Source: https://www.propertyinsurancecoveragelaw.com/2012/03/articles/florida-insurers/florida-statute-%C2%A7627701-requires-insurance-carriers-to-warn-policyholders-of-higher-hurricane-deductible/
Timestamp: 2020-05-31 06:55:31
Document Index: 122607957

Matched Legal Cases: ['§627', '§627', '§627', '§627', '§627', '§627']

Florida Statute §627.701 Requires Insurance Carriers to Warn Policyholders of Higher Hurricane Deductible | Property Insurance Coverage Law Blog | Merlin Law Group
Home Consumer Protection Florida Statute §627.701 Requires Insurance Carriers to Warn Policyholders of Higher Hurricane Deductible
Florida Statute §627.701 Requires Insurance Carriers to Warn Policyholders of Higher Hurricane Deductible
By Larry Bache on March 15, 2012
A deductible is an important element of every insurance policy. It is the amount the policyholder agrees to pay before insurance coverage kicks in, or the portion of the risk the policyholder agrees to self insure. It is no secret that insurance carriers prefer to issue policies with higher deductibles for certain perils, including hurricane losses. In Florida, insurance carriers can require a separate and distinct deductible for hurricane losses and another deductible for other perils under the insurance policy. The bait for consumers to accept a higher deductible for hurricane losses is a lower affordable premium. Many times, policyholders are not even aware they have a separate deductible for hurricane losses and only find out after their hurricane loss. This exposes policyholders to potential financial ruin. To ensure that policyholders are aware of the separate and usually higher hurricane loss deductible, the Legislature requires admitted carriers to print a notice in bold font.
Florida Statute §627.701(4)(a) (2011) provides:
Hurricane deductibles usually range from $500 up to 5% of the dwelling. If a policyholder owns a $200,000 property with a 5% hurricane deductible, she is agreeing to self-insure against a hurricane loss up to $10,000. Many, policyholders cannot bear this financial burden. What happens if the statutory language is omitted by the insurance carrier? This particular issue is currently under litigation, and there is no clear answer. However, the First District Court of Appeals addressed a similar issue in U.S. Fire Insurance Company v. Roberts.
In Roberts, the Court held that a fire policy’s coinsurance clause, which lacked the statutory required language referenced in Florida Statute §627.701, was void. The First District Court reasoned that the provisions of statutes enacted in the public interest should be given a liberal construction in favor of the public, so the consumer protection policy embodied in Florida Statute §627.701 must be given a liberal construction to insure that the public interest protection intended is effectuated.
If you are a policyholder, you need to be aware that you may have a separate hurricane loss deductible. If you have suffered a hurricane loss, verify whether the required statutory language is in your policy. If is not, then you should consider seeking guidance from an insurance professional because the deductible may be considered void.
Tags: Consumer Protection, Deductible, Florida Insurers, Insurance