Articles Posted in Insurance Law

Whenever 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.)
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Sadly, 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.

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One 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.

The 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.”
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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.
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Most Florida insurance policies require the insured to give notice of a loss to the insurer within a prescribed period of time, typically 30-60 days. The reason for the requirement is to allow the insurer to investigate the claim while the facts are fresh. While late reporting is presumed to prejudice the insurer, the presumption may be rebutted by showing that the insurer has not been prejudiced by the late notice. See Bankers Ins. Co. v. Macias, 475 So.2d 1216 (Fla. 1985) (failure to cooperate is a condition subsequent and it is proper to place the burden of showing prejudice on the insurer) Kings Bay Condominium Association, Inc. v. Citizens Property Insurance Company, 4th District. Case No.4D11-4819. December 12, 2012 (the trier of fact was allowed to consider if the insurance company was prejudiced by a 29 month delay in filing the notice of claim); Bontempo v. State Farm Mut. Auto. Ins. Co., 604 So.2d 28 (Fla. 4th DCA 1992); Ramos v. Northwestern Mut. Ins. Co., 336 So.2d 71 (Fla. 1976) (an insurer may not avoid liability under its policy by merely showing the violation of a clause requiring “assistance and cooperation” of the insured without a further showing of how this violation prejudiced the insurer); American Fire & Cas. Co. v. Collura, 163 So.2d 784 (Fla. 2d DCA), cert. denied, 171 So.2d 389 (Fla. 1964); American Fire & Cas. Co. v. Vliet, 148 Fla. 568, 4 So.2d 862 (Fla. 1941); United States Fidelity & Guar. v. Snite, 106 Fla. 702, 143 So. 615 (Fla. 1932).

A presumption which can be overcome by competent evidence is known as a rebuttable presumption.
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