Assessing Fla. Insureds' Hurricane Losses During A Pandemic

By Gina Lozier
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Law360 (August 18, 2020, 6:01 PM EDT) --
Gina Lozier
As Isaias taught us, preparing for a hurricane in 2020 will certainly be a unique experience for those threatened by a storm. The aftermath, however, will be unlike anything the insurance industry has ever faced as both insurers and insureds attempt to handle claims in conjunction with our new COVID-19 realities.

In these uncertain times, Florida's policyholders should educate themselves regarding the adjustment process following the reporting of a hurricane claim and make the necessary inquiries to protect themselves while balancing their obligations under an insurance policy.

Simply put, an insurance policy operates as a contract between an insurance company and its insured, which outlines the parties' obligations in the event of a loss. One of the insurance company's basic obligations under the contract is to adjust the claimed loss.

In Florida, the adjustment of a loss by an insurance company is conducted by independent adjusters. Independent adjusters are hired by insurers to ascertain and determine the amount of a claim, loss or damage payable under an insurance contract.[1]

To serve in this capacity, an adjuster must be licensed as an all-lines adjuster but does not necessarily need to be a Florida resident. Florida allows nonresident all-lines adjusters to obtain licenses in the state satisfying certain criteria outlined in Florida Statutes Section 626.8734.

In the event of a catastrophe or emergency, however, Florida allows insurance companies to use both resident and nonresident emergency adjusters, who are not licensed adjusters but meet certain qualifications, to adjust losses on their behalf.[2]

Historically, Florida has not had enough resident licensed independent adjusters to handle the sheer volume of claims stemming from a catastrophic event such as Hurricane Irma in 2017 or Hurricane Michael in 2018. Accordingly, insurance companies routinely pull resources from out of state to assemble a team of nonresident and/or emergency adjusters to assess losses.

Therefore, in the event an insured sustains damage from a catastrophic event, there is a significant likelihood the adjuster assigned to a loss and who inspects the property has traveled from another state.

Given the impact of COVID-19 on our health, mobility and lifestyle, there is a heightened awareness of who we allow into our businesses. It is encouraged that adjusters maintain proper social distancing and take every effort to make the insured comfortable during the claim adjustment process by wearing personal protective equipment.

Although there is no established protocol requiring the insurance company or independent adjuster to disclose recent travel, quarantine, symptoms, etc., any insured who feels this information is critical to their well-being and that of their employees should certainly inquire prior to allowing an individual to inspect the property.

In the event an insured is unwilling to allow anyone on their business property considering COVID-19 concerns, it is important to recognize the risks involved with refusing to allow the insurance company to inspect. Just as the insurance company has a basic obligation to adjust the loss, an insured has a reciprocal obligation to allow access to the property and show the damage. It is well established that the failure to do so could result in a denial of insurance benefits.

As these times are uncertain it is unknown how a refusal to allow an inspection of the property during a pandemic will ultimately impact a claim and an insured's obligations under the policy. When evaluating an insurance company's rights to an investigation a claim, the insurer's rights tend to be measured by reasonableness, balancing the insurer's legitimate interest in ascertaining the validity and extent of the claim against the insured's rights to both privacy and prompt payment of sums due under the terms of the contract.[3]

Much like the discovery process that takes place during litigation, the insurance companies are not entitled to a "mere fishing expedition or general inquisitorial examination of [their opponent and his] papers with a view to ascertaining whether something of value may or may not show up."[4]

Likely the impact on the claim and availability of recoverable insurance benefits will depend on the business owner's circumstances and the reasonableness of the restricted access to the property. As an example, it may be reasonable to limit an interior inspection in a property occupied by an immunocompromised individual as opposed to refusing to allow the insurance company to inspect the roof and exterior of a building.

It is prudent to discuss these concerns with the insurance company and the assigned adjuster early in the claim process. Take notes of who you speak with, obtain their full contact information and memorialize the conversation in writing. Insureds should ask the insurance company to work with them to make them feel comfortable that they are not risking their health or that of their employees for the sake of an insurance claim.

If they refuse to do so, there are resources available through the Florida Department of Financial Services' Insurance Consumer Advocate, which is committed to assisting Florida's insureds and bringing attention to questionable insurance practices.[5]

Additionally, following a catastrophic event, many insureds may retain a public adjuster's services to assist in the submission of a claim and act as a representative for the insured in the claim process.

Tim Cornett, president of the Florida Association of Public Insurance Adjusters, has encouraged Florida's public adjusters to follow the appropriate Centers for Disease Control and Prevention and Occupational Safety and Health Administration guidelines regulating the use of personal protective equipment when inspecting an insured's property. Any third party's involvement may increase the risks associated with COVID-19 and if concerned, an insured should inquire into the public adjuster's safety protocols.

Likewise, if an insured employee has been exposed to COVID-19, is awaiting a test result or is otherwise experiencing symptoms, it is prudent to postpone any scheduled inspection to allow for the appropriate passage of time. Additionally, insurance companies and adjusters may have specific protocols for insureds to follow during inspections. Ask for these in advance to avoid any delays in the adjustment of your claim.

Communication is a central part of the claim process now more than ever. By keeping an open dialogue with your insurance company and the adjusters, you can work to achieve peace of mind that you are properly protecting yourself and your business from the risks associated with COVID-19 while performing your obligations under the insurance policy.

Part of that process is educating yourself regarding all components of the claim adjustment not just the parties' minimal obligations to review and show the damaged property. To do so, read your insurance policy. When you think you understand it, read it again.



Gina Clausen Lozier is a partner at Berger Singerman LLP.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice. 


[1] Fla. Stat. Section 626.855.

[2]  Fla. Stat. Section 626.874.

[3] Fla. Gaming Corp. v. Affiliated FM Ins. Co. , 502 F. Supp. 2d 1257, 1258 (S.D. Fla. 2007).

[4] Scottsdale Ins. Co. v. Camara De Comercio Latino-Americana De Los Estados Unidos, Inc. 813 So. 2d 250, 252 (Fla. 3d DCA 2002) (citing McCarty v. Estate of Schultz, 372 So. 2d 210, 212 (Fla. 3d DCA 1979)).

[5] Information regarding Florida's Insurance Consumer Advocate and her mission statement can be found at https://www.myfloridacfo.com/division/ica/.

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