Valued Policy Law Katrina decisions in the news this week and Fl Valued policy law updates since the 04/05 seasons

August 31, 2007

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.


5th Circuit upholds anti concurrent cause provision as unambiguous

August 31, 2007

Here is an update located on the Insurance Coverage Blog along with the AP article and a pdf of the ruling all found in this blog entry. This was on the Nationwide vs Leonard case.

Below is a PDF of the ruling:

The AP Story

I highly recommend reading this article by Attorney John Pappas “When is a flood a flood” to understand the terms in the insurance policy and court interpretations. There is a citation in this article on this Nationwide vs Leonard case.

Here is also a good news journal article on the issue from 8/15/07. I’m surprised we didn’t catch this ruling before!

Update 9/1/07-Here’s some additional articles. You won’t believe Gene Taylor’s reaction mentioned in this article:

The Sun Herald has a link to the pdf court docs I’m also posting in case the other link to another copy comes down:

This news article quote from Congressman Gene Taylor’s Public director- I cannot believe his comments on “any carrier with anti concurrent language in their policy should be barred from participting in FLOOD” (as a WYO carrier)..I wouldn’t be surprised to see the carriers drop the WYO service- you can see the writing on the wall for the next flood storm! This spokesperson obviously has no understanding about insurance coverage or maybe it’s just too early in the morning to soak in the comments today!

Have you thanked your adjusters as we enter Labor day weekend?

August 30, 2007

As we enter labor day weekend the next 3 days, we hope that many catastrophe adjusters share time with their families and friends with what may be the last of long weekends for sometime should hurricane season activity actually pick up in September. Here is one of the latest pictures from our new favorite weather site, Ralph’s Tropical Weather,  showing atleast 5 new lows being investigated as we speak!

This week we’ve learned of friends deployed to Midwest flooding, CO storms, and other locations finally getting assignments after the very slow storm season for 2006 for many independent adjusters so they will be unable to share the holiday with their families. We hope the insurance consumers will come to appreciate the many sacrifices adjusters do make to choose the life of a catastrophe adjuster.

How interesting to read here  that the 12 hour/7 days a week American work schedule as we entered the Industrial revolution lead to unions to help the deplorable conditions American employees suffered in the late 1800’s ! Did someone forget to share that with insurers who still require those very hours today for storm adjusters?

Today is a great day for carriers and adjusting firms to take a moment out to thank adjusters who service their claims before labor day weekend begins. We used to recognize adjusters committing to work disasters with storm banquets to thank them for their service as they rotated in and out of assignments back to their regular offices every 30 days. That practice today has basically become extinct now that carriers have dedicated catastrophe operations initially created so an insured would not have to deal with an ever changing group of adjusters for consistent handling of their claim. That was a great concept in it’s time and still is but the beauty of the program is eroded over the past few years due to the current practice of in office claim central units requiring insureds again  to deal with “team” adjusters  who are not familiar with their file. It  also became unpopular for banquet facilities to post signs with a carrier name for such gala events and even for conferences due to a large number of consumer complaints on carriers wasting “premium dollars” on such wasteful spending. Other issues arose regarding the serving of liquor or hosting cash bars as well as sexual harassment issues for jokes in today’s ever increasing world of litigation. It still amazes me today the number of insureds that will call in to a carrier office to complain of adjusters taking a long lunch or telling jokes in a restaurant “when they should be out handling my claim”. Listen folks, adjusters are human also and field adjusters commonly work 15-18 hours 7 days a week. They return from 10-12 hours in the field to their rooms at night to enter claim estimates to meet stringent carrier quotas on inspected and closed files due each and every day while out on assignment. They need a break and they need recognition for their hard work. It’s fighting an uphill battle to even mention things like this with the negative impression of “adjusters” out there. New adjusters need to be most careful in following carrier guidelines not to wear storm clothing after hours and to always be cognizant of the public when out in groups for dinner. You can be over heard discussing private cases and this is not a very good thing in the eyes of the public. Instructions from most carriers require you wear “civilian” clothing when going out to dinner on your way back to your room to work files.

