Lawmaker joins fight against condo insurer

Article Courtesy of Palm Beach Post

By Randy Diamond

Published April 6, 2007

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.

Calls to lawyers for QBE and representatives of Brown & 

FORCED 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.

Brown 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 said.

INVESTIGATION UNDER WAY: State Sen. Jeff Atwater, R-North Palm Beach, says Australia-based insurer QBE Group and its representatives, Florida Intercoastal Underwriters, face scrutiny.


Robert 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 Coast.