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  • Source

    Nearly a year after Hurricane Sandy slammed into New Jersey, the state’s insurance regulator has quietly fined a handful of industry professionals over their work following the Oct. 29 superstorm.
     
    So far, the Department of Banking and Insurance hasn’t levied any charges against insurance carriers or their employees. Rather, enforcement actions have been taken against mainly out-of-state public adjusters who came to New Jersey to represent storm-struck home and business owners in their negotiations with insurance carriers.
     
    The actions were the result of consumer complaints the department, also known as DOBI, received, said spokesman Marshall McKnight. And while most of the fines ended up being over more technical violations of the law, such as the adjuster’s licensing or the fine print of his contract, two matters involved actual consumer harm.
     
    One of those cases resulted in the largest penalty over a Sandy-related claim.
     
    Marshall Stephan Perlman, a public adjuster who runs ClaimStar in Bala Cynwyd, Pa., was fined $20,000 and had his New Jersey adjuster’s license revoked earlier this month. Among other things, Perlman pleaded guilty in July to a theft charge in Pennsylvania after he failed to turn over insurance claims checks, according to the consent order he signed with DOBI. He was sentenced to two years of probation and ordered to pay roughly $385,000 in restitution.
     
    According to McKnight, the department had received complaints that Perlman was charging excessive fees to Sandy victims. As it was negotiating with him to bring down his fees, it got word of his guilty plea, leading to the enforcement action. In addition, DOBI also cited Perlman for striking 23 contracts with New Jersey residents that didn’t contain key details, such as his fees or the type of work he would perform.
     
    In a brief interview last week, Perlman, who also was barred by Pennsylvania’s insurance regulator, had no comment about the theft charge. ClaimStar’s phone number has since been disconnected.
     
    Altogether, the department says it has brought seven cases tied to Sandy, and that others are in the offing. "Stay tuned and you’ll be seeing more from us," McKnight said.
     
    The number of cases is a small cry to the volume of consumer calls and complaints that DOBI has received over Sandy. The latest data show 3,747 calls to its consumer hotline and 2,523 written requests for assistance.
     
    The agency has noted that not every call is a complaint, and not every complaint requires a formal administrative action to resolve. Sometimes matters, such as those over the federal flood insurance program, are outside DOBI’s jurisdiction, it has noted.
     
    Another consumer complaint resulted in an enforcement action against Nilda Rodriguez, an insurance broker in Philadelphia, McKnight said. She was fined $4,000 for selling a New Jersey man flood and homeowner’s coverage that she said would cover two buildings standing on a single property he owned, according to her consent order signed in March.
     
    It wasn’t until after Sandy struck and severely damaged the two buildings that the man found out his policies covered just one of his structures. Rodriguez, who also was not licensed by New Jersey at the time she sold the policies, declined to comment.
     
    Other enforcement actions were against out-of-state public adjusters who violated technical provisions of the state’s laws, such as failing to get their companies licensed by the state, even though they had secured a "nonresident" public adjuster’s license for themselves.
     
    That was the case with Dennis Molette, who runs All Property Adjustment Services in Springfield, Pa. He was fined $5,000 for entering into 26 insurance contracts with Sandy victims when his company was not licensed, according to his consent order. Molette did not returns calls seeking comment.
     
    Claims Strategies Group, a public adjuster firm from Fort Lauderdale, Fla., and three of its representatives were fined $2,500 on similar grounds. They also agreed to refund fees charged to clients while the company was unlicensed. Craig Sienema, president of Claims Strategies, did not return calls.
     
    "Public adjusters must be licensed to do business in New Jersey," Ken Kobylowski, commissioner of the insurance department, said in a statement. "When consumers file complaints against public adjusters, we will take appropriate action if our licensees are not following the law."
     
    He added that consumers can call DOBI or check a database on its web site to see whether an adjuster is licensed.
     
    Two other out-of-state public adjusters were fined: Jeffrey Wolff, who runs Premier 1st Corp., in Miami Beach, Fla., and Steven Venook, who runs Advocate Claims Public Adjusters in Coconut Creek, Fla.
     
