The Florida Insurance Roundup from Lisa Miller & Associates (The Florida Insurance Roundup from Lisa Miller & Associates)
Explore every episode of The Florida Insurance Roundup from Lisa Miller & Associates
| Pub. Date | Title | Duration | |
|---|---|---|---|
| 06 Mar 2017 | Episode 1 – Beating Back Flood Rates | 00:11:32 | |
Although Florida accounts for nearly 40% of the National Flood Insurance Program policies, it remains a huge donor state to this federal monopoly, with property owners here paying $4 in premiums for every $1 in claims received. Maria Wells, President of Florida Realtors, has been a driving force behind efforts to encourage a private flood market in the Sunshine State. Ms. Wells shares her advocacy efforts in this podcast and how reauthorization of NFIP this year in Congress is being linked to further incentives to create a robust private market alternative that will benefit property owners and taxpayers alike. "The Florida Insurance Roundup" from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 2/28/17. Email via LisaMiller@LisaMillerAssociates.com Composer: www.TeleDirections.com | |||
| 07 Apr 2017 | Episode 2 - The Abusive Roofer | 00:13:31 | |
They come to your house peddling offers of a free roof, courtesy of your insurance company. Regardless of whether you’ve suffered serious enough storm damage to warrant a total roof replacement, these scam artists have you sign an “AOB”– an Assignment of Benefits – that takes away your rights and benefits of insurance claims proceeds and puts it into their pockets. That’s what happened to Kellie Clark, a ninth-grade math teacher in Pinellas County, Florida. Ms. Clark shares her story of being misled into signing an AOB and then becoming the target of bullying and harassment – including threats of foreclosure action – when she refused to sign over the insurance check. It’s a growing problem in Florida that has caused double-digit rate increases and whose solution is still eluding the Florida Legislature. Links and Resources Mentioned in This Episode Kellie Clark Timeline of AOB with Simbro Group Simbro Group Letter of AOB
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| 25 Apr 2017 | Episode 3 - Bad Faith | 00:21:57 | |
The Florida Legislature is once again trying to decide what to do with the state's 45 year-old No-Fault Automobile Insurance coverage law – more specifically, how to handle the persistent fraud that keeps increasing and with it, automobile insurance rates. But one component that's rarely talked about is the Bad Faith doctrine - and the third-party vendors some say who are manipulating it to win bigger legal settlements from insurance companies.
David Bronstein and J.D. Underwood - two noted South Florida insurance attorneys on opposite sides of the issue - argue the merits of Bad Faith as it relates to consumer rights and insurance company profits. They reveal in this program how just the threat of a Bad Faith case and its related costs are driving up premiums for all Florida insurance consumers. They share their insider perspective on how those looking to make a bigger buck rather than a reasonable claims settlement are hurting the availability and affordability of automobile, as well as homeowners insurance in Florida.
As the legislature considers bills replacing No-Fault PIP (Personal Injury Protection) insurance with mandatory Bodily Injury insurance (BI) – where Bad Faith claims are more prevalent than PIP claims and can result in large verdicts beyond the policy coverage limits - insurance companies want added provisions to require mandatory civil remedy notice by third-party claimants to level the playing field.
Links and Resources Mentioned in this Episode
The Florida Insurance Roundup" from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 4/20/17. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com | |||
| 09 May 2017 | Episode 4 - Legislative Session Roundup | 01:01:32 | |
The Florida Legislature ended its 2017 session this week three days late – and without passing most of the major insurance-related bills. These include Assignment of Benefits reform, Workers’ Compensation reform as mandated by the state Supreme Court, and No-Fault Personal Injury Protection automobile insurance reform. What went wrong? Host Lisa Miller, a former Florida deputy insurance commissioner, takes the guest microphone in this program to explain what happened, share the backstory on some of the negotiations, and offer her insight on what’s needed to make these policy reforms a reality in next year’s legislative session.
"The Florida Insurance Roundup" from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 5/8/17. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com
Additional Resources Mentioned in this Episode: Bill Watch – 2017 Legislative Session Wrap-up (http://bit.ly/BillWatch2017 ) | |||
| 20 Jun 2017 | Episode 5 Part One - Growing Florida's Private Flood Market | 00:13:06 | |
Just in time for the start of hurricane season, the Florida Legislature has made it even easier for private insurance companies to write flood coverage in the Sunshine State. The private market is seen as a much-needed alternative to the debt-ridden, increasingly expensive, federal government’s National Flood Insurance Program (NFIP). Even more so for Florida consumers, who are largely subsidizing the program, receiving just $1 in claims benefits for every $4 paid in premiums. Links and Resources Mentioned in This Episode:
** Listener recorded Call-In Line for questions and comments to air in future episodes: 850-388-8002 or email at LisaMiller@LisaMillerAssociates.com ** "The Florida Insurance Roundup" from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 6/15/17. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com | |||
| 16 Jul 2017 | Episode 5 Part Two – Growing Florida’s Private Flood Market | 00:19:34 | |
Aided by new state legislation this year designed to encourage a robust private flood insurance market in Florida, the number of companies writing flood policies has nearly doubled in the last year, while Congress works this summer to reform the federal government’s beleaguered National Flood Insurance Program (NFIP). Meanwhile, new technology is making structures more resilient than ever to floodwaters, allowing those insurers to more accurately price risk and compete with the NFIP.
Mike Graham of Smart Vent Products has been working with modeling firms that are part of the new technology and shares with Lisa in this program how flood vents, dry proofing, and other mitigation options are lowering flood risks and with them, policy premiums by up to 80%. Just as wind mitigation years ago helped lower homeowners and wind insurance rates, today’s flood mitigation techniques can lower private flood insurance rates, making flood coverage more affordable – and available – for everyone.
Show Notes: Actuarial experts, disaster modelers, and third-party vendors are utilizing new technology to better predict and price flood risk. Models are important because the NFIP and parent FEMA don’t use models – they use only maps. But models help differentiate the flood risk between a property owner in Zone X with mitigation vs. another person in Zone X without mitigation – with premiums priced accordingly by the growing number of private flood insurers entering the marketplace.
Mike Graham of Smart Vent Products shares his experience on some of the newest mitigation technologies and practices, including vents that allow flood waters to wash into – and back out of - structures, minimizing damage. A study of a two-square mile area in New Jersey that suffered $1.2 million in flood claims losses showed through modeling how pre-mitigation would have eliminated the structural damage and reduced the entire area’s flood height by one inch, which while it doesn’t sound like much, equates to a $20,000 cost avoidance per claim according to FEMA. Mitigation measures also help eliminate the need for retention ponds. FEMA estimates that for every $1 spent on pre-event mitigation, $4 is saved in insurance claims.
Links and Resources Mentioned in This Episode:
** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com**
The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 6/15/17. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com | |||
| 20 Aug 2017 | Episode 6 – Citizens Managed Repair Program | 00:17:54 | |
The Florida Office of Insurance Regulation recently approved two first-of-their-kind programs designed to help the state’s property insurer of last resort – Citizens Property Insurance Corporation – control the rapidly rising claims and litigation costs among its current 450,000 policyholders. Citizens will now be able to limit coverage on non-weather water claims to $10,000 unless the policyholder agrees to use Citizens' approved contractors in its new managed repair program. The company can also waive deductibles on such claims as a further incentive for its policyholders to use the managed repair program. | Citizens President & CEO Barry Gilway sat down with host and former deputy insurance commissioner Lisa Miller on the eve of last week's OIR decision to outline the reasoning behind the program and the reforms still needed in Florida's property and casualty insurance marketplace. Also joining Lisa on the podcast is Cam Fentriss, Legislative Counsel for the Florida Roofing and Sheet Metal Contractors Association. She and Gilway found common ground on some key Assignment of Benefit concerns whose costs, Citizens says, is driving its requested statewide average 6.7% homeowners policy hike and an 8.1% commercial lines increase. |
Show Notes: "We're not going to solve the problems until we get legislative reform on the Assignment of Benefits issue to curb some of this ridiculous litigation that is taking place," Gilway said on the podcast. | Citizens is slated to lose $85 million this year because of the exponential growth in non-weather related water losses, such as leaking pipes, and isn't the only insurance company suffering such losses in Florida. The insurance industry has warned for the past five years about increased use of Assignment of Benefits by contractors who submit inflated claims on all sorts of work and then file lawsuits if insurers deny or underpay the claims. | "The Office of Insurance Regulation and Citizens Insurance have acted where the legislature has so far failed to act, to bring measures of responsibility and accountability to an out of control Assignment of Benefits system that is causing double-digit property insurance rate increases on Floridians," said Miller afterward. She predicts that other insurance companies will now seek the same newly approved coverage cap from OIR. | OIR also approved Citizens’ requested policy changes that will now require contractors to submit damage reports and repair estimates, participate in appraisals by Citizens’ adjusters, and answer questions under oath. | "We understand the need for managed repair programs because we know there are abuses out there...so long as they're done in a way that the contractors in the program are determined on an objective basis, we're comfortable with that," said Fentriss. | This Wednesday (August 23, 2017), Citizens will face some of its policyholders at a public hearing being held by OIR in the heart of “AOB Abuse Alley”: Miami-Dade County. There, Citizens’ proposed rates would go up by the maximum 10% for the second year in a row. It says AOB costs are behind its requested statewide average 6.7% homeowners policy hike and an 8.1% commercial lines increase. | Links and Resources Mentioned in This Episode:
** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com** | The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 8/8/17. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com | |||
| 15 Sep 2017 | Episode 7 – Irma’s Claims Challenge | 00:15:33 | |
Florida homeowners, businesses, and other property owners have been assessing the damage from Hurricane Irma and begun filing claims with their insurance companies. Those claims are expected to number in the hundreds of thousands from the first major hurricane to hit Florida in 12 years. How are insurance companies responding? How will they be able to meet the challenges of such an onslaught of claims? Joining host Lisa Miller from the road are the president of American Integrity Insurance Company in Tampa, Bob Ritchie and professional claims adjuster Jason Evans, CEO of Evans Claims Service, in Huntsville, Texas. They explain on this podcast how claims are being handled, why Hurricane Irma has stressed the supply of adjusters needed to handle them, and the ability of Florida’s insurance companies to pay claims. They also share advice with policyholders and other consumers hit by damage and reveal how insurance industry best practices are being put to the ultimate test with Irma. Show Notes:
** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com** The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 9/14/17. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com | |||
| 08 Dec 2017 | Episode 8 - National Flood Insurance Reform | 00:16:11 | |
Congress is pushing into 2018 a decision on how to reform the beleaguered National Flood Insurance Program (NFIP) that 1.8 million Floridians depend on for their property flood protection. Congress must reauthorize the program as well, because without it, federally-backed home mortgages which require flood coverage for high-risk zoned properties could come to a standstill. But the taxpayer-subsidized NFIP is $25 billion in debt and still using old flood data and maps, with rates that don’t match risk. Congress is considering reauthorization under a package of reform bills called the 21st Century Flood Reform Act. Host Lisa Miller, a former Florida deputy insurance commissioner, explores two of those key reforms on this program: what to do with grandfathered properties that are still enjoying 1960’s-era premiums and riddled with repetitive losses, and how best to encourage private flood insurance market alternatives. It’s estimated that 77% of Florida properties would see lower premiums with private market policies. Joining Lisa are guests Brian Squire, Managing Executive Senior Vice President at Hays Companies in Destin, Florida and Helen Devlin, Senior Lobbyist with the National Association of Realtors in Washington D.C. Together, they outline what’s at stake for Florida NFIP policyholders and ideas on how best to balance flood insurance affordability with NFIP sustainability, without hurting Florida’s growing real estate market. Show Notes: The bill passed by the U.S. House would strip grandfathered NFIP rates after two future claims, with rates then rising 10% per year until hitting the current risk-rate. A third claim would raise rates 15% per year. The podcast discusses how this is meant to relieve some of the financial burden to the heavily subsidized federal government program, while providing greater cost accountability and sharing with those properties that continually have losses and keep getting rebuilt or repaired, only to have sometimes identical losses re-occur during the next event. Brian Squire said the key to a more sustainable NFIP and one that encourages private flood insurance alternatives is to change the grandfathering provisions so current recipients can have safe harbor to move into the private market and move back into the NFIP without losing benefits, should the private market not work for them. He noted it’s also important that private insurance companies be properly vetted and with state regulation to provide needed consumer confidence to make the switch. Helen Devlin noted it’s important to have a private market compliment to NFIP and that the National Association of Realtors has been working for years with Congress to make improvements necessary to safeguard property owners. Allowing portability of grandfathered benefits and more insurance options for consumers are key. She also noted the rates charged versus true risk “are out of whack” and that better utilizing improved modeling technology and other advances will create better coverage for more people without “sticker shock” premiums. Links and Resources Mentioned in This Episode: Brian Squire, Managing Executive Senior Vice President at Hays Companies in Destin, Florida www.hayscompanies.com Helen Devlin, Senior Lobbyist with the National Association of Realtors in Washington D.C. https://www.nar.realtor/ 21st Century Flood Reform Act (H.R. 2874) (https://www.congress.gov/bill/115th-congress/house-bill/2874/text) The National Flood Insurance Program (NFIP) (https://www.fema.gov/national-flood-insurance-program) FEMA webpage on NFIP Reform (https://www.fema.gov/flood-insurance-reform) Flood Insurance Writers in Florida (from the Florida Office of Insurance Regulation) (https://floir.com/Sections/PandC/FloodInsurance/FloodInsuranceWritersFL.aspx) Top 10 Facts About the National Flood Insurance Program (from Lisa Miller & Associates) (http://lisamillerassociates.com/wp-content/uploads/2017/06/Top-10-Facts-About-the-National-Flood-Insurance-Program.pdf) The federal Biggert-Waters Act and Florida Impacts (from the Florida Office of Insurance Regulation) (https://floir.com/Sections/PandC/FloodInsurance/FloodInsurance.aspx) Aligning Natural Resource Conservation, Flood Hazard Mitigation, and Social Vulnerability Remediation in Florida (Journal of Ocean and Coastal Economics: Vol. 4: Iss. 1, Article 4. Summer 2017) which found Florida has 15,000 “Repetitive Loss Properties”. Those properties collectively filed more than 40,000 claims against the National Flood Insurance Program between 1978 and 2011 - more than 1,200 claims per year, on average. (https://cbe.miis.edu/joce/vol4/iss1/4/) Since 1978, 12 Counties Have Accounted for a Third of U.S. Flood Insurance Claims (Forbes, November 16, 2017) (https://www.forbes.com/sites/zillow/2017/11/16/since-1978-12-counties-have-accounted-for-a-third-of-u-s-flood-insurance-claims/#d2a72781a8e5) Florida Homeowner Claims Bill of Rights (From the Florida Office of Insurance Regulation) (http://floir.com/siteDocuments/HomeownerClaimsBillofRights2014.pdf) ** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com** The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 12/5/17. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com | |||
| 03 Apr 2018 | Episode 10 - Modeling for School Shootings | 00:16:19 | |
The aftermath of the Parkland, Florida school shooting and other major casualty events can greatly impact the insurance companies that provide liability policies to schools, hotels, and other venues. While these policies traditionally cover a variety of more ordinary events, some policies never contemplated – and priced the risk for – the increasingly unusual catastrophic events seen over the last few years. Now there are new tools to help insurers and their reinsurers better calculate previously difficult and unmanageable risks, leading to better coverage for these venues and ultimately those they serve. Host Lisa Miller talks with Robin Wilkinson, Vice President and Managing Director of Casualty Analytics at AIR Worldwide, a Verisk company, about its new scenario-based Casualty Risk Modeling. Ms. Wilkinson explains how the modeling works with mass casualty events, how it’s helping insurers and reinsurers better rate the risk of both sudden and systemic events, and the types of scenarios the model is being applied to currently. Show Notes: Scenario-based casualty risk modeling can be used to calculate the commercial liability losses from extreme events, such as mass shootings, and in a variety of venues. Such recent events include the Parkland, Florida school shooting, the MGM Grand Hotel Las Vegas massacre, the 2016 Bastille Day attacks in France, and the 2013 Boston Marathon. Most scenarios impact more than one insurance line. “We first try to understand the event, then ask – and determine – how much loss is likely to be an insured loss in that portfolio,” Robin Wilkinson, Vice President and Managing Director of Casualty Analytics at AIR Worldwide explains to host Lisa Miller. “You’re reducing the problem from saying ‘Wow, how big could this event be?’ to ‘How much of that loss is likely to be in my portfolio?’” This modeling tool helps venues consider the footprint or potential spread of an event, by simulating losses to a portfolio. Liability is assessed on products and services along the supply chain utilizing a variety of information. Insurers and reinsurers then overlay their portfolio to calculate aggregate exposure to the event, with losses cascaded down from the industry level, to the company level, and then down to individual policies. While new modeling and technology have been a game-changer on the property insurance side, casualty modeling is more difficult and uncertain, explains Ms. Wilkinson. “Casualty catastrophe modeling uses an economic, rather than a geographic framework, to provide the proximity and explain why various policies may be caught up in the same event,” she said. The other challenge, Wilkinson shares, is that the future might not necessarily resemble the past, because of changing technology, regulation, and even social mores. “It gives us essentially the casualty equivalent of a regional peril model for property.” AIR Worldwide is modeling both “sudden trigger” and “systemic” events. Florida has seen a lot of both over the years. Sudden trigger events are those that happen at one time and in one place, such as the Parkland school shooting, the recent FIU pedestrian bridge collapse, and the BP Deepwater Horizon oil spill in the Gulf of Mexico. Systemic events, while arising out of a single trigger, occur over time and involve more parties. The contaminated Chinese drywall issue in Florida in the 1990’s, asbestos contamination, opioid abuse, and even the Bernie Madoff financial swindle are all examples. In the aftermath of the February 2018 Parkland school shooting, the Florida legislature passed the “Marjory Stoneman Douglas High School Public Safety Act” to improve campus safety through best practices. Wilkinson said the law could impact liability in future similar situations, by setting a new bar for school performance. Failure to comply with new standards might make schools more vulnerable to lawsuits. “So instead of focusing on the shooter or perpetrator (the seeming trend now is) to looking at how those events are being managed and how those venues are being managed. This trend could result in liability insurers paying-out for losses that might be insured or uninsured losses…and where the insurers haven’t really contemplated or quantified their potential exposure,” Wilkinson said. Host Lisa Miller noted that casualty risk modeling is the latest innovation in insurance - taking an existing product or method and developing a new way of looking at it, with new tools. Miller, a former Florida Deputy Insurance Commissioner, discussed how better data enables better prediction and ultimate outcome. “Enhanced modeling is improving the way insurers rate risk. More accurate pricing of risk benefits insurance interests and consumers. It’s also providing opportunities for new markets of enhanced insurance products,” said Miller. Links and Resources Mentioned in This Episode:
** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com ** The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 3/28/18. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com | |||
| 18 Apr 2018 | Episode 11 - Driving Blockchain Home | 00:20:02 | |
