CREATING A HURRICANE PLAN

A hurricane plan is essential to ensure the safety of yourself and your passengers. A plan can save lives and reduce loss or damage to the vessel. Securing your boat before a loss will also make a difference in your insurance claim. Many marine policies have high standards and specific regulations about what steps you need to take before a hurricane. Some policies may require the boat to be out of the water.

Insureds also need to remember that even when a boat is stored at a marina, it is still the policyholders’ responsibility to ensure that proper precautions are taken and their hurricane action plan is followed. Owners should also have an understanding of the marina’s hurricane plan and their obligations based on their dock contract with the marina.

ENACTING YOUR HURRICANE PLAN

The Boat Owners Association of The United States, the oldest and largest association of boaters, has an insurance division that has published a 12 page guide for boat and marina owners. This guide provides information gathered from past hurricanes and explains how to secure vessels at various locations for all types of weather.

According to BoatU.S, getting your boat to dry land may mean less damage, but their guide also provides the essentials to securing your vessel in the water --complete with diagrams for securing dock lines and anchors.

The most important advice for boaters in hurricane zones is to make sure a hurricane plan is in place, and that the plan includes evacuation by the all when bad weather strikes.

AFTER THE STORM

In the event severe weather causes damage to your boat or yacht, policyholders need to be aware that not all insurance is created equal, and they should make recognize that the representatives sent to evaluate the claim are working on behalf of the insurance company. Policyholders with property damage or loss can also hire their own professionals to assist in the claim presentation to the insurance company.

A public insurance adjuster who handles marine claims can even help an experienced boater navigate their marine insurance claim. The intricacies of these types of claims can require attention to detail and experience in understanding the coverage in the policies. A public adjuster can also assist in finding the other essential experts including, marine surveyors, engine specialists, and interior design specialists, etc., who can provide a complete evaluation of the repair and accurate costs.

As the summer months approach, be safe on the water and be prepared with a hurricane plan.

According to the mission statement, the number one objective of the NAIC is to protect the public interest.

Beside the contents inventory application, the NAIC has other resources and website forms that can assist policyholders. The NAIC created the Insure U education program. Available in English and Spanish, Insure U provides insurance information specifically for consumers relating to life, health, home and business coverage. Visit www.insureUonline.org to learn more.

The NAIC webpage is a helpful resource for policyholders nationwide who would like to file a complaint against their insurance carriers. The large interaction map of the US provides shortcuts for each state’s insurance complaint department. Click on the picture of your state and file the complaint.

Of course, when you click on the Florida link, you are directed to a confusing page that does not mention the word “complaint.” After creating an account and clicking on more links, one can finally file their “Request for Insurance Assistance.” This is the code name for a complaint in Florida. Check out my prior post regarding how Florida hides its consumer complaint forms: Does Burying the Complaint Form Deter Policyholders From Filing Consumer Complaints Against Insurance Companies? Other states like Illinois and New York seem to be candid about the ability to file an insurance company complaint. In fact, New Yorkers need only fill out a quick online form to get an instant email confirmation and file number. Illinois’s page has a great title, “I want to file an insurance complaint”.

Why is Florida so secretive about the complaint form? This might be a good question to ask the NAIC president, Kevin M. McCarty, who is also the Commissioner of the Florida Office of Insurance Regulation. Florida’s Chief Financial Officer, Jeff Atwater is also a member of the NAIC.

While the NAIC members include insurance regulatory officials from around the country, the NAIC also recently welcomed someone we know is on a mission for policyholders, Amy Bach. Amy is the executive director of United Policyholders and this will be her first term on the NAIC Consumer Participation Board of Trustees. The UP website explains their goals for the NAIC:

• Simplifying policies to make them understandable to consumers
• Reversing the trend of “exclusions gone wild”
• Making it possible for consumers to comparison shop for quality and price
• Advocating for all states to enact post-disaster regulations to address the problems of underinsurance and insufficient ALE benefits

United Policyholders (UP) is a non-profit organization that is a voice and an information resource for insurance consumers in all 50 states. Funded only by donations from individuals and businesses, UP does not accept funding from insurance companies. UP also provides a great resource for policyholders who have suffered a loss. In addition to the smart phone contents inventory, insureds should also check out the Disaster Recovery Handbook & Household Inventory Guide, the handbook Amy Bach and Carol Ingalls Custodio published..

At the time of publication, this was ”the first-ever guide to preparing for and recovering from a natural disaster written by survivors for survivors, along with expert advice from trusted consumer advocates and personal finance professionals."

The book includes:

• First steps and sources of help on the road to disaster recovery
• Advice on using tax rules specially designed for loss victims
• Step-by-step guidelines for optimizing insurance claim recovery
• Tips for reconstructing the contents of a destroyed home, including detailed lists of items commonly found in households
• How to find the right professional help
• Tips and information important for emergency preparedness

This is a valuable resource for public adjusters and policyholders. To order you copy call 1-888-894-8621 or click here to order online. 

