Mutual in Lamar Adver. Co. v. Liberty Mut. Fire Ins. Co., No. 10-620, 2011 WL 2648483 (M.D. La. July 6, 2011).
Continue Reading...Next month, Stan Kaufman will be honored for his hard work and dedication as the founding public insurance adjuster of CAPIA, the California Association of Public Adjusters.
Continue Reading...The National Flood Insurance Program (NFIP) is facing a September 30th deadline. That is the date the temporary extension runs out on the Flood Program. Unless a bill that reauthorizes the program passes, the NFIP could expire. But this week, the House of Representatives passed H.R. 1309 (The Flood Insurance Reform Act) by an overwhelming majority.
Continue Reading...Ed Rust, Jr., State Farm's Chief Executive Officer, must not have liked reading the headlines following a defamation verdict in favor of an Indianapolis restoration contractor that State Farm accused of fraud.
Continue Reading...The past few weeks, I wrote about the evolution of the all-risk policy from some of the earliest fire insurance policies and explained that “all-risk” does not mean all loss. This week I want to focus on one of the common exclusions found within all-risk policies – the mold exclusion.
Continue Reading...When policyholders suffer a property loss and their insurance adjuster confirms coverage for some or all of the loss, many policyholders will hear the following from their adjuster: “We [the insurer] have a Preferred Service Providers list of recommended contractors you can choose from, all of which have been vetted for quality and reliability. You can also choose your own contractor to perform the repair work, however, if you choose a contractor from our Preferred Service Providers list, we [the insurer] will guarantee the work and arrange repairs if it’s not completed properly.”
Continue Reading...Many different people read this blog for many different reasons. I was in Dallas for a deposition involving a Hurricane Ike claim, where my client's public adjuster was being deposed. The opposing attorney, Robert Radcliff, of Langley Weinstein, is a very skilled, well prepared and creative counsel for the insurance company.
Continue Reading...Most people never think about their insurance policy until they are forced to make a claim. Once a claim is filed, insureds may find it is difficult to agree with the insurance company on the scope of and valuation of damages. In many cases, insureds find themselves in a dispute with the insurance company and are unsure how to proceed because of the large disparity between the damages claimed and the depreciation calculations provided by the insurer.
Continue Reading...At last week’s FAPIA conference, the torch passed from President David Beasley to newly elected President Pat Cuccaro. The audience leapt from their chairs to give David Beasley a standing ovation and to salute his work over the past year.
Continue Reading...Almost twelve years ago, Florida’s Third District Court of Appeal published its opinion in U.S. Fid. & Guar. Co. v. Romay, 744 So. 2d 467 (Fla. 3d DCA 1999). As of the writing of this post, Romay has been cited in no less than 44 published court opinions. Most of these cases, like the recent Citizens Prop. Ins. Corp. v. Gutierrez, 59 So. 3d 177 (Fla. 3d DCA 2011), cite the language from Romay which requires that “[t]he insured must comply with all of the policy's post-loss obligations before the appraisal clause is triggered.” Unfortunately, this statement is only half of Romay. This is the half that focuses on the insured’s obligations. There is another side of Romay that focuses on the insurer’s obligations, and although this other side is not often discussed, it recently found its way into a published opinion from the United States District Court for the Southern District of Florida in 200 Leslie Condo. Ass’n, Inc. v. QBE Ins. Corp., No. 10-61984-CIV, 2011 WL 2470344 (S.D. Fla. June 21, 2011).
Continue Reading...Insurance companies spend millions of dollars training and supervising their adjusters. Insurance claims management calls for this type of technical oversight to create "best practices" in claims handling so that "optimal" outcomes are obtained. While I have been critical of many insurer claims handling techniques which promote the "optimal" result -- to unfairly pay less than what is owed under the policy, the public adjusting industry writes little about its "best practices."
Continue Reading...Many insurance companies are doing everything they can to not pay claims. One obvious method is convincing the Florida Legislature to enact laws that limit circumstances under which they must pay a loss.
Continue Reading...There are few issues that resonate with voters in the state of Florida like property insurance. If you’re one of Florida’s eight million policyholders, you know that it is expensive to live in our state – that feeling is reinforced every time you open your property insurance bill. Unfortunately, many of the legislators in Tallahassee don’t understand that feeling – Many spend more time talking to the powerful insurance lobby than they do real Floridians. There are several, however, who consistently refuse to bow to the special interests.
Continue Reading...The past two weeks, I wrote about how all-risk policies developed from the original fire insurance policies. Though I plan to write about the most common exclusions that consumers encounter in all-risk policies, I want to clarify exactly what one can expect from an all risk policy in more general terms.
Continue Reading...In Colorado, actions for common law bad faith require the insured to prove unreasonable denial or delay in payment of a claim and that the insurer knew or recklessly disregarded the unreasonableness of its actions. Colorado’s 2008 prompt payment statute, C.R.S. § 10-3-1115, carves out a standard different from common law bad faith, based only on reasonableness:
Continue Reading...[A]n insurer’s delay or denial was unreasonable if the insurer delayed or denied authorizing payment of a covered benefit without a reasonable basis for that action.
As many of you know, most homeowners insurance policies provide coverage for more than just damage to your home. For example, most policies provide coverage for injuries sustained by guests or strangers as a result of your actions. But let’s say you are injured at your neighbor’s house. Can you sue your neighbor’s insurer? The Texas District Court of Appeals in Corpus Christi recently delivered an informative opinion which detailed when an injured person can sue his neighbor’s insurance carrier.
Continue Reading...The Florida Office of Insurance Regulation “OIR” is required by Florida Statute §624.313 to publish statistics and ratios on the complaints consumers submit against insurance companies. Its primary responsibility is regulation, compliance and enforcement of statutes relating to the business of insurance and the monitoring of industry markets. Florida Statute requires the OIR to annually publish several categories of information about the insurance companies doing business in Florida. When the 2010 report was released in February 2011, the report tabulated data on Consumer Complaints against insurance companies from complaints lodged in 2009 only.
Continue Reading...Another Florida Circuit Court has ruled that the neutral evaluation section of the Florida Sinkhole Statute is unconstitutional. Similar to the Order noted in Sinkhole Neutral Evaluation Unconstitutional, Hillsborough County Circuit Court Judge James Arnold's Opinion found:
Continue Reading...Following massive hail damage losses, the Arizona Department of Insurance issued a statement which reiterates a warning I have given time and again:
Continue Reading...[C]ontractors cannot “negotiate” the settlement of the insurance claim with the insurance company representatives on behalf of the property owner...
Last week, I began a brief history of the all-risk policy. I left off at the point where insurance companies were beginning to add more perils to their policies. Originally, these perils were added by underwriters, many times at the consumer’s request. In an effort to simplify the underwriting process and increase profits insurance companies began packaging perils together.
Continue Reading...Last week I discussed Colorado case law which requires an insurer to replace a hail damaged roof to its pre-loss function, even if such replacement places the insured in a better position than before the loss. See Dupre v. Allstate Ins. Co., 62 P.3d 1024, 1031-32 (Colo. App. 2002). Policyholders may be entitled to payments for substrate or roof deck not directly affected by hail if replacement of substrate or roof deck is required to support the new top layer.
Below are tips to help policyholders obtain sufficient payments from the insurer. The key is to provide sufficient evidence to the adjuster, so that denial of coverage for a portion of or all of the roof system becomes less likely.
Continue Reading...The California landscape has changed dramatically from when I was a child growing up in Southern California. The population boom that California experienced with the dot.com companies (in Northern California) and the extensive building of homes in Southern California have changed the landscape forever. Despite all these changes, I love living in California and have the privilege of practicing law here.
Continue Reading...Do you have to be named on a property insurance policy to enforce it? The answer in Florida is "no," so long as you have an insurable interest in the policy.
Continue Reading...In Late Notice Of The Claim Part 1 -- Contrary to The Popular Belief of Insurance Carriers in Florida, Late Notice Is Not Necessarily An Absolute Coverage Defense, I wrote that the late notice defense is not an absolute coverage defense. In that post, I discussed the test the Florida Supreme Court has applied to late reported claims. When an insured fails to give timely notice of a loss, prejudice to the insurer is presumed. Bankers Ins. Co. v. Macias, 475 So.2d 1216 (Fla. 1985). A court should presume that the insurance company’s investigation into the cause and damages associated with the loss was prejudiced, however, policyholders can rebut that presumption by showing that the insurer was not, in fact, prejudiced by the late notice. Macias, 475 So.2d at 1218.
Continue Reading...Yesterday, Emmett Pierce of Insure.com reported on a topic that affects policyholders and public adjusters nationwide. In Vanishing Act: Your Home Insurance Coverage Is Disappearing, Amy Bach, the executive director United Policyholders, discussed the nationwide trend of insurance companies offering less and charging more. Steven Venook, the president of Florida’s Advocate Claims Services, provided a perspective of what is happening in the field when claims are adjusted and investigated. Venook explained how higher deductibles and policies rampant with exclusions are affecting claims in Florida.
Continue Reading...Throughout my career, I have spent a great deal of time in Tallahassee, working on a broad range of insurance issues. Even with that experience, Tallahassee is a strange place to me. It is also a distant place to most Floridians – both in location and in familiarity. Some of us know the legislators in our own districts sent to represent home interests, but few know anything about the other 158 members who together create the laws which govern us. For most of us, Tallahassee is something we like to passively complain about – the punch line in an all-to-familiar joke.
Continue Reading...The United States and Florida Constitutions give everybody the rights to due process under law and a jury trial. These fundamental rights were important to the founders of this country. Yet, some Florida legislators fail to respect and observe these rights when it comes to making special laws which protect the insurance companies who fill their campaign coffers.
Continue Reading...My post last week touched on an ambiguity that arose out of an all-risk policy, and I realized that the all-risk policy is an interesting and important topic that has not yet been discussed in detail on this blog. Insurance has evolved over time, and the all-risk policy is, perhaps, the evolution that has most benefitted consumers.
Continue Reading...(Note: This Guest Blog is by Erin Kristofco, an attorney with Merlin Law Group in the Denver, Colorado, office).
Home and business property owners who suffered hail damage during Colorado’s hail storms must determine whether their property insurance policy requires the insurer to replace not only the hail damaged surface, but also any substrate, insulation or the structural deck.
Continue Reading...Citizens Property Insurance Corporation was created by the Florida legislature. Generally, Citizens’ goal is to pay claims from funds acquired through insurance premiums and other investments, but sometimes this is not possible. According to Fla. Stat. § 627.351(6), if Citizens’ funds for paying claims are depleted by a hurricane or other catastrophic loss, Citizens may impose surcharges and other assessments on Citizens’ policyholders, as well as other Florida insurance companies and policyholders to make up for deficits in Citizens’ reserves. To help explain its surcharge and assessment powers, Citizens has provided a brief summary of these powers on its website.
Continue Reading...The lodging and resort industry faces a significant exposure to hurricanes. In an article, Preparation for the Hurricane Season Includes Insurance and Risk Reviews, which I wrote for Lodging Hospitality, I noted the following:
Continue Reading...This morning, I spoke to the Destin, Florida, chapter of the Condominium Association Institute about properly reviewing and purchasing insurance coverage. Before speaking, I saw the prettiest white sugar sand beaches on the planet. Destin also has the clearest crystal blue water you can find along the northern Gulf of Mexico.
Continue Reading...Ambiguities in policies often prompt litigation. In Certain Interested Underwriters at Lloyd’s London v. Chabad Lubavitch, No. 4D10-762, (Fla. 4th DCA June 8, 2011) litigation arose over a potential ambiguity in a windstorm exclusion.
Continue Reading...Texas courts have ruled that insurance policies which provide coverage for vandalism, but exclude coverage for theft, also exclude any damage that is “in furtherance of theft.” Practically speaking, if a thief breaks through your interior sheetrock walls to steal the copper wires behind them, a typical insurance policy will exclude coverage completely, even for the damage to your sheetrock walls. Now, if they had been vandals instead, and had just smashed holes in your walls without stealing copper wire, your policy would likely provide coverage. As you can see, the difference is subtle, but very important.
Continue Reading...Time flies. It seems like yesterday when Ray Altieri excitedly met me outside the entrance to the December 1992 National Association of Public Adjusters Mid-Year Meeting. Ray is Italian and very passionate about things that matter to him--usually his family, work and the New York Yankees.
Continue Reading...The Southern District Court of Florida recently addressed the issue of whether a condominium association fraudulently sought to join parties in a lawsuit to destroy diversity jurisdiction in the federal Court. If there was no diversity jurisdiction, the case would have been remanded to the Florida state court, where it was originally filed.
Continue Reading...Early this week, I was sent the following letter from a Florida public adjuster. He contacted me because he reads this blog and knows I am always interested in hearing about trends in the adjustment of claims.
Continue Reading...Last Friday, the Houston Chronicle reported that Texas Governor Rick Perry has added the Texas Windstorm Insurance Association (TWIA) to the agenda of concerns to be addressed at the special legislative session.
Continue Reading...Plaintiffs in agent negligence cases usually seek to recover what they would have received from the insurer had the proper insurance been procured. However, damages in agent negligence cases aren’t always limited to just that.
Continue Reading...The ability to anticipate future events is important. How about this August 2009 prediction I made in More News on the Michael Jackson Event Cancellation Insurance Policy and Claim:
Continue Reading...One of the trends in insurance claims is that some insurance carriers are a lot more willing to litigate potential defenses regardless of the wealth or size of the policyholder. Two decades ago, corporate clients and those of public reputation infrequently needed to resolve insurance matters in courtrooms. That is no longer the case. With $17.5 million at issue, I would not be surprised if the underwriters were considering application defenses as well.
The Florida Commission on Hurricane Loss Projection Methodology (FCHLPM) recently approved catastrophe modeling firm Risk Management Solutions’ new hurricane model. The FCHLPM, an independent body of experts, was created by the Legislature in 1995 to develop standards and review hurricane loss models used in the development of residential property insurance rates and the calculation of probable maximum loss levels. The “experts” include engineers, meteorologists, actuaries, insurance academicians and the insurance consumer advocate. They review hurricane loss models submitted by various modelers.
Continue Reading...Let’s say you’re a bank and you loan a customer money to develop a commercial property. As part of your normal business practices, you require the developer to purchase insurance and list you as a “loss mortgagee,” which means you have a right to the insurance proceeds as an additional insured. Last, assume that the borrower/developer committed some act that would invalidate his rights and benefits under the insurance policy. Does that also affect your rights as the “loss mortgagee?” Well, if the underlying insurance contract was a fire or marine insurance policy, Texas law states that your rights are unaffected by the acts of the borrower/developer.
Continue Reading...“Any fool can criticize, condemn and complain, and most fools do.”
--Benjamin Franklin
I thought of Benjamin Franklin this morning while responding to a comment raised by a public adjuster to recent Florida legislation. A number of comments were posed to Florida Legislative Update for Public Adjusters, and the last was:
Continue Reading...Chip,
One last question.
What is to prevent every insurer in the state bellying up to the Legislature and asking for the same rights and privileges as Citizens?
Is there any talk from other companies?
Also, you say this will be fought in court. Is there a time-frame and who is lining up to challenge the legislation?
When a dispute as to the amount of loss in an insurance claim arises, some insurance policies allow for the dispute to be resolved through appraisal. Appraisal however, is not appropriate when an insurance claim has been outright denied. Sometimes, when an insurance company finds coverage below the policy deductible, it will wrongfully characterize this coverage as a denial in order to avoid appraisal. This is what appears to have happened in Oceania I Condo Ass'n, Inc. v. QBE Ins. Corp., No. 11-20578, 2011 WL 1984483 (S.D. Fla. May 20, 2011), and the insurance company avoided a compelled appraisal by alleging that the policy was void due to fraud.
Continue Reading...Hurricane Season is here, and with the devastating weather that has already ravaged the United States this spring, Florida policyholders are urged to be prepared. The Florida Association of Public Insurance Adjusters’ most recent article reminds policyholders that true preparation requires homeowners and business owners to not only prepare their property and their families, but to also have an action plan in place for after the storm.
Continue Reading...The failure to provide a policyholder with statutory notice of mediation prevents an insurer from enforcing appraisal in Florida. In Universal Property and Casualty Insurance Company v. Colosimo, 2011 WL 2031332 (Fla. 3rd DCA May 25, 2011), the Court noted that insurers have statutory and administrative duties to inform policyholders of the alternative mediation process.
Continue Reading...Insurance agents play an important role in the insurance marketplace. Insurance policies do not provide "peace of mind" if they have gaps in coverage that leave policyholders without benefits following a loss. Accordingly, insurance agents who promise to work and advise insurance customers should be selected over those that promise to obtain "cheap insurance."
Continue Reading...The answer to the title question should be:
"Nobody should trust the government to conclusively determine anything."
The property insurance law news is that a Mississippi Senator has proposed federal legislation that would allow FEMA to determine the amount of wind damage versus flood damage an insured structure sustained when the issue arises. Anita Lee, of the Sun-Herald, reported on how this proposed system would work in Wicker Charts New Course for NFIP Changes:
Continue Reading...The National Oceanographic and Atmospheric Administration would gather hurricane data from public and private sources. FEMA would use the data to apportion losses between wind and flood.
Elevation and construction materials for each property would be included in the assessment.
Any disputes that arose over a wind/water allocation would be resolved by a FEMA-appointed arbitration panel.
Lawsuits are prohibited. However, an insurance company and policyholder could, by agreement, opt out of an assessment.
There have been many discussions recently regarding Governor Scott’s signing of SB 408 into law on May 17, 2011. The bill changed many important aspects of Florida’s property insurance laws. This post will focus on how SB 408 affects hurricane claims in Florida.
Continue Reading...When assisting policyholders with a claim, a thorough review of the policy or policies of insurance that cover the property is absolutely necessary. Having as much information as possible about the insurance company’s coverage and evaluation will aid in determining the future of a claim.
Continue Reading...Odds are that if you forget to pay a premium and your insurance lapses, that is the exact time catastrophe strikes. I have a theory that the more one insures against a catastrophic event, the less likely the event will occur.
Continue Reading...The most significant legislation involving Florida public adjusters is the limitation of fee compensation in Citizens claims. As quoted from Florida Legislative Update for Public Adjusters,
Continue Reading...For any claim filed under any policy of Citizens, a public adjuster may not charge, agree to, or accept any compensation, payment, commission, fee, or other thing of value greater than 10% of the additional amount actually paid over the amount that was originally offered by the corporation for any one claim.
Last week, I wrote about how advertisements can help prove the necessary relationship in an agent negligence case. While establishing the relationship is very important, successful agent negligence cases must go one step further and establish that the agent failed to perform one of the duties required. Collins v. State Farm Ins. Co., 2007 WL 1296240 (E.D. La. Apr. 30, 2007) highlights this issue.
Continue Reading...The first chapter of my Insurance Law textbook from law school was about the history of insurance. It set the stage for the next chapter on the insurable interest, one of the fundamental principles in insurance law. The term “insurable interest” is actually quite self-explanatory. In order to obtain insurance on something, one must have some interest in that thing that could be covered by insurance. Requiring an insurable interest is one way of negating moral hazard. Wikipedia currently defines “moral hazard” as occurring when, “a party insulated from risk behaves differently than it would behave if it were fully exposed to the risk.” To use a cliché, moral hazard could be phrased as having everything to gain and nothing to lose.
Continue Reading...Most children don't grow up dreaming they will be insurance agents or involved in the insurance business. I have read many insurance industry materials that have tried to teach bright and talented collegians that the insurance business is an important, fulfilling and financially rewarding career. Corey Harris forwarded me an article indicating that there are some other perks for those in the insurance industry that are not mentioned in the recruitment materials.
Continue Reading...This week, Claims Journal reported on the 53rd Weather Reconnaissance Squadron. They told the story of the 1944 bet that changed the way we receive severe weather data and warnings.
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Some things just hit emotionally, leaving me wishing they weren't true. I felt this way after learning of Judge Senter's death. I recently wrote about his retirement in ATribute to Hurricane Katrina Judge Senter. It doesn't seem fair that he could not have more fully enjoyed his retirement.
Continue Reading...I spent yesterday in beautiful Des Moines, Iowa, watching and aiding Chip Merlin in a deposition of an insurance agent in an agent negligence case. On a cloudless day that had highs in the low 70’s, I was stuck in a third floor office suite for a nine or ten hour deposition marathon. But the lesson I learned more than made up for missing out on the great weather. Chip has mentioned before that establishing duty is the key to agent negligence cases, and he showed that gathering and using advertisements distributed by an agent or agency can go a long way to do just that.
Continue Reading...Tucked into many of your insurance policies, you will find an appraisal provision which likely provides that if the insured and the insurer cannot agree to the amount of damage, either party can submit the dispute to appraisal. As discussed in my previous posts, appraisal is supposed to provide an inexpensive and efficient manner of resolving insurance disputes. However, even after an appraisal award has been rendered, the underlying dispute is not necessarily extinguished. After an appraisal award has been rendered, either party can attempt to overturn it in court. But what does it take to overturn the appraisal award?
Continue Reading...I saw the most beautiful and most tragic sights from the air yesterday. The space shuttle was clearly visible, like a flying yellow fire torch, above the clouds in the bright morning blue sky. As it came through the cloud cover, Endeavor was an inspiring sight.
Continue Reading...On May 11, 2011, the Florida Fourth District Court of Appeal released an opinion addressing a policyholder’s claim for prejudgment interest following an appraisal award. Green v. Citizens Property Insurance Corp., 2011 WL 1775731 (Fla. 4th DCA 2011). This blog continues the discussion from my March 2011 post, Recent Third District Court of Appeal Ruling Regarding Entitlement To Prejudgment Interest Following An Appraisal Award In Florida, as well as Chip Merlin’s post from a couple weeks ago, Prejudgment Interest Following A Wrongful Denial.
Continue Reading...The recent tornadoes in Mississippi, Alabama, Georgia and Tennessee caused an unprecedented swath of destruction, and left hundreds of people dead or injured. The tornados completely demolished thousands of homes and damaged thousands of others. In the city of Tuscaloosa alone, there are reports of 200-mph winds which swept homes off their foundations.
Continue Reading...Typically, when I think of a bad faith claim against an insurance company, I think of a lawsuit filed by a policyholder. Bad faith, however, can also be asserted against an insurance company by someone other than a policyholder, in certain circumstances. The Appellate Division of the Supreme Court of New York recently evaluated such a circumstance in the unreported decision in Federal Ins. Co., etc. v. North American Specialty Ins. Co., et al., 2011 NY Slip Op 02724, 2011 WL 1236131 (N.Y.A.D. 1 Dept. April 5, 2011).
Continue Reading...Over the last few weeks, I have written about agent negligence cases. This week, I will continue, looking at a New York decision, Lewiarz v. Travco Ins. Co., 2011 NY Slip OP 002094, N.Y. Sup., App. Div., 3rd Dept.; 2011 N.Y. App. Div. LEXIS 2069 ( March 24, 2011). Lewiarz tells the story of insureds who nearly ran into a statute of limitations problem.
Continue Reading...The Windstorm Insurance Network® held its regional symposium in Atlanta yesterday. I was the moderator of a panel on layered insurance programs. My panel included Harvey Goodman, of Adjusters International and Goodman, Gable and Gould, John Intondi of AXIS and Matt Litsky from Phelps Dunbar. These are some very prominent and experienced professionals. After going over a working breakfast review with them, I felt confident about our presentation despite the dryness of a very complex insurance coverage topic.
Continue Reading...The Texas Supreme Court displayed its strong preference for appraisal this past Friday, May 6, 2011. In In re Universal Underwriters of Texas Ins. Co., No. 10-0238 (Tex. May 6, 2011), the Court stated what a party must show to successfully argue that another has waived its right to appraisal.
Continue Reading...Last week, in Florida District Court of Appeal Says “Gamesmanship” By Insurance Counsel Warrants a New Trial, Shaun Marker wrote about insurance counsel who found themselves in hot water after making improper legal arguments in court during a hurricane insurance claim trial. This week I continue in that vein with another recent case in which State Farm counsel faced a strong rebuke from a Louisiana federal court after making misleading legal arguments to the court in a separate hurricane insurance case.
Continue Reading...New York policyholders, Thomas Woodhams and Charlene Connors, filed a claim for replacement cost damages arising out of a fire loss, but Allstate refused to pay the replacement figures. The policyholders brought suit, but the case was dismissed. Now on appeal, United Policyholders filed an amicus curiae brief on behalf of the insureds.
Continue Reading...Last week, a very able insurance defense attorney from Florida's panhandle, Robert Palmer, brought Citizens Prop. Ins. Corp. v. Mallett, 7 So3d 552 (Fla. 3d DCA 2009), which involved prejudgment interest, to my attention. This case is not favorable to policyholders, especially in Northern Florida, and challenges a longstanding case, Independent Fire Ins. Co. v. Lugassy, which provides for prejudgment interest following denial.
Continue Reading...Over the past several weeks, I have written about agent negligence cases in various jurisdictions. Chip Merlin touched on the subject as well in his recent post, Establishing Duty is the Key to Agent Negligence Case. Because establishing the duty is so important, I want to take a look at another case that illustrates an insured’s failure to meet their burden.
Continue Reading...Most – if not all -- insurance policies contain a cooperation provision stating that a policyholder must cooperate when making an insurance claim. I have often found that insurance companies like to argue that they cannot properly evaluate the damages because a policyholder has violated the policy by not cooperating during the investigation. In fact, I am currently responding to that very claim in a case where the policyholder has allowed the carrier access to its property more than 50 times! So that got me thinking, under Texas law, what does it mean to cooperate with respect to insurance claim investigations?
Continue Reading...Law in its basic definition is a system of rules and ethical guidelines, usually enforced through a set of institutions. It shapes various facets of society in numerous ways and serves as a social mediator of relations between people and corporate entities. So what happens when one party to a transaction does not uphold their end of the bargain? What happens when the party seeking to pull the rug out from the other is counsel for an insurance company during litigation involving a hurricane claim? You get a scathing opinion like the one last week in Central Square Tarragon, LLC v. Great Divide Ins. Co., No. 4D09-4795, 2011 WL 1563136 (Fla. 4th DCA April 27, 2011).
Continue Reading...Another hurricane season is fast approaching, but, before the storms start brewing, one developer is looking to get a glimpse at what happens when the storms roll in. Darrell Jones has spent years developing a video-recording system that he hopes will withstand a hurricane and capture video images of a hurricane’s wrath. Jones’ goal is to preserve footage taken during the hurricane to help evaluate the most important question in hurricane property damage cases: was the damage caused by wind or flood?
Continue Reading...The recent rash of tornado catastrophes across the country has left a path of obvious destruction. This is an example of the obvious damage:
Recently, I wrote about insurance agent’s duties in various states. This week, I will stay with the same topic, but move to another jurisdiction – Louisiana.
Continue Reading...It is a little known fact that many – if not all –homeowner’s insurance policies include provisions requiring the policyholder to comply with certain conditions prior to filing suit against the carrier. These requirements typically include submitting documents, submitting proof of other insurance, making your damaged property available for inspection, and submitting to an examination under oath.
Continue Reading...The title to the post may seem rather absurd, but raising insurance rates and mandating less coverage is exactly what Florida's legislators are doing with currently proposed laws. It is not escaping media covering business issues, as shown by Robert Trigaux, of the St. Petersburg Times, in “As state leaders push for higher rates, property insurers enjoy robust year.” In the article he noted:
Continue Reading...When an insurance company wrongfully denies a claim for damages, the injured may bring a lawsuit against the insurance company and seek the determination of a judge or jury that the insurance company should have compensated the insured for the injury. Sometimes an insurance company will admit liability, but will estimate the amount of damages at a sum less than the insured believes it should be. These situations may also give rise to a lawsuit. In these latter situations, the amount the judge or jury will decide is owed to the insured will often depend on the credibility of witnesses. A recent decision from the United States Court of Appeals for the Fifth Circuit, French v. Allstate Indem. Co., No. 09-30209, 2011 WL 1228281 (5th Cir. Apr. 4, 2011), illustrates the importance of the credibility of witnesses.
Continue Reading...Paige St. John reported on another blockbuster insurance story over the weekend in Gov. Scott Quietly Trying to Kill Citizens Insurance. After obtaining internal government documents and emails, St. John reported:
Continue Reading...Gov. Rick Scott has secretly pushed to kill Citizens Property Insurance before his first term ends...
In a February meeting with the industry lobbyists writing bills for the upcoming legislative session, documents show Gov. Scott's top staff sought to force the 1.3 million property owners who now have a policy from the state-run carrier back into the private market, "phasing out Citizens completely."
...The gap would force many Florida property owners to turn to the unregulated surplus lines market, where rates are unchecked and policies are not backed by a state guarantee fund.
The Associated Press reported that more than 60 tornados ripped through the South last Saturday. The violent weather started last Thursday in Oklahoma and took lives in Arkansas, Alabama, Mississippi, North Carolina, and Virginia. The storms are being called one of the largest single-system tornado outbreaks in United States history, and there were confirmed tornadoes across at least 14 states.
Continue Reading...Insurance companies that engage in unfair claims practices are always concerned that somebody may “blow the whistle” and tell of dirty claims secrets designed to add profits at the policyholder’s loss. A new website, WikiClaimLeaks, is designed to do provide a safe forum for disclosure by insurance company whistleblowers about those outrageous claims practices.
Continue Reading...Over the course of two years, Sarasota Herald-Tribune reporter Paige St. John meticulously examined Florida's property insurers, compiling mountains of data by digging into financial records and chasing industry executives to far away places like Bermuda and Monte Carlo. St. John’s work exposed Florida insurers’ clandestine web of offshore accounts and shell corporations, which allow them to hide massive profits while leaving Floridians exposed to substantial risk.
Continue Reading...The Texas Association of Public Insurance Adjusters (TAPIA) is holding their Spring Conference tomorrow in Houston. This is a chance for all Texas public adjusters to come together and have a good time while learning from others in the profession and earning four hours of continuing education.
Continue Reading...Florida needs a hero. In the midst of a crushing national recession, State Farm Florida, the state’s largest property insurer, has received permission to raise its rates by an average of 18%.
Continue Reading...Currently, many people may be focused on Spring-break vacations and thinking about the start of summer being right around the corner. There are some experts who are focused on another thing -- predicting Hurricane activity for the 2011 Hurricane season. The official start of the hurricane season is June 1st in the Atlantic Basin. This is just over six weeks away and the 2011 Hurricane predictions are in from the Colorado State University forecast team. While they slightly reduced their prediction from the one issued in December 2010, the forecast team is calling for an active season for 2011.
Continue Reading...The CEO and President of Occupational Athletics, Inc., Mark Everest, has announced that public adjuster safety and wellness will be the topic for his new book and audio production. Everest, in conjunction with Occupational Athletes, Inc., is developing an interactive daily system that will help public adjusters gain the knowledge and tools necessary to lead happier, more productive, and safer lives. Occupational Athletes, Inc., has provided systems for other occupations to help individuals stay safe. Everest explained that the new system for public adjusters will be an integrated lifestyle management system that will center on the safety of insurance claims adjusting and help provide a plan for keeping mentally and physically well for the long run.
Continue Reading...My post on Tuesday, Establishing Duty is the Key to Agent Negligence Case, was inspired by an insurance agent negligence case I am involved in out of Ft. Smith, Arkansas. I have the pleasure of representing a hotel management company and owners of a hotel resort with a claim against their former insurance agent. The insurance agent is from Iowa. While researching for a follow-up to that post, I came across articles written by an attorney who represents insurance agents and brokers in errors and omission cases. Surprisingly, our thoughts are similar.
Continue Reading...Dennis Wall is a veteran commentator on various claims practice issues and on advice to avoid bad faith accusations. In Hurricane Report: Acting in Good Faith,I found his point regarding what every insurance company should do when faced with partial payment situations following catastrophes to be dead-on:
Continue Reading...The clear lesson from these recently enacted and revised state laws is this: Good faith claim handling -- particularly of claims for policy benefits and proceeds in the aftermath of a hurricane or another catastrophe -- requires prompt payment for any part of a claim that is reasonably covered.
What constitutes "prompt" payment? It may vary from place to place, depending upon the local law, but the same concept still holds true. A claim should be paid within either a reasonable amount of time or within a specific time period dictated by local laws -- usually 30 days -- of that portion of any claim that is reasonably proven as covered by the proof-of-loss statements. (emphasis added)
In the insurance claims environment, there is a picture I have used in a presentation, Why Can't We All Just Get Along? to show how opposing individuals often react to each other:
In what is being called the second largest land buyout in U.S. history, Galveston County has already bought out over 300 properties, and it hopes to buy 300 more by the end of the year. According to the video below, Galveston County has already spent over $100,000,000 to purchase properties, and Galveston County used FEMA. money to do it.
Continue Reading...Insurance agents provide extraordinarily important services to policyholders. Without the service they provide, consumers would have a difficult time finding the proper coverage at the best available price. Insurance policies are complex, and insurance agents explain the coverages available and why consumers need certain products, so customers can make informed choices and purchase the insurance products that best fit their needs. An agent’s skill, knowledge, advice and service are often overlooked by customers who focus on price alone.
Continue Reading...A couple of weeks ago, in Choose Your Hurricane Protection and Installers Wisely, I discussed the importance of proper hurricane preparation and mitigation when choosing window protection and installers. Hurricane window coverings help to protect your property during a hurricane, and can also help protect your wallet during quiet times because many property insurers offer significant discounts for hurricane mitigation.
Continue Reading...Slabbed brought to my attention that U.S. District Judge Senter was retiring in Federal Judge L.T. Senter is Retiring. Ex Rel Rigsby to be Transfered to Another Judge. An unsung hero in the Katrina litigation, Sun-Herald investigative reporter Anita Lee, broke the story of Judge Senter's retirement in U.S. District Judge Retiring and provided a brief biography of his legal career:
Continue Reading...Senter, a University of Mississippi Law School graduate, served as a circuit judge before he was appointed to the federal bench by President Jimmy Carter in 1979.
He worked from 1980 to 1982 as a federal judge in Mississippi’s Northern District, then as the district’s chief judge from 1982 to 1998. He took senior status in 1998, and began traveling to the Coast in 2000 to help out with the caseload.
He moved to the Coast in 2002. After Katrina hit, he agreed to take on the insurance cases with the assistance of U.S. Magistrate Judge Robert H. Walker. Other judges had to recuse themselves from the cases because their homes suffered hurricane damage.
Based out of Chicago since 1916, Carter J. Auslander and Associates is a licensed and credentialed public adjusting firm. This family owned business takes great pride in the four generations of claims processing skill and expertise. Mr. Carter J. Auslander began his work at Hoffberg, Spak & Associates in 1980. The firm later became known as Theodore Spak & Associates, and is now known as Carter J. Auslander and Associates. Using extra care and dedication, Carter and his son, Russ Auslander, have helped policyholders throughout the United States with various types of losses.
Carter Auslander paid great attention to detail and thoroughly investigated the damage to adjust the Hurricane Katrina damage at the historic Latrobe building.
Continue Reading...As reported in Wind® Regional Symposium in Atlanta May 10, 2011, the Windstorm Insurance Network® is sponsoring a Regional Symposium in Georgia regarding windstorm claims, Given the recent tornados and severe windstorm destruction, this conference is extraordinarily timely for adjusters who are addressing these issues.
Continue Reading...Adjuster Lisa sent me a video from The Incredibles which demonstrates a far too common occurrence at some insurance companies:
Continue Reading...Most policyholders understand that if their insured property suffers damage as a result of a peril covered under their insurance policy, their insurance carrier will pay for that damage. Simple, right? Well, if it was really that simple, I probably wouldn’t be writing this post. Interestingly, there are various theories regarding what “triggers” insurance coverage. In Texas, several theories exist, including the manifestation trigger, the exposure trigger, the continuous trigger, and the injury-in-fact trigger. Today, I will discuss the manifestation trigger.
Continue Reading...Last week, my post discussed Chinese Drywall litigation specific to policyholders seeking coverage for their damages under residential policies of insurance. This week, I continue to discuss the case of Walker v. Teachers Insurance Company, which is currently pending in the Thirteenth Judicial Circuit, Hillsborough County, Florida, Civil Trial Division. Most recently, Judge Robert Foster granted the Plaintiffs’ Motion for Partial Summary Judgment for Coverage under the insurance policy.
Continue Reading...Last week, Tom Hanks and his wife, Rita Wilson, filed suit against their long time insurance broker. The complaint, filed in the Superior Court for the County of Los Angeles, contains ten claims, including professional negligence, breach of fiduciary duty, fraud, conversion, and unjust enrichment.
Continue Reading...The Atlantic hurricane season is fast approaching, and now is a great time to start preparing. One great way to protect your property is with hurricane shutters. Shutters go over windows and other openings in a building to keep out flying debris, protect windows from breaking, and help keep building air pressure stable during a hurricane.
Continue Reading...This is part-one of a two-part series that will discuss the recent ruling in the case of Walker v. Teachers Insurance Company.
Continue Reading...Dr. Robert Hartwig and the Insurance Information Institute (III) do an excellent job providing timely information regarding insurance topics. A recent story on insurance coverage for nuclear accidents is an example. As a result of the current catastrophe in Japan, I have been asked by a number of individuals about property insurance coverage in the event of radiation damage. The III answers the question in "Insurance Coverage for Nuclear Accidents."
Continue Reading...Believe it or not, the official start of the hurricane season in the Atlantic basin is less than three months away. Now is a critical time for policyholders to review their policies with their agents to verify their coverage for flood, particularly if the property is located in a flood zone. Those in the Gulf Coast know all too well the vulnerability of coastal areas to hurricane storm surges. According to Jamie Rhome, leader of the National Hurricane Center’s storm surge unit, there are maps that measure regions of vulnerability with the question: “What is the worst-case potential for flooding possible due to a certain category of storm for this region?” These maps remind the public of the risk of living in coastal areas prone to storm surge.
Continue Reading...(Michelle Claverol will be back next week with her regular post on Business Interruption Claims. She is currently volunteering on a medical mission to Peru, and is not blogging).
Last week I wrote about an agent negligence case that highlighted the importance of carefully reading everything you sign. Continuing with that theme, is a Tennessee case dealing with a “failure to procure” claim.
Continue Reading...If you are interested in setting yourself apart from the crowd and showing carrier representatives you subscribe to the highest ethical standards, you should consider going the extra mile and earning the CPCU designation.