The emerging distributed ledger software technology Blockchain, being developed for use in financial transactions, has applications in how we manage insurance information, too. It could one day be used to reduce Florida’s nearly 27% rate of uninsured drivers – the highest in the nation – while providing added convenience and money-saving efficiencies to both consumers and insurance companies. Blockchain technology is also touted as an answer to the current climate of data breaches and compromised personal information. Host Lisa Miller, a former deputy insurance commissioner, talks with the leader of the insurance consortium applying Blockchain and a Florida State Senator who calls it the next wave in the insurance space, especially when it comes to fighting growing insurance fraud. Guests on the podcast are Christopher McDaniel, Executive Director of the RiskBlock Alliance and Senator Jeff Brandes (R-Pinellas County) who discuss what exactly Blockchain is and isn’t, how it’s currently being used, and the rapid growth opportunities this new technology represents. Show Notes: Blockchain is a new technology that is changing how we manage insurance information. Blockchain is a distributed ledger software that uses a continuously growing list of records – known as blocks – that don’t rely on a centralized third-party vendor to administer. Instead, each party to a financial or other transaction is networked and has the original and updated versions of the transaction, which is contained on many different and anonymous blocks. By its design, it’s advertised as being highly resistant to any data modification by any single participant, once recorded. Christopher McDaniel of the RiskBlock Alliance said that Blockchain unfortunately has been made out to be very complicated and that it really isn’t, despite lots of jargon that has confused both consumers and the insurance industry. And while Bitcoin also uses Blockchain technology for public currency exchange, he said there is no connection between the crypto-currency and the RiskBlock Alliance efforts. “What Blockchain really brings first and foremost to the table is that the concept of transactions can go away. Transactions being anything between two parties, whether that’s the consumer and their insurance agent or whether it’s the agent and the insurance carrier,” said McDaniel on the podcast. “If you have a blockchain solution in place, everybody has ubiquitous instant access to that information.” In addition to the information being made into an un-erasable permanent record, McDaniel said Blockchain is capable of using “Smart Contracts”, which use an “if-then” logic protocol to automate activities, saving time and cutting out middlemen. While Blockchain applications are still very new to the insurance industry, there are applications underway right now. Nationwide Insurance just implemented Blockchain for proof of insurance, simplifying verification of automobile insurance coverage in real time and eliminating the need for paper ID cards. McDaniel pointed out that right now, neither party in an auto accident really knows the other person has auto insurance. They have paper insurance cards that say they do, but that insurance may have since been cancelled, prior to the accident. “Basically inside the mobile phone app is a plug-in, so that the two people involved in the accident can basically tap their phones together and in a matter of seconds it goes out to the Blockchain and it comes back down and says the other person has insurance and how much coverage they have,” explained McDaniel. Florida tops the nation in the number of uninsured drivers on its roadways. The Insurance Research Council (IRC) says 26.7% of Florida drivers drive without auto insurance, according to its latest study based on 2015 data. The insurance industry puts the average cost of an uninsured motorist claim at about $20,000, excluding any vehicle damage. The RiskBlock Alliance, which is part of The Institutes, an industry educational and research organization, has developed 30 different uses for Blockchain technology in managing insurance information. The 23 companies currently involved in the Alliance include Nationwide, USAA, and Geico. McDaniel said the number is expected to grow to nearly 60 companies by year end. Florida State Senator Jeff Brandes (R-Pinellas County) is a believer in Blockchain’s potential, especially in the Sunshine State, and has been urging greater awareness of the technology among his fellow legislators. “My sense is that this is the next wave in the insurance space for transactions and they (legislators) need to be able to understand and begin to find and contemplate some of the opportunities that come along with this new technology,” he shared with host Lisa Miller and McDaniel. Brandes and McDaniel agreed that Blockchain’s proof of insurance capability could be expanded to proof of driver licenses, which would assist law enforcement and Florida’s Division of Highway Safety and Motor Vehicles to identify people who shouldn’t be driving. Brandes said that seems like an area where some legislative authority would be required to pursue. “One of the big opportunities that Blockchain brings is the ability to reduce fraud. To the extent that we can have all the other services and reduce fraud, I think you’re going to see a variety of businesses begin to use it. Many of them won’t even know they’re using Blockchain technology – it’ll just be the new way to do business,” said Senator Brandes. Not only are insurance companies starting to use Blockchain, but they’re introducing it to their policyholders’ businesses, too. McDaniel’s pointed to two sectors – energy and trucking transportation – as examples. “All the pieces and parts that they have need to be insured. We’re bringing efficiencies to them through the Blockchain. A version of our proof of insurance solution for commercial trucking is reducing the current 30-minute manual process at depots…down to less than 30-seconds to prove insurance coverage. That one check, with just one trucking logistics company, happens 200,000 times a day,” McDaniel said. “I think the exciting thing is that we’re seeing rapid adoption of this technology, largely because it drives value for insurers,” added Senator Brandes. “These insurance companies are very focused on reducing fraud. Obviously they see that as a negative piece to their rate base and so the opportunity for them to speed along transactions, close things out quickly, and the idea of automatic transactions, I think really appeals to them and all are strong reasons why you’re seeing large insurers begin to make this shift over. And I think over time, that’s only going to continue.” Blockchain provides a unique set of data from which you can then apply analytics to ferret out fraud right from the beginning and put a stop to it in a more comprehensive way than previously available. The other big consumer benefit to Blockchain technology is data security for its users. McDaniel said the RiskBlock Alliance is looking closely at adopting the GDPR Rule, a European standard on information privacy and ownership, anticipating it will one day be the rule in the United States. “Everybody’s seen all the stuff in the news lately about Facebook. It really centers around the customer’s safety of their data, their right to control their data, and the right to be forgotten. We’re going to that level here right from the beginning in what we’ve built,” McDaniel said. On the podcast, McDaniel also shares the RiskBlock Alliance’s efforts to partner with the B3i, a European effort on the use of Blockchain technology in reinsurance. Host Lisa Miller noted that Blockchain represents an opportunity to bring insurance innovators together with public policy innovators to collaborate on creating new and better insurance products and services for the marketplace. And what better place to do so than here in Florida? She said that Blockchain could also help regulate our new medical marijuana industry here in Florida. “There are exciting times indeed to look at technology that can help us work smarter – not harder – while providing enhanced consumer value and protection,” said Miller. Links and Resources Mentioned in This Episode:
** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com ** The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 4/13/18. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com | |||
| 06 Jun 2018 | Episode 12 - The Prize in Real Estate | 00:17:37 | |
The real estate market and the insurance market are intertwined – in fact, “property” is literally the first word in property & casualty insurance. Both are highly value-based, as higher property values require higher insurance premiums to provide adequate coverage. But there’s a bigger picture: the connection between real estate and promoting investment and job creation, where property sales and insurance will then naturally follow. Host Lisa Miller talks with John Sebree, a Florida real estate leader who is now CEO of the Missouri Realtors®. While stressing that every state has or should have international business, Sebree shares how Florida’s natural connection to Latin American and Caribbean investors and increasingly the Europeans, are netting benefits for our real estate – and insurance markets. Show Notes: Real estate creation and increased sales create more property insurance sales and activity in related lines, such as automobile insurance. A recent study by the National Association of Industrial and Office Properties (NAIOP) shows Florida’s commercial real estate sector contributed nearly $190 billion to the state’s economy in 2017, the third most of any state in the country. John Sebree of the Missouri Realtors® talked about the connection between real estate and the economy, something he learned while on a trade mission to Germany with former Florida Governor Jeb Bush, a commercial realtor, while John was with the Florida Realtors®. “He knew real estate wasn’t a widget,” said Sebree about Governor Bush, “and that if we’re going to bring jobs to our states, we need to be able to talk to them about quality of life, cost living, cost per square foot, so there is a natural connection.” Countries including those in Latin America and the Caribbean are natural markets for Florida, followed by Europe, because it’s relatively close by being within a day’s airplane trip. Real estate drives economic development and the insurance sector is one of the beneficiaries. Sebree said he’s applied the same principle to his current work in Missouri, which is in the center of the U.S., has two rivers servicing coastal ports, and more rail lines than any state in the U.S. The lesson: every state has international interests and potential to develop international markets. Sebree shared with podcast host Lisa Miller his ideas on how to encourage that international investment and overcome challenges. “Often times, they’re looking for a safe place to put their money,” he said. Rather than focusing on selling property on these overseas missions, he said he focuses instead on promoting jobs and investment, because the property sales and insurance on those properties will naturally follow. Looking at things as economic development opportunities creates more economic development. He and Miller also discussed the impact of taxes and regulation on attracting economic investment. Florida’s beaches, beautiful weather, navigable waterways for transportation, and no state income tax are all in the state’s favor. Missouri’s selling points focus on its advanced manufacturing and agriculture technology, in which the Show-Me state is a leader, as well as in logistics. To make it easier for foreign investors to do business in the U.S., the National Association of Realtors® has created a Certified International Property Specialist designation (CIPS). A Realtor that has this designation is specially trained in helping foreign investors through a variety of real estate transactions and related needs. The association’s website (www.nar.realtor) has a master database, sortable by foreign languages spoken by the CIPS Realtor. Host Lisa Miller noted that with Florida’s economy firmly on the rebound, opportunities abound in the state’s thriving real estate market. That means growing opportunities to supply the many insurance needs related to that real estate growth, too. Needs not just centered on the actual properties, but also the new jobs and related economic input created by real estate activity that requires the protection that only insurance can provide. “Food for thought indeed for those of us with our eye on growing our insurance business,” said Miller. Links and Resources Mentioned in This Episode: Commercial Real Estate Packing a Wallop in Florida (from the LMA Newsletter 3/26/18) National Association of Realtors (https://www.nar.realtor) Florida Realtors® (www.floridarealtors.org) Missouri Realtors® (www.missourirealtor.org) ** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com ** The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Host Lisa Miller is a former Florida Deputy Insurance Commissioner. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 4/13/18. Email info@LisaMillerAssociates.com Composer: www.TeleDirections.com | |||
| 09 Aug 2018 | Episode 13 - Insurance Nerds | 00:19:33 | |
It’s an insurance agent – it’s an adjuster – it’s an underwriter – no, it’s an Insurance Nerd! In an industry that sometimes screams boring and is full of complex, technical jargon, comes a refreshing team of veteran insurance professionals that are out to change that. Their goal: to engage younger people considering different career paths and show them that insurance can be fun and personally satisfying work. Along the way, they’re changing the stuffy corporate culture that is often a barrier to Millennials and Generation Z’ers joining the industry. Host Lisa Miller talks with Nick Lamparelli, a 20+ year industry professional who is Chief Evangelist for the Insurance Nerds. He talks about the talent gap that exists in the industry today, the surprising challenges he and his colleagues have encountered, and shares the answers they’ve uncovered to successful recruiting. Show Notes: Nick Lamparelli of New Hampshire has worn many hats in his insurance career. He started his career as an insurance agent, then moved on to become a catastrophe modeler and a consultant for big firms, such as QBE, Marsh, and AIR Worldwide. He’s Chief Underwriting Officer for reThought Insurance Corporation, a firm he co-founded in 2017. Yet, something has been missing along the way. When he was invited to join some like-minded industry professionals in a brand called “Insurance Nerds”, he tells Lisa Miller that he just had to say “Oh yeah!” Insurance Nerds is a consultancy that is the go-to source for transformational talent delivery and career management serving the insurance ecosystem. Lamparelli said that ecosystem includes insurance carriers, agents, brokers, third-party administrators, and reinsurers. Not only do the Insurance Nerds figure out how to engage college students and recent graduates across disciplines to consider an insurance career, but they also make sure the industry is ready and attractive for these younger folks. Lamparelli said that rather than a boring, complex, and overly technical field of work, insurance in reality is science, economics, finance, and marketing. “There’s a home for almost anybody here,” he told Miller. But Lamparelli said that employers “are not prepared – they have a cultural mindset that goes back to the 1970’s.” So part of what Insurance Nerds has had to do is change that mindset so that young professionals can start their insurance job and have what he described as “the transformative moment” where they realize that insurance is indeed the career for them. The Insurance Nerds have discovered that many younger adults have a total lack of knowledge about insurance because they’re usually not exposed to it until well into their adulthood, usually when it comes time to purchase auto insurance for the first time. Host Lisa Miller, a former Florida deputy insurance commissioner, noted that insurance is a noble profession; that those working in it are helping people protect their lives, families, and property. Despite that, there are shortages of talent in key functions, including agents, estimators, appraisers, and underwriters – whom Miller refers to as “the wizards of the insurance industry.” Links and Resources Mentioned in This Episode: The Insurance Nerds (www.InsNerds.com) Nick Lamparelli’s Profiles in Risk podcast (https://insnerds.com/insnerds-podcast-network/) ** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com ** The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Host Lisa Miller is a former Florida Deputy Insurance Commissioner. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 4/13/18. Email info@LisaMillerAssociates.com Composer: www.TeleDirections.com © Copyright 2017-2018 Lisa Miller & Associates, All Rights Reserved | |||
| 10 Oct 2018 | Lisa Miller on Hurricane Michael Insurance Claims | 00:06:50 | |
Former Florida Deputy Insurance Commissioner Lisa Miller was interviewed by Tom Flanigan on WFSU-FM, National Public Radio for Florida, just hours before Hurricane Michael made landfall on the Florida panhandle. She shared with listeners the importance of staying safe prior to and during the storm, how to handle any damage and prepare an insurance claim, and the best methods for filing claims. This includes taking pictures and video of the damage and collecting crucial information to share with the insurance company to help speed up the claims process, utilizing “fast-track” phone apps and other expedient methods. For those policyholders needing assistance with claims, she shared the Florida Department of Financial Services Insurance Claims Assistance Hotline at 1-877-693-5236. Lisa also discussed the need for flood insurance and how most standard homeowners insurance policies do not cover flood damage. She pointed out that Florida has been a leader in the nation with model laws that have encouraged the creation of a thriving private flood insurance market as an alternative and complement to the National Flood Insurance Program. Lisa urged listeners to contact their insurance company about the availability of innovative “add-on” flood coverage to their existing homeowners insurance policy. As a courtesy to fellow residents and policyholders, she advised those with minor claims damage to so notify the insurance company when filing, so that greater priority can be given to more serious claims. Ownership and copyright 2018 , WFSU-FM, Tallahassee, Florida Resources Referenced in the interview: Florida Department of Financial Services Division of Consumer Affairs Insurance Resources Florida Department of Financial Services Insurance Claims Assistance Hotline at 1-877-693-5236 | |||
| 30 Oct 2018 | Episode 14 - Hurricane Michael's Construction Lessons | 00:24:13 | |
Hurricane Michael struck Florida’s panhandle in October 2018 as a strong Category 4 storm, with sustained winds of 155 miles per hour. At least 29 people in Florida died in the storm or its aftermath and another 10 people in Georgia, North Carolina, and Virginia, as of this recording. Beyond the cost in human lives, is the cost of rebuilding homes, businesses, and infrastructure. Estimates of insured losses alone are between $6 billion to $10 billion. Just how well did Florida's building codes, both old and new, hold up against the devastating winds - and what's needed in post-hurricane mitigation as Florida rebuilds? Host Lisa Miller, a former deputy insurance commissioner, talks with two catastrophe adjusters on the ground with Michael's damages and the head of a consumer insurance group that's fighting for stronger building codes in the Sunshine State. Show Notes: Although Florida is recognized as having the toughest building codes in the nation, a large share of homes and other buildings in the Florida panhandle were built before 1995, when Florida’s tougher post-Hurricane Andrew building code was established. The newer Florida Building Code (FBC) requires structures statewide to be built to withstand winds of 111 mph and up. But it wasn’t until 2007 that homes in the panhandle built more than one mile from the coast were required to follow the higher standard. (The Miami area is a “high velocity hurricane zone” with higher standards, in excess of 170 mph.) Catastrophe claims adjusters Jason Brugh and Jeromy Harding spent much of the following week after Hurricane Michael struck, surveying the damage from ground zero at Mexico Beach, Florida to the Alabama-Georgia state lines. They also spent several days in service to local communities, helping clear downed trees from roads and people’s property, re-righting travel trailers, and in one case, putting out a fully-involved house fire. Both had building construction backgrounds prior to becoming insurance agents and claims adjusters. Brugh, of Catalyst Insurance Management in New Port Richey said he and Harding saw total destruction in their travels in the panhandle, with nearly every structure suffering damage. Their inspections revealed that standing seam metal roofs performed very well in the hurricane, while gable and three cap shingles were often completely gone. “FBC 110 mph-rated shingles came off like you’re peeling Post-It notes off a Post-It pad,” Brugh said on the podcast. “We did see improperly installed metal roofs, where they were installed over existing shingles, allowing for an air gap between the two roof surfaces and those roofs were totally devastated. Those peeled the roof decking off like a beer can.” He added that the only damage he saw to properly installed metal roofs was impact-related. Jay Neal, President and CEO of the Florida Association for Insurance Reform (FAIR), said Hurricane Michael is further proof that Florida needs to adopt the tougher Miami-Dade building code statewide. “There’s no logic in having one higher standard for Miami-Dade County and not having it for the rest of the state,” he said. Neal and FAIR are pushing the Florida legislature to provide more funding for mitigation of existing structures; and to make homeowners more aware, too, of the difference installing impact-resistant windows and enhancing roof connections to walls can have on their home surviving the next hurricane. “We spend about 15-cents per Florida resident giving cities, counties, and nonprofits the funds to spend on mitigation and that’s got to change,” Neal said. He cited FEMA statistics that shows for every $1 invested in mitigation, $6 in damages are avoided. It’s an issue FAIR will be presenting to the 2019 legislature. Host Lisa Miller, a former deputy insurance commissioner, said there’s concern that a tougher statewide building code would increase the price of homes in areas like the panhandle, whose residents are predominantly lower income and couldn’t afford it. “It’s an absolute no-brainer,” to have tougher building codes from an insurance standpoint, said Harding of the Barrett Harding Insurance agency in New Port Richey. “From my experience out in the field and adjusting claims, they do work. The newer building code homes in Hurricane Michael were survivable. Yes, there was damage, but the structure is still there,” he said. “Affordability is a Catch-22. A lot of these people were uninsured. So if those homes were built to a higher standard, they would come out on top whether there was insurance involved or not.” Brugh said another issue he noticed with older homes built under outdated building codes: “a lot of them did not have hurricane clips, which when the wind got up in there, it upset trusses, it blew roof decks off, and the sort.” Brugh pointed out that Florida’s wind mitigation credit program provides tremendous savings for homeowners in both shoring-up existing roofs and installing new ones. Just mitigating a home’s existing roof with hurricane clips can provide an 18% savings on the wind portion of an insurance premium. Installing a new shingled roof can result in 13%-16% savings. He noted that decking would have to be re-nailed, which is another 13%-15% savings. The wind portion of a premium can be 70%-80% of a homeowner’s insurance costs annually. Host Miller noted that because most of the building stock in the panhandle is older, it’s more severely damaged than it might be otherwise and as a result, will drive-up claims costs. Industry analysts expect Florida insurance companies should be able to cover all claims. Reinsurance programs will cover those insurance companies’ bills. “Today’s program was certainly an education and a great example of where the ‘rubber’ of public policy really meets the ‘road.’ And how the decisions we make today, will affect millions of Floridians in the future and billions of dollars in insured property value, as we weigh the costs and benefits of policy change – in this case, building codes and mitigation techniques,” Miller said. So what do you think? Does Florida need even tougher building codes? And what lessons should we take away from Hurricane Michael when we rebuild what was damaged and destroyed? Links and Resources Mentioned in This Episode: What to Expect of Building Performance During Hurricane Michael (AIR Worldwide analysis October 11, 2018) Premium Discounts for Hurricane Loss Mitigation (Florida Office of Insurance Regulation) Florida Association for Insurance Reform (FAIR) Lisa’s LMA Newsletter on Hurricane Michael (October 22, 2018) Visit The Florida Insurance Roundup webpage for full details and extras on this podcast. ** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com ** The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 10/26/18. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com © Copyright 2017-2018 Lisa Miller & Associates, All Rights Reserved
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| 26 Nov 2018 | Episode 15 - Active Shooter Insurance | 00:15:10 | |
The Thousand Oaks, California bar shooting. The Pittsburgh synagogue massacre. Just two of the recent mass shootings across the country involving what police term as an “active shooter.” The worst to date in Florida was the Valentine’s Day 2018 shooting at Marjory Stoneman Douglas High School in Broward County, in which 17 people were killed and 17 others injured. Beyond the tragic loss of human life are the lives of the survivors affected. How can they ever be made whole again? The insurance industry is responding to these attacks by offering “active shooter insurance” – designed to help organizations and businesses whose employees, property and reputation are impacted. Host Lisa Miller, a former deputy insurance commissioner, talks with an underwriter on this new line of insurance and its growing sophistication in coverage options for events that used to be unthinkable. Show Notes: Data from the FBI show the average number of active shooter events in the U.S. has doubled over the past eight years compared with the previous eight years. There were 30 such events in 2017 - more than any other year since 2000. Just what is available in the insurance market to protect individuals and businesses? Peter Bransden is an underwriter for Aspen Insurance, leading the firm’s Crisis Management team in Miami. Aspen’s Active Assailant Insurance includes the acts of terrorism, kidnap and ransom, and product contamination. “Active Assailant Insurance has been designed to protect policyholders against a wider range of attacks involving a weapon. It is often referred to as “active shooter” insurance, but these events are by no means limited to firearms, as we have seen vehicle rammings, knife attacks, and suicide bombings,” Bransden said on the podcast. Bransden explained that most policies include five main coverage categories:
