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.

During the 2012 Florida Legislative Session, insurance company lobbyists pushed for the passage of HB 119, which greatly overhauled the Personal Injury Protection portion of your automobile insurance policy.  As part of their sales pitch, proponents of this bill stated that the passage of this Bill would GREATLY REDUCE the cost of automobile insurance in the State of Florida and cut down on “fraud”.

As we learned years ago, “cutting down on fraud” is just another way of saying “severely reducing a policyholder’s chance of ever getting paid on his claim.”  But what about the claimed reduction in the cost of auto insurance premiums?  Surely insurance companies have lowered their automobile insurance rates in exchange for HB 119’s severe limitation of the rights of policy holders…..right?

Well, the Office of Insurance Regulation announced this week that the cost of Personal Injury Protection coverage is expected to drop an average of 13.2 percent in Florida.  Great you say!!!  But then the fine print – since this “no fault”/ Personal Injury Protection coverage accounts for such a small percentage of your overall automobile coverage, the overall decrease in your overall policy would be about 1.2 percent!!  Not a very good reduction in exchange for the severe limitations this new law places on the rights of policy holders.

Once again, it appears Florida’s elected officials have fallen for the insurance companies’ old yarn of “Allow us to restrict coverage today, and we promise to reduce premiums…..tomorrow….maybe.”

 Sadly, although we knew that Citizens Property Insurance Corporation is overrun with corruption, recent news reflects that even we did not know how bad the situation has gotten.  Although the formation of Citizens Property Insurance may have initially been a good idea, it has since morphed into merely a “cash grab” for cronies of Governor Rick Scott and others who know how to work the “system”.

Charles Elmore of the Palm Beach Post recently wrote an excellent article regarding Citizens’ hiring of a West Palm Beach Lawyer and agreeing to pay him $6.5 million dollars – despite the fact that he has no property insurance experience, has by far the highest billable rate, and came in third in all objective rankings.  We have provided the article, in its entirety, below and recommend you read to the end in order to fully appreciate how “insiders” laugh as they bilk the policyholders of Florida:

West Palm lawyer’s fees soar above Citizens rivals

Critics say ties to state officials, costs don’t pass ‘smell test’

By Charles Elmore – Palm Beach Post Staff Writer 

No competitor came close to the $525 per hour fees of a West Palm Beach lawyer whose firm won a contract for more than $6 million from state-run insurer Citizens in December, bidding records examined by The Palm Beach Post show.

The next highest hourly fee, among nine firms bidding from as far away as California: $360.

Citizens executives say the money is well spent if Scott Link and colleagues help the company settle or fight 13,000 claims lawsuits more efficiently without necessarily setting foot in a courtroom, by directing strategy for other lawyers the company already pays. In an interview with Citizens, Link said his role is like “the mover of the chess pieces.”

Not everyone thinks Citizens has check-mated wasteful spending with this deal.

“It doesn’t pass the smell test,” said Jay Neal, president and CEO of the Florida Association for Insurance Reform, a Fort Lauderdale-based advocacy group that includes industry and consumer representatives. “You could bring this in-house and save a lot of money. One of the most important things this company has to do is retain public trust.”

Ackerman, Link & Sartory cited no particular expertise in property insurance before applying in 2012 for the first of two contracts that together stand to pay the firm more than $8 million. In its applications, the firm saw no need to disclose ties to former Citizens President Tom Grady, an ally of Gov. Rick Scott, and Florida Chief Financial Officer Jeff Atwater as potential conflicts.

Records show it finished third of nine bidders in initial scoring by a Citizens evaluation panel for the first contract based on written applications, barely making the cut for interviews. Then it soared to the top after an interview lasting less than 30 minutes.

The compensation stands out at a company criticized for weak oversight on spending by, among others, Gov. Scott’s own inspector general.

Scott Link’s projected billing of more than $1 million a year under the contract is more than triple the $300,000 pay of Citizens president and CEO Barry Gilway, who oversees the entire company. Citizens is Florida’s largest property insurer serving more than 1 million customers.

