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

In my experience, when sinkhole claims are litigated, the most common issues raised by insurance companies seem to be the following:

• proper protocol to repair sinkhole damaged properties;
• whether a sinkhole is the reason for the damage;
• whether the claim for damages was promptly reported; and
• whether the cause of the damage manifested during insurance company X’s period of coverage.

According to the article, the conference discussed recent problems in a residential area of Port Richey where claims for sinkholes are on the rise.

One suggestion for insurers which might be helpful is to make sure the proper testing is performed to determine if sinkhole indicators are present. A simple guideline is to evaluate the subsurface conditions near the areas of damage. For example, if the majority of the damage is showing along a garage wall with stair step cracks, test the soils near this particular wall. I know the complexities of subsurface drilling can make testing in some areas of the property more difficult than others, but the locations of the tests should at least attempt to correlate with the areas of the property showing signs of damage.

Public insurance adjusters are often helpful in sinkhole claims. They know the right questions to ask of the insurance company to learn more about how the claim is being evaluated. Public adjusters are licensed, trained, and bonded professionals. Many of the public adjusters I know have a resume which includes insurance expertise. That’s right, company adjusters, agents, preferred contractor vendors, claims handlers, supervisors, and special investigators are the former occupations of many public insurance adjusters who now work for policyholders.

It is helpful to have a professional public adjuster helping with a sinkhole claim because the investigation process is more complex than many other property damages claims and the repair protocols are unique with this kind of loss.

An OPPAGA Report recently evaluated the growth, discipline and helpfulness of public insurance adjusters. Here is a direct link to this report titled “Public Adjuster Representation in Citizens Property Insurance Corporation Claims Extends the Time to Reach a Settlement and Also Increases Payments to Citizens’ Policyholders” http://www.oppaga.state.fl.us/MonitorDocs/Reports/pdf/1006rpt.pdf

A quick summary from the report reads:

The number of licensed public adjusters in Florida has grown significantly in the last six years, and the incidence of complaints, regulatory actions, and allegations of fraud involving public adjusters is generally low. Florida’s public adjuster laws are comparable to and in some cases more restrictive than those of other similar states.

Our analysis of Citizens Property Insurance Corporation claims data found that cases took longer to reach a settlement but received higher payments when claimants used public adjusters for claims filed in 2008 and 2009. Public adjusters represented policyholders in 26% of non-catastrophe and 39% of catastrophe claims filed during this period.

With respect to claim amounts and the need for policyholders to hire help, it states:

Policyholders with public adjuster representation typically received higher settlements than those without public adjusters. Policyholders that filed catastrophe claims in 2008 and 2009 generally received larger insurance settlements than policyholders that did not hire these persons. The typical payment to a policyholder represented by a public adjuster was $22,266 for claims filed in 2008 and 2009 related to the 2004 hurricanes (see Exhibit 6). In contrast, policyholders who did not use a public adjuster received typical payments of $18,659. The difference in payments was larger for claims related to 2005 hurricanes, with public adjuster claims resulting in payments that were 747% higher. However, as policyholders pay public adjuster fees as a percentage of their settlement, their net settlement would be lower than this amount.

 

Orth’s article highlights the Department of Financial Services Neutral Evaluation Program and urges consumers to use this process:

The state has approved 43 experts as neutral evaluators with no connections to builders or insurance companies. Insurers typically pick up any expenses for the evaluations.

Many people still don't realize they have this option, though, Giordano said.

The “neutral” evaluation program however, should not be used in lieu of hiring a policyholder advocate. Many of our prior posts have explained how this program works and the pitfalls associated with the process. Neutral evaluation was discussed in “How Neutral are “Neutral Evaluators Certified by the DFS,” “Something is Rotten in the State of Denmark, I mean, Florida - Problems with the Proposed Sinkhole Legislation,” and “Neutral Evaluation of Sinkhole Claims: A Three-Ring Circus.”

