QBE Insurance Company is becoming quite prevalent in the news and legal case decisions in Florida. While reviewing other blogs, I came across Dennis Wall’s two blogs, Insurance Claims Issues and Insurance Claims Bad Faith, to which I suggest that many readers of my blog subscribe. While my feeling is that much of what he writes is a viewpoint of insurance that slightly favors excuses for denials and delay of claims, it is an excellent source worthy of reflection. His recent post, Collateral Source Rule Held No Bar to "Other Insurance" Policy Evidence, helps demonstrate both points.

Wall’s very brief blog post noted that:

In King Cole Condominium Ass’n v. QBE Insurance Corp., (S.D. Fla. Opinion Filed January 5, 2010), a Federal Judge held that the collateral source rule does not preclude evidence regarding an Other Insurance Policy, issued by one USPlate Glass Insurance. Defendant QBE Insurance Corporation argued in that case "that the USPlate policy goes directly to the issue of whether Defendant breached its obligations to Plaintiff under the insurance contract." The Federal Court denied the Plaintiff’s Motion in Limine to Preclude Evidence of the USPlate Policy:

“The Court agrees with Defendant. Defendant shall be permitted to introduce evidence relating to the USPlate Glass Insurance Policy as it relates to its obligations to Plaintiff and whether it breached the contract.”

The practice pointer for all insurance coverage attorneys is to follow up on the "plate glass coverage." Yet, the more interesting part of the decision, and the reason for my interest in this post, has to do with the recurrent theme that QBE hires the same experts and attorneys that claim the policyholder, usually a Condominium Association, is guilty of fraud. In almost every case that I know of where QBE has disputed the amount of the damage, QBE has hired the same set of experts and its attorneys argue that the condominium association is guilty of fraud because, in part, the association asks for amounts of damage higher than the amounts QBE’s experts estimated. Wall’s blog failed to raise or note this issue which many policyholders would question.

QBE retains the same set of alleged expert witnesses in virtually every case, including engineer, Dan Laverich. In the same case Wall referenced, he made no mention of this or of the Court’s opinion that such practice may be explained to a jury in order to question whether Laverich has an outcome oriented bias towards QBE. In his brief summary, Walls neglected to note that the Court ruled that the dollar amount paid to Laverich by QBE was clearly relevant to establish his "prejudice and bias" to provide opinions on behalf of QBE. I wonder why Wall did not comment on that part of the case?

QBE has been a subject of recent blog posts. Michelle Claverol noted a QBE decision worth reading in her post, Replacement Cost Value Coverage After a Claim Denial: Florida Valuation Issues, Part 6:

Likewise, in Vantage View v. QBE Ins. Corp., 2009 WL 536546 (S.D. Fla. March 3, 2009), the insurer denied the claim. The court, relying on Bailey, held that it is not “reasonably possible” for the insured to make repairs without receipt of the funds from the insurer and that the insured was therefore relieved from its obligation of repairing or replacing the damaged property before demanding replacement cost value.

The point of that blog is that QBE denied coverage and then has its attorneys argue that it would never be responsible for replacement cost coverage even if the insured prevails. Since the policy contemplates prompt payment of actual cash value benefits, how does an insured fully replace at replacement cost values without the insurer first paying the full amount of the actual cash value of the loss promptly? QBE was trying to get out of paying the replacement cost, even if it lost on the actual cash value coverage issue.

QBE may even significantly change longstanding Florida law to allow insurance lawsuits to be brought for the breach of good faith obligations at common law. As I noted in Common Law Good Faith Duty Before Florida Supreme Court, QBE has now placed the most important insurance consumer protection question before the Florida Supreme Court–I can imagine QBE’s insurance competitors and attorneys are wondering why. In that post, I noted:

QBE Insurance Corp. v. Chalfonte Condominium Apartment Ass’n., will be a landmark case in Florida. Mary Fortson and I have been working on an amicus brief on behalf of United Policyholders. My opinion is that it would not make sense for Florida law to not recognize the duty of good faith when every adjuster is trained from day one that insurers have such a duty. The duty of good faith and fair dealing is accepted as the most basic principal of an insurance company’s primary obligation in the insurance industry.

Why in the world would a judge say that a good faith duty does not exist? To do so would not only be legally wrong, it would be factually wrong as well.

In A Common Law Remedy For Lack Of Good Faith And Fair Dealing Is Before The Florida Supreme Court, we uploaded our amicus brief on behalf of United Policyholders. There I argued:

Making an insurer accountable for causing additional damages that naturally flow from the breach of its mandated obligation of utmost good faith is good public policy and logically required if accountability is important to the law. Without accountability for breaches of these insurance good faith duties that most recognize as involving the public trust, the law would minimize these concepts and the importance of personal responsibility for insurers to do what they are obligated to do.

Does anybody, even Dennis Wall, disagree?

