Insurers Criticized at Mold Hearing

[Guest guest]

http://flains.org/newfic/mediapublic/ FIR: Late-breaking Insurance News July 31, 2002 Insurers Criticized at Mold Hearing The Florida Department of Insurance held the first of at least three public hearings on mold Tuesday in south Florida and the criticism of the insurance industry was intense. The hearing was dramatically different from the department's south Florida hearing on insurance scoring late last year when only a handful of consumers attended. There was a standing room-only audience at Plantation City Hall, just north of Fort Lauderdale, for the mold hearing. Some two dozen consumers testified mold had made their homes unlivable and their homeowners insurance claims were denied or the company didn't cover all of the damages. Trial lawyers and public adjusters attacked the insurance community as expected and denounced proposed endorsements by carriers that cap mold coverage at $500 to $10,000. Two state legislators from the area attended and appeared unsympathetic to insurers on this issue. FIC lobbyist Guzzo and Dr. Hartwig, senior vice president and chief economist for the Insurance Information Institute in New York, represented the insurance community. The "mold litigation explosion" threatens to force huge property rate increases in Florida as it has in Texas and California, they warned. Florida DOI should approve the "various lawful and appropriate" endorsements filed by carriers to preserve the exclusions and limitations on coverage for mold damage that have existed in property insurance contracts in Florida for decades, Guzzo testified. A DOI team that included Steve Roddenberry, deputy director of the Division of Insurer Services, and General Counsel Mark Casteel, was non-commital about how the department will act on the endorsements and when. Roddenberry said additional hearings will take place over the next 45 days - an original deadline was to wrap them up by the end of August. DOI will make a decision at the end of the hearings or, perhaps, later, he said. Casteel said the inability of insurers to provide detailed Florida-specific data to back up arguments that mold claims and losses have risen sharply the last few years "has been very difficult for this department." The message seemed to be, DOI is not likely to approve controversial endorsements that limit coverage for mold based on losses and detailed data from Texas and California. But who knows what DOI will do. There are at least two more hearings, including August 14 in Orlando and a hearing in the Tampa Bay area at a still undetermined date. And the insurance community, under the direction of the FIC Property Committee and Chair Grawe of Allstate, will be submitting additional testimony. It was clear that many - maybe all - of the consumer witnesses had been recruited by trial lawyers or public adjusters to testify at the hearing. One young mother testified with a baby in her arms and a second had her young child in a stroller alongside. Florida DOI's Roddenberry said some of the consumer complaints about unfair treatment from their insurance company sounded serious to him. He ordered DOI staff to investigate several of them. Roddenberry had emphasized at the beginning of the hearing, however, that "by and large, mold is not a covered peril" under property insurance in Florida. Some of the consumer complaints appeared to be over mold damage from a sudden and accident water event, where there might be coverage.But other speakers at the hearing talked of cases where construction was poor or repair work by plumbers inadequate, where there presumably would not be insurance coverage. One consumer said her fight was with her condominium homeowners association and noted from the outset she did not have insurance for her apartment. But the common theme was that homeowners insurance policies should handle everything. "Florida Insurance Council members are concerned that the mold litigation explosion in Texas and California is spreading to Florida and threatens the affordability and availability of homeowners and commercial property insurance here," Guzzo testified. "Approval of the mold endorsements pending with the Department of Insurance would not materially limit the insurance Florida home and business owners presently have, or need to have. Approval of these endorsements would preserve the availability and affordability of property and liability insurance in light of the new litigation explosion."

[Guest guest]

PLEASE notice this article came from a website run by an insurance trade

group.

I say this because of this statement :

" It was clear that many - maybe all - of the consumer witnesses had been

recruited by trial lawyers or public adjusters to testify at the hearing. "

THIS IS NOT WHAT WAS REPORTED TO HOMEOWNERS FOR BETTER BUILDING WHO HAD REPS

AT THE MEETING.

This was far from the truth. Websites such as this look to have the consumer

in mind when in fact they are deceptive.

R. Cobarruvias

President, Houston Chapter

HomeOwners for Better Building

14646 Cardinal Creek CT

Houston, TX 77062

281-486-5203 H

www.hobb.org

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> Date: 1 Aug 2002 05:14:45 -0000

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> Subject: [] Digest Number 1327

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