Tomorrow is the BIG Day

Well, it’s here!  The big day has finally arrived and tomorrow at 7 a.m., those of us who haven’t already voted will make the trek to our polls and yield the power we are given by our U.S. Constitution. We here at LMA sure don’t take that power lightly and know you don’t either.  Lots of lives and lifetimes have been, and are still being devoted to the freedom that we should never, ever take for granted.  We, the voters, DO make the difference and since the race for governor and many others are seemingly very close, that’s even more reason to cast those crucial votes.  We’ll see you at the polls tomorrow and of course, be glued to our televisions, computers and other forms of media on Tuesday night for the results.  And we will be celebrating because no matter what those results are, we MUST stand together as a state and a nation to provide the support our leaders need. They have tremendous responsibilities in their respective positions, and they absolutely cannot do what is best for us all without our full support and assistance! As we count on them, they in turn, count on us.

Technology Report:  Will drones replace the human adjuster?

The Federal Aviation Administration (FAA) oversees the use of unmanned aircraft systems (UAS or drones) and thus far has been strict in limiting their usage. In fact, the FAA has practiced just saying “no” when organizations such as the realtors who have requested permits to use drones over U.S. land and waters for property valuation purposes.  From the insurance industry’s standpoint, we can use them for research, catastrophe response, underwriting inspections, surveillance to deter and potentially detect insurance fraud…you name it!

Recently, however, the FAA has softened its stance slightly, granting regulatory exemptions to six aerial photo and video production companies, on behalf of the Motion Picture Association of America, to use small Unmanned Aerial Vehicles (UAVs). Many federal policy observers cheered saying that this is a “significant milestone” in broadening commercial use of unmanned aircraft.  Others have said that drones can be weapons and pose a threat because they are easily undetected.  From the insurance industry’s standpoint, it’s obvious that following catastrophes, an insurer could coordinate with emergency response officials to operate the unmanned aircraft to assess the extent and severity of damage to insured property more quickly, efficiently and safely. It’s no secret that claims adjusters can suffer injuries climbing atop (or falling through) roofs when attempting to assess damage, exacerbating worker’s compensation claims and lost work time.

So the real test is this:  Do insurers catch this “wave of technology” and get in the UAS zone like FedEx, Office Depot, and other transportation powerhouses who have plans to use UAS to deliver overnight packages and office supplies to the recipient’s doorstep?   Do we think drones inspecting roof damage will make human adjusters obsolete? It is LMA’s considered opinion the it will be a very long time before drones replace the needed subjectivity and common sense that adjusters provide. Drones will likely do no more than what some field inspectors/estimators provide, such as take digital photographs, calculate measurements/dimensions of the damage and submit that information to an actual licensed adjuster who can properly adjust the claim. We think the human element in claims adjusting can’t be replaced but drones could well change the process drastically. Certainly the speed with which external inspections could occur using drone technology may increase drastically as well as the number of such  (roof damage inspections, for example) inspections that could occur in a given day. Further, the information gained from these aerial inspections may help insurers to more quickly categorize claims, identifying those that will most likely require internal inspection by humans. Regardless to what degree the industry embraces this new technology, it’s fairly certain that the need for human analytical skills and decision making will never become obsolete in the claims adjusting process.  We will be curious to hear your thoughts!