Continue Reading...In the category of fact is stranger than fiction, the following newspaper article about human nature and the concept of retaliation intrigued me:
Cop Blows Whistle on Insurance Agent
By Ryan AbbottJACKSBORO, Tenn. (CN) - A police officer sued Tennessee Farmers Insurance Co., claiming its agent doubled the premiums on his homeowner's policy to retaliate for the cop's having given him a speeding ticket.
Ricky Ford, a patrol sergeant for the LaFollette Police Department, sued Farmers and its agent James Daniel Arnold in Campbell County Court.
Ford ticketed Arnold for going 60 in a 40 mph zone, and Arnold "admitted this violation and thereafter paid a fine for speeding," the complaint states.
Ford says that after this, "the defendants sought to cause economic damages to the plaintiff by threatening to discontinue his homeowners insurance coverage, amending his homeowners coverage, which he had had for nearly 11 years, and thereafter doubling the plaintiff's insurance premiums, all for which the defendants sought to retaliate against the plaintiff for having performed his public duty functions and to otherwise cause serious economic consequences to the plaintiff."
Ford claims that the defendants willfully violated state law by retaliating against him for doing his public duty.
Ford seeks $75,000 in compensatory damages and $225,000 in punitive damages, for unfair trade and interference with contract.
He is represented by David Dunaway, of LaFollette and Knoxville.
(Click Here to see the Complaint)
Continue Reading...Myths and rumors in the property adjusting community are puzzling to me. As the current President of the Windstorm Insurance Network®, I was copied on an internet post that wrongly indicated that the Windstorm Insurance Conference® had attendance by public insurance adjusters that outnumbered the attendance of insurance adjusters by a four to one margin. The statement was ignorant and completely wrong.
Continue Reading...Public adjusters should adjust first party claims and not third party liability claims. To do otherwise is the practice of law. I am warning public adjusters about this topic because of an email I received:
Continue Reading...Chip, good morning. we need your input on Public Adjusters doing 3rd party claims. In several of your presentations I have heard, Public Adjusters are not allowed to do 3rd party claims. Other FAPIA members said the contrary. Please clarify. Please see the string of emails below in chronological order from the most recent to the latest. Thank you.
Los Angles will be the location for NAPIA/CAPIA insurance West Coast Seminar. NAPIA, the National Association of Public Adjusters, has teamed up with the California Association of Public Insurance Adjusters to provide this one day seminar to public adjusters on March 23, 2011, at the Marina del Rey Hotel. This seminar promises to be filled with practical and helpful educational presentations including:
I have received a number of emails regarding the tragic tsunami and earthquake that occurred this morning off the coast of Japan. Most have been questions regarding insurance coverage for potential consequences in Hawaii and on the west coast.
Continue Reading...Recently, I discussed a case dealing with insurance agent duties in California. In an effort to bring the discussion closer to home, I will discuss a recent Florida decision. In Mitleider v. Brier Grieves Agency, Inc., No. 4D09-3362, --- So. 3d ----, (Fla. 4th DCA February 16, 2011), Corey Mitleider brought suit against his insurance company and insurance agent for negligence, negligent misrepresentation, and vicarious liability. The problem arose because Mitleider did not purchase uninsured motorist coverage when purchasing his automobile insurance. Mitleider claimed he relied on the advice of his insurance agent, who told him that uninsured motorist coverage wasn’t necessary to be fully covered.
Continue Reading...Florida’s Third District Court of Appeal just released an opinion related to a policyholder’s claim for prejudgment interest after an appraisal award. In Alberto Jugo v. American Security Insurance Company, No. 3D09-3246 (Fla. 3d DCA 2011), the Third District held that a policyholder was not entitled to prejudgment interest on the supplemental amount of the appraisal award from the date of loss, despite the insurer’s denial of the “supplemental” claim.
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"Chipper, how have you been?" and "Chipper, we need to get together with Ira and play some golf" were two phrases I recalled when I learned of Bruce Swerling's death last week. Harvey Goodman was on the other end of a late Friday afternoon phone call concerning a coverage issue, and he told me he just left Bruce's funeral. I was shocked and saddened. I told Harvey I was more interested in a drink and remembering a person I enjoyed both personally and professionally.
Bruce Swerling was a gentleman. He carried himself with dignity and as a true professional, especially when it came to business interruption and extras expense claims. Whenever he was in the audience during a speech, Bruce would always invite interesting debate. It was obvious that he was one of the best at his profession. His peers recognized this as well.
The Texas Association of Public Insurance Adjusters (TAPIA) will be holding their Annual Conference in Houston on April 21, 2011. I encourage all Texas public adjusters to attend.
Continue Reading...Julie Patel, of the Sun-Sentinel, does a fantastic job reporting on insurance issues. Her latest piece on sinkholes, Sinkhole Claims Push up Insurance Premiums in Florida, suggests that the root cause of the problem is the geology underneath Florida structures. She reported:
Continue Reading...As an attorney representing policyholders in Texas, it should come as no surprise that I often disagree with the Texas courts’ rulings. However, sometimes the Texas courts get it right. One clear example is the manner in which Texas courts construe ambiguous provisions in insurance policies. On this issue, the courts have been very clear: insurance policy ambiguities are construed in favor of the policyholder.
Continue Reading...A couple of weeks ago, Shaun Marker wrote about a recent insurance appraisal decision out of Florida’s Third District Court of Appeal, Citizens Prop. Ins. Corp. v. Mango Hill Condo. Ass’n 12, Inc., No. 3D10-2014, 2011 WL 613518 (Fla. 3d DCA Feb. 9, 2011). Shaun’s post is over on the Condominium Insurance Law Blog, where he discusses the facts of the case and provides an excellent legal analysis of the holding.
Continue Reading...The NYDailyNews.com reported homeowners are still waiting to get paid for roof claims caused by a tornado that ripped through Brooklyn, New York. It has been more than five months since the tornado caused the destruction.
Continue Reading...Insurance agents are some of the nicest people I have ever met. They are often trained in salesmanship and influence. Many participate in community activities for professional networking reasons. To effectively sell insurance, you better be a swell person and know a lot of people.
Continue Reading...A recent California decision, Koch v. Markel Insurance Co., 2011 WL 208365 (Cal. Ct. App., 2d Dist., Div. 7 Jan. 25, 2011), highlights the duties insurance agents owe to an insured in California. The case involved a new auto repair shop owner, Blake Koch, who sought to obtain certain insurance from an employee of the Bradford Agency, who was also an agent of Markel Insurance Company.
Continue Reading...This is a common question that policyholders and their representatives have once an insurer demands a recorded statement in the claims process. The short answer to the question is, it depends. As is often the case, there is not a bright line rule regarding whether a policyholder is obligated to give a recorded statement to their insurer once demanded. Some insurers have amended the typical policy forms by endorsement and a review of the specific forms at issue is necessary before giving a certain response.
Continue Reading...For public insurance adjusters, safety should be a top concern when inspecting a loss.
I wanted to remind public adjusters how important it is to be aware of your personal safety when adjusting losses. You are often put in dangerous situations, and it is human nature to take safety and security for granted. Sometimes it takes a close-call to remind us that we need to be more cautious, careful, and calculated in our actions.
Perry Cone is an attorney with the Gray Robinson law firm. Previously, he was General Counsel to Citizens Property Insurance Corporation. He writes an interesting blog regarding insurance at TallyInsLaw.com.
Continue Reading...The Florida legislature and Office of Insurance Regulation should learn from insurance history, recent warnings, and common sense when it comes to building a stable Florida insurance marketplace. Former Florida Insurance Consumer Advocate, and now lawyer in the Merlin Law Group, Sean Shaw highlighted a fundamental flaw in Florida's insurance marketplace in a recent St. Petersburg Times Letter to the Editor. He noted:
Continue Reading...In reality, the lion's share of the blame for the industry's solvency issues falls squarely on its own shoulders. During the current five-year storm-free stretch, the state's insurers have neglected to build their capital reserves to levels that would enable them to withstand the next major disaster. Instead, insurers send as much as 86 cents on the premium dollar overseas to reinsurers who are not obligated to conform to the regulations that act to protect consumers. Florida's undercapitalized and overleveraged insurance companies are essentially slaves to these offshore reinsurers, who often charge five times the actuarial risk of loss simply because they can.
There is another dirty secret that the state's insurance companies don't want you to know. Despite all the self-pity, many Florida companies actually make sizable profits. Nearly every private insurer in the state has divided itself into several separate subsidiary companies that swap money in a veritable shell game to escape regulation.
According reporting by Paige St. John, between 2006 and 2008 Florida property insurers gave out more than $149 million in executive bonuses, perks and dividends to their holding companies while increasing Floridians' rates by an average of 35 percent over the same period.
On January 4, 2011, I discussed the case of Nat’l Fire Ins. Co. of Pittsburgh, PA v. Valero Energy Corp., 777 S.W.2d 501 (Tex.App.—Corpus Christi 1989, writ denied). Nat’l Fire taught us that an otherwise excluded peril could be covered under an insurance policy if the policyholder could demonstrate that the excluded peril itself was caused by a covered peril. However, even if the policyholder can demonstrate that an excluded peril was caused by a covered peril, the policyholder still has work to do: s/he must also show the extent of the damage attributable to the covered peril. But what does that mean? The Texas First District Court of Appeals dealt with this very issue in Travelers Personal Sec. Ins. Co. v. McClelland, 189 S.W.3d 846 (Tex.App.—Houston [1st Dist.] 2006, no pet.).
Continue Reading...“Federal courts are courts of limited subject matter jurisdiction,” is the mantra my Civil Procedure professor impressed upon me on the first day of class. In a nutshell, federal courts won’t hear every case, but only cases that they have jurisdiction to hear. One way to get into federal court is with diversity of citizenship. 28 USC § 1332 grants federal courts jurisdiction to hear cases between parties from different states as long as the amount in controversy exceeds $75,000. If a lawsuit is brought in state court against an out of state defendant, and the amount in controversy is over $75,000, the out of state defendant can have the case removed to federal court. If for some reason the removal was improper, the plaintiff can seek to have the case remanded back to the state court. Over the past few weeks, several hurricane related property insurance lawsuit decisions discussing removal have been published.
Continue Reading...Replacement cost, actual cash value, and total loss valuation payment definitions, procedures and issues are currently being debated before the Florida legislature. In Draconian Property Insurance Bill Filed in Florida Senate, I explained that the pending legislation was against policyholder interests. Our firm has other posts on this debate:
Continue Reading...One thing is for certain in these changing times, social media is a force that cannot be ignored. In February 2010, Facebook reported that over 175 million users logged in on a daily basis. Social media is fast, user friendly and allows us to mix business and pleasure. A recent post on Sterling McKinley’s blog, “Social Media is Not Going Anywhere,” states that social media is changing the way people communicate. According to Sterling McKinley, Facebook and Twitter mimic real life and are wildly popular because they appeal to the masses.
Continue Reading...Many homeowners, like me, purchase some sort of insurance for their property: coverage for wind/hurricane, homeowner’s and flood. Typically, a homeowner will expect that a flood insurance policy provides coverage for a flood, a wind/hurricane policy provides coverage for a hurricane or other wind damage, and a homeowner’s policy provides coverage for damages resulting from other “sudden” losses or “accidents” such as fire, theft and water damage resulting from something like a burst pipe. It would seem to logically follow, then, that if a homeowner purchases an “All Risk” policy, then all of the risks that a homeowner could insure against would be covered by that policy. That, however, is not usually the case.
Continue Reading...In case you didn’t know, your insurance policy is actually a contract between you and your insurer. If there is a breach of contract, Texas law grants citizens four (4) years after the breach to file a lawsuit. So if you want to sue someone for breach of contract, you have 4 years after the breach to do so. If you fail to file suit within those 4 years, you are out of luck. But that’s not all. Texas courts have stated that parties can agree to a shorter limitations period, as long as that period is not less than two (2) years. With respect to insurance claims, which party benefits the most from a shorter limitations period? That’s right, insurance companies.
Continue Reading...An “all-risk” insurance policy provides coverage for all fortuitous losses, less enumerated exclusions.Imperial Ins. Co. v. Ellington, 498 S.W. 2d 368, 371 (Tex. App.- San Antonio 1973, writ denied). Generally under an all-risk policy, the insured need only prove a fortuitous event resulted in a loss. Id. at 375. If the all-risk policy excludes coverage, the insurer must prove that the loss is excluded. Texas Ins. Code § 554.002.
Continue Reading...A proposal for settlement in Florida can be filed by a party to a lawsuit pursuant to Florida Statute §768.79. The proposal for settlement, or offer of judgment as it is sometimes called, is different than an informal settlement offer during negotiations. The proposal for settlement can potentially bring consequences to the offeree if it is not accepted. The proposal for settlement is utilized often in litigation by insurers, notably in Hurricane Wilma cases. I wanted to discuss some of the concerns policyholders may have when an insurer files a proposal for settlement in their case.
Continue Reading...Public adjusting firm, Golub & Associates, was successful in its action against State Farm for payment of fees earned in connection with a fire loss claim. Here is a short recitation of the facts:
Continue Reading...The Windstorm Insurance Network® promotes itself as "The Educational Association for Windstorm Claims Industry Professionals."® It will be hosting a regional symposium in Atlanta on May 10, 2011, at the Emory Conference Center.
Continue Reading...In less than a week, the Senate Banking and Insurance committee will vote on SB 408. If the session doesn’t start until March, what type of “vote” is taking place? Although the 2011 Session of the Florida Legislature does not begin until March 8, 2011, various committees of the House and Senate meet throughout the year. For a bill to become law, it must be voted on by the full legislature (usually during Session). However, before the full legislature can vote on a bill, if must be “heard in committee.” Thus, a bill must be heard by multiple committees in both the Senate and House. Then, the full Senate and House will vote on a bill before it can go to the governor for signature.
Continue Reading...In Hartford Lloyd’s Insurance Co. v. Teachworth, 898 F.2d 1058 (5th Cir. 1990), the insured made claims for hurricane and freeze damage under his Texas insurance policy issued by Hartford Lloyd’s. When the insured and Hartford were unable to agree on the damage, the insured invoked the appraisal provision of the policy. The appraiser for the insured estimated the damages at approximately $4,154,681, while Hartford’s appraiser arrived at a figure of about $1,419,951. Pursuant to the policy, the appraisers submitted their differences to an umpire appointed by a Galveston County judge, and the umpire agreed in large part with insured’s appraiser. The appraisal panel rendered a written appraisal award in the amount of $3,770,043.
Continue Reading...Megyn Kelly, of FoxNews interviewed me last Friday. The topic was "Who Will Take the Lead in Deficit Debate." She appropriately raised the important issue whether our political leaders have the courage to change spending and tax policy to prevent government bankruptcy. Here is the Interview:
Continue Reading...My past few hurricane blog posts have been discussions of the issues raised in the recent Florida state court case of Citizens Property Ins. Corp. v. Ashe, No. 1D09-1546, 2010 WL 4628915 (Fla. 1st DCA Nov. 17, 2010). To refresh your recollection, Ashe was a case in which a homeowner’s property was damaged by a hurricane, the homeowner was paid policy limits by his flood insurer, and a dispute arose as to entitlement to benefits under his wind policy. Another case in that same vein was recently before a Mississippi federal court in Penthouse Owners Assoc., Inc. v. Certain Underwriters at Lloyd's, London, No. 1:07CV568-HSO-RHW, 2011 WL 96514 (S.D. Miss. Jan. 11, 2011).
Continue Reading...Maximizing recovery after a catastrophic loss requires expertise in preparing hospitality business interruption claims, combined with a thorough understanding of the hotel's unique market and operation.
Continue Reading...This week, I attended the Twelfth Annual WINSTORM Insurance Conference in Houston, Texas. This year’s conference was held at the perfect location in Houston- the Hilton Americans. The Tort Trial and Insurance Practice Section of the American Bar was the co-sponsor and continuing education credits were offered to adjusters and attorneys in various states. This is only the second time the Conference was held outside of Florida, but nearly 1000 people registered as attendees and the number of exhibitor booths set a new record.
Continue Reading...I am picking up were I left off last week in my post titled A Wisconsin Policyholder's Success in a Bad Faith Lawsuit Against Safeco, Part III, discussing a favorable bad faith decision against Safeco. My posts over the course of the last few weeks addressed the grounds upon which Safeco denied the Millers’ claim and the analysis applied by the Wisconsin federal Court when finding in favor of the Millers. This will be my second to last post on this decision, and I would like to start discussing the damages that were awarded.
Continue Reading...In a few hours, I will become the President of the Windstorm Insurance Network. The 12th Annual Windstorm Conference has provided some impressions and reminded me of the silent majority of insurance adjusters who go about their jobs providing peace of mind and certainly overpaying parts of claims.
Continue Reading...Florida Senator Mike Fasano is not afraid to talk about the elephant in the room. Yesterday, he called the proposed insurance bill "scary." A blog in the Miami Herald, Fasano: Why debate sinkhole coverage if no one will provide it anymore? reported:
Continue Reading...As many of you know, an insurer has an obligation to deal with its insureds in a fair manner and in good faith. Many insurance policies detail these obligations, leading many to believe that an insurer’s good faith duties arise through the underlying insurance policy. However, as the Texas Supreme Court noted in the case below, the insurer’s duty of good faith and fair dealing does not arise from the underlying contract – i.e. the insurance policy.
Continue Reading...Whether a policyholder’s lawsuit against an insurer was necessary to resolve a first party claims dispute can be an important question for Florida courts in determining an insured right to attorney’s fees pursuant to Florida Statute 627.428. Florida Statute 627.428 is intended to encourage insurers to pay policyholders the claim proceeds they are entitled to without the need for litigation. If a policyholder has to file a lawsuit to recover claim proceeds, then the insurer may be responsible for the policyholder’s attorney’s fees in the litigation. Florida case law has traditionally held that when an insurer pays additional policy proceeds after a lawsuit is filed, the insurer “has, in effect, declined to defend its position in the pending suit. Thus the payment of the claim is, indeed, the functional equivalent of a confession of judgment or a verdict in favor of the insured.” Wollard v. Lloyd’s and Companies of Lloyd’s, 439 So.2d 217 (Fla. 1983).
Continue Reading...A very fine insurance defense attorney, Brian Hunter, made a comment to yesterday’s post, Do Insurance Companies Overpay Claims? with the following observation:
Continue Reading..."Second, not only can claims be overpaid, they can be underpaid...."
Assuming this is true, and it probably is based on the law of averages, how can we have any meaningful data? What is the standard against which a claim is judged over- or underpaid? Is it the proof of loss, or the public adjuster's estimate, or the appraisal award, or something else? Even if we use the most presumably objective of these, i.e., an appraisal umpire's award, as a standard, then a good many claims I have seen resolved in that manner have been simultaneously underpaid by insurers and grossly inflated by the insured and/or public adjuster.
Of course, in most cases, an appraisal award is a legal fiction that may or may not bear a rational relationship to the amount necessary to repair the property; but it is certainly and merely an estimate. Frequently, the umpire's award is an average of two competing estimates. Regrettably, few court-appointed umpires have any specialized training in the construction fields, and many have never written an estimate of their own nor done any kind of construction work. Maybe a better standard is needed.
What we do not have is reliable data in Florida during the past several years comparing claim payments with amounts spent by policyholders to actually accomplish like kind and quality repairs. (If I am wrong, I would love to see a source.) Changing the law to require insurers to pay actual expenditures, and not mere estimates of replacement cost (some honest, some not, all estimates nevertheless), would bring greater certainty to all the parties, I think. Yet this is opposed by the same folks, i.e. public adjusters, bemoaning the lack of accuracy in claim adjustment.
Chances are when you take a look at the photo below, you will remember seeing this imagine after Hurricane Ike. Texas Bolivar Peninsula residents, Warren and Pam Adams, evacuated for Hurricane Ike, and returned to their home the only one standing amid massive devastation. Various news reports featured their property and the Adams residence came to be known as the “Last House Standing.”
A blog, Overpaying Insurance Claims, caught my attention. The premise was described as follows:
Continue Reading...I recently began questioning how much money insurers hand out needlessly because their adjusters don't have enough training or are so overloaded with work that they can't possibly handle all of the files they are assigned due in part to a claim a family member recently made.
A few months back, my sister's dishwasher piping burst, which flooded her finished basement and the kitchen sub floor. She filed a claim and received immediate action because the loss was deemed an "emergency" by her insurance company's claims triage unit. The field adjuster came out, estimated the damage, and made arrangement for repairs under the company's preferred contractor program.
The glitch arose when she decided to replace the floor in the basement bath/laundry room with ceramic tile instead of the linoleum that existed before. Being the most honest person on the face of the earth, she was willing to pay the difference on the upgrade.
That's where the insurance company lost out.
The repairs were made to everyone's satisfaction and the contractor was paid. My sister called the adjuster and the claims office a number of times to ask how much she had to repay. After a number of excuses — waiting for paper work, too many other emergencies, “we'll get back to you,” the adjuster is over booked — she resigned herself to accepting more than she felt entitled to.
As promised, here is a review of Judge Van Nortwick’s dissent in the case of Citizens Property Ins. Corp. v. Ashe, No. 1D09-1546, 2010 WL 4628915 (Fla. 1st DCA Nov. 17, 2010). If you recall, Ashe involved a homeowner’s hurricane claim in which the homeowner had applied to both his flood and wind insurance for benefits. The flood insurer paid policy limits, but a dispute remained as to how much the wind insurer owed, if anything, under the policy and circumstances where the flood insurer had paid policy limits. As discussed in “The Collateral Source Rule,” the Florida First District Court of Appeal held that the collateral source rule would only restrict evidence of the dollar amount of payments that the homeowner received from his flood insurer, but all other evidence of insurance payments would be admissible in the trial court. The First DCA also opined that the better view might be to not apply the collateral source rule in contract actions at all. Judge Van Nortwick concurred in part with the majority opinion, but dissented on the collateral source rule issue.
Continue Reading...Continuing last week’s post, in addition to concerns by homeowners that the carriers aren’t paying the full damages in Fourmile fire claims, additional concerns are being raised about the coverage purchased from various carriers. The silent problem of “Underinsurance” seems to be hurting those in the Fourmile area.
Continue Reading...Senate Bill 408 proposes new Florida insurance laws that harm all policyholders. Florida businesses and homeowners will receive fewer benefits, and insurers will be encouraged to delay, deny and defend claims if this bill becomes law. It takes away a lot of financial peace of mind that insurance currently provides.
Continue Reading...Gene Veno, President of the American Association of Public Insurance Adjusters, forwarded to me a new law governing public adjusters in New Jersey. The primary items of interest in the revised New Jersey statute concern public adjuster solicitation and continuing education.
Continue Reading...Claims Magazine is a publication everybody in the insurance claims business should subscribe to and routinely read. The January issue has an article, Speaking Of: WIND 2011, about the upcoming 12th Annual Windstorm Insurance Conference, to be held in Houston, January 24-27.
Continue Reading...When people think of prompt payment laws, they tend to believe those laws were put in place to punish “bad” insurance companies that needlessly delayed paying claims. However, the Texas Court of Appeals for the Fort Worth District has a different opinion: those laws exist not to punish the insurer, but to ensure that the policyholder gets paid in a timely manner.
Continue Reading...The insured in Hadden v. State Farm Fire & Cas. Co., 37 So. 3d 918 (Fla. 5th DCA 2010), filed a lawsuit on September 18, 2006, for breach of contract against State Farm for property damage sustained from Hurricane Charley in August 2004. Unknown to his lawyer, the insured had already filed a petition to declare bankruptcy in Federal Court on September 12, 2006. He filed the bankruptcy petition pro se, meaning on his own behalf without the assistance of counsel. State Farm raised an affirmative defense of judicial estoppel to the breach of contract case. The Court in Hadden described judicial estoppel as an “equitable doctrine that is used to prevent litigants from taking totally inconsistent positions in separate judicial proceedings.”
Continue Reading...Last September, a devastating fire roared through Boulder County, Colorado. The 7000 acre blaze devastated the area and many properties were damaged or destroyed. One policyholder recently expressed his frustrations with the insurance claim for his fire damage to reporter Dayle Cedars with 7News in Denver. Although spared from losing his home, Joshua Onysko, has not been made whole. Farmers Insurance Company did issue a payment to Onysko, but the amount was insufficient to fix the property. The homeowner hired licensed public adjuster Scott deLuise, of Matrix Business Consulting, to assist with the claim.
Continue Reading...The fix appears to be in for sinkhole losses. The insurance industry and lobby worked hard to set the rhetoric in its favor. Florida's Insurance Commissioner seems to now be more concerned about appeasing the insurance industry to keep his job rather than taking on an industry he used to battle. Many policyholders with property in sinkhole prone areas of Florida will financially be doomed given the scenario painted in the Florida Senate Committee on Banking and Insurance Interim Report, "Issues Relating to Sinkhole Insurance."
Continue Reading...The law of comparative causation under property insurance policies is reasonably settled in Texas. If there is a loss as a result of two concurring perils, one insured and one not, the loss is covered only to the extent it can be traced to the covered peril. However, what happens when a peril which is not covered is caused by a peril which is covered? As the Plaintiffs learned in National Fire Ins. Co. of Pittsburgh, PA v. Valero Energy Corp., 777 S.W.2d 501 (Tex.App.—Corpus Christi 1989, writ denied), there is still no coverage unless the terms of the policy allow coverage where an otherwise excluded peril is itself caused by a covered peril.
Continue Reading...Brenda Cannon Henley has written a delightful book, Winds Over Bolivar, cataloguing the individual and community struggles of those from the Bolivar Peninsula following Hurricane Ike. Ms. Henley asked me to write an introduction to her work:
Continue Reading...When one thinks of hurricane related property damage, the most obvious cause of damage seems to be wind and water. A recent appellate decision from Louisiana dealt with a different kind of hurricane related damage: looting.
Continue Reading...Today is the first day of the year 2011. New laws will soon follow the new year. Insurance regulation will likely be a hot topic in many areas of the country as leaders get together for new sessions. Recently, I had the opportunity to speak with Michael C. Bayer, of North East Adjustment Company, Inc. Mike is the co-chair for the legislative committee of CAPIA, the recently formed Connecticut Association of Public Insurance Adjusters.
Continue Reading...Insurance companies guard claims files more closely than almost anything else. Generally, an insurer claims that the contents of its claim file are protected from disclosure by the work product privilege. While this position has found some support in appellate rulings, many insurers misunderstand these rulings and believe that anything they wish to call part of the claim file does not have to be disclosed to the policyholder.
Continue Reading...The Chinese Drywall coverage litigation involving first party property insurance policies has been discussed in the past. Are Chinese Drywall Problems Covered Under Property Insurance Policies? discussed the complex issues involved and warned that these losses may not be covered. FC&S Says Ensuing Loss Coverage Applies to Chinese Drywall Claims and Chinese Drywall Claims May Be Covered Under Homeowners Policy--Favorable Developments in Louisiana gave hope to the policyholders suffering form this unexpected property loss. Unfortunately, a recent opinion, In re: Chinese Manufactured Drywall: Products Liability Litigation, issued December 16, 2010, did not rule in favor of the first party policyholders.
Continue Reading...Florida public adjusters won a constitutional argument that Florida Statute 626.854(6) wrongly banned all solicitation for 48 hours in violation of the Florida Constitution. The opinion is clear in its finding and conclusion:
Continue Reading...We reject the argument of the Department of Financial Services, appellee, accepted by the trial court, that the statute is ambiguous and, as a result, the agency’s interpretation that the statute constitutionally regulates only the time, place, and manner of commercial solicitation should be accepted. We hold that the statute unambiguously bans all solicitation for 48 hours and that this restriction on commercial speech violates Article I, § 4 of the Florida Constitution under the standards of Central Hudson Gas & Electric Corp. v. Public Service Commission of New York, 447 U.S. 557 (1980).
…
In sum, we are persuaded that the Department has failed to prove that section 626.854(6) is narrowly tailored to meet the state’s objectives. “While a statute regulating commercial speech need not be the least restrictive means of achieving the state’s asserted goal objective, it must be narrowly tailored to achieve the desired objective.” Cronin, 774 So. 2d at 875. The Department has not demonstrated that prohibiting property owners from receiving any information from public adjusters for a period of 48 hours is justified by the possibility that some public adjuster may unduly pressure traumatized victims or otherwise engage in unethical or unprofessional behavior. Nor has the Department demonstrated that the other provisions of section 626.854 and the Rules of Professional Conduct and Ethics governing the Florida Association of Public Insurance Adjusters governing public adjusters are insufficient to regulate unduly coercive or misleading solicitation by public adjusters.”
Fortunately, South Florida was not slammed this past hurricane season as the forcasters predicted. Now, with the holiday season here, the last thing on many policyholders’ minds is the ramifications surrounding hurricane claim settlements and restoring affected property. In my December 13, 2010, post titled Hurricane Law Tip - Document Hurricane Repair Expenditures Even After a Claim Settlement, I wrote about the importance of documenting repairs to property following a hurricane claim resolution. The focus of that blog was directed toward policyholders themselves. However, everyone involved in the first-party property insurance industry can do one thing for the policyholders who may not have the pleasure of reading the hurricane law blog posts. With the New Year approaching, we can make a resolution to discuss with our policyholder clients the importance of making repairs and documenting them after a hurricane claim resolution.
Continue Reading...Fox News had me debate cell phone bans last fall. Transportation Secretary Ray LaHood was calling on Congress to pass a national law banning the use of cell phones in vehicles. Millions of us safely use cell phones in automobiles. Many conduct business, get directions and otherwise use the phone for work efficiency while in our automobiles. Research has never supported the assumption that banning cell phone use in automobiles saves lives or reduces property damage claims.
Continue Reading...I would like to continue the topic of my last few posts addressing the “preferred contractor” or “quality vendor” programs that insurers frequently implement. Generally, these programs consist of a number of vendors, such as electricians, contractors, roofers, etc. that have agreed to provide their services to the insurance company’s insureds in the event of a loss. Those services are typically provided at a discounted rate and are often guaranteed by the insurer. The repairs to an insured’s home after a covered loss by a preferred contractor selected from the insurer’s quality vendor program can play a role in a bad faith case against an insurance company.
Continue Reading...Buy Christopher Boggs’ new book, Property and Casualty Insurance Concepts Simplified: The Ultimate ‘How to’ Insurance Guide for Agents, Brokers, Underwriters and Adjusters. It is a wonderful and practical treatise for anybody in the insurance business. For instance, he starts with a very basic concept—how to read an insurance policy.
Continue Reading...Dan Odess wrote an excellent article, Public Adjusters and Insurers: Time to End the Cold War, in Claims Magazine. His premise was simple and professional:
Continue Reading...What do you get your friendly adjuster for a Christmas stocking stuffer? How about an itunes app called “Claim Denied!” Here is the description:
Continue Reading...It is the time of the year when I reflect on my performance over the past year and set new goals for 2012. I also find myself studying trends in insurance to help anticipate how they may impact my legal practice and clients. While doing this, I came across an excellent study in a comparative law analysis of an insurer's good faith obligations and remedies for the breach of that obligation in Damages for Late Payment and the Insurer’s Duty of Good Faith, published by the Scottish Law Commission earlier this year.
Continue Reading...My last couple of hurricane related posts involved discussions of The Other Insurance Clause and The Total Loss Recovery Rule as discussed in Citizens Property Ins. Corp. v. Ashe, No. 1D09-1546, 2010 WL 4628915 (Fla. 1st DCA Nov. 17, 2010). The last major legal issue that was discussed in Ashe was the evidence of alternate insurance payments.
Continue Reading...In less than one month, the Florida Association of Public Insurance Adjusters (FAPIA) will be kicking off their Winter 2011 Conference at the Gaylord Palms in Orlando, Florida. FAPIA has been going strong for over 17 years now and includes over 500 members who are invited to meet twice a year in Florida. The FAPIA conference includes several networking and social events and a full schedule of continuing education courses for public adjusters.
Continue Reading...I would like to continue addressing the “preferred contractor program” or “quality vendor program” that is implemented by many insurance companies. As discussed in What Role Does an Insurer's "Preferred Contractor Program" Play in a Bad Faith Lawsuit? Part II, some of the reasons insurers might choose to set up such a program is to save money when the approved contractor is used or to exert some sort of control over the type and quality of repairs conducted and materials used. In What Role Does an Insurer's "Preferred Contractor Program" Play in a Bad Faith Lawsuit?, I evaluated a case where the insurer was found not to have any liability in connection with a contractor’s work – a contractor that had been selected from the carrier’s preferred contractor program. A decision from the Arizona Court of Appeals has an interesting opinion on what happens when the Quality Vendor Program does not work as planned.
Continue Reading...Insurance company executives were thrilled that Rick Scott won the Florida Governor's office. I can appreciate that any politician may run on a platform that, upon further reflection, seems absurd or not what they meant. From my impression, many voted for Scott because they were fed up with the status quo. Floridians may be even more upset if they learn that their newly elected governor is supporting a plan which will result in higher property insurance rates and laws that would provide immunity to insurers who treat their customers in bad faith.
Continue Reading...Outcome oriented investigations plague the insurance adjustment process. Outcome oriented techniques arise in number of forms, from limiting the information sought, writing reports with no more than what is called upon, not informing the policyholder of other areas of possible damage, de-selecting those that write reports which provide too much information and lead to greater coverage, and simply trying to form opinions of loss or damage that are not truthful. Insurance adjusters often try to convince me that they do not retain outcome oriented investigators who look for ways to limit their customers' recoveries, it is amazing to me how much additional loss is usually found with a little more honest work.
Continue Reading...From time-to-time, governmental authorities prohibit access to certain areas after a catastrophic event, even though not all the buildings in the area were damaged. For example, after Hurricane Ike passed through the Houston area, Houston officials closed downtown Houston for several days to assess the damage. Another example is the evacuation of New Orleans after Hurricane Katrina. “Civil Authority” coverage protects against losses arising out of orders such as these.
Continue Reading...Randy Goodman, of Goodman-Gable-Gould/Adjusters International, was honored with the National Association of Public Insurance Adjusters' Person of the Year Award at NAPIA's Mid-Year Meeting. Randy served as President of NAPIA in 1998-99. He has remained an active member and is very deserving of the award. Just before receiving the award, he was bragging to me about recruiting two new recent members from Florida after explaining the benefits of NAPIA membership.
Continue Reading...The other day at the NAPIA Conference, Mary Fortson, Vivian Persand and I were discussing an issue of importance for policyholders to be mindful of even after their Hurricane Wilma claims are resolved. Oftentimes, much of the advice offered by lawyers and professionals to policyholders in the property insurance industry concerns what steps need to be taken to help policyholders navigate their way through the intricacies of policy interpretation and coverage. The maze of coverage issues actually continues even after the claim is resolved. If there is another hurricane in the next few years, carriers will be aware of the policyholders who had Hurricane Wilma claims and will likely request documentation reflecting repairs if damage is being claimed to similar areas of property.
Continue Reading...Nationwide Mutual Insurance Company appealed an order from Pennsylvania’s Insurance Commissioner, alleging it did not engage in Unfair or Deceptive Insurance Practices in connection with the cancellation of a residential insurance policy issued to Ms. Darlene Miller. The Court affirmed the decision of the insurance commissioner and found that “the Commissioner properly determined, based on credible evidence, that Nationwide failed to comply with Section 5(a)(9) of the Unfair Insurance Practices Act and the cancellation of Miller's homeowner's policy was ineffective.”
Continue Reading...Frank Artiles commented upon my post, The Initial Political Insurance Views of Public Adjuster Frank Artiles. Since I have been a supporter of Frank and think it is only fair that his response not be buried, I am posting his response here:
Continue Reading...Dear Industry professionals,
Many of the quotes that were attributed to me are incorrect, inaccurate and quite frankly not made by me. I would recommend that if anyone has a question regarding statements or quotes feel free to pick up the phone and call me at 305-305-2110
I believe that we need to get public adjusters, insurance companies, attorneys, bankers and independent adjusters to the table to negotiate a system where insurance companies are profitable, homeowners are protected and we reduce the size of citizens which is a disaster waiting to happen. If you do not agree with me, then we can continue the bitter battle. I truly believe as a business man that there is room for negotiations and as a State Representative I believe I can bring people to the table.
As for SOP_81- COMMENT REGARDING MY CAMPAIGN CONTRIBUTIONS- I would ask that you do a little research through Florida elections and look at all my campaign contributions. Not one insurance company donated to my campaign, only public adjusters, appraisers and umpires. However, please be aware that I will be accepting campaign contributions from many entities for the 2012.
I WOULD ASK THAT THE PUBLIC ADJUSTERS, APPRAISERS AND UMPIRES BE PATIENT BUT BE VIGIL. I WOULD LIKE TO THANK THOSE WHO SUPPORT ME AND CONTINUE TO SUPPORT ME.
Semper Fi,
Frank Artiles
Last week, in my post, What Role Does an Insurer's "Preferred Contractor Program" Play in a Bad Faith Lawsuit?, I evaluated the analysis applied by the Nebraska Supreme Court in order to arrive at its decision that a contractor hired by tan insured through the carrier's preferred contractor program served only as an independent contractor. The Nebraska Supreme Court determined that the contractor's actions could not be used against the insurer to prove the carrier's bad faith.
Continue Reading...Attempts to enforce exclusions within insurance policies have made my law practice prosper. I sometimes think of insurance coverage disputes regarding exclusions as being a recent occurrence. Nothing could be further from the truth. Fire Association of Philadelphia v. Evansville Brewing Association, 75 So. 196 (Fla. 1917), a case from nearly a hundred years ago, is a classic example that insurance policies may not cover what seemingly is a covered event.
Continue Reading...Amazing as it seems, one insurer plans to increase rates, even though we have gone years without a hurricane. As reported by Colodny, Fass, Talenfeld, Karlinsky & Abate, First Home Insurance requested a 39.3% overall Homeowners Policy rate increase from the Office of Insurance Regulation. Had the "free insurance market" legislators had their way, First Home could charge their customers nearly double last year's rates, and the customers would have no recourse -- except the "free market."
Continue Reading...I am fortunate to practice law dedicated to the protection of and advocacy for policyholders. Our firm's depth of knowledge regarding insurance policyholder advocacy has increased, as Sean Shaw, Florida's former Insurance Consumer Advocate, has joined our firm.