Specifically in the post “Down and Dirty with Neutral Evaluation,” the neutrality of the evaluators was discussed. To become a neutral evaluator an applicant needs to fill out an application with the Florida Department of Financial Services and be either a geologist or a geotechnical engineer. To qualify as neutral, the applicant can receive up to 90% of his or her gross income or revenue in the past calendar year from property insurance companies. Also, since the cost for the neutral evaluation process is paid for by insurance companies, the neutral evaluators are in effect working “for” the carriers.

As policyholders are required by statute to go to neutral evaluation if requested by the insurance company, I have attended many neutral evaluations. Before the actual evaluation, I provide the expert reports which support my client’s claim for damage. This is information many unrepresented policyholders would not even be aware they need or something they might not be able to afford. Unless the policyholder hires a trained advocate or has the knowledge and resources to handle the matter without help, the neutral evaluator only receives the reports commissioned by the insurance company. This can make it difficult to truly evaluate what is happening at the property.

The post, Public Adjusters Arrested in Broken Tile Insurance Fraud Scheme, set records for “hits” on this site. I also received all kinds of emails and discussion from others. At lunch with six attorneys in our firm, I mentioned that I have been doing this line of work since 1983 and have never handled a broken tile claim. Four others had the same experience, one attorney had a couple, and only Michelle Claverol, in our Coral Gables office, had more than a few.

I learned that some experts conducted tests regarding the breaking of tile. They found that breaking tile is not as easy at it may seem. A pot, shoe, or falling object has got to hit a tile just right or the tile has to be loose or set improperly for breakage to occur. They are not fragile. The back side of a hammer is sharp enough to cause the breakage quite easily with a strong strike.

I was reminded that an attorney friend of mine advertised for broken tile claims at the Windstorm Conference several years ago. Apparently, he had a fake million dollar check with his firm and that of a public adjuster as payees. The space in the bottom left had “one cracked tile’ written on the explanation line. The Florida Bar certainly would not have approved of such an advertisement. Indeed, it is quite unprofessional. To imply to public adjusters and the public that attorneys can help obtain large recoveries for a small cracked tile loss begs for the type of conduct that happened as indicated in the post. This past legislative session, some in the Florida Legislature mentioned this type of conduct as a reason to change longstanding consumer protections regarding insurance. If public adjusters and policyholder attorneys want a bad reputation can be developed, all we need is for some to continue this type of conduct. Insurance adjusters and insurance company management are rightfully upset, and so are the rest of us. A few bad apples are harming legitimate and law abiding public adjusters and consumers.

Finally, the oil spill issues are dynamic. Following my post, Accountants and Business Interruption Experts Will Play an Important Role Recovering BP Oil Spill Income Loss Claims, a dozen or so accountants have offered their services for lost income and earning capacity oil spill claims. Two weeks ago, I was in Steve Riggs’ office at Carr, Riggs & Ingram when I appeared on Fox News in the following interview regarding the oil spill:
 

I suggest that businesses consult with their accountants regarding these lost income claims. On anything more than a simple loss, I encourage businesses impacted by the oil spill to at least discuss the matter with qualified counsel. Proof and presentation of these claims and proving the full impact of the loss of earning capacity are what business interruption attorneys do all the time. Whether counsel should be retained should be determined on an individual basis. Often, no attorneys will be needed.

Truth is stranger than fiction. I will keep this post short so you can read this bizarre story. I have never heard of a house being wired by a CIA agent spouse in a divorce. The attempts to destroy this evidence are amusing. I am not certain what my attorney friend, Ken Duboff's relationship with Global Adjusters is, so that he was quickly on the scene. However, his instructions not to tamper with the criminal and civil evidence were proper, although allegedly not followed.

As I write this, I am thinking about the dozens of very honorable and ethical public adjusters across the country that will call, write and speak to me about this. They have done so in the past. Since many look to me for information, and sometimes leadership, about what happens in Florida insurance adjusting, I am aghast and saddened by these acts. In A Few Bad Apples, I noted:

The insurance industry claims billions of dollars are lost as a result of insurance fraud. They insinuate that their otherwise honest customers become crooks at the time a loss occurs. If that were true, insurance would be the most socially defective product ever imagined and marketed.

