Category Archives: Florida Homeowners Insurance Claims

To Hail and Back: The Four Problems with Hail Claims and the Six Tools You Need to Solve Them

Hail Damage Insurance Claims


Coming to a Roof Near You

As you know, the water extraction assignment of benefits (AOB) issue has had the insurance industry’s center stage for the last couple of months. As a result, we have not heard that much about another trending type of claim. This other trending claim has many striking similarities to the water extraction AOB claims:

  • exponential increases in reported claims;
  • increasing claim payouts per claim; and
  • a industry of contractors, adjusters, and attorneys with growing expertise in litigating these claims.

Before you know it, this type of claim – hail damage claims – will be the center of attention for the insurance industry. The claims keep pouring in (even if the rainwater doesn’t), and no one has dissected the vast array of problems and solutions.

The Four Problems with Hail Claims

  • Suspicious Increases: Insurers are seeing drastic increases in hail claims without a corresponding increase in hail events;
  • An Offer that Can’t Be Refused: Insurers are concerned that roofers are driving these claims with a sales strategy that homeowners cannot refuse – roofers offer to provide homeowners with new roofs, and homeowners will only need to pay their deductible;
  • More Than Meets the Eye: Insurers are troubled when homeowners and their roofers request coverage to replace the entire roof despite an apparent lack of significant damage;
  • An Uneven Playing Field: Insurers are worried that consumer-friendly laws, such as prevailing party attorney’s fees, make the playing field uneven.

Are these concerns true?


Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook and Litigation Data Reports:

Before we go on, if you are in the Florida homeowners insurance claims industry and are looking for a guide with the key cases, strategies, laws, attorneys, and adjusters, or if you’re looking for Florida litigation data reports, please visit this page to learn more about our Florida Homeowners Insurance Claims and Litigation Handbook.

Problem #1: Suspicious Increases: Insurers argue that they are seeing drastic increases in hail claims without a corresponding increase in hail events.

True or False? Probably true, but there is not enough public Florida claims data to be sure.

The Data on Hail Events

According to the NOAA National Climactic Data Center, reported hail events in Florida have been up and down over the years:

florida hail claims data

Looking at this data, Florida insurers should not be receiving exponentially increasing amounts of hail damage claims, right? Think again.

The Data on Hail Claims

In “AOBs & Roofers?!” Scott Johnson provides the only publicly available Florida data that I am aware of.

Here’s what I learned from one insurer only a few days ago.

For five years, from 2007 to 2012, hail claims were barely on its radar, accounting for a mere 1-2% of total claim volume.  Enter the “roving roofers” armed with “insider secrets”. In 2013 hail claims rocketed 700% to over 7.9% of its total claim volume.

Last year the same insurer had an astounding 11.24% of its total claim volume from hail.  In other words—for five years (2007-2012) it paid $1.8m in hail claims.  Then, in just two years (2013 and 2014) it spent $8.3 million!

Without data, insurers have nothing but their opinions. Although Mr. Johnson’s data is limited, other Florida insurers would probably show similar statistics depending on the counties they do business in. If we in the insurance industry go by our experience, then we know there has been a substantial increase in the amount of hail claims over the years, without any corresponding increase in hail events.

This is why insurers are suspicious. Should they be? Probably, but without more data, it’s not a very convincing argument yet.

Problem #2: An Offer that Cannot Be Refused: Insurers are concerned that roofers are driving these claims with a sales strategy that homeowners cannot refuse – roofers offer to provide homeowners with new roofs, and homeowners will only need to pay their deductible.

True or False? It’s safe to say this problem is true.

I’ll save your attention span on this one and just insert some promotional materials I have been provided. Please keep in mind that I have no personal knowledge who created these advertisements or whether they were ever distributed. If you have any reason to dispute that these are not advertisements used by the companies described, please let me know.

hail ads

As you can see, these are very compelling sales strategies that homeowners will have a hard time refusing. We could go into detail about how these advertisements lead to easy sales … which lead to more easy sales … but we trust that you can see how quickly these businesses can grow.

On a roofer-by-roofer basis, your SIU department can identify any fraud by talking to the neighborhood and researching weather reports.

Maybe these advertisements are legal, maybe they are not.

Are they a genuine problem for insurers? Without question, the answer is yes.

Problem #3: More Than Meets the Eye: Insurers are troubled when homeowners and their roofers request coverage to replace the entire roof despite an apparent lack of significant damage.

True or False? Probably true, but expensive to prove!

If insurance company money was not available, no one would suggest that replacing the entire roof of a perfectly performing roof is a wise decision. But when an insurance company may be responsible, roofers and homeowners forget about economics.

What can insurers do? They can take a stand against the roofer, pay their attorneys hundreds of thousands of dollars, take the cases to trial, and hope that randomly selected jurors will understand their position.

So why don’t insurers simply fight these cases in Court?

In our next problem, we talk about why insurers feel there is an uneven playing field when these hail damage claims turn into court cases.

Problem #4: An Uneven Playing Field: Insurers are worried that consumer-friendly laws, such as prevailing party attorney’s fees, make the playing field uneven.

True or False? True.

Florida lawyers and the legislature have made it very difficult for insurers to find justice in the courts. We don’t want to bore you with a complete dissertation on the Florida court and legislative systems, so we will focus on four reasons why insurers are right – the playing field is not level in hail damage claims.

Juries are Too Late to the Party

First, insurers do not even get to know who decides the case – the jury – until after they have to pay their lawyers four to five times what it would cost to settle the case. (As you can see, this problem applies to all cases, not just hail claims). By the time insurers realize that their jury has no roofing experience, it’s too late for them to fold their cards. Thus, this legal process is set up to have all of the lawyers do hundreds of hours of work, charge hundreds of thousands of dollars, and then the insurers get to meet the most important people in the case – the jurors.

