Florida Governor Rick Scott Signs Senate Bill 408 Into Law

Transcription

1 JUNE 2011 Florida Goveror Rick Scott Sigs Seate Bill 408 Ito Law Florida Goveror Rick Scott siged Seate Bill 408 (SB408) ito law o May 17, The legislative itet of SB408 is to reform the ustable property isurace market ad make several substatial chages to Florida s property isurace laws, addressig some of the issues that have resulted i icreased costs. The more sigificat provisios of the law impactig property isurace coverage i the State impose a uiform statute of limitatios, limit sikhole losses, chage the holdback requiremets o dwellig ad cotets coverage, restrict the statute of limitatios o sikhole ad hurricae claims, ad cap public adjusters compesatio. The law does ot apply retroactively, so the amedmets geerally will apply to ew claims ad suits as of the effective date. These provisios are addressed below. Statute of Limitatios o Property Claims Geerally The statute of limitatios o a property isurace claim rus from the date of the alleged breach of the isurace cotract, which typically occurs o the date of the last paymet or deial. Isureds previously were able to exted this time by either submittig a supplemetal claim or waitig years to report a claim. SB408 ameds Florida Statute 95.11, to apply a five-year statute of limitatios from the date of loss for brigig a actio for breach of a property isurace cotract. This chage creates a date certai o which the statute of limitatios will expire. Time Limits for Hurricae, Widstorm ad Sikhole Claims SB408 addresses the widespread issue of late reportig hurricae ad sikhole claims by placig a two-year statue of limitatios o sikhole claims ad a three-year statute of limitatios o widstorm ad hurricae claims. Effective as of Jue 1, 2011, a claim, supplemetal claim, or re-opeed widstorm or hurricae claim must be preseted withi three years after the hurricae first makes ladfall, or after the widstorm causes covered damage. A iitial, supplemetal, or re-opeed sikhole claim must be preseted to the isurer withi two years after the policyholder kew or reasoably should have kow about the loss. To elimiate ambiguity i the type of additioal claim made after a iitial claim has bee paid or deied, the law uses the terms supplemetal claim ad re-opeed claim iterchageably, as i ay additioal claim for recovery from the isurer for losses from the same hurricae or widstorm which the isurer has previously adjusted pursuat to the iitial claim. 1

2 Effective Jauary 1, 2012, all cotracts with public adjusters must iclude the public adjuster s ame ad firm, busiess address, ad licese umber, as well as certai other specified iformatio. Public Adjusters SB408 limits public adjusters fees for re-opeed or supplemetal claims to 20% of the claim paymet. Fees for claims made more tha oe year after evets that are the subject of a Declaratio of a State of Emergecy caot exceed 20% of the claim paymet. Public adjusters are still prohibited from chargig more tha 10% of the paymet of a claim for a State of Emergecy evet made withi oe year of the date of loss. SB408 additioally prohibits public adjusters from makig deceptive or misleadig advertisemets or solicitatios, icludig statemets or represetatios that ivite a policyholder to submit a claim: (1) whe the policyholder does ot have covered damage to the isured property; (2) by offerig moetary or other valuable iducemet; or (3) by statig that there is o risk to the policyholder by submittig such a claim. The law further prohibits public adjusters from usig ay logo or shield that implies, or could be costrued to imply, that the solicitatio was issued or distributed by a govermetal agecy or is sactioed or edorsed by a govermetal agecy. Effective Jauary 1, 2012, all cotracts with public adjusters must iclude the public adjuster s ame ad firm, busiess address, ad licese umber, as well as certai other specified iformatio. All amed isureds must sig the cotract, ad if all sigatures are ot available, the public adjuster must submit a affidavit, siged by all available amed isureds, attestig that they have the authority to eter ito the cotract ad settle all claim issues o behalf of the uavailable amed isured(s). A ualtered copy of the executed cotract must be remitted to the isurer withi 30 days after executio. Public adjusters also must ow iclude the followig laguage o all writte advertisemets, i bold prit ad capital letters, ad i a typeface o smaller tha the typeface of the body of the text: THIS IS A SOLICITATION FOR BUSINESS. IF YOU HAVE HAD A CLAIM FOR AN INSURED PROPERTY LOSS OR DAMAGE AND YOU ARE SATISFIED WITH THE PAYMENT BY YOUR INSURER, YOU MAY DISREGARD THIS ADVERTISEMENT. SB408 exteds a isured s prompt otice obligatios to his or her public adjuster, requirig the public adjuster to provide prompt otice to the isurer ad to iclude their cotract with the otice. Public adjusters also are ow required to provide a writte estimate of the loss to assist i the submissio of a proof of loss, to retai a copy of the estimate for at least five years, ad to make the estimate available to the isurer, upo the isurer s request. Public adjusters must esure that isurers have direct access to the property ad to the isured, ad allow the isurer, upo 48-hours otice, to obtai all iformatio ecessary to ivestigate ad respod to a claim. A public adjuster may ot act or fail to reasoably act i ay maer that obstructs or prevets 2

