When dealing with a hurricane or tropical storm, surviving the weather event is often only the beginning of the battle.  The insurance company’s constant nit-picking of your claimed losses can drive you bonkers – especially while you are trying to put the rest of your life back together.  Then, just when you think you may have worked out a reasonable resolution of your claim, the insurance representative says, “Oh, and by the way, we are going to apply a hurricane deductible to your loss amount.”

The Named Storm Deductible or Hurricane Deductible can take a huge bite out of your ultimate insurance claim recovery.  Although some policies may vary, most homeowner insurance policies in Florida provide for a 10% deductible for hurricane or named storm claims.  The real kicker though, is that this deductible is calculated as 10% of your POLICY amount, not of your claim amount.  For example, let’s say you have a $500,000 policy of homeowner’s insurance, and then have the misfortune of incurring a $75,000 hurricane damage loss.  After the application of the $50,000 deductible (10% of $500,000), the insurance company would only be obligated to pay you $25,000 for your loss.  Good thing everybody always keeps a spare $50k around for just this type of emergency – right?

Dealing with the application of a hurricane deductible is another reason why you should never try to handle a catastrophic insurance loss without professional assistance.  Whether you choose an insurance claim attorney or a public adjuster, either professional would handle the property insurance claim on a contingency fee basis and would only get paid if they bettered your recovery.  Should you have any sort of questions whatsoever about either your insurance policy or the claims process, please feel free to contact our office anytime.

Flooded.HouseAfter a flood or other substantial water event, flood insurance policy holders are often surprised to learn what is covered by their flood policy – and more surprisingly, what is NOT covered under their flood insurance policy.  As I have written about before, flood insurance is totally separate from homeowners insurance, and both provide separate coverage for different types of loss.  Specifically, homeowners insurance does not cover water damage from flood.

In order to qualify for coverage under your flood insurance policy, there must have been a “flood” in your area.  A “flood” condition occurs when water covers at least two acres of land that is normally dry, or if the water condition has damaged two or more properties in your area.  Additionally, this water has to come from either (1) overflowing or inland tidal waters, (2) unusual, rapid accumulation or runoff of surface waters from any source, or (3) mud flow (defined as mud that is carried by a flow of water, thereby creating a river of mud).  Depending on the circumstances, there may also be coverage for waterfront land that collapses or sinks as the result of water that is above anticipated cyclical levels.  Importantly, damage caused by water that overflows out of sinks, toilets, sewers, or similar sources does not qualify for flood insurance coverage, but should instead be covered by your homeowners insurance policy.

The maximum available coverage limit for flood insurance is currently $250,000.00 for your principal dwelling and $100,000.00 for personal property.  Unlike the coverage available under your homeowner’s insurance policy, the building coverage provided under your flood insurance policy is very specific as to what it covers – and what it doesn’t cover.  In order to avoid a lot of heartache later, you may want to review your policy before a loss in order to better understand the limited coverage that flood insurance actually provides.  You can click HERE to see a listing by FEMA as to the specific items that are currently covered under the standard National Flood Insurance Program policy.

The coverage for personal property loss under flood insurance is even more limited – especially for personal items in a basement.  In general, the only personal property covered below the “lowest elevated floor” would be your laundry equipment, freezer (but not refrigerator!), and portable air conditioner.  There is no coverage for any flooring, drywall, window treatments, or any other type of personal property (furniture, electronics, etc.) stored in your basement or below the lowest elevated floor.  As an additional jab, your flood insurance policy only covers your personal property on an “actual cash value basis”, as opposed to what you actually paid for the items or what it would take to replace them.

There is no flood insurance coverage for any loss of use, additional living expenses, or temporary housing while your home is being repaired.  There is also no coverage for any loss of business income.

As you can imagine, the flood insurance policies issued by the National Flood Insurance Program are not overly consumer friendly and really only provide the most basic of coverage.  Should you ever have questions regarding the coverage available under your insurance policy or the manner by which to submit a claim, please feel free to contact our office and we will do our best to answer any questions you may have.

 

Policyholders are often shocked to learn that the loss settlement check they receive from the insurance company is payable not only to the policyholder, but to their mortgage company as well.   Homeowners insurance policies are broken down into several types of coverage – whether for the building, personal property, liability, alternative living expense, or other losses.  For certain types of coverage, the insurance policy will list the mortgage company as an “additional payee” on the policy – which means that the mortgage company’s name must be listed on any loss settlement check.  

