Please call  Lee Gorodetsky at 954-270-7966 for free quotes on Home Insurance, Auto, Flood, Private Flood, Auto, Business & Commercial , & life, Health and group benefits as well.

An onerous version of AOB reform is on the move in the Senate, passing its second of three committees this week. SB1168, by Senator Steube, amends current law to provide that a misrepresentation, omission, concealment of fact, or incorrect statement on an insurance application may prevent recovery only if the misrepresentation, omission, concealment of fact, or incorrect statement directly relates to the cause of the claim. If the misrepresentation, omission, concealment of fact or incorrect statement directly relates to the cause of the claim, one of the following must apply:

  • The misrepresentation, omission, concealment, or statement is fraudulent or is material to the acceptance of the risk or to the hazard assumed by the insurer; or
  • If the true facts relative to the loss claimed had been known to the insurer pursuant to a policy requirement or other requirement, the insurer in good faith would not have:
    • Issued the policy or contract;
    • Issued the policy or contract at a premium rate at least 20 percent higher than the rate actually charged;
    • Issued a policy or contract in as large an amount; or
    • Provided coverage with respect to the hazard resulting in the loss.

 

In addition, SB1168 also amends current law to prohibit an insurer from utilizing “managed repair” controls, such as requiring that a particular vendor make repairs to a dwelling insured on the basis of replacement costs. It also prohibits the insurer from even recommending or suggesting a particular vendor to make repairs to a dwelling insured on the basis of replacement costs.

 

The bill also requires the assignee to provide a copy of the assignment agreement to the insurer within the earlier of 7 days after execution of the agreement, or 48 hours after beginning nonemergency work if the insurer has a facsimile number and e-mail address on its website designated for the delivery of such documents. It allows the insurer to inspect the property at any time. If the insurer fails to attempt in good faith to inspect the property within 7 days after learning of the loss and promptly deliver to the assignee written notice of any perceived deficiency in the assignee’s notice or the work being performed; however, the failure may be raised to estop the insurer from asserting that work done was not reasonably necessary or that the notice was insufficient.

We are working to stop this bill from advancing. Industry’s preferred AOB bill is SB62 by Senator Hukill, which has not been scheduled for a committee hearing and is unlikely to advance given the composition of the Banking & Insurance Committee in the Senate.

 

Meanwhile, the Florida House of Representatives AOB reform HB 7015 by Representative Trumbull was sent to the Senate in the first week of the legislative session. While the House version is not a perfect solution, the bill makes significant changes to the way property repair vendors are restricted in their use of an “assignment of benefits” or “AOB.”   The bill requires disclosures be provided to insureds before entering into an AOB. It also moves to a “loser pays” attorney fee system. The House legislation provides the insured with an opportunity to rescind the assignment within 7 days of entering into the contract with the vendor. Further, the bill increases consumer protections and required vendors to provide written estimates of the work to be completed and required the assignee to notify the insurer of the assignment within 3 days of it being executed.   While it would be better to eliminate attorneys’ fees to repair vendors altogether, this bill is an improvement over the current system.

 

In the end, it is unlikely that the House and Senate versions of AOB will match up. But if the House bill moves toward the Senate version, it will be a weaker product and possibly even onerous.

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Please call Lee from Acentria Insurance at 954-351-1960 or my cell at 954-270-7966 for free quotes on Home Insurance, Auto, Flood, Private Flood, Car, Business & Commercial & Life, group & financial products as well.

An onerous version of AOB reform is on the move in the Senate. SB1168, by Senator Steube, passed its first committee of three committees this week. The bill amends current statutes to provide that attorney fees may not be included in the insurer’s rate base and may not be used to justify a rate or rate change. SB1168 also amends current law to provide that a misrepresentation, omission, concealment of fact, or incorrect statement on an insurance application may prevent recovery only if the misrepresentation, omission, concealment of fact, or incorrect statement directly relates to the cause of the claim. If the misrepresentation, omission, concealment of fact or incorrect statement directly relates to the cause of the claim, one of the following must apply:

  • The misrepresentation, omission, concealment, or statement is fraudulent or is material to the acceptance of the risk or to the hazard assumed by the insurer; or
  • If the true facts relative to the loss claimed had been known to the insurer pursuant to a policy requirement or other requirement, the insurer in good faith would not have:
    • Issued the policy or contract;
    • Issued the policy or contract at a premium rate at least 20 percent higher than the rate actually charged;
    • Issued a policy or contract in as large an amount; or
    • Provided coverage with respect to the hazard resulting in the loss.

 

In addition, SB1168 also amends current law to prohibit an insurer from utilizing “managed repair” controls, such as requiring that a particular vendor make repairs to a dwelling insured on the basis of replacement costs. It also prohibits the insurer from even recommending or suggesting a particular vendor to make repairs to a dwelling insured on the basis of replacement costs.

