Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . 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.

After 18 years, a $1.5 billion project was officially completed to repair the sprawling dike around Florida’s Lake Okeechobee that protects thousands of people from potentially catastrophic flooding during hurricanes.

The Herbert Hoover Dike project overseen by the U.S. Army Corps of Engineers was completed three years ahead of schedule and at a savings of $300 million over the original cost estimate, officials said at a ribbon-cutting ceremony on the lake’s shore in Clewiston.

“Herbert Hoover Dike has never been in better shape than it is right now,” said Col. James Booth, commander of the Corps of Engineers’ Jacksonville district. “It’s great news for the lakeside communities.”

The restoration project, which began in 2005, involved work throughout the dike’s 143-mile (230-kilometer) span encircling the massive lake. The dike was originally started after hurricanes in the 1920s caused lake flooding that killed thousands of people in sugar-farming regions including Clewiston, South Bay, Pahokee and Belle Glade. It was eventually enlarged to circle the lake’s entire 730 square miles (1,900 square kilometers).

A 1928 hurricane that triggered Lake Okeechobee flooding up to 20 feet (6 meters) deep in some towns is estimated to have killed at least 2,500 people _ a majority of them Black farm workers. That storm and its impact on the poor was memorialized in Zora Neale Hurston’s classic 1937 book “Their Eyes Were Watching God.”

By the late 1990s, however, engineers discovered the natural sand, rock and limestone dike that had been updated in the 1950s was weakening and could fail during a storm. That, in turn, led managers who control the lake’s levels to move more water to Florida’s east and west coasts to reduce the flood hazard.

Completion of the dike improvements will enable the lake’s levels to be kept higher, reducing the need for discharges that can carry harmful nutrients to the coasts and improving the quality of water moving south into the Everglades _ the vast wetlands also in the midst of a multibillion-dollar restoration effort, said Everglades Foundation CEO Erik Eichenberg.

“The future is bright for America’s Everglades and the future is bright for Lake Okeechobee,” Eichenberg said.

Everything about the dike project is massive. Over 7.8 million man-hours from 42 contractors went into the work. About 90,000 cubic yards (69,000 cubic meters) of concrete was poured. Twenty-eight water control structures were replaced. There are nine pumping stations and nine navigation locks now in place.

For people living close to the lake, the project means less worry about a dike failure during a storm, said Clewiston Mayor James Pittman.

“It’s nothing short of a miracle. Now, the cities around the lake can dwell in confidence and safety,” he said.

Photo: Rehabilitation work in Pahokee, Florida, in this 2019 photo. (AP Photo/Robert F. Bukaty, File)

Copyright 2023 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

TOPICS FLORIDA

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By L.S. Howard

Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . 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.

The most challenging January reinsurance renewals in nearly two decades saw global property catastrophe rate increases of 25% to 60% with loss-affected clients facing even higher prices, according to John Doyle, president and chief executive officer of Marsh McLennan Cos.

“The property cat reinsurance market was stressed with pricing and attachment points increasing significantly, reflecting several years of higher-than-expected cat losses, macroeconomic factors, and supply and demand imbalances,” he said during an analysts’ call to discuss fourth quarter and full-year earnings.

John Doyle

“In the U.S., property-cat reinsurance rate increases were the highest in 17 years, generally in a range of 40% to 60%,” said Doyle who became MMC’s president and CEO on Jan. 1 (after the retirement of Daniel Glaser).

Doyle said that ceded premiums were tempered by higher retentions in most cases, or catastrophe programs that attached at higher levels.

“Attachment points were up substantially for many of our clients, not only in the United States, but in all geographies with the Jan. 1 cat renewals, so our clients were forced to take more risk, more volatility on their balance sheets,” said Dean Klisura, president and CEO of Guy Carpenter, Marsh McLennan’s reinsurance division.

January Renewals See Hardest Property Catastrophe Reinsurance Rates in Generation

While many in the industry had expected that inflation would drive demand for additional limit, that did not materialize during the renewals, Klisura noted. “Clients mostly bought the same amount of cat limit they bought last year,” he said, explaining that, for many clients, it was cost-prohibitive, given the rate increases in property cat and very challenging terms and conditions.

P/C Insurance Rates

Meanwhile, average commercial property/casualty insurance pricing continues to rise across many lines and geographies, Doyle said. “While the pace of price increases continued to moderate after rising for 21 consecutive quarters, the tight reinsurance market could have knock-on effects, particularly for property-insurance rates.”