Continue Reading...My last hurricane post on November 22, 2010, involved a discussion on the Other Insurance clause often found in property insurance policies, specifically as it was misapplied in Citizens Property Ins. Corp. v. Ashe, No. 1D09-1546, 2010 WL 4628915 (Fla. 1st DCA Nov. 17, 2010). The Ashe decision included more issues than the Other Insurance clause, and I promised to discuss the other issues as well.
Continue Reading...State Farm lobbyists are going to have their work cut out for them after Paige St. John's story, HOW STATE FARM CASHED IN ON A CRISIS, documented how State Farm used financial slight of hand and friendly politicians in the Florida legislature to help create an insurance crisis leading to greater profits through a re-insurance subsidiary.
Continue Reading...As reported in ClaimsJournal.com, Insurance Brokers and Agents of the San Fernando Valley named The Greenspan Company/Adjusters International as its 2010 Company of the Year. This prestigious honor is given to one company each year. According to Jonathan Schreter, President of IBA-SFV, to be considered for this award the company has to “demonstrate an exceptional commitment and support of the organization.” The IBA-SFV is a San Fernando Valley local chapter of the IBA West, a California organization that is a volunteer driven association of choice independent insurance brokers and agents.
Continue Reading...Christmas trees do not spontaneously combust. The National Christmas Tree Association makes this point in its Holiday Safety Facts. The National Christmas Tree Association is the professional trade association representing farmers and sellers of Christmas Trees throughout North America.
Continue Reading...Google and other internet search engines transform and open up areas of discovery involving insurance companies. An example is an internet advertisement of a Safeco claims adjuster, Sandra Parker, which we uncovered in a simple internet search.
Continue Reading...After much delay and anticipation, Kenneth Feinberg has issued the Final Protocol for interim and final claims to the BP/Deepwater Horizon Oil Spill Fund. The entire Protocol is below, and an analysis will follow in a future post.
Continue Reading...Surplus insurers in Florida, a/k/a “non-admitted” insurers, have traditionally been exempted from certain regulatory schemes applicable to traditional “admitted” insurers. This was done to persuade these non-admitted carriers to continue to write insurance on risks not as attractive to the admitted carriers. As pointed out by Dick Tutwiler in his comment to my November 1, 2010, post, Eligibility Requirements for Florida Surplus Lines Insurance Carriers, two 2008 court decisions threatened the stability of the surplus lines insurance market in Florida.
Continue Reading...Public adjusters should probably look at Black Friday as a day to work rather than shop since fires tend to spike on Thanksgiving day. Insurance agents could use the holiday season to remind their clients of the need for insurance coverage because the "fear factor" certainly rises when catastrophes occur close to home. In Thanksgiving Day is Number One Fire Insurance Claim Day, I noted that a State Farm study confirmed the increase in residential fires on Thanksgiving day and provided some tips to prevent a common Thanksgiving day fire. A quick search confirmed a number of Thanksgiving day fires as well as a reminder that we all should be thankful.
Continue Reading...Each week, I post about public adjusting and the trends in the industry. Recently, I learned the background story of public insurance adjuster who, prior to advocating for policyholders as a PA, was a very successful catastrophe adjuster. Mark Goldwich of Gold Star Adjusters, LLC., explains why he left his job at a major insurance company to work as a public adjuster. Mark’s story is published in his book, Uncovered: What Really Happens After the Storm, Flood, Earthquake or Fire.
Continue Reading...The Colodny, Fass, Talenfeld, Karlinsky & Abate law firm sent a newsletter regarding Freshman House Representative Frank Artiles' recent teleconference. In "Freshman State Representative Frank Artiles, a Public Adjuster, Meets With Florida Insurance Industry Representatives On Concerns, Commonalities" the lawfirm noted the following:
Continue Reading...Fire insurance claims spike on Thanksgiving Day. I became interested in this fact after viewing the following commercial by Allstate:
Continue Reading...
With respect to bad faith claims made in State Farm Fire & Casualty Co. v. Simmons, 963 S.W.2d 42 (Tex. 1998), the Court ruled that an insurer cannot insulate itself from bad faith by conducting a biased or pretextual investigation. The Court also ruled that the scope of the appropriate investigation varies depending upon the claim’s nature, value, and complexity. However, this ruling was not unanimous and there were two dissenting opinions.
Continue Reading...What happens when you have two insurance policies that cover the same risk, do you get to collect twice for the same injury? Most property insurance policies include a provision known as the “Other Insurance” clause. An example reads like this:
Other Insurance
If a loss covered by this policy is also covered by other insurance, we will pay only the proportion of the loss that the Limit of Liability that applies under this policy bears to the total amount of insurance covering the loss.
Not long ago, I was attending a deposition when the insurance company’s lawyer questioned my client about why he had hired a public adjuster.
The non-verbal reaction of my client spoke volumes. With wide eyes, he leaned closer to the attorney and explained that his world was turned upside down the day of the loss and he was not just completely overwhelmed by the destruction to his home, but, more than that, he was concerned for the wellbeing and care of his family. He knew he needed professional assistance because of the magnitude of the loss and his experience in dealing with his insurance company on a prior loss.
Continue Reading...When an insurance company receives notice of a claim, there are a number of individuals who will ultimately work on or handle the claim in one way or another. Insurance companies, like many other types of corporate entities, typically have a hierarchy of employees. Claims departments, in particular, are made up of a number of different individuals with varying titles and responsibilities. The varying levels of personnel involved with a claim might shed some light on the manner in which the claim was handled and whether it was handled properly. In a bad faith case, a policyholder’s attorney should be aware, not only of the people who handled the claim at issue, but also of the lines of authority and reporting procedures for those claims personnel.
Continue Reading...The Tennessee Insurance Litigation Blog has a post, Should a Deductible Be Subtracted in the Case of a Total Loss?, which raises a point that many adjusters seem to miss. I wrote about this topic in When Calculating Insurance Payments, Take the Deductible From the Repair Value and Not the Policy Limits and noted:
Continue Reading...Hundreds of Ft. Myers, Florida, businesses dependent on natural gas were recently shut down after a construction worker sliced through a natural gas pipe. The importance of proper power outage coverage is usually realized only after these types of events occur.
Continue Reading...Texas Judge Susan Criss signed an Order this morning approving the settlement of the slabbed cases from Hurricane Ike. She made the following findings:
Continue Reading...4. The Court finds that the Settlement was negotiated at arm's length by Plaintiffs' counsel and TWIA’s counsel. The Settlement is reasonable in light of the uncertainty as to whether the Class Members could prevail on their causes of action against TWIA, the risks and cost of litigation, and the value of claims foregone. The terms and conditions of Settlement are no less favorable to the Class Members than comparable arms-length terms and conditions that would have been agreed to by unrelated parties under similar circumstances.
In Florida, Statute 627.428 generally provides for attorney's fees to a policyholder who prevails against his or her insurance carrier in litigation related to the claim. Florida Statute 627.428 exists, in theory, to discourage insurers from denying and forcing legitimate claims into litigation. In June of 2009, House Bill 853, regarding Surplus Lines Insurers, became law. Part of that law was 626.913(4), which stated that Chapter 627 does not apply to Florida Surplus Lines Insurers unless Chapter 627 contains provisions that specifically state it applies to Surplus Insurers.
Continue Reading...Sinkhole claim information was collected from 215 insurance companies and the results were reported on November 8, 2010. Chip Merlin posted about the report and the absence of fraudulent sinkhole claims in his post, Florida 2010 Sinkhole Report Findings Published -- Where's the Fraud? A few other interesting points in the report also stand out and raise some interesting discussion topics.
Continue Reading...Sinkholes are a problem in Florida. The Florida Office of Insurance Regulation conducted a data call study from insurers regarding the insurance issues created by this peril. One significant finding was the extremely low reported cases of fraud. Here is what the report said on that issue:
Continue Reading...From 2006 through 2010, only 203 claims were reported to the Department of Financial Services Division of Insurance Fraud—less than 1% of the total claims reported. The number of alleged fraudulent claims peaked at just over 2% of the total claims reported in 2007.
In Plaintiffs are Entitled to the Claims File in a Bad Faith Lawsuit, The Big Picture in Discovery of Insurer Claims Practices, Overcoming Work Product Objections that Relate to an Insurer's Claims Investigation, and Reserves Are Important in Insurance Coverage and Bad Faith Claim Disputes, I addressed different kinds of documents that policyholders’ attorneys should seek from an insurance company in a bad faith action. Documents that are frequently the subject of heated discovery battles in bad faith actions include, among other things, an insurance company’s claims file and training manuals and documents regarding employee performance evaluations and incentives. Insurance companies typically prepare these manuals to train their employees to make certain that they are complying with the carrier’s business goals, as well as with applicable statutes and regulations. Similarly, some insurers also prepare manuals to assist their agents and provide guidance as to how the insurer wants things done.
Continue Reading...Dan Luby, of the Florida Insurance News, does a fantastic job tracking down timely articles involving insurance. He linked Taylor Heads to Supreme Court to Get TWIA Documents, which involves a Texas legislator trying to obtain confidential resolutions and settlement information from the Texas Windstorm Insurance Association (TWIA).
Continue Reading...I will be speaking in an upcoming live web seminar entitled "Insurance Subrogation Challenges for Insurers and Policyholders" scheduled for Tuesday, November 16, 1:00pm-2:30pm EST. The scope of an insurer's subrogation rights, generally a matter of state law, may be expanded or contracted depending on the language of the underlying policy. Understanding the interplay between subrogation law and policy language is critical--especially for policyholders who want to preserve and maximize their rights for recovery against third parties.
Continue Reading...An insurance industry article yesterday, Aon Voices Concerns Over Business Interruption Coverage, confirms that businesses cannot trust insurance companies to timely pay claims.
Continue Reading...Some of you have had the experience of going through the appraisal process with your insurer. Most insurance companies include a provision in their insurance policies stating that if the parties disagree as to the amount of damages, either party can demand an appraisal. But are the resulting appraisal awards legally binding? As the policyholder discovered in Franco v. Slavonic Mut. Fire Ins. Assoc., 154 S.W.3d 777 (Tex.App.—Houston [14th] 2004, no pet.), appraisal awards are typically upheld by Texas courts.
Continue Reading...Frederick Kortum vs. Alex Sink will be argued before Florida's First District Court of Appeal this afternoon, sometime after 2 p.m. In Public Adjusters Lose 48 Hour Solicitation Ban Case and Public Adjuster Lawsuits Move to Appellate Courts, I discussed this important appeal which concerns the constitutional rights of public adjusters to solicit following a loss.
Continue Reading...Florida public adjusters have an excellent educational and networking opportunity at the National Association of Public Insurance Adjusters Mid-Year Meeting, which will be held at the Ritz Carlton in Miami Beach from December 9-11, 2010. This is a great conference because the insurance claims business is becoming more national in scope. Insurance claim issues in one state impact other states. Public adjusters need to realize that their trade is not isolated by geographic boundaries and that opportunities exist through associated networking with others in diverse geographic regions. It is obvious that more public adjusters than ever are responding to catastrophes far removed from their home and original offices.
Continue Reading...If you build a house on a public beach, you might expect the state to remove it for you, but what happens if a hurricane builds a public beach on your house? Last Friday, the Texas Supreme Court answered that question in Severance v. Patterson, No. 09-0387, 2010 WL 4371438 (Tex. Nov. 5, 2010). The actual question certified to the Texas Supreme Court by the Fifth Circuit Court of Appeals was, “does Texas recognize a ‘rolling’ public beachfront access easement?”
Continue Reading...Last month, I attended the First Party Claims Conference in Warwick, Rhode Island. Chip Merlin posted from the conference in Jay Feinman Interview at First Party Claims Conference. If you are not familiar with the FPCC, I highly recommend this annual conference to public adjusters nationwide. The conference is open to public, independent, and company insurance adjusters and attorneys who handle first-party property insurance cases. This conference was jam packed with CE credits for the adjusters and there was no shortage of great information shared by all.
Continue Reading...As happy as I was to report A Public Adjuster Wins a Seat in the Florida House of Representatives, I was saddened to learn of Gene Taylor's defeat. Slabbed reported the story in Election 2010 Fallout: Media From Across the Country Weigh in on Gene Taylor’s Election Loss.
Continue Reading...Recently, I spent a few weeks reviewing court decisions which analyzed discovery requests geared toward obtaining documents and information regarding an insured’s prior claims and an insurer’s handling of other insureds’ similar claims. I came across another decision by a County Court in Ohio and found the Court’s evaluation interesting. Although Owens-Corning Fiberglas Corporation v. Allstate Insurance Company is not a bad faith case, the court’s analysis of the discovery issues caught my attention due to my recent posts.
Continue Reading...The recent election results clearly showed that people were upset with those running government—especially those in the Democratic camp.
Continue Reading...I recently read an article that discussed how many Texas policyholders want to see some form of insurance reform in their state. Texas Watch – a consumer advocacy group – stated that a statewide survey showed that about 74 percent of voters are likely to vote for those candidates who favor home insurance reforms. Among the survey results, Texas Watch found the following:
Continue Reading...Insurance lobbyists are going to be called out by one new member of the Florida House of Representatives. Frank Artilles won his campaign despite the insurance industry making an all-out effort to defeat a Republican candidate. It is difficult enough to win an election. It is nearly a miracle when the insurance industry uses its muscle and money to target a campaign.
Continue Reading...Policyholders with flood and all risk policies usually do not have as many problems collecting benefits following a hurricane where wind and flood damaged a structure. Those with only one policy are not so fortunate. When the combination of payments from both policies is less than the cost to repair or when delays in payments occur, numerous issues arise.
Continue Reading...Surplus lines insurance is intended to provide coverage that cannot be easily procured in the conventional insurance marketplace. Traditional insurance companies must file their premium rates and policy forms with state regulatory agencies. The rates and forms must be approved prior to any insurance policies being offered for sale to consumers within the state. Generally speaking, surplus lines insurance is that which is not readily available through traditional means. These are generally unusual risks that require specialized insurance policies or risks that have very poor loss experience and are unattractive to conventional insurers. Surplus insurers have written hurricane coverage in Florida and compete for these risks, although generally there has been a decline in such policies since the active hurricane season of 2005. In 2005, the Florida Surplus Lines Service Office (“FSLSO”), processed about 112,000 policies written in the homeowners market compared with about 53,000 policies in 2009.
Continue Reading...Many policies provide a route to the potential resolution of a claim via the appraisal process. Recently, I spoke with Umpires who handle appraisal cases for residential and commercial losses, and I learned more about what can go wrong during the process and suggestions on ways to prevent the common missteps that can delay or damage the appraisal process. The best practice tips below were kindly provided by well respected Umpires.
Continue Reading...When filing a bad faith lawsuit against a carrier, there are many defenses that a policyholder’s attorney can expect the insurer to assert. Those defenses that are asserted by insurers are assumedly those which are specific to the allegations asserted in the Complaint. Those defenses, however, do not affect the obligations of the insurer to promptly and fairly evaluate an insured’s claim. The Supreme Court of Kentucky in Farmland Mutual Ins. Co. v. Johnson, et al., 36 S.W.3d 368 (KY 2000) was faced with the insurer’s defense that the loss at issue was fairly debatable. The foregoing defense, however, does not absolve the insurance company of its duty to comply with the mandates of Kentucky’s Unfair Claims Settlement Practices Act (“KUCSPA”).
Continue Reading...Texas and Florida insurance companies wanting to preserve coverage disagreements and dispute appraisal awards have one thing in common--requests for itemized appraisal awards. Insurance policies have no provision for such itemizations. In construction practice, nobody accepts or places bids with the lowest line by line bid. Only the bottom line counts. Even in jury trials, the itemization of jury verdicts is far shorter than what the insurance companies are having their attorneys ask for in front of judges.
Continue Reading...Insurance defense attorney Janet Brown founded a valuable organization and conference for the windstorm insurance industry where ideas and lessons are shared every year. The 12th Annual Windstorm Insurance Conference will be held in Houston on January 24-27, 2011. For claims adjusters and those involved with hurricane or tornado losses, this is a "can't miss" event.
Continue Reading...Should Florida create a fourth state-run Insurance entity to cover sinkhole losses? This question was recently reported on by Julie Patel of the Sun-Sentinel. The question was raised during an Office of Insurance Regulation symposium held in Orlando. The attendees were primarily those in the insurance industry---insurance consumers are usually at work during the day.
Continue Reading...With the five-year anniversary of Hurricane Wilma’s visit to Florida passing yesterday, our offices have been fielding a lot of questions. One frequent question has been, “what happens if a statute of limitations expires on a Saturday, Sunday, or legal holiday?” To answer that question, let’s first turn to the statute.
Continue Reading...The standard Business Income (And Extra Expense) Coverage Form CP 00 30 04 02 says, "We will pay for the actual loss of Business Income you sustain due to the necessary 'suspension' of your 'operations' during the 'period of restoration.'" Business Income is defined as:
Last week, Chip Merlin posted “Insurance Company Declares War on Public Adjusters.” In this post, you can see a letter sent to one policyholder of Sawgrass Mutual, a mutual insurance company owned by its members. The letter invited insureds to a special meeting where a vote would be held to determine whether policyholders would be precluded from hiring public insurance adjusters.
Continue Reading...I dedicated my posts these last few weeks to discussing how to obtain information on an insured’s prior claims or other insureds’ similar claims. There are a few other things that policyholders’ attorneys should keep in mind when seeking this kind of information through discovery in a bad faith case.
Continue Reading...Tom Guhl of Pictometry showed me some fascinating and useful photographic technology at the First Party Claims conference. His firm has a large photo image library which can show virtually any structure in the United States. We used to charter helicopters or planes to make aerial reproductions. This is a lot easier and much less expensive.
Nicole Vinson files a post every Saturday regarding stories about public adjusters. A number of public adjusters have asked me how Nicole determines who and what she is writing about. Since I was curious about the answer as well, I interviewed her and learned quite a bit about her methodology.
Continue Reading...One strategy insurance companies use to avoid bad faith liability is claiming that they reasonably relied on their experts’ reports to deny a claim. Texas law on bad faith states that an insurer breaches its duty of good faith when: (1) denies or delays payment of a claim for which liability is reasonably clear, and (2) the insurer knew or should have known that liability was reasonably clear. Therefore, insurance companies often argue that because their retained experts concluded that there was no valid insurance claim, liability was not reasonably clear and they should not be found liable for bad faith. Courts typically side with insurance companies on this issue, but sometimes the facts of a case require courts to doubt this argument, just as the Texas Supreme Court did in State Farm Lloyds v. Nicolau, 951 S.W.2d 444 (Tex. 1997).
Continue Reading...Ray Kirby of Childress Engineering spoke at the First Party Claims Conference regarding the practical and technical issues building ordinances and laws have on insurance claims. He provided me with an excellent paper, Insurance and Building Codes, which touches on some of the topics he spoke about in his presentation.
Continue Reading...I am at the First Party Claims Conference in Providence, Rhode Island. One of the beneficial aspects of going to conferences is meeting, discussing and debating the meaningful issues of insurance coverage and claims law with a variety of knowledgeable and experienced colleagues.
Continue Reading...A recent IRMI article titled “Limiting the Interruption in Business Interruption” discussed the importance of considering payroll during the risk assessment phase of obtaining business insurance coverage. The forms regarding business income and ordinary payroll are hyperlinked for ease of use and understanding.
Continue Reading...On November 24, 1910, The New York Times ran an article titled “Committee Learns Insurance Secrets”. Curiously, I wondered what insurance secrets were being shared nearly 100 years ago.
Continue Reading...When pursuing a bad faith claim against an insurance company, a policyholder’s attorney will seek information that helps establish how the insurer failed to properly handle and/or pay the claim. Last week, I wrote about How to Discover Information about Unfair Practices in Other Insureds' Similar Claims and how that type of information can be helpful. This week, I would like to address the importance of requesting information about prior similar claims filed by other insureds. When faced with these requests, insurers usually object, claiming the requests are overly broad and burdensome. In this day and age, however, it becomes increasingly difficult for a carrier to assert such objections when taking into consideration the advances in technology and software that enable businesses, to maintain and organize a tremendous amount of information and pull it up with a push of a button.
Continue Reading...Could you imagine the outcry if the government forced you to waive legal rights to obtain needed services? Sawgrass Mutual is essentially doing that with its own customers---and the Office of Insurance Regulation and the new Consumer Advocate are doing nothing about it.
Continue Reading...During a recent mediation, my client was adamant that he was entitled to sufficient insurance money to repair his home. I informed him that his policy was an Actual Cash Value policy, rather than a Replace Cost Value policy, but my explanation was met with a blank stare. It then occurred to me that perhaps lots of people do not know the difference between the two. Therefore, I thought it might be helpful to explain how Texas courts have defined Actual Cash Value.
Continue Reading...When Kenneth Feinberg set up the protocol for distributing the funds to oil spill victims, he wrongly included geographic proximity as a consideration. This consideration directly conflicted with the Oil Protection Act, and many claims submitted by Florida businesses impacted by the oil spill were wrongfully denied. Thanks to Alex Sink, Charlie Crist, and Bill McCollum, geographic proximity is no longer a determining factor.
Continue Reading...Rule 69B-220.201 of the Florida Administrative Code sets forth the ethical requirements for Florida insurance adjusters. According to subsection (3), “The work of adjusting insurance claims engages the public trust. An adjuster shall put the duty for fair and honest treatment of the claimant above the adjuster's own interests in every instance.”
Continue Reading...Summer is officially over, but many folks around the country will glow year round with the help of some indoor rays and good Extra Expense Coverage.
Continue Reading...WDSU.com, News Channel 6 from New Orleans, recently reported the story of one policyholder in Louisiana who was assisted by a public insurance adjuster. The article, “Public Adjuster Can Help Insured Get Payments,” relayed the story of Mr. Henry Quintanila. Three rental units he owned were badly damaged by fire. The insurance company, which was not named in the article, paid less than $30,000.00 on the claim. Quintanila wasn’t happy, so hired Anthony Odeh’s public adjusting firm for a better resolution.
Continue Reading...Information regarding an insured’s prior claims or how a carrier handled other insureds’ similar claims is discoverable. Colonial Life & Accident Ins. Co. v. The Superior Court of Los Angeles County, et al., 647 P.2d 86 (Cal. 1982). I will post on both of these types of discovery in detail over the next few weeks. First, discovery to learn whether a carrier used unfair practices in similar claims by other insureds.
Continue Reading...
The Florida Constitution provides for a Right to Privacy. An article by Julie Patel, of the Sun Sentinel, "What Does Your Insurance Company Know About You?" begs the question whether Citizens Property Insurance Corporation is violating the Florida Constitution. The article could have been entitled, "What Private Secrets is the Florida Government Telling About You if You Buy Insurance From It?"
Continue Reading...Merlin Law Group®, a firm focused on property insurance law and advocating for the policyholder both in and outside of the courtroom, is pleased to announce the addition of attorney Douglas L. Grose to its Tampa, Florida, office.
Continue Reading...In the case of Garcia v. State Farm Lloyds, 287 S.W.3d 809 (Tex. App.—Corpus Christi 2009, pet filed.), the Texas Court of Appeals reversed the lower trial court’s summary judgment ruling in favor of State Farm with respect to certain water damage. In Garcia, State Farm argued that the insureds’ failed to raise a fact issue because they did not demonstrate the amount they actually spent on repairs, and they failed to show that they spent more than the amount already paid by State Farm. The appellate court noted that although State Farm’s arguments were good, State Farm bore the initial burden to prove that no genuine issue of material fact existed with respect to the Garcia’s breach of contract claim.
Continue Reading...In Florida, the Florida Insurance Guaranty Association (FIGA), was created by statute to pay claims to policyholders if their insurers become insolvent. The FIGA Act, §631.54(3) defines a covered claim as:
Continue Reading...[A]n unpaid claim, including one of unearned premiums, which arises out of, and is within the coverage, and not in excess of, the applicable limits of an insurance policy to which this part applies, issued by an insurer, if such insurer becomes an insolvent insurer and the claimant or insured is a resident of this state at the time of the insured event or the property from which the claim arises is permanently located in this state.
Many of our clients come to our doors with perplexed looks on their faces and denial letters in their hands. Dizzied after a long battle with their carriers, which our clients seemed to have lost to purported words in their policies that they are presumed to have bargained for, they come to us for understanding and hoping that the policy they purchased is not a pamphlet full of meaningless words.
Continue Reading...United Policyholders recently published portions of Masood Khan’s interview with Amy Bach in its summer newsletter. Chip Merlin wrote about this interview in his post, “Greenspan Public Adjuster Interviewed About Unauthorized Public Adjusting”. Many of the readers posted comments in response to the information provided by Khan about non-public insurance adjusters adjusting losses for the policyholder. In addition to this insightful information, Khan answered a series of several questions about public insurance adjusting.
Continue Reading...Insurance policies often provide an insurance company with the right to repair the damaged property. The general rule is that when an insurer elects to repair the damaged property, the insurance contract is changed to a repair contract with no limit of liability. Accordingly, insurance companies rarely invoke this provision directly. Instead, many property field adjusters obtain bids from favored contractors, who promise to do the job for an estimated price, and then the adjusters subtly "steer" policyholders to the favored contractors. Whether the insurer's suggestion to repair using a favored contractor is more akin to electing the right to repair can be a source of dispute.
Continue Reading...In Plaintiffs are Entitled to the Claims File in a Bad Faith Lawsuit, I explained that an insurer’s claims file is discoverable in a bad faith lawsuit. I also wrote about how reserve information can reveal bad faith claims handling in Reserves Are Important in Insurance Coverage and Bad Faith Claim Disputes. While these are two important sources of information about an insurer’s claims handling conduct, there are many less obvious sources that should not be overlooked.
Continue Reading...On Tuesday, Lewis Collins, of Butler Pappas, and I gave a speech titled, TENSION IN THE TROPICS: PROPERTY INSURANCE TREPIDATION IN FLORIDA, at the Annual Convention of the International Association of Claims Professionals.
Continue Reading...I was the "token" consumer advocate at the Annual Convention of the International Association of Claims Professionals, where Bob Hartwig provided a fast paced presentation, After the Crisis: Overview & Outlook of the P-C Industry. His presentation is worthy of study and not necessarily because of the factual content. Hartwig is the President of the Insurance Information Institute and a chief propagandist for the insurance industry's efforts to reduce consumer protection and allow insurers to wrongly delay or deny claims without accountability.
Continue Reading...Most commercial landlords require new tenants to purchase a property insurance policy that will provide coverage during the tenants’ lease period. By requiring the tenant to purchase property insurance, the landlord does not bear the responsibility of purchasing a broad, all-encompassing insurance policy – an “all risk” policy – that would cover every possible activity that could take place on the landlord’s property. All risk policies tend to be expensive, and instead of passing that cost to the tenant, the tenant can purchase a less expensive insurance policy tailored to his business. However, as the landlord in the case below discovered, just because a tenant purchases an insurance policy does not mean all the landlord’s property interests are properly covered.
Continue Reading...Insurance coverage is available for purchase in many varieties. Two options for large, commercial, or other properties with multiple insurable assets are blanket and specific coverage. Last week, the type of coverage purchased was an important factor in determining benefits available for the Sunrise Condominium Association. Florida Ins. Guaranty Ass’n v. Sunrise Condo. Ass’n, Inc., No. 4D09-5300, 35 Fla. L. Weekly D2124b (Fla. 4th DCA Sept. 22, 2010).
Continue Reading...Business interruption recovery is typically denied if a policyholder is not able to show an actual loss of income as a result of a covered peril. Accordingly, most courts will deny recovery under a business income provision if an insured building serves as a rental property and is fully unoccupied at the time of the loss. See, e.g., Farm Bureau General Ins. v. Dynamic Land, LLC, 2009 WL 454961 (Mich. 2009)(where the court rejected the insured’s argument that it was entitled to “fair rental value” during the period of restoration because the building was unoccupied and undergoing renovations at the time of the loss and it was not able to show an “actual loss of income”).
Continue Reading...On Tuesday, the Wall Street Journal Published the article, "Sinkhole Claims Threaten To Engulf Florida Insurers." Chip Merlin promptly provided this story to you in his post, Public Adjusters and Sinkhole Claims Topic of Wall Street Journal Story.
There were several comments on the post which provided perspective from the field. The public insurance adjuster mentioned in the newspaper article was Tim Zeak, of Florida Public Adjusting.
Continue Reading...There are many different practices implemented by an insurer that can be used to prove bad faith. An appellate court in California was faced with a case where just about everything about the examination under oath (EUO) -- among other things -- pointed to bad faith and the types of damages at issue actually helped the Insureds. Let’s take a look…
Continue Reading...Reporting claims which may just be beyond the deductible is a recurrent discussion with policyholders. Insurance agents and brokers are asked these delicate questions all the time. Independent Agent Magazine ran a story in 2005, Gray Area of Reporting Claims, discussing the issues that arise in reporting and not reporting a claim. Insurance agents and brokers should be wary about not reporting losses without full disclosure of all the consequences to the policyholder.
Continue Reading...Values of loss often have components which seem small but add up to millions of dollars to insurers over the long run. In Holden v. Farmers Ins. Co. of Washington, 2010 WL 3504821 (Wash. Sept. 9, 2010), the Washington Supreme Court affirmed that sales tax should be considered when determining Actual Cash Value. Noting that terms of Actual Cash Value and Fair Market Value would be referred to as ACV and FMC, the significant facts of the case are as follows:
Continue Reading...What judges say is contemplated under an insurance policy is not always what adjusters are taught and do in the field. Jeremy Tyler noted in Prevention of Performance with Replacement Cost Value, that a new appellate decision involving QBE rewrites how insurance companies may adjust property losses in Florida. Many will read Buckley Towers Condo., Inc. v. QBE Insurance Corp., No. 09-13247, 2010 WL 3551609 (11th Cir. Sept. 14, 2010), to stand for the proposition that an insurer does not have to pay anything towards replacement costs under a replacement cost policy, when replacement is elected but repairs have not been made.
Continue Reading...WASHINGTON (Dow Jones)--The U.S. Senate unanimously agreed on Tuesday night to approve a popular flood insurance program for a year, taking a crucial step to ensure the federally-backed program isn't allowed to run out when it expires on Sept. 30.
Continue Reading...Many potential clients are concerned about the attorney’s fee they will have to pay when we successfully resolve their claim. Their concern is understandable, given that any fee would be taken out of their gross recovery. Most potential clients are under the impression that my attorney’s fees will lower their overall recovery. I try to assure them that if we recover, we are entitled to attorney’s fees from the insurance company. At the end of the day, my goal is to make my clients whole by returning them to the financial position they held before their loss occurred. So it is my duty, as an advocate, to aggressively pursue recovery of attorney’s fees. Fortunately, Texas case law allows a successful claimant to recover attorney’s fees. And yes, that even applies to a percentage-based fees.
Continue Reading...Florida's sinkhole issues have hit the national news. In an article in today's Wall Street Journal, "Sinkhole Claims Threaten To Engulf Florida Insurers," the public adjusting industry takes some hard hits.
Continue Reading...With the twists and “turns” that this hurricane season has challenged us with so far, those of us in Florida and the Southern United States have been fortunate. There have been a few close calls this 2010 season, and for the first time since 1926, we witnessed two category 4 systems in the Atlantic basin at the same time. Hurricane Igor battered Bermuda and may have an effect on the Eastern coastline of Newfoundland, which is predicted to be next in its path.
Continue Reading...Our firm subscribes to IRMI Online, which is an excellent source of information for any insurance claims professional. In doing research, I came across an interesting article by Daniel Torpey, from Ernst Young, LLP, Dealing with a Difficult Claim: Breaking the Gridlock of the Property and Business Interruption Claims Process.
Continue Reading...Last month, the Indiana Court of Appeals held that a public insurance adjuster could not be personally liable to an insurance company for tortious interference with a contract and that an alleged destruction of property did not give rise to an independent spoliation of evidence claim.
Continue Reading...Tampa, FL – September 15, 2010 – U.S. News Media Group and Best Lawyers have released the 2010 Best Law Firms rankings, marking the inaugural publication of this highly-anticipated annual analysis. Merlin Law Group is pleased to receive a number 1 metropolitan ranking for Tampa, FL, Insurance Law.
Continue Reading...Getting billing information regarding insurance company experts and consultants is crucial. In Tuttle v. Perry and Berry, 82 S.W. 3d 920 (Ky. 2002), the Court examined the issue of whether the plaintiffs in a medical malpractice action could cross-examine defense expert witnesses as to the amount of fees earned, where evidence of the fees paid to the expert was relevant to the issue of the witness’ potential bias. Last week’s post, An Insurer's Use of an IME Can Serve as Evidence of Bad Faith Against the Insurer, analyzed Hangarter v. Provident Life and Accident Ins. Co. and Paul Revere Life Ins. Co., 373 F.3d 998 (9th Ct. App. 2004). There, the Court evaluated evidence with regard to the defense’s expert, who had rejected insureds’ claims that they were totally disabled in thirteen out of thirteen cases. In Tuttle, the plaintiffs learned through discovery that one of the defendant’s expert witnesses testifies 85-90% of the time for the defense in medical negligence cases. The defense expert’s rate of compensation was $2,000 per day during trial, $500 for the first hour of deposition and $300 per hour thereafter, and $250 per hour for a case review. The lower Court in Tuttle granted a motion in limine excluding information regarding expert witness compensation, so the plaintiffs appealed.
Continue Reading...Divorce is devastating. It can get worse when a couple has an insurance claim. Often, one spouse refuses to participate in the claim process, leaving the one attempting to collect in turmoil with the insurance company. This was the case in a recent decision, Heike Blake v. First Home Ins. Co., No. 09-245 (Fla. 11th Cir. Ct. May 12, 2010.)
Continue Reading...Jim Greer, President of the Association of Property & Casualty Claims Professionals (PCCP), issued a press release this morning indicating that the Department of Financial Services would drop the proposed administrative regulations pertaining to adjusters.
Continue Reading...Proof of loss requirements are becoming a more frequent topic of conversation, and questions regarding proofs of loss are frequently asked of members in our law firm. Proofs of loss are conditions precedent to recovery under virtually all property insurance policies. Unless waived or not demanded under some forms, proofs of loss should be filed.
Continue Reading...When a home or business is damaged by a covered peril (windstorm, fire, hail, etc.), the insured typically makes a claim with its insurance carrier. The insurance carrier then sends either an insurance adjuster or an independent adjuster to estimate the damage and issues a check to the insured. From this common scenario, it would be logical to conclude that the insurance carrier has the burden of showing what is and is not covered under the insurance policy. However, this is not the case in Texas.
Continue Reading...Merlin Law Group supports the Florida Consumer Action Network. Known as FCAN, it is a grassroots consumer organization which attempts to influence public policy by organizing and educating government leaders on matters of consumer interests. In a democratic government where corporate business interests are constantly bombarding our leaders with self-interest propaganda, these non-profit consumer groups are important and deserve support.
Continue Reading...After non-catastrophic losses, most insureds are able to restore operations in a fairly short period of time. In those cases, the measure of recovery will be limited to any business income loss and incurred normal operating expenses during the period of restoration. However, in many cases, businesses are not able to return to their pre-loss income levels after they resume normal operations for weeks or months to follow.
Continue Reading...The anticipation of litigation is the trigger used in Florida to determine when a party to an action can claim a work-product privilege in connection with a documents production.
Continue Reading...We have been lucky so far this 2010 Hurricane Season. Strong northern turns have moved powerful hurricanes away from Gulf and Atlantic shores. Next Friday, I might be writing something else as Igor moves towards the United States.
Continue Reading...Expanding on last week’s blog, Did You Know That An IME Provider Can Be Liable To The Insured, I want to show how an insurer’s use of a medical provider to conduct an independent medical examination can serve as evidence of bad faith against the insurer.
Continue Reading...Many insurance policies will not cover a loss if a building was unoccupied at the time damage occurred. That could mean bad news for many property owners out there. But, before anyone begins to worry, it is important to know how Texas defines “unoccupied.”
Continue Reading...The Florida Department of Financial Services regulates those licensed to adjust claims in Florida. One of those licensed, is a long time friend and a person very familiar with the regulatory process, Mark Boardman. Boardman recently filed a unique Petition for Declaratory Statement with the Florida Department of Financial Services, asking fifteen pointed questions regarding the propriety of various property adjustment practices that are common in the field.
Continue Reading...In the true spirit of Labor Day, I hope all of you take time to reflect on your work and still find time to relax. For today’s blog, I encourage you to take a look at the article, Small Public Adjusting Firm—Big Results. It is an inspiring story of one public adjuster who became a public adjuster after having built “his world around serving insurers.”
Continue Reading...My posts over the last few weeks focused on how an insurer’s breach of its duty to its insured can result in the insurer’s liability for bad faith. This week, I would like to write about how someone hired by the insurer in connection with the investigation of your client’s claim can also have obligations to your client. Specifically, a medical provider hired to conduct an Independent Medical Examination (“IME”) can be liable to an injured insured for breach of a duty.
Continue Reading...Tina Nicholson is based in our Houston office. She wrote a very basic article "Steps For Handling an Insurance Claim" for the Hotel World Network. With Hurricane Earl winds beating the mid-Atlantic coast, her tips may be helpful for many policyholders:
Continue Reading...Since 2004, the majority of our law firm's large insurance battles have focused on hurricane loss insurance disputes. It is not surprising that we are getting phone calls from people asking whether our firm will open offices somewhere between North Carolina and Boston as Hurricane Earl is projected to hit that area. I was surprised by a recent newspaper article that indicated our firm "specializes" in sinkhole losses.
Continue Reading...Oftentimes after a windstorm, flood, or plumbing leak, mold develops in a home. There are several standard insurance policies issued in Texas, and they all have some language that deals with mold. For example, a standard Texas Dwelling Policy—Form 3 specifically excludes mold damage, but covers an “ensuing loss” caused by water damage. These clauses seemingly contradict one another: how can there be no coverage for mold damage if it is an “ensuing loss” caused by water damage? In 2004, the U.S. District Court for the Eastern District of Texas discussed this issue in Malley v. Allstate Texas Lloyds.
