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Consumer advocate: New trick from insurance companies 'doesn't treat consumers fairly'

Thankfully for Floridians, Hurricane Sandy skipped the Sunshine State. But that hasn't stopped insurance companies from giving Florida homeowners the run-around, according to Florida’s insurance consumer advocate.

Robin Westcott penned a letter to Insurance Commissioner Kevin McCarty highlighting a new anti-consumer trend has emerged among the state’s property insurers.

After a homeowner submits a claim, the insurance company digs into the homeowner’s financial past to find evidence of a bankruptcy, lien, or foreclosure. If the homeowner has such a blemish on their credit history, the insurance company finds that the customer was never eligible for coverage, and then drops them, without covering their claim.

“This activity threatens not only homeowners’ financial stability but also the state’s economic recovery,” wrote Westcott, calling the practice “potentially unlawful” and “abusive.”

According to Westcott, several homeowners are being dropped from coverage after they file a claim, despite paying premiums to their insurers for years.

The insurance companies wait until the homeowner files a claim before dropping them due to ineligibility.

Westcott letter points out that Universal Property and Casualty Insurance Company is one of the insurers involved in the practice.

“This is a real-life Halloween trick that does not treat consumers fairly. We must give consumers relief from this game of ‘gottcha’,” Westcott wrote.

She has asked McCarty to investigate.

Read her letter here



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Post-claim underwriting tricks for loss claim reduction and/or denial of payment seems to be alive and well in Texas, also.

We are Insurance General Contractors. We repair/restore insured properties. We see lots o' things from the trenches...

2011 - 2012 Examples from insured loss clients -

1. 81 year old finds his RCV policy of 24 years was (unknowingly) changed to an ACV policy when his policy was exchanged between captive agents a year before. It was "post-underwriting discovered" upon his making a Farmers Insurance wind / hail claim in Mesquite Texas 2011. Sound reasoning helped SF to reinstate the RCV coverage.

2. Family man transfers by telephone existing State Farm coverage of 14 years (that includes critical foundation coverage) to new policy on a new residence. Makes a claim 4 years later, only to find out foundation coverage was dropped, without formal notice. State Farm post-loss claim / post-underwriting logic claims that he should have known by declaration page what coverage was missing. He claimed he trusted 14 years of established coverage was transferred to the new policy. Legal counsel was retained Oct. 2012. Loss claim was made in 2011.

3. Claim is made by client for hail / wind / rain damage to warehouse in Seagoville Texas. Insurer estimates that property coverage is undervalued. Post-underwriting pro-rated claim value is approximately 50% of actual loss value. Loss claim was made in 2011. For years he thought he was adequately covered. He tired and did not challenge the agent for coverage error, or the carrier for explanation.

Roger Poe G.C. (214) 900-3722
Twitter - https://twitter.com/Sandy_Claims
Recommended for NFIP claimants Review - www.FEMAINFO.us


Typo - It was "post-underwriting discovered" upon his making a State Farm Insurance wind / hail claim in Mesquite Texas 2011. Sound reasoning helped SF
to reinstate the RCV coverage.

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