We often talk about the promises an insurer makes in exchange for a policyholder’s premiums. In the law, some of those promises are referred to as “duties,” with the most important being the duty to defend and the duty to indemnify. Generally, the duty to defend is seen as the more important of the two, and when you think about how the claims process works (or doesn’t work), it makes sense.
Last week, the Florida Office of Insurance Regulation announced that another 66,500 policies with Citizens Property Insurance Corp. will be eligible for take-out in April. If the same depopulation process we have been talking about has not changed, those 65,000 homeowners and 1,500 commercial property owners will receive “encouragement letters” from Citizens notifying them that they have the option to purchase coverage from private insurance companies.
We are picking up where we left off in our Jan. 20 post. The subject is the depopulation process that Citizens Property Insurance Corp. has been undergoing for the last couple of years. This is one of those things that looks reasonable on paper, or sounds like a good idea at the time, but that definitely has some glitches. Unfortunately, the glitches are at the expense of policyholders — and some of those policyholders are more vulnerable seniors.
Auto insurance is a critical resource to have after an auto accident, as anybody who has been in a serious crash understands. Florida, unlike some other states, has a no-fault insurance system in which motorists are required to carry minimum levels of personal injury protection (PIP) to cover medical costs when an accident occurs.
We are still talking about some of the problems that have come up during Citizens Property Insurance Corp.’s depopulation program. Before we continue, though, we want to take a brief detour.
We usually write about insurance companies that are eager to say no, even before the policyholder has asked the question. In its efforts to downsize Citizens Property Insurance Corp., though, the state has apparently allowed private insurance companies not to take no for an answer — and for property owners to find themselves having to accept insurance they did not want.
Florida is a state of numerous exhibitions, museums and centers for the display and development of different kinds of art. Works of art placed in museums or brought to them in traveling exhibitions are largely owned by outside parties. Insurance coverage must be obtained for all artwork that appears for exhibit or that is permanently situated. Unfortunately, if an insane rampage by someone results in massive damage and destruction of insured pieces, a virtual hornet’s nest of insurance claims and litigation may result.
Florida is a study in contradictions when it comes to insurance law. The state has led the nation in consumer protection actions, like the national mortgage settlement and, for that matter, established Citizens Property Insurance Co. to provide coverage to residents who would otherwise go without.
An insurer has a legal duty to act with good faith and fair dealing in every insurance contract. When that duty is breached, a tort and breach of contract action for bad faith insurance may be allowed, depending upon the facts of the case. As a general rule in Florida and elsewhere, the insurer will incur liability to the insured if it recklessly or in bad faith exposes the insured to liability in derogation of its contract of insurance.
Try not to get too excited about a hurricane-free 2015, Florida. Chances are your property insurance premiums will not know the difference. Nor, for that matter, will your auto insurance rates respond to the news that we are not the worst drivers in the country.