    Wolff was fined $500 for entering into 41 contracts that did not contain either the time of day they were struck or a prominent section outlining the steps clients must take to cancel their contract. Wolff’s attorney, Jonathan Wilkofsky of New York, said the fine print that the state was looking for is "particularly nettlesome," especially for out-of-state contractors.
     
    "I frankly think it’s a difficult provision to draft, and the standard in the law is a little unrealistic," he said of the cancellation clause.
     
    Venook agreed to pay $2,000 for issuing a contract that did not contain his signature, and for conducting and soliciting business under his company’s name without licensing it in New Jersey, even though he was licensed as a nonresident adjuster.
     
    In an interview, Venook said he too was confused by New Jersey’s requirements and would not return to do business here. He also didn’t think his clients were upset with him, and said he doubled their flood insurance payouts. "I believe if anybody turned me in, it was the insurance companies. All my clients are happy with me."
     
    McKnight, the insurance department spokesman, disagreed. "Adjusters must comply with New Jersey law. All actions resulted from consumer complaints," he said.
  • source: http://www.nj.com/news/index.ssf/2013/09/after_sandy_fight_continues_to_settle_home_business_insurance_claims.html

    By MaryAnn Spoto/The Star-Ledger 
     
    None of the doors in Carl Bennett’s home in Holgate stays shut.
     
    He says floodwaters from Hurricane Sandy sank the back of his home’s foundation but claims his flood insurance won’t pay to fix it.
     
    The reason he was given, Bennett says, is that natural settling of the earth over time — not floodwaters — caused his house to tilt backward.
     
    The more he argues with the National Flood Insurance Program, which covers all flood policies, the more convinced Bennett said he becomes he’ll have to sue to get the money he believes he’s owed.
     
    “It wasn’t just standing water; it was strong enough to push the house next door to me off its foundation,” Bennett said. “I think there’s plenty of evidence the flood caused this. There’s a house in the middle of the street; there’s a watermark on the wall.”
     
    Many flood insurance policy holders are still trying to settle their claims as the one-year anniversary of the Oct. 29 storm approaches.
     
    Policy holders have one year from the date of their first claim denial to file a lawsuit, which could be as early as November, or as late as November 2014, said Adam Derman, whose New York-based firm has opened an office in Point Pleasant Beach.
     
    Dan Watson, a spokesman with the Federal Emergency Management Agency, said the NFIP received more than 74,000 claims from New Jersey policy holders, representing $3.78 billion in payouts.
     
    He said 1,475 appeals were filed between October 2012 and July, though the program does not break them out by disaster. But Watson said “a large portion” of those appeals would be related to Sandy.
     
    Robert Hartwig, president of the Insurance Information Institute, a nonprofit communications company supported by the insurance industry, said claim problems exist primarily because New Jersey has never experienced a storm quite like Sandy.
     
    “Sandy was an event that has some issues associated with it that you don’t see in other events,” he said. Only about half of the homeowners affected by Sandy had flood insurance. And storm surges, like those seen inSandy, aren’t covered by typical homeowner policies, he said.
     
    Those who disagree with their flood insurance settlements can file a supplementary claim with their insurance company. If they still are not satisfied, they can appeal to the NFIP. Then, they can sue.
     
    The NFIP doesn’t actually write flood policies. Instead, commercial insurance companies write the policies and arrange for NFIP-certified adjusters to survey damage. The NFIP denies or pays claims, said Gail Peterson, a spokeswoman for Selective Insurance Co., Bennett’s insurance company.
     
    The reason for Bennett’s denial — natural settling — is one of the most common used by insurance companies to turn down claims, said Derman. These types of legal fights are so new in New Jersey that Derman’s firm is working with attorneys from the Gulf Coast who are well-versed in flood insurance issues after Hurricane Katrina in 2005.
     
    “In New Jersey and New York, we really haven’t had these types of cases, these types of claims, up here,” Derman said.
     
    Flood policies, he said, are very specific about what is and is not covered, and when there’s no clear evidence that damage was caused by a flood, there’s a good chance a claim will be denied.
     
