Civil Remedy Notice of Insurer Violations
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Filing Number:     659957
Filing Accepted:  12/6/2022
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Complainant
Last/Business Name *  
GROSS   First Name   ALAN & ARACELI
Street Address * 11346 HERITAGE WAY
City, State Zip * LARGO, FL 33778
Email Address * NSPEER@ITSABOUTJUSTICE.LAW
Complainant Type: * Insured
Insured
Last/Business Name*   GROSS   First Name   ALAN
Policy # * 80-BZ-5371-1 Claim #* 59-40D7-10B
Attorney
Attorney is Applicable
Last Name* SPEER First Name * NICOLE Initial
Street Address* 350 N. LAKE DESTINY RD.
City, State Zip* MAITLAND , FLORIDA 32751
Email Address * NSPEER@ITSABOUTJUSTICE.LAW
Violation
Insurer Type *   Authorized Insurer Unauthorized Insurer
 
Insurer Name*   STATE FARM FLORIDA INSURANCE COMPANY
NAIC Company Code 10739
 
Name of individual responsible for violation (if any):* STATE FARM FLORIDA INSURANCE COMPANY
Type of Insurance * Residential Property & Casualty   
Reason for Notice *
Unfair Trade Practice
* Statutory provision(s) which the insurer allegedly violated.
 
624.155(1)(b)(1) Not attempting in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests.
624.155(1)(b)(3) Except as to liability coverages, failing to promptly settle claims, when the obligation to settle a claim has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage.
626.9541(1)(i)(2) A material misrepresentation made to an insured or any other person having an interest in the proceeds payable under such contract or policy, for the purpose and with the intent of effecting settlement of such claims, loss, or damage under such contract or policy on less favorable terms than those provided in, and contemplated by, such contract or policy.
626.9541(1)(i)(3)(a) Failing to adopt and implement standards for the proper investigation of claims.
626.9541(1)(i)(3)(d) Denying claims without conducting reasonable investigations based upon available information.
626.9541(1)(i)(4) Failing to pay undisputed amounts of partial or full benefits owed under first-party property insurance policies within 60 days after an insurer receives notice of a residential property insurance claim, determines the amounts of partial or full benefits, and agrees to coverage, unless payment of the undisputed benefits is prevented by factors beyond the control of the insurer as defined in s. 627.70131(5).
* Specific policy language that is relevant to the violation.
Enter all words or phrases (one at a time) that should be used to filter.

A certified copy of the policy is not currently in the possession of Insureds. Based on information and belief, the following policy provisions apply to this Civil Remedy Notice: Section 1 – Perils Insured Against – Coverage A- Dwelling and Coverage B – Other Structures; Section 1 – Property Coverages – Coverage A - Dwelling and Coverage B – Other Structures; Section 1 – Conditions - Loss Payment; and Section 1 – Conditions - Loss Settlement.
 
* Facts and circumstances giving rise to the violation.
Enter all words or phrases (one at a time) that should be used to filter.