Hmmmm……..I guess we don’t learn from history very well in the claims industry. Our work hours meet time frames from the 1800’s and we have totally done a major turnaround in the current “claim central” operations circumventing the very reason we created catastrophe claim field operations to begin with. An in office adjuster who has never experienced the trenches of disaster does not share the same empathy as they have no understanding of the trauma experienced by insureds during a storm. They have never walked up to a home that looks reasonably repairable from the street only to walk to the back of the structure and see it torn in half. Nor have they marched down the street with a ladder in 100 degree heat to measure roofs when you’ve been dropped off  from a carrier bus on a street corner during an “Andrew”. I have managed in office adjusters, field adjusters, and catastrophe adjusters and there is a major difference in the understanding of urgency and the empathy of these different groups of adjusters if they have never worked in the field on a catastrophe operation- especially during the initial phases of cat operations.

I hope we will all take a few minutes to thank our adjusters in some form or fashion over labor day weekend.

We at Dimechimes Corporation thank the many dedicated adjusters servicing the property insurance industry! We look forward to working with members of our rosters as new staffing requests are received this season. Please be safe on your way to your new assignments.

We’ll see you back on the blog next Tuesday!

Adjustin’ to Adjusting-Guest Blogger Linda Goodson-First Storm Duty was Katrina

August 30, 2007

In our first of a series of new articles by adjusters on their experience the first time out on the road as a catastrophe adjuster, we have  Linda Goodson out of Enterprise, AL sharing her experience as a first time cat adjuster during Katrina.

Linda is a ClaimSmentor Honor Award lifetime member due to her major volunteer contributions on our site assisting with class certificates and preparation of material for exhibit booths we attend at claim conferences. She has spent hours this year attending adjusting firm seminars, obtaining carrier certifications, and also attended our 40 hour Fundamentals class picking up many things she says she wished she had known prior to her first time out on the road. Below you will find a summary of her experience not only on her first cat deployment but in her recent efforts to complete FEMA damage assessor training which many adjusters are doing to supplement their income during non storm assignment periods. Linda also had a short stint with the LA Road2LA program in 2007. Linda’s email is We hope new adjusters can learn things to expect from our guest bloggers sharing their experiences. Linda’s bottom line advice to other new adjusters is to accept in office assignments vs field as shown in this following comment from Linda followed by her story:

I worked Katrina and Rita from September 05 to April 06 in the capacity of field adjuster and agent advocate. Volunteered time with adjusters working supplementals and doing some scopes here and there with a small IA firm that belongs to a family member.  If there’s a way to save money, this gal can find it. I lived in a pop up trailer most of that time in the field spending around $200 a month for a place to park it. Honestly, that first year, I think I made more in office than in the field just because of the cost of working field versus working office  still not knowing the cost cuts that I know about now. It was a guaranteed amount every week. During these two particular storms the going pay was around $10,000 a month. No software costs, low gas usage, and when I retired for the evening, I had no phone calls to deal with as it was 12 hour days, 7 days a week. You just have to decide what you can do and no matter what you decide, do it to the best of your ability. The people your there to help deserve that.


What an Experience-Katrina duty-My First Time Out! By Linda Goodson


Okay I admit it. I’m covering all my bases. I decide to up my chances of work by applying for a position with a Federal Agency.

I was told to get my fingerprints done I would have to drive to their nearest facility which was 1.5 hours from where I live. When I asked why I couldn’t get my fingerprints done at my local police dept., they said they felt more comfortable allowing their own staff to do it since they were more efficient and the process was much quicker for them. Made good sense to me that they wanted to use the people they had trained to do this. So I drove to the facility with social security card and drivers license. Everything I needed in order to make this a smooth process.  I didn’t want to slow down this well greased machine they were sending me to.


When I got there, the employee in charge of doing my most efficient and quicker process was stressing that she wasn’t sure what was wanted but she would do her best. It took her approximately 30 minutes to figure out what information her computer wanted. When she couldn’t figure it out she said, “Oh well, whatever doesn’t end up on the fingerprint card, I’ll just write it in”.  While she fumbled with the computer, I asked her if she wanted me to go ahead and complete the paperwork. “Oh no! That will take you a WHILE to complete. In fact, you may want to take it home and fill it out”.