Addressing trends in the insurance market, Martin South, president and CEO of Marsh said: “We’re in the 21st quarter of rate increases of about 4%, which is tough for our clients, and, of course, that is going to impact on their behaviors. Casualty is leveling off at [3%] and property accelerated slightly to 7% in the last quarter.”

He predicted that trend will continue through Q1 of next year as insurers absorb the cost of high cat losses and reinsurance costs.

Overall average directors and officers rates were down about 6%, which South attributed to less activity from special purpose acquisition companies (SPACs), which tended to be higher rated, and new entrants into the D&O insurance marketplace. “Globally about 20 new carriers came into the market, deployed capital, which enabled some of our clients to increase their limits and take opportunities that they saw in that market.”

Moving on to the cyber market, South said rates continued to accelerate with rate increases of 28%, although that is a deceleration from the previous quarter which had seen increases of 53% .

Q4 and 2022 Results

Marsh McLennan’s Q4 operating income was $680 million compared with $986 million in the prior year period. Consolidated revenue was $5.0 billion, a decrease of 2% compared with the fourth quarter of 2021, or an increase of 7% on an underlying basis.

For the full year, operating income was $4.3 billion, and adjusted operating income rose 11% to $4.8 billion. Net income attributable to the company was $3.0 billion. Revenue for the year was $20.7 billion, an increase of 5% compared with 2021, or 9% on an underlying basis.

Risk and Insurance Services

Marsh McLennan’s Risk and Insurance Services (RIS) segment (Marsh and Guy Carpenter) reported Q4 operating income of $472 million, compared to $667 million in the same period of 2021, while adjusted operating income increased 23% to $685 million from $557 million in the same period in 2021.

Q4 revenue for the RIS segment was $2.9 billion, a decrease of 3%, said Mark McGivney, Marsh McLennan’s chief financial officer. “On an underlying basis, revenue in RIS increased 8%, the strong result reflecting the momentum in our business and our resilience in the face of macro headwinds and economic uncertainty.”

For the full year, RIS’s operating income was $3.1 billion, while adjusted operating income rose 15% to $3.5 billion. Full year RIS revenue was $12.6 billion, an increase of 5%, or 9% on an underlying basis.

Breaking down the results of the two RIS units, McGivney said Marsh revenue in the quarter decreased 6% to $2.7 billion, but was up 6% on an underlying basis. For the full year, revenue at Marsh was $10.5 billion, an increase of 3%, or 8% on an underlying basis.

Guy Carpenter’s fourth quarter revenue was $171 million, up 5% on an underlying basis, said McGivney. For the full year, Carpenter’s revenue was $2 billion, an increase of 8% over a year ago, or 9% on an underlying basis, he added.

“Based on our current outlook, we expect Guy Carpenter’s growth in 2023 to benefit from a tightening reinsurance market,” McGivney noted.

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TOPICS TRENDS REINSURANCE

By William Rabb 

Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . 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.

After American Integrity Insurance Co. filed for a binding arbitration endorsement on homeowner policies one year ago, many in the industry expected a wave of other insurers to follow suit as claims litigation costs continued to rise in Florida.

So far, though, that hasn’t happened. An official with Citizens Property Insurance Corp., the largest carrier in the state, said last week that the insurer has no plans to file for a similar endorsement that would offer premium discounts if policyholders agree to arbitrate rather than litigate claims disputes. Heritage Property & Casualty Insurance filed for an arbitration endorsement last April, but withdrew the request two months later. Since then, no other major Florida insurers appear to have asked the Florida Office of Insurance Regulation to approve arbitration clauses.

Florida Senate Bill 2A, adopted in December, may have taken away much of the perceived need for alternative dispute resolutions when it repealed one-way attorney fees and assignment-of-benefits agreements, the big drivers of claims litigation in the state.

But attorneys on both sides of the aisle said this week that more arbitration clauses are coming – if not this year, then next or in 2025. If the trend materializes, it will significantly change the way claims disputes are examined and will raise new issues for policyholders, lawyers, expert witnesses, judges and the arbitrators themselves.

Riordan

“I expect to see more and more insurance carriers going to binding arbitration,” said John Riordan, of West Palm Beach, an insurance defense attorney with the Kelley Kronenberg law firm. He spoke Tuesday at the Windstorm Insurance Network conference in Orlando. “Carriers like it.”

