Recap - Windstorm Insurance Network Conference 2017
After each Wind Conference I am always amazed at the attendance level, value and depth of knowledge brought by the professionals drawn to this annual event. This year was no exception. There is an old saying that 90% of success is just showing up. That old saying certainty applies to the 18th Annual Windstorm Insurance Network Conference.
The last attendance number I heard was that over 1,065 professionals from all over the United States traveled to Orlando, Florida to learn, network, and yes, do a little partying after hours. Make no mistake about it; the folks who taught and those who attended the various workshops are the movers and shakers in the property insurance claims industry. These are folks who for the most part control the claim process and ultimately the money that will be paid out to policyholders when a covered Wind Cat wind loss occurs.
So who are these people? Well here are a few categories; consultants, insurance adjusters of every stripe, insurance agents, government officials, engineers, attorneys (plaintiff and defense), contractors, certification instructors, appraisers, umpires, meteorologist and last but not least the speakers who teach us the value of ethics and professionalism through their experience and life work.
As far as the hot issues this year, in my opinion, based on class size attendance, the AOB (Assignment of Benefits) controversy stole the show. The session I attended was packed. Not surprising, there was a difference of opinion on the problems relating to AOB as well as the fix. But my take away is that this is not an easy fix since Assignment of Benefits plays a bigger role in our society than what many are calling the water scam associated with AOB. AOB has been around a long time and plays a big role in the medical field to ensure treatment and payment for services. In other words, assignments are given all the time in various industries to ensure needed services are available that otherwise would not be available due to a lack of readily available funds.
The general consensus on AOB was that it needs to be fixed as it relates to insurance property water losses. And from what I am told, it is starting to be looked at again in this year’s legislative session. Interestedly, I recently read that some of the AOB lawsuits are declining which makes me wonder if all the legislative activity may have some of the folks who are abusing this process a little worried that the gravy train may come to a stop if some of the abuse is not curtailed.
Another hot topic was the managed repairs programs that some carriers are rolling out which according to some is a by-product of the AOB crises. These companies think by controlling the repairs they can avoid lawsuits that seemingly are ubiquitous with water losses. My guess on where this is going is down the same path as the appraisal process. Those of us who remember when carriers were taking out appraisal correctly guessed that massive litigation cost would follow, which is exactly what happened. Now insurance companies are quick to suggest appraisal when faced with a dispute about the amount of loss and damages.
My prediction is that managed repairs will be abandoned as legal costs skyrocket. And remember, if you are a policyholder and think allowing your insurance company to make your repairs will avoid having to deal with a contractor on your own, read your policy very carefully. What you may find, is that the managed repair program may come with an OPTION clause that that gives your insurance company the right to abandon their obligation to make your repairs. So what’s the big deal with this? Well, when the next big Wind CAT (Hurricane) event occurs and there are not enough managed repair contractors for your insurance company to send out, you’re on your own to find someone to fix your property. Remember, the big print gives and the little print takes away.
Many of the panels included the top property insurance legal minds from both the plaintiffs and defense side dispensing case updates. One of our very knowledgeable senior public adjusters, Mr. Michael Platts shared some of his key takeaways that could impact how claims are handled in the future.
- The Shaw Case ruling that says that an AOB merely transfers the right to be paid but the insured’s obligations under the contract of insurance still remains.
- A new case decided by the Florida Supreme Court; Sebo v. American Home Assurance Co., 2016 FL Lexis 2596, rendered on 12/1/2016 states that in situations where a covered vs. a non-covered loss combine to damage covered property, the loss is covered.
- Under an all-risks policy, the burden of proof in showing that a loss is excluded rests with the insurance carrier. Under exceptions to exclusions, the burden of proving coverage shifts to the insured. Regarding the concept of ensuing loss, the case of Divine v. Rockhill indicates that there must be more than a mere possibility of a covered loss for coverage to be obtained.
- If the appraisal process is entered into and the policy states that the appraisers and/or umpire are to be “impartial,” it is wise to get an agreement from the carrier in writing that the insured’s chosen appraiser is acceptable.
Of course we are not dispensing legal advice here and invite our legal colleagues to weigh-in and comment on these and any other legal developments of note.
On a more optimist note, I was very impressed with the presentation by Dr. Nab the head of The National Hurricane Center. Dr. Nab explained that the National Hurricane Center will be issuing new information regarding watches and warnings for storm surge and wind impacts ahead of the actual hurricane watch and warnings. This makes good sense since water pushed by the wind often causes extensive damages ahead of the actual landfall of a hurricane. As Dr. Nab said, “wind and water can and often does come at different times during the cycle of a declared storm.” This will allow government and emergency workers to assess the possible need for evacuations well in advance of the arrival of tropical or hurricane force winds. Watch for notice of these changes with the arrival of the official hurricane 2017 hurricane season, which by the way is only four months away! In my view, these are important enhancements to help ensure the life, health, and safety of communities.
Finally, I want to comment on a general session forum that I was proud to have chaired. Curtis Hutchins Esq. this year’s Wind President ask me early in the year to accept the Chairman’s position of the Past Presidents Committee. I readily accepted and having done so wanted to make use of the expertise, experience, and talent of all my colleagues who served as President of Wind over the years. After a lot of thought, I came up with an idea to have all the Past President together on the stage at the general session and have a moderated session going over issues the Past Presidents had to deal with during their tenure. I presented this idea to the Board of Directors and with their blessing and further approval from the Conference Program Chair we were off and running.
Over the course of the year ideas were shared and a final program format was agreed upon. So with President Hutchins serving as the moderator our Past Presidents shared their knowledge and expertise with the conference attendees. While I’m not sure of the total years of experience that were represented up on that stage, but my off the cuff guess would be well over a couple hundred combined years of experience. Based on the feedback I got, it was very well received. I am so proud to have been a part of this first ever event.
In my view, the Windstorm Insurance Network Conference of 2017 was a huge success and any professionals who are serious about keeping up with the industry should make it a must-attend event. You can bet WIND will only get better with each passing year.
Let us know what you learned at WIND!