I wasn’t expecting to create a new blog entry until the holiday was over but we’ve had developing news this week on the LA Valued Policy law cases going through the court systems there. We also have several storm disturbances mentioned in the news so I want to be sure to distribute these updates before folks are going running out on any hurricane losses this season.
Here is a news article from the Associated Press put out by Advisen regarding the Landry vs Lousiana Citizens Property Insurance. This case originally went to court in December 2006 and ruled Citizens did have to pay policy limits on the case because of the valued policy law although it was another wind vs water case of attributing damage between these perils. However, Tuesday of this week, the 3rd Circuit Court of Appeals stated the following according to this news release:
“But the state 3rd Circuit Court of Appeal on Tuesday, in a 3-2 decision, set down this standard: if the Landrys can show that the “efficient or proximate cause” of the destruction was such covered perils as wind, rain or hail, Citizens would have to pay the full value of the property _ without a deduction for flood waters. To avoid that, Citizens would have to show the main destruction was caused by floods. ”
The article goes on to say that 3 weeks earlier a federal appeals court in NOLA affirmed a lower court ruling in favor of insurance companies saying the LA Valued Policy Law does not apply unless the damage is wholly attributable to a covered peril such as wind. I found the case referred to in this Claims Journal article citing the Chauvin vs State Farm Fire and Casualty case here. Here is another outstanding paper by the Tort Trial and Insurance Practice Law Journal (Winter 2007) which provides a short summary on the Chauvin case found on the Zelle firm’s site where you’ll find other excellent information on their articles page. This article is worth the time to read all 36 pages. You’ll find the Chauvin cases discussed on page 35/36 as well as other cases in FL we’ll discuss below. This Times-Picayne article also provides more details on the Chauvin’s case and comments from trial lawyer spokesman, Allan Kanner, hoping other cases will make it to the state Supreme Court for more favorable decision for policyholders. Here is also a “public opinion” blog on the ruling by an angry consumer over the issue here.
I checked the Insurance Coverage blog to see if there are any mentions of the new rulings and found this June 06 blog with links to both the FL Valued law and the LA valued law which also mentions another case I’m not familiar with. I’m curious what they’ll have to say now if they provide new information now that we have these additional new LA nd FL cases providing other new decisions.
Fl has also seen much news on the FL Valued policy law as a result of Hurricanes Ivan and Dennis. This article summarizes the well known Mierzwa vs Fl Windstorm case as well as the subsequent decisions by the courts on the FL 1st DCA 2006 cases of Vanguard Fire and Casualty Company vs Golman. That case involved allegations of breach of contract and bad faith and this article provides interesting reading to understand FL valued policy law changes. This is important as many independent adjusters have not worked cases in FL since Dennis in 05 and this is an 06 decision. (Vanguard is now in receivership by the way) The Zelle Property coverage update referred to above and again here reviews the Citizens Property Ins Corp vs Ceballo case holding that although the FL Valued policy law covers policyholders, they are not entitled to 25% of limits for Ordinance and Law coverage without proof of incurred expenses. This is found on page 35 of this document. Note that the information in this document goes on to say “that the court certified it’s opinion to the FL Supreme Court realizing that it’s opinion may be in conflict with another appellate court decision”..referring to the Mierzwa case.
It should be an interesting season with the continual new decisions coming out of the courts. From what I can best assess at this time, these decisions do seem to be upholding the intent of the policy contract provisions. I do wonder how many cases were settled on these valued policy law initial decisions as many of the articles linked to above indicate carriers did settle some of these cases out of court over the initial decisions. Hopefully, one of these great legal blogs we follow will address these decisions and provide their opinion as to what this all means for the 07 storm season in LA, FL, TX, and other storm prone regions. I hope adjusters will take the time when looking at these links to observe and read some of the many great blog entries and news articles free for our reading to better understand the claim issues.
Speaking of developing information- take a look before you sign off the blog at this new Ordinance and law information coming out of FL which indicates a new statute may be in effect in October 1, 2007 requiring extensive wind mitigation measures be done to homes in excess of $300,000 in designated zones. It sounds quite expensive as a roofing trade association is quoted as saying the extra cost to replace a roof would run about $6,000. I am very curious if the insurance agents are aware of this new potential expense and are offering increased Ordinance and Law coverage in the event an insured in a designated area must replace their roof subjecting them to this new requirement to do so. This will have a major effect on insurance damage estimates if carriers have to incur this cost. The trade association says they are working with Crist to try to postpone this. I sure hope so, the last thing we need in FL is another expense right now on top of the skyrocketing insurance premiums. This article I just came across today says that the majority of carrier rate increases have come in prior to the upcoming deadline and are averaging about 28% rate increase requests and some of the major carriers have not filed their requests yet. (Could this be due to Crist taking them all in for rate increase hearings as he recently tried to do ??? )You can imagine what the passing of this rule would do to Floridians in addition to the current rate hike proposals should this pass. It is still amazing that Citizens has a rate freeze through 2009. I’m running to Tn when those rate freezes are lifted! We’ve had the same neighbors going back 10 years and have lost several neighbors who have moved out of state after witnessing Katrina damages combined with what is going on in this state with property taxes and insurance for coastal residents.
I updated the stats on the earlier blog this week on new suits on the 2 year statute of limitations cases. According to the articles coming in, thus far about 2, 964 new cases were filed this week in LA. Here’s that blog if you want to read the updates.
**Update 9/1/07- After writing this blog I did in fact locate an updated opinion on the Insurance Coverage blog on the new decision in LA on the Valued policy law (it just wasn’t showing up in an internet search when I was researching earlier today). Here it is and it’s highly recommended reading for a legal opinion as to how this attorney feels this confuses the anti concurrent cause provision and what this this means to us. You read it and form your own opinion.