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Insurance Consumer Advocate

Sha'Ron James

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Time Running Out for Lawmakers to Stop Insurance Practice Homeowners and Advocates Call Abusive


By: Charles Elmore

Palm Beach Post

Melody and Ronald Ward say Florida’s largest private property insurer “betrayed” them.

They echo a growing number of homeowners statewide. They want legislators to stop it from happening to others before the session ends Friday. But as the House met into the evening Wednesday, time was quickly running out.

“This shouldn’t happen to anyone else,” said Ronald Ward, 62. “It’s a travesty.”

She’s a special-ed teacher. He is disabled. They were looking forward to retirement. After a fire caused damage of $90,000 or more to their Gainesville home, they thought they were covered by Universal Property & Casualty Insurance Co. They had been paying premiums for two years.

Now they say they are living in a tow-behind trailer in their yard and being sued by a contractor for preliminary repairs begun with the expectation they were covered. Universal delivered a gut punch, the Wards said: It denied their claim and canceled their policy, based on consumer credit information it said they left out of their application years earlier.

Profits were up 50 percent to $30 million last year at Universal’s parent company in Fort Lauderdale. It has paid lobbyists to represent its interests in Tallahassee.

Legislators have spent months debating proposals to shrink state-run insurer Citizens, with the Senate version raising rates up to 85 percent for new customers. Leaders are signaling they may accept the House version without the big hikes, but proposed changes could still drive more customers to private insurers and boost their profits. But lawmakers have barely spent any time talking about a practice homeowners say is happening again and again at Florida’s largest private insurer.

It is a practice the state’s insurance consumer advocate, Robin Westcott, calls “reprehensible.” She thinks it violates current law and has called for an investigation by regulators, but has fought for legislation to make it “crystal clear” the practice should stop immediately.

The Senate approved a bill Wednesday, HB 635, containing an amendment adopted last week that would forbid companies from using such credit information to deny claims or cancel policies after 90 days. Sen. Joe Negron, R-Stuart, joined co-sponsor Sen. Arthenia Joyner, D-Tampa, to support the measure on the Senate floor. Negron called the practice “abusive.”

But the House earlier passed a version that does not have that amendment, and so would have to approve it before the session ends.

House Speaker Will Weatherford, R-Wesley Chapel, and insurance subcommittee chairman Rep. Bryan Nelson, R-Apopka and an insurance agent, did not respond to messages to their offices asking where they stand on the issue.

Among others, a Delray Beach couple who were forced to pay five-figure water damages out of pocket called Universal’s practices “horrible,” The Palm Beach Post reported in March. In their case, Universal said they failed to disclose a tax lien satisfied years before in another state.

Universal has more than 540,000 customers statewide, and Palm Beach County is its biggest market with more than 66,000 policies, followed closely by Broward.

The Wards said Universal told them they were canceled because they failed to disclose Ronald Ward had been a co-signer on a delinquent credit account used by his elderly father. Melody Ward said she was not even aware of the issue at the time the agent filled out the application, but in any case the debt had been resolved.

“They told us they were denying our claim because we were fraudulent on your application,” Melody Ward said. “I said, ‘How you can do this?’ They basically said we were liars. I’ve never been fraudulent in my life. I’ll be in 60 in June. I’ve paid off everything I’ve ever owed.”

The problem wasn’t checking out the application, she said — that was fine. It was waiting until they filed a claim two years later to do it.

“If they had looked over my application and denied it, somebody else would have covered me and we never would have had this mess,” Melody Ward said.

The Wards said they have retained an attorney to defend themselves against the contractor suit and to try to get Universal to pay.

In response to questions from The Post, a Universal spokesman said, “Regarding the claim you mention, UPCIC cannot comment on individuals’ policies or claims due to privacy considerations. As we have mentioned in the past, the insurance underwriting process in general depends on applicants providing accurate information in their insurance applications, which is the case for the vast majority of applicants.”

Ronald Ward said he has been on disability for 16 years and is trying to recover from ailments that have included a heart attack, cancer and multiple strokes.

“I’m not in good health,” he said. “This has devastated what was left of my health.”

That doesn’t quite capture how he feels, he said.

“The word devastated is not adequate,” he said. “Betrayed, absolutely.”

Most policies in Florida

Only state-run property insurer Citizens has more policies in Florida than Universal Property & Casualty of Fort Lauderdale, the largest in the private sector.

Company Policies in Florida

1. Citizens Property Insurance Corp. 1.3 million

2 Universal Property & Casualty Ins. Co. 542,882

3. State Farm Florida Ins. Co. 419,090

4. Security First Ins. Co. 177,589

5. St. John’s Ins. Co. 175,535

Source: Florida Office of Insurance Regulation, Dec. 31, 2012

Policies in Palm Beach County

1. Citizens 128,663

2. Universal Property & Casualty 66,245

3. Florida Peninsula Ins. Co. 19,935

4. Homeowners Choice P&C 18,324

5. United P&C Ins. Co. 15,460

Source: Florida Office of Insurance Regulation, Dec. 31, 2012

What’s at issue

By early Wednesday evening, the Florida House had yet to act on an amendment to HB 635 passed by the Florida Senate that says “an insurer that uses a credit report, public record or other public information to determine whether there is a misstatement or omission in the application for insurance related to the insured’s credit history must make such determination within 90 days after the effective date of the policy. After such 90 day period, an insurer may not cancel or rescind the policy or deny coverage for a claim based on a misstatement or omission in the application regarding the insured’s credit history which the insurer could have reasonably discovered by a review of the insured’s credit report, public records, or other public information