Recently in Insurance Law Category

June 29, 2014

Florida Supreme Court Addresses Failure to Attend Uninsured/Underinsured (UM) CME

scales of justice.jpgI have blogged here ad nauseam about the continual conflict between insurance companies and their insureds over claims. While carriers insist upon receiving premium payments timely, their all too common approach to the claims process is delay and deny.

Carriers have at their disposal a bag of tools designed to effectuate this delay/deny business model. Examination Under Oath (EUO) (an oral examination conducted under oath by an insurance company of an insured making a claim under a policy), Independent Medical Examination (IME), appraisal, policy application misrepresentation, refusal to cooperate are just some of the tools at their disposal. Some are statutorily prescribed, others are a matter of contract.

An insurance policy is a contract. While statutes control various rights and obligations between carriers and insureds, the terms of the insurance policy determine many others.

Courts frequently become embroiled in conflicts involving the application of contested policy provisions. One such conflict of significance was fought out in State Farm v. Curran, (Fla. 2014). The Florida Supreme Court framed the conflict as follows:

WHEN AN INSURED BREACHES A COMPULSORY MEDICAL EXAMINATION PROVISION IN AN UNINSURED MOTORIST CONTRACT, DOES THE INSURED FORFEIT BENEFITS UNDER THE CONTRACT WITHOUT REGARD TO PREJUDICE? IF PREJUDICE MUST BE CONSIDERED, WHO BEARS THE BURDEN OF PLEADING AND PROVING THAT ISSUE?
Curran, State Farm's insured, sustained catastrophic injuries in a vehicle crash. Because the at-fault party's insurance coverage was inadequate, Curran demanded from State Farm the $100,000 in UM available under his own policy. He gave State Farm thirty days to tender the money, estimating his damages to be $3.5 million because she suffered from reflex sympathetic dystrophy syndrome (RSD) type 1. On the 29th day, State Farm demanded that Curran undergo a Compulsory Medical Exam (CME) pursuant to the terms of the policy. Curran refused and proceeded to sue State Farm. A jury trial culminated in an award of $4,650,589 in damages to Curran.

Continue reading "Florida Supreme Court Addresses Failure to Attend Uninsured/Underinsured (UM) CME" »

June 12, 2014

Injured Motorcyclist Benefiting From Florida Uninsured/Underinsured Motorist (UM) Coverage

motorbike-1055084-m.jpgMotor vehicle bodily injury (BI) insurance compensates for economic and non-economic damages caused by the insured at-fault driver and vehicle owner. The amount available under any particular policy is capped by the coverage limits chosen by the insured.

BI coverage is not mandatory in Florida. The insured must pay a premium for the coverage on top of what is required to obtain the mandatory coverage of property damage liability and personal injury protection (PIP). For this reason, many Florida drivers do not maintain BI coverage.

Uninsured/Underinsured Motorist coverage is designed to fill the void where BI is either not available or the BI limit is less than the total damages sustained. Put another way, UM provides coverage for damages which you are legally entitled to recover from the owner or operator of an uninsured or underinsured motor vehicle who causes an accident which results in your bodily injury. Like BI, UM insurance is not mandatory.

Is UM available to a motorcyclist who sustains personal injuries in a crash caused by an uninsured motorist? Maybe.

Continue reading "Injured Motorcyclist Benefiting From Florida Uninsured/Underinsured Motorist (UM) Coverage " »

May 13, 2014

Florida Bad Faith Insurance Law: Citizens Property Insurance Corp. Responsible to Real Citizens

law books.jpgFlorida Statute 624.155 provides a civil remedy for persons damaged by an insurer's failure to settle claims in good faith. The remedy can include an award of damages in excess of the insured's policy limits, attorney's fees and litigation costs. This threat is the spur that motivates insurance companies to handle claims properly. (Side note: Insurance companies hate that their insureds have this stick at hand to keep them in line. Each legislative session for the past few years, Republican legislators friendly with the insurance industry have sponsored legislation to eliminate or water down the law. Thankfully, each effort has failed. Unfortunately, they will continue trying.)

The law was recently put to the test in Perdido Sun Condominium Association, Inc. v. Citizens Property Insurance Corporation, 129 So.2d 1210 (Fla. 1st DCA 2014).