On or about September 28, 2022, Alan and Araceli Gross (“Insureds”) suffered significant damage to their home caused by Hurricane Ian. Prior to the loss, State Farm Florida Insurance Company (“State Farm”) issued a homeowner’s insurance policy (policy no. 80-BZ-5371-1) for the Insureds’ home. The policy was in full force and effect on the date of loss and affords coverage for hurricane damage. After providing prompt notice of the loss, the Insureds fully cooperated with State Farm’s adjustment of the claim, including making their home available for inspection and providing all documents requested. The Insureds provided an estimate and photos to State Farm showing that their roof needed to be replaced and not only repaired. Despite State Farm acknowledging there was coverage under the policy, State Farm afforded coverage for only a small portion of the roof and, as is a pattern and practice of State Farm, estimated the repairs under Insureds’ deductible in order to ensure no payment would be issued. It is clear that State Farm has not acted honestly or fairly towards the Insureds. State Farm and its adjusters have misrepresented the scope and cause of damages to the residence and misapplied exclusions in the policy in order to deny coverage for the majority of the Insureds’ claim and to ensure its valuation of the claim would be under Insureds’ deductible. As is the case here, it has become a general business practice of State Farm to not implement proper claims handling procedures, to hire consultants that routinely ignore or intentionally misidentify relevant evidence, and to not settle claims in good faith when under all circumstances it should have. State Farm regularly undervalues claims in order to avoid issuing payment on losses that it knows are covered under the policy. Then, when the claim is challenged, it invokes appraisal and non-renews its insureds’ policies. State Farm routinely refuses to pay claims in full when it has the ability to do so, waits to see if its insureds contest their coverage determination, as was necessary here, and, only then, will it capriciously invoke appraisal. State Farm knows that by opening up a small amount of coverage, it can maintain its ability to demand appraisal later on and deprive its insureds access to the courts. Its insureds are then forced to pay the cost of their own appraiser, which can total several thousands of dollars, before it is ever willing to perform repairs or issue benefits that were already owed under the policy. State Farm has developed this deliberate strategy in order to deter its insureds from challenging its coverage determinations and hinder their ability to seek additional payment for monies owed under the policy. State Farm’s practice of not adjusting losses in good faith in accordance with section 627.70131, Florida Statues, unnecessarily delays resolution of its claims and leaves claimants with no choice but to incur further time and expense just to be fully indemnified pursuant to the terms of their contract with State Farm. State Farm has completely abdicated its duty to adjust and has put the onus on its insureds to spend thousands of dollars in appraisal before State Farm is willing to issue benefits or make repairs that it knows are owed pursuant to the policy. State Farm’s pattern and practice of underrepresenting the actual cost and cause of damages, then demanding appraisal if challenged, is evidence that it does not act fairly or honestly towards the Insureds during its adjustment process and that it has failed to implement proper standards for the investigation and handling of its claims. In order to cure this Civil Remedy Notice, State Farm must immediately acknowledge in writing that Insureds’ estimate is reasonable in scope and issue any undisputed benefits. The written acknowledgment and payment should be tendered to Insureds’ attorney, Nicole M. Speer, Esq. at 350 N. Lake Destiny Road, Suite 300, Maitland, FL 32751. State Farm’s corporate address is 215 S. Monroe St., Tallahassee, FL 32301
Comments
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thoyte@kelleykronenberg.com 01-26-2023 January 26, 2023 Nicole Speer, Esq Cohen Law Group 350 North Lake Destiny Road Maitland, FL 32751 Complainants: Carrier: Alan and Araceli Gross State Farm Florida Insurance Company Claim number: 59-40D7-10B Date of Loss: September 28, 2022 CRN Number: CRN Date: Property Address: 659957 12/6/2022 11346 Heritage Way, Largo, Florida 33778 Dear Ms. Speer: This is State Farm Florida Insurance Company’s (“State Farm”) formal response to the Civil Remedy Notice of Insurer Violations (“CRN”) you filed on behalf of Alan and Araceli Gross (“Insureds” or Complainants”) as it relates to Claim number 59-40D7-10B. The Department of Financial Services (“DFS”) accepted the CRN on 12/6/22 and assigned it filing number 659957. The following reply has been uploaded to the Department of Financial