3 a isurer (or isurer s adjuster) from timely coductig a ispectio of ay part of the isured property for which there is a claim for loss or damage. I the evet that the public adjuster s uavailability delays the isurer s timely ispectio, the public adjuster or the isured must allow the isurer access to the property without the participatio or presece of the public adjuster or isured. A isurer may ot, however, exclude a public adjuster from attedig i-perso meetigs with the isured. Replacemet Coverage ad Holdbacks Isurers previously were required to pay the replacemet cost value of damage to a dwellig or persoal property without reservatio or holdback of ay depreciatio i value, regardless of whether the isured actually replaced or repaired the property. Uder SB408, the isurer ow must iitially teder paymet for at least the actual cash value of a dwellig loss, less the applicable deductible. Ay remaiig amouts ecessary to perform repairs must be paid, but oly as the work is performed. Where a total loss occurs, however, the isurer must pay the etire replacemet cost coverage, without holdback, uder Florida Statute For persoal property isured o a replacemet cost basis, the isurer must offer two claim paymet optios: The first requires the isurer to pay the replacemet cost without holdback of depreciatio, regardless of whether the isured replaces the property. The secod allows the isurer to limit the iitial paymet to the actual cash value of the persoal property to be replaced ad the teder paymet for full replacemet value oce a receipt is provided by the isured. Sikholes As idicated, several chages i sikhole coverage, targeted to reduce fraudulet claims, have bee eacted i this legislatio. Coverage for Sikhole Claims Although isurers must cotiue to cover sikhole losses, SB408 allows a isurer to require a property ispectio prior to the issuace of sikhole loss coverage. The law limits what costitutes a sikhole loss to structural damage to the covered buildig, icludig the foudatio, caused by sikhole activity, ad specifies five distict types of damage that costitute structural damage, based upo stadards cotaied i the Florida Buildig Code, or used i the costructio idustry. For a policyholder to obtai beefits for a sikhole loss, the structure must sustai oe of the eumerated types of damages. The law also authorizes isurers to restrict catastrophic groud cover collapse ad sikhole loss coverage to the mai buildig as defied i the isurace policy. Paymet for Sikhole Claims I 2005, legislatio was eacted that preveted isurers from holdig back a portio of a claim paymet, which resulted i policyholders I order for a policyholder to obtai beefits for a sikhole loss, the structure must sustai oe of the eumerated types of damages. 3