South Florida Plaintiffs’ attorney Dan Rheaume agreed but argued that the outside-the-courtroom system will favor insurance companies. Arbitration will not allow insureds to appeal a decision or to even complain about it, thanks to confidentiality clauses that will likely be built in to policy wording.

“Arbitration has had a very low success rate for plaintiffs,” he said.

An American Association of Justice report in 2019 found that only about 6% of plaintiffs walked away from arbitration with a monetary award. In 2022, the Association noted that that the win rate in arbitration against banks and financial services firms was just 1.8%.

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The reports examined forced arbitration, often required by large retail corporations, cell-phone companies, banks and some employers before consumers can buy their products or work at the company. The American Integrity endorsement is voluntary.

Rheaume

Insurance corporations may likely be better prepared than the average homeowner or small-business person, critics have said. A contractor facing arbitration over a business interruption claim denial, for example, may not have a certified public accountant ready to testify in arbitration about precise business losses, one attorney said. A distraught owner may play well with a jury, but an arbitrator may want to see actual loss calculations.

And insureds may give little thought to the consequences of arbitration once they’re offered a discount on premiums, especially at a time that consumers are seeing soaring premiums in Florida, Rheaume said.

Nonbinding arbitration has long been utilized in Florida. But some lawyers have called it a waste of time since unfavorable rulings are often taken to court, anyway. Riordan expects nonbinding reviews to be phased out in coming years. But the experience has given participants an idea of what to expect if more insurers move toward binding arbitration.

The outcome may also depend largely on who the arbitrator is, Rheaume and Riordan agreed. Many hired arbitrators may not know insurance law, which can hurt both sides. Some may allow expert witnesses while others may not. Florida law requires only that the umpires be licensed attorneys with at least two years’ experience.

“You have to get the right arbitrator,” Riordan said.

A better system might be to require a cadre of three arbitrators to decide claims disputes, said one attorney in attendance at the conference session.

The American Integrity endorsement, approved by OIR in February 2022, is considered to be well-written and something of a model for other carriers to follow, lawyers have said. Tampa-based American Integrity held almost 3% of the Florida homeowners insurance market in 2021 and its aggressive market actions have been closely followed by other carriers.

Senate Bill 2A, last month’s reform measure, essentially codified parts of the insurer’s arbitration clause and now requires arbitration offers to meet certain requirements:

  • The policy must offer a premium discount or credit to the policyholder in exchange for agreeing to binding arbitration.
  • The arbitration requirements must be explained in a separate endorsement attached to the policy and the policyholder must sign a form electing to accept arbitration.
  • The form must explain the rights that the policyholder is giving up, including the right to trial by jury.
  • Before arbitration begins, the parties must first attempt to settle the dispute through nonbinding mediation, as defined by state law. The Florida Department of Financial Services offers a mediation service for insurance disputes.

One question that remains to be answered is whether bad-faith claims against insurers can be covered by arbitration. Riordan said that historically, arbitration clauses do not include non-contractual issues. But Rheaume said that doesn’t mean some insurers in the near future won’t attempt to dictate that bad-faith issues must be decided outside of courts.

“It’s going to take a lot of litigation to settle all of this,” Rheaume said. “There’s going to be a lot of growing pains.”

Bad-faith claims have been an expensive thorn in the side of insurers for years, and many have said that Florida’s law, until recently, made it too easy for plaintiffs’ lawyers to file bad-faith suits, even when claims have been paid. The Legislature addressed that in December, raising the bar and requiring that breach of contract be shown before bad-faith litigation can be initiated.

Still, if those types of claims are not addressed in arbitration clauses, it’s possible that claimants’ attorneys could lose a case in arbitration then file a bad-faith lawsuit in circuit court. “Well, they can try to do that,” Riordan said.

He noted that his firm already has seen some of the first lawsuits from policyholders over American Integrity’s arbitration clauses, suggesting that the policyholder did not read or understand the policy endorsement. It could be two years before those cases are resolved.

Courts through the years have generally found that arbitration in business contracts is acceptable. Only in a case of interstate commerce has the U.S. Supreme Court found that forced arbitration was not appropriate, according to the American Bar Association Journal.

Arbitration clauses will undoubtedly help Florida insurers avoid massive jury verdicts, years of expensive appeals and nettlesome class-action lawsuits. The American Integrity model requires each side to pay its own legal fees and costs, including expert witness fees, which can be considerable and a deterrent for claimants.

That model also requires the insurance carrier to pay for the arbitrator. Of course, that raises questions of bias. How impartial will an umpire be if he or she is paid by the insurer and wants to continue hearing insurance cases, asked one attorney at the Windstorm conference session.

