Florida’s Residential Property Insurance Mediation Program – How Does It Work?

By Kenneth Mundy, Esq.

Hurricane Irma wreaked havoc over Southwest Florida and neighboring counties just a short time ago, and the great devastation it caused left many homeowners wondering, “what do I do now?”. Many of us filed claims with our insurance companies but were left with more questions than answers. Many of us didn’t know whether our claim was fairly adjusted or whether the coverages were properly applied or paid. Many of us simply decided to accept whatever settlement amount was presented before asking the question, “what can I do to get more, if not all, of my losses covered?”.

After all, we pay our insurance premiums every year so it’s only right that we have the expectation that our insurance companies will take care of us in a time of dire need. As many of us are now aware, this is not always the case. Insurance companies do everything in their power to minimize the value of claims. Good news – there is another avenue to pursue if you find yourself in this situation.

Specifically, Florida’s legislature enacted Fla. Stat. § 627.7015, which provides for an “[a]lternative procedure for resolution of disputed property insurance claims.” In other words, this statute creates a procedure for scheduling a mediation conference between the homeowner and the insurance company with the hope that a resolution can be timely reached.

For those who are not familiar with mediation, mediation simply refers to a process in which a neutral third party, usually known as the “mediator”, assists two or more participants in resolving a dispute. The mediator works with the parties to help them reach an agreement. It is important to understand, however, that the mediator has no decision-making authority with respect to settling the controversy at issue; rather, the only people who can decide anything in relation to the dispute are the parties actually involved. Furthermore, mediation is 100% confidential. Generally speaking, this means that parties cannot talk about the specifics of what went on at mediation after their mediation has concluded. The purpose of mediation confidentiality is to allow the parties to speak freely and be creative without being concerned that it will be held against them later, should a lawsuit become necessary. Overall, mediation is an alternative dispute resolution mechanism that is frequently used in a wide variety of cases and its high success rate is the reason Florida’s Department of Financial Services has implemented it to resolve residential property insurance claim disputes.

If you decide to take advantage of this state-offered mediation process, one benefit is that it will be of no cost to you, as insurance companies are statutorily required to bear any and all costs associated with the mediation. Another beneficial aspect of this program is that it affords you the opportunity to present all the reasons why the settlement amount offered was significantly undervalued and it further gives you the ability present estimates, invoices, and other documentation to refute your insurance company’s position with regard to your claim.

Like everything else, however, there are some pitfalls associated with this mediation process that could require the assistance of an attorney. For example, on the day of your mediation, an adjuster will appear on behalf of your insurance company and will have marching orders to follow; specifically, to maintain the insurance company’s position while offering you a minimal amount to settle the claim if you sign a full release. You may feel pressured to take the money and to sign the release because you lack a full understanding of your bargaining position and you aren’t sure what to do next if you decide to walk out. Likewise, the mediator will typically have minimal experience with property insurance, estimating or contracting, and even if they do, the rules forbid a mediator from giving you advice and from arguing your position. Also, there are many procedural issues that may arise throughout this process, further requiring the assistance of an attorney specializing in property insurance litigation.

As discussed earlier, insurance companies will do everything possible to settle your claim for an amount substantially less than its actual value and worth. Don’t put yourself in this position or subject yourself to the bullying tactics of insurance companies; let us assist you. Knowing your rights, being fully informed of your claim, and securing quality legal counsel will substantially increase your chances of being appropriately, adequately, and rightfully compensated for the losses you sustained.

The attorneys at Woodward, Pires & Lombardo, P.A. are here to help. We look forward to hearing from you.