Universal Property and Casualty agrees to pay $1.2M Fine, End “Post-Claim Underwriting”

universal insurance ends post-claim underwriting cohen battisti attorneys at law

The days of Universal Property and Casualty Insurance Company’s now well-known “post-claim underwriting” practices, which led to many homeowner’s having their property damage claims denied or have their policies canceled, and without the required notice of cancellation, are over.  The property insurance giant has agreed to implement corrective action, change its policies and procedures and pay the $1.26 million fine ordered by Florida’s Office of Insurance Regulation.

This insurance company’s unjust denial of claims and cancellation of policies due to improper handling of claims resulted in numerous consumer complaints that were eventually brought to the attention of Florida’s Insurance Consumer Advocate, who at the time was Robin Westcott.  The Insurance Consumer Advocate worked with the Office of Insurance Regulation, the agency responsible for overseeing that insurance companies are following proper procedures, to investigate the complaints that consumers had against Universal.  The investigation revealed that Universal had been using their customers’ credit history information as a basis to issue denials on property damage claims, well after the time when policy underwriting was completed.

Essentially, Universal had been issuing policies and collecting insurance premiums after only conducting a partial underwriting of insurance policies, and then waiting until a homeowner filed an insurance claim to finish the process.  In many instances, Universal alleged that the reason a claim was denied or a policy cancelled is because during the claims handling process, was based on a misrepresentation made by a homeowner on an insurance application.  This would include, for example, if homeowners did not disclose a prior lien or judgment on the insurance application.  Such information is publicly accessible in county records, and easily obtainable by an insurance company during the original policy underwriting process.

In May 2013, the Office of Insurance Regulation issued an Order with its findings that Universal had unnecessarily caused delays in paying claims to their customers, as well as denied claims and cancelled policies following the improper “post-claim underwriting” practices and in violation of Florida Statutes. Insurers are required to return unearned insurance premiums to the policyholder within fifteen days of the policy cancellation, and are required to give the policyholder proper and timely notice of the cancellation

Universal was ordered to pay $1.26 million in administrative fines as a result of the investigation conducted.  Initially Universal challenged the Prior Order, but in October 2013, it signed a Consent Order, and agreed to implement changes to its claims handling and underwriting practices, as well as pay the fine.  Universal will review 262 claims it previously denied on the basis of application misrepresentations.  After Citizens, Universal is the second-largest property insurer in Florida, with more than 542,000 policyholders.

See the Consent Order in full.

Advertisements

Hurricane Sandy – One Year Later

Hurricane season 2013 continues to roll on.  However, today’s date marks a tragic event in hurricane history.  Today, October 29, 2013, is the one-year anniversary of Hurricane Sandy: the super storm the rocked the North East.

Not only were billions of dollars worth of damage and some 366,000 structures damaged during the storm, but an estimated 160 people in the United States lost their lives.  Many more lost their homes.  Today, there are still thousands of people who are still trying to get back to what they called home.

If you are in the restoration industry, you know it may be extremely difficult to get insurance companies to pay out during tragic events such as this.  In the state of Florida, law firms such as Cohen Battisti, Attorneys at Law know this well, and are here to make sure that insurance companies pay you (the restoration company) for the work you’ve done.

The Huffington Post has a great article featuring interactive before (destruction) and after (reconstruction) pictures with a slider to go back and forth between the images.  This is a screen shot of one of them.

Image

Courtesy of the Huffington Post

Reports say that Hurricane Sandy was the deadliest US cyclone outside of the southern states since Hurricane Agnes of 1972.  The National Hurricane Center said the Sandy ranks of the second-costliest tropical cyclone on record, after Hurricane Katrina of 2005.

Hurricanes cannot be prevented, but you can prepare for them.  During hurricane season, always make sure that you have, and follow a hurricane checklist of some sort.  If you are a restoration company, make sure you get paid for your work by using an Assignment of Benefits contract.  Experienced law firms such as Cohen Battisti, Attorneys at Law are able to help you with this.

The North East took a hard hit, but they are getting back on their feet.  The battle still isn’t over though.

Citizens’ Litigation Costs Tailspin in Sea of Claim Denials and Dropped Policies

Citizens’ 1.2 million policyholders should be outraged.  A recent report revealed that Citizens collects $2.2 billion in annual premiums, but monthly, pays an average $2 million in plaintiffs’ attorneys’ fees for lawsuits filed due to Citizens’ failure to pay insurance claims.

Over the past three years, Citizens paid more than $16 million to plaintiffs’ lawyers who prevailed in disputes over claim denials, coverage, and payment issues.  It is estimated Citizens spends more than $30 million per year defending these lawsuits, although Citizens reported that data was not yet available.

