By William Rabb 

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is

Starting today, May 16, Florida insurance agents and 68,000 policyholders will have 45 days to find new homeowners and dwelling coverage, under a financial restructuring plan submitted by FedNat Insurance and its sister companies.

But unlike an insolvency, FedNat Insurance Co. will not be liquidated, and will continue to pay some open claims, at least for a while. That could help the Florida Insurance Guaranty Association avoid having to, once again, raise the assessment on other insurers, industry insiders said.

“The early cancellation of policies … is an extraordinary statutory remedy reserved to address insurers which are or may be in hazardous financial condition without the cancellation of some or all of its policies,” reads a May 13 consent order filed by the Florida Office of Insurance Regulation.

FedNat’s short-notice restructuring plan was ordered by the OIR in April after the Demotech rating firm downgraded FedNat’s financial standing, from “A exceptional” to “S substantial.” The rating suggests that FedNat still has substantial reserves, but that’s not enough for Fannie Mae and Freddie Mac, which don’t recognize the S rating. That could have forced thousands of insureds to find new coverage.

Some type of restructuring was not unexpected, after the publicly traded FedNat Holding Co. reported more than $103 million in net losses in 2021 and $31 million in losses for the first quarter of this year. FedNat Insurance also announced in November that it was pulling out of Texas, Louisiana, Mississippi, Alabama and South Carolina. Last week, FedNat Holding Co. notified the U.S. Securities and Exchange Commission that it was unable to file its 10-Q financial report on time.

The Florida cancellations will mean further anguish for agents and for homeowners who, just two weeks before the start of hurricane season, are now facing a tightened market with fewer carriers, higher premiums, and more policy restrictions.

“I don’t know what companies will be willing to take on these policies,” state Sen. Jeff Brandes, R-St. Petersburg, told the South Florida Sun Sentinel newspaper.

He surmised that most of the insureds will have to turn to Citizens Property Insurance Corp., the state-created insurer of last resort that has ballooned and will soon become the largest carrier in the state.

FedNat, based in Sunrise, Florida, on Friday sent a notice to its agents, explaining some information about the sudden changes. Some 56,500 FedNat Insurance policies will be canceled, including HO-3, HO-4, HO-6, and DP-3 policies. Sister company Maison Insurance, which is not domiciled in Florida, will drop some 3,300 policies.

Monarch National, based in Florida, will cancel about 8,400 policies but will also take on FedNat’s remaining 83,000 policies, according to the consent order.

Braun (FedNat)

Monarch also has struck a deal to be purchased and to obtain a capital infusion through an investor, according to the May 13 consent order. The order, signed by FedNat President Michael Braun, did not name the investors, but said that the cancellation of the policies was a condition of the investment agreement and reinsurance plan.

FedNat Insurance was founded in 1992 and until just a few years ago was listed as the fourth-largest P&C carrier in Florida. It will now stop writing new policies and will move to wind down operations, the consent order notes. Further details about FedNat’s restructuring plan have been listed as “trade secrets” and are not publicly available from OIR.

FedNat’s notice to agents wasn’t so definite about FedNat winding down. It was careful to note that the FedNat companies are not going out of business, but “are shrinking under a plan being reviewed” by Florida OIR.

“The companies are continuing to have active conversations with the OIR about the remaining policies that have not been cancelled,” the memo to agents reads. “Additional information will be shared once the OIR has completed its review.”

The memo continued: “We regret having to take this action. This cancellation has been issued as part of a financial restructuring plan by the companies to reduce their exposure in Florida. The plan includes the cancellation of approximately 68,200 homeowners policies that pose an inordinate risk to their financial condition.”

Official notices were to be sent today to agents. All affected policies, including those recently renewed, will be cancelled effective 11:59 p.m. local time on June 29, 2022, the notice reads. Unearned premiums should be returned to policyholders between June 15 and July 1.

Unearned commissions from agents may be due soon.

“When the company refunds unearned premiums to insureds, agents are required to refund unearned commissions to the company,” the FedNat memo explained. “Your upcoming commission statement will reflect commissions owed from the unearned premium we refunded to your insured due to our consent order regarding the cancellation of the affected policies.”

The company and the consent order said that reinsurance, expected to spike in price for many carriers in coming weeks, has played a role in the need for the restructuring. FedNat’s current catastrophe reinsurance program expires on June 30, and FedNat Insurance and Monarch both indicated that without the reorganization, they were unable to secure adequate reinsurance and to maintain surplus as required by law.

The FedNat companies will continue to handle claims with dates prior to the cancellation date and FedNat and Monarch must continue to file monthly financial statements with OIR, until further notice.

When FedNat Insurance does wind down its operations, it will be the fourth Florida property insurer to become insolvent or to cease operations in the last five months. This year has seen insolvency for St. Johns Insurance, Avatar Property & Casualty Insurance and Lighthouse Property Insurance Co., which was domiciled in Louisiana but held 13,200 policies in Florida.

Some carriers have taken other steps to reduce losses in what insurers have called a Florida market beset with excessive litigation, storm losses, and fraudulent roof

claims. Heritage Property & Casualty Insurance, facing heavy net losses this year, announced last month that it had filed for an endorsement on homeowners policies, requiring binding arbitration for claims disputes, beginning July 1.

Last week, Universal Property & Casualty Insurance, the largest market-based property insurer in the state, said it had expanded HO writing to several counties – St. Lucie, Brevard, Pasco, and Hillsborough counties, and will now write older homes, up to those built in 1976, in those areas. But roofs must be no older than 10 years, regardless of type of roof material.

Universal’s net income had improved significantly since the end of 2021, after the company dropped almost 60,000 policies in the last 12 months, the carrier reported in April.

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WRITTEN BYWilliam Rabb

Rabb is Southeast Editor for Insurance Journal. He is a long-time newspaper man in the Deep South; also covered workers’ comp insurance issues for a trade publication for a few

Homeowners insurance is essential, so it’s important to understand how it works and how to get it

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is

Homeowners insurance can help cover the cost of repairing your home if it’s damaged. Learn more about homeowners insurance basics. (Shutterstock)

Homeowners insurance is a product you never want to use, but will certainly be glad to have if you do. This type of insurance helps pay to repair or replace your home and property if it’s damaged in an unexpected event, like a fire, accident, or crime. If you have a mortgage, you’re likely required to have a policy, but homeowners insurance is a good idea even if it’s not mandatory. 

Let’s go over how homeowners insurance works, the different types of policies, and how to get a quote.

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What is homeowners insurance?

Homeowners insurance is a policy that helps to restore, rebuild, or replace your home and property should they suffer damage in an unforeseen circumstance, called a peril. Your homeowners insurance policy has other coverage features as well, including paying to cover your legal expenses if someone injures themselves while on your property, or if you’re sued.

