The Good News provides a monthly column with important content having to do with topics from the legal community. This month Bill Davell discusses homeowner’s insurance with Tripp Scott director Ed Curtis.
The business model for insurers involves two main principles: first, minimize risk, and second, maximize premiums while minimizing payout.
Homeowners here feel the effects of both principles. The $30-billion combined costs of Hurricanes Irma and Michael and use of legal loopholes by unscrupulous actors to turn the tables and gouge insurers have led to waves of premium hikes, non-renewal notices and often, an aggressive posture by insurers toward claims.
So it is all the more important to make sure you get your money’s worth. Below we answer your questions on how to make sure that’s the case.
Bill Davell: What do I need to consider in buying homeowners insurance?
Ed Curtis: That starts with knowing whom you’re dealing with. Work with a trusted agent, and research the insurer and its reputation for paying claims and treating clients well.
Also know what’s in your contract – what is and isn’t covered. For example, most Florida insurance does not cover flooding, and some doesn’t cover wind damage and sinkholes. There can be limits on mold damage and certain kinds of personal property (like guns and jewelry).
You’ll need to work with your agent to make sure you have the right coverage for your dwelling and the right amount. Also, consider deductibles and whether you want replacement cost versus actual cash value, for the right balance of coverage and cost savings. You must ensure sufficient coverage for bodily injury to you or third parties affected by an incident involving your property. And make sure you do an inventory of personal property.
Yes, it’s hard work. The good news: the Department of Financial Services (DFS) offers a helpful toolkit at www.myfloridacfo.com/division/consumers/understandingcoverage/guides/documents/homeownerstoolkit.pdf.
BD: What do I do when I need to make a claim?
EC: While you have four years to make a claim under Florida law, it’s best to contact your insurer immediately after damage or an incident occurs to preserve evidence. Most insurers will guide you through the process, and often much is automated online. A claims adjuster will be assigned and will often come to inspect damage. Carefully follow instructions to make sure your claim is properly filed and you avoid errors or omissions.
BD: My insurer is disputing coverage for damage to my home. What should I do?
EC: First, understand your rights. Florida statutes include a Homeowners Bill of Rights. (www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0627/Sections/0627.7142.html)
One such right: a full explanation of the basis for the denial. You may be able to appeal in writing through your claims adjuster, especially if it’s based on an insurer mistake (which happens).
If you still feel you’re being treated unfairly, you can reach out to DFS’s consumer helpline 1-877-MY-FL-CFO, or file a complaint online.
Short of legal action, the Department also offers mediation, which can be initiated by the insured or a third party affected by the claim denial. Nevertheless, we recommend involving an attorney, as mediation often involves complex and confusing issues.
Alternatively, or if you are not satisfied with the results of mediation, consider legal action.
BD: What are grounds for legal action?
EC: Violations of insurance company duties with which we commonly deal:
- Underpayment: Sometimes homeowners settle for an amount that turns out not to adequately cover replacement or repairs. Such settlements can be reopened up to three years later, and you may be entitled to attorney fees to ensure you are made whole.
- Delay: Insurance companies must notify you of acceptance or denial of your claim within 90 days, and then pay out within 20 days of an acceptance or accrue interest at a 12% annual rate.
- Bad faith: Insurers must act in good faith to settle worthy claims and in general act fairly and honestly toward you, with “due regard” to your interest. That means undertaking prompt investigations of losses, timely evaluation and fulfillment of your legal liability or their liability to you, fully communicating with you the progress of your claim and the reason for any denial, and acting reasonably to protect your assets, including fulfilling the duty to defend you in litigation and to make reasonable settlements that would avoid greater liability on your part.
Pursuing a bad faith claim requires filing with the state an advance notice to allow the insurer to fulfill its obligations. Doing so ends the case, but ignoring this filing creates the presumption that the insurer has indeed acted in bad faith.
The lawyers in Tripp Scott’s insurance practice group use recognized skills as trial and appellate counsel on behalf of policyholders in all of these areas and more, dealing with everything from the most complex coverage disputes to more routine matters.
For more information visit at trippscott.com or call 954-525-7500.
William “Bill” C. Davell, Esq. is a director with Tripp Scott, PA.
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