A draft contract, not yet signed, provides for additional billing at $262.50 per hour for Link’s travel time. That is on top of any travel reimbursements such as hotels or meals, a Citizens spokesman said.

The firm’s job is to serve as “coordinating counsel,” overseeing strategy on lawsuits involving claims from sinkholes to water damage, cases in which Citizens already pays other attorneys.

No ethical concerns

In its application, Ackerman, Link & Sartory said it had no ethics conflicts to disclose concerning Citizens. Not mentioned: former Citizens president Tom Grady had a business relationship with the West Palm Beach law firm, which paid him as recently as 2010, according to Grady’s state financial disclosures.

Grady, a friend and Naples neighbor of Gov. Scott, was interim Citizens president in 2012 when solicitation began for the first of two contracts Link’s firm ultimately won. Those contracts were for a high-paying role that had not existed before at Citizens, and they were handled as “expedited” bids in a speeded-up process.

“This is an emergency contract there was no need for,” said state Rep. Frank Artiles, R-Miami, a public adjuster who has been an outspoken critic of the deal. “This was an inside job.”

Citizens executives dispute that, saying the arrangement was properly bid and stands to benefit the company by helping it handle cases better. That can mean settling some cases quickly, fighting more effectively on others or working with front-line employees to avoid future problems, they say.

Benefit to Citizens argued

Information presented in support of the firm’s work coordinating sinkhole claims said the average amount paid per lawsuit dropped to about $120,000 during the firm’s tenure, compared with more than $140,000 in 2011. Citizens General Counsel Dan Sumner said if a third of the 10,000 pending non-sinkhole cases were resolved on terms the company considers favorable, it could save $97 million in litigation costs over the life of the contract.

Artiles scoffed at such claims at a board meeting last month, saying the company was still losing about half of the very small percentage of sinkhole cases that go to trial and estimating it could save $50 million in litigation costs simply by paying the full claims policyholders submit.

Gilway said plaintiff attorneys would love that, but the company has an obligation to other policyholders not to pay for unwarranted claims. The Citizens president spoke out forcefully for Link in company meetings, saying in November, “We need the talents Scott Link is bringing to the table.”

Another partner in the firm, Wendy Link, is projected to bill $50,000 a year under the deal. She serves on the Florida Atlantic University search committee considering candidates for FAU president including Atwater, who interviewed for the university job Friday but was not named one of three finalists. Atwater appoints Citizens board members and, along with Scott and other top state officials, oversees the company’s management.

Wendy Link listed Grady and Atwater as her first two references for an appointment to the Florida Board of Governors in 2011, records provided by the governor’s office show.

Link told The Post last week she disclosed potential conflicts including the reference and the Citizens contract to FAU and state officials, who “encouraged me to continue my service to the Search Committee.”

As for other questions, she said, “Our firm has always had a commitment to our clients not to discuss any issues regarding our clients with the media unless the client specifically requests that we do so.”

Meeting with Atwater

Two days before Citizens approved the contract Dec. 13, Atwater organized a meeting in his office that included Scott Link, records show. The participants included a homeowner advocate and the only discussion was “to make sure Floridians are getting the claims assistance they deserve,” an Atwater spokesman said.

Despite protests from Rep. Artiles, Citizens board member John Wortman, appointed by Scott, made a motion to approve the contract last month, and it passed 4-1 with two abstaining.

Any business relationship with the West Palm Beach firm had ended by the time Grady assumed his role at Citizens, so it wasn’t an issue, Citizens officials maintained. Officials said they were assured Grady received no residual compensation from the firm, and both the 2102 contract and the one now pending forbid paying fees to others firms or lawyers — including, specifically, an “of counsel” attorney.

Grady is listed in records as having served “of counsel” to the Ackerman firm. That term typically means he received compensation for services without being a partner or full-time employee.

Total payments of $6.5 million over four years to the law firm have been approved, though a final contract has not been signed, a company spokesman said.