Like most types of insurance, you pay a monthly or annual premium to an insurance company for your policy — some carriers even let you pay quarterly or semiannually. If your home or property is damaged, you file a claim to receive a payout.

If you have a mortgage, you may not realize that you’re paying a homeowners insurance premium. In most cases, lenders require you to pay for homeowners insurance as part of your monthly mortgage payment. The lender holds the money in an escrow account and handles the payment for you.

Types of homeowners insurance policies

The type of homeowners insurance policy you need depends on the type of home you live in and how broad you’d like your coverage to be. Keep in mind, the more coverage you have in your policy, the more expensive your premium tends to be. 

Here are the eight basic types of homeowners insurance:


HO-1: Basic form

Basic form is a type of bare-bones homeowners insurance policy. These policies are relatively uncommon, with insurance companies generally offering more comprehensive policies. With HO-1, you’ll only be covered if your home or property is damaged in a limited number of events, including:

  • Fire or lightning
  • Windstorm or hail
  • Vandalism
  • Theft
  • Damage from vehicles or aircraft
  • Explosions
  • Riots

HO-2: Broad form

Broad form offers more coverage than basic form. With HO-2, you receive coverage for everything included in HO-1, plus a few other common ways your home can be damaged. The additional covered perils include:

  • Building collapse
  • Freezing, leaking, or burst plumbing pipes
  • Freezing or leaking HVAC or appliances
  • The weight of ice, snow, or sleet accumulation
  • Falling objects

HO-3: Special form

This type of policy is the most common form of homeowners insurance. The two previous types of policies only cover a certain set of circumstances. HO-3 covers all types of perils, except for cases that are spelled out as exclusions. Common exclusions are earthquakes, flooding, and nuclear accidents.

HO-4: Tenants Broad form

These policies cover people who rent their homes rather than own them. Under tenants broad form insurance, only your belongings are covered. Your landlord will likely have a homeowners insurance policy that covers the structure of the home. An HO-4 policy covers you for the same perils as HO-2 policies.

HO-5: Comprehensive form

HO-5 policies represent the broadest type of coverage, but are also among the most expensive. You’re covered for all perils except for those specifically excluded, but the exclusions on HO-5 policies are fewer and more narrow than other policies. Exclusions usually include floods and earthquakes.

HO-6: Special Condominium form

If you own a condo unit, you’ll want to have an HO-6 policy. This insurance primarily covers your belongings but also protects the interior of the unit. The policies don’t cover the structure of the building, which is usually owned by the condominium association.

HO-7: Mobile Home form

This type of insurance is specifically for mobile homes and similar homes. An HO-7 policy will typically cover the structure of the building, your property and belongings, and any legal liability that arises if someone injures themselves while on your property. 


HO-8: Modified Coverage form

HO-8 policies are generally used to cover older homes. In these cases, the cost to replace the home would be more than the home is actually worth. Like HO-1 and HO-2 policies, this type of insurance generally only covers perils spelled out in the policy.

 What does homeowners insurance cover?

A standard homeowners insurance policy offers a variety of different coverages. Depending on the circumstances or how your home and property are damaged, you may need to draw on different elements of your homeowners insurance policy. Typical policies include:

  • Dwelling coverage — This coverage, often known as Coverage A, pays to repair or replace the house itself if it’s damaged. While shopping for a homeowners insurance policy, you often decide on your coverage amount based on how much dwelling coverage you need. You can choose the amount you’d like to carry, but you generally want a coverage limit of at least 80% of what it would cost to completely rebuild your home. You should strongly consider having a high enough limit to rebuild your home from the ground up should it be completely destroyed.
  • Other structures coverage — Coverage B pays to repair or replace other buildings on your property, like a garage, gazebo, or shed. In general, your coverage limit for other structures will be 10% of the limit on your Coverage A.
  • Personal property coverage — This coverage, called Coverage C, pays to replace the things you own inside your home, like your furniture, clothes, and other belongings. Your personal property coverage limit will generally be 50% of your dwelling coverage limit. However, you can also negotiate a separate limit when shopping for a policy depending on the value of your belongings.
  • Loss of use coverage — This type of coverage, known as Coverage D, helps to cover additional living expenses you run into if you need to move out of your home while it’s repaired or replaced — like rooms in a hotel, meals out, or storage space. Your Coverage D limit will generally be set at 20% of your dwelling coverage.
  • Liability coverage — Liability coverage, or Coverage E, pays for your defense and any damages assessed to you if you’re found legally responsible for someone injured on your property. Standard homeowners insurance policies often include at least $100,000 in liability coverage, but higher amounts — between $300,00 and $500,000 — are typically recommended.
  • Medical payments coverage — This type of coverage, known as Coverage F, provides a relatively small amount of money to pay for the medical bills of someone injured while on your property. This coverage may pay out between $1,000 and $5,000.

Visit Credible to compare homeowners insurance quotes from various insurance carriers.,/FOX%20BUSINESS/Personal%20Finance,/FOX%20BUSINESS/Money/Insurance&meta_segmentId=d505313b-d5fd-4681-8880-ac6c0c2cf67e&meta_contentCategory=personal-finance&meta_contentDistributor=owned&meta_campaignCode=&meta_pageUrl=

Different levels of coverage

The dollar amount of coverage isn’t the only thing to consider when shopping for a homeowners insurance policy. Policies with the same coverage limits may have different levels of coverage, which dictate how your claim is handled. 

Here’s an explanation for some of the more common levels of coverage. The following generally refer to dwelling coverage and personal property coverage:

  • Actual cash value — With this method, insurers pay claims based on what it would cost to replace the damaged materials, subtracting an amount in depreciation. The older your property is, the more it’ll be reduced in value for the purposes of your claim. If your roof was damaged, the insurer will take into account the age of the materials. So, if your roof is 15 years old and the materials are designed to last for 20 years, the amount you receive will be roughly 25% of the cost of the roof. That’s because your roof is determined to have just one-fourth of its useful life remaining.
  • Replacement cost — This level of coverage is more comprehensive and will usually pay out more than a policy paying claims based on actual cash value. With the replacement cost method, the insurer pays out based on the cost to fully repair or replace the property that’s damaged with similar materials. This is regardless of its age — if that same 15-year-old roof was damaged, you’d receive the full cost of replacing it from your insurance company. However, to get this level of coverage, you’ll generally pay more in premiums on your policy. You also must generally buy the replacement materials and file a receipt to be reimbursed.
  • Extended replacement cost — With extended replacement cost coverage, you have a little more protection. If the actual replacement cost of whatever is damaged exceeds your coverage limit by a relatively small amount, you’ll still receive enough money to cover the cost. To qualify, the replacement cost generally needs to be within about 20% and 25% above your limits.
  • Guaranteed replacement cost — This takes extended replacement cost coverage even further, and represents the most complete coverage you can get. This coverage level will pay the replacement cost of what’s damaged regardless of the coverage limits of your policy (up to a specified maximum). You may not be able to buy this coverage level if you have an older home.

