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

My client owns a business which operates out of a wooden building which was built in 1956.  Recently, upon arriving at the business, my client noticed that ceiling was sagging.  Upon further inspection, it was determined that one of the wood trusses had cracked.  The one cracked truss, has now led to another cracked truss.  Because of the problem, the building is uninhabitable.

My client reported the claim to his property insurer.  The property insurer summarily rejected the claim, alleging that the cracked truss was due to old age, and poor construction. 

Today, I filed a lawsuit against the property insurer under the collapse coverage.  The collapse coverage contained in most policies is quite broad and allows recovery if there is a sudden falling down or caving in or a building or any part of a building.  The cracking of the truss was sudden, and certainly constitutes a "part of a building." 

As with most of my insurance cases, if I win, the insurance company will be responsible for my fees and costs, and if I lose, I'll work for free. 

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My client bought liability insurance for his business.  When he presented a claim, his insurance company denied the claim and has voided the policy for what it says were "material misrepresentations" on the application for insurance. 

Specifically, the insurer says that my client misrepresented that he renovated hotel rooms and that he subbed out much of the work.  According to the insurance company, my client only advised them that he performed "demolition" work.  If what the insurance company said is true, then it probably properly denied the claim and voided the policy.  However, they are wrong.

Like almost all applications for business liability coverage, the application which my client filled out contains a place for the insurance agent to insert a business "classification code."  The classification code is a number which corresponds with a certain type of business operations.  The business classification code on my client's application related to demolition and subcontracting the renovation of buildings - precisely what he does for a living.  Therefore, the very application which the insurance company is relying on, proves that the insurer is wrong. 

The insurance company filed a declaratory judgment action against my client seeking a judicial determination that it can void the policy for this "material misrepresentation."  I am defending the dec action claiming that there was no misrepresentation at all. 

As with most of my insurance cases, if I win, the insurance company will have to pay my fees and costs; and if I lose, I'll work for free.

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My client, a home owners association (HOA), was sued by one of the home owners in its community.  The HOA submitted the claim to its errors and omissions insurance carrier.  The E & O Carrier denied the claim and refused to defend.  I filed a declaratory judgment action which resulted in the insurance company agreeing to defend the claim. 

Unfortunately, the case went to trial and the HOA lost.  As a result, the HOA owed a sizable judgment, and the other side's attorneys fees and costs.  The HOA's attorneys also incurred significant litigation costs at trial.  To add insult to injury the E & O insurance carrier has refused to pay the judgment, or the other side's attorneys fees and costs.  The carrier has also refused to pay the outstanding litigation costs incurred by the HOA at trial. 

This week, I filed another lawsuit against the same E & O carrier seeking payment of the above expenses. 

As will almost all of my insurance cases, I take no fees and costs from my client.  If I win, the insurance company must pay my fees and costs, and if I lose, I'll work for free. 

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My client is a roofing contractor who was sued by a homeowner.  During the tear-off of the old roof, it began storming and the interior of the home was drenched.  My client submitted the claim to his insurance company, however, the insurance company denied the claim.  The insurance company is citing an endorsement to the policy.  The endorsement excludes any water damage to a home unless the roofer documents that he checked the weather report on the day the tear-off began. 

Contrary to the insurance company's assertions, I believe we will be able to show that the roofer complied with this endorsement.  Also, even if he did not check the weather report, I will be able to show that had he done so, the weather report for that day did not indicate rain. 

Because the insurance company has denied the claim, we filed a declaratory judgment action seeking a judicial determination that there is coverage for this claim.   Obviously, a victory for my client will be a great help to the homeowner also. 

As with most of my insurance cases, I have agreed that my only fees and costs will come from the insurance company if we win.  And, if I lose, I'll work for free.  In either event, there will be no fees and costs at all from my client. 

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My client is a landscape architect who was hired to design a "false bridge."  Unfortunately, the retaining wall supporting the false bridge failed.  The housing developer which owns the bridge sued the landscape architect alleging negligence. 

My client submitted the claim to his liability carrier.  The insurance carrier sent a letter stating that it was denying the claim because landscape architects are not authorized to design bridges. 

A "false bridge" is not an actual bridge.  It is simply a road over land with ponds or a water retention on either side.  Although the false bridge looks like a bridge, it is not. 

After demonstrating the differences between a false bridge and a bridge, and showing the insurance company the applicable statutes and regulations which govern the activities of landscape architects, the insurer agreed to withdraw its coverage defense and provide a full defense and indemnification of the claim. 

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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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Is termite damage covered under your insurance policy?  It depends on who you ask.  Many insurance companies and insurance agents routinely tell the insured that termite damage is not covered by their homeowners insurance policy, or their business property insurance policy.  In fact, a simple internet search reveals many sites that say it is not covered.  You should not base you decision on what your insurance company or agent tells you; and you certainly shouldn't base your decision on your own internet research. 

