Heritage Insurance is adding an arbitration clause to its property insurance policies per an Insurance Journal article, Another Florida Insurer Adds Binding Arbitration Endorsement Amid Losses.
The filing came two months after OIR surprised many in the industry when it approved an endorsement from American Heritage Insurance Co., offering arbitration in exchange for a premium discount for policyholders. But Heritage, facing weather losses and spiraling litigation expenses, appears to be taking it a step further, with no mention of a trade-off.
‘If you and we fail to agree on whether there is coverage for the loss, either party may, in writing, demand arbitration,’ the Heritage endorsement reads. ‘An arbitration award shall be binding upon the parties as the issue of coverage and all damages and benefits due and owing under the policy.’
I recently wrote about this as an expected trend in, Is Arbitration Going to Replace Appraisal in Florida, where I noted:
Eleven states ban arbitration of property insurance disputes. Not Florida. While I strongly disagree with the approval of the form, Florida public policy is to allow alternative dispute resolution including arbitration. Since the legislature has not taken up suggested bans on arbitration over the last three sessions and given court approval of arbitration, the Insurance Commissioner may have found that this form allowing arbitration follows public policy.
This provision is a game changer. My prediction is that since the Florida Office of Insurance Regulation approved the form, many insurers will follow suit and apply for similar policy language. If the courts allow the provision to stand, the answer to the question will be ‘yes.’
Looks like the trend is starting to gain traction.
Thought For The Day
Don’t follow trends, start trends.