PIP Statute being challenged by the Palm Beach County School Board

We know that the ongoing saga of Florida’s embattled PIP system is an issue being closely monitored by many in our industry, therefore, we try to always take notice when things happen that involve PIP.  So with that, we wanted to share with you the latest attack on the PIP statute.  The Palm Beach County School Board (PBCSB) has filed suit in circuit court requesting that a judge declare a part of the PIP law or at least the part’s application as being unconstitutional. This latest suit is just another in a long line of litigation initiated after key reforms aimed at cutting out fraud and abuse within the system were passed a little over two years ago by the Florida Legislature. Some supporters of the Legislature’s 2012 reform initiative, however, continue to say that the effort didn’t do what was needed to battle high costs, fraud and abuse within the system. In its circuit court action the PBCSB is saying that automobile insurers are shifting their obligations onto public entities, illustrating their case with a school bus driver who was injured on the job, and received PIP benefits from his insurer. When the insurer sought reimbursement from the school district for the PIP claim (considering it was a school-bus related accident), the school district responded that it wasn’t required to reimburse the insurer because of the protection it enjoys under Florida’s sovereign immunity law. However, the state law governing an insurer’s right of reimbursement with accidents involving commercial vehicles (defined to include public school transportation), has been on the books since at least the 1990s. We will keep a close eye on this case and let you know how the circuit court rules. Regardless of which side prevails, we expect the opposite party to take the matter up on appeal.

Stacked Opposed to Non-Stacked UMBI Coverage

We wanted to share a terrific article we read in The WE Advisor because it reminded us that as former state insurance regulators, we can’t begin to tell you the number of times we observed agents on the stand defending their licenses in administrative hearings who could not properly explain to the judge how a particular coverage or product worked. To that end, we wanted to reprint one of the best, straightforward and easy to understand explanations of the difference between stacked verses non-stacked uninsured motorist/bodily injury coverages we’ve seen in a long time.

Why You Need Stacked UM Even for Single Car Policies

Authored By: Ron Kuruvilla, Corporate Trainer/Agent Advocate for WE Insure, Inc., Jacksonville, Florida

Insureds ask agents all the time whether or not they should get stacked Uninsured/Underinsured Motorist Bodily Injury Coverage (UMBI). Insureds know it costs more for stacked coverage and unfortunately, most agents don’t really understand the difference between stacked UM and non-stacked UM so all they can do many times is agree with the insured and move on. However, Stacked UM is actually a whole lot more than that. You, as the agent, should be offering stacked UM to every single insured; even that single car policy you just wrote.

First of all, what is uninsured motorist coverage? This very important coverage will pay for an insured’s damages if he/she is in an accident with an insured that is not carrying any bodily injury liability insurance or someone who is not carrying enough bodily injury insurance to cover all the damages the driver caused to the injured party. Many insureds tend to drop this important coverage because they don’t understand what it actually pays for and how not having it can have some devastating consequences in the event of a major claim. Time and time again, I have heard agents tell insureds that stacked UM just means that coverage limits “stack on top” of each other so for example a $100,000 limit would be $300,000 when there are three cars on a policy. That’s part of the answer. However, non-stacked UM is a vehicle-specific coverage whereas stacked UM follows the insured from vehicle to vehicle and a whole lot more. If the insured is using another vehicle and gets into a wreck, his stacked UM will cover his injuries should it be needed. Stacked UM also covers the insured as a passenger in another person’s vehicle, riding a bike or even as a pedestrian. In fact, stacked UM can also follow you when you are riding in other street legal vehicles for which you may already have a separate policy for. For example, if an insured has a personal auto policy with stacked UM limits of 100/300 with ABC Insurance Company and a motorcycle policy with XYZ Insurance Company, in the event of an accident involving the motorcycle, the insured’s stacked UM with ABC Ins Co will cover his injuries even though the motorcycle is insured through XYZ Ins Co.

It is very important that you understand UMBI so that you can explain it properly to your insured’s. Do not assume that the insured knows. You are the one with the license and as such, the state expects you to be the expert. In the event of a claim, the insured and his lawyer may infer that their agent didn’t explain UM fully or worse, didn’t event offer it. If you are deposed and can’t explain what UM is and/or difference between stacked and non-stacked UM, there will be doubt as to whether you were able to explain it at all and even a UM rejection form may be called into question. There was an agency in Florida that was sued multiple times in one year by the same law firm over their failure to offer stacked or in some cases UM at all. The producer was not able to explain what UM was and the importance for it at a deposition and their E&O carrier ended up paying out every single time. Take the time to explain all the coverages to your insureds and document the conversation, even going so far as having the insured sign the documented conversation acknowledging they understand its intent. Failure to spend 15 minutes explaining coverages fully to your insured could mean hours on the stand and thousands of dollars out of pocket later.

