October 10, 2022
The last week of September, 2022, the State of Florida braced for what was categorized to be one of the worst storms to make landfall in U.S. history. Initially, all weather channels displayed the storm’s trajectory heading towards Tampa Bay. As the Buccaneers’ fans scurried to prepare for an avalanche of winds and rains, either by evacuating or hunkering down, Ian’s path unexpectedly shifted South and ferociously targeted the Ft. Myers and Naples areas, bringing with it 150 mph winds and pushing ashore up to 18 feet of water from the Gulf of Mexico. Although last minute the storm took the least expected path, what insurance carriers can expect is a massive increase in property claims being reported as damages throughout the State of Florida are still being calculated.
As insurance companies and their adjusters prepare for the burst of claims, there are some specific requirements to keep in mind when adjusting claims in Florida:
- License Requirements. Pursuant to Florida Statute 627.1013, an adjuster must have an active license to adjust claims in Florida. This may seem like an obvious requirement. However, companies should make sure their adjusters’ licenses are up to date. In addition, an adjuster’s name and license number must be on the initial contact and any subsequent communications with the insureds.
- Matching. Section 626.9744(2), Florida Statutes, provides that in homeowner insurance claims in which a loss requires replacement of items and the replaced items do not match in quality, color, or size, “the insurer shall make reasonable repairs or replacement of items in adjoining areas.” CMR Constr. & Roofing, LLC v. ASI Preferred Ins. Corp., 2021 WL 877560, at *8 (M.D. Fla. Mar. 9, 2021). As far as the claim is concerned, the “loss” refers to the property that was “actually damaged.” Vazquez v. Citizens Prop. Ins. Corp., 304 So. 3d 1280, 1285 (Fla. 3d DCA 2020). The additional “undamaged” items being replaced solely for matching purposes, are separate from the actual loss and therefore, are not paid out until the expenses are incurred. Id. The statute only applies to policies that are adjusted and settled based on replacement cost value. Therefore, this provision does not apply to policies adjusted at actual cash value.In addition, the statute’s requirements apply unless otherwise provided by the policy, so adjusters should pay close attention to the policy language.
- Assignment of Benefits (“AOBs”). Assignment agreement means any instrument by which post-loss benefits under a residential property insurance policy, or commercial property insurance policy, as that term is defined in s. 627.0625(1), are assigned or transferred, or acquired in any manner, in whole or in part, to or from a person providing services, including, but not limited to, inspecting, protecting, repairing, restoring, or replacing the property or mitigating against further damage to the property. Although AOBs are legal in Florida, the actual assignment is subject to, and must comply with, the requirements listed in Florida Statute 627.7152. For example, an assignment must “[c]ontain a provision that allows the assignor to rescind the assignment agreement without a penalty or fee by submitting a written notice of rescission signed by the assignor to the assignee within 14 days after the execution of the agreement, at least 30 days after the date work on the property is scheduled to commence if the assignee has not substantially performed, or at least 30 days after the execution of the agreement if the agreement does not contain a commencement date and the assignee has not begun substantial work on the property.” Lastly, and most importantly, adjusters must always look at the policy language as some policies make assignments of the post-loss benefits unenforceable.
These are just a few of the nuances that insurance companies and their adjusters can expect when adjusting Florida claims. Look for more information on this topic at the upcoming Webinar, “What to Expect When You Are Adjusting: A Primer for Hurricane Ian Property Claims” presented by Thomas Keller and Dericka Burke with Butler Weihmuller Katz Craig LLP.