The benefits:

• It is very user friendly. Because it is so easy to use the email function, it is likely that those who start the program will finish it and, as a result, they will have their list and photos saved in a safe location.

• Once you have made the list, you can save the photos and the app takes your information and compiles a spreadsheet of the items in an easy to read log.

• You can take multiple photographs of each item you inventory.

• The serial number scanner is impressive. If you hold your phone over the item with a serial number, the phone can detect the number and save it for you. No typing required.

• The app has a section called "Preparedness" that is filled with numerous tips that could help any insured. Be sure to check out "What to do after a storm if your home is damaged" and "Additional Coverages".

However, as an attorney who represents policyholders, I have a few critiques of the program:

• The type of information listed on this app could impede your insurance claim if sent directly to the carrier. For each item the user wants to catalog, the app allows photos, a description of the item, the purchase date, purchase price, serial number, and a category. The problem is that many policies of insurance may require different information when an insured actually files a contents claim. For instance, if the policy of insurance is a replacement cost personal property policy, the insured should be paid the amount each item costs to replace. If the insured inserts the purchase price on an inventory form that is submitted to the insurance company and the insured does not also include a replacement cost number, the carrier may just pay the purchase price. This can be problematic if the item increased in value since the time of purchase.

• Purchase date is another category that could be more of an impediment to a policyholder. Many insurance policies require the insured to give an age of the item. Checking the section "Duties After a Loss" will spell out more specific information needed in a particular policy. If the insurance company only requires that you give an approximate age of an item, this is not the same as purchase date.

• Ages of the items should be logged. When I was analyzing my own items, I had a hard time remembering the year I purchased the item, let alone the specific date. If insureds use this app and inventory their items giving approximate dates, the spreadsheet does not reflect this approximation. Instead, the date is locked in and if an insured makes an error about the dates, the insurance company may allege a misrepresentation even though it was simply a mistake. Since there may be no need to even provide a purchase date, this field should be changed.

• The default date could cause problem. The app had a default date in the system and I could see that default information being used unintentionally in an inventory submitted to an insurance company, causing the insurance company to question an insured about the accuracy and honesty of the list as a whole.

• Categories of items are unnecessary. An insured does not have to label their personal property into certain categories of items unless it is required in the policy. Most policies only require a description of an item. If you use this app and categorize an item like a jewelry box under the jewelry category, the insurance company may improperly apply a jewelry limitation and not pay for this item if the limit is reached.

• The app does not lock. While you can set a passcode for your cell phone, you have to delete the app if you want this information to be removed from your phone. If you make an inventory of your household goods and your phone is stolen, the thief has a good preview of your cherished personal property and the rooms where you keep your valuables. The app should have its own lock or other security measures.

Overall, the ease of this app makes it one for policyholders to use. Even if you only have to the time to document 10 items in each room, if you have a loss, you are 10 steps ahead. But the inventory made by the application should not be forwarded to an insurance carrier without conforming the list to the policy requirements. Insureds should check the requirements of their policies and prepare their lists to make sure claims are properly processed.

Next week, I will write about the NAIC and its recent connection with United Policyholders.

In 2003, a terrible hail storm hit Minnesota, and Mr. Norcia was assigned to many of these cases as an independent adjuster for QBE. During his work on the hail claims, Norcia questioned QBE’s instructions on a large number of hail claims. Mr. Norcia explained that more than 90 condominium associations in his territory were damaged by the hail storm but QBE was asked Mr. Norcia to send letters to the insureds instructing them to demonstrate damages worthy of payment. This request went against all of Mr. Norcia’s training and experience as an insurance adjuster. He knew it was the carrier’s job to adjust and investigate the damages but QBE persisted, and Mr. Norcia became a public insurance adjuster. In Palm Bay Yacht Club, QBE challenged its former agent’s methodology and qualifications, even alleging that Mr. Norcia had little to no personal experience with roofs and windows.

The Court recognized that the insurance company should not forget it considered Mr. Norcia was qualified--- when he worked for them “Mr. Norcia’s vast experience in insurance matters has qualified him to offer expert opinion testimony about property insurance loss valuation, which includes…whether observed damage was caused by a wind event like a hurricane.” The Court also reminded the parties, “ the methodology employed by Mr. Norcia in determining whether a building component required repair or replacement is exactly the same process by which QBE’s own adjusters evaluate a property damage loss.”
 

In Florida, the Office of Insurance Regulation is required by Florida Statute §624.313 to publish statistics and ratios on the complaints consumers submit against insurance companies. The OIR's primary responsibility is regulation, compliance, and enforcement of statutes relating to the business of insurance and the monitoring of industry markets. The OIR must annually publish several categories of information about the insurance companies doing business in Florida.

Well, the complaints for 2010 have now been released and a summary of the OIR information was compiled by Brent Winans of Clear Advantage Risk Management.

The report data for 2010 shows that the number of "official complaints" filed against insurance companies dropped compared to 2009 and, also surprising, the complaint share against the state backed carrier, Citizens Property Insurance Corporation, decreased.

