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Florida court to policyholders: Quit your whining! (p. 2)

Sun Jun 3rd, 2012 on     Homeowners Insurance,    

Hurricane forecasters have revised their 2012 predictions. Originally, the experts said the season would boast just 10 named storms, four of which would be hurricanes; two of the hurricanes would develop into major hurricanes. When the official hurricane season started this week, though, the numbers increased to 13 storms, five hurricanes and two major hurricanes.

So, Florida homeowners, make sure you have adequate hurricane insurance. And check the language of your insurance policy, to make sure state-mandated warnings are included and included just as the law prescribes. If the high deductible warning is not there, or is not in bold-face, 18 point type — all capital letters — your insurance company could have been on the hook for a $7.2 million judgment.

The Florida Supreme Court ruled this week, though, that the insured was not entitled to a damage award if the warning was not in compliance with the regulatory standard. Not only would there be no award, but the plaintiff condominium association had no right to sue in the first place.

The court ruled on the matter at the request of the 11th U.S. Circuit Court of Appeals. The insurance policy, issued by an Australia-based company, included most of the mandated language we discussed in our last post. However, the insurer used the word “windstorm” instead of “hurricane,” and the warning appeared in 16.2 point type rather than 18 point type.

An insured has no right to sue insurers that do not follow the notice requirements, the court said, adding that legislators had no intention of allowing consumers to sue. (In legalese, it’s called a “private right of action.”) Nor did legislators say anything about a penalty for noncompliance, and the court cannot impose one where none is called for.

We’ll finish this up in our next post.

Source: The Republic, “Fla. justices rule no penalty for insurance companies that violate deduction notification law,” Bill Kaczor, May 31, 2012

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