Other questions have cropped up: Which rules of civil procedure will be followed in arbitration proceedings? American Integrity stipulates that the Florida Rules of Civil Procedure and Florida’s Revised Arbitration Code should be adhered to. But other insurers, based in other states, could require that arbitration proceedings follow, say, New York rules or be heard in other states – a disadvantage for Florida policyholders, Rheaume and others have said.

“American Integrity’s endorsement is pretty good. It has very few ambiguities,” said Rheaume. “But other carriers, they may not go in a similar direction.”

TOPICS CARRIERS FLORIDA

By William Rabb |

Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . 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.

Frontline Insurance Co. has sparked confusion and concern from agents and insureds after the carrier last week sent out differing information about its financial rating agency.

The potential good news for agents and policyholders: Freddie Mac, the quasi-government corporation that buys mortgages from smaller lenders, may have agreed to accept insurer ratings from KBRA, formerly known as Kroll Bond Rating Agency, according to those who have spoken with Frontline leadership. KBRA has rated Lake Mary-based Frontline as “BBB+.”

The potential bad news: KBRA on Monday told Insurance Journal that it is still talking to Freddie, the Federal Home Loan Mortgage Corp.

“We are in discussions with Freddie Mac and await the outcome of their process,” said Adam Tempkin, KBRA’s director of communications.

Frontline put out two memos to its insurance agents last week. The first explained that the company had decided to participate in a temporary arrangement that would make Citizens Property Insurance Corp. a backstop for some outstanding claims, in case of a Frontline insolvency. That arrangement, devised by the Florida Office of Insurance Regulation last year, was seen as a work-around for insurers that had lost their financial stability rating from Demotech, the firm that has rated the majority of Florida-based carriers for more than two decades.

Freddie Mac and Fannie Mae announced in December that they had agreed to the Citizens cut-through endorsement plan, allowing some carriers to bypass a grade from a financial rating firm. Otherwise, homeowners with mortgages and with unrated HO insurers could have to scramble to find new carriers or be forced-placed into more expensive policies.

Frontline lost its rating from Demotech earlier this month, after Frontline officials had criticized Demotech last year for warning that multiple Florida carriers were in danger of seeing their ratings downgraded or withdrawn. Frontline, which in 2021 held a 3.9% share of the Florida homeowners’ market, moved to KBRA. KBRA ratings have been accepted by Fannie Mae, which buys loans from larger lenders, but not by Freddie Mac, according to the mortgage buyers’ guidelines.

As of late Monday, KBRA was not listed as an accepted rating firm on the Freddie Mac Selling Guide.

The first memo last week from Frontline apparently surprised Citizens officials and OIR regulators, who had not communicated with Frontline about the Citizens arrangement, sources have said.

Less than 24 hours later, Frontline put out another bulletin, rescinding the earlier communication and hinting that Freddie Mac may soon accept KBRA’s rating system. The second memo was not crystal clear on whether the mortgage buyer was fully on-board, however, which raised further questions in the industry.

“Following the issuance of yesterday’s update, we learned that Freddie Mac is or will be directly contacting mortgage servicers and lenders to resolve the issue and communicate that previous letters are no longer applicable and further notices should not be sent to our policyholders,” the Frontline update from CEO Leman Porter reads.

Porter said the company is working to obtain additional information. If insureds receive letters from Freddie Mac, the information should be forwarded to agency sales representatives.

Freddie Mac officials did not return phone calls and emails from Insurance Journal regarding the status of KBRA and Frontline’s rating. Frontline’s manager of communications said in an email Monday that the company will respond when it has information it can share.

Agents who spoke on background said the conflicting information has created some uncertainty in the market at a time that the Florida insurance industry can least afford it. Some agents are likely to see the confusion as a sign that Frontline is facing financial trouble and may try to move some policyholders to other carriers.

Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . 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.

By William Rabb |  January 23, 2023

Florida officials have taken strong action against two of the insurance industry’s most-detested adversaries, disbarring a notorious plaintiffs’ attorney who filed thousands of frivolous claims lawsuits and moving to revoke the license of a public adjuster that obstructed insurers in multiple claims.

The actions against attorney Scot Strems and adjuster Scott David Thomas came two weeks after the Florida Legislature approved Senate Bill 2A, a sweeping insurance reform measure, and will likely be seen as high points for a year that had witnessed six insurer insolvencies and mounting litigation losses. Florida-based insurers have complained that some lawyers and public adjusters have gamed the system in recent years, crippling carriers with millions of dollars in legal expenses.