If the justification for the contract is to save money over the long haul, is the firm’s pay tied to any specific dollar figures to be saved, or number of cases to be resolved? A draft contract provided by Citizens mentions no particular figures but says, in part, “Anticipated cost efficiencies including demonstrated savings in fees and defense costs will be measured and related to the implementation of specific strategies in order to determine the effectiveness and efficiency of the specific strategies and/or the overall claims litigation strategy in achieving the state objectives.”

‘Hope and a prayer’

Former state insurance consumer advocate Sean Shaw, a Tampa attorney who sues insurers, said, “There’s no evidence this is going to save any money. It’s a hope and a prayer.”

A spokesman for Gov. Scott said before the Dec. 13 vote, “This will be entirely up to the Citizens board and we have every expectation that they will do the right thing to protect Florida taxpayers.”

In an explanation of its ethics policy on its website, Citizens explicitly forbids senior managers from, for example, working for or entering a contractual agreement with a private insurer that receives a bonus to take Citizens customers within two years.

Neither Citizens nor the law firm saw anything in Grady’s situation they regarded as a particular ethics problem, though the company website says determining whether a course of action is ethical involves questions including “How will it look to others?” and “How will it affect Citizens’ status as a trusted decision-making entity?”

Link’s firm claimed no expertise, or even any significant experience, in property insurance or sinkholes when it applied in 2012 to win a newly created $1.5 million contract to become coordinating counsel for sinkhole claims. Instead, it emphasized experience with complex civil litigation involving brokerage and financial firms, auto insurers and phone companies.

The firm was not the initial top choice of a Citizens evaluation committee including Sumner, assistant general counsel Elaina Paskalakis and vice president of claims Lance Malcolm, records show. Based on written applications, the committee scored it No. 3.

No. 1 was Gray Robinson of Tallahassee, followed by Colodny, Fass, Talenfeld, Karlinsky, Abate of Fort Lauderdale. Those firms declined to comment for this story.

“There were others ranked higher for less money per hour?” Artiles said. “Are you kidding?”

But the Ackerman firm rocketed to the top in the interview round. In an interview lasting less than 30 minutes, Sumner told Link he had done a “good job” in the written application distinguishing between the role of coordinating counsel and that of a regular defense lawyer working on a particular case, an audiotape shows. Sumner asked him to elaborate and add “color.”

Sumner asked about fees, saying “you get what you pay for,” but the firm’s fees were high compared to other bidders. Scott Link said he would hesitate to lower fees, which he considered already “discounted” compared to other firms that charge more than $600 an hour doing similar work. That would not be fair to other clients, he said.

Malcolm asked about how the law firm could help the company’s front-line workers process sales and claims. Paskalakis had no questions.

In March, Link’s firm said it reached the limit of its previous $1.5 million contract and Citizens granted it another $100,000 per month.

Citizens emphasized experience as coordinating counsel for the broader contract awarded in late 2013, and by that time the West Palm Beach firm was bidding as an incumbent expanding its prior role.

In his 2013 interview for the bigger contract, Link was again asked if he would consider renegotiating his fees.

“I would certainly increase them if you insisted on it, but I would do it reluctantly,” he said.

People laughed. The moment of levity over, Link then repeated his position the fees were already discounted and lowering them would be unfair to other clients.

 

 

By now you have probably seen the attached video {Click Here to Watch} of the “enthusiastic” (ok, really drunk) Alabama fan who was trying to deliver some frontier justice to an Oklahoma fan in the adjoining section.  Clearly, her activity stands out as a shining example of how fans should act on any given Saturday in the Southeastern Conference and surely there is a co-ed somewhere in Tuscaloosa who is proud to call this fine lady his mom.

