Florida bill aimed at bad faith insurance denials

New legislation is now heading to the office of our Florida Governor. If passed, it would prohibit insurance companies from using credit information to deny homeowner claims.

Senate Bill 708 was passed in part because consumers had complained that making claims had become a confusing process. This new legislation would apply to insurance policies that have been in effect for more than 90 days and is said to be designed to strengthen existing standards. This bill had cleared the House on a 115-0 vote and if signed by the governor would take effect on July 1.

This is a bill providing homeowners a so-called bill of rights. It follows up upon scrutiny of claims-denying practices of Florida’s top private insurer, Universal Property & Casualty Co.

Universal Property purportedly would cancel policies rather than pay claims based upon what some policyholders felt were irrelevant details contained in applications – the applications sometimes filled out years earlier. Ironically its profits were said to have risen even as customer complaints increased.

That legislators felt a need to pass such legislation demonstrates just how important it is for policyholders to have reliable coverage. Most people make homeowner insurance claims after some sort of catastrophe has taken place concerning the home. No homeowner will wish to discover that they have no insurance to cover damages just at the time that they need it the most.

While we welcome such legislation it’s yet to be seen whether this will curb bad faith practices of insurance companies in denying claims. Policyholders will still wish to speak to seasoned attorneys in the insurance area in the event that they feel a claim has been wrongfully denied.

Source: The Palm Beach Post, “Florida lawmakers pass bill aimed at insurance practices The Post probed,” Charles Elmore, April 30, 2014

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