Some Hurricane Irma Insurance Settlements Have Strings Attached

FORT LAUDERDALE, Fla. | Some Florida homeowners are finding that their insurance companies are employing an interesting strategy to avoid future claims.

Settlement checks sent by at least three companies include language saying that accepting the check releases the companies from further obligations connected to the claim.

Plaintiffs' attorneys say they have major problems with this strategy: It tries to intimidate policyholders into not seeking payment for additional costs that come up during repairs, and is likely unenforceable.

Palmetto Bay-based trial attorney Joe Ligman pointed to a section of Florida insurance law stating an insurer, after paying "actual cash value" for an insured loss minus any applicable deductible, "shall pay any remaining amounts necessary to perform such repairs as work is performed and expenses are incurred."

But that's not what notices from two of Florida's largest insurers say.

On the back side of checks sent to homeowners, Fort Lauderdale-based Universal Property & Casualty includes the statement that an endorsement by the payee "constitutes receipt and release in full settlement for the claim or item mentioned in the draft." Universal P&C is the state's largest property insurer, with 612,227 policies as of Sept. 30, according to state records.

Along with a check sent to at least one of its homeowners, Deerfield Beach-based People's Trust Insurance sent a letter saying that "your endorsement of the indemnity check constitutes a full accord and satisfaction of a disputed loss."

And a third company, Sarasota-based Gulfstream Property and Casualty Insurance Co., enclosed with checks to at least two victims of Hurricane Irma a "release of property damage" that "does hereby … release, acquit and forever discharge" the company and its officials "from any and all claims, actions, causes of actions, demands, rights, damages, costs, loss of service, expenses and compensation whatsoever" stemming from the hurricane.

In contrast, state-run Citizens Property Insurance Corp. acknowledged in December that rising labor and materials costs triggered by Hurricane Irma would likely result in higher repair costs than initially estimated.

"As they go through the claims and repairs process, things will come up that may require us to readdress (and reopen) the claim," Citizens spokesman Michael Peltier said.

Locke Burt, chairman and president of Ormond Beach-based Security First Insurance, said his firm does not send release language with its claims checks "because we agree with the trial lawyer. It wouldn't stand up in court." Plus, he said, "We wouldn't treat people that way."

The Sun Sentinel contacted Universal P&C, People's Trust and Gulfstream and asked each why they assert that acceptance of a settlement check releases them from supplemental claims.

The state law requiring insurers to pay any remaining amounts for additional work does not apply to People's Trust, which operates under a business model known as "managed repair," said Amy Rosen, the company's chief marketing officer.

The company, with 129,626 policies statewide, provides a premium discount in exchange for a customer's agreement to use its affiliated "Rapid Response Team" contractor to make repairs. Rosen said it sends the letter asserting acceptance of its check releases it from future obligations only when a policyholder "wishes to receive a monetary payment in exchange for (the company's) agreement to waive its right to have (the Rapid Response Team) perform the repairs."

"If the insured accepts the monetary payment … then a settlement has been reached," Rosen said. "If the insured does not accept the payment, then (the Rapid Response Team) repairs the property and, if additional covered damage is found, that is also repaired."

Perry Cone, Gulfstream's general counsel, declined to respond to questions about why it directs its policyholders to sign the release.

Travis Miller, spokesman for Universal Property & Casualty, said the statement on the checks "does not preclude claims for replacement costs or supplemental damage," adding it "represents payment for items that have been reported to the insurer, have been reviewed, and are included within the scope of the draft." He said other statements with the check will specify that the release pertains to a portion of coverage the check is for, such as additional living expenses, and "does not affect other payments such as replacement costs or other portions of the same claim (or any other claim.)"

Trial attorney Ligman, representing a policyholder who has declined to endorse a check from Universal, has filed a petition asking a Miami-Dade County Circuit Court judge to determine whether endorsement of the company's check would bar him from making future claims.

"Universal refuses to change their check policy and continues to send the check release endorsement in violation of Florida law in order to trick their insureds to believe that they are releasing all future claims," the petition says.