The reason the mortgage company is listed as an “additional payee” on the insurance policy is that the mortgage company has a vested interest in insurance coverage payments issued for any loss to the insured property.  The mortgage company presumably loaned money to the policyholder and, in order to provide a guarantee of repayment, the policyholder agreed to grant the bank a mortgage on the property as collateral for the loan.  

Should the subject property be damaged or destroyed, the unrepaired property would then be worth less than before the loss and therefore, the mortgage company would not have the same amount of security for the loan as prior to the loss.  In order to protect the mortgage company’s security for the loan, the mortgage company’s name will appear on all insurance loss payments related to the property given as collateral for the loan.  Because the property protects the mortgage company in case of non-payment of the loan by the policyholder, the mortgage holder has a strong interest in making sure the property is either repaired or the outstanding loan is paid down to a point at which the loan is again fully secured by the value of the property.

The inclusion of the mortgage company’s name on the insurance check usually just affects coverage relating to the actual building on the property, since the home is usually given as collateral for the mortgage loan.  On the other hand, claims for damage to personal property, liability, or loss of use do not relate to property subject to a mortgage and therefore settlement checks on these losses would not have to include mortgage company’s name as an additional payee.

do-i-really-need-flood-insuranceMost people believe that when they buy homeowner’s or commercial property insurance that they will be covered for any damage that may occur to their property.  Unfortunately, as many people have painfully learned during recent flooding events, the normal policy of homeowner’s property insurance does NOT provide coverage for damage caused by “rising water” or flood.  This realization often comes too late for property owners and only after catastrophic damage has occurred to their property due to a flooding event.

The usual policy of homeowner’s insurance will only cover storm related water damage if it is caused by “wind blown” water, as opposed to “rising” water.  A good example of “wind blown” water would be water that comes through a broken window or a roof opening caused by the storm.  On the other hand, damage caused by the buildup of rain water which eventually enters the structure and causes flooding-type damage would not be covered under the standard policy of homeowner’s insurance.

As can be easily imagined, disputes often arise between property owners and their insurance companies over whether damage was caused by “rising” water as opposed to “wind blown” water.  The property insurance company, obviously, would like to prove that the damage is from a flood event – and thereby not covered under its insurance policy – whereas the property owner would advocate that the damage was the result of water entering through an opening in the structure and thereby covered under the policy.

The best and safest course of action is for all property owners to obtain both property insurance and flood insurance – regardless of whether or not their structure is located in a flood zone.  If you ever find yourself in a dispute with your property insurance company as to whether your damage is covered under your insurance policy, it is best to seek the advice of an attorney who specializes in property insurance claim matters.

The University of Florida Gators were scheduled to play football against the University of Idaho Vandals on August 30, 2014 in what was to be the Gators season home opener in Gainesville, Florida.  The football game was initially scheduled to begin at 7:00 p.m., but due to heavy rains and lightning, the start of the game was repeatedly delayed and ultimately began around 10:00 p.m.  After the first play of the game – Idaho kicking off to the Gators – additional lightning appeared and forced the eventual cancellation of the game.  Although the two teams could have potentially rescheduled this game for a bye-week later in the season, officials from both schools ultimately decided against it.

So – all of that is nice, but what does it have to do with insurance you say?  Well, due to the financial acumen of UF Athletic Director Jeremy Foley, the Florida Gators have always maintained an insurance policy to cover any loss in ticket revenue should a game be cancelled.  Prior to each home game, the University provides its insurer, Lloyd’s of London, with an estimate of both prospective ticket sales and any potential losses.  If a game is cancelled or if the University otherwise incurs a total loss of ticket revenue for a game, the insurance carrier pays the University for this loss.

Since the football game between Florida and Idaho was cancelled, the University refunded the purchase price to all ticket holders and placed a claim against Lloyd’s of London for the revenue the University stood to make on these ticket sales.  End result?  Although the score of the actual football game ended at 0-0, the University of Florida still walked away with a cool $1,800,000.00.

 

Over the past few months, many Citizens Property Insurance policy holders received a notification that, unless they opted out within a certain time frame, their property insurance would be automatically transferred out of Citizens and into one of several small start-up insurance companies.  These newly formed property insurance carriers have been nick-named “take-out” companies because their sole source of new business is to take over property insurance policies that have been transferred out of Citizens.  This process has created a love/love relationship between Citizens and these new insurance companies as, through the transfer of policies out of Citizens and into these new start-ups, Citizens can further its goal of depopulating its customer base and the new start-ups get “free” customers without having to market for same.