What homeowners insurance doesn’t cover

Any homeowners insurance policy you buy will have certain exclusions — things that aren’t covered. These can be different from policy to policy, so check the “Exclusions” section on your policy for a full outline of what isn’t covered. However, some standard exclusions are common to most policies, including damages caused by: 

  • Flood
  • Earthquake
  • Poor home maintenance
  • Sewer backups

Harm to your pets usually isn’t covered, and neither is damage to your car.

How much does homeowners insurance cost?

The amount you’ll pay for homeowners insurance will depend on the level of coverage you need, additional coverages you buy, and where you live. Nationwide, the average annual premium for homeowners insurance policies is $1,278 per year, or $106.50 per month, according to data from the National Association of Insurance Commissioners

Factors that affect the amount you’ll pay include:

  • Location — People who live in parts of the country more prone to natural disasters will generally pay higher premiums than people in areas that don’t experience them as regularly. Even within a region, your costs can vary depending on your location.
  • Deductible  When you file a claim, you generally must pay a portion of the repair cost before insurance kicks in to cover the rest. This is called your deductible. The lower your deductible, the less you have to pay out of pocket, but the higher your premium cost tends to be.
  • Amount of insurance coverage  You’ll generally buy a policy with a dwelling coverage limit high enough to cover the value of your home. The higher the value of your home, the higher the coverage limit you’ll need — and the more expensive your premium will be.
  • Age of your home — Older homes tend to be more expensive to insure than newer ones.
  • Your claim history  Insurers will try to gauge your risk by looking at how often you’ve filed insurance claims in the past, often using a Comprehensive Loss Underwriting Exchange report. These reports collect data for the past seven years of auto and property insurance claims. People who have filed numerous claims may be considered a higher risk and need to pay more in premiums.

How to get a homeowners insurance quote

Shopping around can help you get the best homeowners insurance policy for you at the lowest cost. To do that, you’ll need to get quotes from multiple insurers. Here’s how to get a homeowners insurance quote:

1. Figure out the coverage you need

Estimate how much it would cost to completely rebuild your home and replace everything that’s inside. You can ask an insurance agent to help you come up with this figure. The replacement cost of your home is a good starting point to determine the coverage limits you need on your policy. 

2. Look into home insurance companies

Do some research on insurance companies. You can use a resource like Consumer Reports, which rates and reviews insurance companies. You may also be able to get a list of insurers in your area from your state’s department of insurance.

3. Get quotes from each company and compare them

Get a rate quote for the coverage limit you determined in Step 1 from each company on your list. Make sure the rate quote you receive includes the coverage limits, your deductible, and the monthly or annual premium you’d pay. As you compare one quote to another, you want coverage limits, deductibles, and other features to be similar. 

Credible makes it easy to quickly compare homeowners insurance quotes from different insurance carriers.

By William Rabb 

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is

A now-suspended Miami lawyer, along with the successor to his law firm, a public claims adjuster and a restoration company, have agreed to pay a total of $1 million to settle a lawsuit brought by Citizens Property Insurance Corp. that had accused the defendants of fraud in hundreds of insurance claims.

The settlement is far less than what Citizens, Florida’s largest property insurer, had initially sought from attorney Scot Strems and his co-defendants. But officials said it should help deter other bad actors in a fraud-plagued Florida litigation environment.


“This settlement certainly accomplishes what we set out to do, which was to seek justice for what we saw as an egregious fraud and to expose the threat of this type of activity,” said Joseph Theobald, senior director of Citizens’ special investigations unit.

The settlement, announced Thursday, is the latest development in what Florida insurers have called widespread, coordinated deception and exaggeration in assignment-of-benefits claims, which have reportedly cost carriers millions of dollars. Citizens filed the suit in 2020. That was about the same time that the Florida Bar moved to suspend Strems for violating numerous Bar rules, including filing thousands of lawsuits against insurers, many of them on the same claim. Strems’ suspension from practice is due to end later this year.

Also named in the suit and settlement are Contender Claims Consultants in Miami and its principal Guillermo Saavedra; and All Insurance Restoration Services and company leaders Cesar Guerrero and Derek Parsons.

Florida’s chief financial officer, Jimmy Patronis, said the settlement and the investigations that led to it were significant.

“Had this fraud been left unchecked, it could have cost policyholders $16 million a year,” Patronis said in a statement. “As criminal investigations continue, this action sends a loud signal that if you’re ripping off customers, we’re going to find you and hold you accountable.”

Patronis did not say what he based the $16 million figure on, but a Citizens spokesman said that the Strems law firm was responsible for as much as $112 million in questionable claims and litigation filed from 2015 to 2020.

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The Strems firm closed in 2020 and most of its attorneys formed a new firm known as The Property Advocates. A lawyer for Strems and the new firm said Thursday that the $1 million settlement was a pittance compared to the $65 million that Citizens had demanded early in the legal process and that it did not cover the insurer’s investigative and legal costs. The defendants agreed to settle in order to limit further expenses and to move on, said attorney William Schifino Jr., of Tampa.

“This is not a victory for Citizens by any stretch of the imagination,” Schifino said.

He noted that at a 2021 hearing, Miami-Dade Circuit Judge Michael Hanzman, the same judge who is overseeing a $1 billion settlement in the Champlain Towers condominium collapse, questioned the sagacity of Citizens proceeding with the lawsuit.


“I would strongly encourage Citizens, before it requires the taxpayers to fund this litigation much longer, that it seriously explore potential resolution, given the limited nature of the funds that may be available as well as the legal obstacles to this claim,” the judge said, according to an official transcript of the hearing that Schifino provided to the Insurance Journal.

Citizens’ spokesman Michael Peltier pointed out that Citizens is not funded through taxes, but through premiums paid by policyholders. Florida law requires that the insurer levy additional assessments on policyholders only if it experiences a deficit in the wake of catastrophic losses.

Schifino said that Citizens’ years-long investigation “was proving to be very expensive to Citizens,” but had produced little evidence against his clients. he said.

Citizens said its investigative unit began digging into the Strems firm in 2016, after seeing suspicious patterns in claims and claims litigation. Investigators sifted through more than 5,000 claims and found that many of them followed a similar track, Peltier explained: Most were filed within 45 days after a loss; multiple claims were filed at the same time; claims were filed after repairs had been completed and after an AOB agreement had been signed; the same plumber, water mitigation company and adjuster were usually used; and boiler-plate plumbing invoices were used in some cases.