Citizens is an insurer created by the legislature for the public purpose of providing "affordable property insurance to applicants who are in good faith entitled to procure insurance through the voluntary market but are unable to do so." § 627.351(6)(a)1., Fla. Stat. As a creature of statute, Citizens' operations, procedures, duties, and legal status are governed by section 627.351(6), Florida Statutes.

After its insured property was damaged by a hurricane in 2004, Perdido Sun made a claim on its insurance policy with Citizens. Perdido Sun was not satisfied with the amount of Citizens' eventual payment on the claim and filed a breach of contract action to recover additional sums under the insurance contract. Perdido Sun prevailed on the breach of contract claim.

Based on the result in the breach of contract case, Perdido Sun filed a second lawsuit against Citizens for the civil remedy provided in section 624.155(1)(b)1., Florida Statutes, a statutory "bad faith" claim. Citizens asserted that it was immune from suit under section 627.351(6)(s)1., Florida Statutes, and that a statutory bad-faith action under section 624.155 was not among the specifically listed exceptions to this immunity. § 627.351(6)(s)1., a.-e., Fla. Stat.

Continue reading "Florida Bad Faith Insurance Law: Citizens Property Insurance Corp. Responsible to Real Citizens" »

April 2, 2014

Purchase a Defense Attorney With Florida Bodily Injury (BI) Vehicle Insurance

handshake.jpgBodily Injury (BI) insurance sold in Florida covers the insured for damages caused by his or her negligence up to the policy limits. The minimum coverage limit is $10,000, but can be in the millions. Inexplicably, BI insurance is not mandatory in Florida. Only PIP and Property Damage Liability are mandatory.

While the difference between $10,000 and, say, $1,000,000 in BI coverage is significant, the insurance company has a duty to defend the insured equally regardless of the limit. This is another benefit of maintaining bodily injury insurance.

Continue reading "Purchase a Defense Attorney With Florida Bodily Injury (BI) Vehicle Insurance " »

April 1, 2014

Florida Vehicle Accident Law: Parental & Guardian Vicarious Liability for Minor

application.jpgThis link contains an overview of permit and license standards in Florida for drivers between the ages of 15 and 17.

Florida Statute §322.09(1)(a) requires an authorized adult (e.g., parent or guardian) to sign and verify the minor's application. In turn, §322.09(2) makes the adult jointly and severally liable for any damages caused by the negligence or willful misconduct of the minor under the age of 18 years when driving a motor vehicle, any motor vehicle, upon the roadway.

Continue reading "Florida Vehicle Accident Law: Parental & Guardian Vicarious Liability for Minor" »

March 3, 2014

Florida UM (Uninsured Motorist) Coverage Means What it Says

crushed vehicle.jpgMany people, including some personal injury lawyers, believe that UM insurance always provides coverage when the insured is not at fault and there is no other insurance to cover the losses. This is wrong.

When the driver of an uninsured or underinsured (UIM) vehicle causes an accident, UM/UIM should kick in to compensate for losses such as wage loss, medical expenses, and pain and suffering. This is prescribed by Section 627.727(1) Florida Statutes, which provides, in pertinent part, as follows:

No motor vehicle liability insurance policy which provides bodily injury liability coverage shall be delivered or issued for delivery in this state with respect to any specifically insured or identified motor vehicle registered or principally garaged in this state unless uninsured motor vehicle coverage is provided therein or supplemental thereto for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness, or disease, including death, resulting therefrom. (Italics provided)
Crashes without the wrongdoing of another driver do occur. Our office was recently retained by a woman who struck a tree after swerving her car to avoid hitting a dog that had suddenly entered the roadway. She sustained severe whiplash and a blow to the head which caused her to lose consciousness. She was rushed to the hospital by ambulance and admitted for testing and overnight observation. Her car was totaled. The accident was not her fault.

Continue reading "Florida UM (Uninsured Motorist) Coverage Means What it Says" »

February 23, 2014

The Pre-Suit Settlement Demand Package in Florida Personal Injury Cases

truck2.jpgInsurance companies operating in Florida are under a legal duty to adjust claims in good faith to prevent their insureds from being subject to excess judgments (a court judgment in excess of a policy's liability limit). A carrier that fails to act in good faith may be forced to satisfy an excess judgment as punishment for breaching the duty.

