Filing Number: 782750
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| Filing Accepted: 9/13/2024 |
| Last/Business Name
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BLUE CRAB KEY CONDOMINIUM ASSOCIATION
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First Name |
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| Street Address
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5201-5481 BLUE CRAB CIRCLE |
| City, State Zip
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BOKEELIA,
FL
33922
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| Email Address
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BLUMCM9@GMAIL.COM |
| Complainant Type:
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Insured |
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| Last/Business Name* |
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BLUE CRAB KEY CONDOMINIUM ASSOCIATION |
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First Name |
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PHOEBE |
| Policy # * |
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AMC-36287-03 |
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Claim #* |
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CLM41904 |
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Attorney is Applicable
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| Last Name* |
WISE
First Name *
PHOEBE
Initial
S
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| Street Address* |
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5811 PELICAN BAY BLVD SUITE 650 |
| City, State Zip* |
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NAPLES
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FLORIDA
34108
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| Email Address * |
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PWISE@HAHNLAW.COM |
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| Insurer Type
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Authorized Insurer
Unauthorized Insurer
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| Insurer Name |
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| Insurer Name* |
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AMERICAN COASTAL INSURANCE COMPANY
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| Insurer Name* |
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| Street Address* |
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| City, State Zip* |
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,
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NAIC Company Code 12968 |
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| Name of individual responsible for violation (if any):*
SYLVIA BOLAR, TROY MCDERMOTT, ALEXANDER ZESCH
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| Type of Insurance
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Commercial Property & Casualty
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| Reason for Notice
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Claim Delay
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Unsatisfactory Settlement Offer
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Unfair Trade Practice
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Claim Denial
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Other
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Misprepresentation
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Statutory provision(s) which the insurer allegedly violated.
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| 624.155(1)(b)(1) |
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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.
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| 624.155(1)(b)(3) |
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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.
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| 626.9541(1)(i)(2) |
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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.
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| 626.9541(1)(i)(3)(c) |
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Failing to acknowledge and act promptly upon communications with respect to claims.
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| 626.9541(1)(i)(3)(d) |
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Denying claims without conducting reasonable investigations based upon available information.
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| 626.9541(1)(i)(3)(f) |
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Failing to promptly provide a reasonable explanation in writing to the insured of the basis in the insurance policy, in relation to the facts or applicable law, for denial of a claim or for the offer of a compromise settlement.
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| 626.9541(1)(i)(3)(g) |
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Failing to promptly notify the insured of any additional information necessary for the processing of a claim.
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| 626.9541(1)(i)(3)(h) |
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Failing to clearly explain the nature of the requested information and the reasons why such information is necessary.
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| 626.9541(1)(i)(3)(j) |
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Altering or amending an insurance adjuster’s report without:
(I) Providing a detailed explanation as to why any change that has the effect of reducing the estimate of the loss was made; and
(II) Including on the report or as an addendum to the report a detailed list of all changes made to the report and the identity of the person who ordered each change; or
(III) Retaining all versions of the report, and including within each such version, for each change made within such version of the report, the identity of each person who made or ordered such change;
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Specific policy language that is relevant to the violation.
Enter all words or phrases (one at a time) that should be used to filter.
Loss Payment:
In the event of loss or damage covered by this Coverage Form, at our option, we will either:
1) Pay the value of lost or damaged property;
2) Pay the cost of repairing or replacing the lost or damage property, subject to (b) below;
3) Take all or any part of the property at an agreed or appraised value; or
4) Repair, rebuild or replace the property with other property of like kind and quality, subject to (b) below.
We may adjust the losses with the owners of lost or damaged property if other than you. If we pay the owners, such payment will satisfy your claim against us for the owners’ property.
We will pay for covered loss or damage to Covered Property within 40 days after we receive the sworn proof of loss, if you have complied with all of the terms of this Coverage Part and:
1) We have reached an agreement with you on the amount of loss; or
2) An appraisal award has been made.
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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, while the insurance policy was in full force and effect, Hurricane Ian passed through the Lee County, Florida with NOAA speeds ranging between 141 mph and 161 mph as reported by NOAA, causing substantial damage, including water intrusion, to the Property, including the interior and exterior of all covered buildings.