Citizens sent about 400 cases to the Department of Financial Services’ Division of Investigative and Forensic Services, which initiated its own investigation. In 2020, Citizens went ahead with its lawsuit, alleging that the defendants had formed an illicit enterprise, all working together to defraud insurers. The enterprise violated state and federal anti-racketeering laws, created false invoices and inflated the cost of claims, mostly on non-weather water damage, the suit charged.

The alleged fraud usually began with a Contender adjuster promising free home remodels to homeowners, the lawsuit’s 392-page amended complaint reads. Once inside the home, “Contender sheds its public adjuster duties” and begins working for the enterprise to manufacture claims and damages.

“Contender convinces homeowners to provide intake data and sign an agreement on a (computer) tablet to help adjust their claims,” the complaint reads. “In truth, however, Contender is serving as an unlawful law firm agent to solicit clients for Strems Law Firm, and as a feeder to AIRS (All Insurance Restoration Services). The tablets point to, which was designed to create retainer agreements between the homeowners and Strems Law Firm, without any discussion with the law firm or any attorney.”

In answers to the complaint, the defendants denied wrongdoing.

The DFS’s own investigation into Strems, Contender Claims Consultants and another law firm appeared to be making progress in recent years, despite a lack of cooperation from defendants. Agency investigators subpoenaed records from Contender and others, but the defendants refused to comply, according to court records. In 2021, a circuit court judge essentially ordered Contender to comply.

Then, In September last year, DFS appeared to drop the pursuit of the records. Agency officials said they couldn’t discuss the reason why but said an investigation was still underway. Schifino said he was not familiar with the DFS investigation, and DFS officials were not available late Thursday.

Citizens’ leaders did not say how the defendants in the civil suit would share the burden of paying the $1 million settlement, or if it has been paid. The case was dismissed in late March after the settlement was formalized, which suggests that the payment has been made, Schifino said. It was unclear why the settlement was not announced sooner.

Principals with the adjusting firm and the restoration firm and their attorneys could not be reached for comment Thursday.


By Michael Tobin and Nikki Ekstein 

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is

Airbnb Beefing Up Guest Services With Satisfaction Guarantees, AirCover Protection

By Michael Tobin and Nikki Ekstein | May 12, 2022

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Wednesday morning Airbnb Inc. revealed what it’s calling its “biggest change in a decade.” Beyond modifications to its user interface and nifty new bells and whistles, it’s also addressing one of the company’s greatest pain points: poor consumer protections for guests.

Airbnb will now offer a substantial set of satisfaction guarantees for guests and is staffing up an army of customer service agents to deliver on them. “There are inherent structural advantage to hotels, like product consistency and having a front desk,” explains CEO Brian Chesky over Zoom. “And it’s been an underlying assumption for many years that we really can’t meet hotels in that sense.”

AirCover for Guests is his bid to change that. “We wanted to take some of the uncertainty of Airbnb off the table,” he says, “and make the idea of being one-of-a-kind an asset, not a liability.”

Take the misadventures of San Diego-based Kelsey Swann, who was looking forward to a quiet escape in California’s Sonoma wine country with her kids, only to find the timeshare resort she booked on Airbnb was far from that ideal. First, she was given a multiple-hour runaround between three different units which were all either unavailable, unlockable, or uncleaned. Then, once finally settled, the karaoke parties started, blaring through paper-thin walls from what seemed like every direction. They checked out the next morning.

To add insult to injury, during a days-long battle with customer support to get refunded for three unused nights, she had $3,500 fraudulently charged by the same host. Getting those charges reversed, she says, took several days and required extra support from her credit card company.

Amid the drama, she turned to a family travel Facebook group for advice; sympathetic comments poured in by the dozens. “Airbnb is the worst,” one group member told her. “We got nothing because the host disputed everything,” rallied another, who had been in a similar situation. “We loved using Airbnb for years—but it’s back to hotels for us,” another more chimed in.

Airbnb Bets on Remote Work With New Tools Including Insurance

Traditionally, Airbnb will pay out the portion of a booking that a host has earned within 24 hours of check-in. If a guest’s problem hasn’t been resolved by then, the traveler has no real recourse or protection with Airbnb, and the host has little incentive beyond a poor review to make things right.

Hosts have long enjoyed a wide array of insurance-like protections called AirCover for Hosts. There’s $1 million in liability insurance and another $1 million in damage protection. AirCover for Guests nudges toward parity.

Hosts, however, have long enjoyed a wide array of insurance-like protections called AirCover for Hosts. There’s $1 million in liability insurance and another $1 million in damage protection. The plan covers messes left by pets and other deep cleaning costs, too, with generous 14-day filing windows.

AirCover for Guests nudges toward parity. It extends the window to file complaints to 72 hours and adds guarantees that customers will be rebooked or refunded when things go wrong—be it inaccurately described listings, pests, or broken heaters.

Airbnb Adds Protection and Insurance Features With AirCover

Wednesday’s other brand-wide upgrades are also about creating a more user-friendly experience. There’s a redesigned homepage, the ability to search more open-endedly through categories (think “amazing pools,” “windmills,” or “yurts”), and a new tool called “Split Stays” that helps travelers seamlessly line up multiple bookings for trips that last longer than two weeks.

But AirCover for Guests is unique in how it underscores the two-sided marketplace of Airbnb’s business model: satisfying both the hosts who open their homes and the guests who stay in them. And as early response indicates—hosts caught wind of the policy earlier this year—pleasing them both is difficult. While guests should be thrilled with having more time and support when things go wrong, hosts say the same policy hurts them by opening the door to scammers who want a free stay.

How It Works

The new policy will cover not just problems that arise after check-in, but incidents where a host cancels a stay within 30 days of the reservation, in which cases Airbnb will automatically rebook guests into comparable (or better) homes.

That would have helped Roberta Roy, a Seattle-based mom of three who had her Rome apartment booking canceled at the last minute “because the previous guest broke the bed.” Trying to find something new on her own with just a few days to spare, she said, cost her twice as much. And calling Airbnb for help was nearly impossible thanks to an impenetrable automated phone system: “I felt like the issue could’ve been very easily addressed by Airbnb, but they were completely unreachable.”

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For guests who encounter issues at the scene, getting support will now be as simple as pushing a red “help” button in the “Trips” tab of their app. This begins an official arbitration process, via text thread, with the newly-expanded, better-trained Community Support team.

Assuming the host has already been contacted and was unable to offer an acceptable solution, customer service agents will have access to an automatically-generated list of Airbnb properties similar to the existing booking, from which they will be able to immediately rebook the guest at no cost.