Services. After reviewing the CRN, State Farm conducted a thorough review of its handling of the Complainants’ claim. The facts as detailed in this letter will show that State Farm acted in good faith, fairly, honestly, and with due regard for its Insureds’ interests. Procedural Deficiencies in CRN First and foremost, the CRN fails to adequately describe the alleged violations and fails to provide sufficient information to allow State Farm to correct the alleged violations. Contrary to the requirement to “describe the facts and circumstances giving rise to the insurer’s violation as you understand them at this time,” the purpose of which is “to enable the insurer to investigate and resolve [the] claim,” the CRN itself only provides unsupported, vague, ambiguous, and incorrect allegations with no factual bases. For example, the CRN states “when the claim is challenged, it invokes appraisal and non-renews its insureds’ policies” when in fact Complainants’ claim with the 9/28/22 date of loss is the third claim involving the dwelling roof since 2017, and State Farm has clearly renewed the Policy despite affording coverage for the roof in 2017. Aside from the fact that the CRN allegations are devoid of any specific facts, the tenor and inferences of the allegations are wholly without merit. State Farm denies each and every one. Additionally, the notice fails to list the proper policy language per Julien v. United Property & Casualty Insurance Company, 311 So. 3d 875 (4th DCA 2021). In Julien, the circuit court found Julien's civil remedy notice failed to satisfy the statutory requirement that an insured "state with specificity" the policy language and the statutory provisions at issue. In his civil remedy notice, Julien cited thirty-five statutory provisions and listed nearly every provision in the insurance policy. The appellate court agreed with the circuit court that the notice failed to specify the statutory and policy provisions at issue. As a result, the Fourth District affirmed the circuit court's dismissal with prejudice. The CRN fails to set forth any specific policy language alleged to have been violated in accordance with §624.155(3)(b)(4), Florida Statutes. The notice is therefore deficient. The CRN simply lists general policy sections based upon information and belief. This lack of specificity prevents State Farm from addressing any issues regarding the Subject Claim and Policy. The CRN requires the Insureds to “indicate all statutory provisions alleged to have been violated," pursuant to section 624.155, F.S. The notice you filed in the above-referenced matter includes statutory provisions that could be claimed against an insurance company regardless of whether they are relevant or applicable to the alleged facts contained in the Notice. Because the CRN fails to identify any specific facts applicable to the listed statutes that were allegedly violated with respect to the subject claim, State Farm is unable to properly respond, and said CRN should be rejected and returned. Finally, the Notice fails procedurally with respect to the requirement to specify how State Farm may “cure” the alleged violations. The purpose of a Civil Remedy Notice is to provide a carrier with one last opportunity to “cure” the alleged violations. In this instance, there is no indication at all what action State Farm needs to take to cure the alleged violations other than “State Farm must immediately acknowledge in writing that Insureds’ estimate is reasonable in scope and issue any undisputed benefits.” The “cure” sought by the Insureds is payment of all insurance proceeds demanded, notwithstanding State Farm’s right to investigate and adjust the loss. The method for curing the violations alleged in a civil remedy notice are not determined by the Insured. Section 624.155 does not impose on an insurer the obligation to pay whatever the insured demands. Section 624.155(2)(d), Fla. Stat., would have no effect or purpose under such an interpretation. In Talat Enterprises, Inc. v. Aetna Casualty and Surety Co., 753 So.2d 1278 (Fla. 2000), the Florida Supreme Court accepted and quoted the reasoning of the court below in its opinion which stated in relevant part, as follows: “Section 624.155 does not impose on an insurer the obligation to pay whatever the insured demands…Section 624.155(2)(d) would have no effect or purpose under such an interpretation. The law does not support such an expansive and illogical reading of Fla. Stat. Ann. §624.155(2)(d)…[t]o cure an alleged violation and to avoid a civil action, an insurer must pay the claim . . . before the sixty days expire. Talat, 753 So2d at 1282 citing Talat Enterprises Inc. v. Aetna Cas. & Sur. Co., 952 F.Supp. 773, 777-778 (M.D. Fla. 1996). The law does not support such an expansive and illogical reading of Fla. Stat. Ann. §624.155(2)(d). Talat, 753 So2d at 1282 citing Talat Enterprises Inc. v. Aetna Cas. & Sur. Co., 952 