The days of insurance companies taking the initial estimate of your damage and cutting it down to a fraction—without telling you or explaining why—are over. We are proud to report on this huge win for policyholders, requiring the type of transparency in the claims handling process our attorneys have been fighting for for decades. Right before Hurricane Milton made landfall, the Florida Department of Financial Services (DFS) issued a new Emergency Rule protecting homeowners by prohibiting these types of deceptive, unfair, and fraudulent practices by insurance companies.
Why The Need For This New Rule?
We have been reporting on these tactics by insurance companies for years. It has long been the insurers' playbook to make a determination that some of your damages were not caused by the storm (meaning, they are not covered under your policy), alleging—without evidence—that they were caused by wear and tear, a faulty install, a failure to maintain the property, etc. But, what they also often do is hide the critical records where they claim to have documented those findings. This is why we report on Florida court rulings and TWWHB victories that force insurance companies to turn over these critical pieces of evidence to keep the claims adjustment process transparent and fair.
In addition to simply refusing to produce critical documents that support their claims decision, national media investigations showed insurers with Hurricane Ian claims were slashing their field adjusters' estimates by shocking percentages (sometimes upwards of 90%) without the authority or approval of the field adjuster who drafted the initial estimate and without telling their insured why the estimate was reduced. The Washington Post even interviewed TWWHB about these fraudulent Hurricane Ian tactics. In light of this egregious conduct, state officials enacted this Emergency Rule:
“to protect Florida consumers against unfair and deceptive acts in the Florida property insurance market through transparency and communication between the consumer, adjusters, and insurers.”
Florida Emergency Rule No. 69BER24-24
What Does the New Rule Require?
Per Florida's New Emergency Rule No. 69BER24-4, Florida insurers handling Hurricane Milton claims will have to prepare estimates using an electronic estimating program—typically, Xactimate—and apply pricing data that is both relevant to the timeframe in which the repairs will be undertaken and consistent with what contractors are charging in the geographical area. This is to prevent insurers from using old or outdated pricing data that does not accurately reflect the exponentially increased cost of construction immediately after a hurricane, which we have seen insurers do many times. One example: an insurance company using outdated or inaccurate pricing data might tell you it will only cost $15k to replace your roof, but every roofer in town is telling you they cannot do it for less than $30k.
Second, with respect to modifying the initial estimate prepared by the field adjuster whom the insurance company sent out to inspect and document your damage, the new Emergency Rule strictly prohibits any alterations to the estimate unless the desk adjuster making the changes can “demonstrate with additional documentation” why each modification was required to produce an accurate estimate and provide the identity of each adjuster who is responsible for each change. The insurance company must also produce the estimate to the policyholder within the time required by law—within seven (7) days after it was prepared. And—relevant to our purposes once the case is in the discovery (document-gathering) phase of litigation—insurance companies must retain all versions of any estimates it prepares. In our practice it is the prior versions of estimates (before they were reduced) that insurance companies try to hide during discovery when we ask for all documents relevant to its claims decision.
This New Rule Is Designed to Protect You
At TWWHB, this is the fight we fight every day: trying to force insurance companies to treat policyholders fairly and pay claims timely and in full. We are thrilled with the DFS's decision to react to the horrific claims handling we witnessed after Hurricane Ian and enact a rule that requires transparency in the claims handling process and prohibits insurers from surreptitiously changing estimates at the policyholders' expense. We agree with the DFS that:
“Fair and transparent loss estimates and claims adjustments will be crucial to ensure Floridians are properly and fairly compensated under the terms of their property insurance contracts[.]”
Our experienced and dedicated team has been helping homeowners with their hurricane claims as far back as Hurricane Opal in 1995. While it has been disheartening to watch insurance companies only grow more bold and callous in their treatment of policyholders over those years, which led to the need for these types of rules, this New Emergency Rule only encourages us. We stand ready to help homeowners with their Hurricane Milton claims and help the DFS enforce these new rules that hold insurance companies accountable to their contractual obligations. If you have questions about how your insurance company is handling your Hurricane Milton claim, do not hesitate to set up a call with one of our attorneys. We never require any fee, cost, or obligation to answer your questions and make sure you understand your rights.
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