Finally, she did enough on the computer to make her feel she had done her job well, and we began the fingerprinting. As a former law enforcement officer, I knew these prints were the worst I had ever seen. I was relieved when she made a mistake of some sort and had to start over. But to my dismay, the second set of prints was just as sloppy. However, she was convinced they were gorgeous and there was no convincing her otherwise.  What took 10 minutes to do the week before at a police department for my FL adjuster’s license, took her 1 hour 20 minutes to do and it was incorrect.  And as I was leaving I realized they were packing up to go home. Hmmmmmm … I looked at the paperwork she handed me on my way out. It would have taken me no more than 10 minutes to fill out.


Upon leaving the facility, I called the agency that sent me to them but got no answer. Finally 30 minutes later, I got an answer and I’m put on hold for 12 minutes. I hung up when I realized their office had closed 5 minutes ago and they probably weren’t coming back.


When I got home, and began looking over the fingerprint card, I noticed she had switched my birth day and birth month. Once again, I called the agency to hopefully stop this card from being sent to Washington. To my surprise someone answered, allowed me to explain what I was concerned about, politely put me on hold. 15 minutes later, I hung up.


Email!! I would email them. Just a brief email explaining my concern of the incorrect information but I’m still waiting for a response.


As I sit here, I’m reminded of my first year of storm season employment. It would seem if you were doing everything they wanted done, according to how they wanted it to be done, you would go through some sort of desperate confusion. And it didn’t even have to be a government agency.


Really it took me back to my first storm and my first experience with an IA firm. Within 24 hours of being hired, I was expecting that any minute of my training and contract sessions, I would be branded on the butt, or my ear tagged.


My first year out felt like I was spun around blindfolded and turned loose at ground zero with a computer in one hand and a measuring tape in the other.


The first lesson in adjusting was learning how to adjust to my situations. Let me explain.


I passed a training center in my own town, to go to one of their other training centers many hours away, where I had to pay for room, food, gas,GAS, oh my word, gas. Not to mention it took us longer to get where they needed us to be. We spent two days on the road that we could have spent in the class back home. Then our training was cut short. We got three of seven days of training, and we were sent out with a promise that there would be someone there to help us, called a TA. I had seven TA’s in a course of 3 months, and only met one of them. Can I be self-taught? You bet I can. I learned how that year.


Very few classes included people that you would feel confident to learn from. People demanding respect by trying to belittle the people they were put in charge of. Talked down to in classes, help rooms, and help lines only to find out that most of these people were moonlighting until their positions were available again at some casino or local bar. If you were fortunate, an adjuster with years of experience headed your class.  As I myself am very talented at many things, I would not be a great teacher. Teaching, in itself, is another gift that I don’t necessarily possess. Trust me, like 7 days of cheese; if you don’t know your software program, your system will lock up. All the knowledge you have is worthless if you can’t correctly get it into that program. It can take you 3 hours to do a scope, and if you don’t know that software, it will take you 6 hours to get it ready to be sent out to the company.


One fellow, whom I was told to direct my questions to, was walking around with people following him, grabbing his shoulder with intent in their eyes to get answers they had obviously tried to get elsewhere.

I thought to myself, “If I could only touch the hem of his coat”.  I never could reach him. When there was no one around trying to get life giving information, there was still a wall of conceit, and arrogance. I refused to grovel. There had to be another way.


Research was my only tool and I used it daily. Yes, it slowed me down. I wasn’t able to do as many claims as I should have been able to do with good training and support. Atleast what I did was right and I was able to sleep at night knowing that and it helped knowing that I didn’t have to throw my pearls before swine to get it done right for the insured and the carrier I was representing.


Borrowed a pop up trailer from a friend. Made sure I got my tetanus and other shots before I got started. I brought my handy dandy first aid kit, rubber gloves, hand sanitizers, and 50 cent face mask. After working 3 months of flooded homes, I found out just how important a GOOD face mask is while spending hours in flooded areas. I ended up hospitalized.