Continue Reading...Chip brought up the five year anniversary of Hurricane Katrina in his post last week titled, “The Hurricane Katrina Five Year Anniversary is Noted as New Hurricanes Lurk in the Atlantic Ocean.” The anniversary of Katrina will have special meaning to all who were affected by it, but this five year anniversary also has a practical importance to anyone in Florida that is still attempting to put the pieces back together after Katrina, thanks to Florida’s five year statute of limitations on contract lawsuits. Fla. Stat. § 95.11(2)(b) requires that “[a] legal or equitable action on a contract, obligation, or liability founded on a written instrument…” must be commenced within five years.
Continue Reading...This month, a letter to the editor by Guy Marvin was published in the Florida Times Union.
Marvin is the President of the Florida Insurance Council (“FIC”). The FIC is based out of Tallahassee, but Marvin has ties to Jacksonville from his former work as general counsel at Independent Life Insurance Company.
Continue Reading...Louisiana Citizens Property Insurance Company has settled a state class action case, Press v. Louisiana Citizens Fair Plan Property Insurance Corp., for failing to fully pay overhead and profit to insureds. The proposed settlement, for $23 million, covers claims from Hurricanes Katrina and Rita.
Continue Reading...Last week's post, The Big Picture in Discovery of Insurer Claims Practices, discussed a case from the Supreme Court of Kentucky that provided an overview of how Courts tie together various principles of discovery that are generally raised in the discovery of bad faith cases. General rules of bad faith discovery vary between states and the types controversies at issue. An Indiana federal court decision, Harper v. Auto-Owners Ins. Co., 138 F.R.D. 655 (S.D. Ind. 1991), is a classic example.
Continue Reading...The Insurance Commissioner has apparently decided to start calling some of my clients. According to the St. Petersburg Times, his office is trying to find statistical information regarding sinkholes reported between 2006 and 2009. We'll call and try to find out more information so we can help them get accurate answers, but, in "Florida Regulators Investigate Rash of Sinkhole Claims" reporter Jeff Harrington found the following:
Continue Reading...Florida Insurance Commissioner Kevin McCarty said Wednesday that he has issued a "data call" to commercial and residential property insurers to collect sinkhole claims information.
Specifically, regulators are seeking details about claims opened anywhere in the state from 2006 to 2010. Included in the report will be the types of claims, testing procedures to determine legitimacy, costs of inspections, locations of claims, legal fees and public adjuster fees, and amount of structural loss.
Slabbed has been dogged regarding its reporting on the Mississippi qui tam litigation involving State Farm. A recent post, Rigsbys file “Motion to Reconsider Scope of Proceedings in Light of Evidence Adduced in Discovery” – ask Court for additional time to conduct Discovery into “the Scheme,” provides some insight regarding the flood adjustment techniques required by National Flood versus how flood adjusters in the field actually do their job.
Continue Reading...What happens in Vegas stays in Vegas--unless you learn something you can use to make yourself a better attorney. The 360 Advocacy Institute is hosting a national summit on insurance bad faith law and techniques. The speakers are some of the most cutting edge participants in this area of the law. Learning and having fun usually do not go together, but this event is different.
Continue Reading...The media is trying to scoop each other on the five year anniversary of Hurricane Katrina. In State Farm's hometown of Bloomington, Illinois, the Pantagraph ran a story about State Farm's Hurricane Katrina litigation. A massive and unfinished novel could be written on that subject. I found the article by Ryan Denhem, How State Farm Fought Through the Second Storm, to be far too light an analysis of some of the most important insurance coverage litigation ever waged.
Continue Reading...The Fifth Circuit Court of Appeals recently issued a 21-page opinion in the case of Consolidated Companies, Inc. v. Lexington Insurance Company, No. 09-30178, ___ F. 3d ___ (5th Cir. August 17, 2010). The opinion is dense, to say the least, but it resolves an issue that sometimes can make or break a settlement in business interruption claims.
Continue Reading...The water is warm, the wind sheer is declining, and it is late August. For those along the southern coastal areas, it is important to monitor waves of weather off the African coast for the next six weeks. The most active part of hurricane season is upon us. There is reason to be concerned.
Continue Reading...The amount of time one has to bring a lawsuit is limited by the law. Each state has established statues which define the amount of time provided to file suit for particular causes of actions based on particular circumstances. Recently, I learned more about how important and valuable the pre-litigation correspondence file can be when the insurance company appeals a case based on the allegation that the lawsuit was filed too late.
Continue Reading...I wonder if the Liberty Mutual Fire Insurance Company would want to advertise how proud they are of their case investigations that result in lawsuits. Yet, wrongful claims practice cases sometimes result in decisions by trial judges that seem wrong to those who practice in this area. The case of Luse v. Liberty Mutual Fire Insurance Company, No. 09-1221, 2010 WL 2698342 (M.D. Pa. July 7, 2010), is a recent example.
Continue Reading...Sinkholes won’t go away. While policyholders, insurance companies and governmental leaders fantasize that this peril would sink into oblivion, nobody’s magic wand will make this a reality. Hurricanes and sinkholes will happen in Florida because of the geography and geology. As more people who live and work in Florida, more losses will result.
Continue Reading...A post earlier this week, Greenspan Public Adjuster Interviewed About Unauthorized Public Adjusting, generated a number of comments and questions, both public and private. Many well meaning individuals probably overstep bounds and violate the law. Some are simply scamming.
Continue Reading...Coral Insurance Company has been placed in receivership. One aspect of handling claims where the insurer is in receivership is that a statutory time limit exists to file a lawsuit. However, for adjusters and policyholders, before a lawsuit can be filed, a "claim deadline" must first be met. We often get requests shortly before the lawsuit deadline only to find the claim deadline had not been met.
Continue Reading...Texas law allows for interest to be awarded to a policyholder as a penalty for the insurer delaying payment of a claim, in addition to the amount of the claim. Section 542.060 of the Texas Insurance Code states:
Continue Reading...If an insurer that is liable for a claim under an insurance policy is not in compliance with [Chapter 542, Subchapter B – Prompt Payment of Claims], the insurer is liable to pay the holder of the policy, in addition to the amount of the claim, interest on the amount of the claim at the rate of 18 percent a year as damages… .
Insurance company coverage counsel certainly will do everything in their power to dismiss claims that their clients breached obligations of good faith when those cases are in federal court. Last week's post, Networking and Sharing Information Can Help Win Cases and Prevent Losses: A Liberty Mutual Example, is followed by another case with a very similar point in Johnson v. Liberty Mut. Ins. Co., No. 10-494, 2010 WL 2560489 (D. N.J. June 24, 2010). The important observation is that it is becoming a lot more difficult to get by motions to dismiss in federal court since civil procedure case law changed, starting in 2007. Bad faith lawsuits are often "sitting ducks" because all the facts and motives giving rise to the bad faith activities are generally not known until after discovery reveals exactly how, what and why the insurance company failed to pay or pay timely.
Continue Reading...Amy Bach, the Executive Director of United Policyholders recently interviewed public adjuster Masood Khan. In United Policyholders' summer newsletter, Khan, a vice president of The Greenspan Company Adjusters International, was interviewed regarding a number of important topics. One of the more controversial comments he made will be of concern with accounting firms, consultants and contractors. Masood Khan correctly noted that in most states, those determining, presenting, negotiating and adjusting losses for policyholders without a public adjuster license are illegally practicing public adjusting. In most of the states, it is a crime to do so.
Continue Reading...I recently represented a client at a court hearing on a motion to compel appraisal to determine the amount of roof damage from Hurricane Wilma. The insurance company’s attorney opposed appraisal, so the judge asked him who other than appraisers should determine the amount of damage from Wilma. “I’m not getting on that roof!” exclaimed the judge. “Are you getting on the roof?” he asked the insurance company’s attorney before looking at me and asking me the same question. As much as I wished I were qualified to differentiate between hurricane damage and wear and tear, I admitted that such a decision should be left to the experts. That experience led me to ponder on the subject of experts.
Continue Reading...In a business interruption claim the insured has an obligation to mitigate its losses by reasonable means, but, as illustrated in Insured’s Duty to Mitigate – Understanding Business Interruption Claims Part 30, insureds should not be required to go out on a limb to protect the insurer and then get a hand slap in response.
Continue Reading...Usually, I write about cases involving public adjusters, but here is an interesting case where the insurance company’s adjuster helped the insureds.
Recently, a frequent allegation raised by the insurance companies seems to be “too little…too late.” Insurance policies typically include a condition that requires losses to be promptly reported.
Jeremy Tyler and Shaun Marker have addressed late reporting and late notice issues in great detail in their posts about hurricane losses. This week, I came across a case where the insureds were successful in overcoming the late notice/late discovery defense raised in a water damage claim in Pennsylvania. After reading the case, I reached out to some of the public adjusters in Pennsylvania and I learned a little more.
Continue Reading...Matt Litsky represents certain underwriters and syndicates from Lloyd's. I have talked with Matt and written others explaining that many policyholder counsel incorrectly file suit against Lloyd's. Failing to properly name and serve Lloyd's can lead to dismissed legal actions and possible malpractice claims against counsel who make these mistakes.
Continue Reading...Every now and then, a headline has me wondering “what is this?” I love whales and watching them. I love salmon in a very different way and usually only watch them on my dinner plate. So, when the Insurance Journal listed a headline, Flood Program Must Consider Salmon and Whales, my curiosity was piqued.
Continue Reading...Sometimes cases are lost because the policyholder attorney lacks information about an insurance company. I was recently thinking about this when our firm's Knowledge Manager, Ruck DeMinico, sent a property insurance opinion involving a claim with Liberty Mutual to our firm's attorneys. The opinion, Delfrate v. Liberty Mutual Fire Ins. Co., ___ F. Supp. 2d ___, 2010 WL 3023866 (M.D. Fla. July 16, 2010), demonstrates these perceptions.
Continue Reading...As many people are aware, property insurance policies often have a large deductible for hurricane losses. In Florida, the hurricane deductible can be a percentage of the dwelling policy limit: 2%, 5%, or even 10%. These percentage deductibles can be very large on personal lines residential claims where a policyholder’s house may be insured for several hundred thousand dollars. Policyholders must be aware that the Florida legislature has created a statute prohibiting an insurance carrier from applying a policy hurricane deductible more than once during a calendar year for personal lines residential claims.
Continue Reading...Severe rain and flooding swept through Tennessee last May, causing catastrophic damage which made the headlines around the globe. Lives were lost, people were separated, drinking water was rationed and the homes and businesses many residents were severely damaged.
A house is surrounded by floodwater Tuesday, May 4, 2010, in Nashville, Tennessee. (AP Photo/Jeff Roberson)
Every now and then, I check Hurricane Harbor just to see what this hurricane prognosticator is predicting. Her rather bizarre Blog reads the way a few of my friends will sound a little later tonight:
Continue Reading...The insurance industry never rests when it comes to lobbying and politics. The Florida Insurance Council has a new leader who used to be its old leader. Insurance lobbyist Cecil Pearce has taken over the reigns from Guy Marvin. Here is a little about Pearce from the press release:
Continue Reading...The Texas Supreme Court released an interesting ruling recently. Many were intrigued by it because it appeared to be counterintuitive at first glance. In State Farm Lloyds et al. v. Page, No. 08-0799, 2010 WL 2331460 (Tex. June 11, 2010), the Court decided that mold damage to a woman’s personal property was covered in a standard homeowner’s insurance policy, but damage to her home was not.
Continue Reading...Slabbed is a blog that grates on those in the insurance industry, its legal counsel and proponents. My impression is that because those from the insurance industry do not like the criticism, positions and strong rhetoric, they stop reading Slabbed and read only those that criticize policyholder advocates, policyholders, and others who pander to the insurance industry. Nobody likes to be criticized or cast in the role of the villain. That is human nature. Yet, I agree with comedian Chris Rock, who stated that "anyone who makes up their mind before hearing the issue is a ... fool."
Continue Reading...Just a few weeks ago, the Fort Myers Division of the United States District Court for the Middle District of Florida handed down its memorandum opinion on the insurer’s motion for summary judgment in Royal Marco Point I Condo. Ass’n, Inc. v. QBE Ins. Corp., No. 3:07 CV 16, 2010 WL 2757240 (M.D. Fla. July 13, 2010). Among other things, the insurer, QBE Insurance Corporation, argued that its participation in appraisal and timely payment of the appraisal award precluded an action against it on bad faith.
Continue Reading..."If it is OK for Gene to say it, then why can't I?" was the question I asked Mary Fortson nearly ten years ago as we discussed a number of legal issues for a brief we were filing in federal court. I loved Eugene Anderson. He was free to say what he knew was the truth regarding insurance. We had a bond.
Continue Reading...Practicing law and practicing adjustment are two different things. Some attorneys arrogantly think they know more about insurance because they understand insurance law. They often have no clue what they are talking about or understand what is going on in the insurance claims office. One significant part of understanding insurance and insurance claims handling for attorneys, whether policyholder or insurance company counsel, is to understand the training, management and day to day activities of adjusters. Thinking that an attorney is skilled in insurance because he can read, write and understand insurance cases and statutes is akin to thinking that an attorney can be skilled in surgery because he can read, write and understand medical malpractice cases.
Continue Reading...On Tuesday, July 27, 2010, The SunCoast News ran an article by Carl Orth titled: “Fasano Aide Brings Ideas Back from Sinkhole Conference.” According to the article, issues regarding public adjusters, sinkhole losses, fraud, the rise in sinkhole claims in the downturned economy, and the value of Florida’s Neutral Evaluation program were discussed at the conference.
Continue Reading...The attempts by Mississippi's Gene Taylor to craft an insurance product that fully covers hurricane losses seems to be having trouble, but not because Gene Taylor is not trying. While the House of Representatives passed a bill supported by Taylor which includes coverage for the perils of wind and storm surge into one policy, one Republican Senator offered a compromise bill which does not accomplish that but merely proposes a different method of dispute resolution. As reported in the National Underwriter, both Taylor and the insurance industry think the compromise legislation does not work.
Continue Reading...Over the last few weeks, the Friday blog post has addressed the different approaches that can be used by plaintiff’s attorneys when battling evasive discovery tactics used by insurers in bad faith cases. We discussed the fact that, in a bad faith lawsuit, an insured is entitled to a plethora of information that might not otherwise be discoverable. We’ve also mentioned claims files quite a bit, but I realized that we had not really discussed in detail what should be in an insurer’s claims file, how it can help you in your bad faith lawsuit, and why you may be entitled to it. So, here goes…
Continue Reading...Florida's Third District Court of Appeal, which sits in Miami-Dade County, ruled yesterday that a public adjuster constitutional challenge to the public adjuster fee limitation and solicitation restrictions that was filed in Miami-Dade County should have been filed in Leon County. As noted in Sink Appeals Public Adjuster Suit: Delay Possible For Miami-Dade County Public Adjuster Lawsuit, this venue dispute slowed this lawsuit significantly. In the interim, a similar suit was not ruled on favorably by a Leon County judge, as noted in Public Adjusters Lose 48 Hour Solicitation Ban Case.
Continue Reading...I have previously written about how an insurance company can waive its right to appraisal by taking too long to invoke it, but are there other ways an insurance company can waive its right to an appraisal? For example, does an insurance company waive its right to appraisal when it recognizes some but not all of the damages claimed by the insured? What if the insurer anticipatorily breaches the insurance contract? The United States District Court for the Southern District of Texas recently weighed in on this issue in Boone v. Safeco Ins. Co. of Indiana, No. H-09-1613, 2010 WL 2303311 (S.D. Tex. June 7, 2010).
Continue Reading...Scott Johnson is an excellent leader for the Florida Association of Insurance Agents (FAIA). His father was President of the FAIA for 37 years. Scott Johnson has a keen and unique perspective on insurance in Florida. His views regarding the insurance landscape should be considered and not dismissed without analysis, even by those in strong disagreement.
Continue Reading...Following the passage of a hurricane or tropical storm, policyholders should photograph or video record hurricane-related damage to insured property as soon as possible. The more detail the better. Photographs of the condition of the roof system immediately after a hurricane can be particularly helpful in the insurance claim for damages. The photographs can capture the condition of the damaged property immediately after the storm’s passage and can be used to potentially refute arguments that the hurricane was not the cause of the damage. The importance of the photographic evidence ties in with the discussions that Jeremy Tyler and I have had over the last several weeks in the “Late Notice of the Claim” postings.
Continue Reading...The year was 1944. The average price of gas was 15 cents a gallon. The median home price was less than $4,000.00. George Lucas was born. Coppertone Suntan Creme was invented in an attempt to shield the soldiers fighting in the Second World War from harmful rays. This was also the year that Alfred A. Lesser (“Al”) began public insurance adjusting in Florida.
Continue Reading...Guessing where a hurricane is heading is not an exact science. Those predictions are much better today than in the past due to better hurricane modeling. Via television, everybody can get constant updates on The Weather Channel. As Tropical Storm Bonnie approaches the oil drenched areas of the Gulf of Mexico, I wanted to share a few Internet sites I visit to quickly get an idea about what is going on and, if I have time, some fun.
Continue Reading...Most of you are familiar with the concept of reserves. How many of you are familiar with the role of reserves in a bad faith case? Is this type of information even discoverable? Although it might not sound terribly significant, it is an important factor that should be evaluated and which many attorneys may overlook.
Continue Reading...While writing last week's post, Texas Windstorm Insurer Settles 2,400 Hurricane Ike Slab Claims, I almost quoted Texas attorney Steve Mostyn, who explained that Texas law really left no other rational choice. Burdens of proof are crucial when it comes to close cases, and Texas places a unique and difficult coverage burden on policyholders. An article in the Houston Chronicle titled Windstorm Insurer to Settle Some Ike Cases quoted Mostyn:
Continue Reading...Property insurance policies are written in complex language. The fact that there are so many different interpretations and disputes about the language by some very bright people is probably enough evidence to prove that point. David Rossmiller wrote a post, Corban v. USAA: A few (more) words about anti-concurrent causation, which had me thinking about words used in an insurance policy and what a policy covers. He stated:
Continue Reading...Mississippi Representative Gene Taylor successfully placed language into House Bill H.R. 1264—“the Multiple Peril Insurance Act”— which would require "Write Your Own" insurers participating in the National Flood Program to remove anti-concurrent causation language from their all risk insurance policies. Taylor's house was destroyed in Hurricane Katrina. Many of his neighbors’ insurance claims were denied based on the continuing wind versus flood insurance coverage controversy which I noted recently in Texas Windstorm Insurer Settles 2,400 Hurricane Ike Slab Claims.
Continue Reading...The Statute of Limitations is defined as the time period within which you must file a lawsuit. Unsurprisingly, there appears to be some confusion over when the statute of limitations runs out against the victims of Hurricane Ike, and public adjusters are not the only ones confused – many lawyers are unsure as well. There is one thing that lawyers are sure about, though: it’s better to be safe rather than sorry!
Continue Reading...The tone policyholder attorneys use to explain issues and facts to others is important. Insurance coverage issues can be complex and difficult to understand by those of us who work in this business on a full time basis. The longer I do this, the better I understand that attorneys do not have license to talk down or demean anybody. Attorneys are fortunate to be of service to others and sometimes get paid handsomely for it.
Continue Reading...I hesitated to write more on late notice of claims, but the issue just keeps coming up. In my research this week, I came across a recent case from the United States District Court for the Southern District of Florida that I thought I would share: Vision I Homeowners Ass'n, Inc. v. Aspen Specialty Ins. Co., 674 F. Supp. 2d 1333 (S.D. Fla. 2009).
Continue Reading...The insured’s duty to mitigate its damages after a loss is a well-recognized principle in property insurance law. In business interruption claims insureds are required to take affirmative steps to reduce their loss of earnings after a loss. While an actual business loss occurs only where the insured is unable to reduce or eliminate lost profits, insureds are not necessarily required to engage in super-heroic-acts to mitigate their business interruption loss.
Continue Reading...The Galveston Island and Bolivar Peninsula slab cases are settling. There was an agreement between the Texas attorneys that nothing would come out in the press until the clients signed the agreements. Since even the Texas Windstorm Insurance Association (TWIA) participated with a press release, I assume that the gentlemen's confidentiality agreement to wait on telling everybody publicly that a settlement has been reached, even before clients have signed the releases, no longer applies. The vast majority of my clients have only received letters from our firm, and I am awaiting final figures from TWIA so that we can consummate the deal. I hope everybody is not optimistically jumping the gun.
Continue Reading...*(Note: Bob Glasser is a managing director at BDO Consulting, a division of BDO and Seidman, LLP, in the New York office. Mr. Glasser is a certified public accountant, a certified fraud examiner and a certified insolvency reorganization accountant, with more than thirty years of diverse financial management and accounting experience at public and private companies. Mr. Glasser leads the firm’s New York Insurance Claim Services practice).
Most CFOs and risk managers have an understanding of their property and liability insurance needs and dollar limits and are comfortable purchasing coverage that protects their companies from a loss due to an insured peril. However, it has been my experience that their comfort level drops dramatically when it comes to business interruption coverage and limits. The uncertainty surrounding business interruption coverage, extensions of coverage and respective limits of that coverage consistently results in many middle-market organizations finding themselves underinsured and short of cash when faced with a major loss. Even the fortunate CFOs and risk managers who have not experienced a major loss may eventually discover that they have been significantly overinsured for business interruption losses and paying unnecessarily higher premiums for their coverage. Of course, the more devastating situation is finding out after a shutdown of operations from a loss that company management has not mitigated the company’s risk of lost profits and now has insufficient coverage to protect profits and cash flow during a potentially long period of restoration.
Continue Reading...Last week I wrote about insurance policies concerning vandalism and theft. In a similar vein, this week I discuss another case involving theft; only this time the thief was no stranger to the insured.
Continue Reading...Insurance adjusters and their attorneys should demand examinations under oath on a timely basis. Prompt adjustment requires it. However, the current technique and growing practice by many insurers is to request an examination months and even years after the loss. Sometimes, the demands are made after suit has been filed. This is a wrongful delay tactic that needs to stop.
Continue Reading...As previously noted in the first four posts of the Hurricane Law series discussing Late Notice of Claims, in Florida, if a policyholder does not timely report an insurance claim to the insurance carrier, prejudice to the insurer will be presumed. This presumption may be rebutted by a showing that the insurer was not prejudiced by the late notice. Bankers Ins. Co. v. Macias, 475 So.2d 1216 (Fla. 1985). If an insurance carrier claims a policyholder breached a cooperation clause however, the insurance carrier “must show a material failure to cooperate which substantially prejudiced the insurer.”
Continue Reading...Yesterday, Rocco Calaci posted a blog entry announcing that La Niña conditions are already being observed. While I dare not attempt to explain the mechanics of these conditions, it is generally understood that La Niña is a climate phenomenon that is marked by an unusual cooling of the sea surface in the Pacific Ocean, which in turn affects wind and weather patterns globally. It is also generally said that these conditions foster more frequent and stronger storms in the Atlantic Ocean and the Gulf of Mexico. As a result, NOAA has forecasted 14 to 23 named storms, of which 8 to 14 are expected to be hurricanes and 3 to 7 major hurricanes during this season.
Continue Reading...This week, I had the opportunity to discuss trends in public adjusting with a very seasoned and humble second-generation public adjuster, Leonard "Len" Theran, located in Massachusetts. His public adjusting firm, Professional Loss Adjusters, Inc., employs seven public adjusters, who adjust claims in Massachusetts, Connecticut, Rhode Island, Vermont, Maine, New Hampshire, Texas, Louisiana, Mississippi, Florida, North Carolina, South Carolina, Minnesota and Michigan. Professional Loss adjusters has been helping insureds since 1894.
Continue Reading...(*Chip Merlin's Note--Rocco Calaci has been a noted meteorology expert witness in the Katrina Legal Wars. Click here to read his previous guest blogs)
In late April and May 2010, I wrote about the La Niña situation in the eastern Pacific Ocean, how it would develop, and its impact on the 2010 Atlantic hurricane season. One reason the forecast numbers for potential hurricanes is above average is due to the expected La Niña.
Continue Reading...The Fifth Circuit Court of Appeals recently issued an opinion in the case of WMS Industries v. Federal Insurance Co., affirming the U.S District Court for the Southern District of Mississippi’s ruling in favor of the carrier in a business interruption/extra expense coverage dispute that arose in the aftermath of Hurricane Katrina, which struck the Mississippi Gulf Coast on August 29, 2005.
Continue Reading...Public adjusting is considerably a young occupation in the United States. Last week, I had the opportunity to meet with Norman Lesser, a public adjuster who has one of the original public adjusting licenses in Florida. His public adjusting firm was established in 1958. The information Mr. Lesser shared with me was priceless for so many reasons. One reason is what I like to call the History Channel effect. I am sure most of you reading this are familiar with the History Channel. You either have a favorite program on it, find yourself watching it without intention because it draws you in, or you never have to change the channel because it is all you watch! Sure, “History” may have been boring for most in school, but the stories and the history behind something you are attached to or vested in is often very fascinating and helpful
Continue Reading...This week, I have another example of how a properly drafted Motion to Compel can make a world of a difference in the progress of your case. In a case against Safeco, a plaintiff’s attorney included the following argument in his motion:
Continue Reading...These discovery requests seek documents aimed at Safeco’s attempts to institutionally turn claim handling practices into profit producers….The discovery requests also seek the personnel files of the claim handlers involved in the handling of the claims at issue in this case. These files should reveal, among other things, the training of the various claim handlers and whether they received incentives or reprimands for their claims handling.
(Chip’s Note: With hurricane season only a month old and one hurricane making landfall, this guest post is a reminder that wind isn't always damaging; it can be harnessed for good purpose as an alternative energy source. Wind energy is more relevant and necessary now, in light of the environmental catastrophe caused by BP's Gulf Oil spill. The following is a guest post by Mary Jones).
Wind is caused by the uneven heating of the Earth by the sun and the fact temperatures are always trying to reach an equilibrium (heat is definitely moving to a cooler area). With the rising price of energy and the damage to the environment from non-renewable fuels, it has become cost efficient to harvest this renewable resource.
Continue Reading...A number of policyholder attorneys have asked me why FIGA is being so difficult lately. At one time, it was not that way. There has obviously been a change of the guard because nobody should expect quick resolution of any claim from FIGA based on recent complaints and the developing case law helps demonstrate this point.
Continue Reading...The Florida Association of Public Insurance Adjusters (FAPIA) is holding its annual convention. I have put together a unique panel of attorneys and public adjusters who once worked for insurance companies in various capacities. This panel discussion, "Learning From Those on the Other Side of Claims Presentation: Persuasive, Professional and Ethical Techniques of Claims Adjustment for the Policyholder," is the type of practical discussion and analysis which should become much more common at public adjuster seminars and conventions rather than lawyers telling public adjusters what the law is on any given coverage topic.
Continue Reading...The best way to ignore or cover up improper and incompetent claims practice activity would be to ask only the guilty party, right? That is exactly what Louisiana Insurance Commissioner James Donelon and Risk & Insurance appear to have done. It seems that Donelon is not only in bed with the insurance industry, but also with the BP oil spill claims adjusters. Everybody in the business knows that most BP oil spill adjusters need a great deal of accounting help, which they are not getting.
Continue Reading...This is the continuation of my Saturday guest blog series. I like to share the stories of public adjusters and try to focus the topic of my blogs to current topics and issues public adjusters are facing in the field.
As I write this, I am preparing for the Florida Association of Public Insurance Adjusters (FAPIA) Summer Conference in Fort Lauderdale. I always look forward to conferences like FAPIA because I get a chance to hear my colleagues and public adjusters speak on topics directly affecting the industry. I get to meet new people and see old friends. I always learn something new and gain new perspective on what is happening in the legislature, in various courts, and in the field.
Continue Reading...Jeff Masters' post, Act I, Scene I, Tropical Depression One of the Hurricane Season of 2010, indicated that a tropical depression was forming in the Western Caribbean. The National Hurricane Center has now confirmed this prediction and designated the storm Alex. In the discussion this morning was a note I did not like at all:
Continue Reading...THE GFDL...SHIPS...AND LGEM
MODELS FORECAST ALEX TO BE A HURRICANE OVER THE GULF OF MEXICO.
THE INTENSITY FORECAST WILL NOT YET DO THAT...BUT WILL CALL FOR
MORE STRENGTHENING OVER THE GULF THAN THE PREVIOUS FORECAST.
One of my TWIA slab case clients was very happy about the proposed resolution of her claim. Her tone changed when she mentioned that TWIA raising rates five percent. I have often felt that our elected leaders are in a no-win situation when the people electing them to office hold a noose over their neck when it comes to government sponsored insurance. Voters want lower rates, even if that means the government charges absurdly low rates and unfairly competes with private enterprise.
Continue Reading...The United States House of Representatives has unanimously passed a bill reinstating and extending the National Flood Insurance Program until September 30, 2010, according to an article in the National Underwriter, New NFIP Extension Bill Passes House; Senate Action Uncertain. The bill (H.R. 5569) will be sent to the Senate for further action. My suggestion in Flood Insurance is Harder to Find and Politics is One Reason was to call all Congressmen. Now we are down to just the Senators that need to get their act together.
Continue Reading...In a local television news report in New Orleans and one yesterday in Tampa, I explained the need for policyholders in coastal areas to purchase flood insurance. The problem is that flood insurance is getting harder to find and more expensive to purchase.
Continue Reading...(Note: This guest blog is by Vivian Persand, an attorney with Merlin Law Group in the Coral Gables office).
Last week, I wrote about some of the things you can expect to see, and not see, when Insurers like Safeco and Liberty Mutual respond to discovery requests. This week, I want to explain one of the steps you can take to combat these evasive discovery tactics. Some of the most effective and successful methods have been used across the country by large and small firms alike. What makes these plaintiffs’ law firms stand out is not the type of claim they pursue, the amount of the claim or the kind of insured they represent, but their commitment to not letting insurers get away with stonewalling discovery tactics. These attorneys go the extra mile, invest wisely, and do their homework. Sure, it might take some time; it’s going to take extra effort, and, naturally, nothing is free. But in the end, plaintiffs’ attorneys who obtain adjuster’s diaries, employee training manuals, and documents showing incentives for employees to put money into their own pockets instead of the insureds’ pockets, are going to go a long way in proving how their insured’s claim was improperly handled by the insurer from day one. This type of evidence can show your judge how the insurer never really intended to pay anything near a fair amount on your insured’s perfectly legitimate claim, if anything at all.
Continue Reading...The oil spill attorneys advertising for a mass of clients and recent advertisements in Texas regarding Hurricane Ike claims, seem to indicate that all my colleagues always win, and win big. Nothing could be further from the truth. The truth is that if you are going to trial or push for what should fully be paid, at least one party to the litigation will lose and, sometimes, lose after a lot of money is offered to settle. Everybody loves to talk about their wins. Losses happen, and I am reminded of that bitterness and horrible feeling of injustice every now and then.
Continue Reading...Could there be a worse time to have a hurricane or tropical storm than the summer and fall of 2010? Given the extraordinary warmth of water this early in the hurricane season and the ongoing BP oil spill catastrophe, policyholders and public officials need to start taking immediate steps to prepare for two catastrophes which are greater than their sum. Jeff Masters, of WunderBlog, is discussing the possibility that a tropical depression is currently forming in the Atlantic. Those in the Gulf Coast have one eye out for the increasing probability of a hurricane while also watching for the spread of oil.
Continue Reading...A frequent issue that lawyers, adjusters and other insurance industry experts address in Florida involves policyholders’ failure to timely report their Hurricane Wilma claims to the insurance carriers. Often times, a policyholder is unaware of his or her rights and obligations under the policy and Florida law, and is unfamiliar with finding and determining damages to property. Also, policyholders have often heard horror stories of insurers canceling policies after one claim. Some policyholders try to make repairs themselves to avoid the headache of presenting a claim and going through the claim process. When the problem re-presents itself and the policyholder decides to file an insurance claim, a significant amount of time has passed since the date of loss.
Continue Reading...When considering the selection of an insurance commissioner, why not vote for somebody that knows about insurance laws and regulations rather than a politician? The race for California's Insurance Commissioner had a stunning result demonstrating that the Republican electorate might make such a selection. Brian FitzGerald, an insurance enforcement attorney in the California Department of Insurance with virtually no political campaign other than a Facebook website holds a small lead for the Republican nomination for California's insurance commissioner.
Continue Reading...My last work Friday night, other than checking the eleven o’clock news -- hoping BP had found a miracle to contain the oil spill, was to read emails from Texas attorney Steve Mostyn and Javier Delgado, of our firm about coinsurance coverage issues. I woke up this morning thinking about yesterday. My wife, Kim, noticed that my cell phone's power was depleted, and she asked whether I wanted it recharged. I thought some more about yesterday. "No" was the answer.
Continue Reading...Dimechimes ClaimSmentor had an interesting post on its blog which partially supports my opinion that the BP claims process has an insufficient number of qualified people attempting to figure out and pay the full amount owed to those damaged by BP. An Open Letter to Admiral Thad Allen, President Obama, White House News Correspondents, ESIS Insurance, and All involved in the BP Oil Response- We Can Help Address Your Claims Concerns- Lead, Follow, or Get the Heck out of our Way!!!! stated this:
Continue Reading...The last thing public adjusters need is another class on the unauthorized practice of law as a substitute discussion for professional behavior. On Thursday, I will present a speech regarding professionalism at the National Association of Public Adjusters Annual Meeting. The title, "Fantastic Adjustment Results through Professionalism and Ethical Conduct: Tips from the Masters and Lessons from the School of Hard Knocks" fairly explains what I think is the most important issue facing the public adjusting industry in the long term.
Continue Reading...This is a new series devoted to public adjusters. The purpose is to share your stories and to tell others about your cases and clients. I want to make this a place where information can be shared and the industry examined for the benefit of field advocates fighting for policyholders.
Continue Reading...Colorful and strong willed people make the world more interesting. Every meeting and phone call I had with Pat Catania was filled with colorful debate. He was a fighter and always made me rethink issues, methods of adjustment and coverage because he never accepted conventional thinking. When he learned he had liver cancer, he fought the conventional grim prognosis to the bitter end. I would have expected nothing less from him.
Continue Reading...(Note: This guest blog is by Nicole Vinson, an attorney with Merlin Law Group in the Tampa, Florida, office. This is part of a series she is writing on Examinations Under Oath and Public Adjusters).
Everyday, I talk with various people about insurance claims. I meet with public adjusters, consult with clients, discuss cases with my colleagues, talk with defense counsel, and, often, take testimony of witnesses or experts concerning insurance claims. My focus in all of these communications is to find a way to help the client and solve the problem. Many times this is easier said than done.
Continue Reading...In Texas, courts have long held that the qualifications required of appraisers are that they be competent and independent. Similarly, the appraisal provision of most insurance policies typically contains language requiring an appraiser to be competent, knowledgeable, impartial, disinterested, etc. Although both Texas courts and most insurance policies require that appraisers be – in some form or fashion – competent and independent, it is not always clear how someone should interpret such language. Fortunately, Texas courts have shed some light on this topic.
Continue Reading...Today is the day Governor Crist decides the fate of the pending property insurance bill by choosing whether to exercise his veto. Yesterday, investigative journalist Paige St. John's article, Lobby Had a Hand in Insurance Bill, was on the front page of the Sarasota Herald-Tribune. While I was unsuccessfully advocating for policyholders this past legislative session, I observed the insurance lobby, with an army of insurance lawyer lobbyists, seemingly writing most of the proposed laws that eventually passed. Indeed, I have not found one quote from a Florida representative claiming to have stopped any insurance industry sponsored law.
Continue Reading...(Note: This guest blog is by Nicole Vinson, an attorney with Merlin Law Group in the Tampa, Florida, office. This is part of a series she is writing on Examinations Under Oath and Public Adjusters).
In my post last week, I explained the new provision in Citizens’ homeowners policy and received many comments that address great issues.
In Part I of this series, I posed several questions for discussion:
I want continue evaluating these questions and pose a few more. How each of the questions can be answered depends on many factors. Discussing this policy change is important because it can change the way a claim is presented and the obligations of those involved.
Continue Reading...The Merlin Law Group has started a legal blog about the insurance issues that arise with Condominiums. Condominium law is an area where a little experience leads to the conclusion that there is a lot more to learn. Condominiums have unique insurance issues which we felt could better be addressed in a separate blog.
Continue Reading...Insurance agents should use two recent events to encourage their clients to purchase flood coverage. The recent Nashville Flood is one example of how quick generally unaffected areas can be swamped from rain. The other is the upcoming 2010 hurricane season, which meteorologists seem to predict as a windstorm Armageddon.
Continue Reading...(Note: This guest blog is by Nicole Vinson, an attorney with Merlin Law Group in the Tampa, Florida, office. She will be writing a guest blog series on Examinations Under Oath and Public Adjusters).
After taking a look at the new Citizens Property Insurance Corporation policy, which potentially requires a non-party to sit for an examination under oath, lots of discussion has started and some of the same main themes keep coming up.
Continue Reading...The Texas hurricane insurance coverage disputes caused by Hurricane Dolly and Hurricane Ike are fully engaged. Texas’ two year statutes of limitation are approaching. New law suits are being filed, pending lawsuits are being set for trial, settlement conferences are causing great frustration, and the discovery battles between insurance counsel and policyholder counsel are considerable and contentious. Sadly, this is a pretty normal state of affairs on a two year anniversary following a major catastrophe.
Continue Reading...(Note: This guest blog is by Nicole Vinson, an attorney with Merlin Law Group in the Tampa, Florida, office. She will be writing a guest blog series on Examinations Under Oath and Public Adjusters).
The new language in Citizens Property Insurance Corporation’s 2010 policy has spurred debate and questions about the obligations of both policyholders and public adjusters in Florida.
Continue Reading...Sergio Leal has joined the Merlin Law Group in Houston. As he is a proud University of Texas graduate, football seasons will be more debatable in our office. Texans do not concede that the best football is played in states a little further east.
Continue Reading...I receive a fair amount of private emails regarding certain posts. Yesterday, I received about fifty saying that this Blog was “down.” Thanks. This blog is hosted by LexBlog and this was their explanation:
The issue, arising out of the software interfacing with our cloud server environment was identified, and repaired. We do not expect any continuing service disruptions. Your blog content was not at risk during this down time nor is it at risk at anytime. All of your work is completely backed up.
Your blogs on the LexBlog Network are hosted in a cloud environment developed and operated by LexBlog on the Amazon Elastic Compute Cloud (Amazon EC2). Amazon EC2 is widely recognized as a highly reliable environment and allows LexBlog to provide you with 99.99% uptime.