Chesky says that the directive will be to upgrade a guest when in doubt: “We’d rather you be convinced this is a better home, not a worse home.”

An Airbnb property in the Great Smoky Mountains. Photographer: Olivia Carville/Bloomberg.

Airbnb will also have “a second line of defense” prepared for big events and high-demand seasons, when inventory can be fully booked out.

“Let’s say it’s Palm Springs during Coachella and all the Airbnbs are booked,” says Chesky. “Our agents will also have queued up properties or hotel rooms that might be off platform.” The idea, he explains, is having more agents being able to respond in more languages, to offer solutions “in minutes or hours rather than days.”

The Early Response

Hosts were tipped off to the policy change earlier in the year and have been discussing it in Facebook hosting groups. Running through the largely negative posts are fears that guests would take advantage of the policy and claim a refund for minor, or in worse cases, fabricated complaints.

Photo: Akos Stiller/Bloomberg

Some hosts Bloomberg spoke to in April said they were contemplating creating a website to attract their own bookings, so they wouldn’t have to deal with Airbnb’s policies and rules. Kim D., a Superhost who has properties in Western New York and Florida, said she worries that a guest could try to take advantage of the new policy and seek a refund for a minor problem. (Bloomberg is not using her last name because she worries Airbnb could remove her listings.)

A guest could stay at her property for three nights and come up with a minor issue for wanting to leave, which could risk Airbnb approving a refund, she said, adding there’s a “gray area” between what hosts, guests, and the company view as worthy of reimbursement.

The company views the new policies as breathing room for guests. “We didn’t want to be punitive to hosts, but a lot of guests don’t check out the entire property the first day they arrive and they discover something the second day,” Chesky said of the timeframe at an event Tuesday. “And that’s kind of a ticking time bomb—by day two if you discover anything you can’t call us? So we try to be reasonable.”

A 72-hour window would also give the host and guest more time to address the issue themselves, an Airbnb spokesperson told Bloomberg.

Chesky thinks that for most hosts, the policy should be a net benefit. “95% of hosts—maybe 99%—will be happy because they’re doing a great job. And if a host cancels or lists of properties that are not as described, it kind of hurts the brand of every host,” he says.

For consumers like Swann in Sonoma, it may be too little too late. “Would I use them again? Maybe,” she says. Rome’s Roy, however, is encouraged. “We love Airbnb. We have always used Airbnb,” she says. “I’m really glad they’re addressing these issues.”

Copyright 2022 Bloomberg.

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Lawsuits and criminal accusations have erupted after a luxury car dealer in South Florida filed for bankruptcy and as many as 90 Lamborghinis, Ferraris and other high-priced cars disappeared from the dealership.

At least nine people have filed suit in Broward and Palm Beach counties, alleging that they bought the vehicles but they were never delivered, or that the titles are missing and ownership is in dispute, the South Florida Sun Sentinel reported.

Boca Raton police also have opened at least 26 investigations regarding alleged fraud over the cars, after Excell Auto Group declared bankruptcy in April. The business and others were owned by Scott and Kristen Zankl, the newspaper reported.

Derek Stephens, who is suing two businesses involved in the case, said he lost a 2013 Ferrari 458 Spider that he had left on consignment at one of the Zankls’ businesses, Karma of Palm Beach, according to the Sun Sentinel. Karma reportedly told Stephens that the car was taken by the company’s landlord in a dispute over unpaid loans. Karma had agreed to pay Stephens $230,000 if it sold the vehicle, Stephens’ lawsuit states.

“Some people don’t feel sorry for him, having that kind of car,” said Stephens’ attorney Darin Mellinger. “Even still, it’s a sad situation.”

Plaintiffs will likely have to wait months or years before the disputes are settled while the bankruptcy court sifts through all creditors that may be owed money by the dealership and related businesses.

The Excell Auto Group bankruptcy petition estimates that it owes $10 million to $50 million to as many as 49 creditors. Assets available for distribution to unsecured creditors range from $0 to $50,000, the filing shows. The court has asked the dealership’s owners to produce a list of all the missing cars locations.


May 11, 2022

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Three Florida legislators will hold a town hall-type meeting Thursday to gain input from residents ahead of the special session called to examine the state’s property insurance issues.

The gathering in Melbourne City Hall, starting at 6 p.m., was organized by Rep. Randy Fine, R-Palm Bay. Rep. Thad Altman, R-Indialantic, and Senate Majority Leader Debbie Mayfield, R-Indialantic, also will attend, according to a Florida Today news report.

Fine said rising homeowner premiums have generated more phone calls and emails to his office than any other issue in recent months. Residents at the town hall will be able to voice their concerns about what should be done about the crisis.


“As the Legislature prepares to return to Tallahassee this month to tackle the crisis in property insurance, I want to give my constituents from around Brevard County the opportunity to share their perspective with me, Sen. Mayfield and Rep. Altman, as we figure out how to tackle this complex issue,” Fine said in a statement. “For me, this event will primarily be an opportunity to listen.”

At the top of the list of concerns, Fine said, is the number of inappropriate claims for supposed hail damage to roofs, which are resulting in increased expenses for the insurers and financial losses.

Members of the public who sign up to speak on Thursday each will be given an amount of time, based on the total number wishing to speak, the newspaper reported.

Gov. Ron DeSantis has called lawmakers to the May 23-27 session to examine a number of property insurance issues, including possible changes to the Florida Hurricane Catastrophe Fund that could help reduce the cost of reinsurance, along with ways to limit claims and litigation, including wider use of binding arbitration.

Citizen’s Property Insurance is bearing the weight of state’s coverage

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As Florida homeowners wait for a special session on property insurance reform to convene in May, more and more insurance companies are facing trouble and homeowner’s premiums are going up while policies are getting dropped by the thousands.


By: Stassy Olmos

Posted at 5:21 AM, May 09, 2022

and last updated 10:25 AM, May 09, 2022

TAMPA, Fla. — As Florida homeowners wait for a special session on property insurance reform to convene in May, more and more insurance companies are facing trouble and homeowner’s premiums are going up while policies are getting dropped by the thousands.

As of May 1, seven property insurance companies in Florida are currently in liquidation due to financial losses. Several national companies have pulled out of the state, and for some still operating, their ratings are dropping — the latest is FedNat which has 152,000 policies in Florida.

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One of the largest insurers in the state Fednat Insurance Group out of the Sunrise area in South Florida, just did a filing with the SEC indicating they may no longer be able to continue to operate because their rating was downgraded,” said Mark Friedlander a spokesperson with the Insurance Information Institute.

The rating comes from Demotech, downgrading FedNat from an “A” or exceptional to an “S” substantial.