However, many of main offenders in 2009 also topped the list for 2010 complaints. People's Trust holds the title of having the highest complaint index two years running-- this is quite a statistic for a company that has only been insuring Floridians since March 6, 2008.

Perhaps the number of complaints decreased in 2010 because the number of claims decreased, but it would be interesting to hear from insureds to see how many were dissatisfied with a claim experience compared to the numbers of insureds who actually filed a written complaint for help.

Last July, I was intrigued by Julie Patel's investigative report on insurance complaints and posted about how difficult the insurance department webpage can be to navigate if an insured is looking to file a written complaint online.

The complaint form isn't even called a complaint form, so I have a hunch that many more dissatisfied insureds in Florida never file a complaint or perhaps, they start a google search about filing a complaint and end up leaving the myfloridacfo webpage without filing anything because the form is buried!

While the OIR report describes what it considered a COMPLAINT, we have no way of knowing how many complaints weren't filed or how many complaints were not counted by the OIR because they did not qualify or meet the OIR's recording rules for "written complaints." Calls to the department are not counted by the OIR and it is unclear whether written anonymous complaints are counted.

Since this is Consumer Awareness Week, maybe this post will get the attention of the Department of Financial Services and the complaint form will be made more accessible to Floridians-- also allowing the OIR more accurate data.

We know the Director of the Department of Financial Services' Division of Consumer Services is reading our blog, she posted a comment on Sean Shaw's post regarding consumer resources just two days ago.

Director Carter commented about a new consumer resource,

Florida's Chief Financial Officer Jeff Atwater issued a press release announcing our newest online resource, an OnDemand Library of educational presentations and videos on various insurance and financial topics that will allow consumers to educate themselves at a time that is right for them. From our online Insurance Library to our numerous consumer guides, all of our services are designed to empower Florida consumers to make informed financial decisions for their families and businesses.

Perhaps Director Carter will also address making information more easily accessible when it comes to telling the Department about problems or dissatisfaction consumers may be experiencing with their insurance carrier.

Andrew Fusco is licensed as a public adjuster in over twenty three states and is certified in building damage estimating from the Warwick Institute, Warwick Rhode Island. He also holds an SCLA Senior Claims Law Associate designation from the American Educational Institute and the Associate in Claims (AIC) designation from the American Institute for Property and Casualty Underwriters.

Michael Fusco started his career as a public adjuster in 1979, and he is licensed in over twenty-five states, as well as Canada, the Caribbean Islands, and Chile. In addition to his recent engagement at the University of Alabama, he has been a guest lecturer at Georgia Tech, University of Georgia, and Georgia State University.

Over the course of the school year, members of the Insurance Society of UA invite guest lecturers to speak about prevailing insurance and financial issues. According to its website, this longstanding student organization aims to assist students who are interested in exploring careers in financial services, insurance, risk management, or actuarial sciences. The society offers its members assistance with networking opportunities, help with resumes, job placement, assistance with internships, scholarships and much more.

Members of the society were very interested in the work of public insurance adjusters. But Alabama doesn’t license public adjusters and acting as a public adjuster in Alabama has been considered the unauthorized practice of law. However, as WorldClaim showed the students, it is possible to represent policyholders in insurance claims in many other states and even in more exotic locations like New Zealand, Chile, and Spain.

Michael’s Fusco’s lecture - The Insurance Claims Process: A Public Adjuster’s Perspective - discussed the history of insurance, the standard New York fire policy and its evolution, and how public adjusters level the playing field for insureds during an insurance claim. One of the slides in the presentation shown below provides a visual image of how vastly different an insurance claim can be when an insured is not represented.

Mr. Fusco explained that by hiring a public insurance adjuster, an insured can balance the scales because they have assistance in properly presenting the claim with complete and accurate information, using the insurance company’s language.

In talking to Michael Fusco about his recent lecture, it was refreshing to learn about the warm welcome he received from the University of Alabama and Professor William Rabel. This was interesting because many of the Insurance Societies sponsors are insurance companies. Allstate and State Farm are gold members. Yet the society invited the public adjuster perspective and Fusco was given an entire evening during this school year’s seven lecture series to educate about the work of public adjusters.

As you will see from the WorldClaim website, William Rabel, Teaching Professor of Insurance & Financial Services at UA, was pleased with Mr. Fusco’s presentation. Professor Rabel commented, “I want to interest more students in our profession and having outstanding speakers makes it easy. Michael Fusco is a great ambassador!”

Here is a picture of Michael (right) with Professor Rabel (left) in front of the insurance company hall of fame at the University of Alabama.

Maybe in the future, more Alabama citizens will also embrace the work of public adjusters but the potential legislation allowing the licensing and regulation has not passed yet.

Ackerman explains:

The mitigation firm racked up a $50,000 bill in two weeks - money that would later be deducted from our insurance payout, which was particularly painful because neither our house nor our belongings ended up being salvageable.