Every “cloud” has a little rain, and LexBlog has been an excellent service for us and our readers. So, I do not expect this to happen with any frequency. Sorry for the frustration.
Continue Reading...The tragedy of loss of human life and damage to the environment when discussing the BP Oil Spill cannot be overstated. The important role that accountants and business interruption experts will play helping prove financial loss cannot be overstated either. Experienced professionals like Bob Glasser, noted in yesterday’s Are Lawyers Pandering for BP Oil Spill Clients Going to Get Sued for Malpractice in Follow-up Class Actions? A Guest Blog Regarding Business Claims By Bob Glasser Explains and Guest Blogger Bruce Smith, who wrote The Forensic Accountant's Role In Business Interruption And Business Income Claims, should be in high demand from businesses and entities that lose revenue and income as a result of this oil spill. Attorneys presenting these lost income claims should consider hiring such individuals as consultants and financial expert witnesses.
Continue Reading...There has been a disgraceful amount of pandering by potentially incompetent lawyers to sign up BP Spill Victims. Many of these lawyers are experienced only in personal injury cases, and many are not licensed in the affected states and are using the internet to lure clients. One attorney from California, who is not licensed in Florida, gave a seminar this week in Destin, Florida, about his services. Many of these attorneys have no intention of providing sound disaster recovery advice that accountants and other experienced attorneys can provide. The "elephant in the room" is that they do not have the experience or resources to give competent legal advice but are banking on contingent percentage contracts that obligate clients to sums far in excess of what is reasonable. These attorneys do not have the competence or experience to discuss business interruption concepts because they have never practiced in this area of the law. Many attorneys are advertising and signing up clients without then doing anything that is reasonably required under the circumstances.
Continue Reading...During the Congressional hearings, Senator Jeff Bingaman, Chairman of the Energy and Natural Resources Committee, said:
Continue Reading...If this is like other catastrophic failures of technological systems in modern history, whether it was the sinking of the Titanic, Three Mile Island, or the loss of the Challenger, we will likely discover that there was a cascade of failures and technical and human and regulatory errors.
Several public adjusters with Global Adjusters were arrested in a broken tile fraud claim scheme. Wrong is wrong. Everybody is entitled to a presumption of innocence. Yet, the statement in the arrest warrant alleges what so many others have been complaining privately to me, and then publicly in the past legislative session---there are far too many broken tile claims occurring with the same public adjusters in South Florida for all to be legitimate.
Vivian Persand is making headway against Safeco and Liberty Mutual Insurance Company. Sharing information and networking with similarly situated policyholders who are litigating issues involving the companies’ claims management practices and underpayment of claims is important. Attorneys who do share information reduce the cost of litigation for their clients, show that the insurance defense attorneys generally are not truthful in their disclosures of incriminating information, and generally win more cases. As a result of a Hurricane Ike insurance dispute involving a medical complex insured by Safeco and problems involved with opposing counsel and Safeco in that matter, I have become involved in organizing the policyholder's bar so that we can more effectively litigate the claims practices of Safeco and Liberty Mutual.
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 attorney Donna DeVaney are writing on sinkhole issues).
Although infrequent, yesterday’s tragedy in Saint-Jude, Quebec, is a startling reminder that catastrophic sinkholes do happen.
Continue Reading...This morning I am in Dallas at the Windstorm Symposium. Steve Pate and I will be giving a presentation about the most significant property insurance cases from the states of Alabama, Mississippi, Lousiana and Texas over the past year.
Continue Reading...This morning's edition of Business Insurance has an article, Claims Could Get Messy After Huge, Costly Oil Spill, which explains that insurance claims are going to be complex and that the cost will certainly be in the billions. My reading of a FC&S discussion on the issue of "pollution" exclusions in homeowners policies indicates the same thing. Indeed, given the definition of a "pollutant" in the standard form policies, one may question whether oil escaping in a natural form would be a "pollutant."
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).
Complying with code upgrades often extends the period of time it takes to repair or replace the property after a loss. Depending on the type and nature of the code requirements, repairs could be extended for several months and depending on the type of policy this time delay may not be covered. Depending on the size of the business, this could translate into significant unrecoverable losses.
Continue Reading...Nashville is a mess. My wife asked me to turn on the news and we watched a tractor trailer floating down a street. "Oh, my God!" was my response as I watched.
Continue Reading...First party property coverage may exist under some common form property insurance policies for losses caused by the oil spill. While I have been rather pessimistic regarding the possibility of first party insurance companies sending legions of claims adjusters to help oil catastrophe policyholders, there appears to be some coverage available, and possibly, a lot more, depending on what the cause of the loss is eventually determined to be. These facts are important. Each coverage form is important as well and must be reviewed in detail.
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 attorney Kristin Demers-Crowell are writing on sinkhole issues).
Senate Bill No. 742 was approved by the Governor on June 16, 2009, and took effect on January 1, 2010, as an amendment to Florida Statute 627.706. This amendment is important to note because it allows an insurer to non-renew an insurance policy which contains sinkhole coverage in Pasco County or Hernando County and instead offer coverage which only includes catastrophic ground cover collapse coverage. In other words, it is now the insurer’s option to remove the coverage in Pasco and Hernando counties.
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).
Many policyholders are not familiar with the documents or income accounting records required to present a business interruption claim. To comply with the requests from an insurance carrier, policyholders are often forced to retain accountants to accumulate the data and provide a report to the company, but such services are rarely free.
Continue Reading...I hate to make doomsday predictions, but there is a possibility that the BP Oil Spill could be worse than any hurricane or catastrophe that I have been involved with. I spent yesterday speaking with others about the current situation. Indeed, my father teaches those in the oil industry how to recover and react to oil spills. Unless the source of the oil is stopped or slows down soon, oil is going to be all over the northern Gulf Coast and Florida. If the spill cannot be contained or slowed in the near future, it will significantly impact our economy.
Continue Reading...A number of former and current clients have called our offices about the recent oil spill in the Gulf of Mexico. They have expressed fear about damages to their business and property, as well as actions that they can take take to protect themselves from the consequences of this disaster. We have already been retained for business losses as customers of clients are cancelling plans for travel to the Gulf Coast. If something does not change soon, this disaster will likely be much worse than most hurricanes. It has the potential to be worse than any of them.
Continue Reading...Nicole Vinson has just joined Merlin Law Group. Nicole’s first party insurance advocacy began in Jacksonville, and now she will be handling claims throughout Florida from our Tampa office.
Continue Reading...Many property insurance policies cover "Volcanic Action." In Volcano Fiasco - Understanding Business Interruption Claims, Part 17 and Possible Coverage to Obtain Recovery from Volcanic Activity - Understanding Business Interruption Claims, Part 18, Michelle Claverol wrote regarding the possibility of collecting for business loss caused by volcanic ash. My friend, Mark Nation, wrote about travel coverage in Travel Insurance Claims Expected As a Result of Volcano Eruption.
Continue Reading...(Note: this Guest Blog is part of a series on sinkhole issues).
Have any of you been involved in a neutral evaluation where the neutral evaluator appointed by the Department of Financial Services is an engineer or geologist that you have worked against many times? This begs the question – how “neutral” is neutral evaluation? Depending on the situation, you can wind up with a not-so-neutral evaluator or, worse yet, an evaluator who you have an adversarial relationship with from past claims. I have a few tips that can help you get more information about whether your prospective or appointed neutral evaluator is “neutral.”
Continue Reading...Policyholders know when they have been "ripped off" by the fine print of an insurance policy. The most common "rip off" is when insurance companies sell replacement cost insurance and then do not immediately pay replacement cost value. A number of insurance companies, like Chubb and AMICA do not play this "bait and switch" game in other jurisdictions. However, the insurance industry wants to change Florida law to make it legal in Florida.
Continue Reading...An excellent post by Brandon McWherter, of the Tennessee Insurance Litigation Blog, correctly noted an important point regarding insurable interest and title. The general rule is that title is not necessary to establish an insurable interest in property.
Continue Reading...Tempus fugit. Two weeks to go before the Windstorm Insurance Network holds its Dallas Symposium.
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).
Yesterday, I wrote about how swiftly the insurance industry has decided to shut down the possibility of recovery on business interruption claims resulting from the recent volcano eruption in Iceland. As reported, it is estimated that having to close Europe’s busiest airports may cost the airline industry in excess of $2 billion. While the insurance companies’ message of non-recovery was heard loud and clear, coverage fights will likely ensue, depending on the language of each individual policy.
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).
On April 14, 2010, a volcano that was silent for almost 200 years spewed a massive plume of ash thousands of feet into the Icelandic sky. The volcanic ash quickly spread throughout Europe’s atmosphere, forcing the cancellation of 81,000 flights and the closure of airports in U.K., France, Germany and Scandinavia. Millions of passengers were stranded and flights did not resume until almost a week after. The International Air Transport Association and the Centre for Asia Pacific Aviation estimated that the disruption may cost the airline industry in excess of $2 billion.
Continue Reading...The Associated Press reported today that Senate Bill 2044 and House Bill 447 have stalled in the Florida legislature.
The article, published at Insurancenewsnet.com, states:
Continue Reading...Florida legislators will be debating insurance on the Senate floor today. The Senators are likely to have significant debate because recent indications are that there is extraordinary controversy about how to “fix" all of Florida's property insurance problems.
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 attorney Donna DeVaney are writing on sinkhole issues).
I haven’t seen a ghost, but the new insurance legislation pending in the Florida legislature is almost as scary. There has been a flurry of activity in the Florida House this week regarding HB 447. The Florida Senate is considering a similar bill, SB 2108. It is helpful to review the Florida Senate Bill Analysis and Fiscal Impact Statement for an overview of the major reforms.
Continue Reading...State Farm has a First Party Coverage Seminar which sets forth the claims handling standards that are fairly standard throughout the insurance industry. The instructor's manual to this seminar should be studied by insurance coverage counsel. It sets forth very explicit claims adjustment standards and even explains the purpose for many of them. I will be going over these claims standards because they are extremely important in understanding how an adjuster is supposed to go about handling a first party insurance claim.
Continue Reading...I have been in a networking seminar regarding Safeco and Liberty Mutual insurance companies all day. One of my colleagues provided me some materials from State Farm. I am posting a couple of them for your review.
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).
New York-based drugstore chain, Duane Reade, must feel like it is Ground Hog Day every time their attorneys call to give status on their case against St. Paul Fire and Marine Insurance Company. Duane Reade, recently acquired by Walgreens, owns and operates 200 drugstores in and around New York City, including 124 in Manhattan. Duane Reade has been battling its carrier for almost 8 years in a protracted insurance coverage dispute arising from the September 11, 2001, destruction of its single most profitable store, formerly located on the main concourse of the World Trade Center. After a bench trial, four Federal District Court opinions, an appraisal and two appeals, the business interruption saga finally came to an end.
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 of the most daunting tasks in submitting an insurance claim is the production of documents. Most insurance policies have language similar to the following:
Continue Reading...The insured, as often as may be reasonably required, shall produce for examination all writing, books of account, bills, invoices and other vouchers or certified copies thereof if originals be lost, at such reasonable time and place as may be designated by the company or its representatives, and shall permit extracts and copies thereof to be made.
(*Chip Merlin's Note--Rocco Calaci has been a noted meteorology expert witness in the Katrina Legal Wars. Click here to read his previous guest blogs)
In about six weeks, the 2010 hurricane season will begin. As most of you already know, the National Hurricane Center and Dr. William Gray are predicting an "above average" year for hurricane activity. This was similar to last year's forecast for the 2009 hurricane season and we had a very quiet year. This year should be different.
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 attorney Kristin Demers-Crowell will be writing on sinkhole issues).
Most homeowner policies in Florida are "all risk" policies, which means the peril that caused the damage is covered unless specifically excluded in the policy. Generally, to defeat coverage under an "all risk" policy, an insurance company must prove that a specifically excluded peril caused all of the damage.
Continue Reading...Have you ever become so frustrated with government red tape that you simply lost your composure? Most of us have. While many swear they will do something legally about the governmental problem, most never follow up. The old phrase, “you cannot fight City Hall,” does not apply to a few of us who fight, and then fight some more. It does not apply to a special client of mine, Suzanne Harris, who brought Okaloosa County to its knees in legal proceedings and has garnered national recognition for her successful efforts. Her work underscores the importance of open public records, and our efforts for policyholder requests of those records from Departments of Insurance.
Continue Reading...Today’s deposition of Professor William Spelman starts a series of depositions in the Texas slab cases involving TWIA. Several weeks ago, policyholder attorneys, including myself, met in Galveston to organize a series of depositions and decide upon the work assignments for these cases. This will be the first of many depositions and discovery attempts by policyholder attorneys to gain additional recovery for those individuals who suffered the most devastation caused by Hurricane Ike.
Continue Reading...Law Reviews are where the academic discussions of law are openly published. While in law school, I was fortunate to serve as the Executive Editor on the University of Florida Law Review. The experience enabled me to research, correct and debate with law professors and scholars about points of law and how they should be framed for public review. Last week, the Mississippi Law Journal published an article, William F. “Chip” Merlin, Jr., Corban v. USAA: A Case Providing Far Too Little Because It Was Rendered Far Too Late, 79 MISS. L.J. Supra 129 (2010), which I humbly suggest may help many understand the issues related to the anticoncurrent clause in cases involving storm surge. I strongly urge you to read it if you are an attorney representing policyholders. For everybody else, it is another example of how I can make sleep potions better than anything you can find at the pharmacy.
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).
“Experience is the name everyone gives to their mistakes” – Oscar Wilde
I picked up a couple of pointers worth sharing in an article published by the University Risk Management and Insurance Association titled, "Case Study-Business Interruption: An Exposure by Many Names," by William Austin, et al., (2005). The article examined a case study similar to what some academic institutions near the Gulf Coast experienced in the aftermath of Hurricane Katrina. The business interruption case study, however, was analyzed in a scenario where a catastrophic fire damaged a state of the art research facility at a higher education institution that thrived on revenue from its prestigious research and development programs.
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).
These days it is hard to find a topic on property insurance law that has not been previously discussed in some way on this blog. However, many new people join our blog each day, so I feel it is important to bring up previous posts in order to learn and build on what has been said before. In a previous blog, (Cooperation Clause Does Not Require Policyholder’s Slavish Obedience), Chip discussed the growing trend of insurers’ threatening letters to policyholders stating that a failure to comply with every single request could void coverage under the cooperation clause.
Continue Reading...Safeco and Liberty Mutual Insurance Company claims practices impact the lives of millions of claimants. Over the past several months, we have been coordinating efforts with others to learn why so many of the claims are paid slowly or not for the amounts which claimants have demanded. This has been a national effort and a relatively enormous project for any one person with other matters to attend. Some prior posts have alluded to this effort we have initiated:
Safeco and Liberty Mutual Claims Practices Questioned on a National Basis: Policyholders Organize Against Wrongful Claims Practices
Should Liberty Mutual and Safeco Insurance Company Customers Expect Great Rates for Poor and Wrongful Claims Performance?
Sandy Burnette won an appeal and had a matter remanded for appraisal. In American Capital Assurance Corp v. Courtney Meadows Apartment, 35 Fla. L. Weekly D802a (Fla. 1st DCA April 7, 2010), the court held:
Continue Reading...[T]here is no language in the policy that requires appraisal to be invoked, if at all, within any set time from receiving or waiving the sworn proof of loss. Thus, under the terms of the instant policy, the insurer's demand for appraisal was not untimely. Furthermore, the insurer has not waived its right to appraisal as it has not acted inconsistently with that right from the time of demand...
Accordingly, because the insurance contract provided for appraisal, the insurer's demand for such was not untimely, and the insurer did not waive its right to appraisal, the trial court erred in partially denying the motion to compel appraisal.
These are actual photographs of damage to the ceiling and walls of one of my client’s homes. A carrier denied this sinkhole claim based on a report from an engineering firm that opined that the damage wasn’t caused by sinkhole activity. In addition to the numerous 2-4” wide openings to the walls and floors of the home, the floor elevation survey revealed a 7.25 inch floor elevation differential. Note that these photos show only a fraction of the actual damage to the house. Indeed, several veteran attorneys on both sides of the case and a well-respected retired judge who mediated the case all agreed that this was one of the worst sinkhole damage cases that they had come across.
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).
Often times, an insurance adjuster fails to properly investigate the damages to the insured risk and does not properly evaluate the obvious insurance exclusions for many reasons. After suffering a loss, the insured a business owner is making decisions to get the business up and running as soon as possible, and many of those decisions are based upon the representations of the adjuster, or the lack of information given by the adjuster. The business decisions of whether to move to new location, lease more of the building to offset the additional costs or debt, replace or repair the improvements and betterments installed by a tenant, hire security to protect the premises, purchase a new policy that will cover theft and vandalism on a vacant building thought to be insured under the existing policy, etc., have a significant impact on the amount of money the insured will pay out of pocket and may never recover under the policy.
Continue Reading...This Property Insurance Coverage Blog set record visits last month. Thank you! I noticed a significant drop as the Easter weekend started. The Florida legislature took a well deserved breather last week as well. So, it seems like it is a good time to get caught back up.
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).
Several weeks ago, in a blog titled To Consider the Economy, or Not to? ‘That is the Question’, I examined two diverging legal views regarding the use of post-loss market conduct in business interruption claims. In that blog, I borrowed information from an article published in the July/August 2009 issue of Coverage titled “Measuring Business Interruption Loss in Wide-Impact Catastrophes: Insurance Against Catastrophes or Only Against Insured Damage from Catastrophes?” by Richard Chattman and Gregory Miller and I explained that:
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).
“In the event of loss or damage, we will adjust the loss with you.” This is a common phrase in property insurance policies, but an important phrase nonetheless. The key word in this sentence is the word with. The insurer will adjust the loss with an insured, not the insurer will adjust the loss for the insured. While the word with may not seem too important at first glance, this phrase can play a very important role in determining whether an insurer or insured may have breached the policy.
Continue Reading...First party insurance claims involving Chinese drywall have been given some hope from recent Louisiana trial court rulings. Two trial court rulings in Simon Finger and Rebecca Finger vs. Audubon Insurance Company, No. 09-8071 (Civil District Court for the Parish of Orleans, March 22, 2010), struck three affirmative defenses of the homeowners’ insurance company that denied the insurance claim to a home with Chinese drywall. The three significant exclusionary provisions of the policy struck were cited as follows:
Continue Reading...The question posed in this title was the headline to a post by the St. Petersburg Times columnist, Robert Trigaux. It was pretty harsh against some of our elected representatives who are neither running the insurance companies nor conducting these actions. Still, here are some of the significant observations in his post:
Continue Reading...David Pettinato won a motion to have an appraisal award confirmed yesterday. His case, Nationwide Mutual Fire Insurance Company vs. John Francisco, No. 2:08-cv-277 (Fla. MD March 30, 2010), relied extensively on another case we argued and won at the trial level and Eleventh Circuit Court of Appeal, Three Palms Pointe, Inc. v. State Farm Fire and Casualty Co., 250 F. Supp. 2d 1357 (M.D. Fla. 2003), aff’d 362 F.3d 1316 (11th Cir. 2004). David's recent case and Three Palms Pointe, which I started working on a decade ago, are instructional about many of the appraisal coverage issues which routinely arise.
Continue Reading...David Pettinato and I were having a discussion about our law firm yesterday afternoon. The one thing that I promised him was that change would be constant as we strive to do our jobs better and improve our service. In February, David Pettinato suggested that I contact policyholder attorney Shaun Marker, since I indicated we needed to provide better service to clients and referral sources in the Palm Beach County area. Following a Press Release, I am proud to announce that the Merlin Law Group has opened an office in West Palm Beach with Shaun Marker.
Continue Reading...Following yesterday’s post, Claims Jobs are Disappearing and One Suggestion for Insurance Career Safety, I received a number of private emails concerning my note that insurance adjusting was a “noble” business. I also had a number of public adjusters asking about and reminding me of the certifications offered by NAPIA for public adjusters. These private emails deserve some attention and highlights.
Continue Reading...The economic slowdown has many concerned about job security. This is also happening in the insurance claims business. Bob Hartwig, President of the Insurance Information Institute, gave a speech at the Property Insurance Loss Research Bureau Annual Claims Conference explaining that there has been a sharp decline in the amount of claims positions, as indicated in a published story by Claims Magazine, Claim Adjusters Hit Hardest by P&C Employment Drop:
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).
In general, 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. However, business interruption coverage ought not be used to put the insured in a better position than it would have occupied without the interruption. Most policies will therefore typically exclude coverage for any consequential (or remote) losses, delay, loss of use or loss of market, which do not directly flow from a covered loss.
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).
I have been getting numerous calls from homeowners and public adjusters regarding supplemental claims from Hurricane Wilma. While many of these claims are getting paid promptly and properly, many are not. There are a variety of reasons that these claims are being denied, but the predominate problem I run across is that the insured does not have a record of the repair expenses for work previously performed.
Continue Reading...Stupidity is what will kill this country. Financed real estate transactions cannot occur in some parts of the country without flood insurance being purchased on the structure. Such insurance is difficult to find in the private market. As a result, the National Flood Program exists. But, it can only exist if Congress allows it, and Congress has left for its Easter vacation without passing legislation allowing the National Flood Program to operate.
Continue Reading...The Florida House of Representatives appears to be following the lead of the Florida Senate regarding public adjusting. As noted last week in Amended Florida Public Adjuster Bill Passes in Florida Senate Banking and Insurance Committee, significant amendments to the original language of proposed legislation regulating public adjusters is moving through the Florida Senate. These amendments and proposed laws appear to be approved by committee action yesterday afternoon in the Florida House of Representatives. In my view, public adjusters should be prepared for these significant changes to become law because similar language is running simultaneously in both chambers of the Florida legislature.
Continue Reading...Peter Thomas is one of those people that have the unique ability to think deeply about a wide variety of subjects, figure out how they interplay and then how that information impacts various people and entities in the future so he can make money in his business. It is no wonder he has been long successful in reinsurance and is a Managing Director of Willis Re. He was our moderator for the panel discussion, "The Legal Threats," I mentioned in my post yesterday, Insurance Insolvency & Reinsurance Roundtable Annual Seminar.
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 attorney Kristin Demers-Crowell are writing on sinkhole issues).
Insurance companies have come up with a whole new excuse not to pay covered sinkhole claims. The recent trend has been to deny payment on confirmed sinkhole losses by arguing the damage is not "structural" damage as defined by Florida Statute 627.706.
Continue Reading...The 17th Annual Insurance Insolvency & Reinsurance Roundtable invited me to participate on a panel discussion today in Scottsdale, Arizona. The panel is advertised to discuss "The Legal Threats." I suppose I am on the panel, which usually consists of insurance company attorneys, because somebody has to be the token policyholder attorney who actually files the lawsuits that may impose reinsurance demands or insolvency. While I am hopeful that the clients who trust their insurance disputes to the Merlin Law Group may have claims against carriers that have reinsurance, insolvency is the last thing we ever wish for an insurer. It's bad for everybody's business.
Continue Reading...A recent order from Galveston County regarding the TWIA litigation specifically names the TWIA representatives who will be deposed and the manner in which the depositions will take place. Suffice it to say that it is no easy challenge preparing for these depositions (see attached order). As members of the Plaintiff’s Ike committee, the members of our firm have read and catalogued thousands of TWIA documents, emails, correspondence and forms in preparation for these depositions. We are expecting more as the depositions start.
Continue Reading...The Texas policyholder bar representing Texas "Slabbers" met yesterday in Galveston. The bottom line for those with the most significantly destroyed buildings is that these cases and the litigation discovery is being coordinated and will be moving much quicker.
Continue Reading...I have long found it odd that insurance companies, especially policyholder owned companies such as State Farm, allow their lobbyists to lobby against the interests of their policyholders. A recent article, Does Industry Lobbying Pose Ethical Challenges?, by Dr. Peter R. Kensicki, CPCU, raises this issue. Kensicki is an insurance professor and has been in a leadership position on the ethics committee of the Society of CPCU and has written many insurance ethics articles.
Continue Reading...With the unfortunate increase in foreclosures that have occurred because of the poor economy, it is important to understand the two basic clauses protecting lienholders. It is also important to appreciate the significant protections provided to those lienholders holding the loss payable clause known as the "standard" or "New York" loss payable clause.
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).
In this business, everyone has their own style of “working a claim.” There are, however, healthy techniques of claim presentation that practitioners should follow to effectively present a business interruption claim.
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).
Over the past few weeks I have written about the necessity of mitigation and the potential consequences of not doing so. Two weeks ago in Consequences of a Policyholder's Faiiure to Mitigate, I wrote that it was important for policyholders to obtain help from experienced professionals in the event of a large loss. While my list of potential professionals was not intended to be all-inclusive, a comment reminded me that I failed to mention that policyholders could call their agent or carrier directly if they had any questions about what was required under the policy.
Continue Reading...There are two great things about making fifty-one. First, I do not think I am any longer going to hear, "so, you made it to the BIG FIVE-O!" Second, it beats the alternative.
Continue Reading...The American Association of Public Insurance Adjusters (AAPIA) testified and presented an amendment to a proposed bill before the Pennsylvania House Insurance Committee yesterday. The bill was tabled to consider the proposed amendment. Gene Veno President of AAPIA made the presentation before the committee and reported that he:
Continue Reading...Amy Boggs wrote a post yesterday, Sinkhole Repairs: Where's the Grout?, that was followed by a story, Florida Sinkhole Reappears after Rain, which demonstrates that she is right--grout is not the proper method to fix most sinkholes:
Continue Reading...A 20-foot sinkhole in Clermont, Fla., opened up this Monday between two homes, and the recent heavy rains could be to blame.
In 2001, a sinkhole appeared in the same spot and was filled with cement. It has now reopened and is causing some concern.
(Note: this Guest Blog is part of a series on sinkhole issues).
We are seeing an increasing number of cases involving the ineffective repair of sinkholes. I had a recent case where the homeowner repaired the property pursuant to the carrier’s recommended repair method, which called for grouting only. When the grouting failed to correct the problem, the carrier re-tested the property at our request. After drilling 65 feet below the surface, they found no evidence of the 270 cubic yards (27 truck-loads) of grout that they had previously pumped under the house. The homeowner and I were left asking: Where’s the grout? After the testing, the carrier re-thought its initial position that the repairs had been effective.
Continue Reading...Many in my office laugh at my collection of insurance company memorabilia. We have old insurance advertising records, magazine advertisements dating back to the 1920's, shirts, hats, coffee mugs, decks of cards, and a long hallway covered with old insurance advertising signs. Our library has insurance books written by and about insurance companies and the insurance industry. Many of these are a century old.
Continue Reading...The Sarasota Herald-Tribune conducted a year long investigation into the manner Florida insurance companies diverted premiums and monies as expenses and losses to hide actual profits. This revelation is probably shocking to many who have been told repeatedly that the Florida insurance industry is losing money as a result of "unfair" rates and for other claims related reasons.
Continue Reading...Gaps in coverage and uninsured losses occur for a number of reasons. Most policyholders are not in the insurance business. They have a very limited understanding of the product they are buying and how risks they face may be insured. In Property Insurance Resolutions for 2010, which follows Concerns and Resolutions for Property Risk Management in 2009, published in the IRMI.com, William Austin makes the following observations:
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).
In these tough economic times, many businesses are looking to cut expenses and trim their budgets. While it is tempting to reduce insurance coverage to minimize operating costs, business owners should not skimp on insurance protection to trim budgets, particularly when it comes to additional coverages like Extra Expense Coverage.
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).
I recently took the deposition of an independent adjuster who worked on behalf of one of the larger insurers in the state. While most of the deposition was pretty standard, I was shocked when the adjuster said that he had advised the homeowners to stop making temporary repairs to their home. When I asked him to explain why he did not think it was a good idea for temporary repairs to the roof and exterior of the building to be completed, he answered that coverage had not been established yet and he did not think the repairs should be made until it was.
Continue Reading...In Louisiana, the answer is probably “yes.” The FC&S pondered this question in its March 2010 Dec Page report titled, “Recovery Under Flood Policy and Homeowners Policy?” The highlighted case was Lightell v. State Farm Fire & Cas. Co., 2009 WL 4505942 (E.D.La. 2009). The article noted the significant facts and issues as follows:
Continue Reading...The insured suffered property damage due to the wind and flood caused by Hurricane Katrina. They collected partial payment of their policy limits from both the homeowners and flood insurance policies. Believing that the payments were not indicative of the extent of the actual damage to the home, the insured filed a lawsuit against the insurers. State Farm, the homeowners insurer, filed a motion for summary judgment.
State Farm asserted that the insured is estopped from recovery related to wind claims because he previously alleged that he was entitled to flood policy limits due to the total destruction of the property. And, the insurer said that the insured has the burden of proving the damage was caused by wind (a covered loss) as opposed to flood (not covered).
An Order by the Office of Insurance Regulation shows one method some Florida insurers may use to “poor mouth” losses to the public and our legislators in Tallahassee while taking millions home through shell accounting techniques. Many of the smaller insurers operate as three corporations--the insurer, a managing general agent, and a holding company. It does not take a financial genius to figure out that investors and managers can siphon off profits by simply charging excessive fees through the managing general agent. The insurance part of the jointly owned enterprise then claims it cannot make any money for various reasons which we have been hearing about in the press and from some insurance lobbyists looking to raise rates and reduce benefits to policyholders.
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 attorney Donna DeVaney are writing on sinkhole issues).
Two weeks ago I wrote on the three ring circus that Florida’s statutory neutral evaluation of sinkhole claims has become. Fla. Stat. 627.7074. This follow up blog focuses on the “down and dirty” reasons why the process is unfair to policyholders.
Continue Reading...The Florida legislature is a difficult place to navigate. The place is an adult maze, and it takes effort to find the right room. Possibly, the logistics are a warning to novice citizens such as me that actually try to have some small input regarding the laws we agree to abide.
Continue Reading...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:
Continue Reading...
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 attorney Kristin Demers-Crowell are 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 attorney Donna DeVaney 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 part of a series 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 attorney Kristin Demers-Crowell are writing on sinkhole issues).
In 2009, the Florida legislature passed a law allowing Florida residents to opt-out of sinkhole coverage. The purpose of the law was to help insureds lower their yearly insurance premiums. The practical effect, however, has been that we now have many in this state who have insurance policies that effectively cover nothing in the event of sinkhole damage.
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 attorney Donna DeVaney 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,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 the ninth of a thirteen part series 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 the fifth of a thirteen part series 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 the third of a thirteen part series 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 the second of a thirteen part series 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 the first of a thirteen part series 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, we will start a weekly series regarding examinations under oath which are sometimes called sworn statements under oath.
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...As this is being posted, I am providing an ethics seminar to Florida public adjusters along with Merlin attorneys Bob Reynolds and Michelle Claverol. This follows my earlier posts on the topic, Public Adjusters Sued in Class Action for Wrongful Conduct--Are Unauthorized Practice of Law Class Action Suits Next? and Public Adjusters Targeted by Lawyers for Overcharging Policyholders.
Continue Reading...I just finished a two day settlement conference of a commercial insurance claim dispute held on the 51st floor of Fulbright & Jaworski in Houston. The view from the conference room was beautiful and in juxtaposition to the manner my client felt the insurance claim was handled. As is becoming customary for many of my cases, the terms of the settlement are confidential. The resolution ended very amicably, although the process was somewhat frustrating. The significant aspect to others is this was a matter whose facts are similar to, and seem repeated in, thousands of other Texas losses, no matter if the loss is small or a complex middle eight figure claim. Insurance claim denials and delays seem commonplace in Texas.
Continue Reading...Dan Luby of the Florida Insurance News forwarded a Blog, Alex Sink's Cold War with the Insurance Commissioner, by Gary Fine regarding a possible “riff” between Alex Sink and Kevin McCarty. I find this curious because the two of them are leading consumer advocates for policyholders. I have never found Bill McCollum, Sink’s opponent for Florida Governor next year to be a supporter of policyholders. He is clearly the insurance industry’s candidate. Yet, the Blog noted:
Continue Reading...“Interestingly enough, Attorney General Bill McCollum - and Sink's likely rival for the governor's office in 2010 - praised McCarty's report, saying that Floridians should be "very pleased" with the amount of surplus lines coverage since it has helped decrease the need to have commercial coverage picked up by state-created insurers.”
A South Florida law firm is apparently looking for cases where a number of public adjusting firms have allegedly overcharged policyholders. I was forwarded an email over the weekend and was then provided a copy of the legal advertisement that literally named a number of public adjusting firms.
Continue Reading...I will be attending and speaking at a very interesting seminar for attorneys regarding wrongful insurance claims practice at the Wynn Las Vegas on August 26-28. The 360 Advocacy Institute is sponsoring the "Insurance Bad Faith and Settlement Institute." I agreed to attend after speaking with Richard Slawson about having nationally recognized presenters who will talk about their perceptions of what cutting edge "bad faith" really means to attorneys who deal with insurance companies.
Continue Reading...Claim delay and failure to timely pay undisputed benefits are the most frequent complaints of policyholders. Many understand when an insurer cannot pay legitimately disputed amounts following an honest, prompt and thorough good faith investigation. But what happens when portions of a loss can be paid but are not for reasons that are not based on good faith?
Continue Reading...Two significant pieces of information show a continued trend in the property insurance business and suggests that insurance customers should not rely on the loyalty of their insurance companies. An article by Bea Garcia in the Miami Herald, Florida May Gut Discounts for Hurricane Shutters highlights the industry wide issues raised by State Farm’s requests to eliminate discounts and “recalibrate” the terms of previously granted discounts for measures taken to protect structures from hurricane damage.
Continue Reading...Yesterday’s post, Appraisals Better Be Won Because They are Difficult to Overturn--Even if Unfair in Result or Procedure, generated a comment which I spent considerable time thinking about and responding to last night. I appreciate everyone that takes time to post comments to this blog. Many regular readers are from insurance companies, independent adjusting firms, insurance defense counsel, and those with interests and opinions often opposed to mine . The free exchange of ideas is important. True learning often results from the difficulty of understanding and respecting different views and philosophies.
Continue Reading...Imagine entering into a contract to build a structure to specifications with your fee, the fair value, to be determined at the completion of the project. If a disagreement over the value could not be resolved, each side selected a “competent” person to determine the fair value. If the chosen persons could not agree, a third person enters the evaluation, and an agreement of any two of the three bound you as to the amount you would receive. You have no right to depositions, to testify, to critically analyze the opposing experts or even have experts appear live to explain to the three why you are right and the other side wrong. Sounds crazy, but this is the binding process of appraisal common in the property insurance disputes. Many Courts uphold it as a fair process to resolve differences. My advice to policyholders: WIN THE APPRAISAL ANY LEGAL WAY YOU CAN BECAUSE THERE IS LITTLE LIKELIHOOD OF OVERTURNING A BAD APPRAISAL AWARD.
Continue Reading...As a follow up to Sunday’s blog, Is Property Insurance Propaganda and its Impact on Public Policy Similar to What the Health Insurance Industry Does?, I have linked to an interview Wendell Potter gave to Democracy Now!, that aired on July, 16, 2009. In this fascinating and engaging interview, Potter explains why he decided to become a whistleblower, and he details the media strategies behind some of the health insurance industry’s biggest embarrassments and most publicized tragedies. He also talks about how the health insurance industry is now consolidated in just a few companies, how it rids itself of risky (sick) policyholders, and the scare tactics they use to influence public opinion and maximize profits.
Continue Reading...Just a reminder, my post, FEMA Grants An Additional 60 Day Extension For Ike And Gustav Victims To File Flood Proofs Of Loss, indicated that the deadline for having Flood Proofs of Loss in the hands of the flood insurers is on Friday, August 7, 2009. Please check for any changes and bulletins. In another prior post, A Warning Regarding Federal Flood Proofs Of Loss, I indicated:
Continue Reading...We are preparing for the August 13 Public Insurance Adjusters Ethics Seminar that I announced in Merlin Law Group Hosting Public Adjuster Ethics Seminar Followed by a Political Fundraiser for a Public Adjuster Running for Public Office. A draft of the presentation makes for some fairly informative reading regarding the limitations and ethical considerations of adjusting in Florida.
Continue Reading...I was thinking about the question of property insurance trade associations and lobbying while reading today’s St. Petersburg Times article, At what Cost Care? The article was a question and answer discussion with Wendell Potter, who was a public relations executive for two major health insurers. Potter has given an inside view into the political and social power of the health insurance industry in a manner most Americans probably deplore. I wonder if property insurers are different? I doubt it.
Continue Reading...Every now and then, Courts follow the rule of law that insurance policies are supposed to be interpreted as a regular person would do so—not as a trained insurance law expert would interpret them. In DEB Associates v. Greater New York Mutual Insurance Company, 407 N.J. Super. 287, 970 A.2d 1074 (N.J.Super. A.D. June 1, 2009), the court granted coverage for the increased costs of construction caused by pre-existing building codes. The court followed this rule.
Continue Reading...The Risk and Insurance Management Society (RIMS) has taken a strong stance against contingent agent and brokerage fees. A recent article in the National Underwriter Property and Casualty Online Edition suggests the debate of this topic may be heating up again.
Continue Reading..."Cheaper" insurance rates often mean far less coverage. In this world, you often get what you pay for. If there is ever a lesson to be learned about that, just ask those that live in the "Sinkhole Capital of the World," Pasco County, Florida. They can elect to get "Catastrophic Sinkhole Coverage" as ordinary coverage or get "Sinkhole Coverage" which is every bit as catastrophic where it counts--the ability to get back to where you started from--but covers damage from a slow moving sinkhole. The latter optional coverage is very expensive and covers Floridians from loss caused by most of the sinkholes that occur. The other coverage, which is much less costly, covers only very quick and substantial collapse sinkholes which happen once in a gazillion years to the properties owned by anybody. Guess which form the insurance industry wants to insure? BINGO!
Continue Reading...Imagine if our legislatures had truly knowledgeable insurance consumer advocates. Do you think the insurance industry would have tried to pass laws in Texas and Florida that allowed insurance rates to unfairly rise or allow immunity for wrongful conduct after a loss occurs like TWIA is attempting in Texas?