It has been our experience that insurance fraud by customers occurs, but in a very limited instances. Yet, when it does, the insurance companies, police, and departments of insurance act in concert with publicists to show they are doing their anti-fraud jobs and make an impression on the public that some are engaged in wrongful behavior.

When a public adjuster is involved, it reinforces the perception by those acting on behalf of the insurance industry that 'public adjusters just cannot be trusted.' The old adage, "a few bad apples can destroy an entire basket," comes to mind when I hear or read stories like the one cited above. Public adjusters must beware that if this perception persists, they could be in danger of having licensing statutes disappear or severely limited in the states that allow public adjusting.

I am giving a speech about professionalism and ethics at the National Association of Public Insurance Adjuster's Annual Convention next month. The title, “Fantastic Adjustment Results through Professionalism and Ethical Conduct: Tips from the Masters and Lessons from the School of Hard Knocks,” will certainly be timely given this situation. The problem is that the people who need these lessons the most will not even be in the audience.

Let's set the stage for how this happens. After a theft or a fire, the insurance company adjuster comes to the loss. One of the items orally requested from the policyholder is a list of all the lost, stolen or destroyed personal property along with all receipts. Exactly what is said becomes a major issue and some of my clients in the past have indicated that they did not make a claim for personal property items because the insurance adjuster said they had to have receipts to verify ownership, value, age, etc. Sometimes, my clients hear the instructions and think they are required to have receipts or they will not get paid.

I have always felt that the proper instruction from an honest insurance adjuster knowing that most people do not keep records or receipts of their covered "stuff" is:

The insurance policy allows us to ask for all the documents you have that help verify the loss. If you have any receipts for the items you are claiming, I would like to see those originals. If I need a copy, I will pay you for the cost of the copy. Please do not think that you have to have a receipt of the purchase of any personal property item you are making claim for, but if you do, I have to see it as soon as possible. Regarding your purchase of replacement items for those that are lost, the policy does require you to keep those documents of purchase and those receipts. You have to keep those post-loss purchase receipts as a condition under the policy to get replacement cost benefits."

(Note: In Florida, a homeowner insured with an admitted carrier gets replacement cost of personal property right away, so that instruction is not entirely accurate in Florida.)

Some insurance adjusters fail to make the highlighted portion clear to the policyholder. Some policyholders fail to hear it. And as a result, invoices are made up or somehow obtained that are not the original but a fabrication. Special Investigative Unit (SIU) adjusters love this game of finding the fraudulent invoice. While I have no problem of them catching frauds, I hate when otherwise honest people are baited into a needless situation of committing a fraudulent act just to get what is already owed to them.

The Claims Magazine article could be such a case or it could be a case of a person trying to justify an intentionally inflated claim:

When Gayland Anthony Oliver suffered a structure fire to his Greensboro, N.C., home in May 2009, he is alleged to have used the opportunity to pad his claim with some pretty fancy duds.

...Oliver claimed that $8,100 in custom-tailored suits had been destroyed in the structure fire. However, State Farm Fire and Casualty Company found the claim suspicious and conducted an investigation. They discovered that the invoices submitted for payment were fraudulent and did not reflect the true cost of the suits.

Oliver was arrested for submitting false claims to his insurance company....

Corey Harris' post was accurate, but there are many of the same traps for the honest policyholder in the theft scenario. The insurance company has many valid reasons to require that the police are notified following a theft loss. Three of those are:

1. Theft is not only a crime against the owner, but one against society. Finding thieves and placing them behind bars helps everybody, including insurance companies and their customers.
2. The police often recover stolen items. To that extent, the recovery of stolen items mitigates the insurer's loss and if recovered soon enough, the policyholder's loss as well.
3. Theft always has a component of a moral risk to the insurer. A few policyholders stage, hide or otherwise claim that a loss occurred as a result of theft caused by a third party when it simply is not true. Unlike a natural disaster, there is always a possibility of fraudulent theft. The requirement to notify the police helps prevent such from occurring, increases the probability of finding it, and therefore reduces the "moral hazard."

