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Will arbitration replace assessment in Florida? | Property Insurance Law Team Blog



The title of this post was a question asked to me by a number of people after an April Fool’s joke Insurance magazine article, Will more insurers claim arbitration in claims disputes with Florida decisions? The Insurance magazine noted that the Florida Office of Insurance Regulation approved an insurance form requiring mediation and then arbitration to resolve property insurance disputes:

[T]The Florida Office of Insurance Regulation approved an application from American Integrity Insurance. The carrier, one of the largest non-life insurance companies in the state, had requested approval for mandatory arbitration and mediation approval in multi-risk homeowners, starting April 22 for new business and June 21
for renewals.

The approval signals a major change in OIR’s long-standing view of arbitration, sources said.

The sources are correct. Former Florida insurance commissioners were much more concerned about protecting policyholders’ interests.

The language in the approved form is not an April Fool’s joke for policyholders who do not get paid in full or immediately by their property insurance companies:

All disputes, including disputes arising out of or related to this agreement, between us and you, or any other insured, omnibus insured, other person claiming under the insurance or a recipient of benefits after loss, (hereinafter referred to as “party” or collectively as “parties”) whether or not it is governed by state or federal law, and whether it is based on statutory obligations, breaches of contract, theories of damages, damages or other legal theories, regardless of the basis of the obligation or legal theories on which the claim is made; exclusively and definitively determined by a confidential arbitration proceeding (the “Arbitration Procedure”) as set forth herein, on the premises of the country of residence and shall not be submitted to a court other than any injunction sought, any action under § 682.02 (1), any additional relief sought therein may be submitted to the Circuit Court in and for county of residence premises. Disputes that are the subject of this binding arbitration shall exclude your civil remedies from bringing an action under section 624,155 of the Florida Statute. Resolution by binding arbitration must be requested within five (5) years from the date of the loss, and you must comply with all other provisions of this policy.

Arbitration shall be conducted in accordance with the provisions of the Revised Florida Arbitration Code, Chapter 682, Florida Statutes, this Agreement and in accordance with the Florida Rules of Civil Procedure, Florida Evidence Code and substantive Florida law (including laws, regulations, ordinances). , case law and customary law). Furthermore, nothing in this Agreement shall be construed as violating any applicable statutory complaint or mediation procedure in Florida.

This arbitration is an arbitration panel:

(a) Within twenty (20) working days of notification of the arbitration award, the Parties shall jointly elect one (1) arbitrator. The arbitrator must be either a retired Florida district court or federal court judge, or a member of the Florida Bar with at least ten (10) years of experience as an attorney who is reasonably familiar with applicable arbitration rules, knowledge of insurance, contracts and building law (which may apply to litigation) in Florida.

(b) If the parties are unable to reach an agreement on an arbitrator within twenty (20) days of receipt of the request for arbitration, either party may make a request to the Circuit Court on behalf of the country of residence, for the specific and sole purpose of appointing the arbitrator. accordingly. The arbitrator shall be independent of all parties, witnesses and legal representatives. No former or current official, board member, subsidiary, subsidiary or employee of a party, witness or legal adviser, nor any person with a financial interest in the outcome of the proceedings, may act as arbitrator in the proceedings. The parties agree that no attorney’s fees or costs shall be paid or payable in such action to appoint an arbitrator.

As stated in the last sentence of the above provision, this arbitration agreement does not prescribe any legal fees:

The parties have the right to be represented by a lawyer of their choice in the binding arbitration proceedings. Each party will be responsible for paying for their own lawyer if they hire a lawyer.

Arbitration provisions, such as the one above, can be fatal to the interests of policyholders. Public citizen notes in Arbitration clauses in insurance contracts: The urgent need for reforms,

The growing use of binding arbitration clauses before litigation poses a huge threat to insurance consumers. It represents a major change in the balance of power between insurance companies and consumers that must be addressed by state legislators and insurance regulators.

Eleven states prohibit arbitration in property insurance disputes. Not Florida. Although I do not agree with the approval of the form, Florida’s general policy is to allow alternative dispute resolution including arbitration. Since the legislature has not taken up proposed bans on arbitration in the last three sessions and given the court’s approval of arbitration, the Commissioner may have found that this form of arbitration follows public policy.

This provision is a game changer. My prediction is that since the Florida Office of Insurance Regulation approved the form, many insurers will follow suit and apply for similar insurance language. If the courts allow the provision to apply, the answer to the question will be “yes”.

Today’s thoughts

A healthy democracy requires a decent society; it requires that we be honorable, generous, tolerant and respectful.
—Charles W. Pickering


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