Some insurance policies even include mitigation and training by ex-FBI active shooter response agents, who will train a business or organization on how to prepare and respond properly in the case of such a horrific event. Most General Liability (GL) insurance policies do not cover active shooter events, leaving policyholders with potentially large liability exposure. Many GL policies specifically exclude terrorism, following the 2001 911 attacks. Bransden and host Lisa Miller discussed how the increase in shootings may prompt even greater policy exclusions. “I fear that the tipping point, as is often the case in insurance, will be a court ruling. By that that time there will be on the one hand, a client facing the fallout from an active assailant attack and, on the other hand, an insurance company denying a claim. Ultimately the losers are the victims,” Bransden said. Miller noted that as the world becomes more complex, insurance companies have to adapt the products and services they offer to fit consumers’ changing needs. Scenario-based modeling for casualty events and the practical insurance products that result, such as Active Assailant insurance, are good examples of innovation in insurance. “While no one has a crystal ball and can predict human behavior and the terrible tragedies that have befallen the nation this year, technology and actuarial science are improving how we quantify that risk and price it accordingly. It’s all about helping people and their organizations and companies become whole again, in the event of the unimaginable,” said Miller. Links and Resources Mentioned in This Episode: Determining the Risk of School Shootings – Florida’s new law may mean more lawsuits (LMA News Release, April 11, 2018) The Florida Insurance Roundup podcast Modeling for School Shootings (April 3, 2018) Visit The Florida Insurance Roundup webpage for full details and extras on this podcast. ** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com ** The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 10/31/18. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com © Copyright 2017-2018 Lisa Miller & Associates, All Rights Reserved | |||
| 17 Dec 2018 | Episode 16 - Flood Follies | 00:21:25 | |
2018 was a tough year for flooding in the United States, and nowhere worse than in the Carolinas, where Hurricane Florence dumped three feet of rain in spots. Damage is estimated at $13 billion but at least half of that is uninsured – as most residents had no flood insurance. While some didn’t know they needed it, others took a gamble by going without and lost. But the bigger folly some argue is federal flood insurance itself which encourages some homeowners to disregard risk, by providing subsidized premiums at a level far below what’s actuarially-required to cover the claims’ costs. The same program also pays homeowners to rebuild their flooded homes in the same low-lying spots, over and over again. How can we better protect our lives and property from flood waters? And what urgency will Florence bring to the debate on providing better flood insurance protection for coastal and inland residents alike? Host Lisa Miller sat down with a catastrophe risk modeler and a coastal flood scientist to get some answers. Show Notes: Lisa’s guests are both PhD’s – one working in private sector flood insurance and the other in public university research on flooded coastlines – and both are focused on mitigating risks. Dr. Roger Grenier is Senior Vice President and Global Resilience Practice Leader at AIR Worldwide in Boston. His team has worked since 1992’s Hurricane Andrew to develop catastrophe modeling as a way to predict the severity of extreme events. Their data and analytics has helped make the insurance and reinsurance industries more resilient over time. Dr. Robert Young is a Professor of Coastal Geology and Director of the Program for the Study of Developed Shorelines at Western Carolina University in Cullowhee, North Carolina. His team of scientists and policy analysts examine how storms and sea level rise are changing America’s coastline and communicate their findings to policymakers. From individual homeowners to local communities to federal agencies, they have developed tools to protect from and adapt to flood risks. Dr. Grenier said advances in modeling technology are having a greater influence in assessing and pricing flood risk. Older mapping technology, largely based on historical data, such as stream flows and hazard areas based on land use, has been used primarily by the National Flood Insurance Program (NFIP) to determine risk and rates. The NFIP has evolved over its past 50 year history and is now beginning to adopt catastrophe models. “When you develop a model, you can look forward and assess not only changes in land use but also changes in the climate and that’s how our models are driven, by starting really with a climate model as opposed to relying strictly on historical data,” said Dr. Grenier. Modeling brings other benefits: its cost and scalability mean more frequent updates and more realistic gray areas of risk in place of black and white maps, where a property is strictly “in” or “out” of a particular flood zone. The podcast also discusses policies on pricing risk and funding rebuilding after flood calamities. Dr. Young said federal policy provides “moral hazards”: incentives to do the wrong thing rather than the right thing. After storms, federal flood insurance and federal Stafford Act disaster funding pay to restore homes and sometimes elevate properties and structures to help prevent future flooding, something he said is only a partial solution. “If you lift-up an oceanfront home, you still have to hold the shoreline in place. And if you raise a community anywhere in the floodplain, you still have to get utilities to that community and get transportation in there. The biggest problem that I see right now is that there are very few incentives to change the exposure map for these communities, to get some properties out of areas that are in the floodplains,” said Dr. Young. Case in point: Dauphin Island, Alabama. This community of repetitive loss properties has received seven disaster declarations in the past 30 years. There have been properties rebuilt multiple times in the same location following successive storms, thanks to federal and state subsidies that rebuild the infrastructure. From 1978 through September 2018, the taxpayer-backed NFIP has paid out more than $68 billion in claims – historically, nearly 30% of claims are paid to the 1% of properties classified as repetitive loss properties. “It’s not the folks on Dauphin Island that are crazy, it’s the rest of us that are crazy for allowing that to happen,” said Dr. Young. The answer he said is changing incentives by finding a way for the true cost of living in these dangerous places to be incorporated in the cost of these properties. The imbalance occurs in both high-cost oceanfront investment properties but also in affordable housing communities along our coastline. The podcast also discusses this year’s White House budget that stressed reforms to bring needed financial stability to the debt-ridden NFIP and expanding the private market to reduce the federal government’s NFIP exposure. Under budget director Mick Mulvaney’s proposal, FEMA would have authority to discontinue NFIP coverage for extreme repetitive loss properties following future losses. Starting in 2021, coverage for commercial properties would be phased-out, while no policies would be written for new construction inside a special flood hazard area. FEMA meanwhile is forging ahead and redesigning NFIP’s 2019 rates to more realistically price risk. Dr. Grenier predicted that any future changes will be by a measured process as the private insurance market evolves, so it can price for it and provide reserves for it. “People need to understand the limitations of maps and understand other aspects of the home, such as elevation. They need to hear the message about buying flood insurance, whether from private insurers or the NFIP, and be realistic about what they can expect when they have no insurance versus having a flood policy. Private insurance companies, powered by advanced catastrophe risk models, are able to better understand risk. In Florida, encouraged by model regulation to encourage a vibrant private market, nearly 30 companies are offering coverage as an alternative to NFIP at competitive rates. Host Lisa Miller, a former Florida deputy insurance commissioner, noted “it’s clear as crystal that when it comes to flood risk, we still build too close to known dangers. The growing folly of our public policy is encouraging risky human behavior. And we all pay, some with our own checkbook, the majority through higher taxpayer subsidies, and yet others, sadly, with their lives.” Links and Resources Mentioned in This Episode: Private Flood Insurance & Resilience webpage (Lisa Miller & Associates) IBHS Fortified Home™ Program (Insurance Institute for Business & Home Safety) Coastal Wind Damage in North Carolina from Hurricane Florence (AIR Worldwide In Focus, 10/8/18) The Aftermath of Hurricane Florence (AIR Worldwide, 10/18/18) Flood insurance paid homeowners $100,000 more than FEMA after Harvey, expert says (Houston Chronicle, 6/16/18) Private flood insurance could fill North Carolina's coverage gap (Lisa Miller column in the Raleigh News&Observer, 11/16/18) Our View: Federal flood insurance program needs rethinking (Fayetteville Observer, 12/2/18) North Carolina Flooding Exposes Flaws in Flood Insurance Program (Bloomberg News/Bureau of National Affairs, 9/21/18) New resilience organization at FEMA aims to build ‘culture of preparedness’ (Global Resilience Institute, 6/5/18) ** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com ** The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 12/3/18. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com © Copyright 2017-2018 Lisa Miller & Associates, All Rights Reserved | |||
| 27 Feb 2019 | Episode 17 - Florida Legislative Preview | 00:20:27 | |
The Florida Legislature convenes its 2019 session next Tuesday, March 5. The big insurance issue: the growing cost of property insurance claims litigation. But there are also bills that would change Florida’s no-fault auto insurance and more than 200 bills funding much-needed Hurricane Michael relief to the 14 Panhandle counties still struggling with debris cleanup and recovery. But there are other issues of interest lawmakers are addressing, including whether to allow smokeable medical marijuana and how to address ongoing water quality issues. Host Lisa Miller, a former deputy insurance commissioner, talks with Jim Saunders, Executive Editor of the News Service of Florida for a preview on what to expect this session. Show Notes: Calling efforts at Assignment of Benefits (AOB) reform “the main event” for insurance interests before the Florida legislature this year, Jim Saunders of the News Service of Florida said the key component is attorney fees in claims disputes. He and host Lisa Miller discussed the behind-the-scenes effort by leaders of the Florida Senate’s Banking and Insurance Committee and the Judiciary Committee to rework the current bill (SB 122). The bill seeks to limit one-way attorney fees to named insureds and beneficiaries only – not contractors and their attorneys operating under an AOB agreement with the insured (policyholder). A revised bill is expected as soon as this coming week (March 4, 2019). Another major issue this session is Hurricane Michael relief and recovery funding. Saunders called Michael a “wildcard issue” in the AOB reform debate. Hundreds of millions of dollars of appropriations bills have been filed to provide help to the 14 mostly rural Panhandle counties impacted by the October 10, 2018 Category 4 hurricane. That includes Florida’s devastated timber industry, whose losses are estimated at $1.3 billion. Other topics discussed include medical marijuana and bills that would allow patients to use a smokeable form of it, as well as refined regulation on its production; algae blooms and water quality in Florida; and efforts to further encourage the testing and use of automated vehicles in the Sunshine State. Saunders also provided details of Governor DeSantis’ major transportation plan, geared in part to increase highway capacity for evacuations of residents in future hurricanes and other disasters. Links and Resources Mentioned in This Episode: Lisa Miller & Associates Assignment of Benefits (AOB) webpage Bill Watch of February 18, 2019 (LMA Newsletter) AOB Reform bill SB 122 is scheduled to be discussed on Monday, March 4, 2019 during the 3:30 pm ET meeting of the Florida Senate Banking and Insurance Committee. To watch the meeting live or later, click on The Florida Channel and search by date and committee. Hurricane Michael Coverage & Photos (LMA Newsletter) ** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com ** The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 2/27/19. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com © Copyright 2017-2019 Lisa Miller & Associates, All Rights Reserved | |||
| 29 Mar 2019 | Episode 18 - The AOB Problem | 00:23:06 | |
For the seventh time in as many years, the Florida Legislature this spring of 2019 is considering bills to reform abuses of Assignment of Benefits (AOB) insurance contracts between vendors and property owners. AOBs allow contractors to take control of a homeowner’s insurance policy and bill their insurance company directly for repair work – sometimes fraudulently inflating the scope and cost of the claim. When the insurance company refuses to pay or underpays the claim, the vendor sues. The latest figures show the number of AOB lawsuits continue to rise in Florida, up 18% in 2018 from the year prior – and up 900% from 2008. The costly lawsuits remain concentrated within a disproportionately small number of lawyers and firms, utilizing a loophole in the state’s one-way attorney fees law. Host Lisa Miller, a former deputy insurance commissioner, talks with Wesley Todd, CEO of CaseGlide, a claims litigation management firm whose analysis shows AOB abuse is costing each of Florida’s six million property owners $400 a year in added premiums. Show Notes Wesley Todd and his firm CaseGlide are managing litigation for 100,000+ claims on behalf of its insurance company clients. He said his analysis has revealed startling statistics that should be of concern to everyone in Florida. AOB litigation on average is costing each insurance company doing business in Florida $50 million a year which equates to about $400 for each of Florida’s six million property insurance policyholders. Looked at another way: “What if this law and the legislators and lawyers behind this current law were giving to a small set of 10-15 trial lawyers $1 billion per year by lack of reform?” Todd said. Florida’s one-way attorney fees statute is driving the AOB abuse and the general increase in insurance litigation. It allows policyholders to recover legal costs if the insurer has been shown in court to have underpaid the claim in any amount – even by just one-dollar. Past efforts in the legislature to clarify that only a named policyholder would be entitled to file suit have all failed. “This is a significant problem in Florida and it isn’t complicated. Insurers are going to be get paid through their premiums and have had to raise rates to do so,” Todd said. He points out the arguments that supporters of the current AOB and one-way attorney laws are using – that any changes will hurt consumer protection and prevent the little guy from going against the big insurance company – were the same arguments used against sinkhole reform in Florida, which passed in 2011. None of those dire predictions came true nor will they if meaningful AOB reform passes this session, he said. The CaseGlide Index is a real-time index containing aggregate industry litigation data that previously hasn’t existed in one database. It can also serve as a central foundation for rating oversight by regulators, rating agencies, and the reinsurance marketplace. Todd says part of the focus is to provide evidence required to help the Florida Legislature tackle the AOB problem. Todd agreed with host Lisa Miller that AOB abuse isn’t an issue the courts can totally resolve. While the current case before the Florida Supreme Court (Restoration 1 vs. Ark Royal Insurance Company) will be helpful in stemming some AOB and litigation abuse, “we still need to address the one-way attorney fee statute,” Todd noted. “They are going to find one way to make it where they recover one more dollar (above the original insurance company settlement offer)…and when they find that, they’re going to get their $300,000 in plaintiff attorney bills with their contingency fee.” He and Miller also discussed Florida’s Bad Faith Law, something Miller pointed out is added jeopardy in claims litigation. “There are Hurricane Irma claims that are still being brought by the same law firms that bring AOB claims. It’s a problem that one day might end up being bigger than AOB,” Todd shared. Todd said Hurricane Michael insurance claims will present a wonderful case study on AOB. “Michael will be a perfect test case as to what happens when a storm doesn’t hit Tri-County (South Florida) and hits an area with less claims influencers if you will, whether it be attorneys, public adjusters, or loss consultants….and whether there’s a big difference in lawsuits to claims.” He thanked Miller for her efforts over the years in educating policyholders to better understand before they sign an AOB that there could be negative consequences to doing so. Links and Resources Mentioned in This Episode: Assignment of Benefits webpage (Lisa Miller & Associates) Assignment of Benefits Resources & Consumer Alerts (Florida Office of Insurance Regulation) AOB Lawsuits Continue Meteoric Rise (LMA Newsletter of 4-3-19) Florida’s one-way attorney fee statute (627.428 F.S.) Bill Watch on AOB 2019 legislation (Lisa Miller & Associates) ** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com ** The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 3/8/19. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com © Copyright 2017-2019 Lisa Miller & Associates, All Rights Reserved | |||
| 14 May 2019 | Episode 19 - New AOB Law: Putting Consumers on Offense | 00:22:43 | |
Florida’s seven year wait for meaningful reform of Assignment of Benefits (AOB) abuse is over. The Florida Legislature has passed a measure to level the playing field for consumers and reduce the skyrocketing rates of litigation filed by vendors against insurance companies, driving double-digit rate increases. Hailed as a “wake-up call for the bad actors” exploiting homeowners and the insurance industry, what exactly does the reform do and what doesn’t it do? What impact is it expected to have with more than half of Florida’s insurance litigation today now involving an AOB? And what creative alternatives and other shenanigans still exist for further scams? Host Lisa Miller, a former deputy insurance commissioner, talks with insurance defense attorney Kimberly Salmon of Groelle & Salmon, and Paul Handerhan of the Florida Association for Insurance Reform. Show Notes An Assignment of Benefits (AOB) agreement is a legal contract that allows repair vendors to receive payments directly from insurance companies for work they perform at a policyholder’s home, without the homeowner having to pay money upfront. While it sounds good, unfortunately in the past seven years in Florida, unscrupulous vendors and their lawyers have taken advantage of AOB to take control of a homeowner’s policy, then inflate the scope and cost of claims and sue the insurance company if it refuses to pay the inflated bills. The number of property insurance AOB lawsuits rose 900% from 2008-2018. In late April 2019, the Florida Legislature passed HB 7065 which puts new requirements on assignees (contractors and other vendors) and insurance companies. An AOB must now provide the following:
The bill also allows an insurance company to offer a policy prohibiting assignment in an effort to lower homeowners policy premiums, which have grown by double-digits. Paul Handerhan, Senior Vice President of Public Policy for the Florida Association for Insurance Reform, noted the significant consumer protections in the bill, especially a homeowners ability to get out of an AOB contract. “That’s a dramatic improvement on the way assignments have worked in the past prior to this bill. Literally, there was no statutory requirement for any rescission period. If a policyholder, in the middle of the night with an emergency service, signed an AOB, they would effectively have no way of getting out of the contract,” said Handerhan, who is a practicing public adjuster. The bill also revises the current one-way attorney fee system which was seen as incentivizing lawsuits and institutes a new formula, based on the disputed amount: the difference between the assignee’s presuit settlement demand and the insurer’s pre-suit settlement offer. If the prevailing judgment is:
If the insurance company fails either to inspect the property or to provide written or verbal authorization for repairs within seven calendar days after the first notice of loss (FNOL), the insurer waives its right to an award of attorney fees, except for circumstances beyond its control. The formula does not apply to lawsuits filed by policyholders, who would still enjoy the protections of the one-way attorney fees under 627.428 F.S. Kimberly Salmon, a partner with the Tampa firm of Groelle & Salmon, said that under current law, when she and other insurance defense lawyers go to court, if the vendor wins the case by just $1, the vendor is entitled to attorney fees under the one-way fee statute. She told Lisa that after this law is enacted, vendors will be restricted on what they can recover, together with broader impacts. “It’s going to enable the insurance company by the tools that it gives them and by the timeframes that it prescribes, an opportunity to actually evaluate the scope and cost of the repairs, of the damage, and it actually incentivizes both the insurance company and the vendor to resolve the matter as fairly and quickly as possible, which is going to be a direct benefit to the consumer. So it’s win-win,” said Salmon, whose firm has handled thousands of AOB cases on behalf of insurance companies and their policyholders. Lisa and her guests discussed various emails and blogs in the marketplace with reaction to the bill’s passage. Some include concerns of an already-seen ramp-up of marketing efforts by some trail lawyers to encourage the filing of AOB lawsuits before the new law is enacted. One blog said the bill itself will actually increase the number of lawsuits, referencing the 7-day time period for an insurance company to inspect a property after FNOL, and concern it would leave a window of opportunity for mold to grow. Handerhan noted that reference pertains only to insurance companies that don’t choose to inspect and “if they don’t, they may not be entitled to collect attorney fees if the case winds up going to litigation.” He said their failure to inspect within 7 days in itself, would not be a cause for action. Lisa and her guests also talked about ways the bill may be exploited. Salmon noted the bill creates conditions prior to a vendor filing a lawsuit against an insurance company. One of those (along with examination under oath and recorded statements) is that if appraisal is in the policy and demanded, the vendor is required to go to appraisal. While appraisal sounds good and is binding, she cautions insurance companies to carefully weigh options before electing appraisal. “The statute says that for purpose of these post-loss benefits, the vendor is standing in the shoes of the insured. Under current case law, it looks like an appraisal award could trigger the right to file a bad faith suit and under the wording of this statute, the question is, does the vendor have those same rights? So I’d be very cautious about the language in an insurance policy if there is a unilateral right to demand for appraisal,” Salmon said. The other section of the bill that is worrisome to Salmon references a power of attorney that grants a management company, family member, or others the authority to act on behalf of the insured. “So possibly, with a limited power of attorney, someone in that position could file a lawsuit on behalf of the insured. That would really be a way around the protections that were intended and all of the work that went into this bill,” Salmon said. Host Lisa Miller, a former deputy insurance commissioner, warned “the creative lawyers that have been preying on consumers and causing this insanity” who may be listening to the podcast. “I would caution you that the legislature was listening to consumers complain about this, that had been victimized by the use of an AOB and the resulting litigation explosion that has occurred because of it, and I believe that any attempt to thwart the intent of this legislation will be dealt with summarily in coming session that starts in January.” Lisa and guests also discussed the upcoming Florida Supreme Court case of Restoration 1 vs. Ark Royal Insurance Company that we have been following closely. It will address the question of whether insurance companies have the right to require that all parties with an insurable interest sign an AOB contract, including the homeowner’s mortgage company. “I have every reason to believe that the Court with everything they have seen thus far, will uphold the Ark Royal decision. I’m very hopeful and competent,” said Salmon. Links and Resources Mentioned in This Episode: Florida House Bill HB 7065 Florida Association for Insurance Reform (FAIR) Groelle & Salmon law firm 20 law firms that file the bulk of AOB suits (from Citizens Property Insurance Corp.) Assignment of Benefits webpage (Lisa Miller & Associates) Assignment of Benefits Resources & Consumer Alerts (Florida Office of Insurance Regulation) AOB Lawsuits Continue Meteoric Rise (LMA Newsletter of 4-3-19) Florida’s one-way attorney fee statute (627.428 F.S.) Bill Watch recap on the 2019 legislative session (Lisa Miller & Associates) ** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com ** The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 3/8/19. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com © Copyright 2017-2019 Lisa Miller & Associates, All Rights Reserved | |||
| 31 Jul 2019 | Episode 20 - Wind vs. Earthquake: Who Wins? | 00:27:12 | |