The police may ask for a list of what was stolen and the "value" of those items. The important thing for the honest policyholder is to get a revised list to the police if either the items or values change so that the SIU guys do not start asking about discrepancies. They will often check, and they may inquire as to significant differences. If numerous items are stolen, most people will not realize what is missing until they conduct an inventory of what is left and try to remember what may be missing. Sometimes, people simply forget what items they owned or realize that items in another part of their structure were also stolen until they look for them. The important thing is to keep the insurance company and police informed and with the same information about the changes and why the changes are being made.

And always remember, two wrongs never make a right. Never make up an invoice and never claim more than the full value of an item just because the insurance company may threaten not to pay or pay enough. When the insurer does not conduct itself in the right manner, I bet you can guess the type of professional that should be called to do something about that.

First, when a theft loss avails itself to you, look at it through a lens of common sense. Are the circumstances asserted by the claimant plausible? Was there forced entry, for example? Simply stated, if the facts do not bear scrutiny, pass on it. Any decent insurance defense attorney will harp on inconsistencies at an EUO. The claim mentioned above is an excellent example. Think about things logistically, that is, in order for a burglar to steal furniture, they need assistance moving the furniture, a truck to transport it, and a place to store it until it may be sold. Primarily speaking, three guys moving furniture into a large truck is substantially more likely to be seen than a lone thief in the night pocketing jewelry. Further, it is not very plausible that petty criminals have access to moving trucks and warehouses for storage. Finally, do thieves typically take the time to inspect power tools, leaving their casings behind? Of course not, they would simply take case and all. These points may seem picky, but they are precisely the type of suspicious facts that carriers will exploit and, often, ring true with jurors.

Especially in today’s economic climate, there will be no doubt that the insured’s finances will be poured over with a fine-tooth comb by defense counsel. Be prepared to give tax records, income documents, records of debts, etc. and, YES, the carrier does have the right to ask for them. Now this does not mean that legitimate theft losses do not happen to people in financial trouble, but financial trouble may be a motivating factor to commit insurance fraud. To those ends, the insurance professional looking at a suspicious theft loss must be extremely mindful of the list of stolen contents, as this is often the source of big problems. All too often, policyholders are tempted to exaggerate just a bit on that contents list. This is usually done in three ways: adding items that simply did not exist, changing an item’s value, or changing the age of the item in order to thwart potential depreciation. Take care to make sure the policyholder is not stating that they purchased $25,000 in contents in the last 12 months with a $35,000 salary, for example, or that they purchased several big-ticket items within the past year but with no savings and little disposable income.

Finally, the carrier will ask for receipts and proof of purchase for every single item claimed in a theft loss. It is very important to provide these receipts to substantiate the claim. What if the client can not locate receipts? I guarantee the insurer will say they are unable to pay for items which are not substantiated by receipts. This is complete foolishness. Most people do not retain receipts for every item they own. Further, I know of no policy provision stating, “no receipt, no payment,” rather, there are plenty of other methods to justify contents. Photographs, owner’s manuals, affidavits from people who can confirm the contents etc., all may be used to justify contents… so long as they actually existed!

Tune in next week insurance fans when we discuss Typical Questions Asked During an Examination or Sworn Statement Under Oath of a Disputed Structural or Personal Property Valuation Claim Suspected of Being Inflated, Exaggerated, or Made Up.

First, the key element of fraud is the intent to deceive. Obviously, intentionally setting one’s property ablaze for the purposes of duping the insurance company demonstrates a clear intent to deceive. The problem is 999 times out of 1,000 there will be no Hollywood-film moment with the dastardly perpetuator of the fraud breaking down in an EUO, admitting the fraud, and begging forgiveness. It just rarely, if ever happens. In fact, out of all the fraudulent fires I investigated this happened once. And the woman did not admit the fraud, she merely asked for a break to use the rest room… never to return to the examination.

