A former insurance defense attorney reveals the inside information insurance companies don’t want you to know.
As many Florida residents emerge from their homes and begin to assess the damage caused by Hurricane Irma, they will inevitably (and sometimes unfortunately) need to familiarize themselves with the homeowner’s insurance claim process. Oftentimes this process can be confusing; ignorance or failure to follow proper procedures can result in your claim being denied or underpaid which can be disastrous. As an attorney I spent over five years defending insurance companies from all manner of insurance claims. I now devote myself 100% to those individuals who need representation in their claims and lawsuits against insurance companies. During my career on the “other side” I learned many things which most insurance companies and adjusters would rather you not know, and which will be helpful if you have to make an insurance claim in the coming weeks and months.
Unfortunately, insurance companies and their adjusters are not in the business of paying out claims. Generally, insurance company adjusters are trained to resolve claims for the smallest amount possible or deny them outright if they can claim that there is an exclusion under the policy. You may not realize it, but for the adjuster, this process starts from the moment you pick up the phone or log in to report your claim. Understandably, you may be suffering from an incredible amount of stress and anxiety from damages or losses caused by Hurricane Irma, however you must keep in mind that every question you answer will be a factor in determining if your losses are covered or not. The insurance company doesn’t care if you were stressed or confused at the time you told them something; they will happily use it against you later on. While you should always be honest and forthright in reporting a loss to your insurance company you have a right under the Florida and Federal Constitutions to have an attorney report the claim and deal with the insurance company for you. The adjuster is a trained professional; you are not. A homeowner without familiarity with the way insurance policies are interpreted and how insurance companies value losses will always be at a severe disadvantage. During my career I have had to help so many people that could have avoided a denial or underpayment of their claim if they had just taken some time to follow these steps or simply consulted with a professional early on in the process. Once the damage is done it will be much more difficult for an attorney that you hire later on after your claim gets denied to successfully recover for you. Remember, Florida Statutes 627.421 generally requires that your insurance company provide you with a complete and updated copy of your copy of your insurance policy including all amendments and endorsements. As stated above, do not discuss your loss until you are completely prepared to do so. This means having a complete copy of your policy in front of you so that you are aware of what is covered and what is not. You have every right to review your entire policy before you discuss your claim with your insurance company.
If you do decide to contact your insurance company directly, make sure you take the following steps before contacting your insurance company. Remember there is no rush and generally you will have several weeks to report a loss after an event such as Hurricane Irma:
One of the most important things to understand after a hurricane is that under Florida law if damage is caused by a named storm such as Hurricane Irma, and a hurricane warning or watch is issued by the National Weather Service, all wind losses to your home are treated as hurricane losses under Florida Statutes § 627.4025. Florida law defines “Hurricane coverage” as coverage for loss or damage caused by the peril of windstorm during a hurricane. The term includes ensuing damage to the interior of a building, or to property inside a building, caused by rain, snow, sleet, hail, sand, or dust if the direct force of the windstorm first damages the building, causing an opening through which rain, snow, sleet, hail, sand, or dust enters and causes damage. You should know that winds which occur during a hurricane are still considered legally to be part of the hurricane, even if the winds themselves were not part of the actual named cyclone. “Hurricane” in a hurricane coverage endorsement in a residential property policy includes tornados spawned during a named hurricane. See State Farm Florida Ins. Co. v. Moody, 180 So. 3d 1165 (Fla. 4th DCA 2015). So if your home was damaged by a tornado during a hurricane any coverage for hurricane damage will usually apply. If structural damage to your home occurs during a named hurricane or tropical storm, the usual requirement that the damage result from an opening or hole resulting from the force of the wind does not apply. New Hampshire Ins. Co. v. Carter, 359 So. 2d 52 (Fla. 1st DCA 1978).
In Florida every homeowner’s policy contains what are known as “cooperation clauses.” These cooperation clauses contain numerous “landmines” which could result in your claim being denied or drastically underpaid. The most important of these is the requirement that the insured appear for an “Examination Under Oath” or “EUO” at the request of the insurer. While an insurance company is supposed to use the EUO provisions to verify losses, too often they are a tool that is abused to deny claims by unsophisticated customers after a major hurricane or storm. An EUO is a formal sworn statement generally conducted at a court reporter or lawyer’s office in the presence of court reporter. During the EUO you will either be questioned by an insurance company investigator or an insurance company defense attorney. Never appear at an EUO without an attorney. I cannot stress this enough. The attorney or investigator who questions you will likely sit you down for several hours and make you answer complicated questions. Most or all of these questions will be geared towards getting you to say or admit something that they can use against you to deny your claim.
Because appearing for an EUO is a “condition precedent” to coverage under an insurance policy, your failure to appear can result in your coverage being revoked even if you do have a valid claim. See Goldman v. State Farm Fire Gen. Ins. Co., 660 So. 2d 300 (Fla. 4th DCA 1995). One well-known insurance industry tactic is for an insurance company to send you a letter in the mail requesting that you appear at a scheduled time and place for your EUO. The insurance company will generally not try to coordinate this date with you because they know that if you can’t make it they can simply not pay your claim. Often the letter will require you to show up in another city or across town at a time when you may have to work or take care of your children.