I was  discharged two days later from the hospital. I was next  offered a position in office with the same company. As an advocate, I was able to continue helping and that was very important to me. My slight concern of being cooped up inside was diminished when I saw how busy the offices were. Keep me busy and I can handle anything. This gave me the opportunity to see this storm work from a different perspective and I was grateful for the opportunity.


After working two offices to completely closing the storm, I was given the okay from the doctors and I began working as an assistant to any adjuster friend who needed help out in the field with supplement claims.


In all my dealings, I learned so many things about myself.  I can handle any situation as long as I stay positive, motivated and continue to help others.


I can survive a pop up trailer, as long as I stay focused on the people I’m there to help, who lost their home.


I can survive pork and beans and Vienna sausage as long as I stay focused on the people I’m there to help who lost  ‘everything’.


I can live away from my loved ones during this time, as long as I stay focused on the people I’m there to help who lost loved ones forever.


When I look back on the monetary gain, I think about the cost of gas, food, tires, air cards, cell phone coverage, and rent. It takes a lot of money to make a lot of money. The largest reward is in knowing that somewhere each day, I helped someone find hope. A way to get back as much as they deserved, to begin a new life while representing with respect and passion the carrier who believed in me enough to let me be a part of this tiring, challenging, and yet extraordinary line of work of Adjusting.


We thank Linda Goodson for sharing her story with her reality based view of her experience. We encourage other adjusters to share your story with our readers. If you were a first time adjuster during one of the worst disasters in catastrophe claim history, we’d love to hear your story and share your advice for new adjusters.  You can submit your story to  us through our staffing firm. We will publish a few of these stories each week for others to learn from before they go out on the road the first time.


While the majority of carriers require a stated experience level such as 2 or 3 years of experience under normal circumstances, many rules had to be bent during Katrina requiring deployment of many adjusters who had completed training and adjuster licensing but had no practical field experience prior to Katrina.


The stories of their struggles to complete their job are heart breaking under the worst of circumstances during Katrina storm duty assignments. I know of MANY who worked and were not paid a dime after incurring over 10K in housing ,office, and travel expenses. We hope to make a difference for new adjusters by sharing some of the warning signs  to look for so they are not taken advantage of by the few firms out their taking advantage of trainee adjusters inexperience. We can tell their stories without naming the adjusting firms involved to avoid libel problems. It’s the key issues such as contract issues, fee bills, warning signs, and other key “red flags” new adjusters need to learn to avoid some of the same problems you will read about as these folks share their stories with our readers.


You may read in many adjuster forums snide comments about “3 day wonders” referring to the many new adjusters coming from the influx of 3 day (some maybe 3 hours!) training schools for some courses alleging to teach an adjuster everything they need to know to earn big six figure incomes. That is far from the truth. It takes years of experience and training to properly understand the serious nature of the adjuster position. We hope by following our blog entries on adjuster income and some of the lawsuits costing adjusting firms, carriers, and adjusters that you will learn more about becoming a true professional representing the Independent adjusting community well to preserve all of our jobs in the industry. Take a look around the prior blog entries on income and adjusting and take the advice to heart.  Learn from these “new adjuster” stories and stop the name calling. These folks who went out the first time are people with families to support. We need to learn to work together to help mentor them and to improve the training programs available to new adjusters. They do not know that some of these schools aren’t properly training them until they work with experienced adjusters who point out the error of the training processes some are out their teaching. If you read about “how to overcome the three year requirement by vendors” advice you might consider running to another more reputable training facility. I can’t thank the valued experienced participants of ClaimSmentor enough for their constant sharing of information with others.




Statute of Limitations- Katrina 2 year anniversary brings deadline to file LA suits

August 29, 2007

The 2 year anniversary of Katrina  is today while the LA statute of limitations came and went yesterday which was the deadline to file Katrina lawsuits in LA by insureds.