But I digress.  The real reason for his post is to discuss whether or not this fine lady would be covered by her homeowner’s insurance policy for any of her extra-curricular activities.  Although most people think of their homeowners insurance as only providing coverage for either property damage or injuries which occur on the insured property (slip and falls, dog bites, etc.), the standard homeowner’s insurance policy also provides coverage for bodily injury or property damage caused by the insured while away from home.  In short, the usual policy provides coverage for: “bodily injury” or “property damage” caused by an “occurrence”… to a person off the “insured location”, if the “bodily injury”… is caused by the activities of an “insured”.  Now, since all those quoted terms are specifically defined elsewhere in the policy, you can rest assured that such coverage is subject to several exclusions and that obtaining coverage for your follies may not be as easy as it seems.  But as least it is a start.

Now, with regard to the specific example posed by our southern belle, there is a specific exclusion to this coverage for, shall we call them, intentional acts.  The exclusion reads, in pertinent part:  Personal Liability Coverage….do(es) not apply to ‘bodily injury” or “property damage”  which is expected or intended by one or more “insureds”.   Oops!  Even though some might say she is a little “cray cray”, her acts look pretty intentional.  Perhaps the better advice would be that, if you plan to get that drunk, maybe you should stay at home and watch the game from the safety of your own home.

Pursuant to Florida law, everyone who operates a motor vehicle in Florida is required to carry automobile insurance coverage.  As part of the process of obtaining or renewing your driver’s license, you are usually required to show “proof of insurance” or to otherwise prove that you have adequate insurance coverage.  What most people don’t understand is exactly how important it is to carry this insurance.

In Florida, there are numerous types of automobile insurance coverages available.  In short, Property Damage Coverage provides coverage for damage you cause to another person’s automobile.  Comprehensive Coverage provides coverage for any damage to your own vehicle.  Personal Injury Protection coverge provides coverage (usually up to a limit of $10,000) for the payment of your own medical bills and/or lost wages in case of any accident.  Bodily Injury Coverage provides coverage for any injuries you may cause to others through the operation of your vehicle.  Uninsured/Under-Insured motorist coverage provides coverage for your injuries if the person who caused the accident does not have enough (or any) insurance coverage to compensate you for your injuries.  Loss of Use/Rental Coverage provides coverage for either a rental car or compensation for the loss of the ability to use your vehicle while it is getting repaired.

Although there are many coverages available, the only coverages that are Mandatory under Florida law are Personal Injury Protection and Property Damage coverages.  With this minimialistic coverage, the only things that would be covered in an accident would be your own medical bills (up to $10,000) and the cost to repair the not-at-fault driver’s vehicle.  What would NOT be covered is any sort of personal injury damages or the repair of the at-fault vehicle. 

Unfortunately, history shows that in Florida many/most drivers are opting to have only minimial insurance coverage.  If someone chooses to only carry the minimal coverage mandated by law, he is putting others at risk for any damage he may cause through the operation of his motor vehicle.  Furthermore, a recent article revealed that 25% of drivers carry ABSOLUTELY NO insurance!  Apparently the game is to obtain coverage for the sole purpose of obtaining/renewing your driver’s license, and then immediately cancel the coverage thereafter. 

Clearly, it is imperative that you obtain sufficient automobile insurance coverage to protect you and your family.  Without Uninsured/Under-Insured Motorist Coverage, you would be without any recourse if you were injured by an uninsured driver.  Conversely, if you do not carry Bodily Injury Coverage,  you could be financially devastated by having to pay for injuries you may cause someone else.

By now, most Floridians have heard about – or even experienced – the incredible spike in flood insurance premiums that are coming their way due to the Biggert-Waters Flood Insurance Reform Act.  In short, the Biggert-Waters act is a new federal law which attempts to address a $24 billion dollar deficit in the coffers of the National Flood Insurance Program by raising flood insurance rates across the board.

Unfortunately, the slipshod manner by which this law was enacted is going to have a catastrophic affect on the economy of Florida and the financial future of many Floridians.  The Tampa Bay Times wrote just the other day about a Seminole couple who was looking down the barrel at a 900 percent increase in their flood insurance premium.  Contrary to the initial thoughts of many, Florida is not known for incurring large amounts of flood losses.  In fact, many studies have shown that Floridians have only received about $1 in claim payouts for every $4 that Floridians have paid into the federal flood insurance program.  Despite not having a large amount of historical claims, Florida does stand out as having the most overall flood policies issued – over 2 million policies and counting.  Because of the sheer number of these policies, Florida must bear the brunt of the steep rise in premiums.

