Insurance Claims And Issues

Increasing Risk, Increasing Insurance Role.

    Current market conditions strongly reflect significant risk.  In this situation, Insurance Coverage Issues and Claims are inevitable.  They are coming.  They are coming under all sorts of Insurance Policies.  These Insurance Coverage Issues and Claims will in turn trigger many accusations that Insurance Companies and others acting in Fiduciary settings did not act in Good Faith and Deal Fairly.  In a climate like this one, these Issues and Claims are inevitable.  See generally Peter G. Gosselin, "In This Economy, Failure is an Option" (Los Angeles Times Online Sunday, July 20, 2008).

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Florida Laws and Hurricane Deductibles: Damages or Declarations.

     Florida has a lengthy statute which addresses Hurricane Deductibles. The Florida Statute, Sub-Section 627.701(4)(a), applies to policies issued or renewed on or after May 1, 2005. This effective date reflects the Florida visitation in 2004 of Hurricanes Charley, Frances, Ivan and Jeanne, and the 2005 visitation of Hurricane Wilma. This lengthy Florida Statute has now given rise to 5 lengthy Federal Court opinions. Any discussion of the statute and these cases is difficult, and a short discussion runs the risk of leaving out something important. This discussion will be kept as short as possible in this post in order to point out how the Florida Legislature and at least 5 Federal Court rulings in Florida have so far treated the recent use of Hurricane Deductibles.

     The Florida Hurricane Deductibles Statute requires certain language in specified pitch or points:

Any policy that contains a separate hurricane deductible must on its face include in boldfaced type no smaller than 18 points the following statement: THIS POLICY CONTAINS A SEPARATE DEDUCTIBLE FOR HURRICANE LOSSES, WHICH MAY RESULT IN HIGH OUT-OF-POCKET EXPENSES TO YOU." A policy containing a coinsurance provision applicable to hurricane losses must on its face include in boldfaced type no smaller than 18 points the following statement: "THIS POLICY CONTAINS A CO-PAY PROVISION THAT MAY RESULT IN HIGH OUT-OF-POCKET EXPENSES TO YOU."

     Personal lines residential property insurance policies containing a separate Hurricane Deductible and that are subject to the Florida Statutes, must also comply with the following requirements of Sub-Section (4)(b) of Section 627.701:

Beginning October 1, 2005, for any personal lines residential property insurance policy containing a separate hurricane deductible, the insurer shall compute and prominently display the actual dollar value of the hurricane deductible on the declarations page of the policy at issuance and, for renewal, on the renewal declarations page of the policy or on the premium renewal notice.

These statutory provisions have caused a Hurricane of Judicial interpretation in 5 reported rulings by 3 Federal Judges. All 5 available rulings have been made in Federal Cases in the Southern District of Florida.

The Jury Pool for Katrina Coverage Lawsuits

    In any lawsuit, the Venire must be considered by the parties.  The Venire is the list of potential jurors, the potential jury pool, the group from which a Jury will be selected at Trial.  In Mississippi, most individuals did not have Flood Insurance as was true across all of the Gulf Coast before Katrina.  However, many people in Mississippi as well as other States did not have Homeowner's Insurance or Property Insurance either.  They are left to counter the devastation left by Katrina either with the help of volunteers, or by waiting for Government assistance God help them.   See this news article published today for a fuller description of their situation:  Peter Whoriskey, "As Aid Lags, Volunteers Shoulder Rebuilding on Gulf Coast/Local Gratitude Mixes With Frustration Over Government's Failures" (Washington Post,  Sunday, January 28, 2007, p. A03).

    The Venire must be carefully considered in any case, and in no lawsuits should the Venire -- the Jury Pool -- be given more careful consideration than that available to decide fact issues in the Katrina Damages lawsuits.

    A recent case that went to verdict in Mississippi, in which the Trial Judge directed a verdict on Coverage for the apparent Policy Limits and in which a Jury assessed Punitive Damages of $2,500,000.00 was previously posted here on January 12, 2007.  A more detailed discussion of it is also posted today, and on January 15, 2007, on Insurance Claims and Bad Faith Law Blog.

 Please see Disclaimer.

Liability Insurance Policies and Defense Under a Reservation of Rights.

    It is neither a breach of the Liability Insurance Contract nor Third Party Bad Faith, for the Liability Insurance Company to defend under a Reservation of Rights and also file a Declaratory Judgment Action, it was recently held in Download State_Auto_Property_Casualty_Insurance_Co. v. Stillwell Masonry Co. (M.D. Ala. Case No. 3.06.CV.435, Opinion Filed December 22, 2006).pdf.    Although that case involved "a Series I Contractor's Policy" and Alabama Insurance Law, it is consistent with the vast majority of decisions in jurisdictions across the United States under similar circumstances involving all types of Liability Insurance Policies which provide a duty to defend.
 

REMINDER:  THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP.  ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY FAMILIAR WITH THE PARTICULAR INSURANCE ISSUE IN THAT JURISDICTION, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.