LA had extended their statute of limitations on property claims from 1 year to 2 years following the Katrina storm damage. Yesterday was the last day for insureds in LA to file suit. AL and MS have different terms with AL with a 6 year limit and MS with a 3 year according to the chart below so it may still be years that we continue to see new litigation. The chart also shows a 2 year property damage statute in TX (Rita claims). We do not yet know if there were a mass number of suits filed or not this past week in LA. We will report back on that when information becomes available.

Here is a good blog article by the Merlin group  giving a simple explanation as to what that means for insureds on their claims in LA as well as from an attorney’s perspective. They point out, as I did in the Citizens blog on the task force last week, about the 5 year statute of limitations in FL which a task force board member indicated he wanted to reduce because of the long tail on  claim file reopens. Click here for that blog. The interesting thing is that just because an insured can no longer file suit on a case, does not mean that a carrier will refuse to take a look at a claim request to reopen a file for supplemental damage, it simply means the insured no longer can file suit on the case.

Don’t mistake this for their handling of a newly reported loss at this late date. Claims with late reporting barring unusual circumstances are always handled under a Reservation of Rights while the cause of the reporting delay is investigated with a denial in order for late reporting if the investigation determines the carrier’s right to inspect a loss and investigate the claim have been prejudiced by the late reporting.  Here is a good article written about liability claims but explains reservation of rights letters and provides very good instruction for completing one. The Citizens 2007 Claims Procedure manual also has some ROR sample forms as does a link in my blog on  Scruggs  about the 242 carrier exhibits which contains many actual ROR letters sent out on coverage issues if you need to see  samples of finalized ROR letters.

You might also be interested in looking at the actual FL statute of limitations which does not just pertain to insurance claims but to other actions such as 1 year for a lien to be placed on real property for services or material performed(such as a contractor may do if an insured fails to pay the bill).

Here is a good article explaining both the Statute of Limitations and the Statute of Repose if you do not know the difference. This next article here gives general guidelines on the number of years different statutes run while this last article gives you a chart for all 50 states. An adjuster needs to make sure these are up to date stats before applying them to a particular loss. Make sure to note that there are different statutes for different kinds of losses such as an injury versus a property damage loss. Other factors such as federal or state laws will govern the proper limitation period as the articles linked to above explain. This explanation  from FL on “tolling” a statute and things to consider when dealing with minor children is also good information to know as to when the statute “clock” stops running on various issues.

Here is also information on the federal statute of limitations under the Federal Tort Claims Act that pertained to the Katrina Canal Breaches Consolidated litigation.

The Merlin blog points out some issues in MS causing delays there and here is an article coming from Alabama about FEMA grants and the Increased Cost of Compliance allowances to elevate a building in a flood zone there. It is hard to imagine that two years later they are just working on raising homes in the damaged zones. Anyone driving through MS in places like Biloxi can see the reconstruction problems abound as demolition has not even begun in many cases on the coast. The Fema trailer camps break your heart when you realize those folks have been living basically on a concrete pad with wall to wall campers not much more than the size of a small one or two man tow camper.

As these anniversaries approach bringing with them state statute of limitations, do not just assume you are to deny a claim or not respond  and timely answer a suit through your carrier’s counsel. These are major issues you need to immediately bring to the attention of your claim manager for direction and guidance on claim handling for any loss approaching or surpassing the state statute of limitations.

I’ll let you know as soon as we start seeing the numbers of new suits alleged to be filed with this week’s deadline in LA. Lest we forget while thinking of this two year anniversary, there were 2,000 deaths, 800,000 homeless, and extensive damage as this anniversary article summarizes. It puts insurance policies and statutes of limitations in perspective. In the insurance world they are very important but to the Katrina victims the coverage issues and statutes just bring a new storm of pain and trauma as they learn of these problems after the storm. I’ll end today’s blog with this insurance article summarizing the stats from both Katrina and Rita with numbers. The number of files that may be effected by the statute of limitations is a very very small percentage of the claims settled as you can see. One can certainly appreciate the comments of this news organization regarding trial lawyers “self serving fiction” spouted in unfounded comments about insurance contracts/claims when viewing the REAL numbers of claims which are unsettled.