But isn’t that an equal risk that both sides face? Not really, and here’s why:

Unlike Insurers, Roofers have Nothing to Lose

That’s our second reason why the playing field is not level: if a roofer wins the lawsuit, the court will order the insurer to pay the roofer’s attorneys’ fees. If the roofer loses, he usually will not have to pay any attorneys’ fees. In short, insurers have tons of risks – whether they win or lose. Roofers? Virtually nothing to lose.

Low Expectations

The third reason why the playing field is not level is because a “win” for the roofer could mean $1. Yes, $1. With a few exceptions, if a roofer obtains a judgment against an insurer for $1 more than the insurer offered to pay, the roofers’ attorney will get hundreds of thousands of dollars in attorneys’ fees.

Sophisticated Parties, Unsophisticated Rules

The fourth reason why the playing field is not level is because the prevailing party attorneys’ fees law does not make sense in the roofer versus insurer context. The prevailing party attorney’s fees rule was intended to make sure our grandmothers across the state don’t have to pay an attorney to sue their insurance company. This attorney fee rule is a windfall for roofing companies whose sole purpose is to profit. And with sales strategies like these roofers are using, there is no doubt they will make plenty of money soon.

Six Solutions that Should Be in Your Hail Toolkit

Enough with the problems. Let’s talk about the six things you should have in your hail toolkit to prevent indemnity and expense leakage:

1. Engage engineers with hail experience

If you are reading this article, then you’re probably the type of person that has vetted the experts.

Or are you? Have you met all of your engineers investigating hail losses face-to-face?

This is an obvious point, but its importance cannot be overstated. If the jury believes your expert more than the other expert, you will probably win. Go meet with the engineers in the industry and find out who you would believe if you were a juror.

2. Gather your best minds (or hire them) and draft specific policy language for hail claims

After securing the right engineer experts, get your team together to evaluate whether you can draft specific policy language relating to aesthetic roof damage caused by hail. If you can carefully craft this exclusion and satisfy OIR, you can avoid the vast majority of the new claims.

3. Get familiar with all of the weather data tools

Our friend Nick Cammarata’s firm, SDII Global, handles hail claims across the country. When he investigates hail claims, he starts by heavily investigating these three databases:

4. Read Verisk’s E-Book “Property Hail Claims in the United States: 2000-2013

If only they had a 15 page report like this for Florida claims! In this report, Verisk provides hard data showing that the entire nation is seeing an exponential surge in how many hail claims are reported, and how much it costs to resolve them.

5. Talk to Lisa Miller to find out more about how you can help her AOB legislative efforts moving forward

One of the best ways to stop suspicious hail claims is to join Lisa’s effort to legislate AOBs right out of the industry. Of course, hail claims and emergency water extraction claims are two different animals; however, it will only be a matter of time before all of these roofers use AOBs to create litigation factories. As you may have noticed, we need all of the help we can get as the legislature continues to put the AOB issue on the backburner.

All you have to do is join Lisa and her clients. They have spent years pushing the legislature closer and closer towards solving this problem and, until we get some more support, we might continue to face standstills in the legislature. Of course, AOB legislation won’t prevent homeowners (rather than roofers) from reporting suspicious hail claims; however, it will prevent the landslide of new claims that will undoubtedly occur if the legislature does not pass the right AOB law.

Many insurers have already thrown their support behind Lisa’s efforts to stifle AOB claims, and your company should, too.

6. Use data analytics and automation to eliminate unnecessary indemnity and loss payout leakage for hail claims

Using claims and litigation software, your claims team and legal counsel can:

  • know the result of a hail damage claim the second it is reported;
  • automate the routine documents towards solidifying your coverage position; and
  • streamline quality processes to efficiently resolve each claim.

Legal defense fees for hail claims are quickly skyrocketing without any clear end in sight.  If you can leverage all of your prior and future claims data, you may not have to spend a dime to know the best possible outcome and who needs to be involved to get you there.

If you would like to know more about claims and litigation software customized for Florida homeowners insurers, sign up for CaseGlide’s “Six Ways to Split Legal Defense Costs in Half this Year Free Webinar” today.

To Hail and Back

Ultimately, the problems with hail damage claims will not go away by themselves. It’s going to take a real team effort to keep Florida homeowners’ insurance premiums down. After seeing how quickly the sinkhole and water extraction industries grew, we shouldn’t wait until hail claims get to those same dangerous levels.

Every insurer knows the tools they need to solve this problem today. We need experts like Nick to give insurers a backbone at trial to fight the frivolous hail claims. We need insurers to jump to support Lisa’s ongoing legislative efforts, and help her support these same efforts next year. We need data and reports showing the financial impact of these claims, rather than just opinions. Last but not least, insurers should pounce on opportunities to use claims and litigation software to resolve these claims as effectively and efficiently as possible.

Unpack your tools, and let’s go to work.

If you have any questions about this article or anything else Florida homeowners insurance related, please contact me.


The Top Ten First Party Property Insurance Blog Posts

Florida Homeowners Insurance Claims and Litigation Handbook
Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook


First Party Property Insurance Blog’s Top Ten Posts and Pages

1. Our Getting Started Home Page: we built this page a few months ago to help people navigate the Blog, and it was viewed over 8,000 times. If you haven’t seen it, it is by far and away the best way to navigate through the Blog and find what information you need.

2. Our List of the Biggest and Fastest Growing Florida Homeowners Insurers: viewed over 1,000 times during its limited time on the Blog. Surprisingly, most of the people we speak with did not pay attention to this; however, if you’re in this business, it’s the most important thing to know.

3. Florida Homeowners Insurance Claims for Water Leaks and Damage, and the Constant or Repeated Seepage Exclusion: viewed nearly 1,000 times this year. This massive post includes everything you need to know about the most popular coverage issue in Florida homeowners insurance claims.