We also hired a "public adjuster" - an incongruous name for the company that would act as our own private adjuster, to do for us what the insurance company's adjuster does for it. For a small cut of what we would eventually recover from the insurance company, our public adjuster, Ricky, handled all dealings with the insurance company, inventoried the contents of the house, assessed the building damage, created and submitted our claims and got our rental costs paid out of the living expenses portion of our policy, coverage we didn't even know we had.

Ricky made sure that nothing was overlooked because, unlike us, he knew what to o and what to look for. My husband Jeff and I are educated people. But whatever knowledge we had accumulated in our lives to that point, none of it had anything to do with evaluating the extent of the damage to our house and belongings, or filing a claim that would protect our interests, much less defending our claim against the insurance company's efforts to minimize its payout. Ricky knew how to talk to the insurance company. He wasn't emotionally involved in the loss and could therefore advocate for us effectively and give us rational advice we would not have been able to formulate on our own.

On his first trip to our house, the insurance company adjuster gave us an inventory log, asking us to list every item that had been in the house, what we paid for it, where we got it, and how long we'd had it.

In fact, the only information relevant to our claim was what the item was, what its fair market value was at the time of the fire and how old it was. Had we told our insurance company that the couches in the family room were free hand-me-downs from family members, or that the kids' name-brand winter coats were $3 each at a yard sale, it's unlikely the company would have agreed, up front, to assess those items at fair market value, which is what we were entitled to.

Without Ricky, we would never have known that.

Ackerman will publish two more chapters. The next will appear this Sunday in the Concord Monitor. Neither name of the insurance company nor the name of the public adjuster are being disclosed. The Concord Monitor described Ackerman's account of the insurance company and public adjuster as the unnamed villain and anonymous hero in a post responding to a reader’s comment.

To read Jenifer Ackerman's series, click here.

For over thirty years, George W. Keys, Jr., SPPA, has dedicated his professional life to being a voice for policyholders in property insurance claims. Today, Mr. Keys works as a public insurance adjuster, appraiser, and umpire, but it is his interesting background that impacts how he views and handles insurance claims when he is adjusting a claim or working on an appraisal.

In 1990, Keys moved on to work as an independent adjuster, and adjusted claims for various insurance carriers throughout the country. He developed relationships with many insurance companies and was assigned to mainly large losses. When Hurricane Andrew hit, Keys was sent in to handle the destruction for many of the large commercial losses, but several of the claims handling procedures he was being asked to follow did not comport with proper claims adjustment according to the policies. After trying to go against the grain and do what was right by the policyholder, Keys decided it was time to use his skills to help only policyholders, becoming a licensed public adjuster in 1993.

Just two years later, Keys was the victim of a near fatal home invasion. After being shot and unable to walk, some would have considered themselves to be disabled or would have looked for a different profession. But not George Keys. He focused on getting better and gaining the opportunity to become a better adjuster for his clients. After months in rehabilitation, Keys was able to use a walker to maneuver, and later, a cane. Today, George Keys has regained his strength and the ability to both walk and work at the job he loves.

George Keys also found love while assisting an insured with a loss in Cape Coral. The future Mrs. Keys was, at the onset of her loss, handling her own claim. She did not have a public adjuster or lawyer. While performing a property inspection, the insurance company’s adjuster told her “to sit down and to shut up”. Knowing that this behavior was beyond the limits, she looked for help and hired George Keys. The insured learned that the adjustment of the loss by the carrier was beyond wrong. After she hired George Keys, the initial evaluation of less than $19,000.00 was resolved for a claim payment in excess of $200,000.00. When a former client becomes your spouse, it’s a great testament to a job well done.

After meeting his wife, Keys continued his commitment to helping policyholders, and in January 2007 opened Keys Claims Consultants, Inc., in Naples, Florida.

Keys’ approach to adjusting insurance claims does not start with screaming and yelling at the insurance company. Instead, he uses his experience, attention to detail, professionalism, and southern charm to explain to the insurance company the specifics of the claim at hand, and to negotiate the best outcome for the policyholder.

In addition to more than thirty years of experience adjusting losses in the US and abroad, George Keys’ credentials include:

• Senior Professional Public Adjuster (SPPA) from the National Association of Public Insurance Adjusters - The highest designation obtainable by exam from NAPIA

• Immediate past member of The Board of Directors for The National Association of Public Insurance Adjusters (NAPIA)

• Founding Member of The Florida Association of Public Adjusters (FAPIA), past President of The Florida Association of Public Adjusters, current Member of The Board of Directors of The Florida Association of Public Adjusters  

Most recently, Keys presented with Herbert Brock, Esq., Patrick Betar, Esq., and Emery Kunzman at the 2012 Wind Conference on “Condominium Claims and Losses – Lessons Learned”. In July, George Keys will present at the AAJ conference in Chicago on “Proper Investigation and Evaluation of Claims”.

To learn more about George and his firm, click the image below:

Section 17. Standards of conduct of public adjuster.

(a) A public adjuster is obligated, under the adjuster's license, to serve with objectivity and complete loyalty the interest of the client alone; and to render to the insured such information, counsel, and service, as within the knowledge, understanding, and opinion in good faith of the licensee, as will best serve the insured's insurance claim needs and interest.