 Should Amendment 2 Pass, How Will Medical Marijuana Impact Florida’s Workers’ Compensation System?

It was interesting that at a recent gathering of insurance industry folks, where the Governor was speaking on his “get out to vote” topic, that the real topic of discussion became Amendment 2.  “How will the five percent premium credit that employers qualify for by having a state-sanctioned drug-free workplace program be handled?”; “Will workers’ compensation insurers have to provide marijuana to injured workers as part of their medical benefits?”; and “Will workers’ compensation policy language need to be changed to allow for the use of “medical marijuana?” were some of the questions asked from the group.  I think we all have lots of questions and questions mean research, which we did.  And while we found a few things to share on the topic as it relates to workers’ compensation insurance, we know this will be one of ongoing learning as we go, if the amendment does pass.  And if it does, the law will have a significantly expanded definition of what is an appropriate use for medical marijuana. As such, the Florida Department of Health will most likely license growers, dispensaries, users and personal caregivers, who would presumably assist others such as the elderly or disabled. Of particular interest to Florida employers, Amendment 2 states that accommodations for medical marijuana use are not required in any place of education or employment and health insurers will not be required to pay for medical marijuana.   We do see where there will be conflicting obligations under federal and state law, and even county ordinances, such as the Miami-Dade Human Rights Ordinance. This Ordinance requires employers to make “reasonable accommodations” to employees’ with disabilities. And, as this relates to the drug-free workplace premium credit, passage of Amendment 2 will not repeal or restrict these Drug-Free Workplace incentives.  We in Florida will certainly need to remember that regardless of what state law says, possession, cultivation and distribution of marijuana is still illegal in the eyes of the federal government, and is still a Schedule 1 narcotic – the same classification as heroin and cocaine. If any employer in Florida is subject to federal regulation or licensure, that employer must continue to remain in compliance with the federal laws that allow them to stay in business. In addition, nothing in Amendment 2 will force employers to allow workers to come to the job under the influence of marijuana. However, unlike a blood alcohol test, there are no easy tests or objective standards to measure current marijuana impairment. It will rest upon the employers to guard against impaired users coming to work and/or remaining at work. Medical marijuana sure does open a new can of “worms” in the world of workers’ compensation injuries and the rates that are set considering the factors of severity and frequency of workers’ compensation injuries. Should Amendment 2 pass tomorrow, we will certainly be watching this evolve one way or the other as time passes and lessons are learned.

The Property and Casualty Insurance Fraud Task Force is Making a Difference

The P&C Insurance Fraud Task Force held its quarterly meeting on October 22 in Lake Mary, Florida, with a packed crowd of task force members coming together to continue their work of fighting fraud in our great state.  We are honored and privileged to be a part of this dedicated group and wanted to share a bit about them in today’s publication.  For those of you who may not be aware of the task force and how it functions, it is made up of a team of insurance company SIU folks, state insurance fraud investigators, claims adjusters, attorneys, prosecutors, and all types of folks who really want to “stomp out fraud” in our state. The Task Force was created in 2010 by the Florida Department of Financial Services with the mission to reduce, deter or eliminate property and casualty insurance fraud in the state. The task force is made up of specific committees of claims, underwriting, legislative and public awareness, and multiple subcommittees that serve under the four main committees. We meet four times a year, using those meetings to report on the great deal of work (all voluntary) that occurs between the quarterly meetings, as well as plan for future tasks.  There is a lot more that we do and we urge you to check out our website at and our Facebook page at  The Task Force is always looking for folks who have the passion and dedication for reducing and sooner-than-later, “STOMPING OUT FRAUD IN FLORIDA”!  Come join us but be prepared to work!