Update 8/30- This article is being added as it gives an update on new suits filed which seems a minor number in this article. Also note this report indicates there are a few deadline changes allowing for an extra few days to file.

Update 4:30pm 8/30/07- Here is a new article indicating brisk activity at the courthouse

Update 10:20 Pm 8/31- According to this new article– 2,984 new suits were filed in the last week just in the two jurisdictions mentioned in this article- and these are unrelated to the levee cases which are also mentioned in this new article.

Additional Job Opportunities Available for Aviation, Property, Casualty daily adjusters

August 29, 2007

We’ve been out of town and returned to the following additional staffing requests for  daily(non catastrophe) adjusters to work these assignments with Independent adjusting firms. If you are interested AND MEET the qualifications specified below, please view the information requests on our staffing firm website. Please view the requirements for all candidates listed on our opportunities tab.

1) Additional Aviation adjusters needed- nationwide

2) Property and Casualty adjuster needed in Miami,FL. Must be a resident there with a permanent FL license. Minimum 3 years of experience. This is a request for a billingual adjuster with a passport as this position will be handling international claims. This position is for an independent firm but a salaried position with full benefits. Approximate salary is 70K plus expenses.

3) Auto adjuster needed in Wyoming. Must have Wyoming adjusters license. Software is CCC Pathways. Must have experience auto adjusting. Prefer minimum of 2 years of experience.

4) Property/Casualty adjuster needed for Lafayette, LA. Must be a resident and must have the new LA adjuster’s license. Minimum experience 2 years. I’ll have the estimating software requirements later today.

Enough is enough- Citizens FL Claim Reserve problem-to the tune of $300 Million

August 24, 2007

Hadn’t I just written about claim reserves last week in this Claims / Agency Relationship blog?

August 22, 2007 published this article regarding Citizens of Florida stating that an outside auditor has told Citizens it needs to add almost $300 million to its reserves. The article goes on to quote some folks from Citizens who indicate it’s due to files reopening from Wilma at the encouragement of public adjusters and south Florida attorneys.

The article quotes Mr Julio Robaina, who chaired the legislative task force on Citizens claim handling, as saying “he will introduce legislation to stiffen regulation of public adjusters and to reduce the amount of time consumers have to file a claim”. Chip Merlin of the Merlin Law Group had quite a comeback you’ll have to read about in the link above to this article. Does Mr Robaina really think he’d get the votes necessary to “reduce the time consumers have to file a claim”? Look at what is going on all over this great state to property taxes and mortgage foreclosures and Mr Crist’s efforts 100% pro consumer/ 100% anti carrier as recent articles explain. Does this political representative know anything about the statute of limitations and what is involved in over turning the state laws on these regulations?

Read further here on this Merlin Law group presentation to the task force on page 7 where he addressed the fact Citizens lacks sufficient home office and staff management. Now I’m not sure what the Merlin group who handles bad faith cases against insurers has to do with presenting to the task force but I am sure glad someone is pointing out the problems. Don’t you think that is giving them fair warning of the problems they should already be more than aware of? Where is Citizens going to be when it comes to defending adjusters accused of bad faith due to their claim handling instructions if that becomes an issue as it has with other insurers during Katrina?

Didn’t FL just tighten up public adjuster licensing 7/1/07 which now requires a public adjuster to take the exam versus the exemption from licensing exams by taking online courses? As to the other practices by PA’s made in this article about giving gifts to insureds, we can surely hope the Dept of Insurance is curtailing that now rather than waiting for new legislation to be passed. Here is a task force document  on page 10 already addressing PA’s and task force recommendations.

I did double check the Merlin blog to see if there was a current blog entry on this new announcement.There is not yet but this entry from late July  goes into a great deal of information on the financial problems at Citizens of FL. There is another more recent blog here addressing the Florida crisis and insurance reform problems.