(b) A public adjuster shall not misrepresent to a claimant that the adjuster is an adjuster representing an insurer in any capacity, including acting as an employee of the insurer or acting as an independent adjuster unless so appointed by an insurer in writing to act on the insurer's behalf for that specific claim or purpose. A licensed public adjuster is prohibited from charging that specific claimant a fee when appointed by the insurer and the appointment is accepted by the public adjuster.

(c) A public adjuster shall not solicit, or attempt to solicit, an insured during the progress of a loss-producing occurrence, as defined in the insured's insurance contract.

(d) A public adjuster shall not permit an unlicensed employee or representative of the public adjuster to conduct business for which a license is required under this act.

(e) A public adjuster shall not have a direct or indirect financial interest in any aspect of the claim, other than the salary, fee, commission, or other consideration established in the written contract with the insured, unless full written disclosure has been made to the insured as set forth in subsection (h).

(f) A public adjuster shall not acquire any interest in salvage of property subject to the contract with the insured unless the public adjuster obtains written permission from the insured after settlement of the claim with the insurer as set forth in subsection (h).

(g) A public adjuster shall abstain from referring or directing the insured to get needed repairs or services in connection with a loss from any person, unless disclosed to the insured:

(1) With whom the public adjuster has a financial interest.

(2) From whom the public adjuster may receive direct or indirect compensation for the referral.

(h) A public adjuster shall disclose to an insured if the adjuster has any interest in or will be compensated by any construction firm, salvage firm, building appraisal firm, motor vehicle repair shop, or any other firm that performs any work in conjunction with damages caused by the insured loss. The word "firm" shall include any corporation, partnership, association, joint-stock company or individual.

(i) Any compensation or anything of value in connection with an insured's specific loss that will be received by a public adjuster shall be disclosed by the public adjuster to the insured in writing including the source and amount of the compensation.

(j) A public adjuster shall not give or offer to give a monetary loan or advance to a client or prospective client.

(k) A public adjuster or any individual or entity acting on behalf of a public adjuster shall not directly or indirectly give or offer to give any article of merchandise having a value in excess of fifteen dollars ($15) to any individual for the purpose of advertising or as an inducement to enter into a contract with a public adjuster.

(l) Public adjusters shall adhere to the following general ethical requirements:

(1) A public adjuster shall not undertake the adjustment of any claim if the public adjuster is not competent and knowledgeable as to the terms and conditions of the insurance coverage, or which otherwise exceeds the public adjuster's current expertise.

(2) A public adjuster shall not knowingly make any oral or written material misrepresentations or statements which are false or maliciously critical and intended to injure any person engaged in the business of insurance to any insured client or potential insured client.

(3) No public adjuster, while so licensed by the Department, may represent or act as a company adjuster or independent adjuster on the same claim.

(4) The contract shall not be construed to prevent an insured from pursuing any civil remedy after the three-business day revocation or cancellation period.

(5) A public adjuster shall not enter into a contract or accept a power of attorney that vests in the public adjuster the effective authority to choose the persons who shall perform repair work.

(6) A public adjuster shall ensure that all contracts for the public adjuster's services are in writing and set forth all terms and conditions of the engagement.

(m) A public adjuster may not agree to any loss settlement without the insured's knowledge and consent.

(n) A public adjuster who is not actively licensed as an attorney in this state shall not give legal advice or otherwise engage in activities which are the practice of law.

While the Insurance Journal article recognizes that public adjuster can benefit policyholders on a claim, it also presents the critics' point of view. Insurance groups allege that the law would only drive up the price of insurance in the state.

Monique Kabitzke, the state director representing the industry’s Property Casualty Insurers Association of America, was quoted as stating that "Licensing public adjusters would do more harm than good when it comes to settling claims and holding down claims costs." But what information did Ms. Kabitzke use to form this opinion? The article mentions a PCI white paper on the issue that shows even though Alabama has a higher median home value than its neighboring state Mississippi, which has a public adjuster law, Alabama’s overall claims cost is 16 percent lower.

Merlin Law Group's attempts to locate this PCI white paper have been unsuccessful.

The report that is available to policyholders and insurance companies alike, is the 2010 OPPAGA Report. This report gives unbiased statics from Florida that show public adjusters increase the amount of insurance claim payments for policyholders.

While Alabama residents are currently being told that insurance company adjusters are supplied "free of charge" to help them with claims, Alabama insureds must remember insurance company adjusters work for insurance companies.

For more information on FAPIA membership and conference registration, click the image below:

The Windstorm Insurance Network^® will host its 4th Annual Wind Regional Symposium in Charlotte, North Carolina. This one day conference will be held on May 8, 2012. The agenda is filled with training and certification classes and includes an address by keynote speaker Ken Futch, CSP. Ken Futch is president of Ken Futch and Associates, an Atlanta-based training company that teaches organizations and individuals how to recognize and capitalize on opportunities. The in-demand WIND Umpire and WIND Appraisal certifications will be offered in the afternoon sessions.