But – even if the Feds have thrown Florida under the bus, help may be on the way from our Florida legislature.   State Senator Jeff Brandes of St. Petersburg has said that he is close to filing a bill that would encourage private insurance companies to offer flood insurance in Florida.  Normally, flood insurance is not provided under your normal homeowner’s insurance policy and must be purchased separately through the federal flood insurance program.  This new proposed legislation would encourage private insurance companies to offer an alternative to the federal flood coverage by making changes in the residential “surplus lines” insurance market.  In general, surplus lines insurance carriers are not as regulated as “normal” insurance carriers and are not subject to many of Florida’s laws and requirements (including rate regulation).  Lloyds of London, for instance, is a surplus lines carrier, as opposed to State Farm Florida Insurance Company, which is a “non-surplus lines” insurance company and therefore subject to the laws and regulations of Florida.

It has become clear that any relief for Florida property owners will have to come from reforms at the State level as opposed to waiting for the Federal government to take action.  Considering the large available market for the issuance of private flood insurance policies and the relatively low occurrence of flood claims, Florida may well turn out to be quite a profitable endeavor for a private insurance carrier willing to take on the risk.

 

By now, you’ve most likely seen the stories about the large sinkhole that opened in Dunedin, Florida this week.  The Dupre family was awakened early Wednesday morning to what sounded like someone noisily attempting to break into their house.  Upon inspection, the homeowners were shocked to see that their entire back porch was sliding into a rapidly expanding sinkhole.  The family, along with several neighboring households, were all immediately evacuated by the police and soon, both this home and the adjacent house were officially condemned by the city.  As of this posting, the sinkhole has expanded to over 90 feet wide and almost 60 feet deep.

Those are the facts you’ve heard thus far from the media.  What you probably haven’t heard is the long series of events which led up to this disaster.  Approximately two years ago, Michel Dupre noticed cracking to his home and contacted his insurance company – Citizens Property Insurance Corporation (Yes – that’s right – good ole’ Citizens again!).  After testing the property and realizing that sinkhole activity was causing damage to the Dupre residence, Citizens tried to force the family to accept minimalistic repairs to their home.  The repair method mandated by Citizens only consisted of injecting grout into the soil beneath the home and made no allowance for any actual stabilization of the home.  Insiders in the field will tell you that “repairing” a sinkhole home by grouting alone will fail to fix the problem over fifty percent of the time and will almost always cause additional damage to the home.

Take a look at the attached Standard Penetration Testing (SPT) boring logs from Citizens’ investigation of the Dupre home.  When testing a property for sinkhole activity, engineers check the density of the soil by striking the drill bit with a 140 pound hammer and then noting how many blows it takes to drive the drill bit down 12 inches.  (For instance, on SPT boring #1 you can see that at 15 feet below the surface it took 3 blows of the hammer to drive the drill bit down 12 inches).  If you look closely at SPT boring log #3, you will note that there is a “WR” condition from approximately 25 feet below surface to 70 feet below surface.  WR stands for Weight of Rod.  In order for the engineer to record a WR condition, the drill bit must actually FALL UNDER ITS OWN WEIGHT without even being hit by the hammer.  As you can see, beneath the Dupre residence, the drill bit fell OVER 45 FEET – which indicates that Citizens knew there was at least 45 feet of “nothingness” below the Dupre house!  In spite of this finding, Citizens’ engineer only categorized the damage to the Dupre home as “slight” and noted that there was very little possibility of any further damage.  (Bet he wishes he could take that back!)

