I will be in Tallahassee today providing testimony regarding property insurance claims legislation. It seems that every year the Florida insurance industry makes up a crisis which calls for Florida legislators to fix. Remember how the AOB reform was promised to reduce rates and had to be passed? The legislation was passed and the insurance rates have not gone down. Why should anybody trust the insurance lobbyists? Insurance companies try to act like victims when they are making up alleged scapegoats and obscuring the reality of what they do in the claims process.

The short answer to the question I pose above is that insurance companies have the money and resources to pass legislation which is not in the best intertest of the consumer. They use a lot of clever propaganda to get legislation passed by our elected politicians in response to the most recent crisis story they have created. While there exist some Florida politicians clearly in the pocket of insurance companies, most legislators simply want to make life better for their constituents. Yet, many of these well-meaning elected officials lack depth of insurance experience to understand the significantly unique changes to Florida insurance law which will not help policyholders at all. It has been over a decade since any pro-policyholder insurance legislation has been passed. Every bill seems to whittle away at rights, remedies, and protections, which Florida law used to provide. What happened to our elected officials who promised to watch out for us rather than the insurance companies?

Tens of thousands of Florida property insurance claims are delayed and denied by insurance companies who have internal claims tactics designed to underpay claims and wear down policyholders. I provided examples last week in, The Marring Protocol and Other Unfair Methods to Underpay Florida Policyholders, and Insurance Company Advertisements and Promises of Peace of Mind Versus the Reality of Claims Treatment. During last year’s legislative session, I had business and homeowner policyholders come to Tallahassee to testify about how shabbily they were treated by their own insurance companies. Examples of insurance company cheating seem to be numerous.

Want some more evidence of what policyholders have to put up with from their own insurance companies? How about this transcript of a voice mail sent by a Florida based insurance desk adjuster to the independent field adjuster. The desk adjuster, who never went to the loss site, “zeroed out” an otherwise proposed claim payment of over $50,000 by ordering the field adjuster to change his loss estimate report to zero per the claims standard of that Florida based insurance company:

…this is Gregory Foster with UPC Insurance. I need to get a claim off your (redacted) claim, number (redacted). It was never approved by your company and seems that you sent it up. Umm, but we need this estimate zeroed out—this is again UPC standard on these Hurricane Irma claims. Needs to be zeroed out and put in the uh, general loss statement needs to go ahead and be changed to we cannot determine the damage, or the date of loss of the damage. Uh, so if you could give me a call back if you have any questions, I know you’ve done quite a few of these for us, at 727-400-3194, again that’s 727-400-3194. I’d greatly appreciate it, thank you.

Just so people will not wonder if this is a “one case mistake,” please read a portion of a redacted deposition by another independent field adjuster being told by a Florida insurance company to change reports so claims will be underpaid:

Q But are there other instructions that they gave you or told you to do or not to do on any other claims that affected your ability to adjust this claim?

A Yes. Under the constantly changing claim-handling practices 23 or 24 different processes that I’m aware of, there were several instances where they asked licensed field adjusters to go against their statutory duties to handle claims in good faith with the policyholders.

Those include ignoring damages, ignoring mitigation amounts that the insured provided evidence of payment, removing estimates that the field adjuster wrote so that they could use snider roofing comparative estimates and therefore underpay the field adjuster for the agreed upon fee schedule, treating the independent field adjusters as employees.

I don’t know how you would fire a 1099 employee without them being an employee of a corporation but they did it, basically strong-arming the IA firms and the independent adjusters into handling the claim 100%.

Q On this case was this one of the only times you were asked to include a false narrative in your report that you did not agree with by the Defendant?

A No.

Q How many times would you say you were asked to include something that you didn’t believe to be true in your report?

A I don’t really have a way to count that at this time. I’m preparing you a spreadsheet to include all of those instances.

Q Okay. Let’s put it this way; would you say it was over 110 times?

A Over.

Q Over 150 times?

A Over.

Q Over 180 times?

A Over.

Q And about how long was this going on for?

A Again, in varying degrees we had 23 or 24 different guideline changes; some in writing, some oral that changed the way that tile roofs and/or shingle roofs and/or interior damages were handled.

Q And was this — you know, was this something that was occurring before Hurricane Irma or during and after Hurricane Irma?

A It would all be after Hurricane Irma. I didn’t start working for them until after Hurricane Irma. And at first the claim handling was great. That’s why I signed on to work for them.

Q So, let me ask you this then. About – you know, give me an estimate, you don’t have to give me an exact date — but around what date or what year did it start changing into what you’ve testified to now?

A There were a series of guideline changes probably starting at the end of 2017. Some of the guideline changes included slipping back to a prior claim damage directive with slight modifications. But it just — it was basically every four to six weeks there was a new guideline change. I believe the count was four claim managers over the time period that I worked for them which is just a little bit over two years.

Q And these changes – these instructions, specifically the ones dealing with putting false, you know, false statements in your narrative, those were the directives of the insurance carriers themselves or the independent adjusting firm?

A They were not consistent with the IA firms’ handling on other carriers. So, I can only conclude from that that they came from UPC. Plus I got the directive directly from the people who I believe to be managers and employees at UPC.

Q And that — some of those direct instructions specifically in this case with regard to the false statement that there was no windstorm damage observed, that was actually directly from an employee of the Defendant, correct?

A Yes, directly.

Q …with regard to the things we’ve gone over in terms of the instructions by the insurance provider and the independent adjusting firms to include a false statement in your report, do you have any e-mails, letters, correspondences or anything in writing from either of those two parties that indicated they wanted you to do that?

A I do.

Are all claims handled like this? No. There are reputable insurance claims departments that do not stoop to such misconduct. Still, all the currently debated legislation is making it easier for wrong-doing insurance companies to escape accountability rather than penalizing them for breaking the law, underpaying claims, and delaying claims payments. Two years ago, in, Delays, Denials and Underpayments Occur When Insurance Companies Are Not Held Accountable—-What Are Florida Legislators Thinking, I noted:

It is hard to imagine legislators from areas where hurricanes have struck over the past several years supporting these laws that harm their own constituents. But the insurance lobby has dozens of lobbyists. Policyholders suffering delays and underpayments while trying to rebuild are not in Tallahassee working and have no professional lobbyists helping them. Their own representatives are there to protect them.

Even insurance company adjusters are taught that if they fail to act in good faith and harm their customers, they can be expected to get sued for it. Why would anybody want to pass a law that protects insurance companies acting in bad faith?

We know of hundreds of similar examples of underpayment, delays, and denials. These instances have harmed Floridians who counted on fair treatment following Hurricanes Michael, Irma, and Matthew. From our view, insurance companies should follow ethical rules and be held accountable when they fail to do so. If people are not held accountable to following rules, what good are the rules in the first place?

This holds true today. The current legislation does not address the overriding claims problems, seems to protect low and slow paying insurers, but gives nothing to the Florida policyholders who voted the elected officials into office.

Thought For The Day

Every senator needs to stand up and represent their constituents – not big business, not the ACLU, not activist groups, not political interests, but the American interests, the workers’ interests.
—Jeff Sessions