In an action that insurers had been hoping for over the past two years, the Florida Supreme Court on Dec. 22 blocked Coral Gables claimants’ attorney Scot Strems from practicing law in the state. The court overrode a referee’s recommendation of a two-year suspension and it ordered Strems to pay more than $45,000 in costs incurred by the Florida Bar in prosecuting the investigation.

One insurance defense attorney said the disbarment shows the perils that claimants’ lawyers face when they try to engage in the mass-lawsuit filing model that Strems and a few other law firms had taken to an extreme level. An insurance industry consultant blogged that Strems’ punishment marks the “collapse of an evil empire.”

Strems in 2020 became the poster child for what many in the Florida insurance industry said was the root of the Florida property insurance problem: plaintiffs’ attorneys filing large numbers of unnecessary claims lawsuits, leading to an explosion in litigation costs for carriers.

After the Florida Bar filed its complaint against Strems in 2020, he was suspended from practice following a referee’s report. Strems appealed to the Supreme Court, as did the Bar, which urged permanent disbarment. Numerous insurance interests had filed complaints about Strems and his law firm, charging that in many cases, his firm filed multiple suits on the same claim.

The high court, which has often come down harder than a referee has recommended on lawyer discipline, landed on disbarment — but not permanently.

“Although he has certainly engaged in ethically questionable behavior, he has not demonstrated that he is not amenable to rehabilitation,” the justices wrote. “Permanent disbarment is warranted only where an attorney’s conduct indicates he or she engages in a persistent course of unrepentant and egregious misconduct and is beyond redemption.”

The court’s 37-page order shows that Strems’ violations involved far more than “the unfettered pursuit of frivolous lawsuits.” He also submitted false or misleading affidavits in two cases in which he negotiated settlements. In one case, Strems attached a purported email chain between him and opposing counsel. But he failed to include seven emails from the other lawyer that directly conflicted with Strems’ assertions in the affidavit, the court explained.

In another case, Strems’ firm represented an 84-year-old homeowner who had filed a claim after a hurricane. The woman agreed to an attorney fee of 30% of the settlement, or whatever the court awarded in fees. After Strems negotiated a $45,000 settlement, though, his firm took half of that as a fee.

In answer to the Bar’s complaint against him, Strems in 2020 denied most of the charges. In a statement to Insurance Journal, Strems’ attorney, Benedict Kuehne, said that Strems is deeply disappointed with the disbarment decision.

“For his entire career, Scot dedicated his professional endeavors to helping wronged homeowners pursue their legitimate grievances against insurance companies that refused to pay for damages to their homes,” Kuehne said. “He has never intentionally or purposely violated Bar rules. The referee, after considering all the evidence and the absence of any prior difficulties with bar rules, deemed a modest suspension as the appropriate resolution.”

Strems’ actions not only cost insurance companies, but also hurt his own clients, the court found. Between 2016 and 2018, many of his suits were dismissed because Strems and his associates missed court deadlines and willfully violated procedural rules, the court noted. One trial court judge said that the firm engaged in “blatant obstruction of justice” and practiced delaying tactics in virtually every case.

As his firm took on more and more insurance claims cases, Strems repeatedly failed to manage the growing workload or hire enough attorneys. That resulted in a number of court sanctions against the firm, often on a weekly basis.

Strems closed his law firm in 2020 but some of the lawyers with the firm formed another one. He now intends to ask the Supreme Court to reconsider the severity of the sanctions, “based on his long track record of doing the right thing under often difficult circumstances,” Kuehne said. “His prior unblemished career should merit an opportunity to prove his value to the profession and the public.”

Infamous Adjuster Could Lose License

Florida’s Department of Financial Services on Dec. 16 formally asked an administrative judge to revoke the license of Scott David Thomas, owner of Indemnity Public Adjusters, based in south Florida.

The department’s attorneys outlined nine counts charging that Thomas had violated Florida laws by repeatedly harassing insurance company adjusters and engineers, sometimes threatening them with violence and thwarting their inspections.

His actions against Citizens’ Property Insurance Corp., Tower Hill Insurance, Lloyd’s of London and QBE Specialty Insurance resulted in claims being denied altogether or delayed for months, DFS said in the proposed order filed with the Florida Department of Administrative Hearings.

Thomas’ strategy may have been to wear down insurers so that they would forget about their own property inspections and accept his fee-paid adjustment reports.