Continue Reading...State Farm is a tenacious opponent. "If you at first you don't succeed, try, try again" is a motto which must be emblazoned in bold letters somewhere in its Bloomington, Illinois, headquarters. But, down in the Sunshine State, some are criticizing State Farm for its creative methods of raising rates.
Continue Reading...One of the more interesting aspects of my job as an advocate for policyholders is learning from non attorneys what insurance products mean at the point of sale and how they are supposed to work after the loss. This may seem a little curious to many, but if you think about it, why would anybody trust a judge’s ruling on a medical malpractice case to explain how to practice medicine? Judges are not trained in insurance. Attorneys who say they practice insurance recovery law, but learn insurance coverage and practice only by reading legal cases are too arrogant and ignorant to be in it for the policyholder. Maybe those types of attorneys can find their way to the insurer’s employ, so my job is made easier.
Continue Reading...I wonder how concerned some insurance companies would be if they learned that one of their former managers who was responsible for claims conduct lawsuits spoke to a group of policyholder attorneys. After hearing and learning from such an individual yesterday, I have a new appreciation for how sophisticated the litigation management can be in some insurance companies and how important discovery involving improper insurance company conduct can be to success for my clients. I also wondered how much of a disservice some attorneys do to their clients by failing to invest time and money in conferences such as this.
Continue Reading...Most insurance policies contain a liberalization clause. Always look for them because a liberalization clause means that any change in the law broadening coverage would benefit the policyholder, even if the change happened in the middle of a policy period. One Florida court, however, recently took a narrower view on a liberalization clause's applicability.
Continue Reading...Coinsurance penalties are the last thing policyholders worry about following a loss. My experience has been that many field adjusters fortunately do not go through the costly calculations to accurately determine if a structure is underinsured. Thus, the penalties from being underinsured do not arise as often as they could.
Continue Reading...I was going to write on the fascinating topic of errors and omissions aspects of 100 percent coinsurance penalties, but the response to yesterday’s Post, Should the Rust Family Stay in State Farm's Power and Ownership Given the Recent Record of Policyholder and Corporate Citizen Ethics, requires some follow up.
Continue Reading...State Farm lost its most significant claims case while Ed Rust Jr. was the "owner/manager" of State Farm. Ed Rust Jr. was the person who ultimately decided that thousands of State Farm policyholders would be underpaid or denied benefits in Mississippi. He is the chief corporate leader of State Farm Mutual, the corporation that allows its wholly owned subsidiary, State Farm Florida, to essentially lie about its financial situation. Everybody—especially Rust--knows that State Farm Florida is paying millions that would otherwise be profits to State Farm Mutual. I suspect a number of highly qualified agents and claims adjusters wonder why there has been no change in the top management for two generations. After all, in the United States, we believe in earning leadership rather than being born into it.
Continue Reading...Amy Bach of United Policyholders commented on yesterday's post, The Obligation of Good Faith Claims Handling and Policyholders' Perceptions of Why it Does Not Happen, She wrote:
Continue Reading..."As usual, great point Chip. I helped write and pass a law in California that allows claimants to obtain claim related documents during the adjustment process. We tried to get a similar law passed in Louisiana after Katrina - and I've been thinking this would be a good concept to work on exporting nationwide...."
"How did you come up with that amount for my (or my client's) claim?" I was thinking of that question while taking the deposition of an Allstate corporate representative in an Indiana claims practice case, and how an insurance adjuster should honestly answer it. It is the same question millions of other policyholders, public adjusters, and attorneys ask insurance company representatives every day.
Continue Reading...In the last week, two Florida cases have been released which discuss prejudgment interest.
In Sunshine State Insurance Co. v. Davide, 34 Fla. L. Weekly D1422a (Fla. 3d DCA 2009), Florida’s Third District Court of Appeal held that when an insurer erroneously withholds a portion of a payment due, the insured is entitled to prejudgment interest on the amount not timely paid from the date the payment became due under the policy, not from the date the property was damaged. As I will explain at the end of the case summary, this case applies only to pre-2007 claims. On July 11, 2007, consumer friendly legislation took effect which would have provided Davide with a statutory right to interest from the date Sunshine received notice of the claim.
Continue Reading...As we have seen with the Katrina and Wilma litigation, courts will enforce the anticoncurrent causation clause, standard in most all risk and wind insurance policies. Many who suffered total losses could not fully recover because they did not have adequate flood insurance. Generally, policyholders with insufficient flood coverage limits fall into three categories:
We all enter into contracts everyday. Every time we buy a product, get a gym membership, or even renew a home insurance policy we sign and enter into contracts. What we usually don't do, however, is read the fine print. More often than not, these contracts we enter into everyday are what we like to call "form contracts." Form contracts contain standard terms of legal mumbo jumbo that most people think nothing about and proceed to sign without reading. Often the legal mumbo jumbo includes forum selection clauses. Forum selection clauses dictate where any litigation surrounding the contract will take place. Not only can this clause shlep any old person across the country to litigate a contract dispute, but this clause can be mandatory and dictate which jurisdiction's law will be controlling in the suit and consequently whether or not a court has jurisdiction to hear the case. Recently, one court stressed a forum selection clause's importance.
Continue Reading...The Florida legislature passed a law prohibiting Public Insurance Adjusters from soliciting business within 48 hours of a loss. Obviously, the lobbyists for the insurance industry were overjoyed with this law’s passage because it effectively allows the insurance companies and the insurance restoration industry to set the tone of the adjustment, without the typical policyholder having access to professional help.
Continue Reading...Coastal Mississippi policyholders are well served by the daily and in depth reporting by Slabbed. Writing daily for this blog is time consuming; posting two to five in-depth discussions each day must border on a full time job. Lately, Slabbed’s posts have highlighted two important issues regarding insurance coverage and insurance coverage litigation in Mississippi. One, if insurance companies want to pay nothing under the all-risk policy because of the anti-concurrent causation clause, a new form policy is needed--even if the government has to sponsor it. Two, the insurance industry is winning the lawsuits in Southern Mississippi because they are winning the discovery battle over key information.
Continue Reading...Last week I gave a speech entitled "How the Changing Insurance Market in Florida Affects Your Business" at a meeting of the Boca Raton Chamber of Commerce.
In order to make the most important point of my speech memorable, I started the speech by asking all the insurance agents in attendance to stand up. About a dozen or so did, and I am certain they were wondering what kind of lawyer trick I was up to.
Yesterday, we filed an amicus curiae brief on behalf of United Policyholders in the Florida Supreme Court. This type of legal argument is often called a “Friend of the Court” brief because it is not filed by a party to the lawsuit, but it is filed by a person or entity with an interest in the outcome of the case. In theory, amicus briefs provide courts with information needed to reach the right decision. Usually, amicus briefs address the public policy or state or nation wide effects of a legal decision, while the parties to the case focus solely on how the outcome will affect them.
Continue Reading...Policyholder attorneys should make a point to attend the day-long meeting of the Bad Faith Insurance Litigation Group which will be held on July 27, during the American Association for Justice Annual Convention in San Francisco. I Chaired this Litigation Group over a decade ago and regularly return to the meetings and learn information from colleagues helpful for my clients’ cases. If you represent policyholders and take your professional development seriously, this is a group you have to join--it makes you a better advocate for your client.
Continue Reading...An attorney from another law firm asked me whether an insurer is obligated to investigate facts supporting coverage in a property insurance coverage dispute. It is common for colleagues to share information and help when they can. It seems that the more one shares, the more one receives --usually with compound interest.
Continue Reading...(The recent State Farm Lloyds v Johnson decision from the Texas Supreme Court has generated a lot of debate within our firm. It is an important case, but it is important to remember that the Court warned that the record was not developed sufficiently to rule upon State Farm's arguments. Courts do not generally provide advisory opinions, and this opinion is particularly interesting because it addresses several hypothetical scenarios and how the law should be applied to each).
The facts involve a hailstorm that moved through Plano, Texas, in April of 2003, damaging the roof of Becky Ann Johnson's home. She filed a claim under her homeowners insurance policy with State Farm. State Farm's inspector concluded that hail damaged only the ridgeline of the roof, and estimated repair costs at $499.50 (less than the policy's $ 1,477 deductible). Johnson's roofing contractor concluded that the entire roof needed to be replaced at a cost exceeding $13,000. (These facts and degree of disagreement seem typical even for the losses we have encountered following Hurricane Ike).
Johnson demanded appraisal of the "amount of loss" pursuant to the appraisal provision in her standard-form policy, but State Farm refused to participate in an appraisal. State Farm argued that the parties' dispute concerned causation and not "amount of loss," so that appraisal was not appropriate. Johnson filed suit, seeking to compel appraisal. On cross-motions for summary judgment, the trial court agreed with State Farm that no appraisal was warranted. The court of appeals reversed. The Texas Supreme Court affirmed the court of appeals.
Continue Reading...On August 27, 2005, the Rocks' home and two vehicles were destroyed by a fire. The Rocks had a homeowner's and auto insurance policy with Guideone Mutual Insurance Company. Following the Rocks' loss, the Rocks filed claims with their insurer for damage to their home, damage to the contents of their home, and vehicle damage.
On July 31, 2006 Guideone denied the Rocks' insurance claims. Guideone denied the claims based on alleged material misrepresentations regarding Mr. Rock's criminal history on the homeowner's insurance policy application, and the Rocks' failure to comply with their contractual duties throughout the claim investigations, such as concealment regarding their claims, intentional acts, and failure to produce their children for examinations under oath.
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In April 2005, thieves climbed onto the roof of the Laws' building in Houston, Texas, tore off the exterior panels that housed each of seventeen air-condition units, and stole the copper condenser coils. Though the salvage value of the copper coils was only $2,000, the total damage to the air-conditioning units approximated $200,000.00. Underwriters denied coverage for the Laws' claim based on commercial policy's theft exclusion.
Continue Reading..."Should I Stay or Should I Go?" I imagine the State Farm claims employees and agents must be playing these classic lines from The Clash over and over. According to an article in yesterday's South Florida Sun-Sentinel, there is some speculation State Farm wants to stay and may try to politically strong-arm Florida into allowing it.
Continue Reading...We will be participating in a brand new Property Insurance Claims Conference this fall. The inaugural First Party Claims Conference (FPCC) takes place October 26-27, 2009, at the Crowne Plaza Hotel in Warwick (Providence), Rhode Island. A series of presentations, panel discussions, and interactive seminars will address significant issues regarding first party claims.
Continue Reading...Career insurance adjusters are important to society. The adjuster's job is difficult because it requires the ability to work well with other people, knowledge, and technical skills. It is a trade where experience can teach much more than any book or course. Most well meaning and experienced insurance claim adjusters get their customers’ claims paid without hassle and in a spirit of cooperation--sometimes well beyond the actual policy terms and conditions.
Continue Reading...Insuring to value is an important aspect of insurance. Most policyholders, especially condominiums, face significant penalties for not purchasing full replacement value insurance coverage. If a policy has a coinsurance penalty, any loss benefit will be reduced if property is not insured to full value. The reduction can be significant.
Continue Reading...After yesterday's post, “Leading Insurance Academic Proves State Farm Accepts "Reasonable Expectations" of Insurance Coverage,” I received an email from Jim Fortson, a marketing consultant who is married to our firm's Managing Attorney, Mary Fortson. Jim is always reviewing ads and marketing information to keep informed of current trends. I get many ideas for my blogs from readers like Jim, and thought I would share his with you.
Continue Reading...Professor Jeffrey Stempel is among the best legal writers of matters pertaining to insurance. When reading his work, I often think "why can't I explain my thoughts so clearly and eloquently?" Maybe that is why he is the insurance law professor, and I am in the middle of legal muck and controversies.
Continue Reading...I anticipate significant discussion and controversy regarding Citizens plan to remove the appraisal clause from its policies. Currently, many claims under Citizens policies go to appraisal because policyholders and Citizens disagree over the value of a loss. I suspect that many of these cases going to appraisal are those where policyholders hired public adjusters. Appraisals have become so common in Florida that the Windstorm Conference has classes on appraisal and a certification for umpires. An Insurance Appraisal and Umpire Association formed over the past couple of years.
Continue Reading...Suppose you were not such a good person and tried to pay less than you owed on several debts. There was a process to resolve those debts, and you repeatedly lost and eventually had to pay the debts. What would you do? Well, if you are Citizens Property Insurance Corporation and its Board of Governors, you change the rules, looking for a different resolution process to avoid paying the debt and the publicity of underpaying claims.
Continue Reading...Fire was the major peril insured by the insurance industry over a hundred years ago. In the tradition that is still commonplace today, insurers wrote specific exclusions into the insurance contracts which limited when they had to pay for loss caused by fire. I guess my friends along the coasts of Mississippi and Texas could relate when they found their all-risk insurance policies which cover hurricanes excluded damage from the waters that came with the hurricane.
Continue Reading...The insurance process works pretty well most of the time, with most claims resolved in a more or less acceptable manner. Most insurance company adjusters want to get the full amount of benefits to customers as quickly as possible, have the claim closed, and get a fair paycheck for their work. Most insurance company adjusters are initially taught good faith obligations of claims performance. There are a number of insurers and insurance company attorneys who truly seem to be engaged in good faith claims teaching, discussion, and review of problem cases. They try to get even bad faith claims resolved fairly and quietly.
Continue Reading...There is no place for fraud by a policyholder or public insurance adjuster when reporting a loss to an insurance company. At this week's Florida Association of Public Insurance Adjusters (FAPIA) summer conference, our law firm emphasized this message. Like insurance company and independent adjusters, public adjusters are bound by ethical standards. I was happy to see that the FAPIA leadership made ethical and professional behavior a prominent theme of discussion at the conference. Both policyholders and the insurance industry can benefit greatly from increased emphasis and enforcement of public adjuster professional and ethical standards.
Continue Reading...Don't you think Madoff would agree that society should throw a financial swindler in jail? I imagine most insurance executives think there should be consequences if they do the same thing. Shouldn't they agree that claims management practices which intentionally underpay must be punished by law as a matter of public policy? Who would not agree--unless you were part of a system that wanted cheating of policyholders to be "business as usual?"
Continue Reading...Some Mondays are more interesting than others. When I go to conferences with adjusters, I make a point to ask about "in the street" information on insurers I am litigating against. The information and leads to witnesses or evidence are often extremely valuable to my clients. Adjusters know when the orders from claims management are wrong and aimed at paying less than what is fairly owed. Most want to disclose facts about insurers that wrongly demand underpayment.
Continue Reading...Alex Sink, Florida's CFO and candidate for Governor in 2010, was the keynote speaker at the 2009 Summer Conference of the Florida Association of Public Insurance Adjusters (FAPIA) yesterday.
Sink has not failed in her job as CFO and has an excellent chance to become Florida's next governor. Her opponent in the race, Bill McCollum, seems to be the darling of the insurance industry. Sink, on the other hand, is setting out a course as a champion for consumers.
Continue Reading...The insurance industry is probably calling and writing the editors of the FC&S Bulletin because the June 2009 edition correctly notes that Ensuing Loss Damage is covered under the ISO form policies for typical Chinese Drywall losses. I recently noted various coverage issues related to Chinese Drywall. A number of these cases are coming to our office because insurers are not affording first party coverage.
Continue Reading...The Florida Association of Public Insurance Adjusters Annual Convention starts today. I have been asked to speak to their Board of Directors this afternoon regarding their concerns about restoration companies and repair contractors acting as policyholder representatives in the negotiation and settlement of insurance claims. It is a growing trend and one which generally is not good for the insurance companies or the policyholders because of inherent conflicts of interest.
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Isidore’s home in Slidell, Louisiana was damaged in Hurricane Katrina. Isidore was originally included as one of several hundred improperly joined plaintiffs consolidated in the Federal District case, In re: Katrina Canal Breaches Litigation. When that case was administratively closed, all plaintiffs were ordered by the court to file separate amended complaints. After settlement negotiations with USAA, Isidore’s insurer, failed, Isidore refiled suit in the United States District Court for the Eastern District of Louisiana. USAA moved to dismiss for lack of subject matter jurisdiction.
Continue Reading...I received the United Policyholders newsletter today. It is full of valuable information to policyholders with a variety of different concerns. While many individuals are concerned about hurricanes, the newsletter covers a myriad of topics. For example, the current newsletter highlights issues involving wildfires.
Continue Reading...Vivian Watson’s home was covered by an Allstate “Deluxe Homeowners” policy when Hurricane Katrina hit on August 29, 2005. Following Hurricane Katrina, Watson filed suit against Allstate in Federal District Court, alleging that her property suffered a total loss caused by wind, wind driven rain, flooding and waters entering New Orleans and surrounding parishes. She sought the full face value of the homeowner's policy for dwelling and other structures, personal property, and additional living expenses without deduction or offset, pursuant to Louisiana’s Valued Policy Law. Allstate filed a motion for partial summary judgment, arguing that Watson’s case should be dismissed because the damages were not caused exclusively by a covered peril (like most homeowners policies, Watson’s did not cover flood damage).
Continue Reading...At the Greater Delray Beach Chamber of Commerce Hurricane Seminar this morning, Brent Winans of the Plastridge Agency gave a fantastic presentation, "10 Ways to Get Ready for a Hurricane Claim in 10 Minutes." Winans holds the coveted CPCU designation and is Vice President of Risk Management Services.
Continue Reading...Governor Charlie Crist just vetoed HB 1171, which was euphemistically titled the "Consumer Choice Bill."
Continue Reading...I do not know why the State Farm Florida President would write a letter to Governor Crist telling him State Farm will remain in Florida if Crist signs the bailout bill. Of course it would. What a competitive advantage a few large insurers would have over the rest of the domestic competition.
Continue Reading...(This post is part of a presentation I will provide to the Chambers of Commerce in Del Ray Beach and Boca Raton over the next two weeks.)
Since 1985, I have had the pleasure of providing legal counsel to hundreds of different companies with virtually every type of insurance claim problem and concern following a disaster. There are recent trends in the Florida insurance industry regarding insurance coverage that many do not appreciate. Without the perspective gained by experience, I find many providing advice do so from a limited, and often self serving, perspective. Many of these advisors are unknowingly part of one of the newer trends.
Continue Reading...Public adjusters hate to appear and be questioned for an examination under oath. Whether they can be compelled to, should, and the legal consequences for doing so (or not) are of considerable debate.
Following my discussion regarding examinations under oath last week, Dealing with Questions that Seem Irrelevant in an Examination Under Oath, this seems to be a ripe property insurance coverage topic.
Continue Reading...(*Chip Merlin's Note--Rocco Calaci has been a noted meteorology expert witness in the Katrina Legal Wars. After meeting him at a recent FAPIA Convention, I invited him to write a series of guest blogs. Click here to read his previous guest blogs)
Why do people forget that the atmosphere reacts to weather changes at all levels besides the standard heights of 1000, 925, 850, 700, 500, 300, 250 and 200 millibars? If someone doesn’t evaluate the entire column of air at all levels, how can an accurate analysis be performed? How can you trust algorithmic results from incomplete data?
Continue Reading...I received a comment that was an important and recurrent question regarding examinations under oath. The issue concerns the seemingly endless questions of possible immaterial nature asked by the insurer:
Continue Reading..."Question concerning Examinations Under Oath.
The attorneys for the insurance companies doing the EUO seem to be asking questions that have nothing to do with the loss, (i.e., How long have you lived in this state, request a list of previous addresses, what high school did you attend, where were you born. Also they request tax returns for three to five years).
We have seen the EUO’s last one to four hours with questions that seem to have nothing to do with the fact that the insured filed a claim for damages that they have bought insurance to cover.
Are there guidelines for questioning during a EUO?"
Why are major insurance companies selling insurance with "feel good" messages rather than explaining how many different types of accidents and catastrophes they will not cover? If they were honest, wouldn't they explain to customers what is not covered before the purchase? Sandy Burnette wrote a comment to "Is the State Farm Policy Really Worth Anything?" As I indicated in yesterday's "Some Public Adjuster and Insurance Attorney Concerns and My Blogging Mistakes," he made a valid criticism which I corrected and appreciate him calling to my attention.
Continue Reading...When you write things for the public, mistakes and opposite views will be pointed out. The public nature of blogging is a relatively new experience for me. I speak, write, and advocate in private all the time. Indeed, most of what I do on behalf of clients is very private. Further, some public matters and cases later become private matters much to the chagrin of third parties. So, regarding this Blog, I appreciate comments that point out when I am wrong or when there is a differing opinion or explanation.
Continue Reading...The Insurance Journal ran an article, Florida Domestic Insurers Urge Veto of 'Dangerous' Deregulation Bill, which indicates a significant portion of Florida's insurance industry opposes State Farm, State Farm agents, and the other big insurers trying to get a competitive advantage from this legislation. The article outlined many of the competing views and stated in part:
Continue Reading...My presentation at NAPIA's Annual Meeting was titled, "The Legal, Ethical, and Practical Adjustment Issues from Windstorm Claims to Walls, Windows and Roofs." I asked three others, New York attorney Jonathan Wilkofsky, New York public adjuster Ron Papa, and Maryland public adjuster Randy Goodman, to participate as an expert panel on these adjustment issues. I have found that this type of presentation keeps the audience involved with dialogue, questions and differing views and emphasis. It was a high level nuts and bolts analysis of adjustment issues that occur regularly in windstorm claims.
Continue Reading...David Berardinelli made a presentation at NAPIA's Convention on Friday. His topic, "From 'Good Hands' to Boxing Gloves: How Allstate Changed Casualty Insurance in America," was an excellent and updated version of a speech I have seen before. Many of his points are important to understanding why the claims culture has changed so much over the past twenty years. Sadly, part of the story he tells reflects the greed of some executives in the financial industry.
Continue Reading...I received an email from a right wing group that has ties to the insurance industry. It is a call to lobby Governor Crist to support State Farm's bailout legislation. Every consumer group I know of has called the bailout another giveaway to the insurance industry at our expense. But the insurance propagandists are still pushing their illogical arguments.
Continue Reading...Property insurance policies usually contain cooperation clauses regarding subrogation rights. Subrogation occurs when an insurer pays a policyholder a loss for which a third party may be responsible. The insurer becomes interested in getting its money back from the responsible third party. Accordingly, most property insurance policies have a clause which reads similar to this:
"The insured shall cooperate with the Company and, upon the Company's request, assist in...the conduct of suits....; and the insured shall attend hearings and trials and assist in the securing and giving evidence and obtaining the attendance of witnesses."
Continue Reading...Governor Crist has signed the flawed Surplus Lines Bill (HB 853) into law. The story was reported today by the Insurance Journal in an article, Gov. Crist Signs Florida Surplus Lines Regulation Bill:
Continue Reading...Congressman Paul Kanjorski, Chairman of the Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, announced that his Subcommittee will hold a hearing to protect insurance consumers from risks in the insurance system and to prevent insurance companies from posing a systemic risk and threatening the American financial system. This systemic risk may be the federal government’s only legitimate concern when it comes to regulating insurance.
Continue Reading...I am in Del Mar, California, meeting with a hundred public adjusters at NAPIA's Annual Convention. At the first NAPIA convention I went to, I spoke about Examinations Under Oath. That was in 1985, in Carmel, California. Since then, I have learned at these meetings how some of the brightest minds apply insurance policy language to maximize benefits for policyholders. You'd think the insurance industry would have its adjusters do the same, but most of their conferences involve how to not overpay.
Continue Reading...My work day started at 4:30 am EDT in Tampa, with a trip to South Padre Island regarding a Hurricane Dolly dispute. It will end at sunset following meetings on Hurricane Ike matters. As my pilots are working on getting me safely home through the summer Gulf Coast weather, I am wondering how Judy Guice did in her argument earlier today before the Mississippi Supreme Court.
Continue Reading...Judy Guice will argue the policyholder's position in Corban v USAA at 1:30 p.m., Central Time today. You can read the briefs at our prior post and watch the oral argument here. Judy Guice is bright and dedicated to this cause--she was denied her own claim based on similar reasons as her client.
Continue Reading...Have you ever visited one on one with an elected legislator for more than 30 minutes? I have a number of times, and the results are mixed. Yesterday, I had a surprisingly pleasant and rewarding experience talking with Mike Fasano, a Florida Senator.
Continue Reading...What is the value of insurance if it does not pay for insured losses? Imagine if you had a significant accidental water damage to your home or business, do you know whether your insurance company has your back? Will it really be there to help you? Don’t count on it. Today, modern insurance companies are re-writing their insurance policies to limit what is covered and excluding many losses that used to be covered under all-risk policies. State Farm, as an insurance industry leader, is leading the charge of making an insurance product that no consumer should trust as providing the amount of coverage the insurance product afforded 25 years ago. It is always important to remember that Policyholders Buy Insurance for Peace of Mind and Not Economic Advantage and that concept is being defeated as carriers try to gain economic advantage by changing small print in the policy that may have significant consequences discovered by the policyholder only after disaster happens. To be Fair And Balanced with State Farm, I could have substituted Allstate, Nationwide and USAA into the title.
Continue Reading...Policyholders and their agents need to make certain that an application for insurance coverage has the correct answers and information. While some states require the intent of fraud in the application to rescind coverage, many states merely require materially wrong information to void an otherwise valid claim. Indeed, in Florida, even an unintentionally wrong answer which results in a higher premium charge can be the basis for denying an otherwise valid claim, even though the wrong information and the loss have no relationship at all.
Continue Reading...At our recent seminar on insurance adjustment techniques and practices, Texas Hold 'Em" #2: Merlin Law Group's Seminar for Texas Public Insurance Adjusters, I warned public adjusters that wrongful practices, especially the unauthorized practice of law by giving legal advice, would probably result in lawsuits against them. Yesterday, I found an article, Class Action Lawsuit Targets Fees Charged by Public Adjuster, that addresses some of my concerns.
Continue Reading...The issue whether Florida will join the majority of states recognizing an insurer's duty of good faith at common law is squarely before the Florida Supreme Court. In Citizens Property Ins. Co. vs. Louis Bertot, the Third District Court of Appeal noted the issue before it:
Continue Reading...As I mentioned in yesterday’s afternoon blog, FEMA issued a signed memorandum authorizing an additional 60 day extension for Ike and Gustav victims to submit a proof of loss. Now a policyholder has a total of 330 days from the date the damage was incurred to file. The memorandum notes that FEMA will be closely monitoring the extension to determine whether additional extensions are warranted. This 60 day reprieve may be your last chance to file a proof of loss and recover the insurance proceeds you are owed. Failing to timely and properly file a flood proof of loss is a bar to recovery of the claim.
Continue Reading...One way to get cheaper rates is to buy an insurance policy that covers nothing. An article shows this is how the Florida legislature is tackling the insurance rate problem:
Continue Reading...Tina Nicholson received word that the Federal Flood Deadline for Hurricane Ike Claims has been extended 60 days from the impending deadline next Monday. As I indicated in a post last week, oral promises mean nothing in National Flood claims. So, I instructed Ruck DeMinico, of our firm, to call the one person I know well enough in the National Flood program to get the story--Russ Tinsley.
Continue Reading...The Texas Windstorm Insurance Association (TWIA) has a new operations plan and laws that affect it, assuming Governor Perry signs the legislation. The good news for TWIA policyholders is that the consumer protections of Chapter 541 are still in place. The bad news is that I predict rates are going to increase substantially.
Continue Reading...Last November, I wrote a post, A Chance For Mississippi Courts To Get It Right, about a very important case that will be argued before the Mississippi Supreme Court next Tuesday, June 9, 2009, at 1:30 p.m. I know many must think that justice sometimes moves at a snail's pace because six months have passed since I first wrote about the case and we are only arguing the appeal. Corban v USAA is important to all Mississippi policyholders, and the arguments can be watched live over the Internet.
Continue Reading...The Consumer Advocate for the Florida Public Interest Research Group, Brad Ashwell, wrote a letter published in the Gainesville Sun calling on consumers to urge Governor Crist to veto the State Farm bailout legislation. He clearly explained how the bill will harm Floridians:
"The problem is that this bill would remove consumer protections by no longer allowing the OIR to protect Floridians from excessive or discriminatory rate hikes as Kevin McCarty and his office have successfully done time and time again.
If HB 1171 becomes law, major insurance carriers would not only be able to charge whatever they like, they would also be able to game the system by manipulating rates, quoting excessive premiums to coastal homeowners, then dropping those policies if they choose to so they can maintain and grow inland policies where there is less exposure. The lack of predictability this would create is exactly what we don’t need in a state with an already fragile and overstrained property insurance market.
And perhaps the most troublesome provision is that the bill would help further grow the surpluses of these larger insurers while preventing small Florida-based carriers from doing the same. In this way the bill aims to provide an unfair competitive advantage to larger companies by discouraging across the board competition with smaller carriers. This would ultimately harm consumers and businesses by fostering an insurance market offering fewer choices in terms of dependable insurers. It’s also important to recognize that there’s no guarantee these large companies will continue writing policies in Florida.
Rather than deregulating the market, which hasn’t worked out in the past, we should be working on policy goals that support a more competitive insurance market that provides consumers with more affordable options. In short, we need more Florida-based companies competing, not fewer large insurers who dominate the market, essentially holding homeowners hostage, charging any rate they choose."
He is right, and nobody disputes his facts. Proponents of the bill argue it gives consumers the “choice” to pay excessive rates if they want. The legislators who voted for the bill did so because of political pressure, without understanding the consequences, or because they like the incentives offered by insurance companies for their votes. Either way, the “choice” is just a way to justify this bad legislation.
Another day, another twist as the TWIA / Windstorm bill winds its way through the Texas legislature.
In its latest incarnation, the Windstorm bill, now found in HB 4409, does not contain the language that would have stripped consumers of the ability to bring an action under Chapter 541 against Texas Windstorm Insurance Association (TWIA) for wrongfully denying or delaying payment of claims.
Continue Reading...Charles Miller is one of the most hardworking and dedicated students of American claim practices today. He recently published an article in the Connecticut Insurance Law Journal regarding claims practice testimony in bad faith cases. For practitioners, it is a must read.
Continue Reading...There has to be a better way for Texas to make laws. Well meaning people who become legislators generally want to make things better. It is obvious that the Texas legislature is not functioning in a way that allows good intentioned people to make good law.
Continue Reading...What happened to the time when a significant insurance coverage decision arrived and everybody in my line of work analyzed that topic for several years? Now, the insurance industry is writing so many new and differently worded forms, it is hard to rely upon case decisions as being of widespread significance. If a case decision is made which insurance companies want to avoid, they re-write the policy or the insurance industry lobbies legislators to change the statutory law "gaming" the insurance business to outcomes predetermined in the insurer's favor. Accordingly, I spend more time researching trends of politics. I also review insurance trade journals to contemplate how my policyholder clients may be impacted.
Continue Reading...An article in the Austin American Statesman, Late surprise: Windstorm insurance passes, provides insight regarding the ethics of some in the Texas legislature. Most would agree that laws and rules are to be followed, but maybe that does not apply to the Texas Senate:
“By Senate rules the vote was to have occurred before midnight Wednesday, but a Senate sergeant at arms unplugged the clock at the back of the Senate just before midnight.
By a 27-4 vote, senators voted to amend House Bill 4409 to include the provisions of Senate Bill 14, that was passed in April to address the looming crisis in the Texas Windstorm Insurance Association.
“This is our last hope to be able to work on this issue,” said state Sen. Mike Jackson, R-LaPorte, the Senate sponsor of the House legislation.
For nearly a half hour, during the debate on the issue, the Senate clock read 11:58.”
Our understanding is that the anti-consumer language is not included, but the version on the Web site has the bad language and struck the consumer protections. It is buried at page 47 of 84 of the pdf version. We will keep those in Texas posted on the bill.
The coverage questions regarding problems with Chinese drywall are becoming ever more frequent in our firm. I will caution everybody that I am not giving a definitive answer. I can say that the analysis is complex, depending on which state law you are applying. As usual, the policy and the factual problems associated with the particular drywall result in some of the loss covered, all covered, or none covered. Merlin’s Woody Isom and Mary Fortson have been tasked with keeping up on coverage and recovery efforts and particular questions should go to them. After considering a number of issues, the one thing I can tell you is that anybody who claims they have a guaranteed accurate answer is puffing something stronger than is legal.
Continue Reading..."The only thing that stops God from sending another flood is that the first one was useless."
--Nicholas Chamfort (1741 - 1794)
I think a person named "Noah" has been building an ark in Florida because it has been raining, raining some more and, just when you thought it would stop, it rains a lot more. Over the weekend, some attorneys in the panhandle were curious about referring clients with flood claims caused by this drenching. At first they thought "groundwater" was excluded under the all-risk and National Flood policies. However, I believe policyholders with damage caused by very bad rainstorms may be covered under the National Flood policies.
Continue Reading...Following up on Sunday's post, The Insurance Checklist--Insurable Interest and Address of the Risk, and while waiting for the politicians to decide how much our rates may go up in the following year, as indicated in yesterday's post, A Big Week for Texas and Florida Politics of Insurance, here are some cases that explain insurable interest.
Continue Reading...The Texas legislature has its hands full this week with an omnibus biill regarding TWIA. Florida Governor Charlie Crist has to decide whether to veto various measures regarding insurance legislation. Additionally, three federal bills were just filed which may impact the landscape of how insurance is made available and sold.
Continue Reading...Insurance claims decisions cannot be made in good faith without full investigation and honest consideration of the resulting information. Some adjusters are not truly listening to their policyholders and considering what their policyholders tell them. Some carriers seem to conduct investigations with cursory expert work or only consider the opinions of the typical insurance expert without giving full consideration to other opinions. Many insurers are not conducting full investigations of Hurricane Ike claims, instead doing just enough looking to find reasons to deny or underpay.
Continue Reading...I have reminded many to check their insurance policies because the windstorm season is approaching for the southern coastal waters and the Atlantic seaboard. Over the past two weeks, I have fielded two important insurable interest questions and noticed a wrong address of the risk, which may have raised significant problems. Accordingly, it is a good time to discuss these two potential areas of coverage disputes and review policies to make certain you do not have these issues.
Continue Reading...The politics of insurance is tough for consumer champions. The insurance lobby has many faces and methods of forcing its position. In Florida, the dirty campaign against those governmental officials who stand up to State Farm and the big insurance industry has begun in earnest. Florida has one of the most respected insurance commissioners in the country, Kevin McCarty. Mike Bennett, a relatively unknown state Senator, is attacking McCarty simply because McCarty voiced the opinion that Bennett’s insurance “choice” bill would hurt Floridians.
Continue Reading...I was reading a blog by Steve Piontech, Editor-in-Chief of the National Underwriter Life & Health. His remarks seemed to add another valid reason why federal charter and the choice of a sole federal regulator needs to be avoided:
Continue Reading...An important evidentiary hearing concerning alleged wrongful claims practices is taking place in Mississippi. Since the allegations partially involve an insurance company obtaining altered or biased reports from experts, it should be studied by those with similar concerns in other areas of the country. The primary issue in this case is whether State Farm adjusted flood losses so that the Federal Government paid too much on those flood claims through the National Flood Program. The lawsuit contends that State Farm had a motive for doing so because it could minimize the amount owed under its own all risk insurance policies which exclude flood damage.
Continue Reading...After reading what actually passed, the House Committee seems to have struck all of the Senate language concerning 2210.552, and then added a new subsection (on page 36 of its 51 page bill) which reads :
SECTION 40. Section 2210.552, Insurance Code, is amended by
adding Subsection (e) to read as follows:
(e) Notwithstanding Subchapter H, Chapter 74, Government
Code, or any other law, an action brought under this section may not
be transferred by the judicial panel on multidistrict litigation.
Maybe the calls and messages paid off. Maybe policyholders just got lucky. The important activity for now is to make certain that legislators know to keep it this way.
Stay tuned for developments.
The legislative process has been called something akin to watching sausage being made. In Austin last night, it was very old and molded meat as the ingredient. The story was reported by the San Antonio Express News:
Continue Reading...Why do some elected representatives kick the people who voted for them and pander to insurance companies? Tina Nicholson forwarded me a bill that has passed the Texas Senate that guts all consumer protections for TWIA policyholders.
Continue Reading...Hurricane prognosticators are still trying to beat psychics at the game of hurricane prediction. As I indicated in two past posts, When, Where and How Big are the Windstorms of the 2009 Hurricane Season? and Psychic Predicts No Hurricanes On Florida's Treasure Coast, both scientists and psychics claim credit when they accurately predict a hurricane season and blame mother nature when they are wrong. Sounds a lot like the stock brokers I have known.
Continue Reading...Amy Boggs has an interesting case against QBE Insurance Company which has recently moved from the contract portion of the case to the claims practice a/k/a Bad Faith case. The condominium client we represent is The Dorsett House Condominium Association which was damaged from Hurricane Wilma. QBE Insurance Company insured many condominiums in Florida and has been the subject of much criticism. It recently lost a trial where the verdict on the contract damages was over $20 million.
Continue Reading...If you have questions on insurance coverage, I have answers. A public Comment and a few private questions to yesterday's post, Matching of Property Damage is Statutory in Florida, were enough cause to provide some general case examples and one significant suggestion.
Continue Reading...Suppose some shingles on a roof are damaged, but not all. Does a policyholder get a hideous looking checkerboard roof which affects the value of the structure and possibly the neighborhood? If part of a carpet is damaged, is it patched leaving a new part slightly different looking in the middle of a room? Many of these issues never arise because many insurance companies pay to match, trying to maintain a happy customer. Some pay for only the damaged amount, and end up fighting with their customers.
Continue Reading...The people in a law firm will determine its success. I am blessed to have Jean Niven on our team and working directly with me. Without Jean, the Leeds would not have won their case. She made me look good at trial and saved my neck on appeal.
Continue Reading...Imagine – all kinds of legislation, hand in hand with lobbying and political positioning, just in time for the start of hurricane season on June 1. A couple of recent news stories point out the possible direction that several key measures may be heading.
Continue Reading...A number of the attorneys in the Merlin Law Group are at the Trial Advocacy Program at the University of Florida Law School this week. Merlin’s Woody Isom is on the faculty and previously wrote a post about the Program’s intensive and innovative methods.
Continue Reading...Motivated claims adjusters need to study, improve, and be noticed for their skills and dedication. The May edition of Claims Magazine featured two stories I found interesting for different reasons. One article every adjuster should read is "Designation Envy-Why CPCU Should Matter to You." The other article, "Emerging Transformed-New Challenges Create Opportunities for Independents," should be read by claims practice attorneys and experts because it provides a glimpse into claims cultures designed to reduce amounts paid to policyholders.