But I think it is very important for me to stress this next point to public adjusters and attorneys who handle first party property claims alike: look at your claims with a skeptical eye. If it looks like a duck and quacks like a duck, it’s probably a duck. That is, if you have a fire claim about which you have suspicions, you do not have to represent that person. In this industry the players on both sides of the ball need to weed out fraudulent claims. There are enough legitimate claims to go around, and advancing fraud just gives our industry a huge black eye. For example, raise your hand if you have seen this scenario: “Well, I was cooking fish with a huge pan of hot oil on the stove, when [insert weak excuse here: the doorbell rang, someone called, I fell asleep, I needed an ingredient and went to the store] and I forgot I was cooking and left the stove on.” Twenty minutes later the oil ignited and started a fire in the kitchen. But it was a controlled burn, with smoke damage throughout the house. Ever hear that before?

Well, a few years back there was such an epidemic of this type of claim in Dade County a task force was created. Am I saying this fact-pattern never happens legitimately? Of course not. Unattended cooking is covered under most policies. But I am saying these types of claims occur few and far between without fraud. Certainly attorneys and public adjusters who accept any claim that comes their way, all the while turning into the proverbial three monkeys, “I don’t want to see fraud, hear about fraud, or talk about fraud.” should be ashamed of themselves.

What public adjusters and attorneys should be doing is looking at these types of claims through a filter of skepticism. Ask your client the questions they would be asked at an EUO by defense counsel, not to prepare them for how to lie and get away with the fraud, but to ferret out the fraud before you sign and perpetuate it. First, discuss the facts and circumstances of the claim. For example, I once investigated a kitchen fire claim identical to the facts above where the policyholder stated in a recorded statement after the fire that she was cooking, suddenly remembered she had to pick up her daughter from school, and left the house in a rush, failing to turn off the stove. That could happen, right? Well… the problems were the date of loss was in July after school was out for the summer and further investigation showed that the daughter was not even in the country at the time. That’s pretty damning evidence. Second, you can bet dollars to doughnuts that the carrier is going to delve into the policyholder’s finances attempting to prove economic hardship facilitated a fraudulent fire claim, so ask the policyholder those hard questions during your assessment of the claim’s viability. Hence, perform your due diligence, investigate the facts of a suspicious fire and if the circumstances do not add up, walk away.

Additionally, pay close attention to the rest of the claim. That is, ALE (additional living expenses) and contents, specifically. Greed is inherent to all people. Even Ghandi probably had to fight off urges to take an extra spoonful of rice. This is important when regarding suspicious fire claims, as people who will commit fraud for money are all too often overcome by greed. They very often will make demand for additional living expenses (ALE) which are drastically over-inflated or outright phantom. I cringe when I am meeting a potential new client and I see those little paper receipt booklets for alleged rent payments. For example, I once investigated a claim where a young woman had a kitchen fire and stated under oath that the house was uninhabitable and she had to move in with her grandmother until repairs were made. How nice. Family helping family. Of course, she also produced a lease and little paper receipts claiming Granny was charging her $2000 per month. Unfortunately, she could provide no evidence as to where that money came from (re: cancelled checks, ATM receipt, etc.) and it was plainly obvious she was outright lying. In most jurisdictions if the policyholder is fraudulent with ALE the whole claim may be denied. In Florida, Wong Ken vs. State Farm, 685 so2d 1002 (3rd DCA 1997) holds that very premise.

The other area that must be scrutinized very closely is contents. Fraudulent policyholders will typically include every item they own –and then some—to their contents claim. Review that contents claim with a fine-tooth comb. Be reasonable, that is, if the policyholder is a working-class person making $40,000 per year chances are they do not own three gold Rolexes. And for that matter, how are three gold Rolexes allegedly located in a bedroom on the other side of the house from the kitchen damaged by fire? Much like fraudulent ALE, in most jurisdictions a fraudulent contents portion may lead to the entire claim’s denial. In Florida, see Schneer vs. Allstate, 767 so2d 485 (3rd DCA 2000).

