by Terrie Didier, Esq.

QUESTION: What are my rights if an insurer refuses to provide me residential property insurance due to adverse underwriting information?

ANSWER: By statute, the insurer must provide the applicant specific information regarding the reasons for the refusal to insure. If the reason for the refusal to insure is based on a loss underwriting history, the insurer must identify the applicable loss underwriting history. If the reason for the refusal to insure is based on a report from a consumer reporting agency, the insurer must notify the applicant of his or her right under the federal Fair and Accurate Credit Transactions Act to obtain a copy of the report from the consumer reporting agency.

QUESTION: If I inquire about coverage on my property insurance contract, is that considered claim activity?

ANSWER: No. Pursuant to statute, unless a claim is filed by the insured which results in an investigation of the claim, it is not considered claim activity.

QUESTION: Can my insurer cancel or nonrenew my policy based on a single water damage claim?

ANSWER: No. Pursuant to statute, a single claim on a property insurance policy which is the result of water damage may not be used as the sole cause for cancellation or nonrenewal unless the insurer can demonstrate that the insured has failed to take action reasonably requested by the insurer to prevent a future similar occurrence.

QUESTION: How much notice must my insurance company give me before cancelling or nonrenewing my policy:

ANSWER: Generally 120 days, but there are some exceptions, including a policy that has been in force for less than 90 days. Note, too, that if a policy has been in effect for more than 90 days, the insurance company may not cancel or terminate the policy based on credit information available in public records.

QUESTION: Should I file a claim against my homeowner’s insurance for a small loss?

ANSWER: Typically if you file a claim for any amount, the cost of your premium will increase. For this reason, there are circumstances in which it might not be in your financial interest to file a claim even if you have a low deductible.

Assume you have a $500 deductible. If a falling limb from wind creates a breach in your roof and causes $1,000 in damages, you probably shouldn’t file a claim if you can afford to pay the damages out-of-pocket. Certainly, the insurance company is responsible for paying the $500 above the deductible. But the cost of paying a higher premium (especially over time) may cost more than paying the $1,000 in damages.

Additionally, filing too many claims gives your insurance company an excuse to cancel the policy.

QUESTION: When a loss requires replacement of items that do not match in quality, color, or size the items in adjoining areas (i.e., wood floors), must the insurer replace all like items?

ANSWER: If the policy provides replacement cost coverage, pursuant to statute, when a loss requires replacement of items and the replaced items do not match in quality, color, or size, the insurer must make “reasonable” repairs or replacement of items in adjoining areas. BUT, when determining the extent of repairs or replacement of items in adjoining areas, the insurer is permitted to consider the cost of repairing or replacing the undamaged portions of the property, the degree of uniformity that can be achieved without such cost, the remaining useful life of the undamaged property, and other relevant factors.

QUESTION: How much time do I have to give notice of a supplemental hurricane claim after the initial claim is concluded?

ANSWER: By statute, you must notify the insurer of a supplemental claim within 3 years after the hurricane first made landfall or the windstorm caused the covered damage.

QUESTION: How much time do I have to file a lawsuit against my insurer after a loss?

ANSWER: Five years from the date of the loss. But if the loss is due to a hurricane, the insured must notify the insurer of the loss within 3 years or the lawsuit will be barred.

QUESTION: If I hire an attorney to represent me in my insurance claim, is the insurer responsible for my attorney’s fees?

ANSWER: Maybe. If the attorney must file a lawsuit on your behalf against the insurer and a judgment is entered against the insurer, by statute, the insurer is required to pay the reasonable fees of your attorney. If your attorney helps you settle the claim before a lawsuit is filed, the insurer is not responsible for your attorney’s fees.

QUESTION: How much time does an insurer have to provide the check after the parties agree to settlement of a claim?

ANSWER: By statute, once a written settlement agreement is signed, the insurer must tender the payment no later than 20 days after the date of the settlement. The tender of payment may be conditioned upon execution by the insured of a release mutually agreeable to the insurer and insured. If the payment is not tendered within the 20 days, it bears interest at the rate of 12% per year. However, if the tender of payment is conditioned upon the execution of a release, the interest does not begin to accrue until the executed release is tendered to the insurer.

OVERINSURED PERSONAL PROPERTY NOTE: Pursuant to statute, in the event of a total loss or destruction of personal property on which the amount of the appraised or agreed loss is less than the total amount insured limit, the insurer must return to the insured the unearned premium for the excess of insurance over the appraised or agreed loss, to be paid at the same time and in the same manner as the loss is paid.