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

This week, the Florida Department of Insurance Regulation released its annual report on the insurance industry in Florida.  Contained in that report is a breakdown of the profitability of property insurers from doing business in the State of Florida.  While we know that insurers continually bemoan their inability to make a profit in Florida, and the word "crisis" is thrown about with regularity, the numbers indicate a stark contrast.   Business for property insurers in the State of Florida is booming and robust.  

The OIR Report sets forth the profit by line of business as detailed below:

Fire Insurance:  Premiums $702,044,756; Net Profit After Dividends $448,803,211

Homeowners:  Premiums $4,971,640,913; Net Profit After Dividends $1,666,262,684

Commercial Property: Premiums $639,877,984; Net Profit After Dividends $49,479,326

(As an aside, the report undercuts another "crisis" as it reveals that medical malpractice insurers in Florida received premiums $331,698,637, and earned Net Profit After Dividends $116,547,579.) 

What a wonderful business model!  All you have to do is demean lawyers, and cry "crisis" enough times, while asking legislators to "tweak" laws and "clarify" statutes.  Then, with the stroke of a pen your costs are driven down by eliminating consumers' ability to recover for claims; while at the same time you can increase your gross revenues by allowing unnecessary rate increases.  All at the expense of Florida consumers. 

This is precisely what we have with the current Senate Bill 408 which is now before the Florida Senate.  SB 408 is the result of a make believe "crisis."  SB 408 is nothing more than an insurance industry wish list.  It skated through the Senate Banking and Insurance Committee without so much as a single comma being dislodged from the bedrock into which it was firmly embedded.  SB 408 has absolutely nothing in it to benefit Florida consumers, and will simply allow insurers to increase their already bulging bottom lines. 

If this bill is enacted, 1000's of Florida homeowners will soon come to realize that when their life's most valuable possession is damaged and destroyed they will have absolutely no way to force insurers to pay for the damage.  Unlike a hurricane or a sinkhole, this will be a man made tragedy that will wreak havoc on the lives of unsuspecting Florida homeowners for years to come - while insurers' profits will continue to rise. 

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Allstate Floridian, which is now Castle Key Insurance Company, insures my client's luxury home.  After noticing cracks in the walls and flooring, my client asked her insurance company to perform sinkhole testing.  The insurer confirmed the existence, and proposed a remediation plan.  The remediation plan did not include underpinning.  Given the significant sinkhole activity present at this sight, an appropriate sinkhole remediation plan should include underpinning.  Additionally, the amount estimated by the insurance company for damage to the house is not sufficient. 

In order to prove the appropriate remediation plan, and the amount of structure damages, I have retained a geologist, a technical engineer, and forensic general contractor.  

Today, I filed a lawsuit against Castle Key in order to force them to pay for the underpinning, as well as the appropriate amount for the damage to the home.  In many of these cases, if I win, I can force the insurance company to pay my fees and costs. 

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On Monday, I took the deposition of a "neutral" evaluator in one of my sinkhole cases.  In this particular case, my client submitted a possible sinkhole claim to her homeowner's insurance company.  The homeowner's insurer hired engineers who did testing and stated that there was no sinkhole activity.  (A review of the engineer's testing actually confirms the existence of a sinkhole, even though their conclusions state that there is not, but that is another blog). 

When she received the insurer's engineering report, my client naively requested a "neutral evaluation."  The "neutral" evaluator reviewed the insurance company's engineering report and gave the opinion that there was no sinkhole.

I have never seen a "neutral" evaluator disagree with an insurance company's report.  Never.  At his deposition on Monday, this "neutral" evaluator testified that he has done many such evaluations and he has NEVER disagreed with the insurance company's conclusions. 

To further compound this problem, the Florida Statues say that the neutral evaluator's conclusions are "presumed correct." 

This particular engineer also confirmed that 1) he solicits sinkhole business from insurance companies; and 2) doing these evaluations was a good way to get his name in front of insurance companies to let them know he's available to do sinkhole investigations for them.  This is typical, as most of the neutral evaluators I've seen also do substantial work on behalf of the insurance industry. 

Bottom line: Homeowners, DO NOT ASK FOR A NEUTRAL EVALUATION.  Not only do the evaluators typically do substantial work for the insurance companies, but they also routinely find in favor of those insurers, and our Florida Statutes say that their conclusions are presumed correct. 

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My client suffers from a couple of different debilitating medical conditions.  He purchased an AFLAC policy at work, which was supposed to pay him when he was off work as a result of illness or injury.  The maximum benefit was for 6 months, at which point AFLAC would not pay anymore for that particular medical problem until he had returned to work for a certain time.  My client was off work for 6 months, and then went back to work.  Shortly thereafter, before the "return to work period" had expired, he had to go back off work for another medical problem. 

