Filing Number: 786196
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| Filing Accepted: 10/8/2024 |
| Last/Business Name
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WANG
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First Name |
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LINH AND CELSO SHENG FAH |
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| Street Address
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8424 N MULBERRY STREET |
| City, State Zip
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TAMPA,
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33604
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| Email Address
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KAISENVENTURES@GMAIL.COM |
| Complainant Type:
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Insured |
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| Last/Business Name* |
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WANG |
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First Name |
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LINH & CELSO SHENG FAH |
| Policy # * |
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ADP0013980 |
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Claim #* |
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AH141026 |
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Attorney is Applicable
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| Last Name* |
CHAVIN
First Name *
VALORIE
Initial
S
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| Street Address* |
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12955 BISCAYNE BOULEVARD, SUITE 201 |
| City, State Zip* |
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NORTH MIAMI
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FL
33181
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| Email Address * |
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VCHAVIN@CMSLAWGROUP.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 TRADITIONS 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 12359 |
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| Name of individual responsible for violation (if any):*
VICTORIA BOSTWICK; JASON LOHEIT
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| Type of Insurance
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Residential Property & Casualty
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| Reason for Notice
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Claim Denial
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Claim Delay
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Unfair Trade Practice
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Other
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Violation of Florida Administrative Code 69B-220.201
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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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| 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)(a) |
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Failing to adopt and implement standards for the proper investigation of claims.
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| 626.9541(1)(i)(3)(b) |
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Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue.
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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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Specific policy language that is relevant to the violation.
Enter all words or phrases (one at a time) that should be used to filter.
Linh Wang and Celso Sheng Fah Wang (the “Insureds”) paid for a policy of insurance with American Traditions Insurance Company (“the Insurance Company” or “the Carrier”) bearing policy number ADP0013980, which provides coverage for damages to the Insureds’ investment property, including significant damage sustained as the result of a failed plumbing component. The Insureds submitted a claim to the Insurance Company when a sudden and accidental escape of water from the plumbing system damaged their Property. Sadly, the Insurance Company elevated its own interests over those of its Insureds, and what should have been a simple adjustment of a covered claim quickly became protracted when the Carrier refused to exercise care in the adjustment of the claim, intentionally refused to acknowledge obviously covered damages, ignored the Insureds’ evidence of the damages suffered and the cause of same, and misrepresented the policy’s terms and conditions as a means of denying coverage for the loss. To date, the Insureds are still without the compensation to which they are entitled, and they have been forced to pay out-of-pocket to restore their Property, and have lost substantial rental income during the time the Property was uninhabitable. The Insurance Company has failed and refused to fully, timely and properly compensate its Insureds for the damages suffered because of this covered loss.
The Insureds believe the following Policy language is at issue:
CONDITIONS
. . .
a. “Your” Duties After Loss. In case of a loss to covered property, you must see that the following are done. These duties must be performed either by you, an “insured” seeking coverage, or a representative of either:
(1) Give prompt notice to us or your insurance agent;
. . .
Except for Necessary Emergency Measures taken under OTHER to COVERAGES 6. solely to protect covered property from further damage when the damage or loss is caused by a Peril Insured Against, there is no coverage for repairs that begin before the earlier of:
(a) 72 hours after we are notified of the loss;
(b) The time of loss inspection by us; or
(c) The time of other approval by us;
. . .
(4) As often as we reasonably require:
(a) Show the damaged property to the extent reasonably possible;
(c) Provide us with records and documents we request
. . .
(6) To the degree reasonably possible:
(a) Retain the damaged property including any damaged or failing components which could be attributed to the cause of a loss whether or not that component is covered under the policy; and
(b) Allow us to inspect, photograph and/or videotape all damaged property including any damaged or failing components which could be attributed to the cause of a loss whether or not that component is covered under the policy prior to its removal from the “insured location”, to determine the cause of loss and the condition it was in at the time of loss.
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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.
The Insureds own property located at 824 N. Mulberry Street, Tampa, Florida 33604 (“the Property”). The Property consists of three separate units the Insureds offer as rental properties. On March 18, 2024, the Insureds were alerted by their tenants in Unit C that an escape of water from the plumbing system in the unit above the garage caused water to leak down into the garage, damaging the ceiling. The Insureds immediately called a plumber to address the leak. The plumber identified the leak stemmed from the toilet wax ring in the unit’s bathroom. He cut into the garage ceiling and was dismayed to find significant, pervasive black mold throughout the area. The plumber recommended the Insureds retain a water and mold remediation company without delay.