F.Supp. 773, 777-778 (M.D. Fla. 1996). For the aforementioned reasons, the Civil Remedy Notice is insufficient as a matter of law. Notwithstanding these facial deficiencies in the CRN as filed, State Farm will respond to each alleged violation separately after providing a factual history of this claim. Insureds are limited to the benefits and exclusions under the policy issued to them by State Farm. Factual History of this Claim The Complainants reported this claim on October 6, 2022. Complainants reported that on or about September 28, 2022, as a result of Hurricane Ian, the roof had lost shingles, soffit blew out, and no interior damages. State Farm e-mailed two letters to the Complainants on the following day. The first letter acknowledged the claim citing Policy conditions and duties; and the second letter regarded the Homeowners Claims Bill of Rights. State Farm inspected the property on October 10, 2022. On October 13, 2022, State Farm sent Complainants a letter advising them of their right to mediation with DFS. State Farm issued a letter to the Complainants on October 17, 2022, which detailed non-covered observed damages at the property and that no discernible wind damage exists because State Farm previously addressed the same damages in the Complainants’ prior claim reported three months beforehand. The letter stated: “Thank you for speaking with me on October 17, 2022, when we discussed the damage to your property. Based upon the results of our discussions, site inspection, and investigation, it was determined that there is no accidental direct physical damage to the following sections of the property: left elevation, rear elevation, dwelling rear slopes, woodshed, screen patio and plastic fencing. However, there is evidence of wear, tear, and deterioration to your shingles on the rear slopes. Damage resulting from these causes of loss is not covered by your policy.” In the 10/17/2022 letter, State Farm excerpted specific language from the Policy including “Your Duties After Loss” provisions 2a through 2f. State Farm also included an estimate with its coverage determination letter, reflecting that $840.31 was the amount of newly observed damages by the field adjuster. Since the applicable Policy deductible is $7,754.00, the amount of the estimate was ($6,913.69). It is important to note that Complainants reported a previous claim on June 16, 2022 with an alleged date of loss of March 12, 2022. State Farm’s 6/29/22 inspection of the insured property in relation to that claim resulted in estimated damages totaling $1,010.22, which was below the applicable $3,706.00 (non-hurricane) deductible. Damages related to the roof only and no interior damages. State Farm had already acknowledged, inspected, and adjusted the loss for the 3/12/22 claim. Moreover, State Farm previously accounted and paid (after applying the then-hurricane deductible of $7,412.00) for a full roof replacement in 2017 for this property to these same Complainants related to Hurricane Irma. Based upon a permit search in the public records, the Complainants never replaced their roof and therefore, also failed to recover the allowable depreciation for their Hurricane Irma claim. On November 28, 2022, State Farm wrote Complainants’ counsel pointing out the differences in the $34,122.00 estimate provided by Complainants (through counsel on 11/3/22), quoting applicable Policy language therein. On December 6, 2022, Complainants, through counsel, filed both a Notice of Intent to Initiate Litigation (“Notice”) and this CRN. State Farm responded to the Notice on December 10, 2022 standing on its prior decision. State Farm clearly responded to this claim in a timely fashion with applicable policy exclusions to its Insureds. State Farm also inspected the property and adjusted the loss under a reservation of rights, finding that the damages are below the non-hurricane deductible. Response to Individual Alleged Violations by State Farm As to §624.155(1)(b)(1), Florida Statutes, which addresses an insurer’s refusal to attempt to settle in good faith, Complainants have failed to show that coverage above the deductible is warranted for the alleged damages. Florida law continually affirms the principle that an insurer has the right to investigate claims presented for payment. An insurance company is expressly afforded an opportunity to evaluate its rights and liabilities. Neither the subject policy nor Florida law provide that a carrier must accept whatever demand is made by its Insureds must be accepted as the amount necessary to repair a loss. As stated above, an insured is limited to the coverage afforded under a policy of insurance, and the insurer has fulfilled its obligations under the policy for the damages observed. Therefore, State Farm has not violated this provision. Likewise, for §624.155(1)(b)(3), Florida Statutes, which addresses failing to promptly settle claims when the obligation