Continue Reading...On June 4, 2009, Merlin Law Group will host the second in a series of seminars for Texas-licensed public adjusters: Texas Hold ‘Em #2—Down to the Nitty Gritty of Adjustment—Nine Months After Ike, at the Hotel Derek in Houston, Texas. Response to the first seminar was very favorable with many public adjusters asking when we would do it again.
Continue Reading...Property insurance losses are often caused by strange events. These events, combined with obscure insurance contract language, lead to much of the litigation between policyholder and underwriter. In yesterday's post, Florida and Texas Courts Have a Slightly Different View of Insurance Causation Burdens of Proof: Part I, I highlighted Florida law regarding basic causation. Today, I am going to explain significant differences under Texas insurance law and suggest what policyholders and their experts need to make certain they achieve the results in Texas that other policyholders more easily receive in most states.
Continue Reading...Since last May, just before we opened our Houston office, I have been reviewing and pondering causation and burdens of proof found in Texas insurance cases. While writing yesterday's post regarding sinkhole coverage cases, I came across two Florida cases that demonstrate Florida’s view that policyholders truly have minimal proof requirements coverage under all-risk property insurance policies. Texas insurance case law does not follow this majority view. I will explain how they are different in two posts. Today will focus on Florida law. Tomorrow, I will provide Texas case examples and some practical suggestions so Texas policyholders do not get surprised at trial. I figure the insurance company adjusters and attorneys do not need any more help, so they get no suggestions.
Continue Reading...A former insurance defense attorney called me yesterday, asking if I would represent him and his wife in their sinkhole insurance dispute. While he oversaw many sinkhole matters from the insurance company's position, I guess he knows that a lawyer who represents himself has a fool for a client. His call to me is part of a trend, sinkhole loss calls to our Tampa office have been on the rise. Last week, the St. Petersburg Times ran a front page lead article, Geologists Worry About Drought's Effects on Sinkhole Season. The insurance coverage available, various statutory changes, caselaw, science, and repair of sinkhole losses make these cases fairly complex. Extreme rains or droughts seem to make sinkholes more frequent.
Continue Reading...There are still a number of Hurricane Katrina cases we are actively litigating in Mississippi. One of the cases being followed closely by Slabbed is the Qui Tam litigation, brought by the two Rigsby sisters that worked for State Farm following catastrophes. The Rigsbys claim that the federal government paid more in National Flood payments than what was owed because State Farm altered engineering reports and made outcome oriented adjustments, which maximized flood related damaged so that the amounts paid under State Farm's policies would be minimized.
Continue Reading...We have received a number of questions following Hurricane Ike regarding cancellation of insurance policies. Most of the time, the reasons for cancellation are legitimate. Sometimes, the cancellation is based on mistakes of facts. Once in awhile, the cancellation is based on a bad motive and leaves the policyholder in a very difficult situation.
Continue Reading...I am an advocate for insurance policyholders. I am accountable to them. Our firm accomplishes the results they expect through a "can do" outlook, innovation and the timeless All-American mother of most success-- hard work.
I was imagining what it would be like to make a living as an insurance industry lobbyist. Lobbyists are usually lawyers or staffers that go by a title such as a "governmental affairs assistant." Some are the directors of various insurance trade organizations. Insurance companies measure their lobbyists’ accountability in a different way.
Continue Reading...Imagine if the only way politicians could raise campaign money was from the people who could vote for them. Until that happens, the insurance industry, which is among the strongest lobbying powers, will continue to influence otherwise well meaning public servants into making laws serving only insurers. Thank goodness there are a few independent consumer-centered public service groups with expertise to take on the sophisticated and well funded insurance lobbyists and their lawyers.
Continue Reading...The Florida Consumer Action Network (FCAN) has urged Florida Governor Charlie Crist to veto recently passed legislation that would allow insurers to raise rates without approval by the Office of Insurance Regulation. FCAN is probably Florida’s largest consumer action group. The Bradenton Herald quoted foes of the legislation who refer to the bill as "the State Farm bailout bill." I agree.
Continue Reading...As I noted in a blog post last week, House Bill 853, legislation intended to exclude surplus lines insurance carriers from an entire Chapter of the Insurance Code, was poised to pass both chambers of the legislature -- with only the hope that time would run out before they could agree on the wording.
Continue Reading...My wife and I spent a very pleasurable weekend in Dallas as guests of Charles and Tracey Shreves. They operate the Spink Shreves Auction Galleries and held an informal gathering of serious stamp collectors from across America. I enjoyed viewing some amazing private collections.
Continue Reading...Numerous newspaper articles have discussed this session’s bills which impact the insurance industry. The anti-consumer bill, which provides for deregulation of insurance rates, passed. I expect Governor Crist will veto that bill as was previously reported.
Continue Reading...Democratic Senator Jon Tester of Montana is standing up to the insurance industry, opposing the industry’s push for federal charter of the property and casualty industry. In an article in the National Underwriter, Tester noted that state regulation has worked regarding the insurance industry:
Continue Reading...Florida Insurance Commissioner Kevin McCarty is working tirelessly for fair treatment of insurance consumers. It is amusing that the Florida legislature may give into State Farm's bullying and even allow higher insurance rates, which McCarty says are unnecessary. Some of our legislators are pandering to State Farm and the Florida insurance industry by using the usual "word spin" games. Deregulating rates under the guise of "consumer choice" will simply lead to higher premiums.
Continue Reading...One wrongful adjustment method that occurs from time to time is the practice of taking the deductible from the policy limit. For insurers, this is a way to never pay the policy limit. When this occurs, the underwriter essentially charges unearned premium for the amount of the deductible, and the policyholder never has a chance to fully recover under the policy. Sometimes the practice occurs out of ignorance. Some just take advantage of the unknowing policyholder.
Continue Reading...Richard Dietz, a former claims supervisor with Farmer's Insurance Group, has taken to the airwaves to confess the sins of his former employer, co-workers and himself. His video is being broadcast in the state of Washington in support of a consumer protection referendum which would provide financial penalties for insurers that wrongly delay or deny claims.
Continue Reading...I wrote about surplus lines insurance companies in an earlier post, Surplus Lines Insurers, Sinkholes, and the Law of Mars. I explained how an attorney in our firm, Donna DeVaney, was able to get a favorable ruling in a sinkhole case involving a surplus lines policy due to a recent Florida Supreme Court case, Essex Ins. Co. v. Zota, 985 So. 2d 1036 (Fla. 2008).
Continue Reading...I am certain some insurance Texas adjusters are going to be surprised to learn that Texas case law has held that when a partial loss happens, depreciation SHOULD NOT be deducted from the loss. I mention this due to the hundreds of loss statements prepared by insurance company representatives where depreciation is routinely deducted.
Continue Reading...Texas insurance law has its quirks which are different than the majority. My experience is that every state has its nuances of insurance coverage law. Not necessarily wrong, just different. Sometimes, incorrect judicial decisions are made and then remain the law for generations. Often, adjusters in the field simply ignore statutes or common law rules and adjust claims the way they are taught.
Continue Reading...Comments are important in the Blogoshpere. What I may or may not write is relevant only if it is important to others. If some wish to comment with views from which we can all learn, progress is made. Sometimes, we do not read the comments to blogs which may be insightful and provide some food for thought. For this reason, I am posting some of those comments which in my opinion provide more provocative thoughts for your review and comment:
Continue Reading...This week I noted the recurrent problem of outcome oriented insurance company claims conduct in Adjusters Cannot in Good Faith Rely Upon Biased or Outcome Oriented Opinions. In Does It Stay or Does It Go? State Farm's Assault on Florida, I then noted a finding regarding State Farm's fitness to conduct insurance which stated:
"State Farm’s actions raise serious questions regarding the fitness and trustworthiness of its officers and directors to engage in the business of insurance."
State Farm is challenging that finding by asking for an administrative review.
Continue Reading...I saw a number of property managers of former Community Association clients yesterday at the Community Associations Institute National Conference in New Orleans. We recalled the trials and tribulations of catastrophes long past. We consult with a number of them regarding their insurance programs and will sometimes have a conference with their insurance brokers and agents trying to anticipate coverage which would be needed in the event of another disaster.
Continue Reading...Most insurance opponents find it amusing when I explain how many places I have been in a week. If they only knew how many matters I have "touched" in a day they would fully appreciate how hard I work to protect policyholders. This morning at breakfast, a Zurich attorney asked about my daily schedule and I responded as I normally do, that I am "busy." The truth is that I was up at 5:45 am, in Tampa, flew to Destin, Florida, and picked up a client which lead to strategy on her case, then on to New Orleans where I met with new potential clients, met with the Zurich counsel, went to a Condominium Conference, worked on the paperwork of a seven figure hotel settlement, etc.,---- I am in the "muck" of insurance disagreements and want to help, which is why you should listen to the following suggestions.
Continue Reading...As noted in Sunday's post, the Risk and Insurance Managers Conference was held in Orlando this week. In a reflection of the economy (and most of our stock portfolios), the attendance was down 40% over last year. Corporate risk managers are facing budget cuts just like everybody else. Even the large insurance broker, Willis, reflected the austere mood by having no booth and greeting people in an open area.
Continue Reading...Most of the time, I battle large corporate insurers in David vs. Goliath like battles. I find it amusing that State Farm's attorneys are struggling in this fight, given State Farm’s enormous size and power. Today, State Farm's lawyers, lead by the very able Mark Delegal, are lobbying Florida's leaders on a very anti-consumer bill. This bill would allow State Farm to charge whatever rate it wants. Florida Governor Charlie Crist is reportedly prepared to veto such legislation.
Continue Reading...The Associated Press reported that the National Association of Insurance Commissioners (NAIC) has come out strongly against the proposed Federal Charter for property and casualty insurance companies. As I have now stated in two recent posts, (read them here and here), this federal legislation is not in the interests of policyholders and is an attempt by some insurance carriers to escape accountability and increase their individual profitability.
Continue Reading...Recently, Allstate has accused other insurers of investing in credit default swaps. Does Allstate have knowledge of insurers engaging in this illegal activity? Or are these allegations a facade for the new federal oversight that would place Allstate under control of the federal government. My view on this topic is pointed:
Allstate and other major insurers are seeking federal charter to avoid state consumer protection laws and to gain an economic advantage over other property and casualty insurers. The federal legislation offers no specified safeguards for consumers, and provides for the same inept federal regulation that allowed the collapse of our financial system.
Continue Reading...Would you expect Americans to get a fair trial in Iran? Probably not, because most would believe that the judge and jury would rule against Americans no matter what the evidence showed. Many policyholders first call our office while waiting for a conclusion from the insurance company's expert. Usually, the expert becomes involved after the policyholder complains about the insurance adjuster’s first conclusion. The policyholder, now worried about cementing an already bad situation with a bad finding from an alleged expert, calls to see how we can help.
Continue Reading...The Risk and Insurance Management Society (RIMS), kicks off its annual convention in Orlando today. One of the basic principals of risk management is the avoidance of loss. A second principal is to mitigate the effect of losses. These are win/win situations for the policyholder and the insurance company because financial and time resources are not used on replacement of otherwise unnecessary losses. Indeed, if practiced widely, insurance premium rates should be reduced. It has been my position that loss prevention and mitigation must be part of public policy and should be reflected in building codes, life safety codes, and taxation policy. The benefit would be far greater than just reduced insurance premiums. Just as insurance is a societal product, risk management and loss prevention are socially significant. This should be reflected in our laws.
Continue Reading...Thursday’s Hurricane Ike policyholder attorney meeting in Houston, which our law firm organized, was a great success. More than 30 attorneys from the Galveston and Houston areas registered. We coordinated litigation and shared ideas and information to help our individual clients. This will eventually help all insureds involved in litigation receive the benefits owed by their insurance companies. I am certain the judges assigned to the cases will be happy to hear we are working on methods to streamline the litigation process so the cases can move quickly and cost efficiently.
After the meeting, I reread an appellate decision involving Texas Windstorm Insurance Association (TWIA), Tex. Windstorm Ins. Ass'n v. Poole, 255 S.W.3d 775 (Tex. App. Amarillo 2008), from a new perspective. The Court determined what kind of an entity TWIA is. The opinion starts with an amusing story:
(*Chip Merlin's Note--Rocco Calaci has been a noted meteorology expert witness in the Katrina Legal Wars. After meeting him at a recent FAPIA Convention, I invited him to write a series of guest blogs. Click here to read his previous guest blogs)
Whenever a hurricane strikes a community, we obsess over the maximum wind speed and storm surge depth. In my last blog, I mentioned many other weather elements within a hurricane that can cause damages. Now I want to speak my mind on how we need to look at hurricane damage from another perspective.
Continue Reading...Modern insurance is a financial product that was historically developed overseas rather than in the United States. Many insurance contract legal principals were also first developed by English Courts. Accordingly, reading how the theory of insurance law has developed outside of the United States can be enlightening and helpful to American insurance attorneys, adjusters and consumers interested in this topic.
Malcolm Clarke, a professor of Commercial Contract Law at Cambridge has written a splendid insurance law book, Policies and Perceptions of Insurance Law in the Twenty-First Century (Oxford Univ. Press 2007). His work should be in the library of and cited by all policyholder attorneys because his explanations of insurance are very helpful to consumers of insurance.
Continue Reading...I was recently retained by a hotel management company regarding problems associated with their Hurricane Ike insurance claim. Yesterday, during an Examination Under Oath taken in that matter by Liberty Mutual Insurance Company, the CEO of the management company handed me an article indicating that the property and casualty insurance company had a profitable year, despite the economy and catastrophes such as Hurricane Ike. He had previously thought the insurer’s slow and low payments might be the result of economic difficulties. Even large corporate clients like the hotel wonder why they must hire an attorney just to get what the insurance company owes them.
Continue Reading...The April 6 Edition of BestWeek ran a story, Insurers Have Faith in 'Bad Faith' Victories, which indicates insurance companies are winning the legislative battle against consumer protection statutes. The story notes that the insurance industry's lobbying propaganda claims that consumer protection statutes make insurance more costly at a time when people can least afford it.
But how affordable is "cheap insurance" that does not pay or pay on time?
Insurers are using the premiums paid by their customers to sponsor pro-insurance industry laws that do not hold insurers accountable when they wrongly delay or deny payments. The same premiums pay for lobbyists to do everything they can to defeat proposed legislation that provides meaningful remedies to customers who have been harmed by an insurer's shoddy claims practices.
Last year, Washington passed laws that made it unlawful for insurers to "unreasonably" deny insurance claims, and allows treble damages when an insurer does so. The Washington Insurance Commissioner stated "the law is encouraging insurers to be more responsible."
What those insurers want are consumer protection laws with no teeth. They want illusory laws that mandate "good faith" claims handling without meaningful accountability. That type of law would be akin to prohibiting murder, but not giving the police the power to make an arrest.
Honest insurers and those that act in good faith should have no problem with strong consumer protection laws. Those companies already play by the rules. The only reason insurers would lobby against strong consumer protection laws is because they want to cheat their customers. This forces otherwise good and honest carriers into dishonest practices so they can compete. A legal system that fails to hold entities and people accountable for breaking rules is tantamount to a society without rules.
Our law firm is helping to sponsor a seminar and meeting with Hurricane Ike policyholder attorneys this Thursday, April 16, in Houston. We held a similar meeting following Hurricane Katrina and felt it was beneficial for attorneys and clients to meet, learn, and share ideas regarding the common problems and issues arising out of Hurricane Katrina claims, denials, and delay.
The Ike meeting will start promptly at 8 am with a nationally recognized claims practice expert providing an in depth seminar. Other attorneys are scheduled to speak on common discovery issues. We hope to discuss methods to decrease costs of experts and other common costs as well as best practices to avoid losing arguments we expect the insurance companies to raise. We intend to share ideas about how to speed up the litigation, so that the Hurricane Ike lawsuits move along as quickly as possible.
If you are an attorney who does not represent any insurance companies and you are actively helping Hurricane Ike policyholders, you are invited. I encourage you to attend since there is everything to gain and nothing to lose.
Currently, about twenty attorneys are attending this one day conference.
There is no charge. Lunch and cocktails are provided in return for your attendance and ideas.
Please contact Javier Delgado at (713) 626-8880, in our Houston office to get more details and clearance to attend.
If you love dealing with your group health insurance bills and claims, you will be overjoyed with the new legislation proposed in Congress allowing property insurance companies to apply for a Federal Charter. This proposed legislation is the most unfair and anti-consumer federal legislation filed in recent years.
Continue Reading...One of the most fascinating parts of my job is learning of the extraordinary events that happen to people. Just when I think I have heard it all, I catch myself saying, "you've got to be kidding!" The client's typical response usually is, "I know, I wouldn't have believed it either, but…," and the remaining details are explained. Sometimes, I notice that I am smiling at the story and thinking hard about how the catastrophe can be covered under an insurance policy. Then, I end up apologizing for not seemingly being more empathetic to their predicament, but the mental exercise of applying a theory of financial insurance recovery to the facts is fun for me. This is how I use my limited talents; it has become my life’s work.
Continue Reading...This is a Blog and not a book. So, I will try to give everybody the Readers Digest version of some thoughts I have on the very complex and important coverage topic.
The Texas Windstorm Insurance Association covers "windstorms." One of the most classical types of windstorms are the hurricanes that menace those of us living along our country's Southern waters in the summer and early fall.
Some modern policies exclude, charge higher deductibles, or cover certain aspects of "Named Windstorms," which are hurricanes or tropical storms named by the National Weather Service. Those policies even limit how long windstorm coverage lasts or is effected after the "Named Windstorm" diminishes.
Continue Reading...My posts which discussed the roof damage claims denied by TWIA (See Internal Texas Windstorm Roofing Claims Memo Explains Damage is Not Covered, The TWIA Roof Damage Memo: Checking Basic References to Resolve Adjustment Questions, Roof Repair Methods Prove TWIA is Wrongly Denying Roof Claims, and "Physical Direct Loss" Caselaw and TWIA's Roofing Memo) resulted in a number of comments. The author of the internal TWIA memo is Reggie Warren. He is in TWIA’s claims management of TWIA and gave powerpoint presentations to Hurricane Ike catastrophe adjusters. We are in the process of collecting as much information as possible about Mr. Warren, since he appears to set TWIA’s claims policy.
Continue Reading...The Windstorm Insurance Network held a symposium last week in Houston. Tina Nicholson of our firm and Shannon O'Malley from the Dallas office of the insurance defense firm Zelle Hofman made a presentation regarding Texas Bad Faith Law. I met Shannon when Zelle Hofman was defending Factory Mutual in the Port of New Orleans litigation following Hurricane Katrina.
Continue Reading...I have received three questions regarding proofs of loss in the last two days. This post will provide a general and basic understanding of a topic about which I could write a small book.
Continue Reading...I am back from my epic 50th Birthday Celebration. I will have plenty to write from the experience. There is a lot to learn about life from a trip to Italy. If you have not visited, you must, and do not wait to put it on a "bucket list."
Do you ever take time to think about how another views your thoughts and philosophies? When you have two nine hour flights, you have some time to ponder these ideas.
In the insurance claims environment, there is a picture I have used in a presentation, Why Can't We All Just Get Along? to show how opposing individuals often react to each other:
(Note: This Guest Blog is by Ruck DeMinico, Knowledge Manager at Merlin Law Group).
My wife and I were reviewing our homeowner’s policy this weekend, and she was unaware of a few things that all homeowners must know. I am sure there are many more people in her situation. While this blog may be elementary to those who work in insurance, on the off chance that a novice reads this blog, I would like to mention three of the most important things every homeowner should know when updating their insurance for the hurricane season.
Continue Reading...The Texas Supreme Court issued two opinions March 27th, clarifying when a delay by the insured in submitting a notice of loss in a claims-made policy can bar recovery.
In the first case, Financial Industries Corp. v. XL Specialty Ins., ___ S.W. 3d ___, 2009 Tex. LEXIS 109 (March 27, 2009), the Texas Supreme Court was faced with the issue of whether, under a claims-made policy which required, as a condition precedent to recovery, written notice to the insurer of any claim "as soon as practicable after it is first made," an insurer could deny coverage because the insured waited seven months after the suit was filed to give notice, although notice was given within the policy period.
The Court distinguished between the prompt-notice language, ("as soon as practicable"), and the requirement that a claim be made during the policy period.
The insurer (XL) and insured (FIC) stipulated that FIC violated the policy's prompt notice provision and that XL was not prejudiced. Noting that claims-made policies benefit an insurer by allowing it to "close the book" on a policy at its expiration, giving the insurer a certainty unattainable with other types of policies, the Texas Supreme Court sided with the insured. FIC gave notice within the policy period, so that XL could "close the book" on the policy at the end of the policy period. Because XL was not denied the benefit of the claims-made policy, it could not deny coverage based on FIC's immaterial breach of the prompt notice provision, as they could not prove prejudice from the delay in notice.
In Prodigy Communications Corp. v. Agricultural Excess & Surplus Ins. Co., ___ S.W. 3d ___, 2009 Tex. LEXIS 111 (March 27, 2009), the policy required the insured give written notice of any claim "as soon as practicable," "but in no event later than ninety (90) days after the expiration of the Policy Period or the Discovery Period." Prodigy gave notice almost one year after it was named in a lawsuit, but within 90 days of the end of the discovery period. The insurer denied coverage, alleging the notice was not "as soon as practicable," but admitted it was not prejudiced by the late notice.
After a lengthy discussion regarding claims-made policies, the Texas Supreme Court distinguished between the two notice requirements, stating:
"[The requirement that the claim be made during the policy period...is not simply part of the insured's duty to cooperate, but defines the limits of the insurer's obligation, and if there is no timely notice, there is no coverage.... [A] notice provision requiring that a claim be reported to the insurer during the policy period or within a specific number of days thereafter 'define[s] the scope of coverage by providing a certain date after which and insurer knows it is no longer liable under the policy'"
While the prompt notice provision of the policy could benefit an insurer by giving it more time to investigate and participate in negotiations, the Court held that the provision was not a material part of the bargained for exchange in the policy contract so long as notice was given within the policy period. Because the insurer was not prejudiced by the delay in notice, it could not use the immaterial prompt notice provision to deny coverage.
(*Note: This Guest Blog is written by Javier Delgado, an attorney with Merlin Law Group in the Houston, Texas office).
Texas Windstorm Insurance Association says you only have 30 days to appeal its determination of damage to your property! DO NOT RUSH TO APPEAL before you learn what TWIA is not telling you; you will give up valuable legal rights and remedies.
Continue Reading...(Note: This Guest Blog is by Deborah Trotter, an attorney with Merlin Law Group in the Gulfport, Mississippi office).
As homeowners, business owners, adjusters, and government and relief agencies begin to sort through the devastation left in the wake of the dangerous storms and tornadoes that tore through the southeast last week, the stark and solemn reality of the loss of life and property is overwhelming. So many families and communities are grieving tremendous losses.
Continue Reading...(Note: This Guest Blog is by Deborah Trotter, an attorney with Merlin Law Group in the Gulfport, Mississippi office).
The spring storms and tornadoes that ripped through Mississippi, Alabama and Louisiana recently could be a preview of a devastating hurricane season. Policyholders should take the opportunity now to review their policy coverage.
One of the many things we learned from Hurricane Katrina, is that people often do not know the various insurance benefits available to them under their homeowners and/or business policies. And sadly, many insurance company adjusters do not feel obligated to inform policyholders of all of the policy benefits available to them.
Continue Reading...A reminder that the Windstorm Insurance Network is sponsoring a special Texas Windstorm Insurance Symposium. It will be a one day event on April 2, 2009, at the Hilton Hobby.
Follow these links for the Program Agenda and a listing of the Breakout Sessions.
Online registration for the event is closed, but walk-in registration onsite will be accepted on a space-available basis.
(*Note: This Guest Blog is by Jean Niven, an attorney in the Tampa office of Merlin Law Group).
Hurricane season is fast approaching, leaving coastal residences and businesses vulnerable to the whims of Mother Nature. Surviving natural disasters should not be just a warm up to the difficulties encountered in filing an insurance claim. The purpose of insurance is to provide peace of mind. When disaster strikes the insurer is tasked, pursuant to Florida law, with providing prompt assistance in the form of a competent adjuster who has the best interest of the insured as its first priority. Sadly, that scenario has become a fairy tale for many insureds. Instead of providing the friendly professional assistance advertised in TV commercials and on bill boards, the insured is frequently faced with obstructionist tactics designed to wear down even the most stalwart of personalities. This at a time when a person is most vulnerable and frequently has limited financial capability.
Continue Reading...(*Note: This Guest Blog is by Ed Acle, an attorney in the Coral Gables office of Merlin Law Group).
Merlin Law Group often assists commercial policyholders with claims for business interruption insurance. Many policyholders, electing to save as much as they can on their premiums, often forego this type of coverage on their policies. Those that obtain business interruption (or “BI”) insurance often neglect to take full advantage of the full protections afforded by this coverage. This could have grave implications, as the accurate application of BI coverage on a claim can often make the difference between a business’s continued operation or the shuttering of its windows forever.
Continue Reading...
Congratulations to Kevin McCarty and Chip Merlin, who were recently honored by the LexisNexis Insurance Law Center‘s Person of the Year Awards. Chip received Honorable Mention in the category of Policyholder Attorney of the Year. Explaining the basis for the award, the Insurance Law Center noted:
“Chip Merlin’s dedicated and ethical work on behalf of policyholders is a true measure of success that merits an honorable mention in this Policyholder Attorney category.”
Kevin M. McCarty, Florida’s Commissioner of Insurance Regulation, won the award for Regulator of the Year. As you might remember from previous blogs (A Fantastic Regulatory Settlement; State Farm's Fitness and Trustworthiness to Conduct Business Questioned), Chip predicted that McCarty would not cow to State Farm and other big insurers. This is one of the reasons Lexis chose to honor McCarty:
“Kevin McCarty’s impact on Florida and the nation’s insurance marketplace is undeniable. He has proven himself as a force to be reckoned with. In his steadfast role as “agitator in chief” of the property and casualty marketplace in the Sunshine State, he has irritated homeowners’ insurance companies for the benefit of consumers to the point where large carriers have threatened to exit the marketplace.”
You can read more in Julie Patel’s article in last Tuesday’s Sun Sentinel.
(Note: This Guest Blog is by Frank Chimento, Director of Business Development and Client Services at Merlin Law Group).
I would feel confident making a wager that if Americans were polled on a scale of 1 to 10, with 1 being the least, their level of understanding or interest in insurance matters would be somewhere around 2.5. At least it was for me, until one day at the Almeda Mall in Houston, Texas.
Continue Reading...I’ve been reading an outstanding book by noted author, Charles Swindoll about the life of the Apostle Paul. The book is simply titled, Paul: A Man Of Grace and Grit. While gaining an in depth understanding of the persecution this great man endured while remaining steadfast toward his mission at hand, I was reminded of the resolve of the hurricane victims in Texas.
I remember shortly after Hurricane Ike devastated the Texas coast, Chip Merlin and I were walking along Bolivar Peninsula. I believe we were in Crystal Beach to be precise. Among the heaps of destruction and the busted concrete slabs and the tattered wooden pilings, I remember Chip stopping to point out to me how many United States and Texas state flags were flying high, along with POW and Vietnam Veteran flags as well. I also remember him clearly stating that, “Texans are not going to just lay down over this without a determined fight.” Texans have grit!
On a personal note, I’ve also witnessed the tremendous understanding that Texans have displayed. For example, in talking with literally hundreds of hurricane victims and hearing about even more, I’ve never once heard a policyholder verbalize wanting anything more than what they’re owed contractually from their insurance company. I can’t recall anyone wanting vengeance against TWIA for only receiving an arbitrary 11.2% payment. Instead, I’ve witnessed an outpouring of empathy for fellow storm victims, a spirit of cooperation and a resounding sentiment of not wanting handouts from anyone. Texans exhibit grace!
Hurricane Ike has brought out the best that Texans offer even in the face of unprecedented hardships, insurance claim denials, severe underpayments and political and legal posturing aimed at preventing a timely and full recovery.
Even this weekend, residents on Bolivar Peninsula are getting together to share information about how to rebuild and recover from the storm. One of our Houston based attorneys, Tina Nicholson, is participating in that effort. Two weeks ago, a group of caring citizens banded together and marched on Austin to voice their concern and their expectations. All over the damaged areas of the state, home and business owners are pulling together; single-minded in their mission to hold insurance companies accountable to the promises they made and to rebuild their communities and their lives.
It is true that in times of trials and tribulations our true character emerges and is tested. I find inspiration and hope from the Texans I’ve met. Insurance companies like TWIA should take note that the people who suffered at the hands of Hurricane Ike should not be taken lightly; behind their tremendous grace is unrivaled grit!
http://www.crystalbeachtoday.com/amenities/ for more information on the event this Saturday.
(*Chip Merlin's Note--Rocco Calaci has been a noted meteorology expert witness in the Katrina Legal Wars. After meeting him at a recent FAPIA Convention, I invited him to write a series of guest blogs. His previous guest blog was, Is The Saffir-Simpson Scale Still Relevant.)
Is a hurricane only wind and water?
I have been collecting and analyzing meteorological data from Hurricane Ike for the past several months. The actual date of my research and analysis began on September 14, 2008, the day after Hurricane Ike hit southeast Texas.
Continue Reading...And you thought your claim with Citizens was a challenge? Hope your insurer never goes insolvent leaving you in the hands of FIGA—the Florida Insurance “Guaranty” Association. FIGA is a legislatively created corporation which handles claims after insurance companies become insolvent. The reality of how FIGA works in the field stands in stark contrast to its stated goal of providing “fast, fair and professional claim service.” In my experience, the only things “guaranteed” with this system are roadblocks and delay. No one is immune. No matter how respectable the insured. No matter how severe the loss.
Continue Reading...What if you received an invitation to attend a “hands on” public insurance adjuster seminar where you would be asked to handle a large commercial hurricane claim from start to finish? Experienced public adjusters would give a short lecture and demonstration about each phase of the adjustment process. After each of these presentations, you would be asked to perform that task. This process would be repeated for each phase of a typical claim, including preparation of a scope, estimates, reports, communicating with the insurer, presentation of your claim, settlement negotiations and appraisal. You would be videotaped throughout the entire process. After you complete each step of the process, a panel of 4 to 6 experienced public adjusters would critique your work product. You then would take the video tape to a room and view it with another experienced public adjuster who would review the critique comments with you and discuss ways you may be able to improve your claims handling techniques.
How many of you would take 5 days out of your practice, work from 7 a.m. until 11 p.m. every day preparing and performing, and pay $1,000, plus food and lodging, for the privilege of participating in this process?
That’s exactly what six of the Merlin lawyers will be doing in May. The Trial Lawyers Section of The Florida Bar and the University of Florida College of Law put on an Advanced Trial Advocacy Program in May of each year. I have served on the faculty of the Basic and Advanced Trial Advocacy programs several times in the past and am looking forward to serving again this year.
The participants are provided with court papers, deposition summaries, expert reports, photos, etc., relating to a lawsuit. A faculty of very experienced, Board Certified Civil Trial Lawyers and trial judges give lectures and actual demonstrations of each phase of a trial. The participants then are assigned different roles and, over the course of 5 days, will try the case from jury selection to verdict. Every presentation is video taped and the participant is critiqued by a panel of experienced trial lawyers and trial judges. A mock jury is selected the first day and at the end of the trial actually deliberates until reaching a verdict. The deliberations are video taped and then shown to the participants at the end of the program. The old saying, “you don’t want to watch sausage being made” definitely applies here! The things that jurors find important and their views on lawyers and lawsuits are sometimes shocking, but always educational.
Every member of the Merlin Law Group is committed to being the best they can be. We believe that being better trial lawyers makes us better at handling claims and lawsuits even if they do not go to trial. We learn to develop an appreciation for the “equities” of a case – those things that motivate a jury to find in favor of our clients and against an insurer – and to be better focused on the important issues in a case.
The course is intense and involves a lot of hard work, but pays off as the experience makes us better lawyers.
Anyone out there want to start an “Advanced Claims Adjusting” course??
-Woody Isom
(Woody Isom has been a member of The Florida Bar since 1975, a Florida Bar Board Certified Civil Trial Lawyer since 1983 and a National Board of Trial Advocacy Certified Civil Trial Advocate since 1988.)
*(Note: This Guest Blog is by Craig Kubiak, an attorney in the Tampa office of Merlin Law Group)
I recently settled an insurance claim for a client here in Florida. Throughout the pendency of the claim, the insurance company’s experts emphatically denied what I believed to be the cause of the damage to my client’s house. I conducted depositions throughout the state of Florida and elsewhere. Lo and behold, after leaving no stone unturned, I found out some very interesting things about the experts used by the opposing party and how the carrier treated my client and handled the claim in this particular matter. Prior settlement negotiations that were left for dead were suddenly resurrected like a phoenix rising up from the ashes. Soon thereafter, the claim resolved confidentially. Suffice it to say, that under the terms and conditions of the agreement, I am only permitted to state that the parties have resolved their differences amicably and that the litigation has now ended.
Who do you imagine requested that this claim be settled confidentially?
Making an offer to the other party in a lawsuit to settle a case confidentially is equally available to both parties. Once agreed to, strict adherence is an absolute requirement. Upon reflection, I cannot think of a single instance in mine, or anybody else’s career, when the party who filed the lawsuit ever requested confidentiality. The offended party in a lawsuit wants the world to know how they have been treated by the offending party. They often think to themselves, “If this happened to me, it can happen to you too.” The offended party is often mad, confused, and even a little scared all at the same time. There have been times at the conclusion of one of my client’s claims, after all the paperwork has been signed and the checks disbursed, when they have said to me, “I still don’t understand why they treated me the way that they did.”
So when do you agree to keeping something confidential? Not every case filed by Merlin Law Group, or any other law firm for that matter, settles confidentially. In fact, most don’t. The facts and circumstances of each claim dictate when and if your claim may be a candidate for such a resolution. Most claims don’t start out with confidential settlements on anybody’s mind. But being extremely thorough and diligent during the discovery phase of a claim can sometimes uncover dirty little secrets that the insurance company doesn’t want the rest of the world to know. Recognizing that the other party does not want certain information to get out to the general public has value. How much value is determined by just how dirty their little secret is.
So, have you figured out yet which party involved in the lawsuit I filed asked for a confidential settlement?
(Note: This Guest Blog is by Mary Fortson, Managing Attorney at Merlin Law Group.)
Since Chip is on vacation, I figured it’s time to take the plunge and write on his blog. My initial concern had been whether I’d be able to come up with a topic. Chip is always so creative in his ideas and extremely thorough in his explanations that I imagined I would never be able to follow in his footsteps. However, when I read the blogs Chip had authored recently on TWIA and the concept of “direct physical loss”, ("Physical Direct Loss" Caselaw and TWIA's Roofing Memo; Roof Repair Methods Prove TWIA is Wrongly Denying Roof Claims; The TWIA Roof Damage Memo: Checking Basic References to Resolve Adjustment Questions; Internal Texas Windstorm Roofing Claims Memo Explains Damage is Not Covered), I realized that was a great topic and that I’d like to comment on that concept as well.
Chip’s blogs made me recall a very interesting case that he and I had worked on in Florida several years ago where another well-known insurer, State Farm, had tried to avoid paying on a part of a claim by denying that a “direct physical loss” could be claimed. It’s interesting how creative insurance companies can be when it comes to arguing about whether they should be paying on a loss.
The case was Three Palms Pointe, Inc. v. State Farm Fire & Cas. Co., 250 F. Supp. 2d 1357 (M.D. Fla. 2003), aff’d 362 F.3d 1317 (11th Cir. 2004). In our case, a condominium association had sued State Farm when that insurer had refused to pay the relocation expenses of the condominium residents, even though the process that was necessary to repair the damaged building was so extensive that the residents absolutely needed to move out of their units. In fact, there were life/safety reasons requiring the relocation of the residents that everyone agreed existed. The argument to the federal district court involved several issues, which included the question of whether the concept of a “direct physical loss” had been implicated when considering the resident relocation expenses. State Farm conceded that construction expenses and expenses to move personal property were covered under the condominium association’s property insurance policy, but argued that the relocation of the residents was a “personal and collateral” expense that was not related to a “direct physical loss”.
In analyzing the situation, the district court judge cited Florida case law that recognizes a “direct physical loss” includes losses that are necessarily more extensive than just the damage to the structure or membrane of the building, and can include other, somewhat intangible things. In fact, as recognized by Judge Moody, the concept of a “direct physical loss” is not defined in the insurance policy, and it is necessary for a court, when interpreting what a policy provision means, to give the benefit of the doubt to the insured in such a situation. Ultimately this judge determined that the important question to consider was whether the reasonable and necessary repair costs included the cost to relocate the residents. The district judge answered that question as a definitive “yes”, and entered judgment in favor of the insured condominium association. State Farm was not willing to accept that decision, and ultimately appealed the ruling to the federal appellate court, which also found in favor of the policyholder.
I was very proud to have worked with Chip Merlin on the Three Palms Pointe case, and to have successfully advocated for our policyholder client. It is a shame that insurers still argue the concept of “direct physical loss” as a way to avoid paying the amount owed on a claim. But as the wealth of case law that Chip explained to his readers shows, this insurance policy provision does not offer insurers the “out” they may hope to find.
-Mary Fortson
For those of you that read something and you think it is dead wrong, do your eyes squint and head start shaking? Mine did when I first read the internal TWIA roofing memo. As I read it, I was thinking:
"Does the TWIA claims executive who wrote this not understand the basic insurance principle of what constitutes a direct physical loss?"
Continue Reading...Previous posts highlighted TWIA's secret internal memo (Internal Texas Windstorm Roofing Claims Memo Explains Damage is Not Covered and The TWIA Roof Damage Memo: Checking Basic References to Resolve Adjustment Questions) which wrongly orders denial of coverage for roofing damage. In response, we received a technical manufactuer's bulletin from a certified roofing contractor which helps explain why this is factually a covered loss.
Continue Reading...Unlike any other birthday, this one has caused a great deal of reflection for me. I am grateful my job allows me to interact with so many wonderful people. The most pleasurable aspect of this life is spending it with others. Even my opponents who work for the insurance companies provide pleasure--I love the competition. Winning is even better.