So the moral to this blog: look hard at suspicious fire claims before agreeing to advance them. Ask your potential client the questions posed above, not to prepare them on how to commit fraud, but so potential fraud claims may be unmasked well in advance of EUO where, I promise, any competent defense counsel will unveil any ill intent.

Tune in next week insurance fans when we discuss Typical Questions Asked During an EUO of a Suspicious Theft Loss.

So, it should come as no surprise to find an old insurance coverage case, Heron v. Phoenix Mut. Fire Ins. Co., 180 Pa. 257 (Pa. 1897) where a fire insurance policy sold to Fred Heron in the late 19th Century had the following exclusionary language:

"This entire policy...shall be void. . . if the hazard be increased by any means within the control or knowledge of the insured, . . . or if (any usage or custom of trade or manufacture to the contrary notwithstanding) there be kept, used or allowed on the above described premises, benzine, benzole, dynamite, ether, fireworks, gasoline, greek fire, gunpowder exceeding twenty-five pounds in quantity, naphtha, nitroglycerine, or other explosives, phosphorus, or petroleum or any of its products of greater inflammability than kerosene oil of the United States standard (which last may be used for lights and kept for sale according to law, but in quantities not exceeding five barrels, provided it be drawn and lamps filled by daylight or at a distance not less than ten feet from artificial light)."

I would wager that poor old Fred was just like the rest of us today. My bet would be he never read that insurance policy or thought about how those rascally insurance scriveners would find ways not to pay for a fire loss if one occurred. I suspect Fred Heron was more concerned about his Fourth of July celebration. The devastating facts were recited by the Court:

"For the purpose of celebrating the 4th of July of that year, plaintiff bought a lot of assorted fireworks which were delivered at his residence on the morning of the 3d, and were shortly afterwards, with his knowledge and approbation, placed in the parlor for use on the following evening. In some unexplained way they took fire on the afternoon of the same day, and caused the damages for which this suit was brought."

It is clear that over a hundred years ago the judges would consider not enforcing unfair language in insurance contracts if they could find a logical way to do so. Avoiding forfeiture of a valid contract after purchase has been a major theme of our jurisprudence. Insurers have every incentive to sell insurance with agents promising security and then write fine print substantially reducing the benefits the consumer thought he or she purchased.

I strongly suggest reading Barry Zalma's "Fraud By Insurers" published on the Lexis Insurance Law Center. Zalma, an insurance defense lawyer, apparently agrees with me on this point when he wrote:

"Ostensibly legitimate insurers are attempting to limit their exposure by giving a policy a common name like “homeowners” that leads the insured to believe that liability coverage is provided for defense and indemnity of an accident, including continuous or repeated exposure to substantially the same general harmful conditions that occur within the policy period, as provided by the standard ISO homeowners policy. Then, with an endorsement hidden in the back of the policy in small print without any warning, the endorsement changes the definition of “occurrence” to words that eliminate most coverage unless it happens within and is reported to the insurer during policy period. It is, in effect, selling the insured a bowl of sweet and healthy blueberries and delivering, in a sealed package, toxic mushrooms.

In an editorial in the June 15, 2009, issue of Zalma’s Insurance Fraud Letter...Barry Zalma writes: “insurance sellers, buyers, counsel, and claims staff must refuse to attempt to enforce such policy provisions unless the following questions are answered in the affirmative:

• Is the new wording conspicuous and clear?

• Was it called to the attention of the prospective insured?

• Was the insured asked to acknowledge in writing that the coverage provided is less than that provided by the standard ISO CGL form?

• Was the insurance agent or broker warned, in writing, of the modification of the form and the fact that it provides less coverage than an ISO CGL?

• Was the insured and the agent or broker asked to acknowledge and have the insured acknowledge in writing that they understand and accept the modification?

• Was the premium significantly reduced in light of the reduction in coverage?"