4. A $7M Alleged Insurance Fraud – Espinosa Arrest Affidavit: approximately 1,000 times since being posted this year. Unfortunately, we haven’t been able to publish any of the updates. Nevertheless, this post is by far and away the most entertaining post on the Blog.

5. Florida Homeowners Insurance Statutes: we had over 800 visitors view this page. It’s a page you must bookmark right now in your web browser. It’s the only easy way to find the Florida homeowners insurance statutes, and we included tons of additional content to help you, too.

6. Problems and Solutions for Assignment of Benefits Claims: nearly 1,000 people visited our site for analysis on the assignment of benefits issues, and this was the most popular AOB post this year. If we had the time, we would write a post on this issue every single day. This is such a hot topic right now. We encourage you to contribute on this issue by sending us information. If you want to guest post, we will gladly share it with hundreds of subscribers and thousands of readers, and we won’t hesitate to give you credit.

7. Florida Homeowners Insurance Claims for Hail Damage to the Roof – Article & Analysis: hundreds of people viewed this post from a few months ago. This is probably the second most controversial issue in the industry (behind the AOB claims issues). We would also welcome you to guest post on this issue; help our readers out; and give you and your company exposure.

8. Florida Homeowners Insurance Claims for Water Leak Not Excluded as a Matter of Law: hundreds of readers reviewed our detailed analysis on what could be the most important Florida homeowners insurance appellate decision of the year. If you haven’t read the case or my article and you’re handling homeowners insurance claims in Florida, then you’re committing malpractice. It’s an extremely important decision moving forward.

9. All of the Posts on the Citizens Sinkhole Settlements: here is a post on the most recent Citizens sinkhole settlement, and it has links to all of the other Citizens sinkhole settlements.

10. All the Posts on the Citizens Takeouts: here is a link to the latest post on this year’s Citizens takeouts. While reading that post, you can find links to all of the prior settlements.

If you have any questions about this article or anything else Florida homeowners insurance claims related, please contact us.

The Calm Before the Insurance Storm: What if Hurricane Wilma Made Landfall in Florida in 2015

Florida Homeowners Insurance Claims and Litigation Handbook

If you are looking for Hurricane Irma Florida insurance claims resources, click here.


My Claims Journal series “Digitizing Claims Litigation: Providing Insurers with the Power and Control They Deserve” focused on the intersection of technology and property insurance claims.  In this article, I wanted to discuss more than technology and explore what could happen if a storm like Hurricane Wilma makes landfall in 2015.

Ask yourself: has anything changed in the past decade? We take a look at how indemnity exposure has changed; however, we really focus in on whether loss adjustment expenses would be any different, and we focus on whether the laws and technology have changed anything.

Hurricane Wilma only pummeled Florida for approximately five hours, but its legacy lasted another decade.  Nobody could have predicted that this storm would give rise to over a million insurance claims, and over nine billion dollars in damages.  Thousands Wilma claims were filed each year, and many were not resolved until just a couple of years ago.

Fast forward to 2015. Would anything be different if Hurricane Wilma made landfall in Florida today? It depends on what you focus on. A lot has changed, and a lot has stayed the same. Let’s explore the advances in two key areas: indemnity and loss adjustment expenses.


From an indemnity exposure standpoint, most of the developments since Hurricane Wilma have been positive.  Many of the traditionally hurricane-prone states have compiled financial protection against losses, including impressive catastrophe funds, effective reinsurance, and increased risk transfer to the private sector. Additionally, there has been a strong initiative to educate the nation about flood insurance.

All that being said, the stakes are still very high. Real estate growth is all over the coast, and so are our greatest potential losses. Studies suggest that a hurricane like Hurricane Wilma will still have the same or greater indemnity impact on insurers in 2015.

Accordingly, although we did not learn our lesson and continued to build in the most disaster-prone areas, we were lucky enough to have a long enough gap in hurricanes to save a good amount of money.

Loss Adjustment Expenses

In addition to the lost profit of indemnity, loss adjustment expenses also skyrocket following a hurricane. If a hurricane makes landfall in 2015, will loss adjustment be any less expensive than it was in 2005?

Legal Developments’ Impact on Loss Adjustment Expenses

Lawyers and lawmakers spent the last decade trying to respond to the 2004 and 2005 hurricane seasons. Although there were some positive legal developments, the legal framework is mostly the same.

Florida’s 90-day rule statutory amendment imposed a significant burden on insurers: try to pay all hurricane claims within 90 days after receiving notice of the claim. Further, there have been no changes to the attorney fee statute benefiting successful attorneys representing homeowners. That being said, the ensuing property insurance bills in Florida helped mitigate some of the expense risks. Some of the positive laws in Florida since 2005 include reduced time limitations for hurricane claims, and opportunities to offer modified percentage deductibles.

Meanwhile, in courtrooms across Florida, lawyers spent nearly a decade trying to iron out the parameters of coverage for hurricane claims. When the dust settled, not much had changed.  The vast majority of cases can result in expensive and risky jury trials.


If a large scale hurricane like Wilma makes landfall in 2015, insurance companies should be proud that they likely have the financial resources to help their insureds recover. Unfortunately, despite the ensuing technology revolution and all of the legal expenses incurred in the past decade, adjusting and closing these claims will still cost insurers the same amount it cost them nearly ten years ago. Although the lawmakers and lawyers could not make any monumental breakthroughs, the industry can hold out hope that technology is inches away from revolutionizing how we view hurricane risk.

Have Any More Questions about Florida Homeowners Insurance Claims?

If you have any questions, please contact us.