The homeowners (understandably) had severe reservations about the minimalistic grouting program being pushed upon them by Citizens and therefore the homeowners hired engineers and other professionals to help encourage Citizens to properly repair the home.  In spite of the clear evidence that Citizens’ mandated repair would be insufficient to repair the home and to protect the Dupres, Citizens refused to listen to the Dupre’s experts for over two years.  Now you may have heard in the media that Citizens, “offered to pay the family $90,000 to repair the home”, but that is absolutely false.  In fact, Citizens has only offered to pay the Dupres $1,500 (not a misprint – One Thousand Five Hundred Dollars) despite the all of the evidence (even from its own engineers) of the true cost to repair the home.

As I’ve referenced in previous posts, Citizens has spent over 100 million dollars fighting insurance claims and absolutely refuses to make any payment whatsoever on sinkhole claims.  After two years of fighting for coverage, the Dupre family had no option but to let Citizens have its way with their home.  After two days of letting Citizens stubbornly pump “grout” beneath their home….you guessed it!  (And yes, that is a swimming pool you see below being squeezed down into the hole.)

Clearly, the Dupres are now going to “have their way” with Citizens – hopefully a jury of homeowners will help decide Citizens’ fate.  But the question then arises – what about the neighbors?  At least two homes have now been condemned and several others have incurred grevious damage as the direct result of Citizens’ actions -what recourse do these neighbors have?  If they have sinkhole coverage, then these homeowners could look to their own policies for loss coverage, but why should these other carriers have to bear the burden of Citizens’ arrogance?  What if the neighbors do not have sinkhole coverage?  Unless the damage to their home mandates condemnation (and thereby activating coverage under the Catastrophic Ground Cover Collapse portion of their policy), these homeowners would have no recourse and would have to make any repairs themselves.  Thanks Citizens!

Hopefully Mr. Scott and the rest of our elected officials in Tallahassee will take this situation to heart and will enact some real reforms at Citizens.  If not, the voters of Florida should hold them accountable on election day.  Because, who knows – you could be Citizens’ next victim.

Even though the online insurance marketplace under the Affordable Care Act, otherwise known as ObamaCare, went into effect on October 1, 2013, it seems very few people have actually signed up for coverage under the new law.  A recent blog in the Miami Herald stated that the paper had searched “high and low” for individuals who had completed the online application for the subsidized health coverage through the online marketplace, but that they had been unable to locate anyone who had successfully completed the process and obtained coverage.  The Miami Herald even went as far as equating ObamaCare enrollees in the same category as “legrechauns and unicorns”.  Apparently the goverment created website – Healthcare.gov – has suffered numerous technical issues which have confounded prospective enrollees and caused many to just give up on the process.

Others have set forth a different reason for the technical difficulties.  A recent Forbes article  noted that a growing consensus of technology experts – inside and outside the goverment – are of the opinion that the system is crashing because of the fear of letting people know the underlying cost of ObamaCare’s insurance plans.  Apparently, the website was initially designed to allow prospective customers to browse the available pricing options prior to registering, but that option has since been “delayed”.  When the Health and Human Services Department was asked why this (seemingly important) option was “delayed”, the HHS spokesperson stated that they wanted to ensure users were aware of their eligibility for subsidies before they started seeing the prices of the policies.   

Although this is contrary to procedure of other health insurance websites (eHealthInsurance.com, for one), the goverment’s apparent concern is that they want to see what subsidies you may qualify for prior to showing you the true cost of the insurance.  By forcing you to register and enter all of your personal and financial information first, the goverment can see if you qualify for any of their (heavy) subsidies.  The website can then tout these subsidies to you instead of just hitting you with the full cost of the insurance.  For example, instead of showing up front that your new monthly premium would be $400, they can show you that your premium “could” only be $30 – after the application of the heavy subsidies.  The only problem is that you have to be at or near the poverty level in order to recieve these subsidies and, otherwise, you don’t qualify for a subsidy.  Guess you are lucky enough to pay full freight! 

