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

I am pleased that this blog has been nominated as one of the top 50 insurance blogs for 2009.  If you could, it would be helpful for you to comment on our nomination by clicking this link http://www.lexisnexis.com/Community/insurancelaw/blogs/topblogs/archive/2010/06/22/insurance-law-community-s-top-50-insurance-blogs-for-2009.aspx

The voting concludes on July 9, so time is of the essence.  If you think we should be the top blog in 2009, you should say so!  Thanks. 

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You spend a lot of money on homeowners insurance. What does it really cover? And, what do you do if your insurance company denies, low-balls, or simply delays your claim? You have more power than you think.

There are innumerable ways your home can be damaged. You may immediately think of fire and storm damage like a tornado or hurricane. However, there can be water damage from a broken washing machine or ice maker line, vandalism, sinkhole, hidden decay, hail damage, tear gas (yes, tear gas), sewage back-up, damage from blasting nearby or even from vibrations sent through the earth by heavy equipment being used in the vicinity.

I have handled many actual cases involving all these types of damage and many more. I even had a case where someone’s wooden floors were destroyed by someone dancing on them in high heels. It would be impossible to list all the various ways a home can be damaged. As a result, coverage for your home is typically provided as “all-risk” coverage, which means your home is covered for damage from all risks unless there is a specific exclusion.

The most typical homeowners claims in the Central Florida area are:

- Wind and hail damage to roofs.
- Sinkhole damage
- Broken water lines to ice makers, plumbing and washing machines
- Fire damage
- Vandalism and theft

In this article, I will discuss how to identify roof damage, and what to do if you find it.

You Paid for “Replacement” Cost

Your homeowners policy covers all storm damage to your roof. And, not only is your roof covered, it is covered for “replacement cost.” This means that the insurance company has promised you in your policy to replace your roof – regardless of age – if it is damaged by a storm. For example, suppose you have a 20 year old shingle roof that is working fine when it is damaged by a storm. Your policy provides for complete replacement of the roof with no depreciation. Some people feel bad about asking for the entire replacement cost of an older roof. Don’t. You paid for replacement cost in your premium, and the insurance company promised to provide you with replacement cost if you need a new roof.

What if I Suspect Wind or Hail Damage?

If you suspect your roof has been subjected to high winds or hail, you need to have it examined by a qualified and experienced roofer immediately. You can have severe damage to the tiles or shingles on your house even if no tiles or shingles are actually blown off the house. Many roofs look absolutely fine from the ground even though they have been totally compromised by storm damage.

Wind Damage

Shingles have a sealing strip between them. Many times, wind will lift the shingles and break the sealing strip during a storm. After the storm, the shingles simply lay back down in place – looking fine. If that sealing strip is compromised, then your roof likely needs to be replaced. This sealing strip is critically important to the integrity, functionality and longevity of your roof. If the sealing strip is compromised you roof will likely start leaking within a year or two of the wind event. That is why you need to have it examined immediately, before it starts leaking.

Likewise, tile roofs suffer from a similar plight. The tiles themselves on a tile roof system are simply decorative. The water barrier for a tile roof is the underlayment – the paper below the tiles. In a strong wind, the wind can “chatter” the tiles on your roof. This means the wind gets up under the tiles and repeatedly “jiggles” them up and down during a storm. After the storm, the tiles look fine. However, during the storm the chattering tiles have also “jiggled” the nails securing them to the underlayment causing the holes around the nails to open up wider than they should. This allows water to seep in around the nail holes throughout the roof. As with shingles roofer, many times, the water damage does not begin to show up for a year or two from the wind event.

Hail Damage

If your home is subjected to hail, you should also have your roof examined by a roofer. Some hail damage is easy to spot – like when it knocks holes in your pool screen, or dents the metal or lead boots on your roof. But, just as significant is hail damage that can only be seen close up. Often when hail hits a roof it causes what is known as “degranulation” of the shingles. Degranulation can only be seen on close inspection by someone who knows what they are looking for. When hail causes degranulation the integrity of the shingle is compromised, and the serviceable life of the shingle is significantly shortened – all of which warrant roof replacement under your homeowners insurance policy.

Choosing a Roofer

Before allowing a roofer to examine your roof for storm damage, you should quiz him about his experience in identifying storm damaged roofs. Ask him what he will be looking for and how he is going to document the damage. A qualified and experienced roofer will have a camera, video camera, and chalk readily available to document the damage. If you have doubts about the roofer’s ability to be able to identify and effectively communicate the damage to another, then don’t even let him on your roof. Find a roofer in whom you are confident.

