WEST PALM BEACH, Fla. (CN) – On the one-year anniversary of Hurricane Irma’s landfall in the Sunshine State, homeowners’ claims of being shafted by their property insurers are still pouring into Florida courts, where state-run insurance company Citizens has been sued more than 2,000 times in the last three months.
Hurricane Irma generated an estimated $10 billion in insured damage and was blamed for at least 80 fatalities in the state.
It hit the Caribbean islands as one of the strongest-ever-recorded Atlantic hurricanes, before arriving in Florida as a Category 4 storm. Most Florida households lost power, and curfews kept residents huddled by candelight in communities from the Keys to Jacksonville.
Though the downed trees have been cleared, and flood waters long-since receded, the insurance litigation fallout from Irma shows no signs of subsiding. The storm has contributed to a 58 percent year-over-year increase in lawsuits against the state’s Citizens Property Insurance Corp., often an insurer of last resort for vulnerable coastal areas. Hundreds of lawsuits over unpaid Irma claims were filed against insurers in South Florida courts over the last month alone.
Behind the numbers are frustrated homeowners with ravaged property, attorney Valorie Chavin said in an email. For many clients whose claims were either underpaid or outright denied, Chavin said it’s been nothing short of a nightmare.
“We have clients living with mold, kids getting sick, houses being inundated with water, tarps not work[ing], families displaced. And the constant emails and calls for updates and help are heartbreaking,” she said.
After their home’s roof was ripped off in the storm, a family-of-three represented by Chavin had to move into a dilapidated rental property because they were not getting timely reimbursement from their insurer, the attorney said. Adding insult to injury, she said, the insurer falsely accused them of submitting a fraudulent claim.
“The carrier’s expert witness was forced to concede that his opinion — that it was ‘impossible’ for Hurricane Irma to rip this roof off — was wrong when faced with video footage taken from the neighbors across the street,” Chavin said.
Citizens for its part denies that unfair claims-handling is the root of the record influx of lawsuits. A spokeswoman for the insurer said in an email that countless homeowners rush to file litigation once they retain attorneys.
“With respect to the insured having dialogue with us prior to suit, the trend has been that not much of this has happened,” Citizens spokeswoman Christine Turner Ashburn said. “Those claims that are reported with representation typically accept the [claim] settlement and then file suit without additional discussions. For those insureds not represented, they are certainly contacting our Resolution Unit and submitting supplements along the way.”
In roughly half of the new lawsuits served on Citizens through mid-summer 2018, the plaintiff policyholder did not dispute Citizens’ claim adjustment/payment prior to filing suit, according to Citizens’ data.
“In other words, the insured did not communicate any dissatisfaction with the claims decision, nor did the insured provide any additional information concerning the loss for Citizens to investigate or consider,” Turner Ashburn said.
Last week, attorney Steven Simon of the Hurricane Litigation Group filed a lawsuit on behalf of homeowner Lawrence Malysa, alleging Tower Hill Prime Insurance used “bogus and fraudulent” engineering reports to justify underpaying claims. A Tower Hill-enlisted adjuster, which allegedly evaluated hundreds of claims for the company, had no license, according to the lawsuit.
Malysa says his interlocking-tile roof was damaged in the storm, and there is no way to replace the now-out-of-production tiles. His hopes of getting reimbursed were dashed when an inspector working for Tower Hill generated a report that allegedly declared there was “no evidence of wind damage.” The inspector fabricated the report to fit a “predetermined conclusion” that the home was unscathed, according to the lawsuit.
Tower Hill responded to the fraudulent-appraisal allegations in a statement, saying it has not been served with the case, but that it “will aggressively defend itself” against the lawsuit.
“To date, Tower Hill has paid out more than $500 million to help its customers repair their homes and property from damage caused by Hurricane Irma,” Tower Hill said in the statement.
Marc Ben-Ezra, partner at Florida Professional Law Group, said in a phone interview that insurers’ adjusters are frequently trying to sidestep Irma claim payouts by attributing damage to supposedly preexisting issues at homeowners’ properties.
Ben-Ezra points to a case wherein an insurance company pegged a client’s hurricane loss at his Charlotte Harbor home at $6,000 despite allegedly pervasive destruction at the property. The insurance company moreover hassled the man about a document-filing deadline while he was recovering from a spinal abscess surgery, Ben-Ezra said.
The case ended with a $240,000 settlement, he said.
Attorney Ely Levy at Militzok & Levy, one of the highest-volume Irma claim firms in Florida, echoed the claims of dishonest adjusting.
“We have seen adjusters hired by carriers to adjust a roof loss not even go onto the roof to inspect,” Levy said in a statement. “And then the carrier will deny the claim or underpay the claim, stating that the damages are below the deductible amount.”
Getting a jury trial scheduled remains a serious hurdle for homeowners trying to battle insurers like Citizens and Universal Property and Casualty Insurance, Levy said.
“There is a logistical challenge as far as procuring trial dates,” the attorney said in an interview. “Getting on the trial docket and picking a jury does take some time. It’s getting better. But it is a No. 1 challenge for policyholders.”
Levy added: “The chief judges in each circuit have done a tremendous job at helping push the flow of cases along.”
Citizens said it is “seeing shorter times for the insured to file suit.” Irma suits over the summer were coming in between three and six months after the initial claim filing, whereas in prior disasters the typical time between the initial claim and bringing a dispute to court was 12 months or longer.The insurer also maintained that it has no choice but to process claims in a methodical manner, given an increasing incidence of insurance fraud. Citizens said the “penetration rate,” the number of case referrals to a Florida insurance fraud investigation unit, has been “higher than in prior [catastrophes].”
Citizens said all of its claims were “adjusted by qualified, licensed adjusters.”
According to data from the Florida Office of Insurance Regulation, roughly 82,000 Hurricane Irma claims remained open across the state as of mid-August (the last available data point). About 603,000 Irma claims were closed with payment, while more than 311,000 Irma claims were closed without payment. The latter figure includes claims in which the loss was deemed to be less than the policyholder deductible.
The Office of Insurance Regulation says it has scheduled one more data call for Hurricane Irma claims-reporting by insurers. Companies are required to report on Oct. 15, and the office plans to release the newest data shortly thereafter, according to the FOIR website.
Insurers’ defense teams meanwhile seem more-than willing to dig in their heels in two metropolitan counties in South Florida, where Citizens and Universal already had contentious interactions with local insurance attorneys over skyrocketing plumbing-leak claim numbers long before Hurricane Irma. State statistics show that these counties, namely Broward and Miami-Dade, have a significantly elevated percentage of pending Irma claims.
As the litigation deluge rages on, attorney Chavin remains incensed by her clients’ reports of hardship.
“I can’t believe that it is nearly one year since Hurricane Irma and the responsible homeowners in South Florida who paid expensive premiums for insurance have to fight for the coverage that they are entitled to,” she said.