To register for the WIND Symposium, click here. 

Previous posts provide some helpful insight on preparing contents inventories. United Policyholders’ website also offers some very helpful suggestions on how to tackle this daunting process. One of the tasks a dedicated public adjuster will handle in a fire claim is assisting the insured with preparing the contents inventory. Some public adjusters also hire contents consultants to further assist. Hiring a professional to assist on a contents inventory can be a very wise move, especially for policyholders who have lost everything

Here is why:

1. Your insurance company is unlikely to help you inventory the loss.
2. A complete inventory is crucial and understanding insurance company lingo is needed to properly fill out the form.
3. There is little room for error on an inventory form. Policyholders uninformed of the claim process may make an innocent mistake that are misinterpreted by the insurance company.
4. The items you are claiming need to be on the inventory. Insurance company representatives may give a policyholder the impression that a partial list is adequate or that items can be claimed or added to the list later. But what they don't mention is that if supplemental items are added, there will be more scrutiny of the claim because the insureds "failed" to list the supplemental items on the first form and the insurance company will want to know why.

In the recent case of Magie v. Preferred Mutual Insurance Company, the New York plaintiffs suffered a total fire loss. The policy of insurance provided more than $340,900 for the contents coverage alone, but the insureds lost thousands of items and their inventory exceeded the coverage. Preparing this inventory would be a overwhelming and intense process for any insured. Luckily, the insureds hired a public adjusting firm to assist in preparing the contents inventory.

After the fire, the insurance company failed to properly pay both the structure portion and the contents portion of the claim and the insureds brought suit. Among other defenses, the carrier alleged material misrepresentations relating to items claimed on the inventory.

With the help of the public adjuster’s testimony, the policyholders were able to show the trial judge that the items on the list should be paid by the carrier and that the list did not include material misrepresentations. The insurance company wanted receipts to prove the insureds owned such items, but the court recognized the difficulty in producing such records in connection with a claim where a lifetime of collected household items were destroyed, and recognized that such documentation was also destroyed in the fire.

The testimony in this case showed that the insureds made innocent mistakes on the inventory with respect to some items that were classified as destroyed when, in fact, they were impacted by the fire loss. The court referenced the public adjuster's testimony, "... in quantifying plaintiffs' loss indicated that, of the thousands of items he listed, less than one tenth of one percent were not damaged. And, those reported non-damaged items had been exposed to the fire so as to affect their value. Out of these thousands of damaged items, defendant points to a small number as purportedly reflecting incorrect information."

After the trial judge determined the mistakes were not fraudulent or material misrepresentations, the carrier appealed the ruling. Last month, the appellate court affirmed the trial court’s decision and explained:

Out of these thousands of damaged items, defendant points to a small number as purportedly reflecting incorrect information. However, plaintiffs offered explanations as to some of these items, and the proof at trial simply did not compel the conclusion as a matter of law that plaintiffs intended to defraud defendant or that the incorrect information constituted material misrepresentation. The fact that plaintiffs did not have documentation for some losses was explained by documentation being lost in the fire.

The court relied upon an important principles of insurance coverage in affirming the decision. "Incorrect information is not necessarily tantamount to fraud or material misrepresentation as the insurer must tender “proof of intent to defraud-a necessary element to the defense”.

The apprentice license application also does not explain the apprenticeship supervision requirement except to state that 100 hours of employment per 12 month period are required under the "supervision" of a Florida licensed public adjuster.

The proposed code would add a subsection that defines direct supervision as:

(f) “Direct supervision” means the physical presence of the supervising public adjuster when soliciting or executing a contract for public adjusting services.

Proposed changes for the ethical code have also been drafted. This section of the code pertains to public, independent, and company adjusters. Look for some of these ethical requirements to pair down duties for claims adjusters and field adjusters with respect to the due diligence owed to policyholders who make claims in Florida.

Also, the current ethical code bars an adjuster working for an insurance company from advising a policyholder that hiring a public adjuster will have adverse effect on the claim but the proposed changes delete this section of the code and do not substitute it with new language.

To learn more about these and other proposed changes, including those specific to public adjuster contracts,click here. We welcome your comments on the proposed changes.

Be sure to stay tuned for future posts on rule modifications.

Even if all of the top ten catastrophic events, including the September 11, 2001 attack, the Northridge Earthquake, and the top eight hurricanes, had occurred in the last year and had been paid for last week (a total of $162 billion in 2010 dollars after tax). the property-casualty industry surplus would still be $418 billion. . .

How has this happened?

According to the CFA, most of the savings has been achieved by hollowing out the coverage in homeowners insurance policies and raising rates.

The CFA report also provides suggestions on ways to curb the problem, and for state regulators, the CFA suggests the following:

• A careful examination rate requests and reviews of the reasons behind carriers exiting markets.

• The use of anti-concurrent language should be banned.

• Regulators, not insurers, should determine when a storm is classified as a hurricane in a state.

• States should join together to form interstate compacts to share in hurricane risks to provide a pool of policies and to spread risk.

