Category Archives: Property (Homeowners)

How the Surfside Condo Collapse Highlights Florida’s Insurance Issues

The tragic collapse of the Champlain Towers South condominium in Surfside, Florida, immediately brought to the fore questions about building structural integrity and safety. But as surviving condo owners filed insurance claims and started trying to rebuild their lives, the tragedy is bringing to light big insurance problems in the state.

The disaster will reveal how most property owners in Florida are underinsured, with bigger implications about the insurance market in a state that is seeing rising sea levels and increasingly severe storms with climate change, according to Kristen White, a Senior Associate and Managing Attorney of Roig Lawyers’ First-Party Property Division. Roig Lawyers is a minority-owned law firm that focuses on insurance.

Litigation and Payouts Will Take Years

Attorneys have already filed dozens of lawsuits in the wake of the collapse seeking about $1 billion in payouts, but the condo association’s policy limit of $50 million means condo owners are in the beginning of a long fight to get a share of a small pot.

With a condo, a homeowners’ insurance policy will typically cover everything in the unit inside the drywall. The condo association’s commercial policy typically covers the drywall to the outside – the expensive stuff. Further, Commercial insurers only cover specific causes of loss, and those insurers won’t start paying claims until that cause is determined, which could take years. “And some of the homeowner carriers won’t pay until the commercial policy pays out, so some of the condo owners will have to wait,” White says.

The policy limits are also what were bargained for by each condo unit owner. It will be very difficult for the owners to find a way to exceed the insurance policy limit.

“The condo owners would have to find some bad faith to prove willful actions or willful negligence where someone was criminally liable. They would have to first prove the insurance company breached contract by not paying everything, and then they would have to prove bad faith,” she says. “There are a lot of things that will have to come into play to get beyond the policy limits.”

The litigation process will drag on for years, which will not be helpful for condo owners who have lost everything.

“We’re probably going to start hearing stories once we get a cause of loss and most of the policies begin to pay out,” White predicts. “Someone with a ground floor condo, one bed and one bath, may get $20,000 from their individual homeowner’s insurance company, and that’s it. Their mortgage may be closer to $200,000. That owner will have to wait for the condo association’s insurer to pay out, and maybe they won’t cover the $180,000. What’s that condo owner going to do?”

Winning Against Insurers, Everyone Loses

If a court does rule in favor of condo owners to exceed the policy limits, it could push the insurance carriers into insolvency or out of the market altogether. Florida has already been seeing pressure on its insurance market because of climate change. Citizens insurance, the state insurer of last resort, estimated it would have over 750,000 policies by the end of 2021, up from 420,000 policies in October 2019, as other carriers leave certain areas.

“It’s going to become more difficult to get coverage in Florida,” White says. “Carriers are going insolvent, trying to balance their risk, and leaving the market, which is creating a vacuum. With the passage of SB 76, policies are going to get stricter, and insurance will get more expensive for less coverage.”

Florida property owners will see taxes and premiums increase to offset the increased costs and risks. Premiums don’t just pay for property; they pay for adjusters, underwriters, customer service, and litigation. White noted that insurance fraud will add more pressure to the market.

“Insurers are fighting lawsuits because they can’t just pay out every claim due to the terms and conditions of the policies. They have to fight the claims that aren’t legitimate so they can pay the ones that are,” White says. “That’s what’s going to happen with Surfside. There’s going to be a lot of litigation for years to figure out how much the carriers will pay. Those are all costs — for lawyers, engineers, and legal fees. Who will bear those costs? Policyholders.”

Filed under Property (Homeowners)

Rise In Searches For ‘How To Set Fire’ As Economy Crashes

Internet search queries for “how to set fire” are spiking amid the downturn from the coronavirus pandemic, which experts say is a sign that some people may be planning to commit insurance fraud. Search term data compiled by Google shows that the number of users looking for information on how to start a fire grew by 125% in the last week of March.

Insurance companies are highly attuned to the potential for fraud, but risk experts believe it’s too soon to tell. There was a similar kind of anticipation around 2007 to 2009, “that we were going to see just ungodly amounts of insurance fraud triggered by an economic downturn,” said Frank Scafidi of the National Insurance Crime Bureau, but this never occurred to the scale some projected. They saw an increase in arson activity related to cars, however, where a vehicle would be reported stolen to an insurance company when the owner had a hand in the car’s disappearance.