New adjusters may not be familiar with loss reserve procedures and should read  this great simple explanation on claim reserves and how they are set found here. Many independent adjusters are surprised reading this to learn that this is part of their duties when evaluating a claim even long before your estimate is completed based on your initial assessment of the damages as this article does a great job of explaining. While bulk reserves may be set up by a carrier on all claims based on past historical data at the onset of a new cat, there is still a responsibility to have accurate reserves…especially when it comes to large losses. In recent years, there has been concern expressed about reserves set coming up in court cases when they differ from settlement amounts so you will need to know the carriers current reserve procedures before making recommendations to a manager in your log notes and reports.

The part I do not understand is how the Citizens Board of Govenors just got the news. Establishing and updating reserves on pending claim files is one of the most basic of carrier management duties during an open file review which should be done at regular intervals (bi weekly or monthly) on large pending cases to determine how the case is progressing and to double check that reserves are either adequate or that a revision to a reserve needs to be made either up or down based on the current damage assessment on the case. Most carriers produce management reports listing the cases that need a reserve review on a regular basis.Was this not being done (that seems pretty obvious …… what am I missing here)? Claim file reopens do not all happen at one time unless there is unusual activity such as a class action lawsuit? The only two cases I’m aware of are the two mentioned on the Hurricane law groups site here with one for roof damage building permits and the other on wind damage to glass and FL building codes. The class action link does have attachments to the suit in pdf forms. It is routine for storm losses to reopen due to  construction industry price increases after a storm. This can occur much later than when the initial estimate by the adjuster was written due to contractor workloads or lack of available local contractors in a given storm zone. No surprises there either. Adjusters remaining on the site handle those revisions as necessary on an ongoing basis. So what’s up?

You can find all minutes of the Board of Govenors meetings right on the Citizens of FL website here. I’ve been very disappointed with the promptness with which the website posts the meeting minutes from the Claim Committee notes. For instance, there was a meeting June 14th and the minutes for that meeting still showed minutes from an April Claim committee. I wrote the web master and received a response that the June minutes were still not up in August because they have to be approved by the committee and they did not know when the next claim committee meeting would be. Come on’ folks…the task force shows the claim committee met with the task force I believe it was August 1 yet the minutes from a June meeting were still not up? Those committee notes are the only direct source information adjusters can go to to verify information they are getting from different vendors since the emails they are getting vary so greatly! If you can’t get the minutes up timely to your meetings, how in the heck are they going to manage claims for 1.3 million Floridians in a timely fashion?

I am not picking on Citizens but I do think it is very important to bring out issues independents are concerned about. Citizens of FL is now the #1 insurer in our state. Our independent adjusters want and need the claim assignments. PLEASE treat us fairly, please enhance the communications, and please be alot more realistic about time service expectations during a major disaster. Your threats of imposing huge fines is not having the effect you apparently expected (what else are we to assume?)..instead, adjusters are hesitant to service your claims and you are confirming their concerns every day by the way you are handling the pre-assignment training. (Example-one vendor email says Citizens now requires adjusters must enter their Xact  email address…hello make sure independents understand they are not “employees” yet to have an Xact email they need an active keycode…are you going to pay that hefty fee for a quarterly subscription to Xactware while they are sitting at home idle waiting for THE POSSIBILITY you may deploy them???).

It is appalling to me that Citizens outlines many different fines for infractions against adjusting firms in their Adjusters RFP which are going to be passed on to adjusters but there is no effort to give timely notice to independents on important information they need. Some of these fines are listed at $1,000 each. Just in the past two weeks adjusters who had completed pre-disaster training were again told to go back and take another course on ethics and apparently the adjusting firms had as little or barely more than 1 week’s notice to get this information out to their rosters, accomplish the training, and report back. What a mess this continues to be and adjusters don’t have claim 1 yet from a new hurricane nor one dollar in income from you !

