I’ve got quite a bit of blogging to catch up on after extending my business trip this week to 5 days versus the 3 we expected to be out for as there were many developments in the claims industry during my trip.
For starters- we were discussing adjuster safety in one of our last blogs here and the fact that insurance carriers do not define a weapon in their Code of Conduct forms although they forbid adjusters to carry them. Well, I’m sure glad they did not define it as FAA regulations do! Flying up for our business meeting, the mascara and lipstick were confiscated and coming back the cigarette lighter was! So- I guess things could be worse if we had to live by those restrictions! (Smile) If your an adjuster reading this, you might want to catch up on numerous reply postings over on the topic we posted on CADO (here)about the next opportunity to view “Muffled Cries” on Forensic files which is 9/22/07 at 6:30 PM EST. This is the show about Tampa adjuster, Katie Froeschle ‘s murder while handling a rental dwelling claim. There have been a significant number of replies from adjusters on the Cado forum topic by experienced adjusters who have also faced some pretty tough situations while working claims indicating this was not an isolated situation with Katie but a situation many of us have faced (yes, I have many of my own war stories from my years in the field). The thing that surprises me the most is that many of these incidents happened to male adjusters contrary to my thought that had a male adjuster gone out on the claim Katie did that a murder may not have happened.
The most important breaking news applicable to settling claims comes out of Florida where the Valued Policy Law settlement guidelines for total losses established in the Mierzwa case were overturned. We wrote about valued policy laws and recent decisions in this blog here. If you read this blog, it contains an explanation of the Mierzwa case and how that applied to the FL Valued policy law so just take a minute to read that blog if your not familiar with the case.
While we were out, this case was overturned. Here is a link to the Supreme Court decision on this Florida Farm Bureau vs Cox case. Rather than reinventing the wheel, I’ll refer our readers to the Insurance Coverage blog entry of 9/21/07 here which explains the new decision. Basically, this was a win for the insurance industry as described here in this news article also which in part states:
“The unanimous opinion written by Justice Charles Wells said Florida’s 108-year-old valued policy law was intended to prevent haggling over the worth of destroyed property, not to be used to cover perils that were not insured”
According to this article, this takes the case for the insured back to court now to decide what damage was attributed to wind vs what is flood damage since this decision would no longer allow them to collect policy limits since the major damage was caused by non covered flood damage. The policy limit was 65K and Florida Farm Bureau had evaluated the building damage at less than 12K. The way the Mierwza case stood, the carrier would have had to pay the limits under Valued Policy laws even though the majority of damage was from a non covered loss (flood ..and note the insured did not have a flood policy which amazes me having handled many flood claims myself back in my days as a Santa Rosa County, FL staff adjuster dealing with repeated flood claims on Blackwater river there).
I’m glad to see these recent court decisions both in LA and FL where the courts are upholding policy provisions and the intended purposes of valued policy laws. I wonder how much has been paid by carriers in FL on the Mierzwa case ruling and what this will do to the many other pending cases on these very type of issues.
Wind and water decisions will continue to be tough for all adjusters to evaluate. The consumer groups are being very active pushing for passage of the 2007 Multiple Peril Act being pushed by MS Gene Taylor. It is unfortunate they do not begin to realize what they are pushing for and the ramifications of having wind handled by the government similiar to the Flood policies. I’m going to try to get a blog entry in next week explaining just some of the horrors in the flood policy exclusions such as the 12 square foot of deck landing coverage,etc. I think if policyholders understood the coverage available in a flood policy better and the extreme limitations in coverage they might be much more hesitant about moving the wind to the government if the wind coverage would be as restrictive. It is definitely NOT consumer friendly nor is it adjuster friendly to understand the flood policy or the many unnecessary forms and procedures by NFIP to handle those losses. I don’t think many pushing for it even realize the flood policy has had a 250K limit on a residential building. In layman’s terms just ask yourself this question- how many homes on the beach can you buy for 250K? Give me a break! I sure hope the wind policy won’t contain such unrealistic coverage limitations. These consumers probably also do not know anything about the news releases last year when the powers that be ran out of funding on the flood claims? I’ll post some of those articles in next week’s blog.
I am a proponent of having the coverage by private carriers to end this ridiculous necessity for an adjuster to have to determine what is wind and what is water damage providing the appropriate rates can be charged for this coverage. This would also satisfy the politicians and the insurance consumer. None of us …..adjusters or insureds …….like the current exclusions under the homeowner policies. Just think how much easier the life of an adjuster would be to go in and assess all damage and close the file. Better time service on claims and more income to independent adjusters who can close more files! Chubb insurance is one of the carriers already doing so. See their press release from last spring here about their coverage. Why can’t other carriers do the same? I imagine this is a mute question at the moment with the mass exodus of coverage as they non renew and send out policy cancellations by carriers in coastal communities. I’d imagine the need by insurers for engineer’s who help assess the cause of each type of damage would be greatly reduced, the cost to defend litigation on the wind vs water would be eliminated, less claim managers would be needed to manage the litigation and coverage issues, and reduced claims costs for such huge expenses should lead to greatly reduced policy premiums so it would be a win win for all parties. Think of the reduction in Insurance Department complaints when consumers no longer have to argue over the coverage assessments for wind vs water damages! Makes sense to me! You can’t blame them(carriers)if they don’t want to write the combined coverage no matter how much the public (myself included as a coastal resident) protests with the recent political developments in LA and MS on litigation for non covered flood losses and actions by MS Congressman Gene Taylor and Senator Trent Lott as well as Charlie Crist in FL who has been a one man torpedo destroying insurance relationships in FL by his anti carrier policies while at the same time throwing out all rating rules for his big push for the growth of Citizens of FL with his rate freezes on their premiums……don’t even get me started on that but watch for a blog next week on more about this issue! For now I’ll leave you with a referral to another Rossmiller Insurance Coverage blog that addressed Jeb Bush’s recent comments about the insurance crisis in FL which also happened while we were gone this week! I’m very glad to see Jeb Bush speak out as he was so respected while in office here. Oh for a return to those days!