Most individuals do not maintain adequate policy limits to cover the full consequences of a serious accident. For example, the minimum and least expensive limit for motor vehicle bodily injury (BI) insurance is $10,000 per person/$20,000 per accident. For those individuals who even carry BI coverage at all -- it is not mandatory in Florida -- this is the limit level most frequently chosen. BI insurance is expected to cover past and future medical expenses, past and future lost income, property damage, and non-economic damages such as pain and suffering. Nor do most individuals have enough private money to cover damages above policy limits. In cases involving serious injuries, $10,000 does not go far.

Liability insurance companies have an affirmative duty to gather damages information. They cannot sit idle when information is at their disposal. Evidence such as vehicle property damage and the police crash report, often indicators of the seriousness of a crash and fault, are usually readily available. This information, alone, can be enough for the carrier to make the decision to tender policy limits. For example, in a case involving a $10,000 policy, evidence of a high speed crash resulting in significant property damage should be enough for the carrier to tender.

Continue reading "The Pre-Suit Settlement Demand Package in Florida Personal Injury Cases" »

February 17, 2014

List of Coverages Available Under A Florida Motor Vehicle Insurance Policy

car-insurance-policy.jpgEvery owner or registrant of an operable personal use motor vehicle is required to maintain only two types of insurance coverage in Florida: Personal Injury Protection and Property Damage - Liability. See Florida Statute 627.733 Required security. Nevertheless, other types of coverage are available under every policy written in Florida. While there's an additional premium cost associated with each different coverage, the benefits are valuable. For example, a person who has minimum coverage (PIP and Property Damage Liability) only, can still have his or her driving privileges suspended where their fault has caused someone else to sustain personal injuries. We are strong advocates for Bodily Injury and Unininsured/Underinsured Motorist insurance at substantial limits.

Personal Injury Protection (PIP).
This coverage is outlined in Florida Statute 627.736. For accidents that happen in Florida, PIP covers the named insured, relatives residing in the same household, persons operating the insured motor vehicle, passengers in such motor vehicle, and other persons struck by such motor vehicle and suffering bodily injury while not an occupant of a self-propelled vehicle. For accidents that happen outside Florida but inside the U.S. or Canada, PIP covers you and relatives who live in your home. In this case, you must be driving your own vehicle. Persons other than you or your relatives are not covered. PIP pays:

  • 80 percent of reasonable medical expenses related to the accident

  • 60 percent of lost wages as a result of the accident

  • $5,000 for death benefits
The typical policy limit is $10,000 per person, subject to a deductible of up to $2,000.

Property Damage Liability (F.S. 324.022). This insurance pays for damage you, or members of your family, cause to another person's property while driving. The term "property" includes, for example, a fence, telephone pole or building, as well as another car. Coverage applies even if you drive someone else's car. Depending on the terms and conditions of your policy, it may also include anyone else who uses your car with your permission. The minimum policy limit is $10,000.

Bodily Injury Liability (BI) (324.021). is generally not required in Florida. However, if you have been convicted of a DUI, BL is required for a period of three years after your license has been reinstated. If you were convicted on or before October 1, 2007, you must get a minimum of $10,000 worth of coverage per person and $20,000 worth of coverage per incident. If you were convicted after October 1, 2007, you must have $100,000 worth of coverage per person and $300,000 worth of coverage per accident.

BI pays for serious and permanent injury or death to others when your car is involved in an accident, and the driver of your car is found to be at fault to some extent. This policy pays for injuries caused by you and relatives who live with you, even if they are driving someone else's car. It also covers people who drive your car with your permission. BI coverage applies only after PIP benefits are exhausted. With this type of policy, the insurance company will also pay for your legal defense if you are sued. The minimum coverage limit is $10,000 per person/$20,000 per accident. The maximum can be in the millions. Umbrella coverage is an option to increase the coverage limit.