Homeowners Insurance Policies May Not Cover Golf Carts and Similar Vehicles

Source:  Daily Commercial Newspaper

About the Author: Don Magruder is a Daily Commercial columnist and the CEO of Ro-Mac Lumber & Supply, Inc. He is also the host of the “Around the House” Radio Show heard every Monday at noon on My790AM WLBE in Leesburg, Florida.

Many of our readers are avid golfers and an informal discussion with many of you indicates many own their own golf cart!  There are several names for these “vehicles”…golf carts, golf cars or low-speed vehicles. If it’s a golf cart explains David Knowles, insurance agent, Leesburg then it has a serial number while a street legal golf car, which is technically referred to in the state of Florida as a low-speed vehicle, will have a VIN (vehicle identification number).  According to Knowles, the real confusion begins with insurance coverage. He fears many homeowners are using their golf cart or golf car erroneously believing it is insured under their homeowner’s insurance policy.

Let’s talk about how Florida law looks at golf carts and low-speed vehicles (LSVs). Under Florida law, LSV means any four-wheeled electric vehicle that has a top speed greater than 20 miles per hour but not greater than 25 miles per hour. LSVs may only be operated on streets where permitted by local jurisdiction and on roads where speed limits do not exceed 35 miles per hour. LSVs are equipped with many of the safety features of a car.

By definition, golf carts are manufactured motor vehicles designed for operation on a golf course for sporting or recreational purposes. They are not to exceed a speed of 20 miles per hour. Golf carts can be permitted on roads in certain jurisdictions, however, only in specifically designated and signed areas. Most golf carts do not have the safety features of a roll bar, seatbelt or safety windshield, so their areas of travel are more restrictive.

According to Knowles, the problem is many homeowners purchase an inexpensive rider for their golf cart on their homeowner’s insurance policy. In most cases, that policy does not protect them against accidents on the road. The policy often is very limited, covering only damage to the golf cart while at the home. Knowles said, “Some older homeowner’s insurance policies would at one time cover incidents going to and from the golf course, but most no longer do that.”

For golf cars or LSVs, Knowles points out that regular car insurance must be purchased to fully protect the homeowner. He is quick to note a recent rash of local golf cart accidents have probably put those people in financial jeopardy when they realized their homeowners insurance policy did not cover an accident on the road. Knowles also pointed out that collision accidents aren’t the only risk. “Accidents also include people falling out of your golf cart and getting severely hurt,” explains Knowles.

Knowles recommends that owners of golf carts, LSVs and golf cars contact their insurance agent to verify they have the proper coverage. Owners of these vehicles should specifically discuss their use to evaluate their risk. One unfortunate accident could lead to huge liabilities. Knowles believes that many owners of these types of vehicles are not properly covered, and they should seek an insurance review from a qualified agent.

DFS Releases Revised Draft of Conduct of Public Adjusters and Ethical Requirements Rules

DFS has released yet another draft of the two pending adjuster rules:  69B-220.051 Conduct of Public Adjusters and 69B-220.201 Ethical Requirements for all Adjusters.  As you know, LMA has actively participated in the debate about these rules during their almost three year journey and has been on the front row representing common sense public adjuster regulation. At the heart of the debate is how DFS defines the public adjuster apprentice role. We are in conversation with representatives of the public adjuster association to find common ground because neither they, nor the LMA team, believe that door-to-door solicitation by apprentices, particularly post storm, is a good idea. These latest rule drafts appear to strike any interpretive language other than what’s in statute because DFS has said that because of the litigious nature of the rules, they are not leaving any room for statutory interpretation, which as you know is customary in rule making. We must get these rules to a better place and we will! Please take a moment to look at the newest drafts and let us know what you think.

