Florida Insurance Law Blog : Florida Insurance Lawyer & Attorney : Mark Nation Law Firm : Orlando, Longwood, Gainesville

My client caused a serious accident in which one of the occupants of the other vehicle died.  GEICO insured my client with bodily injury liability limits of $10,000 per person / $20,000 per accident.  The estate for the deceased party agreed that it would accept GEICO's $10,000 limits as full and final settlement of all claims if GEICO agreed to pay them.   

GEICO refused to pay, denied the claim and filed a declaratory judgment action seeking a declaration that there was no coverage under the policy because of an alleged misrepresentation in the presentation of the claim.  The estate for the deceased victim filed a wrongful death lawsuit against GEICO which GEICO agreed to defend under a reservation of rights. 

I rejected the defense under a reservation of rights, and then settled the case with the estate.  

Then, in the declaratory judgment action, I and GEICO filed cross motions for summary judgment on the coverage issue.  The trial court ruled in our favor, finding that GEICO had waived its coverage defenses by failing to comply with Florida's Claims Administration Statute.  I previously wrote on the summary judgment order at http://www.floridainsuranceblog.com/2010/03/articles/claims-administration-statute/geico-waives-coverage-defenses-by-failing-to-comply-with-the-claims-administration-statute/index.html

Yesterday, I filed suit against GEICO for breach of contract and bad faith failure to settle.  The damages being sought in this new lawsuit are the excess judgment damages that resulted from the settlement with the estate. 

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In Florida Farm Bureau Casualty Insurance v. Mathis, ____ So.3d ____ (Fla. 1st DCA April 20, 2010), a home was significantly damaged as a result of Hurricane Ivan in September 2004.  The homeowners had a $250,000 flood policy and a $295,000 homeowners policy on the home. 

The homeowners submitted claims to both the flood carrier and their homeowners carrier, Florida Family.  The flood carrier paid its limits of $250,000 and Florida Family refused to pay its limits. Suit was filed against Florida Family and a jury found that the home was a total loss as a result of wind - a covered cause of loss under the Florida Family policy.  Pursuant to Florida Statute Section 627.702 - Florida's Valued Policy Law (VPL) - the trial court then entered final summary judgment against Florida Family for the policy limits less prior payments. 

Florida Family argued that the trial court erred in not reducing the judgment by the $250,000 previously paid by the flood insurer.

The appellate court determined that there should be no such offset or reduction in the judgment.  According to the 1st DCA, the juries inquiry was limited "solely to the amount of wind damage legally caused to the Mathises' residence and whether that wind damage caused a total loss either constructively or because of the cost to repair the damage."  Pursuant to the VPL Florida Family was obligated to pay its entire policy limits if the home was a total loss as a result of a covered cause of loss.  Based on the juries determination the home was a total loss as a result of wind - a covered cause of loss - and therefore the homeowner was entitled to the policy limits from Florida Family. 

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In Mercury Insurance Company of Florida v. Markham, ____ So.3d ____ (Fla. 3rd DCA April 20, 2010), the application for insurance asked if the subject vehicle had been "rebuilt, salvaged, modified, altered, or specially built/customized?"  Markham - the applicant - stated "no" to this question.   

Prior to the application Markham had put large tires and a lift-kit on his truck.  After an accident, Mercury Insurance denied the claim, alleging that Markham has made a material misrepresentation on the application for insurance.  According to Mercury Insurance, the large tires and lift-kit constituted a "modification" of the vehicle, and if it had known about the modification it would not have issued the policy. 

The trial court found that the term "modified" as used in the application was ambiguous, and granted summary judgment in favor of the insured.  Mercury appealed and the 1st DCA held that even though the term "modify" could be ambiguous in the abstract, under the facts of this case: 

... there is no objectively reasonable interpretation of 'modify' that would justify Roberts' negative answer to this question.  Where, as here, neither the application form, nor the policy incorporated by reference therein, defines 'modify,' we interpret the word in accordance with its plain and ordinary meaning as reflected in the dictionary.

However, the dissent points out that the policy itself provides coverage (with a sublimit of $1,000) for after-market/modified parts.  The dissent made the point that this policy language granting coverage for "modified" parts created an ambiguity. 

The insured also argued that the insurance agent knew of the changes to his vehicle and that the insurance company was charged with that knowledge because the agent was actually the agent of the insurer.  For a discussion of "When is an Insurance Agent and 'Agent' for the Insured vs. the Insurer," see my blog at http://www.floridainsuranceblog.com/articles/agent-broker/

The 1st DCA remanded the agency issue back to the trial court for a trial on disputed issues of fact. 

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I, as well as travel insurance industry experts, expect that there will be a significant number of travel insurance claims filed as a result of the recent (and continuing) volcanic eruptions in Iceland.  According to the industry, approximately 30 percent of travelers carry travel insurance. 

Travel insurance generally covers medical expenses incurred while traveling as well as increased costs as a result of flight cancellations/delays.  As an attorney, I have handled travel insurance claims for travelers, and suspect that there will be many improper denials flowing from these claims.  I will not be surprised if many insurers try to deny the claims based on an "adverse weather" condition exclusion.  However, volcanic eruptions are not "adverse weather."  Even with "adverse weather" most policies cover the event if it causes the airline to cease operations for a specific time period - usually 24 hours.   

As with most of my claims, if I take a travel insurance case and am successful, the insurer must pay my fees and costs, and if I lose, I'll work for free. 

As an insurance lawyer who represents only policyholders, I want you to know that when an insurance company says "no," that is not the end of the inquiry, it is only the beginning!

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The Atlantic basin could be in for an above-average hurricane season this year with four major hurricanes forecast to develop in the region, according to forecasters at Colorado State University.

The forecast team of William Gray, who has led the forecast team for 27 years, and Phil Klotzbach, lead forecaster on the university hurricane forecast team, released their predictions for the 2010 hurricane season, running June 1 to Nov. 30.

The team predicts 15 named storms will form in the Atlantic. Eight are expected to become hurricanes, and four will develop into major hurricanes — Category 3, 4, or 5 on the Saffir-Simpson scale, with sustained winds of 111 mph or more.

Long-term averages are 9.6 named storms, 5.9 hurricanes and 2.3 major hurricanes per year, the team said.

We expect current moderate El Nino conditions to transition to neutral conditions by this year’s hurricane season," Klotzbach said, in a statement. "The dissipating El Nino, along with the expected anomalously warm Atlantic ocean sea surface temperatures, will lead to favorable dynamic and thermodynamic conditions for hurricane formation and intensification.

Reprinted from National Underwriter, P & C

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