BOCA RATON — A state senator joined
representatives and lawyers for three dozen condominium associations
Thursday in accusing the state's largest private market condo insurer of
engaging in an organized plan to deny hurricane claims.
''This is institutionalized bad faith,''
said Sen. Jeff Atwater, R-North Palm Beach of the insurer, Australia-based
QBE Group and its representatives, Florida Intercoastal Underwriters, a
wholly owned subsidiary of insurance agency Brown & Brown Inc.
|Atwater said representatives
of the state Office of Insurance Regulation have told him an
investigation into the claims practices of the condominium
writer and its partners is under way.
He also said he plans to expand property
insurance law to force insurers who delay payments to owe
interest on claims.
Bob Lotane, a spokesman for the Office
of Insurance Regulation, said his office is looking into the
complaints. He declined to provide any additional details.
Coral-Gables based Florida Intercoastal
serves as a managing general agent for QBE, which means it
adjusts and pays claims for the insurer.
It was purchased in 2002 by Daytona
Beach-based Brown & Brown (NYSE: BRO; $27.19), one of the
largest insurance agencies in America.
Atwater made his comments in Boca Raton
after representatives of condo associations in Palm Beach,
Broward and Miami-Dade counties told repeated stories of
roofs, terraces and condominium walls destroyed by the
hurricanes — and of claims that still not have been paid.
to lawyers for QBE and representatives of Brown &
TO BORROW: Boca Teeca 3 condominium board members, including Bill
Aellis, had to get a $1.3 million loan to fix the building's roof
after Hurricane Wilma blew through in 2005.
and Florida Intercoastal Underwriters were not returned.
''The delaying tactics are deliberate,''
said George Landau, the 83-year-old president of the Boca Teeca 3 in Boca
Raton. ''Their idea is stall and stall and stall and maybe you'll get
disgusted and go away.''
Landau said QBE has paid nothing to fix the
seven-story, 168-unit building that suffered about $2 million in damage
from Hurricane Wilma in October 2005.
As a result, the condo has
yet to fix destroyed terraces. It had to take a $1.3 million
loan to fix the destroyed roof, Landau said.
He said a QBE adjuster told
him after the storm that the damage did not exceed the condo
association's' $250,000 deductible.
With loan repayments starting
by the end of the year, Landau said the condo association
will have to charge residents thousands of dollars in
assessments if the insurer doesn't pay up.
The problem is many of the
elderly residents can't afford those assessments, he said.
"People are in danger of losing their homes,'' Landau
UNDER WAY: State Sen. Jeff Atwater, R-North Palm Beach, says
Australia-based insurer QBE Group and its representatives, Florida
Intercoastal Underwriters, face scrutiny.
Reynolds, a lawyer with the Merlin Law Group in Tampa, which represents
the Boca Teeca 3, said he would file a lawsuit against QBE, Florida
Intercoastal Underwriters and Brown & Brown but is prevented from
doing so by a loophole.
Under Florida law, a suit can't be filed
until the insurer has denied the claim.
Reynolds, who organized Thursday's meeting,
said leaving the claim open while it maintains it is investigating has
left many of the condo associations in legal limbo for years.
Some condo officials at the meeting
detailed unpaid claims they have filed with QBE that date back to
Hurricane Frances in 2004.
In some cases, unit owners still are not
living in their damaged units because the associations do not have money
to fix the damage, they said.
Atwater said he wants to expand a law
passed by the legislature in January that required insurers to pay claims
within 90 days or explain why the claims are being denied.
But the 90-day period does not cover any of
the condo associations represented at the meeting because their claims
occurred before the January law was put into place.
QBE prevailed in a major court battle last
summer after residents of a destroyed West Palm Beach condominium tower
were forced to settle their $20 million in hurricane claims from 2004 for
$2.25 million. QBE argued in that case, which involved the 1515 Tower on
South Flagler Drive, that there were prior maintenance problems that were
not properly disclosed.
The insurer is Florida's second largest
condo insurer, after state sponsored Citizens Property Insurance Corp. QBE
covers 1,770 associations, with about 1,000 in South Florida. Roughly
one-third of those complexes are in Palm Beach County and The Treasure