Their paperwork filed with the Securities Exchange Commission states “there is substantial doubt regarding its ability to continue as a going concern under generally accepted accounting principles.”

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That stops them from insuring homes that have federal mortgages and it also stops independent in most cases. It will stop independent agents from representing them,” Friedlander explained.

This follows Lighthouse Insurance receiving a “Not Rated” from Demotech, the lowest rating possible.

Technically it’s a domicile company in Louisiana,” Friedlander said. “That’s a regulatory issue so the Louisiana Insurance Department took action against them or put them in receivership a couple of weeks ago, but they’re a Florida company. They’re based in Tampa, and they have about 27,000 Florida homeowners.”

Florida Strategic Insurance in Tampa Bay has about 3,000 policies with Lighthouse. 

Every single one has to be rewritten,” Florida Strategic Insurance partner Mike Puffer told ABC Action News.

RELATED: Lighthouse Homeowners insurance liquidation leaves customers in the lurch

On top of hundreds of thousands of customers getting dropped from their insurance policies for having older roofs, Puffer said many companies aren’t writing any new policies.

“As an agency,we’re writing roughly 80% to 90% of our new business with Citizens,” Puffer explained. “The crazy thing is as Citizens is supposed to be the carrier of last resort, but they’re again becoming, if they’re not already, the largest insurance company in the state again.”

Citizens only covers homes valued up to $700,000. Puffer said homeowners are forced to go to the excess and surplus market for coverage that is often more expensive and doesn’t cover as much because companies don’t have to follow Florida guidelines.

We went to the state-backed Citizens Property Insurance Corporation to ask how they’re handling this weight of homeowners coming to them.

Since March, we’re adding about 6,000 new policies a week. And that has been described by our CEO it’s kind of an unsustainable growth,” said Michael Peltier a spokesperson for Citizens. “We’re, we’re supposed to be the insurer of last resort, not the insurer’s first choice.”

Peltier said their policies are up 55% from January 2021, now approaching a million policies.

But, it’s happened before.

Back in 2012, Citizens had about a million, million and a half policies, so we were huge. Basically coming off a couple of years of storm seasons, you know, several years earlier,” Peltier explained. “10 years, we had no storms. Citizens saw our policy count go down from 1.5 million to about 400,000 and the private market was booming.”

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But this hurricane season is predicted to be above average, which means claims could go up, and that cost could fall on all Floridians.

“If perchance a big storm would hit and would exhaust our ability to pay, Citizens is required to level surcharges on our policymakers,“ Peltier said. “And then if we, if a deficit is still there, then we have to levy assessments on Floridians, and that’s the risk that we’re trying to avoid.”

Citizens is waiting to hear back on a decision from the Office Of Insurance Regulation (OIR) on a rate increase of 11% in the coming year.

Legislators have not yet released any details on their drafted changes to legislation for the special session or if it will include any provisions for Citizens.

As for FedNat, they have submitted an action plan to OIR on how they plan to secure more funding.

We reached out to FedNat for comment but did not receive a response.

Friedlander said customers with them should not panic, but be prepared.

“It doesn’t hurt to call your insurance agent say, ‘You know what, I want to play it safe. Could you get me some other quotes? Let me be prepared. Let’s see who else will insure our home hopefully for a similar cost in the same level of coverage.’ And that’s the key thing. Whatever you do, we tell consumers don’t reduce your coverage.”

Friedlander said it’s a good idea for all homeowners to have their policy re-evaluated to make sure their home is entirely covered under the costs of current inflation.

We’ve analyzed that home replacement costs have increased more than 16% year over year,” he explained. So what’s it going to cost more to insure your home today than it would have a year ago and you need to make sure you have the right level of what’s called your dwelling coverage.”

UPDATES ON LIGHTHOUSE INSURANCE: (From the Insurance Information Institute)

  • Lighthouse has been ordered into liquidation by a Louisiana judge. That is the next step following receivership. Policyholders were notified they have until May 29 to find new coverage.
  • All outstanding claims will be covered the Florida Insurance Guaranty Association.


Copyright 2022 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

By William Rabb

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Another Florida Insurer Adds Binding Arbitration Endorsement Amid Losses

By William Rabb | May 9, 2022

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Heritage Property & Casualty Insurance Co. reported more losses for the first quarter of 2022 and a spike in its combined ratio. But company officials said Friday they are taking aggressive steps, including rate increases, policy changes and tightened underwriting requirements, to improve the Florida-domiciled company’s financial profile.

The Friday earnings call for the publicly traded Heritage came the same day that the carrier filed notice with the Florida Office of Insurance Regulation that it would cut the eligibility age of metal, slate and tile roofs from 25 to 15 years for new homeowner policies, beginning June 1. A number of Florida insurers, including Heritage, have aleady reduced the age of covered shingle roofs to 10 years, but this may be one of the first filings to tighten requirements on metal and tile, which are generally expected to last for decades.

The conference call also came two weeks after Tampa-based Heritage filed for an endorsement requiring binding arbitration for claims disputes, beginning July 1 for new and renewing homeowners policies.

“Given the turbulent state of the market, rampant with fraud and abuse, we are proposing changes that will control exploitation,” reads a memo accompanying the April 26 filing with OIR.

The filing came two months after OIR surprised many in the industry when it approved an endorsement from American Heritage Insurance Co., offering arbitration in exchange for a premium discount for policyholders. But Heritage, facing weather losses and spiraling litigation expenses, appears to be taking it a step further, with no mention of a trade-off.

“If you and we fail to agree on whether there is coverage for the loss, either party may, in writing, demand arbitration,” the Heritage endorsement reads. “An arbitration award shall be binding upon the parties as the issue of coverage and all damages and benefits due and owing under the policy.”


Both parties must pay for their respective arbitrators and experts. If the chosen arbitrators cannot reach agreement, the matter will go to a chief arbitrator, paid for by Heritage, the endorsement notes. The insured and the insurer will pay their own attorney fees and policyholders will not be able to recover the legal costs from the insurer, as is currently allowed by statute for some claimants who prevail in litigation.

Heritage homeowner policies, like most insurers’ policies, already call for non-binding mediation and an appraisal panel to help settle disputes before litigation. But the arbitration clause is new, according to the OIR filing. The regulatory agency has not indicated if or when the endorsement will be approved.

Insurance groups have embraced the idea of more arbitration as a way to avoid costly litigation, and more carriers are expected to file similar endorsements in coming months. The special session of the Florida Legislature, which meets May 23-27, also is slated to consider ways to expand the use of arbitration.

Policyholder attorneys and consumer advocates have expressed concern, arguing that arbitration does not follow the rules of court and can take away homeowners’ right of appeal and due process.