On October 1, 2022, Blue Crab Key Condominium Association (“Blue Crab”) promptly and timely notified the AmCoastal Insurance Company (“AmCoastal”) of its loss (the “Claim”) through its third-party claims adjuster—AmRisc. Sedwick was then assigned to the claim.
Due to the extensive nature of the claim and size of the Property, Blue Crab hired Dean Cavalieri of Accurate Insurance Management Services and William Schulte, a certified general contractor to assist it with the loss and Claim.
On December 15, 2022, AmCoastal issued a $100,000 advance on the Claim. In January, the adjuster advised that he was going to request another $1,000,000 in advanced funds for the Claim due to the extensive damage to the Property. However, on January 10, 2023, AmCoastal only provided a $450,000 advance. This advance did not even cover the emergency mitigation performed by ServePro which totaled $958,600.00 (not included Overhead & Profit of approximately $191,600.00). Over the next two years, the parties continued to adjust the claim. Blue Crab Key provided all documentation requested and complied with requirements under the Policy related to cooperation and adjustment. In fact, Blue Crab Key, through Bill Schulte and Dean Cavalieri, has provided copies of all estimates, invoices and copies of checks related to the repairs at the Property.
AmCoastal hired DBA Construction Consultants (“DBA”) to inspect the Property and prepare a report identifying the scope and amount of damage. On December 14, 2022, DBA requested additional documentation, which Blue Crab promptly provided. Thereafter, in March 2023, AmCoastal provided Blue Crab with DBI’s report and an undisputed payment in the amount of $988,667.12. However, to date AmCoastal still has not paid for all items identified on DBI’s report—despite the funds being clearly owed as identified by AmCoastal’s own expert.
AmCoastal hired Engineering Systems, Inc. (“ESI”) to also inspect the Property and prepare a cause and origin report. However, the report was severely flawed. For example, the ESI report classifies Hurricane Ian as a Category 3 storm and identifies NOAA’s report as the source of that information. NOAA’s report identified wind speeds in knots not miles per hour. The conversion to mph leaves no doubt that Hurricane Ian was just 2 mph shy of a Category 5 storm when it made landfall at Cayo Costa, Florida--- just a few miles from Blue Crab. ESI also attempted to shift the burden of claim adjustment onto Blue Crab by stating that it did not address Building M because Blue Crab did not yet have “structural repair drawings.” However, AmCoastal---not Blue Crab is required to adjust the loss. Blue Crab simply needs to provide documentation requested--- and not proposed repairs. ESI also failed to consider Florida Building Code from the requisite time period that each building was completed. It also ignored Florida Building Code’s requirement for life safety----- many of the windows that no longer open or close property are “exit” windows to meet the code’s safety requirement. ESI also failed to determine whether parts for the windows are still available—many of which are not. Blue Crab advised AmCoastal of the clear deficiencies in ESI’s report---yet to date, AmCoastal continues to rely on the ESI report as a basis for the partial claim denial—despite, Blue Crab identifying the blatantly incorrect information set forth in ESI’s report. ESI used incorrect wind speeds, failed to indicate or determine whether parts to repair the windows are still available (Blue Crab has identified which parts are available and which are not and provided that information to AmCoastal---however, not all parts for any window are available), failed to use the correct building code for each building, and failed to address the window’s life saving requirements as required by Florida Building Code and Florida law.
Thereafter, AmCoastal hired Thomas Wareham to inspect the Property. Mr. McDermott characterized the inspection as a third-party construction consultant to address the damage to the windows and building envelope. However, it turns out that the inspection was not a neutral third-party analysis of the window claim. Instead, AmCap hired Wareham Construction Inc. to simply prepare an Xactimate estimate for the cost to repair damage identified by ESI. He did not perform his own independent analysis of the claim. This additional inspection wasted months of time. In March 2024, AmCoastal then issued payment a supplemental payment to Blue Crab Key in the amount of $1,039,001.67 based on Thomas Wareham’s estimate. However, Thomas Wareham’s estimate failed to include certain items identified by DBI. Accordingly, to date, there are still items identified in either DBI’s report and Thomas Wareham’s report for which AmCoastal has not paid Blue Crab. All items identified on DBI and Wareham’s report must be paid. AmCoastal must also comply with 626.9541(1)(i)(3)(j) and (1) Pay the value of lost or damaged property; (2) Pay the cost of repairing or replacing the lost or damage property, subject to (b) below; (3) Take all or any part of the property at an agreed or appraised value; or (4) Repair, rebuild or replace the property with other property of like kind and quality, subject to (b) below.
