Industry Leaders Request Veto of SB 2044 Citing Ability for Insurer's to Withhold Partial Payment of Claims
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Large Insurance Bill Addresses Fees & Advertising by Public Adjusters, Deadlines for Filing Windstorm/Hurricane Related Claims, Policy Terms and Payouts by Carriers.
CS for CS for SB 2044 is a rather large bill addressing many aspects of insurance. It limits payments to public adjusters for supplemental or reopened claims to 20% of additional insurance proceeds obtained and prohibits public adjusters from charging more than 10% of proceeds paid by a carrier if the claim involves losses from events that are subject to a declaration of a state of emergency by the Governor. While the bill goes on to regulate advertising or solicitation by public adjusters and the form of contract between the public adjuster and the insured, more attention is being paid to three new provisions that, if they become law, impact property owner obligations, the carrier's ability to change the terms of the contract upon renewal and payment of claims.
These portions of the bill pertain to residential (personal lines) coverage. Policies issued to multi-family property owners/managers (the Association) are generally (if not always) classified as commercial policies.
One part of the bill purportedly bars homeowners from filing claims. It says that the insured must provide notice of any claim (including supplemental or reopened claims) based on a windstorm or hurricane loss to the carrier within three (3) years of the date of the storm. While it doesn't change the applicable statute of limitations for civil actions, in some cases homeowners do not have a full understanding of all the damages caused by the windstorm/hurricane until after demolition and reconstruction begins. Thus, the three (3) year time frame may result in loss of insurance proceeds, depending upon whether the homeowner has the ability to attend to reconstruction after the storm.
Another section of the bill allows the insurance carrier to change the terms of the policy upon renewal by use of a notice entitled "Notice of Change in Policy Terms". Payment of the renewal premium constitutes acceptance of the new terms.
Most importantly, the bill removes the prompt payment requirements on the part of carriers. It only requires the carrier to pay "actual cash value" minus the deductible, regardless of whether the homeowner paid for replacement cost coverage. The carrier then only pays additional amounts once a contract for reconstruction is in place and the costs are incurred (as the work progresses). Critics argue that this provision disproportionately impacts lower income families that do not have funds available to pay for reconstruction (along with all the non-insured items) and/or replacement of personal property without insurance proceeds.
Lisa,
Your headline is unclear as it does not reference any ‘Industry Leaders.’ Yes most, if not all, public adjusters and policyholder attorneys are not in favor of SB 2044, yet your article will leave the average condo dweller uninformed as to the extent of the objections. I always like to know the source of any comments and/or opinions.
Your statement “One part of the bill purportedly bars homeowners from filing claims†is technically true, it borders on hyperbole until you continue reading your post.
Additionally your comment “Most importantly, the bill removes the prompt payment requirements on the part of carriers†is an exaggeration. The ‘90 Day Rule’ for paying or denying a residential claim has not changed, albeit the dwelling coverage can now be paid on an ACV basis. The carrier is still required to pay full replacement cost without any depreciation for personal property. Also, SB 2044 expands the ‘90 Day Rule’ to “initial and supplemental†claims.
Over the last year there has been a backlash in Tallahassee, via the insurance lobby, against public adjusters operating in South Florida who have pushed the envelope to near breakpoint. The term ‘Wild Wild West’ is common place concerning the claims environment in South Florida.
This new law should be veto'd. The legislature quickly forgets the number of complaints filed by consumers regarding the filing of holdback depreciation claims during our very recent and busy storm seasons. Consumers who pay for replacement cost did not understand why the carriers were allowed to hold back depreciation until proof of repairs were presented. Consumers saw this as another delay tactic by the carriers and it forced consumers to jump through more hoops after a disaster to completely recover the money they desperately needed for repairs. For this reason, the legislature passed a statute barring carriers from holding back depreciation on fire and hurricane claims only.
Well, now the issue is back on the table and this should come as no surprise. The current legislation will once again allow carriers to hold back depreciation on all first party claims. Property Insurance carriers stand to gain millions and Florida's consumers stand to gain additional paperwork and hassles in fully collecting what they are owed. Veto this Bill Governor.
Mike Rump, Owner
Continental Public Adjusters, Inc.
Mike,
As an IA I appreciate the assistance of a good public adjuster to work with on a claim. It makes it go smoother and without any troubles.
You seem to forget that on any contract, which is what an insurance policy is, it is the duty of both parties to read and understand the contract before signing. If the insured has questions regarding a policy, that is what the agent is thier to explain to them.
The only way to eliminate complaints from insureds in any state ( I have a license in eight)is to just give them a blank check.
ACV is what a person without undue diress would pay for an item(Contents). So what is a 20 year old sofa that has been heavily used and stained worth? Should an insured be paid for a brand new sofa without ever having bought a new one?
If they decide to keep the old sofa and just pocket the money; what is thier loss?
Should the insured recieve full paymentfor a roof that has had no maintenace performed on it for 20 years without holdback until it is replaced? The fact that they did not have the funds to maintain the roof for the past 20 years is sad but that should not be a reason to shift that responsibility to the carrier.
In most other states holdback is a normal course of business.
Florida is just starting to catch up with the rest of the country.