I’ll be making another blog post next week on the current “pre-disaster” training issues adjusters are experiencing as well as I have great frustrations regarding some comments in the June Board of Govenors meeting where a large FL Independent agency group, FAIA, expressed concerns about Citizens training from the agency side feeling that agents are regulated by state insurance departments for licensing and for CE credits and they had some issues with the mandatory Citizens training for agents (they didn’t mind taking it but I gather it was the way it was being administered). At this same meeting, the Citizens claims committee was there and there was no one representing the 6,000 expected independent adjusters at the meeting to express what would be our major concerns about what has taken place the last month over the continual changes and adminstration of independent adjuster training to work their claims. Just one minor example is the fact Citizens has never even bothered to post the website addresses and email contact information on their Job links so these independents would even know where to apply. The only information, if you searched hard enough, is in the purchasing documents where the announcement was buried (like adjusters would even think to look in purchasing documents? ). The announcement has several incorrectly named firms and no contact information. Here is the link to this meeting board notes. You will find the FAIA (FL Assn of Insurance Agents) comments on page 32-37 and the claim committee comments to the Board on page 45.

I guess if we have one thing to be thankful for over this additional Citizens of FL reserve fiasco, it’s that it isn’t as bad as the Citizens of LA case where they have major computer glitches going on and lots of lost financial data. They apparently aren’t doing a good job of managing claims either. You can read all about the Citizens of LA fiasco here and here.  This article addresses further issues of information blocks while they are trying to  gather information needed to fix the problems over there.

This Insurance Institute article on carrier insolvency brings up the recent FL insurers, Poe Financial Group and Vanguard Insurance, insolvencies. Why is Citizens allowed to operate with inadequate rates and improper reserves? I just don’t understand. Hopefully, someone will come forward and explain to our readers why this is different.

Make sure when you read the document linked above from the Board meeting notes on their discussion on Citizens being a “governmental” agency on page 10. Well, if Citizens of FL actions on reserves, pre-disaster training, the Citizens of LA issues, and the FEMA and congressional hearings on the wind/water issues are any example of government running as an insurance carrier and their suggestion of the Multiple Peril Act of 2007 adding wind coverage to FEMA ,then why should we want any part in supporting such proposals? Please let the private carriers go back to doing what they WERE doing best in the private market.

While none of us in the adjusting community like denying claims under the wind/water controversy- it is still the contract insureds agreed to no matter how many cry “big bad insurance company”and until private carriers develop a comprehensive policy covering both, I’m 100% against the government administering additional programs. Insureds need to ask themselves…if they  signed a loan agreement to pay back x dollars and did so then the loan company came back and told them that the contract didn’t matter- they need to cough up several more thousand dollars they did not agree to- what would they do? I assume as a loan recipient, if they used the same line of thinking they use with carriers, that they would just roll over and pay the extra thousands so they don’t get bad publicity. I still do not understand why so many expect that carriers should pay what was not covered in the insurance contract. I do “get it” that some bad calls may have been made on a small percentage of individual claims which never should have happened. The current midwest floods show that the public still does not “get it” regarding the need to buy flood coverage. Just this week- 2 years post Katrina- news reports are coming out that many locations in the midwest are reporting much damage with only 5-10% of homeowners in flood zones having purchased coverage. Again, I do believe we will see the carriers and the adjusters be the “fall guys”. Things need to improve in this industry but I think the FEMA and Citizens examples show it’s not the answer to turn it over to “governmental” agencies.

If the government wants to do something for the very necessary adjusting community, how about developing an Insurance Claims Advocate group member on your task force like you do for here for task force member links. This committee list shows two claim members- one from Citizens and one from another insurance carrier. There is not one member of the task force committee investigating claims from the independent adjuster group yet they are relying on 6,000 plus independents to service their claims. It could not be one of your 45 selected vendors if you want valid input as they would have to give you “politically correct” input to maintain their appointment. Think about it…we might be able to help straighten out some of these “claim handling issues” you are investigating. Independents work for many different carriers and they might just be able to provide outstanding information on improving claim handling procedures. It sure seems like Citizens is missing the boat if these articles are any examples of what we are going to face servicing their claims.

Please don’t get the wrong impression- we have LOTS of empathy for insureds when we must deny a claim due to coverage issues. That still doesn’t give us the right as adjusters to change the settlement terms we must abide by. We are also very concerned citizens of the state of FL with our friends and families in this state. We have inside knowledge of how claims should be handled and we fear for what the coming hurricane season brings our state.