That same day, based on the Insurance Company’s recommendation, the Insureds contacted Florida Elite Restoration (“Florida Elite”) to assist with reasonable and necessary mitigation. Florida Elite took numerous photographs, documenting the damage to the Property prior to beginning mitigation efforts. Once the damage was fully documented, Florida Elite began emergency restoration work to dry the Property and treat the mold growth to prevent additional, exacerbated damages. To properly remediate the damage, Florida Elite removed the failed toilet, as well as the water-logged vanity and the saturated flooring and walls, together with the damaged portion of the garage ceiling. The area was then dried, and the mold growth was treated. GermMasters Environmental issued a Post-Remediation Verification Clearance Report confirming the mold remediation obtained satisfactory results.
The Insureds submitted a claim to the Insurance Company to address the damage and also paid to relocate the tenants in Unit C because the Property was uninhabitable due to the considerable damages. The Insurance Company acknowledged receipt of the claim and requested a copy of the lease agreement for the affected unit. Instead of properly adjusting the Insureds’ loss and timely paying the Insureds for the damage to their Property so they could make the necessary repairs, the Insurance Company began its efforts to avoid its contractual obligations to fully compensate the Insureds for the claim. The Insurance Company assigned the claim to an outcome-oriented adjuster who approached the loss with an eye towards denial. The retained adjuster, Jason Loheit, is neither a plumber, a contractor, nor an engineer, and is therefore unqualified to determine the cause of the damage, the necessary repairs required to restore the Property to pre-loss condition, or the reasonable costs to make such repairs. Yet, Mr. Loheit was the only representative to inspect the Property on behalf of the Insurance Company. At the time of Mr. Loheit’s inspection, Florida Elite had commenced emergency water and mold mitigation efforts to protect the Property from further damage, as recommended by the Carrier. The Insureds had not begun any repairs of the damage, having retained Florida Elite to only complete the immediate water and mold restoration. Had the Insurance Company retained a qualified expert to inspect the Property, the expert would have easily ascertained that the damage stemmed from a plumbing failure in the bathroom, and that only reasonable emergency measures had been taken immediately following the loss. However, rather than appreciating the urgent nature of the restoration services performed, the Insurance Company sought to misrepresent the terms and conditions of the Policy, mislead its Insureds, and use the recommended mitigation work as a justification for denying coverage for the loss.
Following the inspection, the Insurance Company issued a Reservation of Rights letter reminding the Insureds of their duty to “promptly report the claim and show [the Carrier] the damages.” Confident that they timely reported the claim in accordance with the Policy’s conditions, the Insureds provided the Carrier with nearly 400 photographs taken by Florida Elite documenting the damage to the Property and clearly indicating the damage stemmed from a plumbing loss in the bathroom. The Insureds also connected the Carrier’s desk adjuster with the representative from Florida Elite, and the Florida Elite representative provided the Carrier with a copy of its entire file including all photographs, reports, and invoices documenting the damage prior to, and during the restoration work. The Carrier failed to carefully review the photographs and other documentation provided, as evidenced by its supplemental request for photographs of the flooring and sub-flooring after the toilet was removed and photographs of the garage ceiling – all of which had been previously provided as part of Florida Elite’s file.
Rather than carefully reviewing the documents provided by the Insureds and Florida Elite that clearly show the state of the Property when the loss was first discovered, the Insurance Company flatly denied the Insureds’ claim, charging the Insureds with “gutting” the bathroom prior to the Carrier’s inspection and failing to submit photographs of “the damages upon discovery.” The Carrier misrepresented the terms and conditions of the Policy, alleging the Insureds failed to comply with certain duties including, “prompt report, duty to show, submit documents we request and cooperate with [the Carrier] in the investigation of [the] claim,” although the Insureds promptly reported the claim and took only the reasonable steps necessary to protect the Property from further damage. The Insureds made the Property available for the Carrier’s inspection and submitted all documentation the Carrier would need to appreciate the cause and extent of the loss and properly adjust the claim. Nevertheless, the Carrier misconstrued the reasonable and necessary emergency restoration completed by Florida Elite as “repairs” to the Property and charged the Insureds with prejudicing the Carrier’s investigation by repairing the damage prior to the inspection.