Continue reading "List of Coverages Available Under A Florida Motor Vehicle Insurance Policy" »

January 22, 2014

Surprising Application of Uninsured/Underinsured Motorist (UM) Crash Coverage for Florida Insureds

puzzle2.jpgUnderstanding Florida motor vehicle insurance law can be puzzling. The various coverage options include Personal Injury Protection (PIP), Bodily Injury (BI), Comprehensive/Collision, Property Damage Liability, and Uninsured/Underinsured Motorist (UM/UIM). Presently, only PIP and Property Damage Liability are mandatory in Florida. Neither of these coverages compensates the victim of an accident for non-economic damages like pain and suffering arising from a bad injury. Only two of the coverages do: BI and UM.

UM is typically thought of as coverage purchased for the benefit of the named insured or insureds and resident relatives (see definition at Florida Statute 627.732(6)). It takes the place of BI where BI is not available (UM) or not adequate (UIM) because the loss exceeds available coverage limits. UM/UIM are not thought of as providing coverage to those other than named insureds and resident relatives. This thinking is incorrect.

Continue reading "Surprising Application of Uninsured/Underinsured Motorist (UM) Crash Coverage for Florida Insureds" »

December 16, 2013

Factors in Florida Insurance Contract Rescission Cases

application.jpgWhenever an insured makes a claim, one of the first things every insurance company does is try to figure out ways to deny the claim. Common methods are to assert that the loss is not covered under the policy or that the insured has failed to cooperate with the carrier. Another popular practice is to rescind the insurance contract based on charges of misrepresentation, omission, concealment of fact or incorrect statement in an application for insurance. This method is authorized by Section 627.409(1) of the Florida Statutes, and can even be based on non-intentional misstatements.

While the law does not favor the forfeiture of rights under an insurance policy, see Johnson v. Life Insurance Company of Georgia, 52 So.2d 813, 815 (Fla. 1951), beating back 627.409 charges can be difficult. To prevail under 627.409, the carrier need only show any of the following:

(a) The misrepresentation, omission, concealment, or statement is fraudulent or is material either to the acceptance of the risk or to the hazard assumed by the insurer.

(b) If the true facts had been known to the insurer pursuant to a policy requirement or other requirement, the insurer in good faith would not have issued the policy or contract, would not have issued it at the same premium rate, would not have issued a policy or contract in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss.

These are not especially difficult standards for carriers to meet. Moreover, while carriers sometimes prey on the vulnerable by rescinding based on flimsy or non-existent evidence, not expecting the insured to fight back, more frequently their evidence contains some modicum of substance. Notwithstanding these hurdles, insureds do have a fighting chance under Florida law.

Waiver. "[W]hen an insurer has knowledge of the existence of facts justifying a forfeiture of the policy, any unequivocal act which recognizes the continued existence of the policy or which is wholly inconsistent with a forfeiture, will constitute a waiver thereof." Johnson at 815. The elements of waiver are: (1) the existence at the time of the waiver of a right, privilege, advantage, or benefit which may be waived; (2) the actual or constructive knowledge of the right; and (3) the intention to relinquish the right. Capital Bank v. Needle, 596 So.2d 1134 (Fla. 4th DCA 1992); Taylor v. Kenco Chemical & Mfg. Corp., 465 So.2d 581 (Fla. 1st DCA 1985).

Johnson involved a life insurance policy. Following the insured's death, the carrier sought to rescind the policy based on misrepresentation. It was clear that the insurance application contained material misrepresentations concerning the insured's health and medical treatment before issuance of the policy. It was also uncontroverted that the insurance agent became aware of the misrepresentations only two months after the date of the issuance of the policy, yet the carrier continued to accept and collect premiums with constructive notice of these facts. (The carrier did not challenge that the knowledge acquired by the agent was imputable to it, the principal, even though the agent might not have communicated the information to the company. On this issue, the Johnson court wrote: "[U]nder the circumstances here present the knowledge of the agent is imputable to his principal whether disclosed by him to it or not, and the company will be bound by such knowledge. See National Life & Accident Ins. Co., Inc., v. Travis et al., Tex. Civ.App., 128 S.W.2d 867; Poole v. Travelers Ins. Co. et al., 130 Fla. 806, 179 So. 138.")

Failing to take acts necessary to effectuate rescission. In Leonardo v. State Farm Fire & Casualty Company, 675 So.2d 176 (Fla. 4th DCA 1996), a case involving a theft policy, the court of appeal reversed summary judgment for the carrier in a rescission case because, in part, the carrier did not remit, or even make a tender of, any premiums paid by the insured for the allegedly void policy. (The appeal court also reversed on waiver grounds, because State Farm continued to bill the insured and accept payment of premiums for a considerable period of time after denying his claim, and after notifying him of its intent to void the policy.)

