Insurance Coverage Life-Hacks for Florida Homeowners
Updated: Mar 18
For homeowners unfamiliar with securing insurance coverage in Florida, like most first-time homebuyers and new residents, there are many critical things to consider when purchasing an insurance policy or making a claim. According to S&P Global, property insurers in Florida have been served with an eye-popping 246,926 lawsuits from 2015 through September 30, 2020. In the 9-month span from January through September of 2020, nearly 50,000 lawsuits were filed against Florida insurers for property damage claims. With figures like these, it may seem like the insurers are practically asking to get sued. The sad truth? They are. The insurers know many policyholders do not have the means or patience for a lengthy battle.
The denial or underpayment of legitimate claims for property damage to homes or apartments, like roof leaks, water damage, broken pipes, fire, windstorm damage, and mold is built into the insurance company business model. This is precisely why it is so important to: (1) choose the right insurance carrier to cover your home; and (2) choose to hire the right attorney to advance your claim.
Deciding Between an Admitted Florida Carrier or a Non-Admitted Surplus Lines Carrier for Your Insurance Policy
The insurance companies that write and sell policies in Florida are generally: (1) admitted carriers approved by and who must have physical offices in the State of Florida – the obligations of these carriers are typically guaranteed by the State, who must approve any rate increases for premiums; or (2) “surplus lines” carriers (also known as “excess lines”) not approved by, nor required to be located in the State of Florida – the obligations of these carriers are not approved by the State and they may freely raise their premium rates as they deem fit. Over the past 5 years, the unregulated surplus lines carriers have disturbingly dominated the Florida property insurance market, a state with the highest insurance rates in the nation for its unique risks like hurricanes and floods.
Unfortunately for owners of houses, apartments, and businesses in Florida, the State’s response to the increasing dominance of non-admitted carriers over the property insurance market has been to pass new laws weakening the oversight of insurance agents who sell surplus lines policies. See Florida House Bill 301. By doing this, the State is not only allowing, but actively assisting unregulated surplus lines companies to sell property insurance policies with less accountability. For example, if an admitted carrier denies coverage for a windstorm loss, the Florida policyholder knows they can bring a legal action in Florida to try and recoup the value of the property damage, along with reasonable attorneys’ fees and costs. In that same example, if the policyholder held a surplus lines policy, they may not be able to challenge their insurer in Florida court, as many surplus lines policies contain mandatory arbitration clauses, some of which require these arbitrations (where discovery is limited) to occur in other states like New York, even if the whole dispute stems from property damage in Florida.
Not all hope is lost if you purchased a surplus lines policy, as some non-admitted carriers still boast an “A” AM Best Rating and they do offer coverage in areas and for types of risks that are avoided by admitted carriers. That being said, admitted insurance carriers are approved by Florida’s Office of Insurance Regulation, backed by the Florida Insurance Guarantee Association, offer standardized coverage forms, and do not impose surplus lines taxes and fees (including a 5% surplus lines tax). These benefits often tilt the advantage in favor of admitted carriers, however, admitted carriers may still be superior to some lower-ranked admitted carriers, like Citizens.
Deciding How and When to Pursue Your Insurance Claim
After learning of a loss to your home, or “occurrence,” the first thing a policyholder should do is document everything. In particular, they should take pictures and video of the property damage, such as a burst pipe, discoloration on ceilings, cracking on walls/floors, or other evidence of water damage, broken roof tiles, mold, fallen objects, etc. This should be done prior to reporting a claim to the insurer. If necessary, a policyholder should retain estimators, remediators, and other professionals to assess the scope of the damage, however, an attorney can manage this process. At this stage, some homeowners fall into the trap of (1) filing a claim themselves; or (2) hiring a public adjuster. What these policyholders fail to realize is that public adjusters do not have the ability to file a lawsuit and their fees often eat into a settlement if a lawsuit is necessary. The same principle applies to non-attorney claimants, who are not typically taken seriously by insurers.
Whether your house or apartment is covered by an admitted Florida insurer, or a surplus lines carrier, it is always advisable for a policyholder to be represented by competent legal counsel when filing a claim. Indeed, insurers can and will use everything they learn from a policyholder against them. Founding Attorney of Salomon Smith PLLC, Daniel Smith, worked for years defending the interests of insurance companies, before starting the firm in 2019 and focusing its insurance law practice exclusively on the representation of policyholders.
The attorneys at Salomon Smith are experienced at using Florida law to maximize the financial compensation to their clients. For example, Florida Statute 627.428 awards attorneys’ fees to prevailing policyholders who successfully challenge wrongful coverage denials and underpayments – so the money needed to repair your property will not be spent on legal fees. Rest assured; you will never have to pay the firm for legal services unless there is a recovery. Florida Statute 626.9744, the “Matching Statute,” may also require an insurer to pay the entire cost of replacing a floor, ceiling, or other area, where the replaced property does not match the quality, color, or size of the pre-damaged property. This could result in a new roof if the tiles are discontinued, or a new floor if an older terrazzo floor cannot be replaced.
The attorneys at Salomon Smith are Florida homeowners with decades of collective legal experience litigating in South Florida. We want to hear from you to help you navigate this complicated area and get you paid for damage to your house, apartment, or business. After all, you paid good money for your premiums and deserve compensation for a legitimate claim. Remember, time is of the essence to preserve your claim! Contact attorney Daniel Smith directly at 305-297-1018 or firstname.lastname@example.org to understand your insurance policy and available coverage, discuss your options, and answer your questions.