Florida’s Fourth DCA in Donovan v. Florida Peninsula Finds 2011 Statute of Limitations for Homeowners’ Insurance Claims is Not Retroactive

Florida Homeowners Insurance Claims and Litigation Handbook


In Donovan v. Florida Peninsula, Florida’s Fourth DCA just issued a very important opinion for anyone unsure of the Florida statute of limitations for homeowners insurance claims.

If you have not seen them yet, you need to check out the two best pages on the site: the Florida Homeowners Insurance Statutes and the Property Insurance Blog Working Index.  Combine them, and they are a guide to handling any Florida homeowners insurance claim.

In Donovan v. Florida Peninsula, Florida’s Fourth DCA recently issued a short but informative decision clarifying the statute of limitations for Florida homeowners insurance claims.  Donovan’s case involved a 2005 insurance claim for hurricane damage.

The question was whether the 2011 version of Fla. Stat. 95.11(2)(e) applied to Donovan’s claim.  The claim occurred and was reported to Florida Peninsula before the statute of limitations was amended. Florida Peninsula asked the Court to retroactively apply the 2011 statute of limitations to Donovan’s lawsuit.  Donovan claimed that the statute was not retroactive and, as a result, she was only required to file the lawsuit within 5 years of Florida Peninsula denying the claim (which would have given her until basically the date of this article to file the lawsuit).

In 2011, Florida’s legislature changed the statute of limitations (or statute of repose) to require the homeowner to file a homeowners insurance-related lawsuit within 5 years of the date of loss.  Prior to this amendment, Florida courts would give the homeowner five years from the date that he alleged the breach of the contract occurred.  In other words, according to the old statute of limitations, the homeowner could presumably wait 10 years to report a claim and it would not be limited because he actually had 5 years from the date the claim was allegedly denied or underpaid (of course, the prompt notice provision would prohibit that claim).

The Fourth DCA determined Fla. Stat. 95.11(2)(e)‘s 2011 statutory amendments did not apply to Donovan’s claim.  Thus, Donovan did not breach the statute of limitations because she did not have to file her lawsuit within 5 years of the date of loss.  Donovan had 5 years from the date Florida Peninsula breached the contract to file the lawsuit.

In addition, the Fourth DCA determined that a trial court should not dismiss a lawsuit for breach of the prompt notice provision.  As you know if you read First Party Property Insurance Blog, the question of late notice cannot be determined at the pleadings stage.

If you want to see my other articles on hurricane claims and homeowners insurance, make sure to check out:

What You Need to Know About Handling a Florida Homeowners Hurricane Insurance Claim

What Hurricane Wilma Insurance Claims Taught Us for the 2014 Hurricane Season

Remembering the 2004 Hurricane Season and Looking Ahead to 2014

Here is a copy of the Donovan v. Florida Peninsula opinion here:

Download (PDF, 191KB)


This is not rocket science.  If you are going to pay attorneys millions of dollars to litigate for you, take 5% of the time expended to build simple systems to help you achieve better outcomes while spending the least. There is no reason that every attorney handling a case for a carrier should have to analyze the statute of limitations issue “from scratch.” This is a simple question requiring a simple “check the box” answer for each case.

If you want a copy of a guide that streamlines all routine questions like these, please message me.

Did this Article Answer Your Homeowners Insurance Question?

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Remembering the 2004 Hurricane Season and Looking Ahead to 2014

Florida Homeowners Insurance Claims and Litigation Handbook

If you are looking for Hurricane Irma Florida insurance claims resources, click here.

Any questions? 

Please contact us.


Let’s not only think about what the 2014 Hurricane season may bring. Let’s also remember that this is the ten year anniversary of the most memorable hurricane season ever.


This photograph is from this fantastic Palm Beach Post story that inspired this article.

Remembering 2004

Before we talk about what could happen in 2014, can you believe it is the 10 year anniversary of the most notable hurricane season ever?

Ten years ago, in 2004, Floridians experienced these four powerful hurricanes and their landfall windspeeds and locations:

  • Hurricane Charley: 145 mph, landfall in Fort Myers
  • Hurricane Frances: 105 mph, landfall in Stuart, Port St. Lucie, and Jensen Beach
  • Hurricane Ivan: 130 mph, landfall in the Panhandle
  • Hurricane Jeanne: 120 mph, landfall in Stuart, Port St. Lucie, and Jensen Beach

The hurricanes ravaged Florida, from Key West to Pensacola.  As a former Stuart, Florida resident, I can remember what it was like to clean up after not one, but two hurricanes in a few weeks.  Never in Florida’s history have we seen that many punishing hurricanes in one season. Sadly, 125 Floridians reportedly passed away because of the four storms.

And the economic damages from these storms were earth-shattering:

  • Hurricane Charley: $14 billion
  • Hurricane Frances: $4 billion
  • Hurricane Ivan: $5-$15 billion
  • Hurricane Jeanne: $6-$8 billion

Ten Years Later

Ten years later, the 2014 hurricane season started June 1st.  The last hurricane to make landfall in Florida was Hurricane Wilma in 2005.  Who would have ever predicted we would go another eight years without a hurricane?

Since 2005, resinsurance rates have dropped.  As a result, Florida homeowners insurers are more financially prepared for this hurricane season than any before.  Florida’s Hurricane Catastrophe Fund has accumulated $13 billion, and Citizens has a $7.6 billion surplus.

As First Party Property Insurance Blog discussed last month, the Weather Channel forecasters predict 11 named storms this season.  Of the 11 named storms, Weather Channel predicts that five will become hurricanes and two will shape into major hurricanes.

According to forecasters, Floridians should stand to benefit from an El Nino pattern that will hold the number of storms below average.  Nevertheless, 80% of Florida’s residential and commercial property lies in vulnerable coastal areas.  These properties are valued at $3 trillion.

