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Insurance Consumer Advocate

Sha'Ron James


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Mailing: 200 East Gaines St.
Tallahassee, FL 32399-0308

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Sides in insurance standoff find reason for optimism

 

Date: June 15, 2016
Source: Sun Sentinel
Author:  Ron Hurtibise

 

The arguments were familiar at a daylong forum in Boca Raton attended by 150 players in Florida's homeowner insurance rate crisis.

But unlike their usual methods of venting over the past four years — legislative hearings in Tallahassee, websites, letters to the editor — the opposing sides listened to each other.

And that gave Sha'Ron James, the state's Insurance Consumer Advocate, reason to hope a consensus might be possible that could head off the gloomy prospect of property insurance rate increases for years to come.

"People who expressed concerns about Citizens [Property Insurance Corp.] were actually talking with (Citizens President) Barry Gilway after making their comments," James said afterward.

James organized the forum in Boca Raton to ensure participation by the tri-county area's plaintiff's attorneys, water restoration companies, insurance industry representatives and public adjusters.

Homeowner insurance rate hikes have been proposed by numerous companies this year, including Heritage Property & Casualty, which seeks an average 14.9 percent statewide increase. Citizens warned recently of annual 10 percent hikes for the foreseeable future if increases in non-weather-related water loss claims and related lawsuits are not brought under control.

Insurers say water restoration companies pressure homeowners to sign over the rights to collect policy benefits after emergencies such as broken pipes or water heaters, then inflate invoices and file suits if insurers deny claims or offer too little. Restoration companies often delay reporting damages so they can complete costly repairs before insurers can inspect, insurers say.

While restrictions approved for Citizens and other insurers limiting emergency repair work may help, "they aren't the real solution to the problem," said Sandra Starnes, director of property and casualty review for the state Office of Insurance Regulation.

Restoration companies and attorneys say insurers routinely underpay and take too long to respond to customers.

Accusations were plentiful at the forum, held in the large recruiting room of Florida Atlantic University's football stadium. But so were suggestions for reforms that participants said shouldn't be difficult for all sides to accept.

State Rep. Frank Artiles, R-Miami, a public adjuster, called for state regulation of water repair companies. He also proposed requiring them to provide "good faith estimates" before homeowners sign over benefits — which Gilway later said he would support.

Consultant Scott Johnson, speaking for the Florida Association of Insurance Agents, said restoration companies should be barred from offering referral fees in exchange for names of potential customers. Some companies routinely pay as much as $1,500 per referral, he said.

Some of the restoration companies agreed, while Floyd Ralston, spokesman for the Florida Association of Restoration Specialists, said his association favored state licensing and regulation to weed out the worst abusers.

Meanwhile, Paul Schwartz, owner of All Florida Restoration Specialists, said he could accept limiting assignments to just the work being proposed. Insurers say some companies go far above what homeowners expect, sometimes filing suits in homeowners' names without their knowledge.

"I agree we shouldn't be removing kitchens" before insurers are notified of losses, he said.

After the meeting, Gilway was seen in friendly conversation with Lee Jacobson, vice chair of the legislative committee for the Florida Justice Association, a trial lawyers group.

Both said they were encouraged by the dialogue at the workshop.

"I heard common ground discussed among multiple parties," Gilway said.

Jacobson said he thought the discussion could result in a legislative compromise that has eluded the two sides for four years. "I hope so. I'm tired of going up to Tallahassee," he said.

James said she plans to issue some policy recommendations by the end of summer that will require sacrifices from all sides. "I believe all stakeholders bear some responsibility," she said.