On March 7, 2024, AmCoastal then sent its final coverage letter maintaining its partial denial of the claim. AmCoastal based the remainder of its claim denial on ESI’s determination that “damages to the concrete columns on buildings A, E, & H were a result of wear & tear as a result of long-term moisture exposure which is not covered under this windstorm policy.”
On April 1, 2024, Blue Crab Key submitted a partial Sworn Proof of Loss in the amount of $8,969,028.21. Steven Kahn also inspected the Property to address AmCoastal’s refusal to cover the windows and doors which required total replacement. To date, Blue Crab Keys continues to find window leaks during hard rain. Videos and documentation of the leaks have been provided to AmCoastal, which AmCoastal has ignored. Additionally, since April 1, 2024, Blue Crab Key has incurred additional costs, bringing the cost of the Claim to $10,644,844.92. For example, LCEC had to run new underground lines, there were additional electrical repairs, and additional costs associated with the sewer, irrigation and repairs to the pool house, fencing and equipment. Blue Crab Key continues to provide all invoices, copies of check and other documentation to support its Claim. Mr. Schulte has also provided itemized spreadsheets for each building. In fact, Blue Crab continues to resend documentation and proofs of repairs to AmCoastal over and over again. However, each time a new adjuster or attorney is assigned, its as if the documentation disappears and AmCoastal requests the same documents all over again. This has significantly delayed the claim and demonstrates a failure to properly adjust the claim or set standards for an investigation.
To date, AmCoastal has paid Blue Crab Key $4,900,809.11 towards the $10,644,844.92 owed. Specifically, AmCoastal has issued the following payments:
12-15-22 Ck# 29883 $ 100,000.00
01-10-23 Ck# 30099 $ 450,000.00
03-29-23 Ck# 31354 $ 988,667.12
06-09-23 CK# 32526 $ 913,449.86
07-21-23 CK# 33246 $ 492,096.72
09-21-23 Ck#34491 $ 181,013.95
10-17-23 Ck# 34932 $ 262,193.82
03-10-24 Ck# 36859 $ 1,039,001.67
05-09-24 Ck#37378 $ 474,385.97
Accordingly, $5,744,035.81 remains due and owing on the underlying claim itself. However, AmCoastal has failed to pay interest on the above referenced payments--- despite the clear requirement under Florida law to do so. AmCoastal has also failed to pay the entire scope of loss identified by its own experts without providing an explanation as to why it has withheld payment for those items. Additionally, AmCoastal continues to rely on ESI’s report despite its clear deficiencies, as explained above. The conduct described above clearly demonstrates that AmCoastal is not acting in the best interest of Blue Crab and is simply trying to put its own interests before those of its insured. i.e. refusing to accept proper documentation of claim, Sworn Proofs of Loss, requesting the same documentation over and over again, relying on faulty reports (even after the blatant mistakes have been pointed out to AmCoastal), and failing to pay all funds due when it becomes reasonably known that the money is owed and the loss incurred. There is no dispute that Blue Crab is entitled to payment for damage identified in the DBI and Thomas Wareham reports. Yet, Blue Crab hasn’t received full payment. Additionally, Florida law requires that AmCoastal pay interest on all payments not timely made. None of the payments were timely made and interest is owed for all funds previously paid--- and all funds which remain outstanding.
The lack of communication and oversight during the claims process demonstrates AmCoastal’s failure to adopt and implement standards for the proper investigation of the claim, failure to take the insured interest into account and has deliberately refused to settle the claim when it became reasonably clear to do so. AmCoastal can cure this violation by paying the remainder of the total loss and damage owed under the Policy ($5,744,035.81) plus interest on the $5,744,035.81 ($846,269.46) and interest on all checks previously paid ($276,662.30). The total amount required to cure this violation is $6,866,967.57.
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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.
Before submitting a Notice using this system, please verify that all text has been entered
correctly and completely. Once the Notice has been submitted, the text cannot be changed
or deleted.
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DFS-10-363
Rev. 10/14/2008
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