Ultimately, as the Tallahassee Democrat points out, hurricane predictions are more “guesses” than “predictions.”  As we all found out from Hurricane Sandy, all it takes is one major storm to cause nightmares and cost billions.

One thing we can all agree on: nobody wants another 2004 Hurricane Season.

Did this Article Answer Your Homeowners Insurance Question?

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Florida Supreme Court Decides Curran Regarding Compulsory Medical Examination in Uninsured and Underinsured Case is a Condition Subsequent

Florida Homeowners Insurance Claims and Litigation Handbook

Florida’s Supreme Court recently issued an opinion that could change the way insurance claims and evaluated.  Do you know what the Court said?

In March, Florida’s Supreme Court decided whether an insurer of uninsured motorist (“UM”) coverage has to prove prejudice when the insured fails to attend a compulsory medical examination (“CME”).  As you know, we first addressed this issue almost a year ago in this article.

Here is the Court’s complete decision in Curran v. State Farm:

Download (PDF, 135KB)

The Curran decision contains a lengthy analysis of the relevant Florida case law; however, in summary, the Court determined that a CME provision in the UM insurance policy context is a condition subsequent to coverage for UM benefits; therefore, State Farm was required to plead and prove that the insured’s failure to attend the CME prejudiced State Farm.

photo from

Ultimately, the Curran decision hinged on what type of policy provision the CME provision is: a condition subsequent or a condition precedent. State Farm argued that the CME was a condition precedent to coverage. If State Farm prevailed, then it would have had a presumption throughout the litigation that the insured’s failure to attend the CME prejudiced State Farm (like breach of the prompt notice provision). By contrast, the insured sought to have the CME be characterized as a condition subsequent because, if so, State Farm would have to plead and prove that the insured’s failure to attend the CME prejudiced State 1

The Court agreed with the insured; therefore, the Court required State Farm to prove it was prejudiced.  The Court started the analysis by describing the public policy behind the UM statute, Fla. Stat. 627.727(1). The Court explained its decision must include the public policy behind this statute. Next, the Court simply stated that the CME occurs after the parties enter into a contract and after a claim occurs; therefore, the Court opined that the CME provision was a condition subsequent to coverage. The Court reasoned that the CME provision was a part of the cooperation clause. Under Florida law, insurers have the burden of proving prejudice for breach of the cooperation clause provisions.

Importantly, the Court did not remand the case for further fact finding; instead, it determined that State Farm failed to prove prejudice as a matter of law.  Thus, not only did State Farm fail to obtain the presumption, they lost the issue altogether.

What does Curran mean for Examinations Under Oath in homeowners insurance cases? Advocates for insurers would argue nothing, and insureds’ attorneys would argue everything. The Court was careful to explain that this decision was strongly influenced by the UM statute and public policy, and the Court did not mention whether the cases it cited on the EUO provision were incorrectly decided.  Thus, insurers’ and insureds’ attorneys have room to argue their points on whether Curran should be extended to property insurance EUO failures; however, neither has direct support from the Florida Supreme Court. This decision is similar to the Court’s decision in GEICO v. Nunez, where the Court heavily relied on the specific statute at issue, and not just the insurance policy.

Did this Article Answer Your Homeowners Insurance Question?

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A $7M Alleged Insurance Fraud and the Espinosa Arrest Affidavit

Florida Homeowners Insurance Claims and Litigation Handbook


It’s not too often that suspicions of insurance fraud lead to a lot of evidence, but First Party Property Insurance Blog’s article on this public adjuster’s alleged fraud ring has plenty of details regarding how Miami-Dade police plan to prove their case.  This is a story about arrests, fires, water leaks, public adjusters, and more.  Check this article out to learn more about the Jorge Espinosa case and what you need to know.

And check out our update from May 22, 2015 after the break.


May 22, 2015

31 people have now been arrested. Police raided Espinosa’s house and arrested him for the additional charges of racketeering, arson, and grand theft. As this article explains, police allege Espinosa is responsible for 20 fires and 5 floods.

As discussed below, if this turns out to be true, this is very unfortunate. As I said one year ago on the subject, Florida’s public adjusters can make plenty of money without defrauding insurers. Most public adjusters do practice within the confines of the law, but these bad apples ruin it for everyone – increased scrutiny, increased claim costs, increased policy premiums.

Additionally, this is just more lesson for homeowners insurers. It’s 2015: technology can provides insurers with the ability to know everything about their claims in an instant. Claims professionals armed with technology identify fraud better, faster, and cheaper than professionals using antiquated claims systems.

With the right time and effort, any insurer can have automated reports on all of the key claim factors. Or, without any effort at all, any insurer can use CaseGlide to have vendors populate this data for them, and arm their claims team with actionable analytics on all of their claims.

Original Story

For those of you who missed it, Miami detectives recently concluded a thorough investigation into a potential $7.6M homeowner’s insurance fraud scheme, and arrested 22 people.


Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook and Litigation Data Reports:

Before we go on, if you are in the Florida homeowners insurance claims industry and are looking for a guide with the key cases, strategies, laws, attorneys, and adjusters, or if you’re looking for Florida litigation data reports, please visit this page to learn more about our Florida Homeowners Insurance Claims and Litigation Handbook.

If you haven’t heard about this fraud ring, here is the complete arrest affidavit. It’s a must read:

Download (PDF, 3.96MB)

Although I recommend reading the affidavit front to back, here is my summary:

The fraud investigation centers on Jorge Espinosa of Nationwide Adjusters, LLC.  In short, the arrest affidavit alleges that Espinosa and dozens more had a relatively complex ring involving several parties and a referral network. They allegedly had “runners” recruiting homeowners, remediation companies creating exorbitant bills, and fire and water leak creators.  Further, the arrest affidavit details that certain attorneys allegedly knew that the claims were fraudulent, not covered, yet allegedly continued to represent the homeowners.  The alleged fraud amounts to over $7M.

fire 2

Frankly, if the allegations are true, there is no place for this.  There are hundreds of Florida public adjusters and policyholders’ attorneys that make plenty of money without filing any fraudulent claims. Furthermore, claims personnel will never forget this, and now they must to increase their claim scrutiny moving forward to make sure they are doing their job, whether it means conducting more examinations under oath or enforcing other conditions precedent.  This slows the claim process for innocent homeowners. In addition, instead of helping resolve new claims, insurers must assign personnel to investigate their old claims to see if they may have been defrauded.