If you receive a letter requesting an EUO it is extremely important that you respond to the insurance company in writing by fax or email and tell them
Appearing at your EUO with an attorney has several advantages. Generally, if the insurance company knows that you are not represented they will have you questioned by a non-attorney investigator. These individuals can be abusive and harassing because they know that most insureds who do not have an attorney do not understand their rights. In the case of De Leon v. Great Am. Assur. Co., 78 So. 3d 585 (Fla. 3d DCA 2011) a Florida Appeals Court found that the lawyer for an insurance company had questioned an insured customer for over seven hours and asked numerous improper and intrusive questions. After the insured couldn’t take the questioning anymore and left, the insurance company denied the claim. Fortunately for the insured customer in that case an attorney was able to successfully appeal his denial. Additionally, a qualified attorney will meet with you before your EUO to review your claim and the evidence and prepare you for questioning. If the EUO becomes abusive a good attorney will make sure that your rights are protected. As explained in this article in cases like these you can usually hire an attorney at no cost to you. Remember, questioning during an EUO or deposition is unique and will be unlike anything you have previously experienced unless you have had prior claims or lawsuits.
Another aspect of the “cooperation clauses” in your insurance policy is that you must cooperate with insurance companies in providing them with information. Often, after making a claim you will receive a letter from the insurance company saying something to the effect of “we need more information from you before we can pay your claim” and then containing a laundry list of items they want you to send them. While this can sometimes be true, it is often a delay tactic, or worse in the event you don’t respond to the letter, another excuse to deny your claim for “lack of cooperation.” Don’t fall for it.
This is why it is always important to respond to these letters. When you respond always 1) say that you want to cooperate 2) ask for more time to get the information 3) send them the information as soon as you can. A simple rule is that if you get a letter or email from your insurance company you should respond to the letter in writing. If you don’t have the information you should tell the insurance company you need more time. If you do have the information make sure you review it so you know it’s complete. Always remember that the old adage “anything you say can be used against you in a court of law” is always true when you talk to your insurance company.
In the State of Florida if an insurance company denies, underpays, or improperly disputes a claim by their insured customer in any way, they are required by Florida Statutes 627.428 to pay their insureds reasonable attorneys’ fees and costs. This law was created to even the playing field between everyday people and the massive multi-billion dollar insurance industry.
In 2016, the Florida Supreme Court explained how this law prevents insurance companies from taking advantage of their customers by improperly denying claims ruling that:
“The need for fee and cost reimbursement in the realm of insurance litigation is deeply rooted in public policy. Namely, the Legislature recognized that it was essential to “level the playing field” between the economically-advantaged and sophisticated insurance companies and the individual citizen. Most assuredly, the average policyholder has neither the finances nor the expertise to single-handedly take on an insurance carrier. Without the funds necessary to compete with an insurance carrier, often a concerned policyholder’s only means to take protective action is to hire that expertise in the form of legal counsel. Counsel then have the ability and knowledge to hire an independent engineer or other expert to prepare a report that either confirms or denies the policyholder’s view of the cause of damages. For this reason, the Legislature recognized that an insured is not made whole when an insurer simply grants the previously denied benefits without fees.”
What does this mean for you as an insured homeowner? It means that even if your claim is for a minor amount of money or value, an attorney will take your case because if they win the insurance company (and not you) will have to pay their attorneys’ fees and costs of filing a lawsuit. This is because the government of the State of Florida realized that it is much more difficult for an insurance company to deny a claim or take advantage of their insured customer, when the insured customer has hired an attorney to protect their rights.
If your homeowner’s insurance policy provides coverage for loss of personal property such as televisions, appliances, and similar items, they are generally required to reimburse you or replace the items of the “same, like, kind, and quality.” For example, if because of a Hurricane Irma your $5,000 Sony flat screen TV and surround sound system are destroyed, the insurance company can’t just pay you the money for a no-name brand Wal-mart replacement TV and Chinese speakers. However, if you are not specific when you report your loss, the adjuster will likely assign the lowest value possible for your lost property.
This is why when you are creating a list of lost property it is important not to just say “TV” but also include the make, model, and any other description that demonstrates why the item was unique or especially costly. After a hurricane make sure you provide as many details as possible regarding your lost or damaged personal property. The more detail you provide the more likely it is your claim will be paid in full.
After the enactment of the the Federal National Flood Insurance Act of 1968, 42 U.S.C. § 4001(b), windstorm and homeowner’s policy no longer provide coverage for flooding and storm surge losses. These losses are now covered by the Federal Flood Insurance Program. This generally means that any damages caused by flooding, surface water, or storm surge is excluded from most homeowner’s insurance policies. In Florida, this can even include rainwater, if the water falls on the ground and then flows into your home. See Intrepid Ins. Co. v. Prestige Imports, Inc., 78 So. 3d 583 (Fla. 3d DCA 2011). This exclusion often results in denials and subsequent litigation between insureds and their insurance companies where one side claims the damages was caused by windstorm, and the other side claims the loss resulted from flooding or storm surge. These issues are complicated and fact-intensive, and yet another reason why you must be extremely careful and prepared before you provide a statement to your insurance company regarding the facts of your loss. It is very easy for an adjuster or an attorney to twist your statement into making it sound like your loss was caused by an excluded hazard instead of one that is covered by your policy.
Remember, your home and possessions mean nothing compared to the health and welfare of you and your family. However, when the time comes to deal with the aftermath you should know your rights and protect yourself, because your insurance company will do everything to protect itself from your claim.
Raymond Dieppa is a attorney licensed in Florida and Washington, D.C. his firm Florida Legal, has over 11 years of experience litigating all types of insurance claims in Florida at all levels including the Florida Supreme Court. Florida Legal represents only insureds who have been denied compensation by insurance companies for damages resulting from property and bodily injury. Remember, the information contained in the article above is provided only for informative purposes and should not be relied on as legal advice. The hiring of an attorney is an important legal decision. Insurance issues are complicated and every case is different. If you have an issue or a question, please call our office for a free consultation at 305-901-2209 or email at firstname.lastname@example.org. We hope that this article is helpful to you but we urge you not to make any decisions until you consult with a professional licensed attorney.