AFLAC refused to pay, claiming that this was the same medical problem that they had previously paid for and that my client had not been back at work long enough to qualify for additional benefits for that medical problem.  The medical evidence shows that although the new medical condition was to the same area of the body, it was a different medical condition.  Accordingly, my client would be entitled to recover up to another 6 months of disability insurance benefits. 

On Monday, I filed a lawsuit against AFLAC for breach of contract.  As with most of my insurance cases, if I win this lawsuit, the insurance company will be required to pay all of my fees and costs, and if I lose, I will work for free. 

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My client's homeowners insurer, Nationwide, confirmed the presence of sinkhole damage at his home.  However, the remediation plan proposed by the insurance company's engineers only calls for underground grouting.  The insurance company also estimated the damage to their insured's home (which appeared at first blush to be quite light). 

I retained a geologist, engineer, and forensic general contractor to determine the proper remediation plan and the proper amount to repair the damage to the home.  These experts determined that the remediation plan, and damage estimate are both inadequate.  According to the geologist and geotechnical engineer, the home needs underpinning in order to properly remediate the sinkhole.  The forensic general contractor believes the damages to the home are much more than what was estimated by the insurance company. 

Yesterday, I filed suit against Nationwide in order to have a jury determine the proper remediation plan, and the amount of damage to the home. 

A lot of the times, in this type of case, if I win, the insurance company is required to pay my fees and costs, and if I lose, I'll work for free. 

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Our client bought car insurance from Nationwide.  A few years later, Nationwide transferred the insurance to Allied insurance, a subsidiary of Nationwide.  Later, our client was injured in an automobile accident caused by an underinsured motorist.  Allied has stated that there is only $10,000 in UM available under the Allied policy.  Our client has $100,000 in bodily injury liability limits.  The law provides that an insurer can offer UM limits at a level lower than the bodily injury limits, if the insurer obtains a written request for the lower UM limits. 

Allied states that our client's husband signed a request for lower UM limits when he bought the Nationwide policy.  However, Florida Statute Section 627.727 says that the "insurer" must obtain a written request for the lower limits.  Nationwide is not the "insurer" for this accident, and Allied does not possess a written request that it provide lower UM limits.  Allied steadfastly relies on the Nationwide UM selection form.

I filed suit today seeking a judicial declaration that Allied is required to provide our client with $100,000 in uninsured motorists limits.  If I am successful, Allied will have to pay our fees and costs, and if I lose, I'll work for free. 

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In Segal v. State Farm Florida Insurance Company, ____ So.3d ____ (Fla. 4th DCA 2010), the insured  was sued for "knowingly and/or negligently" making defamatory statements.  The insured sent the lawsuit to State Farm asking State Farm to defend her in the lawsuit and ultimately indemnify her if she was found liable.  State Farm provided the insured with homeowner's insurance as well as an umbrella policy. 

State Farm took the position that there was no coverage under either policy, and brought a declaratory judgment action seeking a judicial declaration that there was no duty to defend or indemnify.  The trial court agreed, and insured appealed. 

The 4th DCA agreed that there was no coverage under the homeowner's policy.  However, the Court determined that there was a duty to defend under the umbrella policy.  Specifically, the Court stated:

At the very least, State Farm has a duty to defend Hale in the present case and must defend her against all claims.  Hale's umbrella policy limits coverage for personal liability to a 'loss,' which is an accident resulting in personal injury or property damage.  The policy specifically includes defamation in the definition of personal injury.  At the same time, the policy does not provide insurance for personal injury when the insured acts with specific intent to cause harm or injury.  Wohl's complaint alleges that the defamation was done 'knowingly and/or negligently,' and the factual allegations do not clearly exclude the incident from coverage. 

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I have no idea why this keeps coming up.  I have handled literally 100's of dec actions in County and Circuit Court.  Every once in a while, the insurance company's lawyer will insist that dec actions can only be heard in Circuit Court.  In United Automobile Insurance Company v. Kendall South Medical Center, ____ So.3d ____ (Fla. 3rd DCA 2011), the District Court once again confirmed that Florida Statute Section 86.011 means what it says when it says "Jurisdiction of trial court -- The circuit and county courts have jurisdiction within their respective jurisdictional amounts to declare rights, status, and other equitable or legal relations whether or not further relief is or could be claimed...." 

In explaining this, the District Court stated:

[U]nlike other matters in equity, there is no concurrent jurisdiction for section 86.011 claims for declaratory relief.  Prior to 1990, circuit courts had exclusive jurisdiction over claims for declaratory relief.  In 1990, the Legislature amended the statute to grant jurisdiction in declaratory matters to both the circuit and county courts but only 'within their respective jurisdictional amounts.'  Therefore, the Miami-Dade Circuit Court has jurisdiction of a declaratory action only if the amount in controversy exceeds $15,000 and only the count court has jurisdiction of any amount in controversy less than $15,000

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