    A house that sat in floodwater won’t necessarily qualify for payment to rebuild the foundation; there has to be evidence that there was flowing water that washed away the soil, said Christopher Gerold, an attorney in Derman’s firm.
     
    Without insurance money, Bennett said he can’t make the needed structural repairs to his expanded Cape Cod on Joan Road. It’s a second home, so he doesn’t qualify for any federal aid.
     
    Angelita “Gigi” Liaguno-Dorr, owner of the Sandy-destroyed Jakeabob’s Bay in Union Beach, said she is still negotiating with her flood insurance company.
     
    She’s running her restaurant from a donated building a couple of blocks from her former location on Raritan Bay.
     
    Liaguno-Dorr said it will take $2 million to rebuild and she had $1.8 million in insurance coverage with Lloyd’s of London. She said she’s received only $450,000.
     
    Representatives for Lloyd’s and Selective insurance companies said they do not comment on specific cases. But a Lloyd’s spokesman said the company “seeks to pay all valid claims as quickly as possible.”
     
    “We just want to build. We just want to come back,” Dorr said. “I don’t understand why it’s taking so long for the insurance company. I think they’re waiting for us to give up.”

     

     

     

     

     

     

  • Ed Beeson/The Star-Ledger By Ed Beeson/The Star-Ledger 
    August 11, 2013 at 6:07 AM
     
    One of New Jersey’s efforts to help Hurricane Sandy victims resolve their insurance woes has had an unexpected result: few takers.
     
    Three months ago, the state launched a mediation program to help Sandy-struck homeowners and business owners settle disputes with their insurers over storm claims.
     
    While the program, which is run by the American Arbitration Association, excludes flood insurance claims, it is available to those with open claims for most other types of insurance, from homeowners to commercial property to business interruption.
     
    The premise is simple: through a short, informal hearing held at no cost to the policyholder, an impartial mediator would try to help both sides work out their differences and reach an amicable settlement.
     
    But the real benefit is that this would let policyholders and insurers avoid draining legal battles that drag on for years, the Department of Banking and Insurance noted in promoting the effort. Similar programs were held with great success in Florida, Louisiana and Mississippi after devastating hurricanes, the department also said.
     
    Despite the push, policyholders have filed just under 500 requests for mediation since the program started in May. That’s about 2.8 percent of the more than 17,000 non-flood Sandy insurance claims that the insurance department estimates are still open.
     
    Ken Kobylowski, commissioner of New Jersey’s insurance department, said these numbers have surprised him.
    "Very candidly, I thought the take-up would be a little higher than it is," he said in an interview last week.
     
    And of the 488 requests for mediation that have been received, just under half, or 223 requests, have gone through a hearing so far.
     
    By comparison, New York State, which established its own Sandy mediation program and began taking requests about two months before New Jersey, has held almost 1,800 hearings out of more than 2,300 requests, according to the state’s Department of Financial Services.
     
    It is not clear why New Jersey’s program has lagged. Kobylowski thinks it has to do with a lack of public awareness. Officials from his department will be at Toms River’s municipal building Monday, trying to drum up interest in the program. In the town alone, there are some 600 outstanding Sandy claims that would be eligible for mediation, the insurance department says.
     
    "We’ll keep the program up and running as long as we see a take-up on a weekly basis," Kobylowski said.
    Christine O’Brien, president of the Insurance Council of New Jersey, an industry group, said light demand for mediation could be a sign that insurers have been effective in working with their customers. Some carriers, after being notified of a policyholder’s request for a hearing, have used the opportunity to take another look at the claim and possibly hammer out a settlement before the mediation, she noted.
     
    But the limited number of takers also could be a sign that many of the insurance disputes from Sandy can’t be fixed in a two-hour session, according to Amy Bach, executive director of United Policyholders, a San Francisco-based advocacy group that’s been working with Sandy victims in New Jersey. That’s because instead of fighting over the value of a claim, many policyholders are fighting to prove their loss is covered by their policy.
     
    "There’s no way that a mediation program is going to break through that type of entrenched legal dispute," Bach said. "The policyholder with a coverage dispute is much better off with a jury."
     