Ultimately, this investigation is in its very early stages.  We will see whether there is more cooperation that could result in revelations about additional schemes.

Disclaimer: All of the people in the arrest affidavit are innocent until proven guilty.  Charges are often dropped or reduced.


How can something like this happen? It’s easy when homeowners insurers have hundreds of people handling claims and cases without any ability to easily share and retrieve information. Although most insurers probably had personnel talk about these things at the water cooler at lunch, only one carrier had the wherewithal to take the time to stop this alleged fraud.  What does this say about the way homeowners insurers do business?  Shouldn’t every insurer set up their staff to have the opportunity, time, and resources to conduct this investigation when they need to.

If you want to be able to have all of your claim and case information searchable, reportable, easily retrievable, and usable for the next case, please message me.

Have Any Questions?

Please contact us.

Ten Reforms to Fix Florida’s Homeowners Insurance Market

Florida Homeowners Insurance Claims and Litigation Handbook

Average Home Insurance Cost

photo from

The James Madison Institute and the R Street Institute issued a detailed report outlining ten ways to help Florida’s property insurance market without raising rates.  The full report is here:

Download (PDF, 1.08MB)

In this comprehensive report, the institutes suggest ten critical changes to allow insurers to succeed in Florida.  PropertyCasualty360’s article provides the following breakdown:

1.     Implement the Hager incremental Cat Fund reduction plan

2.     Establish requirements for “assignment of benefits” provisions

3.     Implement incremental Citizens eligibility reform with a “circuit breaker”

4.     Allow excess and surplus lines carriers to do voluntary take-outs from Citizens

5.     Remove non-primary residences from Citizens and continue reduction of Citizens’ maximum coverage

6.     Expand 2013’s coastal preservation concept to bar other state programs from providing coastal subsidizes

7.     Implement tough, new Citizens and Cat Fund conflict-of-interest policies and make protecting taxpayers a focus of both entities

8.     Create an expert panel to advise the state on the use of RESTORE Act funds

9.     Establish fair settlement procedures

10.   Require an annual report on the combined post-storm bonding capacity of Citizens, the Cat Fund and the Florida Insurance Guaranty Association

You will need quite a bit of time to review the report.  I found two of the recommendations intriguing and worth mentioning:

First, once again you see a group identifying the assignment of benefits claims as a main concern for property insurers.  As you might recall, the Policyholders Bill of Rights Working Group also made several recommendations for addressing the concerns posed by the assignment of benefits/ water damage claims and the associated litigation.  Similarly, the institutes recommend requiring assignment of benefits contractors to comply with the insurance policy conditions that homeowners have to comply with, rather than being shielded by the general rule that policy conditions do not flow to the contractors.  In addition, the institutes suggest allowing homeowners a brief window to opt out of the assignment of benefits agreements to protect the homeowners’ interests.  Overall, it seems that everyone is seriously trying to resolve the substantial burdens imposed by these claims.  I am sure insurers anxiously await to see how and when these efforts will materialize into solutions.

The institutes also recommend Citizens continue to limit its overall exposure, and they single out vacation homes as a coverage risk Citizens should avoid.  There are arguments on both sides here because Floridians obviously welcome the economic benefits of temporary residents; however, if Floridians have the burden associated with a catastrophe, the legislature should pay close attention to the overall economic impact of assuming these risks.  Ultimately, this issue is up for debate and I would love to hear feedback on the benefits of Citizens ensuring these secondary residences.  This recommendation was part of the larger conclusion that we have all heard: Citizens should continue to reduce its inventory.  We all know Citizens is vehemently trying to achieve that result.

The institutes’ report is a highly detailed perspective on the Florida property insurance industry and one certainly worth reading.  It is good to know that, despite the absence of any catastrophes, Floridians are still working on hard on trying to improve this market and prepare it for the worst.

Any Questions?

If so, please contact us.

Florida Homeowners Insurance Questions, the Loss Settlement Provision, and When is Alleged Underpayment Not a Breach of the Policy?



The Loss Settlement provision is, without a doubt, the most overlooked homeowners insurance policy provision.  There are tens of thousands of lawsuits filed every year where the parties dispute what the homeowners insurer owes to the homeowner.

Do you want to know what neither side probably looked at?  The Loss Settlement provision – the provision that actually describes the homeowners insurer’s obligation to pay a claim.  Read this article to learn more about how this provision could decide your case.

Make sure to read until the end because we offer you a free Litigation Report analyzing the ways to improve your case outcomes while paying the least amount possible.

Florida Homeowners Insurance Claims and Litigation Handbook and Litigation Data Reports:

Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook

If you are in the Florida homeowners insurance claims industry and are looking for a guide with the key cases, strategies, laws, attorneys, and adjusters, or if you’re looking for Florida litigation data reports, please visit this page to learn more about our Florida Homeowners Insurance Claims and Litigation Handbook.


Have any questions about Florida’s homeowners insurers, policies, and claims, please feel free to contact us.

One of the most important questions in property insurance litigation is whether an insurer can obtain a summary judgment in a damages dispute. Stated otherwise, can an insurer prevail on a summary judgment motion when the insured alleges the insurer underpaid the claim? You might ask, “how is that possible?” How can an insurer and the Judge agree that even if the insurer allegedly underpaid the insured, the insurer did not breach the contract? If you can answer these questions, then you understand the difference between underpayment and breach.