ObamaCare wasn’t designed to help healthy people with average incomes get health insurance.  The Act was designed to force healthy people to pay more for coverage  in order to subsidize insurance for people with costly medical conditions and/or those with incomes near the poverty line.  Fair enough – if that is what the voters wanted, then that is what the voters should receive.  BUT – the goverment needs to be upfront with the American people as to the true cost of health insurance premiums under the Affordable Care Act.  The very valid concern of the current administration is that, should the average citizen discover that the price of his new health insurance policy is going to skyrocket under the new law – President Obama’s incessantly repeated promise that “nothing would change” under the Affordable Care Act and that there would be savings of at least a $2,500 in their yearly insurance cost would come back to haunt him.

 

Citizens Property Insurance Corporation has been earning a reputation for systematically denying almost every insurance claim asserted by its policyholders.  Instead of honoring valid claims, Citizens spends millions of dollars each month “defending” claims – the same type of claims that other insurance companies would routinely pay without question.  Although those of us in the industry have been decrying Citizens’ business practices for years, last week the Tampa Bay Times finally posted an article pointing out Citizens’ track record of fighting valid insurance coverage claims and needlessly lining the pockets of law firms to “defend” against these claims.

Now, on the chance you might believe that Citizens’ policy of denying claims and raising meritless defenses is just urban legend, I offer the following examples of Citizens’ behavior from our recent experience:

Example A – Our client presented Citizens with a sinkhole damage claim, which Citizens summarily denied.  We provided Citizens with testing evidence which undeniably reflected sinkhole activity on our client’s property and also provided reports from neighbors on all three adjacent sides (left, right and behind) which had been confirmed for sinkhole activity.  Citizens’ response?  They offered $500.  They also promised that, once the policy holder ultimately won at trial (which they conceded would happen), Citizens would appeal the outcome (regardless of merit) in order to further drag out the process.

Example B – Citizens’ engineers actually confirmed sinkhole activity on the property of another one of our clients, but still – three years later – Citizens refuses to pay for the appropriate repair of the property.  Just yesterday, a large sinkhole actually opened up directly next to their house.  Our clients’ story even made the evening news last night.  Even so, Citizens refuses to provide coverage for the appropriate repair of the home.

Sadly, there is no one guarding the hen house at Citizens.  Outside vendors – mostly insurance defense law firms with the most to gain from Citizens’ stance on fighting claims – have convinced Citizens that the best way to handle claims is to fight tooth and nail on every issue, even when there is absolutely no chance of winning.  Obviously, the harder you fight payment on a given claim, the more money the insurance defense law firm can make billing Citizens for delaying/defending/denying the claim.

The other side of this coin is that, once the policy holder ultimately prevails on his claim, the insurance company is also responsible for the payment of the policyholder’s attorney’s fees and costs.  Accordingly, Citizens ultimate “reward” for denying valid claims is that the insurance company has to pay (1) the full amount of the repair costs, (2) pre-judgment interest on this amount, (3) the policyholder’s attorney’s fees and costs, and (4) Citizens’ own attorney’s fees and costs.  It doesn’t take a financial genius to see that it makes more sense to resolve a valid claim early in the process – and thereby avoid the payment of items (2) through (4) above – rather than needlessly waste money defending a claim which the insurance company will ultimately have to pay anyway.  But until there is a change of heart – or management – at Citizens Property Insurance, it may be best to retain qualified representation early in the insurance claim process.

Water DamageAlthough hurricanes, earthquakes, and sinkholes get the majority of the attention in the news, the vast majority of insurance claims deal with water damage to property.  These claims are generally broken into two categories – flood damage and water leak/seapage damage.  Flood claims revolve around damage caused by “rising water”, as opposed to other types of water losses which could come from leaky pipes, water blown through windows as the result of a storm, or overflow from appliances.

For an immediate consultation with regarding your rights, call (800) 451-6786 today.

With regard to the avoidance of damage caused by a flood – well, that’s between you and Mother Nature.  With regard to protecting your property from other types of water damage, you may find the following tips helpful:

1.  Know the location of water valves.  Make sure everyone knows where the main valve is located and how to turn the water off.