    Still, there is some sign that mediation has paid off for those who have reached a settlement through it. According to Kobylowski, the average individual who sought mediation and reached a settlement walked away with about $114,000, while the average commercial claim settled at around $200,000.
     
    For Jackie and John Romero, mediation was the cap to a long, horrific ordeal that started the night of Oct. 29.
     
    In a story that’s no doubt familiar to thousands along the Jersey Shore, the storm’s monstrous tides and gale-force winds all but leveled the Ortley Beach home that they bought in 1964, and sent much of what they owned and treasured out into the Atlantic Ocean.
     
    But while their flood insurance policy eventually paid out – after some prodding from their lawyers at Lowenstein Sandler – they said their homeowners insurance kept denying coverage for their damaged siding and roof.
     
    "They were adamant: ‘No, no, that’s it. We’re not responsible for anything," said John Romero, 74. Homeowners policies typically exclude flooding, but cover damage from wind and other perils.
     
    Eventually, the couple ended up in mediation. The hearing took just a few hours. Among other things, the couple said they were asked to recount how Sandy upended their lives, something that moved them to tears. Back and forth negotiations ensued until the insurer’s attorney, after several phone calls to his boss, agreed to cut a check, the Romeros said.
     
    The Romeros, who didn’t want to name their insurer or the settlement they received, said the amount was about half of what they initially sought.
     
    But more importantly, they said, it enabled them move on. Combined with the payout from their flood insurance policy, the Romeros bought a new home in nearby Brick Township and moved in at the beginning of the month.
     
    "The good news is the house is adorable," Jackie Romero, 70, said.
     
    An effort in Louisiana after hurricanes Katrina and Rita in 2005 handled more than 15,000 cases with a settlement rate of about 74 percent. Mississippi settled 82 percent of the more than 5,000 cases after those storms, the association said.Of the cases that have gone through a mediation hearing so far, about two-thirds have reached a settlement of sorts. Other states that have held mediation programs after major storms had slightly better outcomes, according to data from the American Arbitration Association.
     
    In Florida, the association handled 2,400 claims after 1992’s Hurricane Andrew with a settlement rate of 92 percent.
     
    Kobylowski, the insurance commissioner, said even though New Jersey’s settlement rate so far has been lower, it still means many fewer claims may end up in court one day.
     
    Lynda Bennett, chair of the insurance coverage practice at Lowenstein Sandler in Roseland, said policyholders shouldn’t expect to regain everything through mediation.
     
    "People are not getting 100 cents on dollar, that’s for sure." But insurers have come to the table in good faith and willing to resolve claims where there is coverage, she said.
     
    "They understand they have to come with some money because if the cases doesn’t get solved through mediation, they’re incurring costs to pay attorneys to fight this in court," she said.
     
    At the same rate, not every hearing goes in favor of the policyholder. About a third have ended in an impasse, data from the insurance department show.
     
    That’s happened with a handful of cases that Lowenstein Sandler handled, Bennett said. In these cases, the coverage simply didn’t exist in the policy, she said. "Going to court would have been a losing process. Mediation was as far it could go."
     
    But even if a hearing doesn’t result in a settlement, it doesn’t mean the effort was wasted, attorneys note.
    Charles Yuen, chair of the insurance recovery and liability group at Scarinci Hollenbeck in Lyndhurst, said he brought a significant business interruption claim to mediation. And while the hearing ended without being resolved, it did allow both air out their differences, he said.
     
    "It was helpful to the process and negotiations continue," he said.
  • This morning SB 1770 was signed by the officers and presented to Governor Rick Scott.  According to Florida Law, Governor Scott now has 15 days in which to sign this piece of legislation.  However, if he does not sign the legislation, it will automatically go into effect.  Only a veto will prevent this legislation from becoming enacted on July 1, 2013.  We do not anticipate that the Governor will veto this piece of legislation since it contains so many items that are supported by the insurance industry as well as so many consumer advocate groups.   As soon as we know more, you will receive an immediate bulletin.  If you are not yet a member of the Florida Association of Public Insurance Adjusters, you will only be receiving notices via E-FAPIA until June 1st.  I encourage you to join FAPIA today to help strengthen your industry and to make sure you stay informed on the issues that matter to your business.