 

The bill also requires the assignee to provide a copy of the assignment agreement to the insurer within the earlier of 7 days after execution of the agreement, or 48 hours after beginning nonemergency work if the insurer has a facsimile number and e-mail address on its website designated for the delivery of such documents. It allows the insurer to inspect the property at any time. If the insurer fails to attempt in good faith to inspect the property within 7 days after learning of the loss and promptly deliver to the assignee written notice of any perceived deficiency in the assignee’s notice or the work being performed, the failure may be raised to estop the insurer from asserting that work done was not reasonably necessary or that the notice was insufficient. SB1168 is not on the Judiciary committee in week 4, so it won’t be on that agenda prior to week 5. We are working to stop this bill from advancing.

 

Industry’s preferred AOB bill is SB62 by Senator Hukill, which has not been scheduled for a committee hearing and is unlikely to advance given the composition of the Banking & Insurance committee in the Senate. .

 

Meanwhile, the Florida House of Representatives AOB reform HB 7015 by Representative Trumbull was sent to the Senate in the first week of the legislative session. While the House version is not a perfect solution, the bill makes significant changes to the way property repair vendors are restricted in their use of an “assignment of benefits” or “AOB.”   The bill requires disclosures be provided to insureds before entering into an AOB. It also moves to a “loser pays” attorney fee system. The House legislation provides the insured with an opportunity to rescind the assignment within 7 days of entering into the contract with the vendor. Further, the bill increases consumer protections and required vendors to provide written estimates of the work to be completed and required the assignee to notify the insurer of the assignment within 3 days of it being executed.   While it would be better to eliminate attorneys’ fees to repair vendors altogether, this bill is an improvement over the current system.

 

In the end, it is unlikely that the House and Senate versions of AOB will match up.

Please call Lee from Acentria Insurance for free quotes on Home Insurance, Auto, Flood, Private Flood, Car, Business & Commercial, & Life, group & financial products as well.

With the National Flood Insurance Program (NFIP) currently set to expire on February 9, and many communities still recovering from this summer’s hurricanes, it’s no surprise that the 21st Century Flood Reform Act has passed the House and moved to the Senate. But it’s important to note that Hurricane Harvey—which is estimated to have caused $65 billion to $75 billion in damage in Texas, according to AIR Worldwide—is only the latest in a string of disasters that highlight two major issues in U.S. flood insurance: the underestimated geographical spread of the threat, and the millions of uninsured and underinsured Americans who don’t even know they’re at risk.

Much of Harvey’s flooding extended beyond what are traditionally considered the highest hazard flood zones. It’s not the first such event in recent memory. Iowa in September 2016, Louisiana in August 2016, and South Carolina in October 2015 saw flooding in unexpected places. In fact, of the 43 property/casualty insurance catastrophes identified so far in 2017 by Verisk’s Property Claim Servicesâ, 38 involve losses due to flooding

Please enjoy the full article below;

https://www.insurancejournal.com/news/national/2018/01/25/478275.htm

Please call Lee at Acentria Insurance at 954-351-1960 or my cell at 954-270-7966 for free quotes on Home Insurance, Auto, Flood, Private Flood, Car, Business & Commercial & Life, group & Financial as well.

In the wake of Hurricanes Harvey, Irma, and Maria, the 2017 hurricane season is projected to be the most expensive in history, with total estimated economic losses exceeding $200 billion.

According to a new report from MacKinsey & Company, each of these three major hurricanes are expected to rank among the 10 most costly insured natural catastrophes on record globally.

Based on their research, McKinsey & Company anticipates that these record-breaking disasters will have a number of effects on the insurance industry.

Here are the key effects of 2017’s historic hurricane season, as outlined by McKinsey & Company researchers:

        • These disasters will, for most insurers and reinsurers, be a story of earnings volatility and not of capital due to the record-high surplus of the U.S. property and casualty industry.
        • Personal-auto and business-interruption insurance will be the biggest unexpected losses, given that flooding is typically not covered in homeowners’ contracts.
        • These consecutive disasters will stress insurance operations, including large-volume claim management and loss creeps, due to spikes in adjustment expense.
        • In the coming months, insurers will likely face a significant consumer experience and public relations risk. Insurers need to go into crisis-management mode and deliberately and proactively address the risk, starting now.
        • The long-term impact on premium rates will depend on the willingness of investors to recapitalize and continue to invest. If investors get scared by a new trend of increased losses in the wake of natural disasters, rate increases may be substantial and contribute to the ending of a prolonged soft cycle.
      • Please read the full article below;
      • http://www.propertycasualty360.com/2018/01/09/lessons-and-consequences-of-the-record-setting-201?eNL=5a5633b1140ba01a4996dd35&utm_source=PC360_PersonalLinesPro&utm_medium=EMC-Email_editorial&utm_campaign=01102018

Please call Lee from Acentria Insurance at 954-351-1960 or my cell at 954-270-7966 for free quotes on Home Insurance, Auto, Flood, Private Flood, Car, Business & Commercial & Life, group & Financial products as well.

The Federal Emergency Management Agency (FEMA) has completed a reinsurance placement with 28 private reinsurers to help the National Flood Insurance Program (NFIP) recover losses it may have to pay in 2018.