2.  Monitor utility bills.  An unusually high water bill could signal a water leak.

3.  Turn off water before traveling.  Turn the water off at the main valve or directly on major appliances. Consider leaving a house key and contact information with a neighbor or trusted friend and ask the person to check the inside and outside of your home periodically while you are away

4.  Inspect your home regularly for signs and sources of moisture.   After a storm or rain shower, check for water stains or odors inside your house.  Create a maintenance schedule to check the following sources of water leaks on a regular basis:

Hot water heaters – Hot water heaters may rust or develop cracks over time. Check your water heater for rust and deterioration every year. Check the drain pan for water and ensure that the drain line for the overflow pan is not clogged. Drain and clean the water heater as recommended by the manufacturer.

Garbage disposal – Routinely check for cracks or other sources of leaks.

A/C drain lines – Damage can occur when the line that drains condensation from the evaporator coils becomes clogged and water overflows from the drip pan. Periodically check the drip pan for water and consider an annual service call to reduce the buildup of algae and mold in the drain line.

Indoor and outdoor pipes and faucets – Routinely check indoor pipes under cabinets and sinks for leaks, rust, and any signs of deterioration. Minimize the potential for water damage from frozen and broken outdoor pipes by insulating supply lines (in attics, crawlspaces, and exterior walls), protecting exposed outdoor faucets, sealing gaps in exterior walls, and maintaining adequate heat in your home.

Appliance hoses – Broken hoses are among the most common causes of water damage. Regularly inspect hoses and hose fittings on washing machines, icemakers, and dishwashers for kinks, cracks, bulges, or deterioration. Replace standard rubber washing machine hoses every two to five years or more often if they are showing signs of wear. Consider using steel-reinforced hoses for longer life.

Showers, tubs, sinks, toilets, windows, and doors – Water leaks around bathtubs, showers, sinks, and toilets can cause damage because the leak is often out of sight. To prevent leaks, make sure you have a watertight seal of caulk around tubs, sinks, toilets, tubs, shower stalls, windows, and doors. Cracks or mold on caulk or tile grout may indicate that you do not have a watertight seal. Remove all caulk or grout, clean and dry the surface thoroughly, and apply fresh caulk. Do not apply new caulk or grout on top of the old materials.

Attics and ceilings – Routinely check for wet insulation and water stains.

Wallpaper – Routinely check for bubbling, peeling, and stains.

Roofs – Keep roofs free of debris that can damage roofing and allow water to seep in. Trim tree branches to prevent them from rubbing and damaging the roof.

Repair missing or damaged shingles – Properly seal any cracks around chimneys, skylights, and vents. Check metal flashing for holes, cracks, or other damage. Replace flashing or use silicone caulk to seal any openings.

Rain gutters and downspouts – Direct rainwater away from your home. Keep gutters clear and make sure downspouts are long enough to carry water away from your foundation. Gutters that are filled with leaves and other debris allow water to back up on the roof, which can result in water damage to eaves and roofing material.

Sump pumps – Sump pumps are the first line of defense in preventing water from seeping into basements. Periodically check the sump and remove any debris that could clog the pump. Consider installing a battery-powered backup to protect your basement during power outages.

Landscape – Yards should slope away from the house to prevent puddling near the foundation or under pier and beam houses. Do not allow sprinklers or sprinkler heads to soak the exterior of your house.

Trust me – with regard to water damage, an ounce of prevention is worth a pound of cure.  A few years ago, we had a water leak at our house that resulted in our being out of the home for over 77 nights!  One tiny valve behind a toilet in my daughter’s bathroom broke free while we were on vacation and the resultant leak destroyed the hardwood flooring throughout our entire house and even seeped up the walls for approximately three feet!  Even with the best preparations, accidents may be unavoidable.  Therefore, it is vitally important that you verify that you have sufficient coverage on your homeowner’s insurance policy to protect you from water damage.  If you have any questions regarding your insurance policy or what coverages it may provide, you should contact an insurance claim lawyer to examine your policy and explain what benefits your policy may provide for this type of loss.