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

Patel points out that since 2006, eight property insurance companies in Florida have gone insolvent and insureds with more than 55,000 claims have been forced to deal with the Florida Insurance Guaranty Association (FIGA) for their insurance claims.

We have posted about FIGA in several other posts including, When Insurance Companies Go Under - The Fallacy of FIGA and FIGA is the New Slow Paying and Litigation Threatening "Insurer" in the Florida Property Insurance Claims Game.

The Florida Insurance Guaranty Association was created by legislation in 1970 as a non-profit organization that has a duty to settle claims in accordance with the FIGA Act, the policy, and Florida insurance laws, in a timely manner.

The husband/wife team at Public Adjusters Incorporated, led by President Daniel L. Guilfoyle, III and Vice President Rosemary Guilfoyle, has extensive knowledge of the insurance industry’s ever changing landscape. Dan Guilfoyle was contacted by Julie Patel about his experience as a public adjuster handling claims that had been turned over to FIGA.

Dan mentioned to a policyholder who lost $25,000.00 after his claim was turned over to FIGA. Dan told me the story. Dan’s company was hired as the public adjuster for two separate clients. Both insureds had purchased insurance policies from Northern Capital, and both suffered covered water damage losses. Before Northern Capitol was declared insolvent, both policyholders participated in the policy’s appraisal process to determine the amount of the loss Northern Capital would pay.

Northern Capitol named its appraiser and happened to use the same appraiser on both claims. Likewise, the same umpire was appointed on the two water claims. Both policyholders received signed appraisal awards of damages owed by Northern Capital. But Northern Capital didn’t pay, and FIGA was ordered to step in because Northern Capital was insolvent.

Dan recounted what happened next but said it was unexplainable… FIGA paid one award in full (minus the FIGA deductible), but FIGA determined that the $69,000.00 award for the other insured was not going to be honored. FIGA required that loss be adjusted from scratch by a FIGA adjuster. This policyholder was first delayed by FIGA’s rejection of payment on the signed appraisal award and then further delayed as FIGA began its own evaluation of the damages. FIGA then determined the damages for the loss only totaled some $24,000.00. Dan said that explaining FIGA’s response and actions to his 80-year-old client was beyond difficult. To make matters worse, the policyholder had listed his home for sale and a pending sale fell through because of the water damage claim that had not been resolved. Dan and the team at Public Adjusters Inc. were able to increase the claim amount further, but FIGA ultimately paid $25,000.00 less than the original appraisal award signed on the claim.

Julie Patel interviewed the former vice-president of Northern Capital. He did not understand why FIGA started over on many of the claims. “It wasn't particularly cost-effective for them to start over, especially [because the contractors estimating damage for Northern Capital] in many cases charged significantly less than the FIGA" estimators said Alex Blain-Cruz.

Florida policyholders who are dealing with insurance claims with an insurance company on the brink of insolvency or in court-ordered receivership may have all the more reason to hire a professional public insurance adjuster. The delay of the claim process, potential new claim deadlines, and claims adjustment red-tape require the dedication, determination, and experience that many public adjusters can provide.

Here is a link to the Florida Department of Financial Services that shows the Florida insurance companies that are officially in financial trouble.

The claims filing deadline for Coral Insurance Company is July 25, 2011.

Here is the announcement issued by Florida Insurance Guaranty Association (FIGA) regarding Coral Insurance:

Coral Insurance Company
Effective July 26, 2010, Coral Insurance Company (“CIC”) was ordered into receivership for the purposes of liquidation by the Second Judicial Circuit Court in Leon County, Florida.

With the entry of the liquidation order, the Florida Insurance Guaranty Association (“FIGA”) has been activated to help pay outstanding claims for property and casualty policies. The processing and payment of covered claims will be made by FIGA (subject to the lesser of policy limits or FIGA’s maximum cap). The maximum amount FIGA will cover is generally $300,000 per claim or $100,000 per unit for condominium and homeowner association claims. An additional $200,000 is available for structure and contents on homeowners’ claims. For more information see the FAQ section of this website or the Florida Receiver. No claim will be paid in excess of this cap. All claims are subject to a $100 deductible over and above any deductible identified in the CIC policy. A policyholder may file a claim in the CIC receivership for the $100 deductible and for amounts over the cap.

Claimants who need to check on the status of an existing claim should call the Florida Insurance Guaranty Association at 1-866-928-4310 (toll-free). Consumers who need to report a new claim are directed to contact their agent or contact FIGA at the referenced phone number.

You will need to have the following information available when reporting a new claim:

■Insured’s name
■Insured contact information
■Policy number
■Date of loss
■Brief description of the loss
■Police report (if applicable)

This information can be faxed to (850) 523-1888 or emailed to nclaim@agfgroup.org

"What should I do after I file my claim?"

All policyholders should be informed that per Section 631.68, Florida Statutes, the deadline for settling a claim or filing suit against FIGA is July 25, 2012.

You can read a copy of the Consent Order by clicking here.

I have a client who is a judge. He, his wife and two little girls literally lost everything in Hurricane Ivan in September, 2004. Their windstorm insurance carrier, Vanguard Fire & Casualty Insurance Company, denied coverage entirely, contending that not a single shingle was blown from the roof, not a window broken by wind in this Category 5 storm, dubbed “Ivan the Terrible.” The coverage denial was apparently based on “word of mouth” that a 15-foot wave had allegedly swept the home away prior to any wind damage occurring. The insurance company failed to hire an engineer or meteorologist to confirm this rumor. While my clients were lucky enough to have their flood insurer tender policy limits, like many, they were woefully underinsured and needed help from their wind carrier.

When FIGA took over the claim in 2007, it was the perfect opportunity to make things right. Instead, FIGA has compounded the misery. Initially, FIGA continued the denial of coverage. Then, last year, FIGA revealed for the first time a January 2007 engineering report acknowledging the home had in fact sustained wind damage before the storm surge came. After that, FIGA changed its tune, admitted coverage, and tendered a small sum based on its expert’s opinion. In keeping with the quality of “service” on this claim, FIGA’s expert has never been to the site and based his opinions on photos of nearby homes. On the other hand, the insureds received an opinion from an engineer who walked the site, inspected an adjacent building, and concluded that the home was severely damaged before the storm surge hit.

Nevertheless, I figured—this is our opportunity to work toward a fair resolution of this claim. The insurance policy provides for an alternative dispute resolution process to quickly and economically dispense with disagreements over the amount of loss—appraisal. I thought, surely an entity funded by assessments on the insurance consumers of this State will want to wrap this up as soon as possible. How wrong I was. Indeed, FIGA’s lawyer has advised me that we can expect this case to be going on for a very long time. FIGA contested appraisal and lost. Then sought to stay appraisal while it appealed—and lost. Now FIGA is seeking a second bite at the apple asking the appellate court to instruct the trial judge to stay the appraisal. Even if the appraisal is allowed to proceed, FIGA tells me the award will not be paid and I can expect more litigation.

What is going on here? I spoke with a lawyer in the Panhandle last week about possibly serving on our appraisal panel. He had a conflict because he has two claims pending with FIGA and can’t even get them to call him back. In another case of mine, FIGA has agreed to go to appraisal, but only if the insured signs a release of all claims upon payment of the appraisal award!

With more and more small companies taking over Citizens policies, there is a real danger these insureds could end up with FIGA in the event of another busy hurricane season. Anyone have ideas on how to fix this? After all, you and I are footing the bill . . .

- Kristi Demers-Crowell

(Kristi Demers-Crowell is an attorney in the Tampa office of Merlin Law Group and is licensed to practice in Florida and Texas)