Florida Insurance Consumer Advocate’s Homeowners Working Group Continues Review of Policy and Claims Bill of Rights at August 19 Meeting

 

The Florida Insurance Consumer Advocate’s Homeowners Policy and Claims Bill of Rights Working Group (“Working Group”) met yesterday, August 19, 2013, to continue its work on draft recommendations intended to improve the residential policy claims handling process, particularly with the goal of helping to prevent homeowners from suffering a claims-related financial loss.  The Working Group includes representatives from both the insurance industry and consumer advocacy organizations.

Ultimately, the proposed recommendations will be compiled into a comprehensive report providing recommendations for addressing each item of concern, either administratively or through proposed legislation.

Florida Insurance Consumer Advocate Robin Westcott opened yesterday’s meeting, noting that the Working Group has made significant strides.  However, the issues have not yet been finalized, she added, and some may yet be removed or revised based on the ensuing discussion.  

Ms. Westcott said that the ability of her office to handle trade secret data is necessary to produce reports on Florida’s insurance marketplace.

Next, she addressed the idea of educating insurance consumers.  For example, data shows that 25 percent of policyholders believe their homeowners’ policy also covers flood damage.  Texas, she said, has an excellent model for consumer rights that could serve as a benchmark.  The Working Group agreed it is critical to educate consumers on the difference between a homeowners policy and a flood policy. 

It was noted that a 25 percent rate increase in National Flood Insurance Program premiums is expected in October 2013.  Rates are expected to continue to increase until they are actuarially sound.  Working Group members agreed that flood risk is very real, inasmuch as flooding is the number one natural disaster. 

There has been movement to include storm surge data into private loss projection models, while funding has already been provided to include the same type of data in Florida’s Public Hurricane Loss Projection Model.  This is expected to assist in developing data in wind/water claims.  

The agenda moved to a discussion on the assignment of benefits issue, with Ms. Westcott stating she does not want to eliminate assignment of benefits as an option, inasmuch as it was unlikely that could actually be accomplished.  Moreover, the elimination would probably not be upheld by the courts.  She explained the parameters of consumers’ ability to assign benefits. 

Working Group members agreed that all time periods relating to the issue of assignment of benefits need to be considered together and that insurance companies need to be given notification of the pending claim. 

The Working Group discussed the issue of right to repair, agreeing that authorizing a right to repair program is a good addition to the list of recommendations.  Ms. Westcott expressed concerns about potential abuses with deductible financing, explaining she does not believe an insurer should be able to put a policyholder in a weak position by controlling the repair and the deductible financing.    

Regarding alternative dispute resolution, the Working Group discussed the idea of combining the insurance mediation, neutral evaluation and appraisal processes to reflect a stronger alternative dispute resolution process for consumers. 

Ms. Westcott said she will review the information discussed at yesterday’s meeting.  She emphasized that she intends to have a report finalized shortly, even if that requires the Working Group to meet again. 

 

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