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To understand the answers to these questions, you must examine the Florida cases discussing loss settlement provisions. Following are some examples:


1. Slayton v. Universal

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Slayton holds that even if an insured allegedly underpaid pursuant to the policy, the insurer could have simultaneously complied with its policy obligations as a matter of law. While Slayton is limited to the facts and statutes at issue in the case, its rationale may be applied to any insurance dispute.

Rather than promote litigation, judges should do what Slayton did and allow the insurer to rely on the insured to present a genuine policy dispute before bringing a lawsuit. In Slayton, the Court held that the insured should have used the benefits the insurer paid to the insurer to repair the home and then submit a supplemental claim to the insurer if the original payment was insufficient. Instead, the insured sued the insurer without attempting to conduct the repairs with the payments provided by the insurer. Ultimately, in Slayton, the Fifth DCA upheld the trial court’s finding that the insurer, by providing the payment to the insured, complied with the policy as a matter of law.

By enforcing the loss settlement provision’s requirements, the Fifth DCA in Slayton held that the insurer did not breach the contract, even if it arguably underpaid the claim.


2. Ceballo v. Citizens

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In Ceballo, the insureds alleged that they proved a total loss of Ordinance and Law coverage pursuant to the Valued Policy Law statute and argued the insurer should have paid the coverage. The insureds further claimed that the insurer’s failure to pay the coverage constituted a breach of the contract. The insurer responded that before the insureds could be entitled to this coverage, the policy required the insureds to incur Ordinance and Law damages. To put this into context, the policy and statute at issue in Ceballo provides that the insureds were not entitled to replacement cost coverage until they incurred the damages. Like the Fifth DCA in Slayton, Florida’s Supreme Court in Ceballo determined that the insurer did not breach the contract despite the insureds’ allegations that the insurer underpaid. Thus, the insureds could not present a damages dispute to the jury, and the insurer was therefore entitled to judgment in its favor on that issue.


3. Buckley Towers v. Citizens

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Likewise, the Eleventh Circuit in Buckley Towers considered the lower court’s finding that the insured was excused from incurring damages under the policy. Similar to the policy at issue in Ceballo, the policy at issue in Buckley Towers provided that if in insured wants replacement cost coverage, it must incur the damages. If the insured does not incur the damages, the insured can only obtain actual cash value. Despite this policy requirement, the lower court held that the insurer’s alleged underpayment excused the insured’s performance in that regard.

The Eleventh Circuit Court of Appeals reversed, determining that the insured could not use the prevention of performance doctrine to avoid a requirement that the damages be incurred. Unlike the lower court, the Eleventh Circuit refused to “rewrite the policy.” The Eleventh Circuit held that the insured was required to make the repairs before he or she would be entitled to the replacement cost coverage. In other words, until the repairs were complete, the insurer was correct in issuing only the coverage for actual cash value. The court found that by using the prevention of performance doctrine, the lower court impermissibly rewrote the policy that was freely negotiated between the parties. Even when facing allegations of underpayment, the Eleventh Circuit determined the insurer did not breach as a matter of law. In short, Buckley Towers, like Ceballo and Slayton, shows that courts must adhere to the loss settlement provisions in a policy.

So what do these cases tell you?

First and foremost, beware when relying heavily on the black letter law in these cases because the statutes and policy forms have changed. Instead of focusing on the holdings of these cases, focus on the courts’ interpretations of the loss settlement provisions. In each case, the court determined that the insureds were not entitled to a trial on damages until they demonstrated compliance with the loss settlement provisions. Second, you must scrutinize your loss settlement provisions, whether you are dealing with a sinkhole claim, water claim, or tile claim, before accepting the opposing party’s allegations as fact. Ultimately, the loss settlement provision may make alleged underpayment a question for the judge and not the jury.


You shouldn’t allow your attorneys to overlook this provision, and you should have systems in place to make sure it isn’t overlooked.  Your provision is the same in every case, but it needs to be read in light of the case law.

Don’t trust this type of issue to junior associates.  Get your best management and best attorneys together, create a system for ensuring compliance, and never think about it again.

If you want checklists, guides, and legal document templates on the Loss Settlement provision, please message me.

Did this Article Answer Your Homeowners Insurance Question?

If not, contact us.

Florida Homeowners Insurance Claims for Water Leaks and Damage, and the Constant or Repeated Seepage Exclusion

Florida Homeowners Insurance Claims and Litigation Handbook


What happens when a homeowners insurance company denies a claim for constant or repeated seepage or leakage?

Generally, homeowners insurers’ personnel will look at the damage and, based on (1) experience or (2) an expert opinion, the insurer will determine that it is long term damage that is not covered.

If a person has a roof leak, pipe break, supply line burst, or something else that she thought happened quickly, then she might think the constant or repeated seepage exclusion is unfair.  Depending on (1) the way that the exclusion is written in the policy and (2) the investigation the homeowners insurer conducted, the homeowner might be right.

In this article, you will see what homeowners insurers need to prove that a water leak and its damage are excluded using the constant or repeated seepage exclusion for long term water damage.

So don’t forget to read all the way to the end, contact me, and subscribe.

Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook and Litigation Data Reports:

Before we go on, if you are in the Florida homeowners insurance claims industry and are looking for a guide with the key cases, strategies, laws, attorneys, and adjusters, or if you’re looking for Florida litigation data reports, please visit this page to learn more about our Florida Homeowners Insurance Claims and Litigation Handbook.

Do you think you need to understand this subject? I’d say you should be an expert on it.  