Expanding on its first private reinsurance placement last year of $1.042 billion, the 2018 deal calls for FEMA to transfer up to $1.46 billion of the NFIP’s financial risk to the private reinsurance market. This new reinsurance agreement is effective from January 1, 2018, to January 1, 2019.

Please enjoy the full article below;

https://www.insurancejournal.com/news/national/2018/01/08/476500.htm

Please call Lee from Acentria Insurance at 954-351-1960 or my cell at 954-270-7966 for free quotes on Home Insurance, Auto, Flood, Private Flood, Car, Business & Commercial & Life, group & Financial products as well.

Ross Hancock sold his four-bedroom house in Coral Gables, a city of pastel luxury at the edge of Miami, because he was worried that sea-level rise would eventually hurt his property’s value. He and his wife, Darlene, downsized to a small condo on Biscayne Bay, perched atop one of the highest coral ridges in the area. There, he presumed, they would be safer.

Then Hurricane Irma hit.

The September storm pushed water onshore with such force that it penetrated the seams of Hancock’s building, defeating stormproof windows and damaging a third of the units. It knocked out the elevators, ruined the generator, and flooded the parking lot. Months later the park next door remains strewn with mangled yachts hurled from from the ocean.

Hancock’s unit was spared, but he’s facing a potential $60,000 bill from the condo association for his share of what insurance won’t cover. Now, four years after leaving Coral Gables, he and his wife want to move again—this time, out of Florida. But more than two months after listing their property, they haven’t found a buyer.

“It’s not the greatest time to be showing it,” Hancock said, noting the damage to the building. Still, Irma convinced him that it doesn’t make sense to wait. “At some point, we won’t be able to sell.”

Decisions by people such as Hancock to sell their homes demonstrate that one of the great mysteries of climate change isn’t scientific but psychological: When will the growing risks associated with rising seas and more severe storms begin to affect home values in otherwise desirable coastal markets?

Nowhere is that question more pressing than South Florida, which has some of the country’s priciest properties—and some of the most vulnerable. A state built on real estate speculation, whose chief attribute was proximity to the water, now faces a whole new problem: There’s not enough land, high enough above the water, for its residents to pull back from the rising seas. By the end of the century, database company Zillow Group estimates, almost a half-million Miami homes could be—literally—underwater. That’s more than anywhere else in the country.

In a working paper posted this month on Social Science Research Network, an online repository of academic research, professors from the University of Colorado at Boulder and Pennsylvania State University found that homes exposed to sea-level rise sell at a 7 percent discount compared with equivalent but unexposed properties.

Please enjoy the full article below;

https://www.insurancejournal.com/news/southeast/2018/01/02/475789.htm

Please remember to contact Lee at 954-351-1960 or 954-270-7966 for free quotes on Home Insurance, Auto, Flood, Private Flood, Car, Business & Commercial & Life & Financial and Group Health quotes as well.

What is MAAC-Market accountability Advisory Committee. This is a committee of 9 people appointed from various associations in Florida including FAR and FAMB. What Citizens Insurance is doing, should be doing and how to improve what Citizens does is our role. We make recommendations to the actual board of Directors of citizens of which there are also 9 people, but they are appointed by the house, senate, Governor and others who have final say as to Citizens policy including rates. Since I have only attended my first meeting on 12/12/17, my information will grow over time. What I have learned and soon more will is that Citizens is changing and it looks for the better for the consumer. Training on programs like the new managed repair program & AOB are now mandatory for all appointed agents and not doing required training will mean you cannot do business with Citizens. Also, some agents intentionally misquote policies in several ways which can hurt a consumer and make the shopping for Insurance process more complicated, this will soon be rectified as a warning system which can take away the ability to do business with Citizens. These are all steps in the correct path and need to be expedited as more is coming. For Homeowners who currently have homes built from 1979-1994, you may have Poly Pipes in your home which Citizens has been accepting if the home is 30 years or less in age. That program will cease by the spring of 2018 which will make the sale and purchase of those homes more complicated. Lastly was the topic of reinsurance. This is very complicated, but Critical for Florida as most of our Florida based Carriers do not have the money to pay for a Hurricane Irma , Andrew or Wilma and reinsurance picks up the tab. This cost is currently about 60% of your total premium so it is huge. The carriers will now be required to keep more reinsurance and the new assumption could be ,” what if Irma hit Dade county and came up through the middle of the state, what would be the financial impact”. Understanding this and knowing that not only will each carrier need more reinsurance, but the costs are also increasing after the last 2 years, means that Home Insurance rates will also be rising and it could be very significant. It is so important for every Homeowner to shop Insurance rates each year to find the best coverage you can at the best rate and in that order. if you do not have the correct coverage then your claim will not be paid properly. I know the costs are sometimes high and tough, but remember that if you cannot afford the premium, you cannot afford the claim if it happens to you. Please be smart, and safe and feel free to contact me with any questions.

 

Thank you,

 

Lee