The July 4 earthquakes that hit South Central California are a fresh reminder that California's population is the most susceptible in the country to major earthquakes. So why is it, that earthquake insurance is no longer required as a condition for California mortgages? Especially, when wind insurance is required throughout the state of Florida and elsewhere to protect against hurricane damage? While less frequent, earthquakes are unique in that the risk is constant and the potential damage can easily exceed those of hurricanes, wildfires, and flooding combined. Is it time to readjust our public policies - and our insurance policies - to adequately cover all our 21st century risks? Host Lisa Miller, a former deputy insurance commissioner asks John Rollins, Consulting Actuary for Milliman and Jim Wilkinson, Jr., Executive Director of the Central United States Earthquake Consortium (CUSEC). Show Notes Losses from the early July earthquakes in and around Ridgecrest, California are estimated to reach $200 million of which insurance companies will likely cover only about a fifth, according to Karen Clark & Company. Less than 20% of property owners affected by the magnitude 7.1 quake and the 6.4 magnitude foreshock had earthquake insurance. The event has rekindled discussion on earthquakes in California. If a similar quake had occurred in a more populated area, the costs could have been much worse. California homeowners policies don’t cover earthquake damage. According to global consulting and actuarial firm Milliman, the lack of protection for 90% of the state’s 14 million dwellings poses a risk to the largest assets of many state residents: their homes. So why is earthquake insurance no longer required as a condition for California mortgages? GSE’s (Government-Sponsored Enterprises, a type of financial services corporation such as FannieMae and Freddie Mac) servicing guidelines don’t require it, so private lenders who originate and sell mortgages to the GSE’s don’t either. Contrast this to windstorm insurance, which is required everywhere as a condition for a mortgage, as dictated by the same GSEs. John Rollins, Consulting Actuary for Milliman, explained that while different regions in the U.S. are predominantly impacted by a single peril, such as California with earthquakes and Florida with hurricanes, Milliman’s research indicates that all of the catastrophic perils from earthquakes, wildfires, floods, and hurricanes, actually contribute significantly a measureable amount to the total amount of what an actuarially-sound homeowners premium should be for the true risk of these disasters underlying each policy across the U.S. “Each one of those types of disasters contributes potentially hundreds of dollars to the quote -‘fair’ – or right insurance premium as actuaries would define it,” said Rollins. “So that runs up against a policy question, which is, if you have significant, roughly equal risk from hurricanes, floods, wildfires, and earthquakes across the country, why aren’t the guidelines for determining eligibility of mortgages for Fannie Mae and Freddie Mac… and their concomitant insurance servicing requirements exactly the same across the country? We don’t have all the answers as to why that it, but we do know that a pure clinical look at the numbers would indicate that there’s really no reason to favor one peril over the other,” Rollins said. The Central United States Earthquake Consortium (CUSEC) is comprised of the eight states that would be most impacted by quakes along the New Madrid earthquake fault line, which runs along the Mississippi River, in partnership with FEMA. CUSEC examines the earthquake threat and ways to encourage mitigation and reduce losses. Yet, earthquake insurance isn’t popular. “Clearly we have to figure out a way to get affordability down for earthquake insurance,” said Jim Wilkinson, Jr., CUSEC’s Executive Director. “For example, the six most vulnerable counties in the state of Missouri saw an almost 700% increase in their premium costs between 2000 and 2018. We need to figure out how to get that cost down and the availability up, whether that’s through incentives or other means. There are a whole host of folks, including the banking and real estate industries together with local developers, who have a role in figuring out how to make this affordable for people who need it,” said Wilkinson. Rural communities, Wilkinson pointed out, are especially vulnerable, because they don’t have the resources that larger communities have and shoulder a higher percentage of buildings and infrastructure that are vulnerable. “We want to get to the point where we have covered as many people as we can for this peril,” he said. Host Lisa Miller noted that the purpose of insurance is to spread risk to as large a group of policyholders as possible, which can lead to more affordable premiums. Resiliency, through stronger mitigation programs, has made a demonstrated difference in hurricane and other windstorm events. Mandatory insurance premium discounts for specific mitigation features have been shown to reduce windstorm losses. But can resiliency measures make the same difference to earthquake-threatened communities? Rollins said that with earthquakes, one of the issues is the cost and who is going to pay for mitigation. “Consumers simply don’t like spending money upfront to reduce a contingent future threat that may or may not materialize. And they think very viscerally about the payback period for that investment.” He said there also has to be a catalyst, such as low-interest loans, direct government grants or loans, or public-private partnerships. “The second problem with earthquakes is that there is far less definitive engineering backed up by recent experience to tell us exactly what sort of construction and retrofits would make a big difference and give us the highest bang for the buck,” Rollins added. And in areas facing multiple disasters, a mitigation for one risk may be counterproductive to mitigating against a second risk. “The program is not set-up to build to a higher standard, but simply to rebuild to put it back the way it was,” noted Wilkinson. “They have been working to make changes in the program, so that we’re not adding to the problem. That’s the challenge that we’ve had. It’s a conflict to how we build back better, safer, stronger communities.” Also, “asking a business or a homeowner who is very anxious to get back into their property to spend an extra two weeks and an extra one to two thousand dollars on top of what they’re already facing to do this cross-hazard risk reduction becomes a real challenge,” said Wilkinson. “It’s something we’ve failed to really grasp in the process of how we assess these programs and their costs. It’s something that FEMA is taking a hard look at because we can’t keep printing money and unfortunately the disasters seem to be increasing in frequency.” While better rebuilding after the fact is a goal that we’re all striving for, host Miller noted that “Knowing that we have an uninsured population, we know that residents in earthquake-prone states are exposed to millions of dollars in damage that will not get repaired because the federal government’s ability and willingness to step in and replace everything that gets damaged just isn’t there.” “FEMA will help a community put everything back to the way that it was before an earthquake, but for an individual, they help provide low interest loans but there’s not going to be a check written to rebuild a person’s house,” said Wilkinson. Rollins also discussed the increasing entry of private sector solutions, such as flood insurance, to disaster insurance problems. He noted each one had a public policy change that served as a catalyst that attracted private insurance attention and capital. If Fannie Mae and Freddie Mac were to update one page of their servicing guidelines to require earthquake insurance, too, “it would instantly kind of upend the entire U.S. homeowners insurance market, similar to the way the Biggert-Waters Act and a few other follow-on regulations upended the flood insurance market, resulting in a whole bunch of other business models being considered,” Rollins concluded. Links and Resources Mentioned in This Episode: The Ridgecrest earthquake: Will recent quakes shake up the California insurance market? (from Milliman) The Sand Palace house in Mexico Beach, Florida (from the New York Times) Milliman website Central United States Earthquake Consortium (CUSEC) website Private Flood Insurance & Resilience (from Lisa Miller & Associates) ** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com ** The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 7/30/19. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com © Copyright 2017-2019 Lisa Miller & Associates, All Rights Reserved | |||
| 01 Sep 2019 | Episode 21 - Is Florida’s Building Code Protecting All of Us? | 00:28:15 | |
As Hurricane Dorian bears down on Florida, two reports that examined damage from last fall’s Hurricane Michael have mixed reviews on building construction in Florida’s Panhandle. While newer homes built after the 2002 Florida Building Code was enacted suffered less structural damage than older homes, the roof cover loss and siding damage was just as common in the newer structures. In fact, almost two-thirds of those newer buildings built after the code went into effect had some roof loss from Michael’s high winds. While Florida is known for its tough building code, few know that the maximum wind standards of materials and methods in the code vary depending on which part of the state you live. Miami-Dade County, where Hurricane Andrew struck in 1992, has the toughest wind standards. But the Florida Panhandle, where Hurricane Michael’s Cat 5 winds struck in 2018, has among the weakest wind standards. Why? Just how vulnerable are homes throughout Florida? And what can be done to strengthen them? Host Lisa Miller, a former deputy insurance commissioner asks noted television meteorologist and hurricane expert Bryan Norcross and Cindy Shaw, a forensic engineer with Haag Engineering Services. Show Notes Hurricane Michael struck the Panhandle as a Category 5 storm, the fourth in U.S. history, with maximum sustained winds of 160 mph and a 15-foot storm surge. 43 people died in the storm and its aftermath. Total damages are estimated to climb to $25 billion. A University of Florida Engineering School report prepared for the Florida Building Commission examined both wind and storm surge damages from Hurricane Michael. It found that roof cover loss was the most common type of structural failure, even with wind exposures below the building code’s threshold. “Structural damage was predominantly experienced by older (pre-2002) structures, while newer structures generally experienced no more than roof cover and wall cladding loss. However, roof cover and wall cladding damage was still commonly observed even in newer structures,” according to the report. Almost two-thirds of buildings built after the code went into effect had some roof cover loss. Another report from the Structural Extreme Event Reconnaissance Network had similar findings. Although Florida is recognized as having the toughest building codes in the nation, they vary by wind standards, depending on the area of Florida. In the Panhandle, where Michael struck, those wind standards are among the weakest in the state at 130 mph at the coast and 120 mph slightly inland. In Miami-Dade and Broward Counties, the standards are the strongest at 180 mph at the coast and 170 mph inland. Cindy Shaw is a Senior Engineer and Southeast Regional Manager for Haag Engineering Services, a global forensic engineering and consulting firm. In her review of the reports, Shaw said she noted improvement in homes built after the enactment of the 2002 Florida Building Code, but performance varied a lot, even among similar homes. Homes built above code standards performed best. “Finishing materials installations varied within a single residence and that led to wind damage. Roofing that was to a higher code than a garage door led to vulnerabilities and failures in the overall structure,” said Shaw, a 20 year veteran of structural inspections. “It was tremendously frustrating to see the damage from Hurricane Michael because we lived this already,” said Bryan Norcross, Hurricane Specialist for WPLG-TV, Local 10 News in Miami. He is known for his 23-hour on-air marathon during and after Hurricane Andrew struck South Florida. Andrew was the last Cat-5 storm to hit Florida before Michael. “Something failed. The roof might have been good, but the windows or the front door or the garage door wasn’t, and that lead to a cascade of failure once the home’s envelope was breeched. Our tougher building code in South Florida post-Andrew, ensures the entire house is secure by all its components meeting the same standard,” said Norcross. “The building code was somewhat intentionally made less strong in the eastern Panhandle than even the western Panhandle for no rational meteorological reason.” The problem with the current Florida Building Code and its varying wind standards, said Shaw, is that it doesn’t deal with areas of the state that have had significant hurricanes, whose wind standards don’t match their historical experience. Shaw said those need further refinement. She noted that Florida’s code for existing structures, which covers buildings being updated, is a good example of progressively refined codes that work well. So what would Shaw and Norcross advise the Florida Building Commission on potential changes post-Hurricane Michael? Shaw, who specializes in examining new building materials and methods in the Florida Building Code in between hurricanes, said the design wind pressures that exist as standards need to be less arbitrary and political and instead correlate to the reality of the coastal regions. Improved code enforcement is needed, too. “It’s not that we expect to have no damage when we have a Category 5 hurricane, but we would like to not have catastrophic damage. We would like to not have loss of life. We would like the homes to still be livable. And with regard to Hurricane Michael and up in the Panhandle, we failed on all three of those fronts,” said Shaw. Norcross agreed. “We have this high-velocity wind zone here in Southeast Florida, for no rational reason does it stop at the Broward County lines. There’s just no meteorological reason why you couldn’t have a Category 5 hurricane strike any part of the state of Florida and have a Category 3 or 4 hurricane go all the way across the state. You don’t even have to think about it as a meteorologist, you just have to look in the history book to see examples….Ironically, the Panhandle is especially vulnerable to strong hurricanes,” he said. As for the higher cost of construction that comes with a stronger code, Norcross and Shaw agreed that there are other places in the building where cost savings could be achieved and channeled to build a safer, more durable house. “It’s just too easy to do it all the way right, than to do it halfway,” said Shaw. “The real challenge for builders and the real resistance here, is the inspection process,” said Norcross. “It is a pain in the neck to do anything here in South Florida…the issue is to create an inspection system that is as efficient and simple as it can be.” Host Lisa Miller, a former Florida deputy insurance commissioner, noted that building better should lead to lower property insurance costs as well. “Hurricanes and other catastrophes don’t know or care who is insured or not and as we’ve learned, don’t necessarily follow historical patterns – including those on which we base risk.” Links and Resources Mentioned in This Episode: Investigation of buildings damaged by Hurricane Michael (The University of Florida Engineering School of Sustainable Infrastructure and Environment, prepared for the Florida Building Commission, June 10, 2019) Hurricane Michael: Field Assessment Team Early Access Reconnaissance Report (from Structural Extreme Event Reconnaissance Network, October 25, 2018) Pitfalls in Mitigating Risk (LMA Newsletter of 8-26-19) Cities Where Hurricanes Would Cause the Most Damage (24/7 Wall Street, July 31, 2019) ** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com ** The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 8/23/19. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com © Copyright 2017-2019 Lisa Miller & Associates, All Rights Reserved | |||
| 16 Sep 2019 | Episode 22 - Why the Panhandle Wasn't Hurricane Strong for Michael | 00:32:32 | |
Not only was the Florida Building Code not fully effective in buildings damaged by Hurricane Michael, but neither were mitigation efforts designed to fortify our homes and businesses, according to a new FEMA report. A team of building experts conducted an assessment of 350 structures affected by Michael’s Category 5 winds that reached upwards of 160 mph. They paint a dismal result. Buildings with wind retrofits, such as stronger windows or doors, suffered significant damage, even when those windows and doors held up. The FEMA report notes people were injured as a result. Expensive mitigation upgrades were for nothing. And entire buildings, including multi-million dollar local government facilities, now have to be rebuilt from scratch. What happened? Isn’t mitigation supposed to be a smart investment? Host Lisa Miller, a former deputy insurance commissioner, asks her guests, including a former state legislator who had a hand in creating the Florida Building Code and the Panhandle’s wind standards, and two noted structural engineers. Show Notes This podcast is a follow-up in part, to the August 31, 2019 podcast Is Florida’s Building Code Protecting All of Us? A University of Florida engineering school report found that the Florida Building Code wasn’t tough enough to withstand Michael’s Category 5 winds. Not even in some newer structures, although they did fare better than those built before the 2002 code was enacted. But almost two-thirds of those buildings built after the code had some roof cover loss, according to the report. Although there is a single state building code, it has different wind standards depending on where you live. The eastern Panhandle, where Hurricane Michael struck, has some of the weakest wind standards in the state, at 130 mph on the coast and 120 mph slightly inland. Former state Senator Charlie Clary was involved in the creation of those wind standards in 2002. “We tried to come up with some ways of helping, as we made the codes tougher and more uniform throughout the state, but still be somewhat affordable as they constructed these homes, because we were in a very intense growth mode at that time. There had never been a Category 4 or greater hurricane to impact NW Florida at that time,” said Clary, who is founding principal with DAG Architects in Destin, Florida. “We have to just learn lessons from Michael and make the changes necessary.” In Bay County, ground-zero for Michael, officials estimate nearly 75% of its 68,000 households were impacted. The UF report noted roof and siding loss was common in both pre-code and post-code construction. Dr. Arn Womble, Research Engineer with the Insurance Institute for Business & Home Safety, said roofing products themselves need improvement and that aging effects seem to play a big role in how the roofs perform. “We are frustrated as well as I think everybody in the industry in that the standard test for shingles – and we run them in our lab and they pass a certain test and then when they get subjected to reality out there in the field, they don’t perform like the laboratory test indicated that they might, so we’re realizing there’s a big disconnect there,” said Dr. Womble, who led a field survey team after Michael struck. He added that siding products haven’t gotten as much attention as roofing, but need to going forward. The conversation moved to the newest set of post-Michael reports from FEMA. Its recovery advisory Successfully Retrofitting Buildings for Wind Resistance, resulted from FEMA’s Mitigation Assessment Team survey of Hurricane Michael damage. It found that buildings and homes with wind retrofits suffered significant damage—even in cases when the retrofit itself performed well—because other building vulnerabilities were not addressed when the retrofit was installed. So “the whole retrofit project may be ineffective.” “It is true that when you mitigate to try to gain more resilience, your building is only as strong as its remaining weakest link,” said Dr. Karthik Ramanathan, Assistant Vice President & Principal Engineer for “Most agree if built and installed properly, metal roofs are a great mitigation investment against wind damage. But time and again, you saw metal roofs installed on pre-existing shingle roofs. When you’re not attaching a metal roof to a substrate that it ought to be attached to, you cannot expect a metal roof to perform in the way it is supposed to,” said Dr. Ramanathan. He added that there seems to be a lack of knowledge and a need for education in proper installation. The FEMA assessment also found that “even modest damage to the building envelope or rooftop equipment was observed to lead to costly water damage, which can take months to repair and cause disruption of building operations.” A companion assessment, Best Practices for Minimizing Wind and Water Infiltration Damage has some recommendations on building materials to use to provide extra layers of protection. Based on the University of Florida report, the Florida Building Commission has taken several steps with the support of the homebuilders to strengthen the next 7th Edition of the Florida Building Code to be published in December 2020. It includes adoption of ASCE 7-16, the newest Minimum Design Loads and Associated Criteria. While there’s no reported plans to change the various wind standards around Florida, the method for determining the design pressures on roofs for buildings less than 60 feet in height has changed. There are expected to be requirements for secondary roof underlayment to prevent water intrusion in the event the roof covering is blown off. New sections are also being added to the code detailing requirements for the attachment of vinyl, fiber-cement, and hardboard. Wood structural panels and soffit panels are also being added to the code. All these moves were applauded by the podcast’s guests. “I’d like to see the building code and material science move down the building envelope now from the roof,” said Dr. Ramanathan, who focuses on the structural impacts of storms in his work. “I think the research now needs to focus more heavily on how you build soffits that can withstand the impact of wind-driven rain so that you can keep the home’s envelope watertight. How do you look at the performance of wall siding, be it vinyl or brick, how can you make these better?” He noted that water damage is more expensive to repair than wind damage. All three guests agreed that code enforcement is crucial when building resilient homes and businesses. In a recent guest column in the Insurance Journal, two Munich Re senior executives cite “the need to enhance and consistently enforce building codes” as one of the two big challenges facing reinsurers with Florida interests. “I think you’re naturally going to have different levels of enforcement just because of the different sorts of budgets throughout the state and the ability to cover what’s necessary,” said Dr. Womble. Given the code is key to protecting consumers, having uniform code enforcement is important, he added. With Hurricane Michael recovery still ongoing in the Panhandle, “I think we’re definitely on the right path to building under a tougher code,” said Clary. “Enforcement is vital and it’s important to have the architect and engineers that work for the client involved to make sure the structures are built according to plans and specifications.” Dr. Ramanathan said he sees individual building departments within Florida have gaps in how they adopt and enforce certain practices, including verifying building plans and conducting on-site inspections. “I think the Panhandle and other parts of Florida need to move to the high-velocity zone (170 mph wind standards), which is essentially Miami-Dade and Broward, not just in terms of building standards but also enforcement standards,” said Dr. Ramanathan. “Michael did pretty much just what Hurricane Andrew did, so the time is never more opportune than what it is now to reflect that learning, in terms of building code enforcement in the Panhandle.” FEMA will use its two assessments to develop formal conclusions and recommendations to improve resilience of buildings and their utility systems in Florida. A formal report is expected by December 2019. Host Lisa Miller, a former deputy insurance commissioner, noted “there is ongoing concern that even for those with insurance checks, some Panhandle residents may not be able to afford to rebuild their homes. Is it time for these tougher standards, materials, and practices we’ve discussed today to be enacted across the Florida Panhandle – and across Florida for that matter?” Links and Resources Mentioned in This Episode Insurance Institute on Business & Home Safety (IBHS) www.DisasterSafety.org (IBHS guidance for home and business owners) Successfully Retrofitting Buildings for Wind Resistance (FEMA Recovery Advisory 1, June 2019) Best Practices for Minimizing Wind and Water Infiltration Damage (FEMA Recovery Advisory 2, June 2019) Is Florida’s Building Code Protecting All of Us? (The Florida Insurance Roundup podcast of 8/31/19) Reports referenced from our previous podcast “Is Florida’s Building Code Protecting All of Us?”:
Florida Building Commission Wind Maps Pitfalls in Mitigating Risk (LMA Newsletter of 8-26-19) Cities Where Hurricanes Would Cause the Most Damage (24/7 Wall Street, July 31, 2019) ** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com ** The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 9/10/19. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com © Copyright 2017-2019 Lisa Miller & Associates, All Rights Reserved | |||
| 31 Oct 2019 | Episode 23 – Mediating Open Claims | 00:22:53 | |
Recent disasters and the growing number of open insurance claims are creating renewed interest in an alternative to costly litigation in resolving claims disputes: mediation. While claim frequency is down, claim cost is way up – more than five times what it was 20 years ago. Unnecessary and abusive litigation, including Assignment of Benefits (AOB) contracts, has contributed to growing claim cost in Florida. Host Lisa Miller, a former deputy insurance commissioner, sat down with Bruce Blitman, a Certified Mediator, Arbitrator, and Umpire, to learn what role mediation can play in successfully resolving these claims.