Of course, all is not rosy for the actual policy holder.  As a recent report reflected, the recent crop of small, in-state property insurance companies have no record of withstanding the losses associated with a major hurricane and have not fared well with insurance industry rankings.  In fact, these new companies only average a “C-minus” rating by Weiss Ratings and 11 of these companies have failed since 2006 – without even having a major storm or hurricane to drive up the claims!  According to the new Weiss Ratings, 19 of the 48 Florida-based property insurance companies received a rating of “D-minus” or worse, which is eye-opening in light of the fact that Florida homeowners pay about $6 billion dollars a year to these companies and we haven’t had a large scale insurable event in over a decade.

The take away is that, although you may not be thrilled with the coverage or level of service that you may be getting from Citizens Property Insurance, you had better think twice about switching to one of the new take-out companies.  Despite all of its problems, Citizens does not have the failure risk of the small private companies and Citizens will always have the money to pay claims – even though it may take years to do so!

Yes, dear reader, the above title is correct.  A Florida Appellate Court actually had to rule that your homeowner’s insurance is not responsible to pay for damage caused by the “sudden explosion” of someone’s body.  If you don’t believe me, you can read the actual opinion here.

Per the facts of the case, Ms. Rodrigo filed a lawsuit against State Farm Insurance Company for the damage caused to her condominium unit by blood and bodily fluids that had leaked into her unit from the above unit.  Apparently, an elderly lady living above Ms. Rodrigo passed away and, since no one discovered the body for a long period of time, the body began to bloat and decay –  to the point that the gasses inside the corpse built up enough pressure and the body’s abdomen burst.  The sudden “bursting” of her body released gases and fluids which, per Mr. Rodrigo’s claim, leaked into Mr. Rodrigo’s unit and caused damage to her personal items and….well….certain smells.  (I’ll ignore the parts about the deceased lady having several hungry dogs in the unit and the manner by which those dogs kept their hunger at bay during this time.)

The issue then became how to pay for the damage caused by this yucky stuff.  The subject insurance policy was a “named peril” policy, which only provided coverage for causes of loss that are specifically listed in the policy.  After noting that there was no coverage for gooey bodily fluids, Ms. Rodrigo tried to obtain coverage under the named peril of “explosion” – apparently keeping a straight face while doing so.  At trial, she presented testimony from a doctor that the contents of the deceased’s body, after undergoing advanced decomposition, “explosively expanded and leaked”.  She argued that since there had been an “explosion” of the deceased’s organs – surely it would qualify as damage caused by an “explosion” under the terms of the insurance policy.

Needless to say, neither the trial court nor the appellate court (Really??  You actually appealed this to a higher court!) agreed with this interpretation.

 

 

tornado-damage-floridaOver the last few days, Central Florida has been pounded by torrential rain, tornadoes and high winds.  These damaging windstorms and tornados were especially violent in Manatee, Sarasota, Lee, Hillsborough and Pinellas Counties.  These thunder storms caused flooding in Shore Acres, wind damage in Siesta Key, and claimed the lives of two people in Duette.  Now that the storms have past, we are left to deal with the damage done by this weather event.  Fortunately, most people have homeowners insurance to help pay for the damage to their property, but as we have often seen, going through the insurance claim process can be a world of heartache all its own.

After the storm or tornado has past and/or the flood waters have receded, you should immediately contact your insurance company and place them on notice of your claim.  The sooner you start the insurance claim process, the better chance all parties have of accurately calculating your damage and the cost to repair same. You should also take whatever ever steps you can to mitigate the damage caused to your property and otherwise take action to keep additional damage from occurring.  You should also, to the best of your ability, make a listing of the damaged property.  Although making a listing of your damaged property can be difficult – especially when the items are missing or totally destroyed – you are the best person to know the extent of your property.  If you can’t properly itemize your lost or damaged property, most likley the insurance company will not reimbuse you for same.

After a storm or other weather event, you may also have to deal with emergency restoration companies.  These companies will come to your house soon after the damage occurs and will do the immediate repairs or restoration that may be necessary to protect your home from further damage.  These services usually include the placement of large fans or other equipment to dry out your property, the installation of tarps over your damaged roof, or other similar activities.  Although these services can often be crucial for the protection of your property, always remember that these services are very expensive and that you only have a certain amount of money under your insurance policy limits with which to repair your home.  If large sums of your policy limits are spent on these initial emergency repairs, you run the risk of not having sufficient funds remaining to repair the remainder of your home.  Therefore, it is always important to obtain an agreed upon written estimate of the work prior to the performance of same.

