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Home insurance rights bill advances, but squabbles to follow

4/11/2014

By Charles Elmore, Palm Beach Post

A bill requiring insurers to hand homeowners a one-page summary of their rights when filing insurance claims is heading for floor votes in the Florida House and Senate, underscoring protection against abuses examined by The Palm Beach Post at the state’s largest private carrier.

The legislation makes clear insurers cannot wait for more than 90 days after a homeowner’s application to dig up consumer credit information either to deny claims or cancel policies, a focus of Post reporting on Universal Property & Casualty Insurance Co. of Fort Lauderdale. Its biggest market is Palm Beach County.

Still, some homeowner advocates say HB 743 and companion SB 708 have been watered down considerably after industry lobbying and largely recap rights consumers already have.

Fights also threaten to continue on the floor over provisions that some contractors say make it easier for insurers, not the homeowner, to control who does repair work after claims.

In a statement, Florida CFO Jeff Atwater said the bill represents an important step forward because it would establish a Homeowner Claims Bill of Rights, “a one-page document clear in its language, which sets forth policyholders’ rights under Florida law.”

Insurance companies will be required to provide a copy to any policyholder who files a claim, “allowing them to feel confident and educated during the claims process,” Atwater said.

It also reinforces that companies must complete their underwriting process within 90 days of signing up a customer. Outraged consumers from Delray Beach to Gainesville told the Post they were financially devastated and left with no coverage for huge fire or water damage after Universal canceled policies instead of paying big claims. Consumers said the company took their premiums for years but bailed on claims if their applications failed to mention obscure credit information, such as a tax lien paid off in another state.

Regulators told Universal the 90-day rule was already the law of the land before the company ultimately agreed to a state order, but Atwater said the bill would remove any doubt as it “prohibits the denial of a claim or cancellation of a policy based on an insured’s credit information available in public record after a policy has been effective for 90 days.”

The bill passed the House Regulatory Affairs committee this week and heads to the floor. In the Senate, it awaits a second of three readings required for full passage.

Still, the legislation falls short of addressing a wider range of proposals put forward by a working group led by former state insurance consumer advocate Robin Westcott, said Jay Neal, CEO of the Fort Lauderdale-based advocacy group Florida Association for Insurance Reform.

For example, he said there’s nothing addressing limits on examining customers under oath, whose unchecked use is seen as a bullying tactic.

Jon Lavender, owner of Insurance Fire and Water Restorations of Fort Myers, said he remains concerned about language he sees as strengthening insurers’ ability to force consumers to use contractors the insurer wants. For their part, many insurers see “managed repair” programs as a key way to hold down costs and bring lower rates to consumers.

Floor amendments could be on the way. Steve Burgess, the current state consumer advocate, said “that section should be looked at” to make sure it properly balances the interests of consumers, insurers and contractors."