I grew up in a Coast Guard family. Travel, being in new far away places, and meeting new friends has always been a constant in my life. Leaving is never fun, but there is always the next adventure and challenge. This type of constant change is what I enjoy about my legal practice. I hope that the stamina required to do this work will not fade too fast. This is fun, and I do not want the music to stop.
My wife Kim planned and executed the perfect surprise birthday party last Saturday night. A biographical video she and Jack Stein made left me in tears. Fifty years of life activities seem to go by in a blink.
Thank you for reading this blog which allows me to share my views and thoughts. I am pretty certain I learn more from writing than you do from reading. .
Kim and I are leaving for two weeks in Italy. We have always talked of going, and this birthday is a great excuse. I am getting deeply involved in Hurricane Ike matters, and this will be a nice break before playing the litigation game as hard as I can in Texas.
I will have posts this afternoon and Friday. Guest Bloggers will post until I return. I invite you to write a Guest Blog regarding any aspect of property insurance. Call Ruck DeMinico at (813) 229-1000, for arrangements if you are interested.
Celebrating my 50th Birthday certainly beats the alternative.
After finishing yesterday afternoon's post, The TWIA Roof Damage Memo: Checking Basic References to Resolve Adjustment Questions, I recalled an Amicus Brief we filed in the Florida Supreme Court in the case of Fayad v. Clarendon Nat'l Ins. Co., 899 So. 2d 1082 (Fla. 2005). An Amicus Brief is a brief filed by a someone who is not a party to the court action to help the Appellate Court make the right decision. It is supposed to address factors which may not be fully addressed by the parties to the dispute.
Continue Reading...The post from this morning, Internal Texas Windstorm Roofing Claims Memo Explains Damage is Not Covered, raised a number of interesting methods to research this coverage issue. Many risk managers and public adjusters will simply call me to get a quick opinion regarding many day to day coverage issues. I thought it might be interesting to see what adjusters may have in their basic training materials to answer the questions raised in the memo. I have no idea if the TWIA claims executives looked at any reference materials. I hope they authored the claims memo in ignorance, because the opposite poses a different set of problems.
Continue Reading...The independent adjusters for Texas Windstorm Insurance Association may end up being some of the best witnesses for policyholders in the litigation that is starting. The desk TWIA adjusters in Austin are not listening to them and do not trust them to determine what is damage and what is not.
Continue Reading...The LexisNexis Insurance Law Center Advisory Board released finalists for the LexisNexis Insurance Law Center Person of the Year awards for 2008. The Board invites commentary from visitors to their site through March 18, 2009. The list is as follows:
Policyholder Attorney of the Year – the attorney who did the most in 2008 to effectively advance policyholder positions and improve insurance law from the perspective of policyholders.
Ray Cotkin, Cotkin & Collins, Los Angeles.
Mark DeBofsky, Daley DeBofsky and Bryant, Chicago
Robert Horkovich, Anderson Kill, New York
Ernest Martin, Jr., Haynes and Boone, Dallas
William F. Merlin, Jr., Merlin Law Group, Tampa
Kirk Pasich, Dickstein Shapiro, Washington D.C.
Brian S. Sheldon, Phillabaum, Ledlin, Matthews & Sheldon, Spokane, Washington
Roger Simpson, Cotkin & Collins, Los Angeles
Richard C. Trahant, Law Offices of Richard C. Trahant, Metairie, Louisiana
Ray Zuppa , The Zuppa Firm, Brooklyn, New York
Insurer Attorney of the Year -- the attorney who did the most in 2008 to effectively advance insurer positions and improve insurance law from the perspective of insurers.
William S. Berk - Berk, Merchant & Sims, PLC
Stuart Cotton – Mound Cotton Wollan & Greengrass, New York
Gary M. Eldin - Grippo & Elden LLC, Chicago
Lawrence Greengrass -- Mound Cotton Wollan & Greengrass, New York
Lloyd A. Gura -- Mound Cotton Wollan & Greengrass, New York
Rick L. Hammond – Johnson & Bell, Chicago
Laura J. Hanson, Meagher & Geer, Minneapolis
Bradley M. Jones Meagher & Geer, Minneapolis
Leo J. Jordan – Shannon Gracey Ratliff & Miller, Dallas
Peter H. Klee -- Luce Forward, San Diego
Randy Maniloff – White and Williams, Philadelphia
Barry R. Ostrager -- Simpson Thacher & Bartlett, New York
Mark D. Plevin - Crowell & Moring, Washington, D.C.
Francine Semaya -- Nelson Levine de Luca and Horst, LLC
Philip Silverberg -- Mound Cotton Wollan & Greengrass, New York
Chuck Spevacek, Meagher & Geer, Minneapolis
James Veach -- Mound Cotton Wollan & Greengrass, New York
Insurance Regulator of the Year – the international, federal, state, or local regulator who had most impact during 2008.
Eric Dinallo – Superintendent of the New York State Insurance Department
Kevin M. McCarty – Commissioner of the Florida Office of Insurance Regulation
Insurance Jurist of the Year -- the judge or justice whose rulings had the largest impact on insurance law during 2008.
The Honorable Chet C. Taylor – Louisiana Supreme Court, New Orleans
The Texas Supreme Court – Austin, Texas
There are a number of very fine attorneys.
Kevin McCarty is getting my vote for the Regulator of the Year. He finally made Allstate produce the McKinsey & Company Documents so everyone can view them on-line.
“Don’t complain about the snow on your neighbor’s roof when your own doorstep is unclean.”
Confuscious
Policyholders guilty of insurance fraud need to be held accountable and pay a penalty. Who disagrees with that?
Continue Reading...Ever since last year, when I accurately predicted the hurricane season, people have been asking me these questions. I even put my money where my mouth is by placing our new office in Houston last June--before the hurricanes. Regarding my powers of prediction, it is better to be lucky than good. And, being in a Wizard's lineage helps. Unfortunately, Chambers of Commerce are not hoping we pick their town for our next office.
Continue Reading...On Friday, one hundred and forty-eight Texas public insurance adjusters attended a seminar our law firm sponsored in Houston. I am pretty sure it was the largest ever gathering in Texas of people dedicating themselves to the study of helping property insurance policyholders. It was thrilling, exciting, and taxing for me. I loved every minute of it, and several public adjusters have asked us to hold another seminar this summer.
Continue Reading...A new client informed me last week that his wife was going to protest against the Texas Windstorm Insurance Association (TWIA) in Austin, Texas. From what I hear, she is going to have quite a few neighbors with her as they commemorate the sixth month anniversary of Hurricane Ike by creating a storm of controversy as they march to TWIA headquarters. Power to the People!
Continue Reading...Some in the insurance industry may read my blog and believe that I am on a crusade against the insurance industry. That is absolutely false. I love insurance. I get upset when insurers violate their good faith duties to customers--probably the vast majority from any perspective do too.
Continue Reading...If you want to find a bunch of irate policyholders with plenty of stories to tell, hang out with Tina Nicholson and Javier Delgado in our Houston office. Commercial and residential policyholders have had enough frustration trying to do it themselves and are seeking legal counsel to fight the delays and denials from their insurance carriers. Anger at the insurance company and the adjusters working their claim is the prevalent emotion. Over the next several weeks, I plan to write much more on Texas property insurance law and protection it provides because Texas is the hottest new venue in the insurance litigation war. We are in the middle of it.
Continue Reading...Formal discovery in insurance lawsuits is replete with protracted discovery battles, insurers motions for protective orders, and evasive responses from insurers trying to avoid turning over information damaging to their case. Historically, some of our biggest breakthroughs have come from "alternative" sources and by organizing other policyholder attorneys with similar cases against the same insurance company. The value to policyholder attorneys networking to uncover the motives of an insurer seemingly engaged in repeated denials of meritorious claims cannot be overstated.
Continue Reading...The best way to prepare for an insurance settlement is to prepare the case for trial. Trying to predict what would probably happen at trial is a great way to gauge the value of an insurance dispute.
I am writing this while flying to New Orleans for a mediation tomorrow morning. This blog post may be removed if the matter settles--so read quickly.
Continue Reading...Mark Phillips recently posted a comment in Surplus Lines Insurers, Sinkholes, and the Law of Mars, which would probably terminate his employment as an adjuster for telling the truth if he were still an Independent Adjuster:
Continue Reading..."I handled numerous loss adjustments for a South Florida MGA broker who had arranged his own "excess surplus lines" authority overseas. Due to this flexible "hand-shake" authority and with his own customized and approved manuscripted policy designs, he was actually controlling the underwriting data and policy issuance. He was bold and daring enough to "check off" certain boxes misrepresenting building characteristics and histories inaccurately on applications, so that, at time of loss investigation he could promptly deny coverage when it was noted in the adjusting routine that certain building events and maintenances had not occurred as were required to be validated in order to acquire the policy coverage and issuance. He could thus accurately void the contract on grounds of misrepresentation, and have the underwriting questionnaire in the file to back up the denial. His incentive was of course to sustain his flexible contract arrangement and limit his loss ratios, thus enriching his commission contingencies. Worth noting is that many of the insureds represented a class of Hispanic consumers who had no ability to know what was authentically being stated on their final application and were thus caught by surprise when struggling to communicate in English, back to me the adjuster, that they had not confirmed certain property realities that had been "checked off" on their application.
Another compromised policyholder left at the curb."
The National Association of Insurance Commissioners released its Top Insurance Complaints for 2008. Poor claims service is the primary reason customers complain about their insurance companies. More than half of all complaints about the service or actions of an insurance company concern claims issues.
Here are the top five reasons with percentage to total complaints:
| Claim Handling Delay | 19.4% |
| Claim Handling Denial | 18.43% |
| Claim Settlement Unsatisfactory | 14.27% |
| Claim Handling Other | 6.01% |
| Underwriting Premium and Rating | 4.74% |
Fonte vs Audubon Insurance Company, is an important win for policyholders against the arbitrary adjustment of insurance claims. The following is significant language pertaining to the wrongful claims practice to which the policyholders were subjected:
Continue Reading...An article in the Insurance Journal, National Flood Insurance Program Set to Expire Tomorrow, caught my eye. I think the threat of expiration is political gamesmanship, as indicated in the piece:
“John Prible, government affairs for the Independent Insurance Agents and Brokers of America, says the omnibus bill funding is currently being debated in the Senate but there's "a little game of chicken" happening between the House and Senate on any changes that may be made to the omnibus bill in the Senate. The debate could potentially derail the bill, he said.”
I wonder whether Mississippi Congressman Gene Taylor will try to use this opportunity to get the Multiple Peril Insurance Act of 2009, into law. I am not holding my breath, but stranger things have happened in the political arena lately. Taylor’s website has a summary of what he hopes his proposed legislation will accomplish:
“The Multiple Peril Insurance Act would allow coastal homeowners to buy comprehensive insurance and know that hurricane damage will be covered without lengthy legal disputes over how much damage was caused by wind and how much was caused by flooding.
After Hurricane Katrina, insurance companies overbilled taxpayers and underpaid homeowners by blaming flooding for some damage that had been caused by hurricane winds and wind-driven debris.
The bill will reduce future property damage by requiring participating communities to adopt International Building Codes.”
I recommend Slabbed’s excellent article, HR 1264 - One policy. One premium. One claims adjuster. Protecting America’s home & business owner. Protecting America’s taxpayers, which explains Taylor’s Bill.
In our attempt to be Fair and Balanced, we wanted to give CompuWeather the ability to respond to Insurance Company Experts Are Often Biased and Outcome Oriented.
Here is their response, with a sample report:
Chip:
CompuWeather is the number one provider of site specific past weather documentation for plaintiff's attorneys across the country. These attorneys come back to us for one simple reason, they consistently win more of their weather related cases using our reports.
With this in mind I've attached a sample flood report, as well as background material on CompuWeather, for your review. I look forward to speaking with you, and working with you and your firm in the future.
-Craig A. Weiss
I do not thing they should count on our firm calling anytime soon.
Coordination between litigants following catastrophic losses is becoming increasingly frequent. This is good if the result speeds the resolution of claims and reduces the expenditures to policyholders and insurance companies. However, the Devil is in The Details, as with most things in life.
It is not uncommon for insurance companies to try to get an advantage through case management and discovery orders applicable to all cases. I imagine insurance defense lawyers are thinking the same skeptical thoughts about policyholders’ attorneys.
Continue Reading...My good buddy, Tom Grail, told me the parable of Hurricane Ike Insurance Claims. To appreciate this, one must first understand that the total loss structures in Galveston and Bolivar receive uniform estimates of wind damage from the Texas Windstorm Insurance Association (TWIA). The amount of damage caused by wind for nearly every structure is approximately 11%. The reports are virtually identical for every total loss structure, despite differences in the age of the structure and quality of construction.
Continue Reading...Recently, our firm has been questioned about the appraisal of Hurricane Ike claims. Appraisal is an informal process which determines the monetary amount of disputed damage claimed under a property insurance policy. Questions have come from policyholders and public adjusters regarding a variety of issues.
Continue Reading...LexisNexis is sponsoring an award for the Insurance Persons of the Year for 2008. Here are the categories:
Policyholder Attorney of the Year – the attorney who did the most in 2008 to effectively advance policyholder positions and improve insurance law from the perspective of policyholders.
Insurer Attorney of the Year -- the attorney who did the most in 2008 to effectively advance insurer positions and improve insurance law from the perspective of insurers.
Insurance Regulator of the Year – the international, federal, state, or local regulator who had most impact during 2008.
Insurance Jurist of the Year -- the judge or justice whose rulings had the largest impact on insurance law during 2008.
We are nominating Kevin McCarty as the Regulator of the Year.
I cannot imagine who would want to win the Insurer Attorney of the Year. Such an award would publicly label you as “The Grinch.”
Nominations have to be in by this Friday. They should be sent to karen.yotis@lexisnexis.com.
Nowdoucit from Slabbed wrote a comment to my post, Surplus Lines Insurers, Sinkholes, and the Law of Mars, concerning the selection of lawyers:
Continue Reading..."The more cases I read, the more convinced I become of the importance of retaining an attorney experienced in insurance claims litigation - better yet, experienced and successful.
The case you cited, Chip, is a different but compelling example of the difference that can make."
I have often said that insurance companies have an economic incentive to hold claim money as long as possible, play this "float," and profit from it. Skeptics and attorneys who represent insurance companies always ask for me to provide proof of this allegation. While there are numerous examples, the quote from Warren Buffett in his 2009 annual letter proves the point:
Continue Reading..."As predicted in last year’s report, the exceptional underwriting profits that our insurance businesses realized in 2007 were not repeated in 2008. Nevertheless, the insurance group delivered an underwriting gain for the sixth consecutive year. This means that our $58.5 billion of insurance “float” – money that doesn’t belong to us but that we hold and invest for our own benefit – cost us less than zero. In fact, we were paid $2.8 billion to hold our float during 2008. Charlie and I find this enjoyable.
The Tampa Tribune ran a story, State Farm’s Exit From Florida Proving to Be a Problem for Some, which demonstrates problems consumers will have obtaining new coverage. The on-line edition of the story is somewhat entertaining because the comments show the disparate results of consumers who are shopping for insurance and confusion about underwriting. What is still unclear and troubling is exactly what State Farm hopes to gain from its announcement that it is leaving Florida. Certainly, it is losing revenue and access to a very large insurance market.
Continue Reading...Paul Butler was my first legal mentor. John Pappas was a classmate of mine at the University of Florida School of Law, and the best man in my wedding. They have built a hundred attorney law firm representing solely insurance companies. We have cases against them all the time. As they are physically located several floors below us in the same office building, and both David Pettinato and I worked at the firm in different eras, we have a pretty good idea of what our familiar foes are about.
Continue Reading...Surplus lines insurance companies are a different breed of insurance cat. They are not admitted carriers in the state in which they do business. Thus, most states have consumer protection laws specifically regarding how surplus lines insurance carriers can do business.
Surplus lines carriers are very important to the insurance marketplace. They will often insure the risks many admitted carriers find too risky or novel. For example, when a property owner buys surplus flood insurance or a complex Difference in Conditions policy, it is often sold through the surplus lines market.
Continue Reading...State Farm's announcement to leave the Florida property insurance market has plenty of media attention. It is obvious that State Farm's view of its actions is far different than that of its customers.
Continue Reading...Our firm has friends in the insurance industry and other sources of information who have privately provided evidence of wrongdoing by insurance companies. On more than one occasion, documents evidencing wrongful insurance claims conduct have appeared on my front door or in unmarked mail with anonymous notes asking that the information be disseminated. Sometimes, the proof of the current secret claims warfare against policyholders is provided to us by the insurance industry itself. We received such proof last week in an email.
Continue Reading...Free enterprise is great until your competitors beat you. Dominant competitors may find it advantageous to combine interests to prevent new players from entering markets, destroying profit margins, and taking market share. It is amazing that there has not been more investigation and calls for transparency into the major personal lines insurance companies’ discussions and agreements which may reveal such a conspiracy. While anti-trust exemptions exist for insurance companies regarding sharing of loss data for rate making and other rate or form issues, there are no anti-trust exemptions for agreements that otherwise restrain trade and competition through collusion.
Continue Reading...Mississippi State Senator David Baria admitted that his proposed legislative bill of rights for policyholders is "dead." Mississippi S.B. 2196 would have eliminated anticoncurrent causation exclusionary language from property insurance policies. The Mississippi Senate Insurance Committee failed to act on the bill, thereby killing any attempt to enact a bill of rights.
Unlike other states, the insurance industry dominates Mississippi's Republican party. Accordingly, I was not surprised when the Mississippi Senate killed the bill. Until the Mississippi Republican party frees itself of the very anti-consumer mind set of insurance industry lobbyists or Mississippi changes the balance of power back to the Democratic party, it will be very difficult to achieve meaningful insurance reform there.
Mississippi Insurance Commissioner, Mike Chaney, has his own regulatory version, which is supported by the insurance industry. Julie Pulliam, the director of public affairs (a lobbyist manager) for the American Insurance Association thinks Chaney's "Policyholder Bill of Rights" strikes the right balance. The one thing I have learned from going head to head in politics with the insurance industry is if they think something is the "right balance," then it is bad for policyholders.
It appears that the insurance lobby may have a friend in Mike Chaney. It is obvious they have strong allies with the Mississippi Legislature. It is a shame that some of the nicest people and many lifelong friends have leaders so committed to helping an industry forcefully against their long term economic interests. It makes little common sense. But again, that's politics.
The monthly Florida Underwriter is an excellent publication that I read to stay informed about many current issues facing the Florida insurance market. It is also very good at noting significant legal and political issues which impact insurance. Even the advertisements sometime reflect trends of insurance coverage that are significant to our clients.
Two coverage issues that need to be addressed by many have to do with high deductibles for windstorm loss and the rising tide of vacant structures. For example, Citizens Property Insurance Corporation has a 5% wind loss deductible. Many commercial policies also carry such a deductible. The roof of a building ruined in a windstorm often happens to be approximately 5% of the structure's insured value.
If the property has a significant value, 5% sounds small, but can equal millions. We routinely represent structures insured for more than 50 million dollars. Five percent of that is $2.5 million. Given today's credit markets, many owners of such structures may have a hard time raising sums to cover the deductible cost.
Deductible buy down coverage helps eliminate this problem. For example, Citon Insurance was advertising deductible buy down wind coverage. The cost to insure a $375,000 deductible was $17,941. Not cheap, but it represents a way to cover expenses which may otherwise be unaffordable. Condominium associations may even have fiduciary obligations to purchase the coverage if available.
Vacant property is becoming more common in this economic climate. Most property policies do not cover property which is vacant for more than 60 days. So many agents are selling specialized vacant property coverage.
Proper coverage prevents problems following a loss. It is always a good idea for policyholders to review their properties with their agents to keep fully covered. We strongly recommend that our clients do so before hurricane season. "Just Do It" should be "Just Do It Now" in the insurance world.
I wonder how State Farm’s agents and employees really feel about the officers and managers in Bloomington, Illinois. My bet is not much different than the remaining State Farm policyholders--although State Farm agents and employees are probably not going to say much about it until they get a better job.
While I have my differences regarding what they are taught, State Farm employees and agents are probably the most thoroughly trained in the insurance industry. State Farm has operational guidelines regarding every aspect of company activity. Even agent involvement in the political process is outlined in detail for agents to help the company press its agenda.
Accordingly, the front page story in BestWeek, State Farm Florida Customers Survey Property Market, did not surprise me. Jim Graganella, the CEO of a State Farm competitor, said the remaining State Farm policyholders represent the "cream" of State Farm's book of business. He also highly praised State Farm's Florida underwriters and agents, referring to them as "topnotch." This has been my impression of the agents in Florida for a long time. One of them is my insurance agent.
Locke Burt, an insurance executive and a colleague of mine on the Citizens Mission Review Task Force, was quoted as saying about long time State Farm customers, "A lot of customers are shopping. They are mad."
I wonder what we are going to learn from State Farm’s agents, adjusters and other employees as they start shopping and find work with other insurance carriers looking for "top notch" help. My experience is that there will be more transparency about State Farm's motives and operations once its former employees are free to speak their mind.
(*Chip Merlin's Note: A fascinating aspect of our work is learning about many different things that have nothing to do with the law. We have to understand construction, restoration and building repair to be effective for our clients. Our guest bloggers from TSSA Storm Safe know more about glass windows, doors and glazing than anybody that I have ever met. Their two hour lecture to my law firm was eye-opening. While it may seem weird to some that this topic can be so important, we routinely represent clients whose buildings have tens of millions of dollars at stake in litigation regarding glass windows and doors. This discussion is very timely given the disagreements of wind damage caused by Hurricane Ike.)
I am going to ask you to take a moment to look at a structure; it could be your home or the office building where you carve out a living. In essence, it is one big puzzle constructed out of concrete, steel, wood, rebar, aluminum and, last but not least, glass.
Continue Reading...(*Chip Merlin's Note--Sandy Burnette is a prominent insurance defense attorney with exceptional experience in cases where insurance fraud or arson are suspected. I have known Sandy for 27 years. As you can see from his rhetoric, he is a fierce defender for those engaged in the fight against insurance fraud. Keeping with my Fair and Balanced blog, I invited Sandy to compose a guest post reflecting his views and experience.)
Well, seeing my name mentioned in your recent blog on insurance fraud was certainly enough to capture my attention, but the content of your remarks compels me to respond. Nobody who knows the two of us will be surprised to see we disagree, but in this instance you are simply wrong, Chip.
Our clients often ask us the following question: "Is there a chance you can get back your attorney fees from the insurance company?" The short answer is yes. The long answer and accurate answer is: "We try to get back all the fees and costs, and may even have a chance through consumer protection statutes and bad faith claims to get back even more. The chances depend on the facts of the case."
For example, Kristin Demers-Crowell recently won an attorney fee Order against State Farm. Kristi represented a condominium on the East coast of Florida which had been hit by Hurricanes Francis and Jean. State Farm estimated the damages at approximately $716,000. The condominium’s public adjuster claimed more and demanded an appraisal to resolve the differences.
Continue Reading...A Comment from a previous post, How Ike Insurance Claim Help is Supposed to Be, provided insight to the understanding of the claims process from two adjusters in the insurance industry. The comment is worthy of repeating here:
Continue Reading...This post follows yesterday's discussion regarding good faith. I am about to take a claims adjuster's deposition in Manhattan at the time I am writing this. I will ask a series of questions regarding exactly what good faith in claims handling is.
Continue Reading...It is funny how often there can be a play on words. Just before the Bad Faith Litigation Group Meeting at the American Association Justice (AAJ), I was given a free cap. Trying to be clever, the AAJ had inscribed the hat, "We Know N.O.," reflecting the AAJ's recognition of New Orleans as the host city for the Winter Convention.
Insurance companies should adopt the motto since they operate that way everyday:
"We Know No!"
Is there a more perfect slogan for the Insurance Claims Industry?
(*Chip Merlin's Note--Chris Haley of Trial Exhibits, Inc., was on a panel with John Garaffa, of Butler Pappas, and myself at the recent 2009 Windstorm Insurance Conference. Chris is a veteran Consultant and Expert Witness regarding Electronic Discovery. I asked him to provide a Guest Blog on this increasingly important aspect of insurance coverage and claims practice litigation.)
E-Discovery can be a scary and costly factor in litigation, but with proper preparation before a law suit is at your door, you can avoid disaster.
Five Things To Remember:
I'm often asked where to find more information about planning ahead, good retention policies and proper preservation techniques. Below are several articles and links to resources that will help you find out more.
Links to Information on E-Discovery:
--Chris Haley
There is nothing like combining business with pleasure. I suppose if your business is fun, you are always having a party at work. Today, I am meeting with my bad faith insurance attorney colleagues. Tonight, I will celebrate the Port of New Orleans litigation with my client, co-counsel and legal staff.
Continue Reading...Americans love to root for underdogs. It is part of our value system that anybody can become successful in this Country through hard, honest work and perseverance. Floridians are rooting for the small competitors of State Farm since State Farm's announcement that it is leaving Florida's property insurance market.
The St Petersburg Times noted that such a small competitor, Security First Insurance, has announced it will take 50,000 State Farm policies. Security First is run by former Florida State Senator Locke Burt, a fellow member of the Citizens Mission Review Task Force, .
Burt is one of the most knowledgeable individuals of the Florida insurance market, with a historical perspective. He was a politician in the 90's when the insurance problems following Hurricane Andrew first arose. During the Task Force meetings, I listened carefully to him for an understanding of tried and failed attempts to correct the insurance problems which still plague Floridians. I also watched out for his attempts to suggest obvious pro-insurer legislation--he runs an insurance company.
While I have a great deal of respect for Locke Burt and wish his company great success, I quite often found myself at odds with him during debates of the Task Force. He was the one that pushed for a suggested law that would have eliminated sinkhole coverage. At one point during the last meeting, I made a rather pointed comment to Burt which suggested that he wanted to pass such legislation so his company and all other insurers never paid claims and would just collect premiums.
The bottom line is that for property coverage to exist in Florida, we need the smaller companies to succeed. I wish Security First great financial success. I also hope that they provide coverages Floridians need and that they manage their customers’ policies and claims with the highest degree of integrity. As I have said in the past, it does not take a rocket scientist to figure out that it is far more profitable to take premiums and not pay fully and promptly, than to do otherwise.
(IMPORTANT UPDATE TO THIS POST: On February 20, 2009, the NFIP Administrator issued an additional 90-day extension to file proofs of loss for Hurricane Ike and Gustav.)
Javier Delgado, in our Houston office, called to tell me he had just been retained on several flood insurance claims. I was apprehensive because I know there is a National Flood Insurance deadline quickly approaching. Javier has a lot of work to do in a short period of time. From past experience, I know people will miss the deadline or fail to properly complete the National Flood Proof of Loss form.
Since the deadline is approaching, I suggest everybody interested in this topic read my prior post, A Warning Regarding Federal Flood Proofs of Loss.
"Ensuing loss" provisions are the "Lazarus" clauses in property insurance policies. Property damage claims otherwise excluded from coverage, are raised from the dead and paid as a result of them. They are difficult to understand and the court decisions seem inconsistent. However, when there seems to be an event that is excluded, many times a water damage event, these clauses are often the only means of recovery.
What is an "ensuing loss" clause and where are they found? The following wording is typical of an ensuing loss clause which is typically found at the end of exclusions:
* "...any ensuing loss to property described in Coverages A and B not precluded by any other provision in this policy is covered."
* "Under exclusions ...., any loss that follows is covered unless it is specifically excluded."
These ensuing loss clauses act as exceptions to exclusions. As a matter of practice, all insurance adjusters and those analyzing coverage following loss, should carefully consider how a loss occurred and contemplate how an ensuing loss clause may provide coverage to the policyholder for a loss that at first glance, may appear excluded.
Butler Pappas attorney, Bill Lewis wrote an excellent article, "What The Heck is an Ensuing Loss?". Butler Pappas represents property insurers.
Bill Lewis is a frequent, and able, adversary to our firm. My only caveat of the paper is that it is slightly slanted towards construction that limits coverage--but that should be expected of an advocate for the insurance company. Otherwise, I strongly encourage my fellow "coverage nerds" to read this article regarding a very important aspect of property insurance coverage analysis.
I wonder what was in the minds of clerics charged with uncovering witchcraft? Were they true believers or just doing their job? Did they ever question what they did and the impact of their actions on society?
Such thoughts came to my mind as I read Barry Zalma's January and February Insurance Fraud Newsletters. Some may question why I spend time studying the insurance company's perspective. From my viewpoint, even a broken clock is right twice a day. And, I need to understand the mind of my opponent and anticipate his actions to do a better job for my clients.
Barry Zalma makes some legitimate points. Indeed, I purchased his new ebook, The Truth, the Whole Truth, and Nothing but the Truth-II. His legal discussion regarding Examinations Under Oath made the entire $25 purchase worthwhile.
Guy "Sandy" Burnette invited me to speak at the International Association of Special Investigation Units over a decade ago. I was the token insurance attorney for policyholders. During my presentation, I cautioned that the two major human problems facing fraud investigators would be the issue of wrongly accusing innocent people of fraud and the tendency of some in an investigative role to view everybody as a potential crook. Well meaning or not, seventeenth century witch hunts can be repeated by modern groups. If all you concentrate upon in life is uncovering fraud, you may start seeing signs of it everywhere.
During the 1980's, many fires were classified as intentionally set based upon false scientific principles. Many innocent people were accused of arson and insurance fraud based upon junk science, largely made up by the insurance company fire experts. The National Fire Protection Association and physicists eventually published materials debunking the unscientific myths accepted by the insurance fire fraud industry. How many innocent policyholders lost money and their reputations because of the unscientific witch hunts by these overzealous and ignorant insurance fraud investigators?
Today, Barry Zalma calls for complete immunity when he and the insurance companies destroy people's reputations with wrongful accusations of insurance fraud. He calls for criminal prosecution where the chances of success are only 50%. I do not know if he is just pandering to his insurance clients. He may truly believe society would be better off if he and others in the insurance fraud industry escaped accountability for their wrongful actions.
From my viewpoint, it is much better that one be certain, with unshakable proof, that a person has committed insurance fraud before publicly making the accusation. Insurance fraud is wrong, and there is a need for specialized investigation to help uncover it. Rare occurrences of fraud do not justify an open season on policyholders.
The deteriorating economy appears to be having an impact on our business. We are being referred more insurance disputes involving losses that are directly the result of the souring economy.
For the first time in a decade, we have been referred several fire claims that are allegedly of an incendiary (intentionally set) cause.
There are a number of reasons why fires are intentionally set. Statistically, the most common cause is adolescent males simply setting fires to property. Arson for profit is fairly rare, but insurers understandably hire specialized fraud attorneys, such as Barry Zalma, to take Examinations Under Oath and conduct investigation.
More and more buildings are unoccupied or vacant. When a building does not have somebody in it, the structure becomes an easier target for arsonists, vandals, and thieves. Accordingly, there appears to be more of these losses. Since policies often restrict coverage of and have exclusions that apply only to vacant or unoccupied buildings, more insurance coverage disputes occur.
For example, Tina Nicholson, of our Houston office, recently settled a case for a client where numerous break-ins, thefts, and vandalism had resulted in damage to the building. The policy at issue had specific clauses regarding exclusions and exceptions to exclusions pertaining to vandalism, theft and damage caused by burglars breaking in or exiting the building.
The Motion for Partial Summary Judgment and Memorandum of Law filed by Tina analyzes this very complex insurance coverage issue. These pleadings should be read by two types of people--those wanting to understand highly technical differences in the wording of commercial insurance coverage disputes and those that need help going to sleep. For such a commonplace loss scenario in this economic climate, the resolution depends upon which state law applies and the exact language of the policy in question.
If the economy worsens, I expect we will see more of this type of loss. Risk managers and property managers should carefully review their policies to make certain this type of loss is covered. I am fairly certain that adjusters in the industry have been made aware of the limitations in some of the policies.
Insurance disputes often are tried in federal court. The usual reason is that federal courts have jurisdiction over controversies where parties are from different states and there is a sufficient monetary amount in controversy. I have often questioned the logic of allowing insurance companies voluntarily licensed in a state to remove disputes from that state court and into federal court. If an insurer agrees to do business in a particular state and accept regulation by that state, it is only fair that it should not be able to remove itself from that state’s legal system.
David Pettinato recently had such a situation. Rather than accepting the federal jurisdiction, David filed a Motion for Remand, asking the federal court to remand the lawsuit back to state court. The defendant, Liberty Mutual Fire Insurance Company, filed a response, arguing that the amount in controversy was “more likely than not” met. The court was not convinced of Liberty Mutual’s position and issued an Order remanding the lawsuit back to state court.
Sometimes, policyholders would rather fight their insurance coverage disputes in state court. Where appropriate, motions for remand, similar to the one David filed, should be filed immediately. Federal Courts will closely examine the basis for jurisdiction and remand these matters much more often than many think.
Can you imagine how “freaked out" twenty-year State Farm policyholders are over State Farm's announcement that it is leaving Florida? Most are asking, “why?” If they look past State Farm’s self serving explanations, the "freaking out" may turn into "furiously upset."
Continue Reading...In Tampa, Super Bowl festivities abound. Parties, celebrities, and fancy dinners for all. My beautiful and too-good-for-me wife. should be with them, but she accompanied me to a quiet dinner with friends who took us to the Tampa Yacht Club.
Continue Reading...The Windstorm Insurance Network is sponsoring a special Texas Windstorm Insurance Symposium. It will be a one day event on April 2, 2009, at the Hilton Hobby.
The final seminar schedule should be out shortly, but it promises to be a very lively presentation. Wind versus water fact and legal issues will be analyzed. Tim Marshall, of HAAG Engineering, is going to make a presentation. Bad faith, appraisal procedures and law, and many other topics with a Texas twist will be part of this one day insurance event.
Mark your calendars and register at the Windstorm Insurance Network web site.
State Farm has a method and reason for just about everything it does. As indicated in yesterday's post, its actions do not always reveal its strategy.
Continue Reading...Florida Senate President Jeff Atwater is a banker with a heart. He has supported policyholder friendly legislation in past sessions. From a policyholder’s perspective, and unlike the Chamber of Commerce that is dominated by State Farm and the insurance industry, he is a businessman who stands up to insurance lobbyists and is one of the “good guys.”
Atwater is keenly aware of the financial problems with the Florida Catastrophe Fund. I found this remark in his January 28th letter regarding the Federal Stimulus Law important to all Floridians and the insurance industry:
“State discretion in the use of at least a portion of the package would allow Florida to stabilize its CAT fund and improve the viability of the commercial insurance market within the state. This would reduce the liability of our citizens for the financial consequences of a devastating hurricane season. Stability in the insurance markets would help sustain recovery in the housing market.”
The Catastrophe Fund must file a report by February 1st. Most anticipate that it will indicate that the Fund will not have sufficient access to money in the event of a hurricane because the credit markets are in turmoil. Atwater and all Floridians may need this “discretion” more than that one paragraph may indicate.
State Farm is hard to figure out. They say one thing and often do another. When you finally get to the decision makers, there is usually some logic to why they do things despite disagreement from consumers or regulators. State Farm's announcement that it was leaving the Florida property market really has me wondering--"what's up?" From what I read and hear, I am not the only one.
Continue Reading...Nobody calls my office telling me what a great job their adjuster has done to fairly maximize their recovery in a prompt manner. Why should they? Risk managers, property managers, insurance agents, attorneys, public adjusters and policyholders, generally call our firm because they need help with claim delay or a denial. Their stories usually have derogatory, but colorful, language describing the insurance company representatives.
Continue Reading...I really suck at politics. It is why I have not one, but two, lobbyists help me. Jon Moyle and Chris Floyd stick out in Tallahassee because they are two of the few lobbyists who are trying to help consumers. Most lobbyists are the "bad guys" from the consumer's standpoint, although insurance lobbyists create propaganda to convince consumers and politicians otherwise. I guess insurance company lobbyists are "sneaky bad guys" with a lot of money.
Continue Reading...Crooks operate in secret and often use code language to avoid prosecution. Most of what they do is never written down in order to avoid detection. Even when speaking among themselves, they will use code words so the police cannot easily follow the plan of criminal conduct. Maybe these mobsters should sign up for the class being offered by the Medical Technology Learning Institute which is entitled, Dangerous Documents: Avoiding Land Mines in Your FDA Documents and Emails.
Continue Reading...The probability of a ruinous event happening may change behavior or cause you to insure to reduce the misery. The greater the financial misery, the more likely you are to insure yourself when it strikes. The greater the chance of the event happening, the more likely you will take measures to avoid the misery.
The American Association of Insurance Services recently published its Homeowners Cause of Loss Report. It details the cause of reported losses from 2005 through 2007 for property and liability payments on Homeowners policies. While the expanded version which lists the cause of loss by state is not available to the public, the property loss statistics are informative:
Something is rotten in Florida and Texas regarding the manner Citizens Property Insurance Corporation and Texas Windstorm Insurance Association (TWIA) are treating their customers. Rotten because both are breaking obligations they owe to policyholders. Somebody needs to be held accountable because claims management is condoning, if not initiating, the wrongful behavior.
Continue Reading...My last meeting as a member of the Citizens Mission Review Task Force is today. There is already dissatisfaction with the Task Force and our Report is not complete.
Continue Reading...Kelly Kubiak burst into my office jubilant in her recent victory over Great American Insurance Company. She received an Order granting her Motion for Summary Judgment in a case where the central dispute involved the interpretation of the valuation clause of an insurance policy. We so often talk about the problems of causation that we fail to spend enough time talking about how many benefits insurance policies are supposed to provide. It has been our experience that many policyholders think they have obtained a fantastic settlement from their insurance company until we explain how much money was left on the table through lack of knowledge and experience.
The insurance company adjuster is ethically required to help the policyholder maximize benefits. A properly trained and motivated adjuster teaches the policyholder how the policy can be used to soften the financial blow caused by insured peril. One can imagine how much money is innocently not claimed or recovered when an adjuster does not understand the policy.
In Kelly’s case, the small business she represented had an adjuster fight with the owner over “new” merchandise versus “used” merchandise. I wonder how many other insureds have been cheated as a result of Great American's obviously wrong interpretation of the valuation clause. Many policyholders do not realize the issue or simply fail to fight the issue by retaining an attorney. Unfortunately, this scenario is repeated far too often as many insurance company adjusters do not