Lastly, it is important to remember the difference between flood insurance and wind insurance.  Your normal policy of property insurance does not cover flood damage – meaning damage caused by “rising water”, but will only cover damage caused by water which was “blown into” your home by wind.  For instance, if your property was damaged by water that had been blown in through a window or a damaged roof, your normal homeowners policy would cover it.  If the damage was caused by water rising from a nearby creek, your homeowner’s policy would not cover the damage.  It is crucial that you understand the coverages available to you prior to authorizing any repair work to your home.  If you authorize a contractor to dry out your home after a flood and then realize that you do not have flood insurance – you will be on the hook to pay the contractor out of your own pocket!

As always, should you have any questions regarding what coverage may be available to you under your insurance policy, please feel free to contact our office and we will do our best to answer any questions you may have regarding your property damage claim.

 

It may come as a surprise to many homeowners, but you may be able to substantially reduce your homeowner’s property insurance premiums by just looking through the provisions of your policy.  Specifically, most homeowner’s insurance policies set forth numerous premium “credits” for which you can qualify based upon the age and condition of your home.  These available credits are usually listed in the documents you receive along with your annual policy renewal – you know, the stuff you never read and immediately throw away.

For instance, you may be entitled to a substantial premium discount if your roof has wind mitigation straps.  These straps literally “tie” your roof to your exterior walls and may help avoid the structural failure of your roof and walls during a high wind event.  If your home was built after 2002 or if your roof has been recently replaced, your home most likely has these straps as the use of such was mandated after the building code was amended in 2002.  You should hire a wind mitigation specialist to do an inspection and to determine whether your roof has these wind mitigation straps and whether you qualify for any other premium discounts.  These inspections usually cost between $75.00 to $100.00 – a small investment considering the reduction in premiums you may be able to obtain.

As with many things, the devil is in the details, and this process will require that you take the time to read the onerous and often-times purposefully confusing provisions of your insurance policy – but you may be able to save several hundred dollars (every year!) in homeowner’s insurance premiums.  Better in your pocket than in your insurance company’s wallet!  As always, should you have any questions regarding your insurance policy, please feel free to give our office a call.

Yesterday, a large sinkhole opened up in the driveway of a Pasco County homeowner.  I attached a picture of the sinkhole – which I’m sure was quite a surprise to the homeowner when she began to back out of her garage yesterday morning!  The question now arises – would this issue be covered under your policy of homeowner’s insurance?  One would THINK so, but….welcome to the fantasy land that property insurance has become in Florida.

First, the most obvious analysis would be whether this issue would be covered under the “sinkhole loss” portion of the homeowner’s insurance policy.  Actually, thanks to the recent changes in the sinkhole statutes enacted in Florida, this loss would most likely not be covered as a “sinkhole loss”.  A sinkhole loss is defined under most policies of insurance as structural damage caused to the home by sinkhole activity.  Clearly, the attached picture reflects sinkhole activity, but does it reflect “structural damage” (as now defined in your policy) to the residence?  Pursuant to the recently enacted laws, in order for your home to have incurred “structural damage”, your house pretty much has to be reduced to a pile of sticks (the statute has a slightly more technical definition, but you get the point).  So, even though the subject house is clearly being affected by sinkhole activity, since the damage to the house does not arise to the new definition of “structural damage” = No Coverage!

But there is also a portion of your insurance policy which provides coverage for Catastrophic Ground Cover Collapse.  It is this coverage that the insurance company lobbyists touted as being available to cover situations where an “actual” sinkhole opened up and destroyed your house.  BUT – this Catastrophic Ground Cover Collapse coverage only applies if ALL of the following conditions are met: (1) An open hole you can clearly see with the naked eye (check!); (2) Damage which is sudden and not gradual (check!); and – here comes the kicker – the home must be condemned and ordered vacated by a government entity.  Well – since the subject home does not appear to by destroyed and therefore has not been condemned, all of the required elements have not been met and therefore = No Coverage!

Unfortunately, this homeowner is about to experience the Sinkhole Loophole mess which our Florida Legislature has created for us.  As always, when confronting a complex insurance claim issue, it is wise to contact a qualified insurance claim lawyer to help guide you through the process and to explain the rights you have under your insurance policy.