The Heritage earnings call did not mention the new arbitration endorsement. But company officials did name other steps the company is taking to stem losses.

“We will continue to seek rate changes commensurate with our cost of doing business,” Heritage CEO Ernie Garateix said. “We are committed to proactively and appropriately raising rates to offset higher loss costs and taking actions to improve our profitability throughout the year.”

“We will consider all options,” Chief Financial Officer Kirk Lusk said.

The company’s first quarter 2022 financial results show a $31 million loss, a big increase over this time last year, but less red ink than the $49 million loss in the fourth quarter of 2021. The combined ratio also shot up, to 129.5% for Q1 2022. That’s significantly worse than the 107.7% reported in Q1 2021 and the profitable 93.2% reported for the last quarter of last year.

Financial analysts on the call wondered about Heritage’s unusually large amount of catastrophe losses this year. The company reported net accident year weather losses of $64 million – double the prior year’s Q1 results. The weather losses included $45 million in catastrophe losses, despite no hurricanes so far this spring.

Lusk said the losses were due to six significant weather events, most of them in Florida, in January. Heritage also writes in six Southeastern states as well as other states.

Heritage’s Q1 2022 financial report also shows that it has continued to pull back from the trouble-plagued Florida market, shedding almost 18% of its policies in the state and about 15% of its totaled insured value there.

Across its book of business in all states, Heritage also has seen an average premium increase of 21%, company leaders said.

The financial results, posted a few days before the earnings call, did not soothe Wall Street. Two investment research firms, Zachs Investment Research and, last week downgraded the Heritage stock from a “buy” rating to a “hold.” The stock price closed Friday at $3.72 per share, down sharply from a week before, when the preliminary financial results were posted.

Since the end of March, the stock price has lost half its value, according to Yahoo!Finance and other stock trackers.

Heritage continues to enjoy an “A, exceptional” financial stability rating from the Demotech rating firm.

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eneral insurance contracts are typically annual and should be renewed before the expiry of the policy. Individuals typically buy insurance covers like health insurance, personal accident cover, vehicle insurance, and maybe householder’s package insurance, etc.

Life insurance policies, on the other hand, are long-term contracts and have instalments that need to be paid on time.

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Supriya Rathi, Wholetime Director, Anand Rathi Insurance Brokers, says, “An insurance policy covers fortuity, and one really can’t predict when one would require the insurance to perform or make good on its promise to pay.”

She adds, “An aggressive dash against one’s vehicle, a nasty fall, a sudden heart attack, a sneaky theft incident, or a freaky electrical short circuit causing a fire – any of such events can cause a loss – physical and/or financial.”

Therefore, it is not only important that one decides to buy insurance, but it is also equally essential that one keeps renewing the same on time without breaks.  

For certain insurances like Mediclaim and Motor, there are specific coverages and benefits which are lost if the policy is not renewed on time. 

Risk Coverage:

The most significant reason for timely renewal is the Coverage of risk. There are umpteen examples of individuals, who have missed the renewal and find that they have a claim situation at hand, which despite having held insurance till recently, is now lying uninsured as on the date of the incident as they forgot to renew. 

“Not only is the importance of Date, but even Time. E.g., if you miss your vehicle insurance, you may have to go through a process of inspection of the vehicle, and from the time of the inspection of the vehicle, cover may be granted when the money is received,” says Rathi. 

Note that, if an accident in between inspection and money is being sent, the insurance company is not at risk.

Continuity of Coverage:

Continuity in health insurance is critical for individuals as most of the retail policies carry waiting periods ranging from one year to four years for specific diseases as well as for pre-existing diseases. 

Rathi explains, “A break in insurance can certainly create problems here despite the grace period and the insured would have to go through the waiting periods all over again.”

Moreover, for senior citizens, if the policy is not renewed, chances of getting the same insurance plan after a break are remote, as most of the plans have an entry age barrier.

Legal Requirement:

In the case of Vehicle insurance, it is mandatory for the owner to at the least secure the Third-party Legal Liability insurance. Motor insurance carries the mandatory Third Party Legal Liability cover. Plying a vehicle (irrespective of type) without this mandatory insurance attracts a fine of Rs 2,000 and/or imprisonment of up to 3 months for even the first-time offenders. Thus, an uninsured vehicle can burn a serious hole in an individual’s pocket.

No-Claim/Cumulative Bonus Benefit:

Similarly, some insurers offer a ‘cumulative bonus’ in their policies which substantially increases the sum insured ranging from 5 per cent to 50 per cent on renewal. Break-in insurance would lead to a loss of this benefit. 

Some insurance companies offer this Bonus is given as a direct reduction in the Renewal Premium too. The insured may lose the Benefit of the Bonus if the renewal is not done timely.

Comprehensive Motor Policies also offers a ‘No-claims Bonus,’ (NCB), which entitles an insured to a hefty discount in premium at the time of renewal. 

Moreover, Rathi says, “as this No Claims Bonus, follows the fortune of the Insured, and is deemed as a reward for a good track record, it can be availed by an insured person for a new vehicle ( which carries a high IEV); and avail substantial savings in OD premium. Insurance breaks can lead to loss of NCB.” 

Avoid Administrative Costs:

Needless to mention for other policies also the fact of lapsed policies or renewals with breaks can lead to procedural and administrative hurdles. Apart from this, sometimes there is an additional cost as well; as typically, vehicles which have a break in insurance, are subject to an inspection before renewal. 

This Inspection Rathi adds, “is an additional cost over and above the premium which many a time the insured has to bear to restart their motor insurance. In some cases of medical insurance policy, the insured may have to go for some medical test and that involves both time, effort and cost.”

“Thus, one can realize that a break in insurance increases the pain points for the insured in multiple ways. And this is avoidable. It is more about the mindset and the importance one attaches to insurance,” says Rathi. Just take a little extra care and the insurance policy continues to deliver on its promise of peace of mind for its holder. 

It is suggested that no sooner you receive a renewal notice from the Insurance Company, arrange to pay the advance premium (after ensuring to make any necessary changes in the policy required) and stay secure.

By William Rabb |

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With Florida lawmakers set to convene in less than three weeks to face the swirling winds of the state’s property insurance crisis, Gov. Ron DeSantis has yet to unveil a draft of the reform legislation he would like to see.

But sources have told the Insurance Journal that the governor has said he’s open to changes that would amplify last year’s Senate Bill 76 – by further discouraging claims litigation, reducing one-way attorney fees, and opening the door to wider use of arbitration in claims disputes, among other measures.

Some have pointed to Texas’ reforms, including its 2017 claims litigation law, as a model for Florida to follow. Insurance groups in the Lone Star State have hailed the law, while consumer advocates and plaintiffs’ attorneys have said it strips policyholders of most of their ability to take balky insurers to court.

