Sinkhole claim information was collected from 215 insurance companies and the results were reported on November 8, 2010. Chip Merlin posted about the report and the absence of fraudulent sinkhole claims in his post, Florida 2010 Sinkhole Report Findings Published — Where’s the Fraud? A few other interesting points in the report also stand out and raise some interesting discussion topics.
• Represented claimants recover higher sums from HomeWise Preferred.
HomeWise Preferred Insurance Company provided details from a sample of 110 sinkhole claims for the data call. One half of the sample, “non-represented claimants,” had claim payments totaling $8, 415,667.30. The other fifty-five represented claimants had claim payments totaling $10,306,136.86.
The report does not specify how the 110 claim sample was selected or whether the represented claimants were represented by a public adjuster, attorney, or both. Likewise, the report did not reveal whether any of the represented claimants were forced to litigate to achieve a fair result.
• No site inspections were performed in about 8% of the cases reported in the Data Call.
The report reads, “While some of the claims without site inspection were still open, for most, damage was determined by another procedure; others were denied, cancelled or withdrawn.”
What other procedures are being used by insurance companies that do not require a site inspection? How can a sinkhole claim be adjusted or denied without inspecting the site?
• Claim expenses paid by the carriers decreased
The report explains, “The change is partially attributable to the decrease in per claim Inspection Fees, Other Damage Loss, Other Loss Adjustment Expense, and Inspection Costs. Attorney and mediation fees showed a decrease per claim, however many of the insurers did not report the full amount of attorney and mediation fees, as they were included and paid as part of the indemnity payment of disputed claims.”
If this is only a partial explanation, what are the other reasons for the expenses to decrease per claim? Why are the inspection fees dropping in cost?
• What was missing from the report? Public Insurance Adjusters were not linked to the rise in sinkhole claims or even mentioned in the report.
The results of the data call have spurred a lot of discussion among those involved with insurance claims. Charles R. "Dick" Tutwiler discussed the findings of the report in the article, Florida Public Adjuster Reacts to Insurance Commissioner’s Report on Rising Sinkhole Claims. Dick Tutwiler is the president and CEO of Tutwiler and Associates, a highly respected public adjusting firm with its executive office in Tampa, Florida. “While the commissioner’s report reflected a rise in sinkhole claims, the root cause of why more claims are being reported is not identified. Clearly people are more aware about sinkhole damages given all the publicity from insurance company officials and media reports of sinkhole losses and this fact alone may account for the increased number of sinkhole claims.” In addition, Tutwiler & Associates explained that a combination of other factors may have led to an increase in claims, including “weather events, greater public awareness, policyholder fear of losing coverage, and urban growth in sinkhole prone areas.” Dick Tutwiler is more than qualified to chime in on what is happening in the industry because he and his firm adjust the claims on behalf of the policyholders of Florida and have a clear perspective of the claims from the frontlines.