'Reprehensible' Insurance Practice
Sparks Call for Insurance Commissioner, Legislators to
By: Charles Elmore
Palm Beach Post
Florida Insurance Consumer Advocate Robin Westcott today called for the state’s
top regulator to support her in asking legislators to make clear property
insurers cannot deny claims and void policies based on consumer credit
information more than 90 days after taking a policy.
“This practice is reprehensible and should cease immediately,” Westcott said.
As The Palm Beach Post reported last month, a growing number of customers of the
state’s largest private property insurer, Universal Property & Casualty
Insurance Co. of Fort Lauderdale, say the company took premiums for years but
voided policies when they filed claims. That has meant customers were left with
no coverage for things like fire or water damage that marred or destroyed homes,
on the grounds they had failed to disclose in their applications items such as a
tax lien satisfied in another state years before.
Westcott asked Florida Insurance Commissioner Kevin McCarty to endorse the
initiative. A spokeswoman for McCarty had no immediate response late Wednesday.
McCarty’s office has said little publicly about concerns Westcott raised in
October, when she called for a formal investigation by the state’s Office of
A Universal spokesman last month defended the company’s practices and said it
was up to customers to provide correct information on applications. Universal’s
parent company reported profits rose 50 percent to $30 million last year.
Westcott said using information from credit reports or public records can be
legal and appropriate when deciding to take customers, but the consequences can
be unjust and “heart-wrenching” if such data is used as a pretext to deny claims
sometimes years later. Agents often fill out application for customers, other
critics of the practice have noted, and they or customers themselves may not
know or remember all the items from years past, sometimes involving family
members or spouses, that could be used to void the policy.
“Florida consumers deserve protection from this unfair practice,” Westcott said.
In a letter to McCarty, Wescott said she believes the practice violates current
law but seeks a change in the law — such as by amendment to pending legislation
not identified in the letter — to make “crystal clear” such information should
not be used to deny claims.
The letter can can be read