As discussed this summer, Florida’s Insurance Consumer Advocate Robin Westcott organized a Bill of Rights Working Group to create a Bill of Rights for Florida’s insureds. They addressed the following issues in great detail:
- education, transparency, and monitoring the insurance marketplace;
- improvements to the claim process;
- assignment of benefits and emergency remediation companies;
- examinations under oath;
- alternative dispute resolution;
- post-claim underwriting; and
- coverage provided by repair rather than indemnity payments.
The final report is here:
The Group wants the Bill of Rights to have a lasting impact. For the parts of the Bill that reflect existing case law, they want the Bill to codify the existing case law into statutory law. For the parts of the Bill that are not yet law, they want the Bill to make new law. Lastly, there is an educational component. To help insureds navigate claims, they want insurers to provide insureds with a copy of the Bill when they file a claim.
The report is a great snapshot of today’s insurance industry concerns. I think the Group did a great job of addressing the current landscape. My only criticism is that I would have liked the Group to disclose, in the Bill, some of the data on these claims. To get the new recommendations turned into law, the Group should disclose the data that proves these concerns are justified. In all fairness, the Group might not have needed the data. The Group was comprised of several insurance professionals with decades of experience. Thus, they likely used their private data to form their conclusions and recommendations, even if they did not disclose it.
I think the Bill of Rights will be very helpful for insureds when navigating a claim; however, the Bill’s primary impact on insurers appears to be focused on the assignment of benefit-water extraction claims. If the legislature adopted all the recommendations, AOB contractors will have some new obstacles to deal with, including licensing requirements; limitations to the scope of their AOB contracts; and compliance with certain standards for water extraction.
Aside from the AOB-related recommendations, the rest of the Bill codifies/creates obligations and limitations for insurers, including more standards for communicating during the claim and examination under oath process; prohibitions on post-claim underwriting; and expectations for insurers when they elect to repair. Ultimately, some of these obligations are already existing law, and I bet most insurers already comply with the majority of the recommendations.
Only time will tell the impact of the Group and its recommendations. There is no doubt that they discussed a lot of major concerns. We will wait and see what the legislature does with these recommendations. When that time arises, I will keep you posted.
The assignment of benefits issue is not going way, and its up to insurers to not let this be the next attorney-driven trend.
How can insurers deal with the assignment of benefits issue? First, get the best management and attorneys together and decide exactly what to do on these cases. Second, pay for routine documents and evaluations only once, then automate any documents or processes that will occur in all of these cases. Third, enter all of the case information into software (instead of Word documents and emails) so that you can use data to help guide you towards settlement. Fourth, as failures and successes arise, continue to optimize your system to ensure you achieve the best possible outcomes while spending the least.
If you have any questions or would like to see checklists or guides for handling assignment of benefits cases, please message me.
If so, please contact us.