Continue reading "Factors in Florida Insurance Contract Rescission Cases" »

October 3, 2013

How to Avoid the Insurance Application Misrepresentation Trap

application.jpgSadly, the first thought that crosses the mind of many insurance adjusters when a claim is made is how it can be denied. At the top of the list of the ways to deny claims is rescinding the insurance contract.

Black's Law Dictionary defines rescission as an act "where a contract is canceled, annulled, or abrogated." An insurance policy can be rescinded before or after a claim is made. Insurance companies prefer to wait until after a claim is made. The longer they wait, the more money they receive in premium payments. If no claim is made, the carrier keeps all the premiums and pays out nothing. If a claim is made, the carrier rescinds and refunds only those insurance premiums paid to keep the policy in effect after the rescission. Heads we win, tails you lose.

Thanks to favorable legislation and case law, it is surprisingly easy for insurance companies doing business in Florida to rescind policies. Among the more popular excuses is misrepresentation. Florida Statute 627.409 (2010) allows rescission on this basis if the carrier can show the following:

a) The misrepresentation, omission, concealment, or statement is fraudulent or is material either to the acceptance of the risk or to the hazard assumed by the insurer.


(b) If the true facts had been known to the insurer pursuant to a policy requirement or other requirement, the insurer in good faith would not have issued the policy or contract, would not have issued it at the same premium rate, would not have issued a policy or contract in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss.

Continue reading "How to Avoid the Insurance Application Misrepresentation Trap " »

September 1, 2013

Personal Injury Law: When an Insured is Not Insured Under Florida Law for Underinsured Motorist Credit

law books.jpgOne of the primary objectives of every Plaintiff's personal injury lawyer is to fairly and honestly maximize his or her client's recovery. For Defendants and their insurance companies, the opposite outcome is their primary goal.

For a Plaintiff's lawyer to be successful, he must know the personal injury insurance laws.

In the area of personal injury law involving motor vehicle accidents, uninsured/underinsured motorist insurance frequently comes into play. See F.S. 627.727. While there are many different aspects to UM/UIM coverage, this blog will focus on whether the UM/UIM carrier is entitled to a credit for the money its insured receives for personal injury damages from a self-insured.

In State Farm Mut. Auto. Ins. Co. v. Siergief, So. 3d , 38 FLW D1329a (Fla. 2d DCA 6-14-2013), State Farm's insured, Siergief, sustained injuries in a crash with a vehicle owned by Lee County Sheriff's Department, a self-insured governmental agency. Siergief brought suit against the Sheriff's Department and State Farm, for its UIM benefits. Before trial, Mr. Siergiej and the tortfeasor (Lee County Sheriff's Department), settled for $50,000. The jury verdict against State Farm totaled $210,000. State Farm argued that it was entitled to a credit of $100,000, pursuant to 627.727(6)(c), this being the Sheriff Department's self-insured limit, even though the settlement was for $50,000. State Farm proposed that, in combination with other offsets (e.g., PIP and workers' compensation benefits), the final judgment should be $72,321.60. The trial court disagreed, entering final judgment for $100,000, the UIM limit. (Any amount in excess of a UM/UIM policy limit would have to be pursued through a cause of action for Bad Faith.) State Farm appealed.

Continue reading "Personal Injury Law: When an Insured is Not Insured Under Florida Law for Underinsured Motorist Credit" »

August 23, 2013

In Florida, Scales of Justice Favor Insurance Companies

scales.jpgFor-profit insurance companies enjoy privileges in Florida not afforded individuals and other commercial activities. It is little wonder they profit so handsomely. In turn, their wealth allows them to exercise ever greater control over politicians, the courts, and the psyche of the people. It's an ugly picture.

Negligence
In the context of liability claims, an insurance company's primary responsibility is to protect its insured from an excess judgment. An excess judgment is a judgment entered by the court in an amount greater than the insured's policy coverage limits. The carrier can achieve this outcome in most cases simply by being conscientious and reasonable. Falling below this standard is generally considered negligence.