At the federal level, CFA calls on the Federal Insurance Office to accumulate data similar to what is required of banks under the Home Mortgage Disclosure Act, allowing for detailed analyses of market stress and to assist in the formation of the interstate compacts.

To learn more about how profits drive insurance companies check out prior posts, Insurers Sacrifice Customers for Profit, Insurance Rates Go Higher With No Hurricanes? and Did State Farm Dupe Florida Leaders?

Roth's video message is available here and will be available for download on February 21^st.

Yes, nearly twenty years ago, today’s sinkhole issues were front and center, and both the Legislature and the Department were involved.

The results of the 1992 study stirred attention and the geotechnical experts gathered for the first sinkhole summit. Open File Report 72, “Geological and Geotechnical Assessment for the Evaluation of Sinkhole Claims” was written.

In 2004, another devastating year of hurricane losses in Florida, the Legislature again requested an assessment of sinkhole damage and insurance coverage in Florida. Sinkhole Summit II was held in Tallahassee in September 2004. Merlin Law Group’s Kelly Kubiak observed this summit where twenty five professional geologists, geotechnical engineers and others addressed sinkhole investigations in Florida. Special Publication 57 was published in 2005.  While many of the sinkhole statutes have changed over time and are no longer current or operative, the report provides valuable information to readers who want a better understanding of sinkhole conditions, investigations, and subsidence testing.

More information about sinkholes, Florida sinkholes in particular, can be gained from the sinkhole information pages at the Florida Geological Survey’s webpage. FGA is a state government institution specializing in geoscience research and assessments to provide objective quality data and interpretations. It is a branch of the Florida Department of Environmental Protection. Some of the resources on this site are provided from the Florida Department of Insurance, but the publications and reports are worth a read and should be studied by those who are involved in sinkhole claims. After all, understanding our history will help us in the future.

With respect to advertising, public adjuster advertisements now must include a specific bold and capitalized disclaimer. The Legislature also clarified the prior statute by giving more explanation on what it considers to be an untrue, deceptive or misleading advertisement for the services of a public adjuster. Many other changes related to advertisements should not be dismissed.

Check out section 11 of the statute -- it includes changes to public adjusting fees for reopened or supplemental claims for certain types of insureds.

Section 14 of the statute includes important additions that can impact a claim as a whole. Now, when an insurance company representative needs access to the property, the carrier or representative must give at least 48 hours notice to the insured before scheduling a meeting or an onsite inspection. The insured may deny access if the insurance company or their investigator just shows up onsite without the proper notice. But compare this to section 15(b), which states that a public adjuster may not restrict or prevent an insurer or its representative from reasonable access at reasonable times to an insured or the insured property. Section 15(c) further provides that if the unavailability of a public adjuster otherwise delays the insurer’s timely inspection of the claim, the policyholder must allow the insurer to access the property without the public adjuster.

It will be interesting to see how this section of the statute will play out in actual claims. One of the issues that often occurs in a claim, especially if the damage was caused by a catastrophe, is that the insured has a difficult time getting anyone from the insurance company to actually come to the property and inspect the loss. I have represented many clients, both with and without public adjuster representation, who would have been thrilled if their insurance company would have come to their property promptly after being notified of the loss. This addition to the statute may cause more insurers to place the blame for the delay on pubic adjusters or the insured and claim a violation of statute. But now, many of the claims inspections are coordinated via email between the two sides and a written record may help courts decide if inspection timing was reasonable or delayed and who caused the delay.

Now, Florida Statute 626.860 provides that a public adjuster cannot otherwise be excluded from an in-person meeting with the insurer and insured, and that the insurer must meet or communicate with a retained public adjuster regarding the scope of the covered loss.

Finally, Section 16 prohibits a licensed contractor from adjusting a claim on behalf of an insured unless that person is also a licensed and compliant public adjuster. A person who holds both licenses should not be wearing both hats and contractors can’t engage in public adjusting under the guise that it is contracting.

Remember to download or print a copy of the statute for easy reference and note that sections 5-16 of §626.854 are specific to condominium unit owners and residential claims.

Merlin Law Group's own Chip Merlin, the outgoing president of WIND^®, will welcome the attendees to the conference, but he won't be the only Merlin Law Group attorney who will be addressing the crowds. Merlin Law Group's Jean Niven, David Pettinato, Donna DeVaney, Javier Delgado, and Douglas Grose will be panel members presenting lectures dealing with everything from sinkholes to insurance fraud, and various topics in between.

To become more familiar with Merlin Law Group, we encourage public adjusters to visit our attorneys at the expo center, booths 38 and 39. Stop by to learn more about our firm and discuss with our attorneys the current trends in insurance claims adjusting. As a public adjuster, sharing your stories and thoughts can help your policyholders and the state of insurance claims in general. I want to hear from you so I can introduce you and your stories on my weekly post. If you are a public adjuster who has a story to tell, just stop by to meet me or simply fill out the feedback form with information about your public adjusting story.

