Homeowners Want ‘Uncovered Perils’ Clarified; Fla. Legislators Won’t Budge

Homeowners with outstanding claims for hurricane damage and their attorneys, insurance company lobbyists and Florida’s House Insurance Committee members all disagree about if an insurance company is liable if a property is destroyed in part by an uncovered peril.

Despite pressure from hurricane victims and their lawyers, the House Insurance Committee has refused to budge on a “clarification” that according to the Fort Myers News-Press, means millions of dollars in uncovered losses for hurricane victims.

For policyholders, the biggest concern is a two-sentence provision that would allow insurance companies to refuse to pay policy limits where a house is destroyed in part by an uncovered peril.

“I lost everything I owned and I’ve not got one response from anybody,” said Wesley Van Eaton, a Gulf Breeze resident whose home was blown and washed away by Hurricane Ivan. He told the News-Press that his insurer, Allstate, is refusing to pay his claim for total damages.

Van Eaton said the insurer hopes the Legislature will change the state’s valued policy law to allow it to exclude damage caused by storm surge, an uncovered peril.

Pensacola trial attorneys handling insurance lawsuits for dozens of Panhandle residents brought nearly 35 such hurricane victims to Tallahassee for a Thursday meeting.

House Insurance Committee Chairman Rep. Dennis Ross allowed no time for them to speak as the committee wrestled with its rewritten bill. A lawyer with the firm that brought the people to the Capitol spoke on their behalf, and they all stood for the committee.

“I’ve got 4,100 families in my two counties that I represent that don’t have a bed to call home,” Rep. Greg Evers, R-Baker said. “I understand some of the insurance companies are actually holding off, telling the folks they are not going to make a settlement because they’re waiting on this bill to pass to give them a way out to where they don’t have to pay.”

Insurance companies contend they have never paid full losses when part of the damage was caused by an uncovered peril.

“Our policy covers wind. It does not cover flood,” Mark Delegal, lobbyist for State Farm, Florida’s largest property insurer explained. “I understand the difficulty these people are in, but we entered a contract, we collected a premium.”

He said to require State Farm to pay for homes washed away by storm surge “would be a dramatic, dramatic increase in coverage” and therefore, would require rate increases.

Lawyers contend the insurance industry is using its political muscle to get out of paying claims.

“You know very well the strength of the insurance lobby. This is not a stealth risk that snuck in the middle of the night,” Robert Loehr with Levin Papantonio, the Pensacola firm that bused in hurricane victims said. “I don’t think anybody is seeking benefits that weren’t paid for under these policies.”

From here, the House and Senate part ways as they tackle the first major overhaul of homeowners insurance in Florida since Hurricane Andrew.

The House bill, originally a near mirror of the Senate bill, also no longer contains consumer-oriented measures that require insurers to use common rate territories, making comparison shopping easier, and to challenge large rate increases.

One of the lead supporters of uniform rate territories is Senate Banking and Insurance Committee Chairman Rudy Garcia, who continues to champion it in his yet-unfinished bill.

The House also removed language that would allow consumers to sue their insurers under the state’s unfair trade practices act and approved a provision that would allow Citizens Property Insurance Corp., Florida’s insurer of last resort, to charge competitive rates in areas of the state where the Office of Insurance Regulation determines there are little to no options on the private market.