Property Insurance Coverage Law Blog : Florida Insurance Lawyer & Attorney : Merlin Law Group Law Firm : Tampa, Houston, Coral Gables, Gulfport

One legal treatise noted the value of sharing information:

“The value of information sharing among plaintiffs in similar cases has been broadly recognized in a growing body of case law in state and federal courts and in the legal literature. A review of the authorities makes clear that a consensus of legal opinion, from a wide variety of perspectives, strongly advocates the practice. Judges and scholars agree that sharing of discovery among plaintiffs is necessary to promote full, fair, and efficient access to information, to deter and detect stonewalling, and to advance the truth-finding function of the judicial system. A restrictive confidentiality order that precludes information sharing among counsel with similar cases.”

Francis H. Hare, Jr., et al, Full Disclosure: Combating Stonewalling and Other Discovery Abuses, 161-62 (AAJ Press 1994).

One reason I wrote Insurance Settlement Preparation, and very publicly posted the information about our case against Lexington Insurance Company, is because we are trying to find out from others if they are having any better luck at figuring out why Lexington seems to be taking such a hard line on claims in Louisiana. We have already learned of other cases with similar problems which we have encountered. It saves a lot of time and money to not have to make a trail that another has already laid. We try to return the favor.

Even the media has picked up on Lexington's claims litigation. The Times-Picayune published a story in Sunday's paper, Court Issues String of Policyholder-Friendly Rulings in Insurance Cases. The article noted how many cases Lexington is involved and losing:

"Another explanation, of course, is that the trend is simply a consistent set of decisions on one company's behavior, since three of the four cases dealt with Lexington, a unit of AIG. Lexington did not respond to phone and e-mail requests for comment."

Examples of how sharing information helps everybody (except the insurers) are plentiful. Much of the discovery concerning State Farm’s claims practices following Hurricane Katrina came about as a result of information coming to light in other lawsuits. For example, we published as exhibits to a complaint a client’s original engineering report which would have provided coverage and also the altered report with the forged signature. Before that, spokesmen for the insurance industry asked Dickie Scruggs to "back up" his allegations with proof. As a result, everybody knew to ask for an original report and not accept what the insurer was providing as the absolute truth.

Any attorney that represents policyholders and is interested in sharing information regarding claims practices of insurers should contact our law firm. We will provide information for joining the American Association of Justice's Litigation Group dedicated to this. And, for any others that might have information that may provide me a better understanding of Lexington and AIG, I am only an email or call away from you.

We get told similar stories by other adjusters so long as it is "off the record."

A person with significant experience in the insurance industry, Deborah Moroy of Dimechimes,  wrote in response to Playing the Float and the Wisdom of Warren Buffett:

"I am fiercely committed to improve claims handling in the insurance industry while maintaining positive networking environments. I do not allow any negative posts or adjusting firm or carrier specific "blasting" among our members. I promote the discussion of claim handling in general but regularly post links to great blogs and articles found on the Internet. It has been 3 years of extremely hard work since I cannot post carrier information or ask adjusters to upload file samples so they don't violate carrier code of conduct requirements. So, my sole source of info is through training info I find on the web. The info found on the majority is worthless except in generic format........"

It should be against public policy for insurance companies to have any trade secrets regarding claims practices and there should be even a stronger public policy regarding any codes of conduct which prevent any adjuster or employee from disclosing improper methods or activities of claims adjustment. If we allow insurers to hide behind these shields, all we do is silence the otherwise courageous adjusters because the attorneys for the insurers will threaten them with civil action.

The classic example is the civil prosecution of the Rigsby sisters. They told a story of a State Farm adjuster holding numerous reports which were not being sent to policyholders but were "revised." The revised reports were always worse for the policyholders because they allowed for State Farm to deny claims. Had their story stopped there, they would have been terminated. But their actions went further with Dickie Scruggs, and the rest has been fodder for demeaning posts by the insurance industry.

Still, the message is clear from the insurance industry: We have a Code of Silence that you violate at your own risk.

We have initiated discussions with legislators at the state and federal level regarding these concerns. I could probably use the experience of Congressman Gene Taylor as an example. I took one of the Rimkus engineers to Washington to explain and show how his report was changed and signed without his permission. He did this in front of Taylor. In the civil action, the engineer called just before his deposition to tell us that Rimkus was getting him an attorney. At the deposition, he could barely recall the meeting with Taylor.

While there are legitimate reasons for adjusters and insurance company vendors to remain silent regarding the private information of customers and claimants, laws and contracts which further goals or activities of claims misconduct should never be allowed and there should always be exceptions to any arguments of privacy. The insurance industry should never be allowed to take any retribution against those that publicly make others aware of wrongful claims conduct. Otherwise, the insurance industry is acting like another illegal industry with a code of silence. 

If the insurance industry were really trying to stop bad claims practices, they would be up with me in Washington and in Tallahassee trying to help. I will write and call them to let you know where they stand. Stay tuned.

The sad truth is that all policyholders living along Coastal areas face exactly the same wind versus water fight with their insurers that happened in Katrina. Indeed, in Florida, the revised Valued Policy legislation and recent Florida Supreme Court decisions make it inevitable that more Floridian policyholders will have to litigate these issues. Maybe I should not complain, but there is a societal insurance problem along the Gulf and Eastern Coasts which is simply being ignored because the focus is upon corruption charges against Dickie Scruggs and others.
 

Eventually the sad stories of policyholders not being paid, and the problems of insurers being allowed to change wording in their policies to make "all risk" coverage more like "your risk" coverage, will be played out again. It is winter and hurricanes can seem a long time away. The sensational stories of corruption and the falling economy are in the minds of everyone. The insurance industry has once again escaped meaningful reform. Meanwhile, we are still just a Katrina away from another insurance disaster because those that make policy have shifted focus to other matters without first correcting problems from the past.