Show Notes Bruce Blitman was one of the first Florida Supreme Court certified circuit-civil mediators and has practiced since 1989. He was an associate with several law firms prior to becoming a mediator. “What really makes this process work is that you have all of the decision-makers present at the same time, at the same place, in the same room, much earlier on in the process before all of the time and the money and aggravation have been invested in the case. So there’s a tremendous opportunity to resolve cases when you’re getting to them earlier on in the process,” said Blitman on the podcast. Mediation in Florida dates back 30 years. Initial skepticism has given way to acceptance over the years, as lawyers on both sides have gotten more practiced in the mediation process, according to Blitman. “Lawyers found they were able to either put more money into their clients’ pockets at an earlier stage of the process or if they were insurance carrier representatives, they could save money by putting that money into the plaintiff's pocket without litigation costs,” Blitman said. As a result, mediation has become a way to more efficiently move claims and for courts to move dockets. Host Lisa Miller was an insurance regulator during 1992’s Hurricane Andrew and the eight hurricanes in 2003-2004 that also struck Florida. She suggested in the podcast that state officials initiate formal mediation centers sooner after major hurricanes strike. “After a storm hits, we should consider having immediate mediation on the disputed amount of the claim,” said Miller. Florida law requires insurance companies to pay the undisputed amount of a claim to the policyholder within 90 days of receiving the claim. Blitman said he’s a proponent as well of pre-lawsuit mitigation in such claims, a process that worked “very well” through a catastrophe mediation program set-up in Miami-Dade County following Hurricane Andrew. “There was an enormous amount of claims considered. Not every case was resolved at mediation, but many of them were,” he shared. “And by getting through that vast volume, people were able to get on with their lives much more quickly.” Blitman also noted that many insurance companies became more proactive with mediation going forward. Miller referenced recent Florida legislative committee testimony that almost 40-cents of every dollar involved in a litigated paid claim goes to the plaintiff’s lawyer, not including court fees and the cost of defense counsel. Blitman said such plaintiff contingency fees are typically only 20% to 25% if the claim doesn’t go to litigation. Mediators, he said, are paid hourly, ranging from $150-700 per hour based on the complexity of the case. “If you can resolve a case within five hours of mediation, with both parties splitting the mediator’s fee, those fees are relatively small in comparison to what it would cost to litigate that case endlessly,” Blitman said. He noted that the Florida Department of Financial Services has a roster of mediators available to help resolve different kinds of insurance claims disputes. The podcast also addressed Florida House Bill 337 which was signed into law last spring and becomes effective on January 1, 2020. By raising the dollar threshold of disputes (from $15,000 to $30,000), it will shift court cases that are now heard in circuit court to be heard instead in county court. Miller and Blitman discussed the impact of having a lot more insurance disputes going into civil court, which generally have more limited resources than circuit courts. In fact, 31 of Florida’s 67 counties only have one county court judge. Many of those counties are in the Florida Panhandle and there is concern of logjams created by the 150,000 Hurricane Michael claims. “I think it’s in the best interest of all consumers that we do everything we can to keep claims out of the court system,” said host Miller. “Mediation, with the right attitude and skill set going into it by all parties, can be a very useful approach to create a ‘win-win’ by all parties to an insurance claims dispute.” Links and Resources Mentioned in This Episode Mediation and Neutral Evaluation Assistance (Florida Department of Financial Services Division of Consumer Services) Ten Tips for Getting the Most Out of Your Mediation Process (by Bruce Blitman, Esq.) Court Jurisdictional Limits (Florida HB 337, now law) Insurance Research Council Report Finds Rapid Increase in Cost of Homeowners Insurance Claims, Despite a Drop in Claim Frequency (The Institutes, September 30, 2019) Assignment of Benefits (AOB) (Lisa Miller & Associates) ** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com **
The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 10/29/19. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com © Copyright 2017-2019 Lisa Miller & Associates, All Rights Reserved | |||
| 25 Nov 2019 | Episode 24 – Making the Call on Flood Insurance | 00:23:59 | |
Two hundred Mexico Beach, Florida homes sitting beach block from the Gulf of Mexico, yet labeled X-Zone, FEMA’s lowest risk for flooding, were nearly wiped out by 2018’s Hurricane Michael. Many of those residents had no flood insurance, complicating which damage from the Category 5 storm may or may not be covered by their homeowners insurance. In fact, 80% of flood losses in the Florida Panhandle were uninsured. Yet, there’s just a trickle of greater demand for flood insurance post-storm. Mexico Beach is fighting back with a tough new ordinance to counter the complacency created in residents by FEMA’s inaccurate and outdated maps. Host Lisa Miller, a former deputy insurance commissioner, talks with two residents and an insurance agent about the impact of the new ordinance and how agents could be doing more to promote increasingly affordable flood coverage to their clients. Show Notes FEMA flood maps for Mexico Beach were last revised in 2009 but were based on a maximum storm surge of 10 feet. Hurricane Michael produced a 15.5 foot storm surge plus 5-foot waves topping the surge, when it made landfall there on October 10, 2018. The maps are used to identify which properties must have flood insurance to meet federal mortgage requirements and to set rates for those policies. Only one-third of Bay County, home to Mexico Beach and some of the worst damage in the 13-county impact zone, had National Flood Insurance Program (NFIP) policies. Dina Bautista didn’t have flood insurance, but was one of the lucky ones. Her Mexico Beach home was built on 12-foot pilings, the only one in her neighborhood. “Every neighbor had water up to their roof,” she said. Yet despite the devastation, few Bay County residents have learned the lesson from Michael. “I get the speech of ‘I've been in this house fifty years and never flooded’ quite a bit,” said Trey Hutt, owner of Hutt Insurance Agency in nearby Panama City. “What these mostly elderly people don't get is that in those intervening 50 years, we've poured a lot of asphalt and concrete all around them, and that water is going somewhere. And every neighbor is now building higher than that original home, and water always runs downhill.” Melissa Poage became concerned walking around her Valrico, Florida neighborhood after a recent hard rainstorm and noticing a waterline almost up to front doorsteps. She said her insurance agent had never discussed purchasing flood insurance with her. Her entire neighborhood is in an X-Zone, defined as being at risk of a 1 in 500 year flood event, which equates to a 0.2% chance every year of being flooded. “So I bought flood insurance and it was very reasonably priced, it’s not expensive,” she said. Hutt, a 25 year insurance veteran, said people don’t understand the true meaning of an X-Zone. “In our agency over the years, we’ve paid an awful lot more flood claims in X-Zones than we have in other zones. An X-Zone does not equal ‘we will not flood’, it just means it’s less likely to flood than a Special Flood Hazard Area,” he said. Since Hurricane Opal in 1995, Hutt said his agency has aggressively offered flood policies with homeowners policies (which don’t cover most flood damage). Those customers who choose not to purchase it have to sign a form acknowledging that. “A flood rejection form has become a part of a lot of agencies’ tool kits,” he said. Both Hutt and Poage agree that it should be mandatory for insurance agents to “make the call” and offer customers flood insurance. “I’m in favor of putting pressure on fellow agents to not only recommend flood insurance but we need to be able to prove that we’ve recommended it to a client, otherwise we might face legal action after a big storm such as Michael,” Hutt said. Bautista is an engineer with Dewberry Engineering and along with being a resident herself, serves as the consulting engineer for the city of Mexico Beach. Within weeks after surveying Michael’s devastation from both the 160 mph winds and 20.6 foot peak water level, city officials adopted a tough new floodplain ordinance that goes above and beyond FEMA flood maps. The ordinance affects rebuilding of homes that suffered substantial damage (greater than 50% structural damage) from Michael and all new construction:
“We’re trying to pick up the insurance gap and protect the residents,” Bautista explained. “Most of them may not buy or be required to buy flood insurance in the zone they’re in, but through our ordinance and the actual construction, we’re trying to minimize their risk for future damage.” While such building code changes are not occurring in the rest of Bay County, Hutt said more private flood insurance companies are selling coverage alongside or in competition with the NFIP. Florida’s private market has been steadily growing with the number of companies more than doubling in the past two years. “We’re finding these products are based on better data. They’re often less expensive and they are almost always better coverage,” Hutt said. “The long-term solution is to get flood insurance priced more accurately. Since it’s been driven by political forces more than profitability, NFIP rates are artificially suppressed, and what that does is just encourage people to borrow money and build homes where they frankly might not or should be doing,” he said. The podcast discussion also included the potential for Increased Cost of Compliance (ICC) insurance coverage or FEMA hazard mitigation grants to help homeowners pay for construction required in tougher building ordinances, such as those in Mexico Beach. Private insurance companies offering both homeowners, wind, and flood coverage on the same policy would also simplify the process. Host Lisa Miller, a former deputy insurance commissioner, commended Mexico Beach officials for their leadership in building greater resiliency into the city’s recovery. “You’re completely revolutionizing the new construction and rebuilding of the area in an attempt to withstand Mother Nature the next time. That’s very smart and helpful,” Miller said. Links and Resources Mentioned in this Episode Definitions of FEMA Flood Zone Designations Majority of Michael Flood Victims Uninsured (LMA Newsletter of July 29, 2019) Private Flood Insurance & Resilience (from Lisa Miller & Associates) Flood Follies (The Florida Insurance Roundup podcast, episode 16, December 16, 2018) Coastal communities should exercise caution in using FEMA Flood Maps as the primary indicator of coastal risk (by Dr. Rob Young, Director, Program for the Study of Developed Shorelines at Western Carolina University, and guest on the Flood Follies podcast) ** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com ** The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 10/29/19. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com © Copyright 2017-2019 Lisa Miller & Associates, All Rights Reserved | |||
| 10 Jan 2020 | Episode 25 – Florida Legislative Preview 2020 | 00:27:30 | |
The Florida Legislature begins its 2020 session this Tuesday, January 14 amid growing concern about the state’s property insurance market. Two carriers have failed in recent months. Others are seeking rate increases of up to 30% to stem rising reinsurance and litigation costs. Future financial ratings downgrades on some Florida domestic insurance companies are also likely. There are other insurance issues facing lawmakers as well, including automobile Assignment of Benefits (AOB) reform, bad faith, ongoing Hurricane Michael recovery, and a proposed change to the state building code. There are also big ticket issues, such as education, the environment, and transportation, as part of a proposed $91.4 billion budget. Host Lisa Miller, a former deputy insurance commissioner, talks with Jim Saunders, Executive Editor of the News Service of Florida for a preview on what to expect this session. Show Notes Property Insurance Market – Saunders and Miller discussed the significance of rising reinsurance costs on the homeowners insurance market. One domestic carrier, Edison Insurance of Boca Raton, is seeking a 21.8% statewide average rate increase in its homeowners multi-peril line. Growing operating losses by some companies prompted state Senator Jeff Brandes (R-Pinellas) to describe Florida’s property insurance market as “rapidly declining” and as the most underreported issue going into the 2020 state legislative session. “This is something we really need to get up to speed on because it’s not just a business issue, it affects me, you, and everybody else who owns a home if nothing else,” Saunders told Miller. He noted there are political ramifications of property insurance that are “far different” in South Florida than they are in inland and northern Florida. Automobile AOB Reform - The ongoing effort to reform growing AOB abuse in automobile windshield repair and replacements got off to a shaky start in the committee weeks leading to the session. “I tend to think that it’s a very live issue still,” said Saunders, despite the Senate Banking and Insurance Committee voting it down in December 2019. “It’s not going to be a death-knell” to the reform efforts this session he said, noting the House has been very aggressive with AOB issues in the past. Host Miller said it’s an issue needing to be addressed. She shared a recent automobile AOB case involving a $64 windshield replacement. The insurance company paid the standard $60 fee, but the $4 difference is now the subject of a lawsuit. “It’s insane, make no mistake,” Miller said. Litigation & Bad Faith Reform – Saunders and Miller discussed the potential of Bad Faith law reform passing this session and the Governor’s reference to “factories of lawsuits” which are impeding the state’s economic development and prosperity. “I didn’t get the sense Senate President Bill Galvano has much appetite at all for tort issues during a recent interview,” said Saunders, but “I don’t doubt the Governor and Florida House would be amenable to it.” Miller and Saunders also discussed the changing composition of the Florida Supreme Court in the past year and the expectation it will produce more favorable rulings for business and insurance interests. “The old court was not friendly to insurance companies, as a diplomatic way to put it,” said Saunders. Miller brought up another property insurance company with a recent 28% rate increase request that attributed about 60% of that rate hike to growing legal expenses and fees. “One of the driving forces of those fees is the fee multiplier, approved by the previous state Supreme Court in 2017. You see a judgment for $10,000 but you’ll see a fee award for $150,000 to $200,000, sometimes $300,000,” Miller said. She predicted double-digit rate requests will continue and eventually reach the point where the legislature will respond. Hurricane Michael - The surprising amount of damage from the October 2018 Category 5 hurricane that still exist today in Panama City and especially in outlying rural areas was also discussed on the podcast. There are bills filed this session seeking additional financial relief to communities to help rebuild damaged infrastructure, including schools. “I’m not sure how much traction any of the Michael issues will get this year because there’s a lot of demands on the state budget this year. And if you listen to some of the folks out in the Panhandle, they’re kind of worried that they’ve just been forgotten,” said Saunders, noting it was despite efforts by Panhandle legislators to keep up the pressure for more state aid. Building Code - There’s also a bill that would mandate the Florida Building Code require that the entire envelope of certain buildings being constructed or rebuilt be impact resistant and constructed with high wind-resistant construction materials, together with meeting testing criteria. The differing wind standards of the Panhandle versus other areas of the state has been under debate again since Hurricane Michael. (See Episode 21 – Is Florida’s Building Code Protecting All of Us? and Episode 22 – Why the Panhandle Wasn’t Hurricane Strong for Michael). Saunders and Miller discussed whether the legislature has the appetite to change the building code this session. “Although more recent building using current codes survived Michael’s winds, older buildings built under older code often didn’t,” said Saunders, who called the state building code “a complicated animal” to change. “It’s politically difficult, but it’s also technically very difficult, so whether that’s going to become a priority for legislative leadership to really dig into this year, I’m not sure,” he said. Host Miller agreed. “I think they have so many competing interests and they just think the building commission is going to take care of it or the builders are going to take care of it, and so they can just move on to something else,” she said. Saunders and Miller also discussed the big ticket issues facing the legislature this session. They include the Governor’s requested $900 million in spending for teacher raises and bonuses, $635 million for Everglades’ restoration and other water resources, increases in transportation and prison spending, criminal justice reform, and strategic tax cuts. Links and Resources Mentioned in this Episode 2020 Bill Watch (Lisa Miller & Associates) Lisa Miller & Associates Assignment of Benefits (AOB) webpage Home insurer seeks $30 a month average statewide price hike (Sun-Sentinel, December 30, 2019) Florida Homeowners Insurance Market Update (Federal Association for Insurance Reform, January 6, 2020) More Than a Dozen Florida Insurers Facing Ratings Downgrades (Insurance Journal, January 9, 2020) Viewer Discretion Advised (LMA Newsletter of January 6, 2020) Three New Justices Seated on Florida Supreme Court (LMA Newsletter of February 4, 2019) ** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com ** The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 1/8/2020. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com © Copyright 2017-2020 Lisa Miller & Associates, All Rights Reserved | |||
| 31 Jan 2020 | Episode 26 - AOB Reform: Did Consumers Win? | 00:28:37 | |
In the six months since legislative reform, insurance companies report the number of Assignment of Benefit (AOB) claims in Florida are way down as are related lawsuits. But they’re also seeing new strategies by contractors and their attorneys to work around the reforms. On the other side, contractors complain that without the “old AOB,” they’re getting shortchanged by insurance companies and homeowners for work they’ve already performed. Host Lisa Miller, a former deputy insurance commissioner, talks with Tanaz Salehi, an insurance defense attorney, and Mohammad Sherif, a plaintiff attorney, on the reform’s impact, its unintended consequences, and the potential solutions to ongoing claims problems. Show Notes An Assignment of Benefits (AOB) contract is a legal agreement between the contractor and homeowner, which allows the contractor to receive payments directly from insurance companies for work they perform at a policyholder’s home, without the homeowner having to pay money upfront. In past years, unscrupulous vendors and their lawyers have taken advantage of the AOB to take control of a homeowner’s policy, then inflate the scope and cost of claims and sue the insurance company if it refuses to pay the inflated bills. The Florida Legislature passed AOB reform in 2019 establishing tighter rules to stem the abuse and fraud, while putting more responsibilities on insurance companies, too. The reform, in part, revised Florida’s one-way attorney fee system, to make fee awards fairer. “Insurance carriers have been filing motions to strike plaintiff attorney fees under the new law and have been prevailing in different counties across Florida,” said Salehi, managing shareholder with the Salehi Boyer Lavigne Lombana law firm in Miami. She represents insurance companies. Both Salehi and Sherif agree that while the reform is working, as evidenced by the reduction in lawsuits, there are now issues with loopholes being exploited and unintended consequences for both sides. Host Miller noted reports of various workarounds to the reform law. These include plaintiff attorneys making bulk deals with contractors to recommend the homeowner hire the attorney upfront to represent them at First Notice of Loss, to avoid using an AOB. Also, there are reports of some restoration contractors splitting out “Emergency Services” they provide over several days, in order to get around the $3, 000 statutory limitation. “That ($3,000 cap) applies to emergency mitigation services,” said Salehi. “That leaves a huge void for the roofing contractors that are now charging maybe ten to twenty times what it actually costs to replace the roof and submitting permits to the county for repairs for a fraction of what they’re charging the insurance companies.” Sherif said there are bad actors on both sides and lots of misinformation and confusion in the industry about what the reform did and the expectations going forward. “There are front end desk adjusters at insurance companies who may be overzealous in applying the new law to hold vendors accountable,” said Sherif, a partner with Mubarak & Sherif, a Tampa law firm that focuses predominantly on helping homeowners in the Florida Panhandle with Hurricane Michael claims. Both Sherif and Salehi agree the reform has had unintended consequences, too, especially for contractors who want to work but want to be guaranteed payment. “What I’m seeing is a lot of vendors who don’t want to use assignments anymore but who are having difficulty getting paid. And the expectation has always been that ‘if I can’t go against the insurance company directly, what recourse am I left with as a contractor?’” said Sherif. Salehi, who also advises contractors, said there are some cases where a contractor will submit an estimate, the insurance company will approve and cut a check to the policyholder, who then doesn’t pay the contractor for the work already performed. “The carriers were willing to work with him, but it was the insureds who were not turning over the check. There were other instances where the carriers were not putting his company’s name on the check,” said Salehi, who is also an IICRC-certified water damage technician. The podcast discusses the AOB alternatives available to help prevent and resolve claims disputes among contractors, policyholders, and insurance companies. They include the use of a “Direction to Pay” that among other things, allows the insurance company to put the contractor’s name on the claim payment check. Another form is the “Letter of Protection” that serves as a lien on any monetary proceeds, including but not limited to insurance payouts related to repair work performed. (See “Links and Resources Mentioned in This Episode” below for examples.) But even these AOB alternatives are raising questions. “The more sophisticated vendors are now just removing the assignment language altogether from their contract and just leaving in there the provision that is a direction to pay,” said Sherif. “But what carriers are seeing is sometimes an additional power of attorney and if they get both of them together, the issue, at least from my perspective, is how is that not an assignment?” Host Miller, a former Florida deputy insurance commissioner, noted the heightened hassle is discouraging contractors from doing work in areas where they are most desperately needed, such as the Florida Panhandle after Hurricane Michael. She asked if regulators such as the Florida Department of Financial Services, Office of Insurance Regulation, Department of Business and Professional Regulation, and the Florida Bar are doing enough to police the marketplace. “The legislative fix is always a possibility, but it’s never a way to deal with the problems in the law as they currently exist,” answered Sherif, a former regulatory and senior litigation attorney for the Florida Office of Insurance Regulation. “That’s where I think the regulator could have had more involvement and more guidance.” He and Salehi noted that follow-up enforcement of bad actors and more publicity around such cases would improve accountability. “We urge all stakeholders here – whether you are an insurance company claims handler, defense or plaintiff attorney, contractor, public adjuster, or regulator – to show personal leadership and openly communicate with one another about issues and offer constructive solutions that are fair to all parties concerned,” concluded host Miller. “Give me a call and let’s work together on this!” Links and Resources Mentioned in this Episode Assignment of Benefits (AOB) (Lisa Miller & Associates) Key Provisions of 2019 Assignment of Benefits Reform (Lisa Miller & Associates) Excerpted “Direction to Pay” and “Letter of Protection” Court Rulings Differ: AOB Attorney Fee Fight Continues:
Checklist of Requirements for AOB Agreements2020 Bill Watch (Lisa Miller & Associates) AOB Under Attack (Johnson Strategies Blog, January 9, 2020) Can a Contractor Negotiate with an Insurer? (by Mohammad Sherif, Esq. in LMA Newsletter of July 1, 2019) Citizens, OIR Announcing AOB Reform-Related Changes (LMA Newsletter of June 17, 2019) How Florida’s New AOB Law May be Exploited (LMA Newsletter of May 20, 2019) New AOB Law: Putting Consumers on Offense (Florida Insurance Roundup podcast, May 13, 2019 Assignment of Benefits Resources & Consumer Alerts (Florida Office of Insurance Regulation) ** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com ** The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 1/8/2020. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com © Copyright 2017-2020 Lisa Miller & Associates, All Rights Reserved | |||
| 04 May 2020 | Episode 27 – Coronavirus Insurance Challenges | 00:25:56 | |
The invisible coronavirus' crushing impact is being felt by businesses small and large – and on the insurance companies that insure those businesses. But for those organizations with business interruption policies, do they have a valid insurance claim because the government shut them down and/or their business was "interrupted"? There’s a lot of disagreement and finger-pointing and now Congress and individual states are poised to get involved in what may be a multi-billion dollar solution. Host Lisa Miller, a former deputy insurance commissioner, talks with insurance attorney and consultant John Burkholder and Kevin Miller, a seasoned independent property and casualty insurance adjuster, for answers and advice. Show Notes Insurance claims being filed on Business Interruption (BI) policies generally are focusing on two policy conditions: physical damage and/or civil authority. A typical BI policy requires direct physical damage to a covered property by a covered cause, except as excluded. About 90% of BI policies in the U.S. are reportedly on Insurance Service Office policy forms that specifically exclude viruses. For the remaining policies, it’s also problematic. “In this case (with the coronavirus), we’re not really having something like a direct cause of loss, like a fire. It’s really unique, in that the allegations being made across the country are that it’s because we have a virus in the air,” said John Burkholder, a consultant with Municipal Partners, a firm specializing in risk management for local governments. Other insurance claims are being filed based on the civil authority clause in many policies, where a government authority has ordered a business to be closed. “But in the traditional sense, the civil authority closing someone down has a limiting factor in almost all the policies. Typically, you get up to three weeks and it’s where you cannot enter the property. Here in most cases, you can enter the property,” said Burkholder, who is also an insurance attorney. “The plaintiff’s bar, the claimants, are saying ‘Well we can’t enter because the civil authority says that there’re dangerous conditions in the area and because of the latency of this virus, we can’t get into our property and therefore it triggers business interruption income coverage.” In the meantime, insurance carriers are noting an increase in BI claims filings and investigating individual claims. “That is part of the process of adjusting the claim,” said Kevin Miller, a Sarasota, Florida-based claims adjuster with Velocity Claims Administration, an independent adjusting firm. “It’s about getting recorded statements from the policyholder, gathering documents, collecting information, and sending out reservation of rights letters. Remember, you have to be concerned about avoiding unfair claims practices or bad faith.” Federal lawmakers and an increasing number of states are trying to legislate forced coverage, whether it’s in the policy or not. The Business Interruption Insurance Coverage Act of 2020 in the U.S. House would make coverage available for BI losses “due to viral pandemics, forced closures of businesses, mandatory evacuations, and public safety power shut-offs,” per the draft bill. And it voids any exclusion currently in place in an insurance policy. At least eight states have their own bills – Florida is not one of them. “Business owners are suffering horribly,” said podcast host Lisa Miller, an insurance industry consultant. “They are having difficulty accessing federal bailout funds in some cases, they’ve lost employees, and others are trying to get unemployment. Many of these small businesses are looking for relief from the federal government and they were hopeful, as I’ve spoken to many small business owners, that their insurance companies would ‘be there for them’ as they put it. There are things Congress can do to help ‘be there for them’ and help insurance companies ‘be there for them,’ too.” Restaurants have been among the most vocal groups. “They’ll never be able to fully recover because the meal you didn’t have yesterday cannot be replaced by the meal you’re going to have tomorrow,” said Burkholder. The podcast also discusses the other approach being contemplated in Congress, the proposed Pandemic Risk Insurance Act (PRIA). It would “create a reinsurance program similar to TRIA for pandemics, by capping the total insurance losses that insurance companies would face,” according to the draft, thereby helping insurance carriers pay the claims. But will these programs be enough? “The short answer is no,” said Kevin Miller, who noted that PRIA, as currently drafted, would apply only to future pandemics, not the current crisis. “The insurance industry is the best place to put money into people’s hands and from that, they can be reimbursed by the federal government. This will offset any litigation and prevent the litigation, I feel, from happening, which we all know has already started happening. We see the commercials and see the carriers being served already.” The podcast discusses how insurance companies are trying to get cases fully vetted, while the plaintiff bar representing claimants is seeking declaration actions by courts to expedite litigation. But these are individual policies usually handled on an individual basis, and governed by individual state insurance laws. “Those policies that didn’t exclude (viruses) should be paid and they should be paid promptly,” said Burkholder, who is a former Kentucky deputy insurance commissioner and a certified insurance examiner. But beyond those policies, “it’s a huge, huge exposure and I don’t think it was priced or anticipated or included in what insurance was going to do. We have to come up with a solution that doesn’t kill the golden goose. We need insurance now, but we also need to make sure that whatever we do, that we’ll have insurance next year as well,” Burkholder said. “What we can do on the insurance side in my opinion, and this may be counterintuitive, is hope for more claims, even if they’re being denied,” said adjuster Miller, who has 30 years of experience in claims disputes. “Because the more claims that carriers are getting on the aggregate, we can take that back to our congressional representatives and say ‘Look, this is how big this is getting. Your PRIA Act is not going to take care of it, because that’s for future events.’ We need to do something now because the insurance industry will be turned on its heels should these BI claims be required to be paid.” The guests offered advice to insurance companies and to policyholders, including other federal programs. For her podcast listeners, host Lisa Miller had this advice. “We have to confront this new reality that the virus is not going away tomorrow. It is just so uncertain and uncertainty in the insurance industry or in the business sector is not a good thing. To our listeners, I hope that each of you can make peace with this unexpected uncertainty and that we can find a way to help our customers, and help policyholders, do what we can as we move through these very uncertain times,” Miller said. Links and Resources Mentioned in this Episode The Workplace Recovery Act: A Public-Private Partnership Solution White Paper (Texas Public Policy Foundation) Business and Employee Continuity and Recovery Act The Business Interruption Insurance Coverage Act of 2020 (U.S. House of Representatives) Pandemic Risk Insurance Act (PRIA) (U.S. House of Representatives) Big Onion v. Society Insurance Company Cajun Conti, LLC d/b/a Oceana Grill v. Certain Underwriters at Lloyd’s London et al. New York City Emergency Executive Order No. 100 (City of New York, NY) Coronavirus & the Florida Market (Lisa Miller & Associates) Florida Insurance Informational Memorandums (Florida Office of Insurance Regulation, March 2020 ongoing) FloridaDisaster.BIZ (Resources for the Small Business Emergency Bridge Loan Program and other Florida assistance) Coronavirus Resources & Insurance Consumer Information (Florida Department of Financial Services) Estimates for COVID-19 (AIR Worldwide) NAIC Coronavirus Resource Center (National Association of Insurance Commissioners) Coronavirus Rumor Control (FEMA) ** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com ** The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 5/1/2020. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com © Copyright 2017-2020 Lisa Miller & Associates, All Rights Reserved | |||
| 26 Jul 2020 | Episode 28 – Our Cities Are Flooding | 00:24:12 | |
As hurricane season heats up, a growing number of properties located outside of FEMA-designated high-risk flood zones are actually flooding. The problem is especially bad in the urban areas of America’s cities. A national survey shows nearly 85% report experiencing urban flooding. Insurance claims are on the rise, too. Host Lisa Miller, a former deputy insurance commissioner, talks with Sam Brody of Texas A&M University about his latest research and fellow scientist and resiliency expert Alec Bogdanoff on how we can protect more homes and businesses from flooding. Show Notes “Urban flooding is kind of this hidden danger among all flood risks in the United States,” according to Dr. Sam Brody of Texas A&M University and Director of the Center for Texas Beaches and Shores. It occurs mostly in high growth areas, where development brings rain impervious surfaces, such as roads, driveways, and parking lots, which change the natural drainage pattern of the land. “It’s bringing flood impacts to unexpected areas, sometimes miles outside of the FEMA-designated 100-year flood plain.” Brody’s joint study with the University of Maryland is titled, The Growing Threat of Urban Flooding: A National Challenge 2018. The report revealed neighborhoods that were miles away from known flood risk zones but were surrounded by man-made barriers, such as roads, railroad tracks, and sound walls, referred to as “built environment barriers.” “These features of the built environment are creating the flood hazard and the associated impact. They’re either exacerbating or entirely creating the situation of risk. FEMA’s models, which are all based on stream channels, don’t account for these growing areas of risk and impact,” Brody said. He noted that 2017’s Hurricane Harvey, one of the largest flood events in U.S. history, exposed a lot of underlying conditions of urban flooding, especially in Houston, Texas, the fourth largest city in the country. The study looked primarily at rainfall, but urban flooding can occur with tidal events, too, including high-tide or “sunny day” flooding, as seen in some South Florida communities. Dr. Alec Bogdanoff is Principal Scientist and Co-Founder of Brizaga, a Fort Lauderdale, Florida based firm that assists businesses and communities in becoming more resilient to the effects of sea level rise and long-term environmental changes. He said some storm water systems, which are meant for collecting and sending rainwater out to sea are instead becoming conduits for saltwater to back up into communities during this period of sea level rise. “The challenge comes if you end up with a high-tide sunny day flooding example and instead of it being a sunny day, it’s a rainy day. You now have to wait for the tides to go down before that rainwater is going to go out,” Bogdanoff said. The study included a survey of more than 400 flood control professionals across all 50 states. It found that 83% had experienced urban flooding and 46% indicated it has occurred in numerous or most areas. “To me, the number one surprising result was that 85% of respondents experienced urban flooding outside of the FEMA Special Flood Hazard Area (SFHA), which means this is a problem and it’s growing nationwide,” said Brody. “There are hotspots like Miami, Palm Beach, and Houston of urban flooding but this is something that needs to be addressed at all scales starting from the national level down to the local.” “This phenomenon is greatly affecting businesses and homes to the point that I think it should become a part of the conversation when it comes to insurance, to cover the losses that occur,” said host Lisa Miller. She pointed to the flood protection gap, which is the difference between the insured and the actual value of flood damage. In Hurricane Harvey, the estimated insured losses were $30 billion but the overall value of damage was nearly three times greater, at an estimated $85 billion. More than 75% of those flooded properties, some in urban areas, had no flood insurance to pay for their losses. Part of the problem is adequately communicating risk to property owners. Miller and her guests discussed the limits of FEMA’s flood insurance rate maps, whose flood zones area binary, showing simply whether a particular property is in or out of a zone. “We’ve worked with clients who are in the hundred-year flood zone, so they think they have a one-percent chance every year of being flooded, but the reality is you can be in a much higher-risk zone within that hundred-year flood zone than FEMA dictates from their maps,” Bogdanoff pointed out. “We’re trying to have people understand that it’s not if you’re in or out, it’s how far you are from that boundary and there are gradients of risk extending outward from the hundred-year flood plain that people need to be aware of,” Brody said. The podcast also discussed solutions. Brody said his team, with support from FEMA, has developed a new method to predict and map hazards and risk. Instead of hydrology and hydraulics models, they are using statistics and machine learning techniques to improve flood prediction. “We may not replace the FEMA floodplain maps but we can augment them and complement them to help resident be more prepared and mitigate impacts,” he said. Bogdanoff said Broward County, Florida has developed a series of “incremental but fairly significant” changes to improve resiliency. They include a one-hundred year flood map that guides future development, a Fort Lauderdale seawall ordinance to provide better flood protection, another ordinance requiring flood disclosure, new infrastructure improvements, and efforts to encourage resilient building design. “Ultimately what you want is insurance to be the last risk transfer. We want to do as much as we can to protect people so that they don’t have to use insurance,” he said. Host Miller also noted FEMA’s planned rollout this fall of its Building Resilient Infrastructure and Communities (BRIC) program. BRIC focuses on pre-disaster mitigation by helping local and state governments fund projects that will reduce risk from natural hazards and disasters, such as flooding. It replaces the existing Pre-Disaster Mitigation program. Under BRIC, FEMA will set aside 6% of estimated disaster expenses for each major disaster to fund a mitigation grant program. With demand expected to exceed the program’s resources, both Brody and Bogdanoff favor focusing on projects of regional importance to maximize the federal funding. “Water doesn’t care about political boundaries,” said Bogdanoff. “If you build resiliently in one community, build higher in one community, you could end up hurting another community.” He pointed to the Central and South Florida Flood Control System with its thousands of miles of canals extending from Lake Okeechobee as an example of a regional solution providing flood control, water supply, and salt water intrusion protection for multiple counties. Brody agreed. “If we don’t think regionally, we’re going to come up with the wrong answer.” He said Hurricane Harvey was a “wake-up call” for Texas. The Texas Water Development Board now has a new program that divides the state by water sheds and is creating collaborative plans to deal with unintended consequences of upstream development on downstream communities. “Over the long-term, there’s going to be less need for federal funding and outside support, because these communities will be more resilient in the first place,” Brody said. Host Miller reminded listeners that flooding is the most frequent disaster, the most expensive, and can leave lasting economic devastation to communities and to those who cannot afford to repair or replace their buildings without insurance. “If you don’t have flood insurance, your possessions and life savings are at risk. And further, we’re on the hook as taxpayers having to subsidize those neighbors without flood coverage. As our guests on today’s program have said, the water doesn’t understand a line on a map. Just because it says you’re not in a high-risk area doesn’t mean that you’re not high-risk,” said Miller. Links and Resources Mentioned in this Episode The Center for Texas Beaches and Shores and Interactive Webtools The Institute for a Disaster Resilient Texas (Texas A&M University) The Growing Threat of Urban Flooding: A National Challenge 2018 (University of Maryland and Texas A&M University) Lower-Risk Properties Flooding More (LMA Newsletter of June 8, 2020) Flood Season Is Coming. Homeowners in These Cities Need More Insurance (ValuePenguin, May 18, 2020) Building Resilient Infrastructure and Communities (BRIC) program (FEMA) Lisa Miller & Associates Flood Insurance & Resiliency webpage (resources for private flood insurance) www.floodsmart.gov (The National Flood Insurance Program) ** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com ** The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 7/23/2020. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com © Copyright 2017-2020 Lisa Miller & Associates, All Rights Reserved | |||
| 21 Dec 2020 | Episode 29 – 2021’s Insurance Consumer | 00:22:16 | |
