What happens if your insurance carrier goes under? Many people never consider this as a possibility, but as more and more insurance carriers go insolvent in Florida, this is becoming a very common reality.
Continue Reading A Brief Overview on Insurance Company Insolvencies and FIGA
In my previous blog post, I gave shared an overview of the facts surrounding Florida Insurance Guaranty Association v. De La Fuente,1 which lead Florida’s Second District Court of Appeal (2nd DCA) to certify two unique questions involving FIGA’s liability in sinkhole claims as being "of great public importance." Part 2 of this blog series examines the parties’ arguments regarding the first question: whether the new definition of a "covered claim" under the FIGA Act applies to a sinkhole loss where the homeowner’s policy was issued before the effective date of the new definition (May 17, 2011) but the insurer was adjudicated to be insolvent after this effective date.
Suffering a sinkhole loss is already difficult enough, but for those homeowners with a claim being handled by FIGA, the process can often become even more complicated. This can occur when the terms of the insurance contract issued by the original, now insolvent, insurance carrier arguably conflict with FIGA’s duties and obligations under the Florida Insurance Guaranty Act (“FIGA Act”). In a recent opinion, Florida’s Second District Court of Appeal (“2nd DCA”) found such a gray area regarding a policy’s appraisal provision and FIGA’s obligation to pay a policyholder for their sinkhole loss.1
Recently, Florida’s Fifth District Court of Appeal affirmed an order compelling Florida Insurance Guaranty Association (FIGA) to participate in an appraisal of a policyholder’s sinkhole claim.1 The insureds had originally filed suit against Homewise Preferred Insurance Company in 2010, after Homewise denied coverage. But in 2012, FIGA notified the insureds that it was assuming the handling of the claim because Homewise had become insolvent and, for the first time, FIGA admitted that the sinkhole claim was covered under the subject policy.
Recently, the Florida Second District Court of Appeal (“Second DCA”) considered whether a claim was time-barred by the statute of limitations as it relates to the Florida Insurance Guaranty Association (“FIGA”).1 The policyholders appealed the trial court ruling that the applicable statute of limitation (F.S.A. 95.11(5)(d) and 631.68) barred their claim for sinkhole damage. It should be noted that these statutory provisions specifically relate to FIGA, once it steps in to address claims from a liquidated insurance carrier within the State.
This is part two of my earlier post, Florida Appellate Court Defines The Meaning Of The Term "Disinterested" As It Relates To Appraisal Provision, concerning the recent opinion in FIGA v. Branco.1 The 5th DCA opinion discussed the scope of appraisal. This is often a common issue that policyholders and insurance carriers have when a claim proceeds to appraisal – does the dispute concern coverage or amount of loss? Often the insurance carrier will assert that the dispute involves a question of coverage which is not appropriate for appraisal. Appraisal deals with an amount of loss question. Well the Branco case has a good discussion and analysis on this topic.
Continue Reading Florida Appellate Court Opinion Regarding the Extent or Scope of Appraisal
In Florida, the Florida Insurance Guaranty Association (“FIGA”) handles and resolves claims of insolvent insurers under certain statutory guidelines. But what happens when the underlying insurer had reached a settlement agreement with a claimant before becoming insolvent? You would hope that FIGA would be ordered to honor such an agreement. It is a beautiful thing when the law follows common sense. This happened recently in the case, Alessio ex rel. Estate of Garza v. FIGA.1
Continue Reading FIGA Ordered To Honor Settlement Agreement Reached By Underlying Insurer
The Florida Insurance Guaranty Association (FIGA) is Florida’s public entity for resolving claims for certain insolvent insurers. FIGA is controlled mostly by statute, and attorney’s fees are no exception. Generally, under Florida Statute § 627.428, attorney’s fees are available for an insured who succeeds on legal action against his or her insurance company. However, Florida Statute § 631.70 exempts FIGA from § 627.428 unless FIGA, “denies by affirmative action, other than delay, a covered claim or a portion thereof.”
Continue Reading Florida Court Draws a Hard Line on Attorney’s Fees from FIGA
Many policyholders face a thorny dilemma in disputing their insurance claim because of the fees and costs associated with litigation and the appraisal process. Even when a policyholder prevails and proves an insurer underpaid or a wrongfully denied a claim, the net recovery is reduced by litigation fees that were necessitated to obtain the benefits.
Continue Reading When Does Florida Allow for the Recovery of Attorneys’ Fees?
On January 19th, the Florida Supreme Court issued its opinion in Petty v. Florida Insurance Guaranty Association, which decided whether an insured is entitled to recover attorney’s fees from the Florida Insurance Guaranty Association (FIGA). I wrote about the case in October 2010, when it was at the lower appellate level, in The Definition of a “Covered” Claim by the FIGA Act Leads Florida Second and Third District Court of Appeals to Different Results.
Continue Reading Florida Supreme Court Rules That Since Insurance Policy Does Not Expressly Provide Coverage For Attorneys’ Fees, FIGA Does Not Have To Pay Them