Dismayed by the Carrier’s refusal to acknowledge coverage for the loss, the Insureds sought the assistance of Florida Elite to confirm the Carrier was provided with all information necessary to adjust the claim. The representative from Florida Elite contacted the Carrier’s desk adjuster and specifically indicated the photographs that depict the cause of the loss prior to commencement of restoration work. The Insureds and their representative explained to the desk adjuster that no repairs were made, and instead only emergency measures were taken to protect the Property from further damage, especially given the presence of pervasive mold. The Florida Elite representative confirmed, “we have done no such repairs to date on this claim, only emergency services . . . That is why we have put a halt to the project and have been awaiting approval before beginning the repairs.” The Insureds implored the Carrier to reconsider its improper denial, taking into account the ample evidence provided by Florida Elite confirming the damage was the result of a covered loss. The Carrier refused.
Notwithstanding the Insureds’ complete cooperation at every step of the adjustment, the Insurance Company failed to meaningfully adjust the loss and assist the Insureds in restoring their damaged Property. The Carrier relied only on the single inspection completed by its unqualified adjuster, refused to issue any payment and maintained the disingenuous position that the emergency measures taken by the Insureds somehow prejudiced the Carrier’s investigation – despite that the Policy places the onus upon the Insureds to take necessary post-loss measures to protect the Property from further loss. The Carrier misrepresented the Policy’s terms and conditions in arguing that the Policy does not provide coverage for repairs commenced earlier than 72 hours after the Insurance Company is provided notice of the loss, although the Policy allows (and, in fact, requires) emergency services to be taken to protect the Property. In so arguing, the Carrier refused to acknowledge that the Insureds took only reasonable and necessary emergency measures to prevent the spread of pervasive mold, and that actual repairs to the Property necessitated by the water loss had not begun. Moreover, the Carrier failed to appreciate that its investigation was not prejudiced by the emergency measures because the Insureds provided ample proof of the cause of the damage to the Property. The Insurance Company demonstrated its carelessness in the adjustment when it repeatedly requested (and subsequently ignored) photographs of the damage before emergency services commenced. Determined to deny payment to its Insureds, the Insurance Company refused to reconsider its position. The Insureds felt abandoned by their Insurance Company. Left without recourse, they had no choice but to retain counsel to protect their rights.
In order to solidify its avoidance of coverage for this otherwise covered loss, the Insurance Company also took the position that the Policy excludes coverage for the effected garage unit because it is an “other structure,” as it is “set apart from the dwelling by a clear space.” The Policy excludes coverage for “other structures” when it is “rented or held for rental to any person not a tenant of the dwelling, unless solely as a private garage.” Meanwhile, the tenants of Unit C are part of the same family and the renters of the main house / dwelling. As such, the Carrier’s purported reliance on this exclusion to coverage is misplaced.
The Insurance Company’s pattern of failing to adopt and implement standards for the proper investigation of claims as evidenced by its lackluster investigation and failure to acknowledge and appreciate evidence of the cause of the damage constitutes a violation of 626.9541(1)(i)(3)(a). The Carrier’s misrepresentation of pertinent facts and insurance policy provisions relating to coverages at issue to justify its wrongful denial of coverage constitutes a violation of 626.9541(1)(i)(3)(b). The failure to promptly notify the Insureds of additional information necessary for the processing of the claim or to clearly explain the nature of requested information and the reasons why such information is necessary is a violation of 626.9541(1)(i)(3)(g)-(h). The Insurance Company’s unreasonable delay and failure to promptly and completely settle the claim establishes violations of sections 626.9541(1)(i)(4), 624.155(1)(b)(1), and 624.155(1)(b)(3). By misrepresenting the terms and conditions of the Insurance Policy as a means of denying coverage to the Insureds, the Insurance Company violated section 626.9541(1)(i)(2), Florida Statutes (“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”).