Whether you’re an insurance consumer or professional, 2020 is providing lessons and insight into the changing Florida insurance market for 2021. How can you get the best priced coverage for your needs? And for insurance professionals, how can you better serve your customers now and in the long-run? Host Lisa Miller, a former Florida Deputy Insurance Commissioner, talks with Amy O’Connor of the Insurance Journal and Carol Williams, a strategy and risk consultant for insurance companies, on the qualities insurance consumers – and the professionals who serve them – need to have in 2021 to get the most out of their insurance. Show Notes With the COVID-19 pandemic, the biggest hurricane season on record in number of landfalls, a record-setting number of catastrophic events, growing insurance fraud, and double-digit homeowners insurance rate increases in Florida to name but a few, it’s little wonder folks are feeling overwhelmed at times - and powerless. It’s been a challenging year for insurance consumers. Having an agent advocate is going to be more important than ever in 2021, according to Amy O’Connor, Southeast Editor of The Insurance Journal and Associate Editor of MyNewMarkets.com. “I’m hearing a lot of stories of people not getting coverage renewed, huge rate increases, coverage being scaled down,“ said O’Connor. Consumers may not understand what they’re losing. She advises to look at the policy and make sure you understand it or find someone who can help you. “The age of your home, the condition of your roof, all these things are going to be important to consider as you move forward into renewing existing policy or going with another company,” said O’Connor, who has covered the Florida insurance beat for the past six years. Insurance companies are also being more proactive to help inform and educate consumers. They’re using different channels, including text messages and live chats, to focus on clear and helpful communication to policyholders, according to Carol Williams, Founder and CEO of Strategic Decision Solutions, based in Tallahassee, Florida. Companies are also developing advanced strategies to combat insurance fraud by third-party contractors and an increase in lawsuits, both key drivers – together with lagging hurricane claims and reinsurance costs – of rapidly rising Florida property insurance rates. Williams said a growing number of insurance companies are starting their own repair programs, with a network of contractors ready to respond quickly to a policyholder’s claim. “Something that a lot of consumers overlook in thinking that the insurance companies are only out for themselves, is that the insurance company has skin in the game for making sure that your home is repaired correctly because they are still on the risk. They will still be providing coverage to you after the claim. They want to make sure it’s being done right,” said Williams, an 18 year veteran of the insurance industry and a strategy and risk consultant for insurance companies. O’Connor said insurance is not something that consumers understand very well and they really don’t want to learn a lot about it if they don’t have to, yet it’s something they have to have. “But the moment has come where everybody needs to start paying attention,” she said. Host Miller noted that “homeowners are insuring their largest asset yet agents are frustrated at times trying to get their customer’s attention. Consumers need to take the time.” Part of the problem, Williams pointed out, is that property insurance is often dismissed as a once a year purchase paid out of the home mortgage escrow. But it’s “vital” that consumers take time to review their policies. “Just like people are always focused on having health insurance, property insurance is for the health of your home. People pour over their health insurance policy. You need to do the same thing for your property insurance policy,” advised Williams. The podcast also discussed what insurance regulators can do, including setting the tone for the market and providing education about the actual insurance policy itself. Available consumer education resources include the National Association for Insurance Commissioners, which has overviews of different policy coverages. Host Miller and guests also discussed COVID-19 and the impact the coronavirus pandemic has had on insurance. O’Connor said new procedures utilizing work-from-home technology for agents and remote claims handling practices in potential hurricanes will have a long-term benefit: greater adaptability and responsiveness to consumer needs, in an industry that can be slow to adapt to change. “Consumers are changing the way they do their business, especially with insurance, and they are demanding more from the industry,” she said. COVID-19 has also accelerated the use of Insuretech, where consumers do everything on their phone or computer, from shopping for policies to signing-up for coverage. “That is definitely the path that insurance is going,” said Williams. “There are insurance companies in Florida that are specializing in that because they recognize that is a growing demand. Consumer expectations are changing, so they know they need to adjust with it.” There’s a long-term benefit here, too. Williams said the savings from avoiding some of the traditional manual labor of underwriting and claims are being passed along to consumers through lower premiums. “I see the 2021 consumer being more price-sensitive,” added host Miller. “Prices of everything are going up in this time of COVID, including our insurance rates in Florida, and that’s going to force the issue of people being more sensitive to know what they are buying and ask more questions.” Among them: make sure you know what coverage you’re getting for the price and the quality of the company that is backing the policy. “Look at the financial ratings of the company, consumer complaints, do your research, and don’t make your decision based just on price,” warns Williams. The podcast also touched on the upcoming 2021 session of the Florida Legislature. Florida is experiencing accelerated homeowners insurance rates, due more to increased litigation and questionable claims, than catastrophes. Regulators have approved about 100 rate increases in 2020, with a few close to 30%. Several companies have also reduced the number of policies they write each month with some deciding to stop writing new business completely while they wait for the rates to catch up to the costs. The upcoming legislative session is going to be “hugely important” to the insurance market. There will be bills to try to bring necessary reforms that are seen as consumer friendly. O’Connor said Florida insurance consumers who are concerned about the rate increases, have more power than they may realize as constituents. “People need to look at and decide ‘is this something that I want to support and that I need to reach out to my lawmakers, my insurance agents, and find out is this going to benefit me and help our rates in the long-term or is it just going to keep going down this path?’ and it’s a pretty scary path in terms of cost.” Links and Resources Mentioned in this Episode Florida Property Insurance Market Inches Closer to Crisis – Part 1 and Part 2 (Insurance Journal, October 29-30, 2020) National Association of Insurance Commissioners Consumer Resources Bill Watch (Lisa Miller & Associates) Assignment of Benefits & Insurance Litigation (Lisa Miller & Associates) ** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com ** The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 12/14/2020. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com © Copyright 2017-2020 Lisa Miller & Associates, All Rights Reserved | |||
| 26 Mar 2021 | Episode 30 – Florida’s Property Insurance Dilemma | 00:31:50 | |
Florida’s residential and commercial property insurance market is in a precarious state of flux, for both insurance companies and consumers. Old hurricane claims, litigation abuse, and fraudulent repair tactics have led to big underwriting losses and rising reinsurance rates. Those are being passed along to Florida residents in double-digit rate increases – some as high as 50%. Host Lisa Miller, a former Florida Deputy Insurance Commissioner, talks with two veteran insurance agents on the frontline, who reveal the hidden consequences that higher insurance premiums are having on their customers and the impact now on Florida’s real estate market.
Show Notes Florida’s domestic insurance companies are in a sea of red ink, with $1.6 billion in net underwriting losses. Consumers have been left holding the bag for now. Some are scrambling to find coverage. They’re increasingly turning to their insurance agents for help. “Sometimes we have to have uncomfortable conversations with clients and some clients decide they don’t want to keep insuring the property, they just want the liability (coverage),” said Ana Regina Myrrha, CEO of the American Insurance Point agency in Orlando. “I see people taking a greater risk because they cannot afford to pay for the insurance.” Myrrha, a 23-year insurance agent, said she has had to hire extra staff to review policies and quote and re-quote clients who’ve lost or can’t find affordable coverage. The availability and affordability issue is even more advanced in South Florida, with many clients seeing rate increases of 20% to 40%, according to Dulce Suarez-Resnick, Vice President of Personal Lines for Acentria Insurance Associates in Miami. “In the last two years, more and more of our markets have shut down,” said Suarez-Resnick. “I represent 16 homeowners carriers and I have four open in Miami-Dade County and six open in Broward County.” But many she said have policy restrictions, including roof age requirements of under 10 years old. Those clients have little choice than to be placed with Citizens Property Insurance Corporation, the state-backed insurer of last resort, whose policy count has exploded in the current dilemma. Both agents report the situation has begun impacting home affordability and the Florida real estate market. “Eventually what’s going to happen with people is that they are not going to be able to afford that mortgage payment because their insurance is escrowed with their taxes. And it’s just becoming a dilemma,” said Suarez-Resnick, a 36-year agent in Miami who serves on the Citizens Property Insurance Corporation’s Agent Roundtable. She said her own mortgage payment has gone up year after year, fueled by a $1,400 annual premium increase last year and another $800 increase this year. Some insurance consumers are increasing their deductibles to help reduce the premium increases. The usual 2% hurricane deductible is now offered at 5%. Myrrha worries that some who had regular $1,000 all other perils deductibles are pushing their deductibles to $2,500, $5,000, and even $10,000. “The clients that choose those deductibles, can they afford to pay them in case of a catastrophe? Probably not.” Host Miller and guests also talked about some of the insurance market and litigation reform bills being considered by the Florida Legislature, designed to ease the dilemma and help re-right the market. “It doesn’t matter what kind of reform you pass, as long as you ignore the one-way attorney fees and the fee multiplier then you have really done nothing. You’ve basically closed the door and opened the window,” said Suarez-Resnick, who has travelled to the state Capitol for years to urge reform, from litigation abuse in the 2004-2005 storms’ claims, then sinkholes, followed by Assignment of Benefits (AOB), and now litigation on old hurricane claims. She notes the constant stream of attorney commercials on local television. “So the attorneys are educating the consumer to have a different mindset. ‘Don’t call your insurance agent, your trusted advisor if you have a claim, call us. We can inspect,’ they say. Since when is an attorney a public adjuster?” she asked. She urges the Florida Legislature to pass Senate Bill SB-76, the principal property reform bill this session. Another issue is door to door solicitation by roofing firms offering new roofs that they convince the homeowner their insurance company will have to pay for. “To make matters worse, it’s not only the client. Now I have realtors encouraging clients to file claims to replace the roof in order to get the house sold,” said Myrrha. She said these jobs often involve an AOB and incomplete or shoddy work. She said she educates her clients that “Maybe they’re giving you a free roof now, but for the rest of your life, you’re going to be paying for that roof.” The result, the agents agreed, is that property insurance capacity is running out, the market has dwindled, and the lack of competition has driven rates even higher, pushing people to taxpayer-backed Citizens Property Insurance. Even those homes with replacement values of more than $1 million are having a hard time finding windstorm insurance in coastal areas they said. “I would tell the Florida Legislature that enough is enough. The insurance industry has been bleeding for a while. It’s impossible that they cannot look to the little guy that is using their savings as a down payment on a house and now cannot afford the escrow payment,” said Myrrha. “It’s clear after listening to our guests today that Florida’s property insurance market dilemma is going to deepen and worsen without needed legislative reforms. I see the insurance companies’ future, their profitability, is going to require them to shed business by cancelling or non-renewing more policies, said host Miller. “This dilemma is falling squarely on consumers’ pocketbooks.” Links and Resources Mentioned in this Episode American Insurance Point Agency Florida Legislature Bill Watch (Lisa Miller & Associates) Florida Domestic Property Insurers Summary of 2020 Year-End Financial Results S&P Global Market Intelligence Demotech Financial Stability Ratings for the Florida Domestic Market (March 12, 2021) Citizens Pushing Higher Rates (LMA Newsletter of March 22, 2021) Florida Property Insurance Cos. Financials (LMA Newsletter of March 15, 2021) Several Factors Hinder Homeowner and Auto Glass Insurance Fraud Processing (Florida Office of Program Policy Analysis and Government Accountability, March 2021) Florida’s P&C Market: Spiraling Toward Collapse (Guy Fraker, Cre8tfutures Advisory, January 2020) Florida’s Property Insurance Market Is ‘Spiraling Towards Collapse’ Due to Litigation: Report (Insurance Journal, January 20, 2021) Consumer Impact and Trends in Property and Automobile Insurance (Florida Insurance Consumer Advocate presentation to the Florida House Insurance & Banking Subcommittee, February 3, 2021, pages 37-45) 2021 Legislative Proposals (Florida Insurance Consumer Advocate, February 2020) Citizens Exposure Reduction and Depopulation Opportunities Analysis (Florida State University’s Florida Catastrophic Storm Risk Management Center, November 2020) How a $41,000 Plumbing Leak Turned Into a $1.2 Million Attorney Fee (Lisa’s Blog, March 12, 2020) Assignment of Benefits & Insurance Litigation Webpage (Lisa Miller & Associates) ** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com ** The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 3/23/2021. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com © Copyright 2017-2021 Lisa Miller & Associates, All Rights Reserved | |||
| 24 May 2021 | Episode 31 – Property Insurance Reform | 00:29:41 | |
The Florida Legislature has passed a property insurance reform bill designed to stem double-digit rate increases, costly claims practices, and excessive litigation. While the bill awaits the Governor’s expected signature into law, there are questions about just how effective it will really be. Host Lisa Miller, a former Florida Deputy Insurance Commissioner, talks with a leading state Senator and a veteran insurance defense attorney and legal strategist on what the measure does and doesn’t do – and its expected impact on Florida consumers. Show Notes Over the past 18 months, Florida’s residential and commercial property insurance market has seen a growing number of policy cancellations and non-renewals, greater coverage restrictions, and regulatory approval of necessary double-digit rate increases, some as high as 50%. Senate bill SB 76 changes the calculation of attorney fees and restricts solicitation of roof damage claims, requires claims be filed within two years and requires that insurance companies receive a ten-day presuit notice in first-party litigation. It also directs state regulators to collect insurance claims and litigation data annually. (For a complete summary of the bill, click Lisa’s 2021 Bill Watch.) State Senator Jeff Brandes (R-Pinellas County) voted in favor of the bill, which was watered-down in the last week of session, but warned colleagues on the Senate floor that it was just a 40% solution for what is needed to restore a competitive property insurance market and lower costs. “We have a rash of roof claims across Florida. The two things that we really needed to deal with were attorney fees and roof issues… most of that is missing (from the bill),” he shared on the podcast. The bill changes the decades-old one-way attorney fee statute formula. If the claimant recovers at least 50% of the disputed amount, full attorney fees would be awarded; less than 20%, then there would be no attorney fees. Judgments between 20% and 50% would merit the same proportional attorney fee to the percentage of the disputed amount obtained. “The attorney fee provision is a step in the right direction,” said John Henley, Vice President and Head of Claims Shared Services at UPC Insurance, one of the largest writers of homeowners insurance in Florida. “It’s so much better than the current paradigm, where if a claimant gets a judgement of a penny more than the insurance company offered, they get all their attorney fees paid, and even more.” And the bill’s required ten-day notice before being sued, “is better than nothing, which is what we have now, where we settle the claim and think everything is fine and then they sue us and don’t tell us what they’re demanding,” Henley added. Senator Brandes, a champion for insurance reform in the Florida Legislature, said he hopes the provisions will bring all parties to the table and to act reasonably. “Prior to this law, people had no incentive to be reasonable. In fact, they had an incentive not to be reasonable.” Midway through the legislative session, Florida Insurance Commissioner David Altmaier released a letter citing National Association of Insurance Commissioners data that showed in 2019, Florida had 8% of all homeowners' claims in the U.S., yet 76% of all homeowners' claims lawsuits. The letter “completely changed the dynamics and the tone of our colleagues in the House, because it’s indefensible,” said Brandes. “It’s also unsustainable. That’s largely what’s driving both the cost of insurance but also the investors out of the market.” Henley, a longtime claims attorney, said the one-way attorney fee law is the reason behind the startling statistic. He said another provision in the bill requiring insurance companies annually report to regulators their litigation figures, loss cost, and adjusting cost, will lead to greater transparency of the problem. “When the state starts to get that information and they (regulators) truly see behind the veil of how much money this industry, this litigation economy in Florida is taking from carriers and ultimately insureds, that will be the kick-start to get the other 60% that we want done, done,” Henley said. “People are essentially paying a hidden tax on property insurance that they’re paying through their insurer to the trial bar and that’s what’s causing all of these problems,” Brandes added. Both guests pointed out that while the bill’s changes in law take effect July 1, the effects will take 12-24 months to make their way through carriers’ books of business. That leaves insurance companies to continue to face these challenges and consumers facing skyrocketing premiums, along with other market factors such as record-high lumber prices and the next two hurricane seasons. “In the meantime, Citizens Property Insurance (the state’s insurer of last resort) will likely grow to more than one million policies in the next two years,” said Brandes, putting taxpayers at risk of having to cover any potential reserve shortages that could occur in a future super storm or series of storms. Henley also predicts “a deluge of litigation” between now and when the law takes effect July 1 that he says the industry is already starting to see. He likewise sees limited impacts of the new law itself. “You’re dealing with a very creative plaintiff bar here in Florida. So we need to see this bill play itself out in a court system that has been historically lenient toward plaintiffs. I suspect we’ll see a flattening of litigation only.” Even with SB-76, other challenges to Florida’s property insurance market remain. The aging roof problem, where solicitors go door to door encouraging claims for roofs that instead have normal wear and tear, was unaddressed in the final bill. “We’re already starting to see insurance companies pull away from writing coastal policies simply because they can’t get the reinsurance or raise additional capital,” said Brandes. Host Miller noted that there are three main factors causing rising rates: excessive litigation, contractor fraud, and claims creep from past hurricanes, along with resulting reinsurance price increases. “Consumers are really rising up and they are upset,” Miller said. She and her guests talked about the need for the insurance industry to do a better job communicating to policyholders about the negative effects of door-to-door repair solicitations and lawsuits. “I live in South St. Petersburg and I love it,” said Henley. “But I pay three times more for a house that is three times smaller than one of my best friends who lives in Atlanta, Georgia. Why is that? It’s because of the claims litigation activity that is driven by these bad actors.” He said the reporting requirement on carriers in the bill will prove “it’s not a made-up crisis.” “This isn’t a made-up issue, as some claim,” agreed Brandes. “There’s a real problem in Florida. The insurance market is the Achilles heel of the state….and unless we get our hands around this problem, we’re going to have real challenges going forward. This effects everyone, whether you are renting, owning, or in a condo...We have begun to address the problem, but there’s a lot more work to be done.” “It’s clear from our conversation here and from others we’ve had recently, that the legislative reform passed may have modest impacts on two of the foundations of insurance that are increasingly out of balance in Florida, availability and affordability,” concluded Miller. Links and Resources Mentioned in this Episode Florida Senate bill SB 76 Florida Legislature 2021 Bill Watch summary (Lisa Miller & Associates) Florida one-way attorney fee statute Florida Insurance Commissioner David Altmaier’s litigation statistics letter National Association of Insurance Commissioners: The Cold, Hard Truth about Florida Litigation (LMA Newsletter of April 12, 2021) Senator Jeff Brandes Senate floor debate video (beginning at timecode 1:35:25, The Florida Channel) Senator Jim Boyd (sponsor of SB 76) Senate floor debate video (beginning at timecode 3:07:10, The Florida Channel) Insurance Costs Threaten Florida Real-Estate Boom (The Wall Street Journal, April 25, 2021) Reforming Florida’s broken insurance market (Inside P&C, April 12, 2021) Florida Domestic Property Insurers Summary of 2020 Year-End Financial Results Florida’s Property Insurance Dilemma (The Florida Insurance Roundup podcast, March 26, 2021) Senator Jeff Brandes Legislative Webpage Demotech Financial Stability Ratings for the Florida Domestic Market (March 12, 2021) Regulators Reject Citizens Rate Cap Request (LMA Newsletter of April 26, 2021) Several Factors Hinder Homeowner and Auto Glass Insurance Fraud Processing (Florida Office of Program Policy Analysis and Government Accountability, March 2021) Florida’s P&C Market: Spiraling Toward Collapse (Guy Fraker, Cre8tfutures Advisory, January 2020) Florida’s Property Insurance Market Is ‘Spiraling Towards Collapse’ Due to Litigation: Report (Insurance Journal, January 20, 2021) Consumer Impact and Trends in Property and Automobile Insurance (Florida Insurance Consumer Advocate presentation to the Florida House Insurance & Banking Subcommittee, February 3, 2021, pages 37-45) Citizens Exposure Reduction and Depopulation Opportunities Analysis (Florida State University’s Florida Catastrophic Storm Risk Management Center, November 2020) How a $41,000 Plumbing Leak Turned Into a $1.2 Million Attorney Fee (Lisa’s Blog, March 12, 2020) Assignment of Benefits & Insurance Litigation Webpage (Lisa Miller & Associates) ** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com ** The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 5/14/2021. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com © Copyright 2017-2021 Lisa Miller & Associates, All Rights Reserved | |||