  • Insurance Vet

    Having transacted hundreds of condo association claims in Florida in 04-05 I am entirely familiar with the plate glass issue. Several associations had contracted policies to cover glass damage. The plate glass insurers never contemplated the damages that would be caused and were very ill prepared to deal with the aftermath of the multiple hurricanes. This was however not a justification to not assessing and resolving the quantum issues regarding other damages. The prevalent problem was that a lot of buildings had very faulty fenestration issues well before the hurricanes. We saw multitudes of improperly sealed, corroded, and jerry rigged windows. We in fact conducted photo essays of just the windows on several losses, You can certainly appreciate that these type of pre existent damage scenarios are not always easily resolved. The associations which frequently are ill funded to deal with these issues are not very receptive to the “who is gonna pay” syndrome. All that being said it makes perfect sense and should be obligatory to pay for non contentius issues rather than attempting to place a chokehold on the insured.I’m happy to say the carriers I worked for saw it that way.

  • With the plate glass issue. Never justified in assessing and resolving the quantum issues regarding other damages.

  • shirley heflin

    It gave me a flashback to my favorite movie (to this day) “My Cousin Vinny” starring Joe Pesci & Marissa Tormei when “Vinny” stays up ALL NIGHT reading the Alabama Rules of Crminal Procedure, makes a very persuasive (finally) oral argument to the Jdg. the next day and the Jdg. tells him he did and Vinny was SO PROUD until the Jdg. said “MOTION DENIED.”

    SHIRLEY HEFLIN

  • William Berk

    As usual, this is an interesting and educational blog. However, Chip was probably unaware of the complete picture and thus the full story is not told. I think I have a global perspective, albeit in the representation of the client, (full disclosure) which leads me to comment.

    The referenced King Cole case, for example, resulted in a defense verdict. Indeed, of eight (8) hurricane cases that QBE has tried to verdict, four (4) juries have returned complete defense verdicts. In two (2) other matters, juries returned verdicts substantially less than QBE’s pre trial offer.

    In a seventh (7th) case (Chalfonte), also referenced, the jury awarded within approximately 15% of QBE’s offer, and approximately 50% less than the insured actually spent on alleged hurricane repairs. This case is on appeal to the Florida Supreme Court. Contrary to the implication above, QBE does not argue that the law fails to impose a good faith duty. Rather, QBE’s argument is that the current law, which creates a civil remedy for “bad faith,” should be followed, and not expanded. The policyholder argues that there should be a “common law” bad faith action–in addition to the statutory remedy–and that this cause of action can be joined with the underlying coverage dispute. On this latter point, QBE strongly disagrees for many reasons. The civil remedy can be pursued following determination of liability and the extent of damages, as is the status quo.

    The eighth case tried resulted in a Plaintiff’s verdict, which is on appeal based on, among other issues, juror non disclosure of prior litigation, employment and condominium ownership.

    Thus, when the cases that cannot be settled have actually been tried, seven (7) out of eight (8) juries agreed, or substantially agreed, with QBE’s position.

  • shirley heflin

    Well, Mr. Berk, in response to your comment:

    “…Chip was probably unaware of the complete picture and thus the full story is not told…”

    this leads me to comment that often times the insurance company (and/or COMPANIES) are aware of the COMPLETE PICTURE of claims that should be paid and YET THEY DON’T PAY THEM and those stories ARE NOT FULLY TOLD EITHER.

    SHIRLEY HEFLIN

  • Thank you for mentioning my web logs and for recommending them as an excellent source worthy or reflection, as you put it. I appreciate it.

    I am posting now to recommend that many of my readers subscribe to your blog also. I am also going to add your blog to my Blogroll so my readers can access your blog right away from my own blog sites.

    Thank you for an informative and always interesting blog.

    Best,

    Dennis Wall

  • PATRICK A LOWE

    I became aware of your website after I sought information about QBE Insurance. I had worked for Unigard Insurance Company for over 30 years in the claim department, and then I spent the final 10 years of my working life as an independent ‘Appraiser’ and ‘expert witness’ involving insurance disputes, usually being chosen by the insured. I find your website very informative, educational, and essential for anyone in this industry. We also own a home in Florida, and the “climate” there, and I don’t mean the weather, is completely different than here in Washington State.

  • TJ Phelps

    QBE is a horrible HORRIBLE company. Somehow they are in bed with one or more insurance/mortgage companies and I’m not sure how. I filed a claim in October of 2013 and it’s now almost August 2014 and I still haven’t been paid for it. Thanks George W. Bush for deregulating much of the mortgage industry and giving these companies so much power.

  • Debra Korb

    I am in a nightmare QBE situation in Minnesota. My mortgage company uses them for holding funds from property loss and am not getting the funds released so work can be done. What actions can a consumer take to get a fair process? Managers are not available and they don’t care anyw a y. Tried to call my mortgage company and they are clueless and send me to qbe. It’s a viscous cycle. Somebody PLEASE help!