Citizens’ litigation costs have skyrocketed as the number of homeowner claims have increased, particularly in Miami-Dade, Broward and Palm Beach counties, along with the insurer’s claim denials and the delays in claims handling and payment affecting policyholders.

But not many policyholders will remain with Citizens for long if Citizens continues to have its way.  Florida’s insurer of last resort received approval from the Office of Insurance Regulation to shed 400,000 policies by November and another 200,000 policies in December.  The policies are being transferred to several other private Florida insurance companies, and policyholders will have the option to stay with Citizens or switch to the private insurer.

“I think this practice is outrageous,” states Harvey V. Cohen, managing partner of Cohen Battisti, Attorneys at Law.

President and CEO of Citizens, Barry Gilway, calls the reduction in policies an “unprecedented success.”  Notably, Citizens also just received approval from the Office of Insurance Regulation to increase premiums next year by an average 6.3 percent.  This is lower than Citizens’ original request for a 7.9 percent increase.

With millions of dollars going toward plaintiffs lawyers who successfully bring challenges against Citizens for breach of contract for claim denials and delays, and the ongoing costs of defending lawsuits, Floridians and their government representatives should keep a close eye on Citizens and expect more grand-scheme changes in both insurance policies and Citizens’ internal policies in the coming months.

Contact Cohen Battisti, Attorneys at Law, if Citizens or any insurance company has denied, delayed or defriended your claim.

Fairness in Florida Homeowner’s Insurance Claims Handling

The Homeowners’ Policy & Claims Bill of Rights Working Group is tackling issues such as setting parameters for examinations under oath, and policy provisions for mediation, appraisal, and an insurer’s right to repair beginning with two workshops held in Tallahassee on July 17 and July 18, 2013.

Working group participants include consumer organization advocates and representatives for some of Florida’s major insurance companies. Florida Insurance Consumer Advocate Robin Smith Westcott, appointed by Florida Chief Financial Officer Jeff Atwater, is chairing the working group. During the workshops, Westcott said she was concerned with an insurance company checking homeowners’ applications and credit reports after a claim was made, only to deny the claim and void the policy.

Denials, significant reductions in payment of valid claims and delays in claims handling, which hurt vulnerable homeowners, are some of the insurance industry abuses the working group hopes to remedy. The goal is to provide better consumer education and changes to Florida law through a comprehensive, collaborative report that will offer recommendations for improvements either administratively or through new legislation, along with a review of the Policyholders’ Bill of Rights.

The working group aims to have a bill package presented to lawmakers for pre-session committee meetings set to take place in September and October.

Watch the full-length 7/17/13 workshop and 7/18/13 workshop on The Florida Channel.

Article Written by Cohen Battisti, Attorneys at Law.

Rescuing Hostage Checks

Oftentimes, one sees situations where claims checks or settlement checks due to clients are held hostage by either a homeowner and/or a bank to avoid paying one’s client under an assignment of benefits.  If a claims check or settlement check is improperly encumbered or negotiated by a homeowner or bank, Florida’s civil theft law can help sort the situation out.

Florida’s statutes place strict liability upon a bank for a check’s conversion. Fla. Stat. § 673.1101(4) is very clear where a negotiable instrument “is payable to two or more persons not alternatively, it is payable to all of them and may be negotiated, discharged, or enforced only by all of them” (emphasis added).  Moreover, a negotiable instrument is converted pursuant to Fla. Stat. § 673.4201(1), “if it is taken by transfer, other than a negotiation, from a person not entitled to enforce the instrument or a bank makes or obtains payment with respect to a person not entitled to enforce the instrument or receive payment.” (emphasis added).

Consequently, such a check conversion is punishable under Florida’s civil theft statute, Fla. Stat. § 772.11 (1) (2001), entitled “Civil Remedy For Theft,” which provides: 

Any person who proves by clear and convincing evidence that he or she has been injured in any fashion by reason of any violation of the provisions of ss. 812.012-812.037 has a cause of action for threefold the actual damages sustained and, in any such action, is entitled to minimum damages in the amount of $200, and reasonable attorney’s fees and court costs in the trial and appellate courts.

Therefore, a lawsuit under Florida’s civil theft statute would award one’s client treble damages, attorney’s fees and legal costs.  Note that the law requires that one first make a written demand for the monies due for a period of thirty (30) days.  If the letter’s recipient fails to pay the amount at issue within those thirty (30) days, then one may file suit for the hostage check’s amount, attorney’s fees and treble damages.

 Article Written By: Ricardo Diaz

Image

Attorney at: Cohen Battisti, Attorneys at Law