“Respondent’s repeated hostile behavior is designed to make the process inhospitable to the insurer in the hopes of securing a better claim for his client,” the DFS proposed recommended order reads.

“We agree with the recommendation. None of what he did benefitted the customer at all,” said Michael Peltier, communications director for Citizens.

Thomas’ attorney, Matthew Ladd, said that his client has done nothing wrong and his actions have held insurers accountable, resulting in full claims payments to homeowners.

Ladd filed his own proposed order to be considered by the DOAH judge. In it, he argues that Thomas asked for proof of insurance by roof inspectors in order to protect the homeowners, in case the inspector fell and was injured.

By Brittney Meredith-Miller 

Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . 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.

The beginning of the year is an excellent time to review your homeowners coverages to make sure you aren’t left underinsured if you encounter a loss. An essential part of performing a comprehensive review of your homeowners policy is creating a home inventory. Keeping this database up-to-date ensures that new purchases you’ve made since your last insurance review included in your personal property coverage, and can help speed up the claims process if you do need to file.

Logging everything in your home sounds intimidating, but the Insurance Information Institute offers the following advice for tackling your home inventory without getting overwhelmed:

  • Pick an easy place to start. Contained areas, like kitchen cabinets and closets, are good places to begin.
  • List recent purchases. Recent purchases are fresher in your mind, so they are some of the easiest things to begin listing in order to help you get into the groove of creating your inventory. After you complete that list, you can move on to your older property.
  • Include the basic information. Describe each item in your inventory and record where it was purchased, the make and model and how much you paid for it.
  • Lump clothing into categories. Grouping clothing by type (jeans, sweaters, boots, etc.) in your inventory will save a lot of time. Separately record pieces that are especially valuable.
  • Record serial numbers for major appliances and electronics.
  • Check coverage on expensive items. You may need separate policies for particularly valuable items, like jewelry, art and collectibles, so make note of these possessions and speak to your insurance agent about proper coverage.

In the slideshow above, we’ll look at the most common perils that lead to homeowners insurance claims, according to Experian.

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Brittney Meredith-Miller

Brittney Meredith-Miller

Brittney Meredith-Miller is assistant editor of PropertyCasualty360.com. She can be reached at bmmiller@alm.com.

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By William Rabb

Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . 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.

Florida Adjusters Say No Action on Charges of Insurers Doctoring Their Reports

By William Rabb | January 20, 2023

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Five weeks after three independent adjusters told Florida lawmakers that insurance carriers have frequently doctored their damage assessment reports, the men said they’ve had no contact from state agencies about the allegations. And they’re now disputing assertions from state officials who said the men never provided documentation.

“I haven’t heard anything,” said Ben Mandell, a Florida-licensed all-lines adjuster who testified at a Florida House Commerce Committee hearing Dec. 13.

“It looks like it’s being swept under the rug,” said Mark Vinson, an independent adjuster in Florida and Louisiana who also spoke at the legislative meeting.

Mandell and Vinson said that after the hearing, committee Chairman Rep. Bob Rommel invited them to his office. The adjusters had the documentation of the altered reports on a thumb drive, a small data storage device. But due to concerns about cyber security for state-owned computers, Rommel said he could not connect the drive to his office computers. He asked the men to print out their evidence.

Rommel

“We have not heard from them since,” Rommel’s legislative aide, Kim Timm, said in an email this week.

Mandell disputed that, and said he has tried to contact Rommel’s office. He said the printout of the evidence would be voluminous, so he emailed some of the documents, then phoned, but has had no reply from Rommel’s staff.

Mandell produced a printout of a Dec. 14 email sent to Timm at Rommel’s office, which included photos of damage to a Florida home and Mandell’s signed damage estimate of $40,468.54. The email also included what Mandell said was an “altered” report, sent in November from the insurance carrier.

The carrier’s version, which still had Mandell’s name on it, had reduced the damages to $2,658, the adjuster said. That misleads the policyholder into thinking that an independent adjuster, not an insurance company representative, had found little or no damage to a property – a fraudulent practice by insurers, the adjusters have argued.

The adjuster’s and insurer’s actual reports were not provided to Insurance Journal because Mandell said his attorney has asked that names be kept out of it while he prepares a lawsuit against the carriers involved. Attorney Steven Bush, of Jacksonville, had promised to provide some documentation to Insurance Journal. But on Thursday, he said in an email only that the documents had been turned over to the “APA,” presumably the American Policyholders Association. The non-profit association could not be reached Thursday, but its website indicates it investigates fraud in the industry.