  • Original Article

    Roofing contractors operating in Tennessee will have to provide residents whose homes are damaged due to tornadoes and other storms with more information about their company and about their rights to cancel contracts under a new law.

    Gov. Bill Haslam recently signed a law that comes into response to widespread complaints from homeowners following a number of severe storms that caused widespread damage in the state during the last couple of years.

    In 2011, a number of tornadoes swept through the Midwest and South causing billions of damage. A hail storm that passed through in the Knoxville and Nashville later that year also damaged many homes and businesses.

    As a result, the state was flooded with out-of-state roofing contractors who along with some in-state roofers or individuals posing as roofers reportedly took advantage of homeowners.

    Tennessee Department of Commerce and Insurance spokesperson Christopher Garrett said that the department doesn’t specifically track roofing complaints. However, he said, the department did hear from more homeowners concerning repairs.

    “As far as statistics go, the Contractors Board received an increase in home improvement complaints from victims of the 2011 storms,” said Garrett.

    Sponsored by Sen. Bill Ketron (R-Murfreesboro), SB2714/HB 2915 requires that roofing contractors whose work is covered by an insurer must provide a homeowner with their address, telephone number, license registration, email address, and a detailed description of all damage and repairs.

    The contract must also contain a form notifying homeowners of their right to cancel a contract within three days after signing and/or receiving a written statement from their insurer that the contract is not a covered claim. Once a contract is cancelled, roofing contractors have 10 business days to return any payments to the homeowner, except for emergency repairs.

    Roofing contractors or their agents are also prohibited from telling homeowners they can negotiate a claim with an insurer unless they are also a licensed public adjuster.

    Any violations of these laws would be covered under Tennessee’s Consumer Protection Act of 1977.

    Frank Barrett, owner of the roofing firm, Barrett Co. in Knoxville, said that fraud is endemic in the roofing business especially as contractors and other individuals hit hard by the downturn in the construction industry scramble for any work available. He said his company runs television ads in East Tennessee warning homeowners about roofing contractor fraud and advising them to check a contractor’s reference and the Better Business bureau for any complaints before hiring a company.

    But most important, he said, homeowners should not give a roofer money upfront. That is especially the case when homeowners receive a check from an insurance company to pay repairs and end up handing it over to a roofer who says he needs it to buy materials only to never show up again.

    “Some people are just knocking on the door and tearing up a roof saying it needs to be fix and then just stealing money,” said Barrett. “No one should get paid until the work is done.”

    Barrett also said that homeowners are often unaware of what their homeowners policy covers. He said some insurance companies are neglecting to inform homeowners that they may be required to pay a high deductible to complete repairs.

    Dave Dodson, owner of the Tamko Building Products in Knoxville, said he supports efforts to crackdown on fraud, but is unsure how the state will enforce the new law since the state has no jurisdiction over out-of-state roofers. However, he said out-of-state contractors are needed given the magnitude of the storms that are frequent occurrences in the state.

    “When you have the kind of storms we had in Knoxville you had to have out-of-state contractors, the locals could not get it done,” Dodson said.

    The insurance industry’s Property Casualty Insurers Association of America came out strongly in favor of the bill and praised lawmakers for taking steps to rein-in contractors and ensure that consumers and insurers are not being taken advantage of.

    “After severe weather there are always some crooked contractors who descend upon neighborhoods and take advantage of unsuspecting homeowners,” said PCI vice president Ann Weber. “While the vast majority of contractors are honest, reputable business people, states across the country took positive steps to crack down on these storm chasing contractors, particularly from out of state, who use questionable solicitation and business tactics.”

    Other States Take Action

    Tennessee is not alone when it comes to cracking down on contractor fraud.

    Iowa lawmakers recently approved a similar bill that is now awaiting Gov. Terry Branstad’s signature.

    Arizona, Colorado, Indiana, Nebraska, Kentucky, and South Dakota have also approved measures to increase consumer protections against roofing contractor fraud.

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