As a lawyer, I can be held accountable for negligence causing harm to a client. The same holds true for doctors, bankers, manufacturers, drivers and every other entity ... except for insurance companies.

In DeLaune v. Liberty Mutual Ins. Co., 314 So.2d 601 (Fla. 4th DCA 1975), Liberty failed to settle a car crash claim for its insured's policy limit of $10,000. A verdict was rendered against the insured for $360,000. The court disallowed the Plaintiff's attempt to recover the difference in a separate lawsuit based on allegations of harm resulting from negligence. The court said that an insurance company cannot, unlike every other entity in Florida, be held liable for harming an insured based solely on negligence. (The insured assigned the Plaintiff his right to sue Liberty in exchange for the Plaintiff agreeing not to enforce the judgment against him. This is standard operating procedure in situations where insurance carriers expose their insureds to excess judgments.) See also Thomas v. Lumbermens Mutual, 424 So. 2d 36, 38 (Fla. 3rd DCA 1982).

Not good.

Silent (Dominant) Partner
When its insured is sued, the insurance company calls the shots on every aspect of defending the case. The carrier chooses the lawyers, hires the experts (or not), requires the insured's cooperation, and decides on settlement (or not). Florida juries are not allowed to know any of this. See Sec. 627.4136, Fla. Stat.; Beta Eta House Corp. v. Gregory, 237 So. 2d 163, 165 (Fla. 1970) (The Florida Supreme Court said this information is not relevant to issues of fault and damages.)

Not good.

Continue reading "In Florida, Scales of Justice Favor Insurance Companies" »

May 5, 2013

"Full Coverage" Vehicle Insurance Does Not Mean What Most Floridians Think

crushed vehicle.jpgThe subject of this blog is a recurring theme in our law firm and in every law firm in the state involved in motor vehicle accident litigation.

Insurance coverage is a key issue in every Florida motor vehicle accident case. It is relevant to medical expenses, lost wages, vehicle repairs or replacement, and compensation for non-economic losses like pain and suffering.

Florida law controls some aspects of every motor vehicle insurance policy issued in Florida. At the moment, every new policy must include Personal Injury Protection ("PIP") and Property Damage --- Liability coverage. PIP provides a limited amount of coverage for the insured's own medical expenses and lost wages --- see Florida Statute 627.736. Property Damage --- Liability provides a limited amount of coverage for damage to the property of others caused by the at-fault insured.

Nothing more in the way of insurance coverage is required for a vehicle registered in Florida to be operated lawfully in the state. The minimum mandatory policy is the least expensive policy available, explaining why so many motorists purchase it. Because it complies with Florida law, its owners often think they have "Full Coverage."

Continue reading ""Full Coverage" Vehicle Insurance Does Not Mean What Most Floridians Think" »

February 27, 2013

Notice of Claim to Insurance Agent Equals Notice To Insurance Company/Carrier Under Florida Law

Every insurance policy issued in Florida contains the requirement, in some form or another, that the insurance company be put on notice of the claim and certain other claim events. Failure to provide notice in accordance with the policy's terms may allow the insurance carrier to deny the claim.

Florida law is quite clear that notice to one's agent or apparent agent is notice to the principal. That is true in the context of insurance. See Johnson v. Life Insurance Company of Ga., 52 So.2d 813, 815 (Fla. 1951). Insurance brokers, on the other hand, are not agents. Therefore, notice to brokers is typically not imputed to the principal.

In Gay v. Association Cas. Ins. Co., So.3d , 38 FLWD74 (Fla. 5th DCA 12-28-2012) (on rehearing) the insured maintained an insurance policy with Association Casualty Insurance Company for uninsured and inderinsured motorist coverage which was purchased through Burkey Risk Services, Inc. The insurance policy contained notice instructions. Following a serious motor vehicle accident, Gay informed Burkey of the accident and claims to have received permission from Burkey to cash a check issued by GEICO, the tortfeasor's carrier, in partial payment of his damages. When Gay sought underinsured coverage through his policy, Association denied the claim, citing a breach of the policy's notice provisions.

Continue reading "Notice of Claim to Insurance Agent Equals Notice To Insurance Company/Carrier Under Florida Law" »