However, contrary to popular opinion, termite damage is covered under the terms of some homeowners policies and business property policies.  It takes an experienced lawyer who handles these types of claims to carefully read your insurance policy and determine if damage is covered. 

Let me be clear, you should not make the decision on whether your termite damage is covered or excluded even if there is an explicit exclusion in your insurance policy which seems to unequivocally exclude damage by termites.  For example, an insurance policy may specifically exclude termite damage, but that same policy provides coverage for "collapse."  In that case, termite damage that results in collapse may be covered.  (Also, you should not try to determine what is or is not "collapse."  What is or is not "collapse" is about as complicated as whether termite damage is or is not covered.)

Bottom line, if you have termite damage to your home, you should have a lawyer who is experienced in insurance claims and termite claims evaluate your case.  Not all lawyers are familiar with the interplay between termite claims and insurance policies.  You wouldn't ask a foot doctor to evaluate your brain injury; so don't ask a lawyer unfamiliar with insurance and termite claims to evaluate your case. 

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We recently filed suit on behalf of our client who owns a barbecue restaurant.  After a fire in the kitchen, our client submitted the claim for fire damage to her business insurer.  The insurance company denied the claim, asserting that she had the wrong kind of fire extinguishing system in place at the restaurant.  The insurance company states that under the policy she was required to have one particular type of extinguishing system.  However, the plain reading of the policy endorsement at issue allows for multiple types of fire extinguishing systems, and she had one of those systems in place at the time.  The first thing I will be asking for in discovery is the underwriting file to see if the insurer ever inspected the property while underwriting the policy.  If so, this will certainly buttress our argument that the extinguishment system in place was contemplated under the policy. 

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In Heather Appel v. Lexington Insurance Company, ____ So.3d ____ (Fla. 5th DCA February 26, 2010, the 5th DCA was asked to determine whether a professional liability endorsement in a commercial general liability policy provided coverage to directors of a company who were sued by investors for breach of fiduciary duty.  The allegations stemmed from the directors alleged failure to detect a Ponzi scheme perpetrated by the company's president. 

When the directors were sued, they tendered the defense of the lawsuit to Lexington.  Lexington disclaimed coverage, and the directors filed a declaratory judgment action seeking a declaration that the CGL policy provided coverage for the claims against the directors.  The trial court found no coverage. 

The CGL policy contained a professional liability endorsement.  However, the endorsement defined rather narrowly the "professional services" for which there was coverage.  The endorsement defined "professional services" as:

professional services rendered in the business of selling, installing, maintaining, monitoring or providing connection services for:

1.  Alarm / Security Systems, 2.  Phone Networks, 3.  Video / Video Dial-a-tone, 4.  Wireless Communications, 5.  Cable, 6.  Internet, 7.  Web and Fax services

The 5th DCA found no coverage.  According to the Court, 

the acts and omissions of Green and Martz alleged in the [investors' lawsuit] did not constitute 'professional services rendered for others by the insured' under the policies issued by Lexington.

Procedurally, the case was complicated by the fact that Lexington did not answer the declaratory judgment action, and a default was entered.  However, the 5th DCA held that

The default operates as an admission by Lexington of the well-pled allegations of the complaint, but not as an admission of facts not properly pled or conclusions of law....

Ultimately, the sufficiency of the coverage complaint hinges on whether the allegations that Lexington had a duty to defend Green and Martz in the SOS lawsuit, which is Incorporated in the coverage complaint, and the plain language of the insurance policies, which are attached to the coverage complaint.  Where a document on which the pleader relies in the complaint directly conflicts with the allegations of the complaint, the variance is fatal and the complaint is subject to dismissal for failure to state a cause of action.

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On Tuesday my client was granted summary judgment against Nationwide on the issue of coverage.  I originally blogged on this case on February 16, 2009, when we filed suit. 

Our client maintains and services sewage lift stations. He purchased a "Contractor's Liability Insurance Policy" from Nationwide Insurance in order to protect himself against claims arising out of his business operations.  Nationwide clearly knew that its insured maintained and serviced sewage lift stations, as that information was set forth in the application and the premiums were based on the proposed insured’s SIC designation as a lift station maintenance company.  Nationwide wrote the policy and charged a rather high premium for the liability insurance.  According to Nationwide's underwriting documents, the liability premium was calculated based on the fact that my client was involved in the business of "septic tank installation, repair and maintenance."  Nationwide offers this type of "Contractor's Liability" policy to 32 different kinds of contractors, and the premium charged for sewage related work is only exceeded by the premium charged to those involved involved in excavation work - an ultra hazardous activity. 

During the policy periods, a bank which utilized a lift station serviced by our client was flooded with a backup of raw sewage. As hard as it is to believe, the bank took offense, and filed suit against our client for negligently maintaining the sewage lift station. The insured presented the claim to Nationwide Insurance to defend and indemnify, if necessary.