If your roofer identifies wind or hail damage, then call your homeowners insurance company. Do not delay. There are certain time limits set forth in your policy that may prevent a recovery if you wait too long after discovering a problem. Ask your insurance company to send an adjuster out to inspect your home. Make sure the adjuster coordinates the visit with your roofer so that the roofer can show the adjuster the damage.

Under the Florida Building Code, if 25% of your roof needs to be replaced, the insurance company is required to replace the entire roof. Under Florida’s Insurance Statutes, even if less than 25% of the roof needs to be replaced, the insurance company must replace your entire roof if the repaired area won’t “match” the existing shingles. This is often the case when new shingles or tiles are interspersed into an older roof. Under either situation above, the insurance company must replace the entire roof with no deductions for depreciation.

What if the Insurance Company Denies, Delays or Low-Balls?

In my experience, most of the times the insurance company does the right thing. Sometimes they don’t. Sometimes, the insurance company will have an “independent” engineer or roofer come to inspect the roof. That “independent” engineer or roofer may say that the roof has no damage, or is simply failing because of age, wear and tear, or poor maintenance. Based on that report, the insurance company may deny the claim in its entirety or offer a nominal settlement. The insurance company’s “no,” is not the end of the inquiry…it is just the beginning.

If your insurance company says “no,” you should contact an attorney who handles roof claims immediately. In a situation such as this, I will always meet with you and review your case for free. Most importantly, in Florida, there is a statute that requires the insurance company to pay your fees and costs if you are successful against your insurance company. This statute is a powerful tool in leveling the playing field between the homeowner and the insurance industry.

Mark Nation is a civil trial lawyer who focuses his practice on helping policy holders in claims against their insurance companies. He has litigated thousands of cases involving homeowners, business owners, life, health and disability insurance against most of the world’s largest insurance companies.
 

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U.S. Property and casualty insurer have sufficient capitalization to withstand what is predicted to be a busy Atlantic hurricane season.  Ruud Bosman, Vice Chairman of the Board of Directors of FM Global, a major global insurer, told Reuters in an interview that

The global property insurance industry is well capitalized at the moment following strong underwriting results from a successful 2009 for insurers, and recovering financial markets.

Private forecaster WSI expects the 2010 Atlantic hurricane season to produce 20 named storms, 11 hurricanes and five intense hurricanes of category 3 or greater. 

A copy of the full article can be found here: http://www.businessinsurance.com/apps/pbcs.dll/article?AID=/20100628/NEWS01/100629920

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My client is a truck driver.  He was asked to deliver a load to North Carolina.  When he tried to attach the trailer to his own truck, the trailer would not properly attach.  The company which asked him to deliver the load then provided him with a truck to deliver the load.  Unfortunately, my client was injured when he was hit by another vehicle while in North Carolina. 

He carries full insurance coverage on his own truck, but that policy does not apply to accidents that occur out of state if he is in a vehicle he does not own.  However, the truck he was using to deliver the load was insured with a policy that provided coverage for personal injury protection (PIP), and medical payments coverage (Med Pay).  That insurance company denied all claims regarding the accident.  The insurer claimed there was no PIP because my client carried PIP on his own vehicle (PIP which does not apply to out of state accidents which occur in a non-owned vehicle).  The insurer claimed there was no Med Pay because the Med Pay coverage has an exclusion for any "employees" of the company for which he was working.  

I do not believe that either exclusion applies.  Under Florida Statute Section 627.736, a PIP policy can only have a few "authorized exclusions."  The exclusion being applied by the insurance company in this case is not one of those authorized exclusions.  I do not believe that the Med Pay exclusion applies because my client is not an "employee" of the delivery company.  He was an independent contractor.  

Because the insurance company has denied coverage, I filed a declaratory judgment action to have a court determine whether the exclusions actually apply.  As with all exclusion in insurance policies, the burden of proof will be on the insurance company to prove that the exclusions apply.  

As with most of my insurance cases, there are no fees or costs to my client.  If I win, the insurance company must pay my attorney's fees and costs, and if I lose, I'll work for free.   

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My client was sued for negligence in the administering of medication.  My client's professional liability policy has offered to defend under a reservation of rights.  At the same time, the insurer, Interstate Insurance, filed a declaratory judgment action against my client seeking to void the policy and deny coverage. 

On behalf of my client, I have rejected the defense under the reservation of rights, and have agreed to litigate the declaratory judgment action against Interstate. 

One of the main issues in the case is whether my client made a material misrepresentation in his application.  If so, then the insurer will be allowed to void the policy under Florida Statute Section 627.409.  I will be working to show that there was no material misrepresentation. 

As with most cases of this type, if I win, the insurance company must pay my fees and costs, and if I lose, I'll work for free.  In either event, there will be no out-of-pocket costs for my client. 