The actions taken by the Insurance Company in the handling and adjustment of the claim giving rise to the violations addressed herein, including the established pattern of failing to retain competent and qualified experts to fully and fairly adjust the claim, ignoring clear evidence of covered damages, disregarding the Insureds’ evidence of the cause of the damage, and misrepresenting Policy terms to justify its improper denial of coverage occur with such frequency as to indicate a general business practice and these acts are willful, wanton, and in gross disregard for the rights of its Insureds.
The Insurance Company’s actions amount to, but are not limited to:
A. “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;” (Fla. Stat. 624.155(1)(b)(1).
B. “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;” (Fla. Stat. sec. 624.155(1)(b)(3))
C. Claim Delay;
D. Claim Denial; and
E. Unfair Trade Practices
The Insurance Company’s actions further amount to unfair claim settlement practices:
1. 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; (Fla. Stat. 626.9541(1)(i)(2)).
2. Committing or performing with such frequency as to indicate a general business practice any of the following:
a. Failing to adopt and implement standards for the proper investigation of claims; (Fla. Stat. 626.9541(1)(i)(3)(a))
b. Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue; (Fla. Stat. 626.9541(1)(i)(3)(b))
c. Failing to acknowledge and act promptly upon communications with respect to claims; (Fla. Stat. 626.9541(1)(i)(3)(c))
d. Denying claims without conducting reasonable investigations based upon available information; (Fla. Stat. 626.9541(1)(i)(3)(d))
e.
g. Failing to promptly notify the insured of any additional information necessary for the processing of a claim; (Fla. Stat. 626.9541(1)(i)(3)(g))
h. Failing to clearly explain the nature of the requested information and the reasons why such information is necessary; (Fla. Stat. 626.9541(1)(i)(3)(h)).
3. Failing 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. (Fla. Stat. 626.9541(1)(i)(4)).
In addition to the above statutory violations, the Insurance Company’s adjuster violated the following ethical requirements of Florida Administrative Code 69B-220.201:
(3) Code of Ethics . . . An adjuster shall put the duty for fair and honest treatment of the claimant above the adjuster’s own interests in every instance. The following are standards of conduct that define ethical behavior, and shall constitute a code of ethics that shall be binding on all adjusters:
(b) An adjuster shall treat all claimants equally.
2. An adjuster shall adjust all claims strictly in accordance with the insurance contract.
(c) An adjuster shall not approach investigations, adjustments, and settlements in a manner prejudicial to the insured.
(d) An adjuster shall make truthful and unbiased reports of the facts after making a complete investigation.
(e) An adjuster shall handle every adjustment and settlement with honesty and integrity, and allow a fair adjustment or settlement to all parties without any remuneration to himself except that to which he is legally entitled.
(f) An adjuster, upon undertaking the handling of a claim, shall act with dispatch and due diligence in achieving a proper disposition of the claim.
(o) An adjuster shall not undertake the adjustment of any claim concerning which the adjuster is not currently competent and knowledgeable as to the terms and conditions of the insurance coverage, or which otherwise exceeds the adjuster’s current expertise.
In Florida, the work of adjusting insurance claims engages the public trust. During the adjustment of the Insured’s claim, the Insurance Company breached this duty by failing to adhere to and comply with the above referenced obligations. To cure the defects outlined above, the Insurance Company must:
A. Tender all insurance proceeds due and owing to the Insureds that would reasonably place the Property back into a pre-loss condition;
B. Withdraw the baseless denial of coverage for the Insureds’ loss;
C. Timely communicate with the Insureds’ representative(s) to complete the adjustment of the loss by participating in good faith negotiations to reach an agreement relating to the scope and amount of the Insureds’ loss;
D. Immediately issue payment for statutory interest for any late payments;
E. Act fairly and honestly towards the Insureds and with due regard for their interests;
F. Hire a fair, unbiased, and qualified adjuster(s) and expert(s) to properly assess the Insureds’ damages;
G. Timely and substantively respond to the Insureds’ representative(s)’s communications;
H. Issue payment and provide a written explanation and detail of the payments issued;
I. Timely adjust the claim with the Insureds and avoid/limit any additional delay, costs, and prejudice that the Insurance Company’s conduct above has caused and continues to cause the Insureds;
J. Participate in good faith claims adjustment to avoid the Insureds incurring unnecessary costs of litigation.
This Civil Remedy Notice is given to perfect the right to pursue the civil remedy authorized by this section.
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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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