to settle has become reasonably clear, State Farm responds that an obligation to settle with Complainant under these facts and circumstances is not apparent at all. State Farm has no duty to settle non-covered portions of disputed claims by its Insureds. Notwithstanding these facts, State Farm has made a good faith, reasonable settlement offer to its Insureds to resolve this dispute, which offer has not been accepted to date. State Farm has not violated this statute. State Farm denies any violation of §626.9541(1)(i)(2), Florida Statutes, which addresses a material misrepresentation made to an insured or any other person having an interest in the proceeds payable under such contract or policy, for the purpose and with the intent of effecting settlement of such claims, loss, or damage under such contract or policy on less favorable terms than those provided in, and contemplated by, such contract or policy. No facts have been presented nor do any facts exist supporting that State Farm has made a misrepresentation to its Insureds, let alone a material one. To the contrary, State Farm has been candid and responsive regarding this claim and the prior claims made by Complainants. State Farm strictly denies any violation of this statute. As to §626.9541(1)(i)(3)(a), Florida Statutes, addressing failure to adopt and implement standards for the proper investigation of claims, State Farm has demonstrated that it immediately acknowledged the claim to its Insureds, that it promptly investigated the claim a mere 4 days after receiving notice of the claim, and then, quickly issued a coverage determination letter 11 days after the claim was reported. State Farm plainly has not violated this provision. State Farm did not violate §626.9541(1)(i)(3)(d), Florida Statutes, regarding denial of claims without conducting reasonable investigations based upon available information. As set forth above, State Farm promptly investigated the loss and wrote an estimate for damages based on the inspection. Since the field adjuster observed no accidental direct physical loss and no new discernible wind damage since the Complainants’ prior two claims, the written estimate was under the Policy’s hurricane deductible. State Farm strictly denies violating this statute as it properly investigated the property twice in 2022 before issuing a coverage determination. Lastly, as to §626.9541(1)(i)(4), Florida Statutes, addressing an insurer’s failure “to pay undisputed amounts of partial or full benefits owed under first-party property insurance policies within 90 days after an insurer receives notice of a residential property insurance claim, determines the amounts of partial or full benefits, and agrees to coverage, unless payment of the undisputed benefits is prevented by an act of God, prevented by the impossibility of performance, or due to actions by the insured or claimant that constitute fraud, lack of cooperation, or intentional misrepresentation regarding the claim for which benefits are owed”, State Farm denies violating this statute because no undisputed portions of the claim exist, as set forth in the factual background section. To be clear, State Farm disputes the Complainants’ claim regarding existent coverage, damages within the Policy period, and amount. Conclusion In closing, State Farm asserts that the CRN should be rejected and returned by the Department of Financial Services due to its failure to comply with both §624.155, Florida Statutes, and Florida jurisprudence. Additionally, State Farm denies each and every allegation contained in the CRN. There is no evidence of any statutory violation by State Farm. This response is meant to be comprehensive and is based upon the information contained in the CRN and all information State Farm has to date. If Complainants feel that we are not in possession of all the facts, please inform us immediately. Please note that this response is not exhaustive; we are not precluded from asserting other valid reasons for seeking dismissal of the CRN. Also, this letter or any act or failure to act on the part of State Farm or any agent or representative of State Farm should not be construed as a waiver of any rights or defenses available to it by contract or at law as all such rights and defenses are hereby specifically reserved. We trust that this response addresses the allegations of insurer violation alleged in the CRN of Insurer Violation. Should you have any questions regarding this matter or need anything further, please do not hesitate to contact the undersigned. Respectfully submitted, /s/ Sunita N. Smith Sunita Smith, Esq. For the Firm cc: DFS via portal
Acknowledgement
* The submitter hereby states that this notice is given in order to perfect the rights of the person(s) damaged to pursue civil remedies authorized by Section 624.155, Florida Statutes.

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DFS-10-363
Rev. 10/14/2008