At the December legislative committee hearing, Rommel, R-Naples, said that if the allegations are true, that could constitute fraud by insurance companies and it should be investigated by the Florida attorney general’s office.

Mandell and Vinson said they have not heard from the attorney general, the Florida Department of Financial Services or other agencies that may be in a position to investigate. The communications director for Florida Attorney General Ashley Moody said Thursday that the office had received no correspondence about the matter.

A DFS spokesman said Thursday that the department had, in fact, investigated the adjusters’ assertions, but the investigation was closed “due to a lack of participation by witnesses.”

“I was never contacted by anyone from DFS,” Mandell said in an email. “I have phone logs.”

The DFS has now referred the case to the Florida Office of Insurance Regulation as a possible market conduct violation by the insurance companies, said Devin Galetta, the DFS communications director.

The adjusters caused a stir last month when they spoke about the doctored damage reports. Independent adjusters, unlike public adjusters who solicit homeowners, are often hired by insurance companies to supplement in-house adjustment staff. Until now, many have been reluctant to speak out about the purported practices, fearing that they could lose out on insurance company business, Florida adjusters have said.

One insurance company named by the independent adjusters denied that it has engaged in the practice.

“That’s absolutely not the case with Universal,” Travis Miller, attorney for Universal Property & Casualty Insurance Co., said in December. “The company simply has never in its history had a practice of altering, manipulating or doctoring independent adjusters’ reports for delivery to insureds.”

The email Mandell said he sent to Rommel’s office.

But others have said the doctoring of reports is widespread by some insurers in Florida and other states. Mandell said he has found that about 80% of his damage assessments in 2022 were altered by insurance company desk adjusters, which has meant that many claims were underpaid or not paid at all.

The adjusters said they were disappointed the issue has not been examined further by regulators.

“You’d think that something would have been done about it,” Vinson said this week.

He said he’s now considering delivering printed copies of the altered inspection reports to Rommel’s office in Tallahassee.

Top photo: Mark Vinson at the House committee meeting Dec. 13. (House Commerce Committee/The Florida Channel)

TOPICS CARRIERS FLORIDA

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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 years.

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Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . 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.

Allstate Corp. on Wednesday said it expects to end 2022 in the red with a net loss of between $285 million and $335 million for the fourth quarter, and a combined ratio of 109.1.

Estimated adjusted net loss for the quarter is estimated to be between $335 million and $385 million. In contrast, in fourth-quarter 2021, the company posted $790 million in net income.

Though the insurer continues to implement auto insurance rate increases and expects premiums written to increase 11.4% compared with the fourth quarter 2021, catastrophe losses during the last three months of last year are estimated to be $779 million, pre tax. December events cost the leading personal insurer $616 million, offset slightly by favorable reserve reestimates from prior events.

Winter Storm Elliot in December accounted for about 80%, or $478 million, of December’s projected catastrophe losses.

$5.4B Insured Losses from Winter Storm Elliot: KCC

Other than winter weather, Northbrook, Illinois-based Allstate said the combined ratio for Q4 was impacted by increases in claim reserves for the first three quarters of 2022 and additions to prior-year reserves. Prior-year reserve reestimates, excluding catastrophes, were an estimated $282 million in Q4 with bout $100 million related to upticks in commercial auto insurance severity from shared-economy accounts and states that the insurer is exiting.

Personal auto will finish 2022 with a Q4 combined ratio of 112.6. As it has reiterated over the course of 2022, Allstate continued increasing auto rates in Q4. In December, Allstate said its brands raised auto rates 10.6% across 19 locations. For the year, rate increases are expected to add $4.1 billion to written premiums, up 17%.

“Personal auto insurance claim frequency has continued to increase, but remains below 2019 levels,” Allstate said in a statement.

Q4 2022 homeowners insurance premiums written are expected to come in 9.3% higher (to $2.9 billion) than the same period in 2021. The Q4 combined ratio in homeowners is an estimated 92.6, said Allstate, which is in talks to move its corporate headquarters to Chicago after selling most of it Northbrook campus.

Investment results also contributed to the reversal of bottom-line net profit in fourth-quarter 2021 to a net loss in fourth-quarter 2022. Allstate estimates net investment income of $557 million and net losses on investments of $95 million for fourth-quarter 2022, compared to $847 million of net income and $266 in net gains for fourth-quarter 2021.