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Filed under Fraud, Property (Homeowners)

Jacksonville Woman Pleads Guilty to Disaster Fraud

Bernita Willette Carswell of Jacksonville pleaded guilty to one count of disaster assistance fraud. Carswell claimed her primary residence was damaged during Hurricane Irma, causing her to stay in a nearby rental property. The Federal Emergency Management Agency paid Carswell $15,024.80 in rental assistance, although she never actually left her home. She faces up to 30 years in prison, as well as paying restitution.

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Filed under Fraud, Property (Homeowners)

UPDATE: Jacksonville Roofer Pleads Guilty and Pays Back Homeowner in Clay County

Jacksonville roofer Roger Van Den Bosch has paid back one Clay County homeowner and pleaded guilty to first-degree misdemeanor trespassing. He resolved a separate Duval County case, pleading guilty to four felonies, and agreeing to pay back the customers fully. Van Den Bosch and his company Kinnecorps still face a civil lawsuit from Florida Attorney General Ashley Moody.

Click here to read the article. (Previous post)

Filed under Fraud, Property (Homeowners)

Florida Panhandle Struggles to Recover from Hurricane Michael

Thousands are still struggling to recover from Hurricane Michael in the Florida Panhandle. The Category 5 storm left 22,000 of Bay County’s residents homeless and few affordable living spaces available. With nearly $7 billion in total insurance losses, about 1 in 6 insurance claims remain unresolved. There is reportedly a mental health crisis and a shortage of healthcare professionals as well.

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Filed under Hurricanes, Property (Homeowners)

UPDATE: Roofer Convicted of Insurance Fraud in Duval Charged with Grand Theft in Clay

Jacksonville roofer Roger Van Den Bosch has been officially charged with grand theft in Clay County, just months after pleading guilty to insurance fraud, forgery and theft. In May, the Kinnecorps owner was convicted in Duval County and ordered to pay more than $50,000 in restitution, serve probation and do community service.

Prosecutors are now focusing on a Van Den Bosch’s felony grand theft charge, which he plead not guilty to in a case involving a Clay County homeowner.

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Filed under Fraud, Property (Homeowners)

UPDATE: New Charges Filed Against Jacksonville Contractor & Suspected Fraudster

Eighteen new charges have been filed against Jacksonville contractor, Wyatt Green. Green was arrested in April on charges of organized fraud, forgery and grand theft. The list of Green’s victims has grown from a handful to 19. Homeowners contacted I-TEAM saying that their insurance companies had paid Storm RS to make repairs to their homes that were never completed.

Click here to read the article. (Previous post)

Filed under Fraud, Property (Homeowners)

Florida Supreme Court Dismisses Review of Assignment of Benefits Dispute

A divided Florida Supreme Court discharged jurisdiction and dismissed the review proceeding of an assignment of benefits case due to a law that was passed this spring revamping the AOB system.

According to court documents, the policyholders, John and Liza Squitieri assigned benefits to Restoration 1 to clean up water damage in their home. However, their insurance company Ark Royal Insurance Co. refused to pay the full amount. Restoration 1 sued Ark Royal for breach of contract but lost in circuit court and appeals court.

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Filed under Legislation, Property (Homeowners)

New Claims Technology to Tackle Increased Water Damage Claims

There have been a lot more claims for water damage than wind damage in recent years, including the trillions of gallons of water Texas experienced when Hurricane Harvey hit in 2017. Since that time, water damage claims have gone up each year, representing more than 50% of hurricane claims.

Here are a few of the new technologies in the following areas are being used to help combat this uptick in water and flood loss:

  • Faster, easier and better-targeted forms of communication
  • Faster estimating
  • Virtual inspections
  • Damaged item valuation
  • Smarter vendor selection using data and analytics

Click here to read the article.

Filed under Property (Homeowners)

Florida CFO Urging Insurers to “Step Up” in Closing Out Remaining Hurricane Michael Claims

Florida CFO Jimmy Patronis is urging insurance companies to resolve the more than 21,000 open insurance claims related to Hurricane Michael. On the 9-month anniversary of Hurricane Michael, CFO Patronis released a statement to acknowledge “great strides in recovery,” but noted there’s a lot more work to do.

Click here to read the release.

Filed under Property (Homeowners)