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Florida's Insurance Consumer Advocate Looks at Claims Handling

7/15/2013

By Michael Buck, Best's News Service

TALLAHASSEE, Fla. - The Florida Insurance Consumer Advocate is gathering together insurance industry and consumer representatives in an effort to respond to policyholder complaints about the claims-handling process in the state.

The discussions, which will take place July 17 and 18, will help build the foundation for a comprehensive report that provides recommendations for addressing complaints either through administrative or legislative actions, according to the office of Robin Westcott, the Florida insurance consumer advocate. The working group will also review the current policyholders’ bill of rights.

The working group is set to discuss a host of items, including adjusting, solicitation of consumers after a loss, nonrenewal of policies and mediation, among many others. One item on the agenda, post-claim underwriting, made headlines in May after Universal Property & Casualty Insurance Co. was fined $1.26 million for allegedly engaging in the practice (Best's News Service, May 30, 2013).

“Consumers should not be victimized by poor claims handling and unscrupulous business practices by those seeking to exploit homeowners when they are most vulnerable," Westcott said in a written statement.

Sam Miller, executive vice president of the Florida Insurance Council, said the industry in his state is supportive of Westcott and the claims-process study. The industry will be represented on the working group by the Insurance Information Institute's Florida representative, Lynne McChristian, independent agents and representatives from companies like State Farm Florida, Security First Insurance Co. and American Strategic Insurance Group.

Florida's property insurance market, like the state's automobile market, is full of fraud with particular emphasis on non-catastrophe claims, Miller said. He said that factor has contributed to rising rates in the past few years. Even though rates are rising, Florida has not been hit by a major hurricane in the past seven years (Best's News Service, May 22, 2013).

"Companies are pushing back and they should fight fraud," Miller said. "However, we also should pay all legitimate claims. There can be an occasion where an honest consumer gets caught in the middle because they answer an ad from a roofing company or a water remediation company and some folks are crooked."

McChristian said she's open minded about the agenda items to be discussed. She said some of the proposed issues might be more anecdotal and will be found by the working group to not be widespread in the insurance industry. She did not want to speculate on specific agenda items. McChristian said it's good to have these types of discussions and at a minimum is helps all stakeholders to figure out where everyone is at.

The top five writers of homeowners insurance in 2012 in Florida were: Citizens Property Insurance Corp., with market share of 19.53%; State Farm Group, with 8.68%; Universal Insurance Holdings Group, with 8.42%; Tower Hill Group, with 6.62%; and USAA Group, with 4.78, according to BestLink, A.M. Best Co.'s online financial system (www.ambest.com/bestlink).