The most common dispute in the Florida homeowners insurance industry is whether water damage is covered or excluded by homeowners insurance.  Florida is a rainy and humid place, so there is plenty of water damage.  The question is whether the damage is sudden or long-term.  You better know the difference.

How do you find out the difference? Read this article to find out how homeowners insurers must prove that damage was excluded by the constant or repeated seepage exclusion.

The Policy

The exclusion has many variations; however, in general, it excludes long term water damage. With respect to the variations, some of these exclusions expressly provide that the seepage must come from within a plumbing, heating, or air system. Others contain language that excludes the leakage “whether hidden or not.” In addition, some describe the exclude time period as “weeks” or “months” whereas others specifically exclude damage that occurs over a period of more than 14 days.

Hoey v. State Farm

The main case on the issue is the Fourth DCA’s 2008 decision in Hoey v. State Farm, 988 So. 2d 99 (Fla. 4th DCA 2008). In Hoey, the Fourth DCA determined that the evidence in the record was enough to show that the insurer was entitled to a judgment that the damage was long term and, therefore, excluded from insurance coverage. By analyzing the steady increase in the water bills for roughly three months, the insurer was able to show that there was a failure in the nylon of the toilet supply line. Contrary to many of the litigated cases on this provision, this case had enough evidence in the insurer’s favor to allow the trial court to determine the insurance company clearly did not cover the damage.

Key Evidence

In cases where summary judgment is not appropriate, juries must decide whether the evidence shows that the leakage occurred for an excluded time period. Naturally, insureds’ and insurers’ attorneys should pay attention to the following factors to assess what the jury will think of the damage:

1. The Photographs

The photographs tell the story and are typically the most important evidence. Do they show staining and warping? For an insurer, it is going to be hard to convince a jury that the water loss was long term if there is no staining or warping of particle board cabinets. For an insured, if the particle board has rings and rings of deep brown stains and appears to be falling apart, then how can he or she convince a jury that the damage happened from a single leak?

The most important photographs will come from the field adjuster and, if the insurer promptly hired an engineer who quickly visited the property, then the engineer should have good photographs. Because these losses often occur in obscure areas of the property (kitchen cabinets, wall space), an insured generally does not have prior photographs of the damaged areas. Ultimately, the photographs will be the most critical evidence in the case.

2. The Water Bills

The water bills also can help guide the parties’ understanding of what happened. If there was a sudden and extreme toilet leak or pipe burst, then, depending on where the burst was, there may be a huge surge in the water bills. If the bills constantly crept up for a few months, however, that might suggest there was a pinhole leak that allowed water to seep out over a long period of time. According to the Fourth DCA, the water bills in Hoey were sufficient to allow the trial court’s finding that the damage was excluded.

3. The Experts

The experts in this field are very skilled and can provide the parties with highly detailed evaluations of an infinite amount of different types of water losses. Many of the experts I deal with rely on the studies done by Dr. Ralph Moon from HSA Engineers.I have worked with Dr. Moon a great deal. He has published volumes of studies showing what each housing material looks like after it has been exposed to water for days or months. The studies are very intricate and detailed, and, in some cases, can even tell you what temperature the water was in your case. There are several other outstanding experts that rely on Mr. Moon’s studies. I find that a lot of these experts are very good at explaining why a particular type of damage had to have been caused by long term seepage.

Despite having handled well over 100 of these types of cases, I have not had the chance to meet any experts in this area that are hired by insureds and their attorneys. I would like to hear their counterarguments to the very well reasoned theories laid out in the water duration studies I mentioned above.

If you would like a copy of any of Dr. Moon’s articles or the names of any of the other highly qualified experts, please feel free to email me. If you handle these types of cases, I highly recommend reading Dr. Moon’s articles and sharing them with your team as soon as possible. As you know, the experts will be responsible for explaining the issue to the jury.

4. The Nature of the Source

To determine whether the damage was long term, the parties have to understand the nature of the event. Was the leak coming from the roof? If so (and so long as there was not a wind event), the only seepage that could have entered must have been rain and other moisture over a period of time. If a slight “leak” caused a substantial amount of damage, that is a strong example of a long term water loss. Was the leak coming from a deficiency in the shower stall or tub surround? One might logically expect that the damage occurred each time the person showered or took a bath. Understanding the exact source of each portion of the loss is crucial to determining whether the source, by its nature, is something that would happen over time or all at once.

5. The Policy

To evaluate the claim, insurers and insureds must also go to the heart of the issue – the insurance policy. Interestingly, and as mentioned above, these policies have many variations. Not only are the excluded durations different, but the sources of the loss can often be different. For example, some policies’ constant or repeated seepage exclusions may exclude long term seepage coming only from within a plumbing, heating, or air conditioning system. If the loss was long term but not from one of those systems (for example, through the roof), then insureds and insurers might need to reevaluate whether the loss was “sudden” or not, which is also required by virtually every homeowners insurance policy. As also noted above, some policies contain language that excludes the damage “whether hidden or not.” This is arguably the first place to look when evaluating one of these claims.

If you are an insured, a claims handler, or an attorney in this field, then you certainly need to understand the significance of these issues. This exclusion is as litigated as any other exclusion in any type of insurance policy. Although this was not meant to be an exhaustive review of the issues, I hope that it helped you in some way. As noted above, if you want any of the materials from Dr. Moon or you want to discuss any of the other experts in the field, please email me.


At least 60% of your claims and lawsuits are probably water damage claims. It’s time to approach these on a more global level.

  • What if I told you that you could use a system to search your old claims and cases to determine how much the next case will settle for?
  • What if I told you that you could pay for the legal documents for these claims only once?

Well, its no longer 2001, and these systems are freely available.  If you want to know more about the systems we use, or you want free checklists and guides for handling water damage claims, please message me.


If you have any questions about this article or anything else Florida homeowners insurance-related, please contact us.

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