Nationwide denied the claim, claiming that the policy did not cover any losses dealing with sewage.  Nationwide tried to exclude coverage under its “pollution” exclusion.  The pollution exclusion does not specifically state that sewage is pollution.    

I filed suit for breach of contract. Section 627.419(1) states that the application for insurance is part of the policy and can expand, extend and modify the coverage provided under the policy.  In this case, the application identified the insured as being in the business of sewage, and Nationwide charged and collected a premium based on the fact that my client dealt with sewage. 

On Tuesday, the Seminole County Circuit Court heard cross motions for summary judgment and ruled that the Policy does indeed cover this loss.  The Court held that the policy as modified by the application provided the insured with liability coverage for losses dealing with sewage. 

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In an earlier blog concerning this case, I noted we represented two large car dealerships who had been sued in major class actions.  Universal Underwriters Insurance Company insured both dealerships.  The dealers asked Universal Underwriters to defend and indemnify them for the claims in the class actions. Universal agreed to defend the claims, but advised that even though the class actions covered multiple years, the dealers were only entitled to indemnity coverage under one of policy years. Each dealer carried $500,000 in indemnity coverage per year for most of the years involved in the class actions. Therefore, it was Universal's position that the dealers were only entitled to $500,000 in coverage, while the dealers believed that they were entitled to up to the full policy limits per year for each of the years involved in the class actions.

One of my clients also sued Universal for breach of contract for failing to settle the class action when Universal could have settled the claim for slightly more than the $500,000 which it believed was available to pay for damages, but significantly less than what the court ultimately determined were the actual policy limits.  (I did not sue for "bad faith," but filed a simple breach of contract claim for breaching the contract by failing to settle when the insurer could have done so below the actual policy limits.)  Universal defended by claiming that we were actually suing for "bad faith," and could not do so given its reasonable belief concerning its available policy limits. 

Last week the 11th Circuit gave us a complete victory on the two issues involved in the case.  First, the11th Circuit agreed that the car dealers were entitled to the available policy limits for each of the years involved in the class actions.  Second, the court held that the breach of contract action for failing to settle could proceed regardless of Universal's "good faith or bad faith."  The court noted that whether Universal breached the contract can be determined "objectively" without regard to Universal's intent or belief.  A copy of the decision can be downloaded by clicking here

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My client, a water extraction/remediation firm, was retained by a condominium association to assist with a large water loss. The water extraction firm agreed to perform the work, and the association assigned to it any claims against the condo association’s insurer in the event the insurer failed to pay – which is exactly what happened. (Many of my clients who are vendors take this type of assignment so that they can pursue the insurance claim and the insured does not have to go to the trouble).

This is another case where the insurer has not technically "denied" the claim.  They have simply done nothing after having the claim for months.  Suit was filed this week against the condo associations insurer for breach of contract.

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This week I was retained by a general contractor who subcontracted out roofing work on a large construction project. The Sub negligently installed the roof, which resulted in significant water and mold damage to the interior of the structures. The Sub agreed to replace the roof.  However, the general contractor has paid to repair and replace all of the interior damage.

The general contractor submitted a claim for the interior damage to its Commercial General Liability Carrier.  The insurance company has essentially ignored the claim – neither paying or denying the claim after having it for months.

In exasperation, the general contractor retained me this week to pursue the claim. Suit has been filed seeking reimbursement under the liability potion of the CGL policy for the damage resulting from the leaking roof.
 

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Our client maintains and services sewage lift stations. He purchased liability insurance from Nationwide Insurance. Nationwide clearly knew that its insured maintained and serviced sewage lift stations, as that information was set forth in the application and the premiums were based on the proposed insured’s SIC designation as a lift station maintenance company.

Some time later, a bank which utilized a lift station serviced by our client was flooded with a backup of raw sewage. As hard as it is to believe, the bank took offense, and filed suit against our client for negligently maintaining the sewage lift station. The insured presented the claim to Nationwide Insurance to defend and indemnify, if necessary.

Nationwide, contrary to its many promises, on air and in print, sent a letter emphatically explaining to its insured that it was in fact NOT “on your side.” The claim was denied by Nationwide citing its “pollution” exclusion.

I filed suit for breach of contract. It is my position that the pollution exclusion does not apply for 3 reasons: 1) raw sewage does not fit the definition of “pollution” as set forth in the policy; 2) even if raw sewage was “pollution,” the exclusion requires that the insured be in the business of handling, or abating pollution, which our client was not; and 3) the insurance policy (which by statute incorporates the application for insurance) was intended by the parties to insure claims arising from sewage spills, and Nationwide is prohibited from excluding the very thing for which the insurance was sought.

I suspect that this case will be decided on summary judgment in the very near future.
 

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