Attorney Mark Nation contacted me and asked if I knew an expert that could help determine the amount of profit that Frontline makes from lowballing (underpaying and underestimating) property insurance claims. Nation has a bad faith lawsuit pending against First Protective Insurance Company d/b/a Frontline Insurance. In his response to a motion to dismiss, Nation discusses how he currently views the case against Frontline:
Plaintiffs’ request for punitive damages is not based merely on Defendant’s use of the appraisal process to resolve valuation disputes. Instead, the request is based on Defendant’s repeated pattern of conduct in (1) low-balling windstorm and hurricane claim valuations at or below the policy deductible; (2) ignoring supporting documents and estimates submitted by insureds showing the insurer’s low-ball valuation was incorrect and delaying claims to the point that insureds abandon their claims or resort to litigation; (3) invoking appraisal as a policy in response to litigation, which forces its insureds to incur significant additional expenses to obtain a fair valuation of their claim; and (4) consistently receiving appraisal awards significantly higher than the insurer’s initial low-ball claim evaluations (in this case, the appraisal award was more than 12 times Defendant’s initial valuation). Defendant is no stranger to such bad faith allegations regarding its pattern and general business practice of using the appraisal process as a substitute for fairly evaluating claims. See Fortune v. First Protective Ins. Co., 302 So. 3d 485, 490 (Fla. 4th DCA 2020) (reversing trial court’s dismissal of bad faith claim with nearly identical fact pattern against Defendant involving Hurricane Irma property damage claim and explaining that the appraisal process is not a condition precedent to the insurer fulfilling its obligation to fairly evaluate claims).
Defendant has engaged in bad faith conduct as a general business practice by implementing processes designed to attempt to reduce its financial exposure for claims by delaying payment to its insureds, performing the bare minimum adjustment and valuation for claims, using preferred vendors to support its low-ball initial evaluations, and attempting to use the appraisal process once a lawsuit is filed as a substitute for fairly and fully evaluating and adjusting a claim and also for the purpose of driving up costs for insureds to deter insureds from contesting otherwise valid claims.
Defendant’s general business practices include making low-ball loss valuations, which are typically below or near the policy deductible, then using preferred vendors and engineering companies to support its low-ball loss valuations, and refusing to change its low-ball valuations even when presented with additional supporting documentation from its insureds showing Defendant’s valuation is incorrect.
Instead of properly adjusting claims in good faith, Defendant’s general business practice is to stand by its low-ball claim valuation until its insureds resort to litigation, at which time Defendant invokes appraisal and forces its insureds to incur further expenses just to obtain the fair value of the loss that should have been paid at the onset of the claim.
In each of the following eight claims, ‘Defendant engaged in a consistent pattern of conduct to limit its financial obligations to its insureds, including a similar style of investigation process by initially lowballing the claim valuation or failing to issue a claim decision entirely, failing to consider documentation and information submitted by its insureds, delaying communication with its insureds or outright ignoring it entirely, and using the appraisal process as a substitute for properly and fairly adjusting claims and to limit an insured’s recovery once an insured resorts to litigation.’
The allegations of bad faith conduct and Frontline trying to cover up the lowballing included the following:
In an attempt to conceal its bad faith conduct, Frontline tried to commit the appraisal panel to execute an appraisal award that included confidentiality in the event the award was used during a bad faith claim.
Upon information and belief, Frontline added the Bad Faith Clause to its own appraisal form and instructed its appraiser to have Plaintiffs’ appraiser and umpire execute same in an attempt to limits Plaintiffs’ rights and ability to pursue a bad faith claim.
On April 27, 2021, despite Frontline’s initial refusal to pay any money for Plaintiffs’ claim, Frontline’s own appraiser agreed that the actual cash value of the repairs needed at the Plaintiffs’ Property totaled $392,562.02 (RCV) and $387,062.02 (ACV)—more than 12 times the amount of Frontline’s initial evaluation of $30,894.93.
If you are a policyholder, public adjuster, restoration contractor, or policyholder attorney who has been delayed, underpaid, or wrongfully denied a claim by Frontline, we can do something about it if we will share information and help my able colleague, Mark Nation, with your story. If you want to help, participate, or get information to help your own bad faith case, all you have to do is send an email to Merlin Law Group law librarian Ruck DeMinico. We will soon set up a virtual meeting site and method to help expose the wrongful claims practices by Frontline Insurance. Here is a link for Ruck.
For policyholder attorneys involved with bad faith discovery and pattern and practice, I suggest you read Pattern and Practice Bad Faith Discovery — Dynamite Discovery Decisions, Part 6. It has a link to 21 additional posts on discovery to be used in bad faith cases.
Thought For The Day
Information sharing is power. If you don’t share your ideas, smart people can’t do anything about them, and you’ll remain anonymous and powerless.—Vint Cerf