Florida consumer advocate to examine homeowner claims

Insurance reform in Florida on front burner

TALLAHASSEE, Fla. - Florida lawmakers punted on insurance reform this past year, rejecting most changes to current law. But now, the state's consumer advocate is beginning a push for legislation to protect policyholders.

The state's second largest insurer is challenging a $1.6 million fine. Universal Property and Casualty is accused of finding minor errors in policy applications and then using the errors to cancel policies after homeowner's file claims.

The practice will be the one of the subjects of a two-day hearing next week by the state's consumer advocate.

"Yes, they signed it, but did they really and truly intend to deceive anyone about the risk that the company was taking on, and the answer to that is no," said Florida's insurance consumer advocate Robin Wescott. "They weren't really trying to deceive anyone, it was a mistake."

The consumer advocate also wants to know more about third parties who are assigned benefits.

One scam currently being pulled on homeowners happens within days of a claim. Contractors offer to do all the negotiations with the insurance company, secure the rights and then inflate their claim.

State lawmakers failed to stop the practice this past spring.

"When someone assigns their rights away, that becomes a license to steal," said insurance lobbyist Lisa Miller, "and I think the legislature and others need to look at how that practice is being used inappropriately."

The insurance industry acknowledges that some problems exist, but they say they're born out of an effort to crack down on fraud.

"We want to make sure we pay the legitimate claims but we don't pay for fraudulent reduced claims," said Sam Miller of the Florida Insurance Council.

The hope of the two-day hearing next week is to educate lawmakers and get them to take the problems facing homeowners seriously.

No date has been set yet for universal property and causality to challenge its $1.2 million fine.

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