Be sure to check the WIND^® website for the conference schedule and course downloads in order to get the most out of the classes.

State insurance officials and others are working on legislation that would let Alabamians with insurance claims hire their own adjusters, clarifying what has been a gray area of the law. If passed, there'd be no question Alabamians could hire so-called public adjusters to help establish the scope of their losses and probably get more money from their insurance companies.

Not surprisingly, the insurance industry likes that insureds cannot hire public adjusters. It often makes the claims process a one sided game if the insured is without representation. The horrendous treatment some homeowners and business owners received from their insurance companies after the tornado damage claims last year, may prompt the Alabama legislature to recognize the need for public insurance adjusters.

Legislation was proposed last year to license and regulate public adjusters in Alabama, but it was dropped because of objections from the Alabama State Bar. Now, the Bar is working with state insurance regulators and industry groups on a compromise measure for the legislative session starting in February.

Since the April 27, 2011, tornado struck, Alabama has not received any complaints of actions by public adjusters, but in the past, there were complaints about roofers who improperly negotiated insurance claims. Contractors who act as insurance negotiators are a problem in many areas of the country. Licensing of the profession may make a difference.

Brian Goodman, of the National Association of Public Insurance Adjusters, provided the Birmingham News perspective on how passing a licensing law in Alabama will benefit the state because it will give the state the ability to regulate how these professional assist insureds and protect consumers.

Check back for updates on whether Alabama makes a change this legislative session.

Appointment Renewals When a Licensee Has an Invalid Address

Starting after 5 p.m. EST on January 18, 2012, if a licensee/appointee has an invalid address on file with the Department, then no appointing entity will be able to renew the licensee's appointment. This process is already in place for initiating original appointments and will now be incorporated into the appointment renewal process. When the licensee updates their address(es) in their MyProfile account, then the licensee will be able to have their appointment(s) renewed. The addresses included in this process are email, home, business and mailing.

Late Fees for Late Original and Late Renewal Appointments

Starting after 5 p.m. EST on January 18, 2012, we will begin assessing appointing entities the statutory $250 late fee in addition to the statutory $60 appointment fee for each initial/original appointment submitted late. A late original appointment is any initial/original appointment that has a requested effective date more than 45 days before the submittal date.

For example, if on March 1, 2012, an appointing entity submits an initial/original appointment with an effective date of January 2, 2012 (more than 45 days from the submittal date) for a licensee, the appointing entity will be required to pay the $60 original appointment fee and the statutory $250 late fee. On the other hand, if on March 1, 2012, an appointing entity submits an initial/original appointment with an effective date of February 1, 2012 (less than 45 days from the submittal date), the appointing entity will pay only the $60 original appointment fee.

Additionally, we will begin assessing appointing entities the statutory $25 late fee in addition to the statutory $60 appointment fee for each appointment renewed late. A late renewal appointment is one that is paid after the renewal month.

The late fees must be paid by the appointing entity and cannot be charged back to the appointee.

[See sections 624.501, 626.371, and 626.381, Florida Statutes]

Appointment Renewal Timeline and Notification Changes

Starting after 5 p.m. EST on January 18, 2012, we will begin sending an email notification to an appointing entity 90 days before an appointment is up for renewal, in addition to posting the renewal invoice in their eAppoint account, which will indicate any appointee with an invalid address. An insurance agency that has appointed a customer representative will receive a similar email notification at the same time. This serves as a reminder and provides the appointing entity time to make modifications to the list of appointments they will be renewing such as reminding any appointee with an invalid address to update it with the Department.

Another email notification will be sent to the appointing entity on the first day of the renewal month informing them that they can now access the appointment(s) that need to be renewed and make payment via eAppoint. Licensees that self-appoint will be sent a similar email notification at the same time. The renewal invoice will become available for payment on the first day of the renewal month and can be paid through the last day of the renewal month without late fees being assessed.

On the first day of the month following the expiration date of an appointment, an email notification will be sent to the appointing entity advising payment was not received, late fees have been assessed, and the invoice will continue to be available for 45 more days for payment, including late fees, otherwise the appointment will be cancelled. If the appointment is not renewed after this 45-day period, the appointment will be cancelled for non-renewal and an email notification will be sent to the appointing entity and the licensee notifying them of the appointment cancellation along with information on the process for reappointment and the late fee.

For example, if an appointment expiration date were March 31, 2012, the invoice would become available for payment on March 1, 2012, without late fees being assessed. On April 1, 2012, late fees are assessed at $25 per appointment and the invoice remains available for payment until May 15, 2012. On May 16, 2012, if payment has not been received, the appointment is cancelled.

If the appointing entity wishes to reinstate an appointment after it has been cancelled for non-renewal, and no lapse in appointment coverage is desired, the appointing entity will be required to process an initial/original appointment submission and enter the requested effective date. If the initial/original appointment's requested effective date is more than 45 days from the submittal date, then the statutory $250 late fee described above will be assessed.

Public Adjusters holding a license in Florida should note these changes and make sure they have a proper address on file with the DFS and be alert for emails notifications.