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My client owns an HVAC business and insures his business and two vehicles through Infinity Insurance.  His son had an accident while driving one of his business vehicles.  The son rarely drives that vehicle.  There was damage to the company vehicle, and claims have been presented against the HVAC business for damages.

Infinity denied the claim, on the basis that the policy excludes coverage for "regular operators" of company vehicles who are not disclosed to Infinity.  Prior to this crash, the son had driven the vehicle in question only a few times.  "Regular Operator" is not defined in the policy, however, numerous cases define "regular operator" as someone who repeatedly drives a vehicle which is generally available to his use.  This case does not fall into that definition. 
 

As a result, I filed a declaratory judgment action against Infinity Insurance seeking a declaration from the court that this accident is covered. 

As with most cases such as this, if I win, the insurance company will pay all my fees and costs, and if I lose, I'll work for free. 

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ERISA – Statute of Limitations

One of the most perplexing issues that arise in ERISA cases is the applicable statute of limitations. The ERISA statute itself does not provide a specific statute of limitations for claims for benefits. Instead, Courts look to the Plan document, the insurance policy, and/or state law in making such a determination. Recently, the Ninth Circuit Court of Appeals dealt with this complex issue. In that case, Nancy Wise, an employee of GTE, was suffering with multiple sclerosis. Despite her affliction, she was able to successfully perform her job. In fact, she left GTE in 1997 and began working for a competitor, Qwest. Thereafter, in 1999, GTE attempted to persuade Ms. Wise to return to GTE. Ms. Wise hesitated leaving her current employer giving her medical condition and her eligibility for full benefits with Qwest. In order to procure her return, GTE promised to “bridge back” to her original employment date her benefits eligibility. In other words, GTE promised that her medical conditions would not be subject to pre-existing condition limitations. Therefore, Ms. Wise returned to GTE.

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My client sustained damage to his roof from Tropical Storm Fay.  After the storm, he found many of his shingles in his yard.  He called a roofer who confirmed that he had sustained wind damage to his roof, and that his roof needed to be replaced.  He also called his homeowner's insurer who stated that all of his roof damage was due to the roofer tarping his roof.  (The roofer had to tarp his roof to keep water from pouring in when it rained. 

Today, I filed suit against my client's homeowners insurer for breach of contract.  As is generally the case, if I win the insurance company has to pay my fees and costs, and if I lose, I work for free. 

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In Warfel v. Universal Insurance Company of North America, ____ So.3d ____ (Fla. 2nd DCA May 12, 2010), the insured homeowner submitted a sinkhole claim to his homeowners insurer, Universal Insurance.  Universal had its own engineers examine the home and the soil under the home.  Based on a report from its engineers, Universal Insurance denied the claim.  

Florida Statue Section 627.7073(1)(c), states that

The respective findings, opinions, and recommendations of the professional engineer or professional geologist as to the cause of distress to the property and the findings, opinions, and recommendations of the professional engineer as to land and building stabilization and foundation repair shall be presumed correct.

At trial, Universal convinced the trial court to give a jury instruction that Universal's experts reports were presumed correct, and shifted the burden of proof to the insured to prove that their damage was due to sinkhole.  In a typical sinkhole case (as with any case where an insurer is attemption to limit or exclude coverage on an all-risk policy) the burden of proof is on the insurance company to prove a limitation or exclusion from coverage. 

The insured argued that the 627.7073 presumption was a "vanishing" or "bursting bubble" presumption merely requiring that he produce evidence contrary to the presumption, not shifting the burden of proof. 

The 2nd DCA held:

Absent a clear legislative directive, we must conclude that section 627.7073(1)(c) is a 'vanishing' or 'bursting bubble' presumption that affected only Mr. Warfel's burden of producing evidence.... 

[W]hen credible evidence comes into the case contradicting the basic fact or facts giving rise to the presumption, the presumption vanishes and the issue is determined on the evidence just as though no presumption has ever existed.  Conversely, if the basic facts are sufficiently proven so as to give rise to the presumption and not thereafter contradicted by credible evidence, the party in whose favor the presumption exists becomes entitled to a directed verdict.  Thus, in either event, the presumption is productive of these procedural consequences but is not a matter of the jury to consider.

The jury is not told of this presumption.  

The court then noted that because the insured presented credible evidence refuting the presumption that the trial court should have allowed the case to go to the jury with the burden on the insurer to prove no sinkhole damage.  The court reversed in favor of the insured. 

A copy of the 2nd DCA's Warfel decision can be downloaded by clicking here.

The Court did cerfity the question to the Florida Supreme Court as one of great public importance.

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