The recent election results clearly showed that people were upset with those running government—especially those in the Democratic camp.

Yesterday’s post, Texas Voters Favor Homeowners Insurance Reform, by Sergio Leal, clearly indicates that people are afraid of not having full and prompt benefits paid after they have a loss. Two major points struck a cord:

  1. 77% of those polled felt that consumers should be given stronger legal remedies and enhanced damages and sanctions if insurance companies unfairly deny, delay, or underpay legitimate claims.
  2. 85% of those polled thought that insurance companies should be required to offer a few standard policies written in plain language that would be consistent across the industry.

These two points are related. Policies need to be written to cover losses. The trend has been towards less coverage through small but significant changes in the wording of property insurance policies. This needs to stop because it is not helpful to have prompt and full payment of benefits from an illusory policy that covers very little.

People and businesses are in fear after a loss. The insurance company is often in total control and determines the destiny of policyholders after a loss. A claims culture that is truly as prompt as possible with an attitude of payment and looking for ways to provide the benefits contemplated under the contract is no longer the norm in the industry. I noted that even a major insurer agrees with this proposition in Chubb Calls Competitors Cheap And Unfair.

I predict that the Florida legislature is going to tackle various issues of insurance claim dispute through appraisal. I noted in yesterday’s blog that newly elected House Representative Frank Artiles and I share different views on appraisal. Frank has indicated that he will sponsor legislation calling for the licensure of appraisers and umpires. As far as I know Florida would be the only state in the union with such requirements.

The insurance industry is upset that many public adjusters can appoint themselves as appraisers or have appraisers retained on a contingent basis. They also claim that many appraisals are requested without much, if any, adjustment.

Florida seems unique to a system that allows an appraiser to obtain a percentage of the recovery because most Courts in other jurisdictions find that having a percentage interest in the award will make the appraiser biased or interested in the amount rather than coming to an honest conclusion.

Either through regulation or legislation, public adjuster advertising and solicitation will surely be raised. The "investigation" by the Office of Insurance Regulation into sinkhole losses closely monitored cases involving public adjusters because the insurance industry has been adamant about seeking methods to prevent policyholders from engaging public adjusters after a loss. There is a goal by the insurance industry to obtain legislation or regulation thwarting the time, place and method of how public adjusters can solicit.

The Florida Office of Insurance Regulation may become the Office of Insurance Non-Regulation. Legislation along these lines failed last year only because Governor Crist vetoed the legislation. Newly elected Governor Rick Scott ran a non-regulated medical insurance company. He knows it is a lot easier to make money as an insurer if rates are not regulated and there are few consumer protections afforded after bills are submitted for payment. I wouldn’t expect any insurance industry vetoes by this governor.

Citizens Property Insurance Corporation may come under attack. Its rates are too low for many private insurers to stomach. Its claims handling has taken a very strong turn for the worse over the past six months. My impression from discussions with those representing policyholders is that Citizens’ senior claims officials seem to relish that Citizens has no accountability for courteous and fair treatment to its customers. Since Citizens claims it is not subject to laws requiring good faith, this conduct is not a surprise. I expect a number of the newly elected legislators to conduct public hearings on the recurrent complaints of claims handling by Citizens.

Finally, a number of these matters could be raised and voted on in the legislature with little debate. Special sessions are being planned as this is being written. Charlie Crist will soon be out of power and last year’s proposed laws that were vetoed may escape full consideration by the newly elected.