It’s mid-May – and another hurricane season is about to be breathing down our necks. Maybe you’ve grown immune or indifferent after seasons of weather threats proved wrong. A word of advice: Never let your guard down.
Did recent reminders of the need for storm vigilance get your attention in 2016? Hurricane Hermine and Hurricane Matthew hit Florida last fall. If neither storm affected you, it might be easy to ignore them. The weather is wild and, despite all the scientific tools available, it’s hard to predict where the winds will go and how powerful they will be.
What you don’t know about preparing for bad weather can hurt you. For example, did you know that Hurricane Matthew last October blew up to be a Category 5 hurricane within a 24-hour time frame? If you are surprised, so were weather experts; they said no other storm had intensified that quickly. Read the report about Matthew defying weather forecast models, and then thank our lucky stars that it landed as a Category 1.
What if you prepared for a Category 1 (wind speed up to 95 miles an hour), but a Cat 5 with winds of 165 mph arrived instead? We don’t like to think about it, but thinking on it and acting on it – in advance – is storm-defying behavior. It’s time to review our Hurricane Season Insurance Checklist.
You may also like to up your awareness for the upcoming season by listening in to a couple of hurricane season awareness webinars from the National Hurricane Center. The NHC will be talking about new capabilities to issue advisories and warnings and also has a topic on inland flooding, which is an overlooked, yet deadly, threat.
The Florida Legislature is again looking at ending no-fault auto insurance in Florida. Sound familiar? Tweaking no-fault (also known as personal injury protection – PIP) is a frequent topic for legislative debate.
You may recall a fix to fight no-fault fraud came in 2012. Regulators issued a report in 2015 that said the fix appeared to be working. Regardless, it seems the desire to do something about rising auto insurance rates may be driving the desire to abolish no-fault. Florida is one of 12 states with a no-fault law. Proponents say it allows those injured in a car crash to recover costs for medical treatment under their own insurance policy, without needing to determine who is at fault for the accident. Among the proponents are hospitals, which say about one-third of the people they treat for auto injuries only have no-fault coverage. Critics discount that view, saying no-fault duplicates coverage that most people already have with medical insurance.
The Wall Street Journal frequently appears fascinated by some of the goings on in Florida. The publication has often written about anomalies that seem unique (or some other not-so-favorable adjective) to the Sunshine State. We have “issues” here that just don’t seem to occur in many other places. Living here, in the midst of it all, can cause a loss of perspective. So, without any editorializing in this space, you might find this editorial on the demise of a bill to stop insurance claim abuse interesting reading. Click the link and read it through.
The challenges with assignment of benefits and water damage claims has been documented on this blog several times. Insurers have been calling attention to this problem for at least three years. The reality of allowing the abuse to continue became ever more apparent last week when Citizens Property Insurance announced its first net loss since 2005 — of $27.1 million. Assignment of benefits is the clear cause. The clear solution now that there won’t be a legislative fix? Higher insurance premiums for Citizens’ customers, particularly in South Florida. That’s where assignment of benefits became a “unique” practice, allowing lawyers and contractors to take over a homeowner’s insurance claim and inflate the costs.
Ah, the high costs of being unique.
The cost of insurance fraud is a cost all policyholders wind up paying. Consider that fraud adds about $34 billion each year to the property/casualty insurance sector’s incurred losses in the U.S. That equates to about 10 percent of the cost of insurance. The victims of this fraud are…..everyone.
Florida CFO Jeff Atwater heads the state’s Bureau of Insurance Fraud, which consists of 117 sworn officers plus support staff. He’s been championing fraud awareness and recently published a newsletter with a story about an Orange County man who paid someone to torch his car. This person filed an insurance claim, got paid, got found out – and got jail time. The newsletter said the arson claim cost the insurance company $10,000, and it may cost the perpetrator up to 20 years in jail.
The state has a fraud tip line: 1-800-378-0445. There is also an online form for reporting fraud. We’re in this fight against fraud together.
“Don’t do the crime, if you can’t do the time.” That’s a line from an old TV show from the 70s that anyone who is texting and driving these days probably never viewed. There’s a law against texting and driving, and many will tell you it lacks “teeth” because it is a secondary offense in Florida. That means drivers need to be caught doing something else wrong before they can be ticketed for multi-tasking with their cell phones behind the wheel. The fine for this dangerous behavior is just $30. Does that fit the “crime”?
Some perspective on traffic fines: If you drive with an expired drivers’ license, the fine is $250. I felt very sorry for the student on campus last week, as he was getting a ticket for weaving his scooter around a restricted parking gate. Fine: $170. If you fish without a license, the fine is $100. (With or without a fishing license, the fish do die.)
There are more than a half-million professionals employed within the U.S. property/casualty insurance market. And, if you ask many of them how they got into the industry, most will call it a lucky break. My such stroke of luck occurred decades ago. I was working for a real estate developer, the housing market took a(nother) crash, so I needed to find work. A survey of the marketplace introduced the tremendous opportunities in the insurance field and brought me a wonderful, rewarding career. I highly recommend it!