Mr. Zalma warns that “The insurer that acts to deceive, unlike the insured who acts to deceive, can be held to pay extracontractual damages for the tort of bad faith while the insurer can only collect contract damages from a deceptive insured.” Sandy Burnette and members of the Defense Research Institute must be upset that an insurance colleague recognizes that insurers commit fraud everyday when denying claims based on devious small print exclusions and that they should be held accountable for extracontractual damages when doing so.

Turning back to the legal discussion in the old insurance case, we find that the concerns of judges long ago are not that different than of today:

"We have never gone to the length that other courts have in construing away express provisions or stipulations as to forfeiture. While some hold that it is permissible to use the articles prohibited by the general printed clause, provided they are such as naturally pertain to the stock of goods or property described in the written part of the policy, this court has refused to go so far. In Birmingham Fire Ins. Co. v. Kroegher, 83 Pa. 66, where petroleum was kept for sale in a country store in violation of a printed clause very similar to that above quoted, this court said: "If the question were whether this kind of oil was an article of merchandise ordinarily included in the stock of a country store, or if it were only an inquiry as to the increase of risk, it might well be referred to the jury. But it is nothing of the kind: it is an express stipulation that petroleum or its products shall not be kept on the premises, and if it be so kept the policy is void. It matters not that it was part of a customary stock of goods, for by express contract it was excluded." ...In Birmingham Fire Ins. Co. v. Kroegher...a qualification was suggested ...which the learned trial judge in this case sought to carry to a length not warranted by any of our cases. It was there said by Mr. Justice GORDON: "It is probable that this provision would not apply to the oil used in lighting the premises, for such a use has, in these days, become a necessity for all buildings in the country in which light is required during the night." ...our Brother DEAN, speaking for the court, said: "If the fact were that the use were a necessary one in conducting the business, then it must be presumed the intent of the parties was to insure the subject of the contract as it then was, and as it would continue to be during the life of the policy, notwithstanding the printed condition."

Unfortunately for the Fourth of July reveler, Fred Heron, this court was not sympathetically inclined:

"...These cases rest on the necessary and contemplated use of the property, and cannot be supported on any other ground. They furnish no warrant for the advanced position taken by the plaintiff in this case. There is no ground for a presumption that the parties here contemplated even the temporary presence of fireworks in the insured building in the face of an express contract to the contrary."

So, how many of you waiting to celebrate tonight with fireworks know for certain whether there is an "increase of hazard" provision in your insurance policy that may exclude a fire loss?

Most insurance company and independent adjusters log far more hours in training, classes, and supervised situations than most public insurance adjusters. This needs to change.

Policyholders deserve superior adjustment work by trained and skilled public insurance adjusters. FAPIA's leadership discussed mandating standards far higher than those imposed by the State of Florida for membership as well as encouraging the Legislature and Department of Financial Services to go even further regarding testing of new public adjusters.

One of the chief complaints from adjusters and claims managers in the insurance industry is the sloppy estimating and measurement practices by some public insurance adjusters. They imply that the sloppiness is fraudulent rather than accidental. To the extent that is true, it should not be tolerated.

Insurance company and independent adjusters should be able to bring this type of conduct, whether sloppy or fraudulent, to the Office of Insurance Regulation. It is about time that public insurance adjusters are subject to market conduct examinations the same way insurance companies are subject to such examinations. This one regulatory action may help the many professional and honest public adjusters rid the industry of problem public adjusters. I am certain insurers would support public adjusters having the same minimum training requirements their adjusters have. From the policyholder’s perspective, there is no downside.

Over the next several months, I am going to encourage ideas and support for higher standards of professionalism and ethical conduct for public adjusters in Florida.

Policyholders need these skilled professionals immediately following a loss so that evidence can be collected and assistance provided to help soften the financial blow of a catastrophe. I have found that if retained within hours of a loss, skilled public adjusters make the insurance product work far better for the insured and there are far fewer re-opened claims because the claim is adjusted right the first time. But this only happens if the public adjuster is trained, skilled, motivated and has sufficient resources to get the job done right.