Both sides agree, though, that Texas House Bill 1774 has played a role in reducing the amount of claims suits in the Lone Star State.

Source: Texans for Lawsuit Reform

“It’s had a very numbing effect on litigation and claims,” said Joe Longley, a plaintiffs’ attorney in Austin who once handled many claims against insurers. “It’s made it so difficult to file suit and get claims settled, that most attorneys won’t handle claims litigation any more.”

A report from Texans for Lawsuit Reform, which lobbied for the 2017 bill, show that litigation over hail and wind damage claims dropped like a rock after the law took effect, from just over 500 a month to about 150. Compare that with Florida, which has seen about 4,500 claims-related lawsuits per month filed against the 16 largest Florida property carriers, according to CaseGlide, a litigation management software firm.

The lawsuit number is staggering and is the chief reason why a number of insurers have gone insolvent in Florida and others have stopped writing in the state, insurance industry supporters have said.

Texans for Lawsuit Reform and Texas insurance regulators do not track the average amount of awards or claims settlements. But some plaintiffs’ lawyers said they’ve seen a decline, partly because many homeowners now feel that they’re stuck with what their insurance company offers after a claim is filed.

Texas Watch, a consumer advocacy group, has called Texas House Bill 1774 “the blue tarp bill,” because it has left many homeowners without the funds to pay for a new roof after a storm.

Texas insurance attorneys said that concerns are overblown and that HB 1774, also known as the “hail bill,” still allows plenty of suits to go forward. But the law, along with other measures passed by Texas lawmakers in recent years, has helped take the abuse and self-serving roofing contractors, adjusters and torts out of the claims process.


“What Florida did last year was all screwed up,” and didn’t go nearly far enough to stem unnecessary legal actions, said Steven Badger, a Dallas insurance defense lawyer who has focused on fraudulent claims.

Badger worked for passage of the Texas reforms and has kept an eye on Florida’s recent troubles. He was referring to Florida’s SB 76, signed into law last summer, which aimed to limit attorney fees and discourage litigation as well as solicitation of homeowners by roofing companies.

If the Texas laws are to be used as a model for Florida, as some Florida insurance insiders have suggested, some key requirements stand out.

HB 1774 requires a 60-day notice before a lawsuit can be filed. Florida’s SB 76, signed into law in 2021, mandates only a 10-day notice. And in Texas, the notice must be quite detailed, with the specific amount owed by the insurer and the amount of “reasonable and necessary” attorney fees – calculated according to a prescribed formula. It must be sent to the insurer and to the claimant.

The insurance company then has 30 days to request an opportunity to inspect the property damage. If the presuit notice does not meet all of the requirements noted in the law, is not specific enough, or is even one day late, the insurer can ask a judge to abate the lawsuit altogether. In some cases, if the insurer can show that the notice procedure was not followed exactly, the legal action can be automatically stayed.

“And insurance companies do look at every jot and tittle to find something that’s not exactly right,” said Longley, the trial attorney.

Another section of the 2017 Texas law applies strict rules on attorney fees, something some Florida lawmakers and the governor are said to be eyeing carefully. The bill is something like Florida’s SB 76 –taken up a notch. Both follow complex formulas to arrive at the amount of fees, but the Florida rule essentially forces insurers to pay the plaintiff’s attorney costs if the policyholder wins at least 50% of what he or she was asking for.

The Texas law sets the threshold at 80%.

One well-known Houston claimants’ lawyer said that despite HB 1774’s stricter requirements, the number of claims lawsuits his firm has handled has not significantly declined. As long as attorneys are careful to precisely follow the rules on pre-suit notices and give reasonable demands for damages, policyholders can still get a fair shake and lawyers can still get paid, said attorney Jeff Raizner.

The more far-reaching changes added by Texas lawmakers included allowing carriers to assume the liability of local insurance agents who may be named in a lawsuit. Since many carriers and surplus lines insurers in Texas’ lightly regulated arena are domiciled outside of Texas, that also has had the effect of removing many suits to federal courts.

Texas’ 2017 law was only part of the story behind the drop in claims litigation, Badger said. Texas courts for years have held that assignment-of-benefits agreements are invalid.

“That’s the number one thing, you have to put an end to assignments of benefits,” Badger said.

Assignees in Florida, such as restoration contractors, have been a significant contributor to Florida claims litigation. CaseGlide reports show that, despite the 2019 Florida legislation that attempted to curtail AOB-related suits, those types of actions still make up more than a third of claims litigation.

It’s doubtful the Florida Legislature will take further action on AOB agreements, though. Lawmakers and insurance advocates instead plan to focus on taking away the incentive for attorneys to win fees by working with assignee contractors in litigation, insurance insiders have said.

In 2015, Texas also tightened its public adjuster statute to bar the type of practices often seen in Florida, in which some adjusters have been accused of doing little more than signing the homeowner up with a lawyer. “Now a public adjuster can only sign up a client only if he intends to actually adjust the claim and try to get it resolved,” Badger explained.

Other litigation-limiting ideas that Florida’s governor is said to be in favor of include the increased use of binding arbitration. One Florida insurer, American Integrity, was recently approved for an endorsement that grants premium discounts if policyholders agree to arbitration in lieu of litigation in claims disputes. Legislation on the table at the special session could go so far as to allow insurers to add similar clauses to policies, perhaps without regulatory review, or even to require mandatory arbitration on some claims.

Florida claimants’ attorneys have begun to push back a bit. One noted that Florida statutes require insurers to send notices to policyholders that the state Department of Financial Services provides non-binding mediation services – paid for by the insurer – if the policyholder requests it.

But instead of proceeding with mediation, insurance companies sometimes ask for more and more documentation on the homeowners’ compliance with the terms of the policy, which delays a resolution, said Gina Clausen Lozier, an attorney in West Palm Beach.

“They have the tools already to resolve some of these claims without litigation if they want,” she said.

Insurance defense attorney Josh Beck, of Boca Raton, said the DFS mediation is a “good program,” and he wasn’t sure why mediation isn’t utilized more often.

But it may have to do with the fact that plaintiffs’ attorneys won’t often have their fees covered by the insurer when the case is handled outside of the court system, and some policyholders may be reluctant to wade into mediation without representation.

Raizner, the Houston plaintiffs’ lawyer, urged his Florida counterparts to try and prevent “over-reach” by insurers when the Florida House and Senate meet May 23.

“What we saw in Texas started out as a specific answer to a specific issue,” Raizner said. “Then that got expanded. So they should keep their antennae up. Because what happens in Texas seems to be happening in Florida.”

Badger argued that even with the changes, more needs to be done to limit lawsuit abuse in his state – and in Florida.