- April 6, 2020
- Posted by: andreamcmillan
- Category: Covid-19
An insurance policy is a contract between you and your insurance company. Florida insurance companies typically attempt to strictly enforce insurance policy provisions against Florida policyholders. For example, if you fail to make a premium payment by the due date, your policy can lapse, and coverage will be lost, after a 30-day grace period. The Florida Office of Insurance Regulation (“OIR”), regulates insurance companies doing business in the State of Florida. Acknowledging Florida Governor Ron DeSantis’ Executive Orders 20-51 and 20-52, issued in response to the COVID-19 pandemic, OIR recently issued an informational memorandum (OIR-20-04M) urging insurance companies not to strictly enforce certain insurance policy provisions, during the state of emergency. The memorandum generally urges insurance companies to be more lenient with policyholders, many of whom are suffering financial hardship, in the wake of the pandemic.
OIR to Insurers: Be Lenient With Premium Payments
OIR is encouraging insurance companies, “when prudently possible,” to be flexible with premium payments. For example, OIR stated, insurance companies can be flexible with policyholders by:
- Relaxing due dates;
- Extending grace or reinstatement periods;
- Waiving late fees and penalties; and
- Allowing payment plans
Some Auto Insurers Have Announced Leniency Plans
On April 6, 2020, a national auto insurer announced that it would give its policyholders a “Shelter-in-Place” payback consisting of 15% of the amount of each policyholder’s premium payments for April and May 2020. Payment will consist of a credit to the policyholder’s bank account, credit card, or insurance company account. This same insurer invited its auto and homeowner policyholders experiencing financial challenges to call and learn about delayed premium payment options.
On the same date, a second smaller auto insurer made a similar refund announcement. That company will mail a one-time check to each auto policyholder for $50 per vehicle covered under the policy. Other insurers will likely make similar announcements in the coming days.
Certainly, this is welcome news. But make no mistake about it. These auto insurers are hard-nosed business people, and are not refunding premium dollars, out of the goodness of their hearts. The fact of the matter is, that with most people sheltering in place, many of the nation’s streets are being used by very few vehicles. Fewer vehicles mean fewer crashes. Fewer crashes mean fewer claims. Fewer claims mean less money that auto insurers have to pay to resolve those claims. These companies are literally saving hundreds of millions of dollars, while folks are sheltering in place. The least that they can–and should– do, then, is to pass some of the savings on to policyholders, many of whom are hurting financially. Believe me, there will be plenty left over for company profits.
OIR to Insurers: Make It Easy For Policyholders To Reach You, And Be Flexible In Other Ways
OIR is also encouraging insurers to:
- Consider canceling an insurance policy only after the insurer has exhausted all possible efforts to work with the consumer to continue coverage;
- Extensively and proactively notify policyholders and insurance agents of all available communications channels that they can use to advise the insurance companies of specific circumstances for which they seek the insurer’s flexibility in handling.
OIR to Insurers: Remove Certain Auto Policy Exclusions
An exclusion is a policy provision that eliminates coverage provided by the insurance contract. Insurance companies use exclusions to carve away coverage for certain risks they are unwilling to insure. Typically, a Florida personal automobile insurance policy excludes coverage for an accident or other adverse incident that occurs while the vehicle is being used for business or other commercial purposes. That condition is typically written as an exclusion in the policy.
In view of the stay-at-home orders, many restaurants and other businesses are now delivering goods and services to Florida residents sheltering at home. Many delivery personnel are making these deliveries using their personal automobiles, as a matter of necessity. Acknowledging that fact, OIR is encouraging auto insurers to consider allowing the use of personal automobiles for such deliveries (disregard the exclusion), but only until the governor’s executive orders are lifted. One nationwide auto insurer announced on April 6, 2020 that it will extend personal auto insurance coverage for policyholders who use their personal vehicles to deliver food, medicine, and other goods for commercial purposes. Other auto insurers will likely follow suit.
OIR to Insurers: Try Virtual Underwriting and Claims Inspections
Insurance companies often send adjusters or representatives to meet in person with an individual consumer or a business, in order to inspect property, such as a vehicle, house, or other type of building or structure. This is often done for purposes of:
- binding or issuing new or renewal insurance policies;
- wind mitigation inspections;
- adjusting a claim that has been filed; or
- auditing business records
Acknowledging the social distancing measures promulgated by the Centers for Disease Control and Prevention (“CDC”) and the State of Florida, OIR is strongly encouraging:
- insurance companies;
- agents;
- consumers; and
- employers
to explore “virtual options” for underwriting and adjusting claims, instead of in-person property inspections and business audits.
OIR to Insurers: Accept Electronic Communications In Lieu of Handwritten Documents
Further, acknowledging that normal business operations have been disrupted, and many people and businesses are now teleworking, OIR is encouraging insurance companies to accept electronic communications from policyholders, instead of insisting on handwritten statements, as would ordinarily be required.
Don’t Hesitate To Request Relief From Your Insurance Company
While these OIR crisis management guidelines to insurers are merely that—guidelines—rather than binding emergency regulations, prudent insurers should heed them, and be flexible with policyholders, just as other companies and government bodies are relaxing certain requirements ordinarily enforced. After all, these are far from ordinary times. Relaxing certain requirements at this time is the right thing to do, given the tremendous displacement and adverse economic impact being felt by all, due to the COVID-19 pandemic.
Should you have difficulties dealing with your insurance company while Governor DeSantis’ emergency executive orders are in place, and you think the guidelines in this OIR memorandum offer you some protection, then make absolutely sure you cite the memorandum to the company. Provide the company with a copy of it, if necessary. Tell your insurance company that other insurers have offered their customers premium rebates and premium payment plans, and that you expect the same from your insurer, if it would like to keep you as a customer.
The devastating financial fallout from the pandemic will, undoubtedly, be felt long after Governor DeSantis lifts the emergency executive orders. So, even after the orders are lifted, don’t hesitate to contact your insurer and request relief.
If you have a dispute with an insurance company, contact Palm Beach County insurance dispute lawyer, Andrea McMillan, with the Law Offices of Andrea McMillan at (561) 612-5700 for a free, no-risk consultation. We’re here for you.
Wishing you and your loved ones safety and good health.