| 23 Jun 2021 | Episode 32 – Defense Attorneys’ Take on SB 76 | 01:00:41 | |
Florida’s new property insurance reform law takes effect on July 1. While its intent is good, Florida policyholders are in desperate need for the law to have a significant impact on double-digit rate increases and questionable door-to-door solicitation practices. Will it deliver? Former Florida Deputy Insurance Commissioner Lisa Miller walks us through the details of Senate Bill 76 with two insurance defense lawyers who provide experienced analysis and perspective on each section of the new law, its likely impact, and the areas where legal conflicts may arise in its interpretation. This is a must-listen to podcast for anyone in Florida’s property insurance industry. Show Notes Lisa is joined by Tom Diana and Michael Monteverde of the award-winning Zinober Diana & Monteverde law firm with offices in Ft. Lauderdale, St. Petersburg, and Tampa. Tom is a Co-Founder and Principal Partner of the firm. He is a civil engineer turned lawyer whose main practice areas focus on insurance claims involving engineering and architectural experts, all matters related to construction, and coverage issues related to professional and general liability policies. Michael is a Partner at the firm who focuses his practice on the litigation of complex construction defect matters, first- party and third-party insurance disputes, as well as insurance coverage matters, including high exposure bad faith claims. This extended hour-long podcast walks through the new law from the 44-page Senate Bill 76 (SB 76), section by section, as follows: 489.147 Prohibited property insurance practices, which cover advertisements and solicitations by contractors and public adjusters and establishes contractors or unlicensed persons acting on their behalf may not solicit or incentivize a residential property owner to file a roof damage insurance claim. 624.424 Annual statement and other information, requiring insurance companies file an annual report with specific data regarding litigation of personal and commercial residential property insurance claims 626.7451 Managing general agents; required contract provisions and 626.7452 Managing general agents; examination authority, which clarifies that the Office of Insurance Regulation has the authority to examine MGAs, including insurers’ affiliates. 626.854 “Public adjuster” defined; prohibitions, establishes that a public adjuster, a public adjuster apprentice, or unlicensed persons acting on their behalf may not incentivize a residential property owner to file a roof damage insurance claim and has an “up to $10,000 fine” for violations. 626.9373 Attorney’s fees, regarding lawsuits not brought by an assignee, directing awards of reasonable attorney fees only as provided under two specific statutes. 627.428 Attorney fees, regarding lawsuits not brought by an assignee in judgment against an insurance company. 627.70132 Notice of property insurance claim, changes the notice of claim deadlines by requiring that any claim must be provided to a property insurer within two years of the date of loss and the policyholder then has another year to file a supplemental claim if needed. 627.7015 Alternative procedure for resolution of disputed property insurance claims, creates new statutory requirements for residential or commercial property lawsuits that are not brought by an assignee, including a ten-day presuit notice and demand, before bringing suit against an insurance company. The company has 10 days to respond in writing to such notices. This section also broadens the current one-way attorney fee statute formula. If the claimant recovers at least 50% of the disputed amount, full attorney fees would be awarded; less than 20%, then there would be no attorney fees. Judgments between 20% and 50% would merit the same proportional attorney fee to the percentage of the disputed amount obtained. 627.70153 Consolidation of residential property insurance actions, requiring each party that is aware of multiple lawsuits pertaining to the same property address to notify the court, which may then order the actions be consolidated. 628.801 Insurance holding companies; registration regulation, allowing further regulation of insurance holding companies to ascertain the financial condition of the insurer. The podcast mentioned, but did not cover sections 627.351 Insurance risk apportionment plans and 627.3518 Citizens Property Insurance Corporation policyholder eligibility clearinghouse program regarding Citizens, the state-backed insurer of last resort. This podcast was recorded on June 15, 2021, about two weeks before the new law’s July 1 effective date. This program was produced as both a podcast and a video webinar. While specific lines in the bill – now law – are mentioned, it’s not necessary for the listener to have the bill in front of them as they listen, as Lisa and her guests read aloud the pertinent language. You may watch the video webinar here. Also of note is Senate Bill 1598 (SB 1598), which was also signed into law, effective June 16, 2021. The bill, in lines 171-177, clarify that a license is required to act as an insurance adjuster in the state of Florida. Violations are a third-degree felony, punishable by fines up to $10,000 per occurrence. Links and Resources Mentioned in this Episode Florida Senate bill SB 76 Zinober Diana & Monteverde law firm Department of Financial Services Insurance Fraud Portal (to report unlicensed activity & other violations of SB 76 and SB 1598) Florida Legislature 2021 Bill Watch summary (Lisa Miller & Associates) Florida one-way attorney fee statute Property Insurance Reform (The Florida Insurance Roundup podcast, May 23, 2021) Florida’s Property Insurance Dilemma (The Florida Insurance Roundup podcast, March 26, 2021) Assignment of Benefits & Insurance Litigation Webpage (Lisa Miller & Associates) Tom Diana’s email is tom@zinoberdiana.com Michael Monteverde’s email is michael@zinoberdiana.com Video Webinar of this program ** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com ** The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 6/15/2021. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com © Copyright 2017-2021 Lisa Miller & Associates, All Rights Reserved | |||
| 30 Aug 2021 | Episode 33: Episode 33 – Condo Underwriting & Presuit Settlements | 00:31:11 | |
In the wake of the Champlain Towers South condominium building collapse, insurance companies are looking to tighten their underwriting requirements on Florida condo association policies. Policy renewal premiums are expected to increase up to 25% for those that can’t show a good building maintenance record. While the commercial residential market tightens, Florida’s homeowners insurance market is going through an upheaval of its own. One insurance litigation reform measure passed into law is now coming into play in court: presuit settlements. Former Florida Deputy Insurance Commissioner Lisa Miller talks with two professionals on the underwriting and legal side for their insight on market changes afoot and advice for insurance companies trying to navigate the changes.
Among the solutions he suggested, is requiring engineering studies of all existing condominium buildings, pre-qualification of underwriting through insurance carriers, and possibly legislative changes. Squire said associations should be proactive prior to policy renewal, too. “What's going to make it look better is replacing or maintaining a roof and making sure that you have impact windows. Those are really the two items that can easily be addressed,” he advised.
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| 27 Oct 2021 | Episode 34: Episode 34 – Legal Challenges to SB 76 | 00:35:14 | |
Florida Insurance Commissioner David Altmaier told a legislative committee in late September that the state’s property insurance market is in “critical condition” with a growing number of insurance companies losing money and consumers facing continued double-digit rate increases. A new set of reforms designed to help is already being challenged in federal court by roofers and restoration companies.
** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com **
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| 22 Dec 2021 | Episode 35: Episode 35 – Florida Legislative Preview 2022 | 00:27:17 | |
The Florida Legislature begins its 2022 session on January 11. Among the bills filed are those seeking enhanced insurance consumer protection, greater safety for high-rise condominium buildings following the Surfside collapse, COVID-19 relief, controls on prescription drug costs, and legislative redistricting.
** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com **
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| 11 Feb 2022 | Episode 36: Episode 36 – A Conversation with Real Estate Agents about Property Insurance | 00:26:18 | |
Beside their direct impact on Florida homeowners, multiple double-digit rate increases in property insurance are impacting Florida’s real estate market as well. If rates continue to rise, there’s concern they will affect the availability and affordability of insurance for new homebuyers.
Senator Brandes argued that lowering the threshold or “aggregate retention point” would lower the cost of reinsurance, with the savings under his amendment to be passed along to policyholders. Suspending the hurricane tax would save every Florida residential policyholder an estimated $150 annually.
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| 04 May 2022 | Episode 37: Episode 37 – Special Session on Property Insurance | 00:30:37 | |
The Florida Legislature will meet in a special session May 23-27 called by Governor Ron DeSantis to “bring some sanity and stabilize” Florida’s property insurance market. Homeowners are suffering big rate increases and some have lost their coverage, while a growing number of insurance companies are going insolvent or reducing or eliminating their policy-writing in the state.
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| 23 Jun 2022 | Episode 38: Episode 38 – New Property Insurance Reforms | 00:35:29 | |
The Florida Legislature in a May special session passed a series of reforms to help stabilize a property insurance market that has seen a growing number of carriers stop writing business or becoming insolvent. Homeowners rates keep growing by double-digits and coverage is increasingly difficult to obtain.
The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 6/22/2022. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com © Copyright 2017-2022 Lisa Miller & Associates, All Rights Reserved | |||
| 02 Sep 2022 | Episode 39: Episode 39 – Take Care of the Insurance Customer: Job One | 00:50:52 | |
Alternative dispute resolution – including appraisal – is playing an increasingly important role in settling homeowners property insurance claims. Florida’s 2019 Assignment of Benefits (AOB) law requires third party contractors to utilize these alternatives before filing a lawsuit against an insurance company, if required by the policy.
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| 31 Oct 2022 | Episode 40: Episode 40 – Hurricane Ian: Was the Damage Flood or Wind? | 00:41:54 | |
Most damage from Hurricane Ian appears to be from flooding, rather than wind, and thus won’t be covered under most Florida homeowners insurance policies. Insurance adjusters face a challenging job now determining whether it was wind or water or both that damaged a home, and in some cases in what order, for hundreds of thousands of properties across Florida.
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| 09 Dec 2022 | Episode 41: Episode 41 – Special Session Preview | 00:48:09 | |
The Florida Legislature is meeting in special session the week of December 12 to address two issues vital to Florida’s economy: disaster relief for Hurricane Ian victims and further insurance consumer protections for homeowners across the state. Property insurance and reinsurance rates have grown by 100% or more in the past three years, yet insurance companies’ losses continue, with six carriers becoming insolvent this year, and 13 others withdrawing coverage, driven in part by a nearly 400% increase in claims litigation since 2013.
The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 12/2/2022. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com © Copyright 2017-2022 Lisa Miller & Associates, All Rights Reserved | |||
| 30 Dec 2022 | Episode 42: Episode 42 – Barry Gilway: Florida’s New Law is a Profound Change | 00:43:24 | |
Florida property insurance companies, their policyholders, and repair contractors are starting the New Year with a new law designed to reform an out-of-control marketplace. The Florida Legislature in December passed comprehensive measures to stem high insurance and reinsurance rates, carrier insolvencies, inflated claims, excessive litigation, and an overly-competitive residual market.
Attorney Fees: Ends one-way attorney fees in residential and commercial property insurance policy lawsuits; Offers of Judgment: Reinstates the civil offer of judgment statute (also known as Proposals for Settlement) and makes attorney fees available for the prevailing party, while also allowing for joint offers of judgment; AOBS: Prohibits Assignment of Benefits (AOB) contracts of residential and commercial property insurance policies issued on or after January 1, 2023; Bad Faith: Prohibits the filing of a bad faith lawsuit until a final judgement is issued against the insurance company in the original claim dispute; Citizens Property Insurance Reforms: Makes many essential improvements to current laws governing the state-backed “insurer of last resort,” Citizens Property Insurance Corporation, including: - Changing the eligibility to remain a Citizens policyholder, by requiring that private insurance company coverage has to be 20% more expensive (up from 15%, to match current rules on new policies) and likewise for commercial residential policies; Reinsurance: Establishes a second optional hurricane reinsurance fund (The Florida Optional Reinsurance Assistance Program) for carriers, offering rates of 50% to 65% of the cost of on-line rates, while maintaining the Reinsurance to Assist Policyholders (RAP) program created in the May special session; Arbitration: Allows carriers to offer mandatory binding arbitration in their policies with a resulting premium discount; Claims Handling: Reduces from 90 days to 60 days the time insurance companies have to pay or deny a claim, unless extended by regulators; and reduce from 14 days to 7 days the time a carrier has to review and acknowledge a claim communication and begin an investigation, along with other time requirement changes; Claim Filing: Further tightens deadlines for policyholders to report a claim from 2 years to 1 year for a new or reopened claim, and from 3 years to 18 months for a supplemental claim; and Greater OIR Regulation: Allows the Florida Office of Insurance Regulation (OIR) to withdraw approval of policies with an appraisal clause for companies that routinely invoke it; allows OIR to do market conduct exams after a hurricane on those companies in the top 20% of claims filed or DFS complaints and to include an examination of their MGAs; and requires companies begin monthly reporting of the numbers of claims opened, closed, pending, and those seeking alternative dispute resolution and of which type. You can read a more detailed list of major provisions here of the December 2022 law, built upon previous measures passed in the May 2022 legislative special session.
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| 16 Feb 2023 | Episode 43: Episode 43 – Future of Florida Insurance Litigation | 00:34:06 | |
The December 2022 property insurance market reforms passed by the Florida Legislature are making a big difference already, with fewer and less severe non-hurricane claims and fewer daily lawsuits, according to a major Florida insurance company.
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| 15 May 2023 | Episode 44: Episode 44 – Dynamic Duo: Ian Hit Hard | 00:38:21 | |
An interim report submitted to the Florida Building Commission says that Southwest Florida coastal communities impacted by last September’s Hurricane Ian were “ill-prepared” for the storm surge and flooding, despite lessons on wind mitigation learned from Hurricane Charley 18 years earlier. Ian was the costliest storm in Florida history, killing 156 people and causing an estimated $109.5 billion in damage in Florida. Only an estimated half of that will be covered by insurance.
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| 02 Jun 2023 | Episode 45: Episode 45 – Insurance Claim Estimates Change & Are Supposed to! | 00:32:34 | |
Media coverage has intensified over an allegation by three independent insurance adjusters that Florida property insurance companies are cheating their policyholders out of rightful claim payouts. The three accuse the industry of altering their field adjuster reports and reducing claim payouts – all without their knowledge or approval.
“I do think that what's happened here is some give and take by the legislature,” said Schulte. “More transparency is part of what the new process is with the new laws. Is it just right? Is it too far? Or is it not enough? We just have to wait and see, while these things work their way through the legal system,” he said.
The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 6/1/2023. Email via info@LisaMillerAssociates.com Composer: www.TeleDirections.com © Copyright 2017-2023 Lisa Miller & Associates, All Rights Reserved | |||
| 14 Nov 2023 | Episode 46: Episode 46 – Insurers: Know the Building AND The Board | 00:27:36 | |
Advances in artificial intelligence (AI) and machine learning are getting closer to providing insurance companies with a new underwriting tool to combat fraud: the ability to review meeting minutes and other public documents from homeowners and condominium associations, whose communities are home to nearly half of Florida’s 22.3 million residents.
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| 28 Feb 2024 | Episode 47: Episode 47 – Stress & Strain of Adjusting | 00:21:50 | |
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| 12 Mar 2024 | Episode 48: Episode 48 – 2024 Legislative Roundup | 00:37:54 | |
How will the insurance bills that passed in the recently completed 2024 Florida legislative session compliment past marketplace reforms? Is a property insurance market marred by carrier insolvencies in recent years and ongoing double-digit rate increases starting to stabilize?
(For full Show Notes, visit https://lisamillerassociates.com/episode-48-2024-legislative-roundup/ ) | |||
| 22 Apr 2024 | Episode 49: Episode 49 – When Insurers Exit | 00:23:19 | |
A new report claims that Florida's property insurance market is full of “low quality insurers,” especially those Florida-based companies that write the bulk of the 7.5 million homeowners and condo insurance policies. It casts aspersions on Demotech, the rating agency that reviews their financial stability.
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| 19 Jun 2024 | Episode 50: Episode 50 – Dollar Sale on Flood Damage | 00:29:34 | |
A new working paper from the Congressional Budget Office estimates that for every dollar spent to elevate or buy-out a flooded home, $2.69 would be saved in future costs over the next 30 years. Of the 1.3 million projects the paper identifies, roughly 138,000 would see a greater savings of $6 dollars. Total savings would amount to $519 billion in future damage if governments and homeowners together would spend $193 billion today.
“We started looking into federal spending on adaptation to flood risk and we found that there's a big literature out there, but it can be really difficult to compare across studies, and apply one context to another,” explained paper co-author Evan Herrnstadt. “So we would need a scalable and flexible approach and found it was feasible for us to use the National Structure Inventory from the U.S. Army Corps of Engineers and flood modeling from the First Street Foundation and combine that with some other work to estimate avoided damage from property level interventions like buyouts and elevations,” said Herrnstadt, who is a CBO economist. The national framework that CBO developed used inland and coastal residential properties that contain 1 to 4 housing units.
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| 30 Jul 2024 | Episode 51: Episode 51 – Florida’s Expanding Flood Zones | 00:33:18 | |
High-risk flood zones are expanding this year along significant stretches of Florida’s coastline. In Broward County, nearly 90,000 properties have been moved into a FEMA flood zone. But 80,000 of them were in such a zone prior to ten years ago, when FEMA moved them out – only to add them back in this year. Many will now have to purchase flood insurance.
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| 30 Aug 2024 | Episode 52: Episode 52 – Agent Roundtable | 00:33:33 | |
What’s going on with property insurance in Florida? Specifically rates, coverage, condominiums, automobile insurance, telematics, flood insurance, and the reinsurance costs that carriers pass along to consumers.
Overview of the Florida Insurance Market
Host Miller emphasized the uncertainty surrounding reinsurance costs, especially with the ongoing hurricane season, and the potential for higher rates if a significant hurricane occurs.
Rate Decreases and Stabilization
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