When your home is damaged by wind, vandalism, fire or another covered peril, your homeowner’s insurance should provide the financial security to rebuild or repair your home. However, insurance companies are in the business to make money not to disburse funds to policyholders in an easy and convenient fashion. This means that insurance carriers frequently rely on strategies that involve denying, delaying or lowballing claims. If your insurance company is stonewalling your claim, it is important to keep in mind that you can counter the advantages your insurer has in terms of insurance defense lawyers, experts and litigation resources by putting an experienced Florida insurance claims lawyer in your corner. This blog provides an explanation of three issues which are often important when you need to pursue a property damage claim under your homeowner’s policy.
Application and Insurance Premium Issues
Whether you live in Florida or another state, insurance regulatory agencies and state insurance law limit the way insurance carriers engage in underwriting, promotional marketing and premium rates. When an insurance company engages in underwriting activity, there must be a relationship between the underwriting decision and the risk of loss for which coverage is sought. Many states also protect an insured by imposing regulations or laws that limit the ability of insurance companies to cancel or discontinue coverage once a policy has been issued to a policyholder. For example, Florida insurance regulators recently assessed substantial fines for using background information obtained in the applications of policyholders to cancel coverage only after a claim was made, and years of premiums were accepted.
All states prohibit the use of criteria like color, sex, race, ancestry, national origin, religion in making decisions to provide insurance coverage. Some states extend this protection to factors like age, marital status, sexual orientation, physical or mental disability, language and other traits. If you apply for coverage and you are denied, you have a right to be informed of the reason for the adverse decision.
When an insurance carrier determines an applicant’s rate during the underwriting process, the insurer will consider what are referred to as “rating factors”. There must be a reasonable relationship between the rating factors and the risk that is to be covered. Both rates and rating factors must be on file with the state regulatory agency.
Cancellation of Policies
As a general rule, a policy may only be cancelled after it is issued if the policyholder fails to make premium payments or engages in fraud or misrepresentation. However, insurance companies can elect not to renew a policy at the end of the policy term based on any reason that is not prohibited by law. If the insurance carrier is cancelling the policy, written notice must be provided to the policyholder prior to terminating the policy.
The insured can cancel at any time by providing notice of the insured’s intent to the insurance carrier. However, the policy might include a short rate penalty for early termination. This financial penalty allows the insurance company to keep a disproportionate amount of the premium if the policy is cancelled early by the policyholder.
Policy Exclusions & Limitations
These provisions typically narrow or alter coverage that would otherwise exist under the general terms of the policy. An exclusion refers to a broad exception to coverage like an intentional acts exclusion in your homeowner’s policy. Limitations are a more limited exception to coverage. This type of exception to coverage will typically preclude coverage under specific circumstances or for a designated period of time.
These are just a few of the type of issues that consumers should know about their homeowner’s insurance coverage. If you have suffered damage to your property, we can answer your questions. My law firm represents policyholders in claims disputes in Miami and throughout Florida. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations. No Recovery, No Lawyer Fees. Call 305-461-1095 or Toll Free 1-866-71-CLAIM.