In the third quarter 2022 Allstate reported a net loss of $694 million compared to net income of $508 million for Q3 2021.

Allstate will have its Q4 earnings call on February 2.

TOPICS TRENDS PROFIT LOSS

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WRITTEN BYChad Hemenway

Chad is National News Editor at Insurance Journal. He has been covering the insurance industry since 2007, reporting on trends and coverage in most lines of insurance as well as natural catastrophes, modeling, regulation, legislation, and litigation. Chad can be reached at chemenway@wellsmedia.com

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Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . 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.

The board of directors for Tampa-based Heritage Insurance Holdings has authorized the repurchase of $10 million in shares from stockholders, marking the second buy-back plan in recent months.

The super-regional company (HRTG on the New York Stock Exchange), made the announcement in a news release Tuesday. It did not explain the reason for the repurchase, and company officials could not be reached for comment. Company stock repurchases typically are done to add value and boost share prices, to reduce the cost of capital or to make companies appear to be more financially viable, according to Forbes Advisor and Investopedia.

The buy-back began at the end of December, when a previously authorized $25 million repurchase plan expired, Heritage said.

The move comes a month after the KBRA financial rating firm downgraded the outlook for Heritage Insurance Holdings from stable to negative, citing an elevated debt-to-capital ratio, continued operating losses and “a significant equity decline,” KBRA said.

The holding company includes Heritage Property & Casualty Insurance Co., Narragansett Bay Insurance Co. and Zephyr Insurance Co. KBRA last month affirmed its financial strength rating for Heritage Property & Casualty at “BBB+;” an “A-” rating for Narragansett; and a “BBB+” rating for Zephyr. The Demotech rating firm, which grades the majority of Florida-domiciled property insurers, currently lists all three of those carriers as having a financial stability rating of “A.”

In November, Heritage Insurance Holdings reported a third quarter net loss of more than $48 million, which followed an $88 million loss for Q2. Heritage also has reported more than $40 million in losses from Hurricane Ian, which caused heavy damage across Florida in September and October.

The negative numbers have led to renewed speculation that Heritage could be in serious financial trouble. As recently as 2021, Heritage Property & Casualty was considered to be the sixth-largest insurers in Florida, with a 3.25% share of the market and more than $400 million in direct written premium, according to the AM Best rating and analysis firm.

But since then, the company has shed a significant number of policies in Florida.

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The Florida Office of Insurance Regulation this month also added to the speculation when it posted its Property Insurance Stability Report. The report noted that six carriers had been marked for enhanced monitoring by the office and one of those carriers had been referred to the office “multiple times for different reasons.”

The OIR last year also subjected insurers to a catastrophe stress test, based on three historically powerful hurricane scenarios.

“Based on the results of the CST scenarios, only one insurer was projected to fall below the minimum surplus requirement,” the OIR report said.

It did not name the company, but added that the insurer’s parent company had pledged to infuse more capital “should the insurer’s surplus fall below the minimum surplus requirement following an event.”

As of Wednesday morning, HRTG stock was trading at $2.29 a share, up slightly for the month but down from a high of $7.28 in March 2022, according to Yahoo! Finance.

Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . 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.

Man Confessed to Staged Crash But Alleged Conspirators Went to PIP Clinics Anyway

January 17, 2023

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Miami authorities have arrested five people in connection with a staged auto accident scheme, a scheme that continued even after one of the participants confessed, a state official said.

Five people were booked into the Miami-Dade County Jail last week for their alleged roles in a staged accident in August. It happened like this: The participants were recruited by an unknown man who offered $1,000 to join the scheme. After the crash, the driver of one vehicle fled the scene and a man known as Amauri Rodriguez then jumped into the driver’s seat, Florida’s chief financial officer said in a bulletin.

When a Miami police officer questioned if the accident was staged, Rodriguez confessed, said Florida CFO Jimmy Patronis, whose fraud investigators assisted in the case. Surveillance video showed the crash happened slowly, although the damage suggested a higher-speed impact, according to a local news report.

Despite the confession, all participants later showed up at what Patronis called “personal injury protection (PIP) clinics” in the Miami area. National General Insurance was billed more than $27,000 and United Auto Insurance was billed more than $25,000. Both carriers denied payment on the claims, authorities said.

The other alleged participants included Ruberlandy Cruzata, Orislaidy Montano, Yadira Sanchez and Lixelly Mayari. If convicted of the fraud charges, they each could face as much as 15 years in prison, Patronis’ office said.

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