Florida Hurricane Catastrophe Fund Holds Its Advisory Council Meeting

The FHCF Advisory Council held a meeting October 14 where the semi-annual Bond & Claims Paying estimates were released and discussed.  Not much has changed since the May 2014 bonding capacity estimates, however, since the law requires a meeting in both May and October of each year, a report was provided, basically illustrating that the Fund is in good shape financially. Specifically, it was reported that the Fund can completely finance the $17 billion initial and much of the subsequent season obligations.  It is also estimated that the Fund will have a year-end balance of approximately $11 billion dollars. Including the $2 billion dollars from pre-event bonds issued in 2013, that number would bring it to $13 billion dollars out of its total potential maximum claims-paying obligation. Jack Nicholson’s comments explained the similarity in the May and October estimates. “The financial markets have been very stable since last May until this October and I don’t think it is that unusual that the estimates didn’t change much.  We’ve had some volatility this month since we did the estimates, but I don’t think any of that impacts access to the bond markets or liquidity tightening or loosening dramatically.  And, no real change in inflation or interest rates either. Lack of volatility is always good news although no one knows what the financial markets might look like when we actually have to issue debt at some point in the future.  The amount of debt that we need to raise in the short term is only about half (about $4 billion) of our capabilities (over $8 billion).  Most of our claims now will be paid out of cash resources – that is always a big plus.”  He also stated that the good luck of not having hurricanes in the last eight years allowed the Fund to accumulate significant cash resources and there are no plans for Legislative action this coming session. Of course, those plans could change in that the insurance industry is mixed with those who support reducing the FHCF and transferring risk to the private reinsurance market and others who want to use the Cat Fund’s resources as a reinsurance mechanism to continue to reduce Citizens policy count. You can read the entire claims paying capacity report by clicking HERE.

The second document provided at the Advisory Council meeting addressed the Hurricane Loss Mitigation Program. Please see the program report by clicking HERE.  We found some of the numbers quite interesting and share them with you.  Since the establishment of the Hurricane Loss Mitigation Program in 1997, the program has obligated over $181 million dollars to mitigation programs, with over $43 million going to the Mobile Home Tie-Down Program and over $83 million to the Public Shelter Retrofit Program.  We do find it interesting and are a bit concerned, that in the Mobile Home Tie-Down Program, only 30,496 mobile homes have been tied down, considering the $43 million dollars in funds provided, and in the Public Shelter Retrofit Program, only 503,766 usable shelter spaces have been provided considering the $83 million dollars in funds provided.   It seems that we should see bigger and better results for the dollars allocated and was wondering what your thoughts might be.

Volusia County Not Liable for Boy’s Death on Beach

On October 16 a judge ruled in favor of Volusia County in a family’s lawsuit over the death of their 4-year-old son who was fatally struck by a pickup truck on Daytona Beach. Judge Robert Rouse wrote that Aiden Patrick’s father was “aware of all the dangers” posed by vehicles driving on the beach. In fact, the judge said there was nothing the county could have done to make Aiden’s father more aware of the immediate danger for the child on the beach. The Daytona Beach News-Journal reported Aiden ran into the path of the truck as he ran after his father on the beach in July 2010.The family’s attorney Lou Pendas said he’s filing a motion for the judge to reconsider. This extremely tragic and sad event serves as a stark reminder for all of us about the dangers of driving full-sized vehicles on Florida’s beaches. Should local governments continue to allow the practice within their jurisdictions? Regardless of your position, we encourage those of you living in the beach areas to become involved and express your concerns to your county commissioners.

Say a Prayer Tonight and Count on Blessings at the Voting Booth

Ok…we’ve done our research, checked out voting histories, paid attention to the promises made, read the amendments and proposals, said our prayers and we’re ready to put all our hard work into action with our vote.  We understand that at least 30% of the registered voters already cast their votes in the early voting arena so that leaves 70% to get to the polls tomorrow.  We know you will vote and hope you will encourage your friends and family members to exercise this very important right.  It really does depend on all of us.  So,  let’s get it done and get ready to celebrate.  See y’all afterwards….Lisa