4 If there is o structural damage, or if the cause of structural damage is ot sikhole activity, the there is o coverage. receivig large checks, some of which were alleged to have bee spet o urelated expeditures. SB408 restores a isurer s right to a holdback o structural claims. Isurers ow may pay the market cost of the damaged property first ad the remaiig repair cost oly after the policyholder sigs a cotract to repair the damage. The ew law also requires that sikhole damage be repaired i accordace with the recommedatios made by the isurer s professioal egieer. If the repairs caot be completed withi policy limits, the isurer has the optio to either pay to complete the recommeded repairs, or to teder policy limits. Sikhole Claim Ivestigatio SB408 itroduces a process for the ivestigatio of a sikhole claim: A isurer must determie whether the buildig has icurred structural damage caused by sikhole activity. If there is o structural damage, or if the cause of structural damage is ot sikhole activity, the there is o coverage. (1) Iitial Ispectio ad Structural Damage Determiatio. The isurer must ispect the premises upo receipt of a claim to determie whether there is ay structural damage that may be the result of sikhole activity. The use of a structural egieer may be required to evaluate whether the isured buildig has icurred structural damage as defied by statute. (2) Sikhole Testig Iitiated by the Isurer. The isurer must egage a professioal egieer or professioal geologist to coduct sikhole testig where it is determied that structural damage exists ad the isurer is either uable to idetify a valid cause of the damage or determie that the structural damage is cosistet with sikhole loss. If coverage is excluded uder the policy, eve if a sikhole loss is cofirmed, the the isurer is ot required to coduct sikhole testig. (3) Policyholder Notice. The isurer must provide writte otice to the policyholder, detailig what it determied to be the cause of damage ad a statemet of the circumstaces uder which the isurer must coduct sikhole testig. The isurer also must otify the policyholder of his or her right to demad sikhole testig ad the circumstaces uder which the policyholder may icur costs associated with testig. (4) Authorizatio to Dey Claim. The isurer may dey a claim where it is determied that there is o sikhole loss. (5) Policyholder Demad for Testig. The policyholder must demad sikhole testig i writig withi 60 days after receipt of a claim deial, if the isurer deies the claim without performig sikhole testig ad coverage would be available if a sikhole loss were cofirmed. Where coverage for a sikhole loss is foud, the policyholder must file a copy of ay sikhole report prepared o his or her behalf with the Couty Clerk of Court before paymet for the loss may be accepted. SB408 also provides that where a policyholder accepts a rebate from ay cotractor performig repairs, coverage is void. 2

5 Neutral Evaluatio of Sikhole Claims Neutral evaluatio remais available to either party as a alterative for the resolutio of disputed sikhole claims. The eutral evaluatio must, however, at a miimum, determie: (1) cause; (2) all methods of stabilizatio ad repairs, both above ad below groud; (3) the costs for stabilizatio ad repairs; ad (4) all iformatio eeded to determie whether a sikhole loss has bee verified. The eutral evaluatio must reder a opiio o all matters i dispute, ad the eutral evaluator s report must be filed with the Clerk of Court. The law also specifies that a eutral evaluator must be provided with iformatio ecessary to perform his or her duties, icludig reasoable access to the property ad all reports prepared o behalf of the policyholder. The parties must agree o a eutral evaluator withi 14 busiess days. If a agreemet caot be reached, the Departmet of Fiacial Services (DFS) shall appoit a eutral evaluator, who the has 14 busiess days to otify the parties of the date, time ad place of the eutral evaluatio coferece. The eutral evaluator is required to make a reasoable effort to hold the coferece withi 90 days after the DFS s receipt of the request for eutral evaluatio. His or her report is due withi 14 days after the eutral evaluatio coferece. The law specifically provides that the eutral evaluatio does ot ivalidate a isurace policy s appraisal clause, ad a isurer s actios i eutral evaluatios are ot to be costrued as a cofessio of judgmet or admissio of liability. For more iformatio about ay of the topics covered i this issue of the Isurace Law Alert, please cotact: Lizette Flores lflores@bressler.com The iformatio cotaied i this Cliet Alert is for geeral iformatioal purposes oly ad is either preseted or iteded to costitute legal advice or a legal opiio as to ay particular matter. The reader should ot act o the basis of ay iformatio cotaied herei without cosultig first with his or her legal or other professioal advisor with respect to the advisability of ay specific course of actio ad the applicable law. The views preseted herei reflect the views of the idividual author(s). They do ot ecessarily reflect the views of Bressler, Amery & Ross, P.C. or ay of its other attoreys or cliets. 17 State Street New York, NY Columbia Turpike Florham Park, NJ SW 149th Aveue Miramar, FL Bressler, Amery & Ross, P.C. All rights reserved. ATTORNEY ADVERTISING