Claims File Transparency | Property Insurance Coverage Law Blog

The Florida House Insurance and Banking Subcommittee was obviously upset with rising insurance rates and poor claims handling, as noted in Participate In Your Democracy—Even If You Are Called a Bazooka. I was always told that an honest person has nothing to hide. If so, why don’t we require the insurance companies to turn over the claims file materials in a property insurance claim absent an insurance company’s suspicion of fraud or criminal conduct?

I raised this issue before in “Should All States Require Insurance Companies to Turn Claims Files Over to Policyholders?” I specifically noted a California statute that Florida legislators should consider copying that requires insurers to provide to policyholders within fifteen days of their request:

[A]ll documents that relate to the evaluation of damages, including, but not limited to, repair and replacement estimates and bids, appraisals, scopes of loss, drawings, plans, reports, third-party findings on the amount of loss, covered damages, and cost of repairs, and all other valuation, measurement, and loss adjustment calculations of the amount of loss, covered damage, and cost of repairs. ¹

I suggest that the statute be worded to say “all claims file materials, including but not limited to….”

I further raised the possibility of this type of legislation last year in Florida Bill Proposes Claim File Transparency. Had that bill passed, the Florida House of Representatives may have had the answer to their questions because constituents would have the claims file materials explaining why the insurance companies were not paying claims fully or on time. On the other hand, the bad claims actions may never have occurred because the insurers would have known they could not hide the truth about their claims handling—the policyholders would find out what was in the claims file.

An additional problem with Florida’s current scheme for claims estimate transparency is that nothing is holding the insurance company accountable for its failure to turn over the estimates, as I noted in Let’s Get Tough on Drunk Driving but Not Have Any Penalties For the Drunk Driver: Making It Difficult For Policyholders To Collect On Debts Owed By Delaying and Underpaying Insurance Companies.

The bottom line is that, as my mother always told me, “honesty is the best policy.” If you want honesty from insurance companies, we have to have enforceable transparency about how the claim is being handled. The way for that to occur is for the policyholder to have access to all claims file materials.

Thought For The Day

“If you tell the truth, you don’t have to remember anything.”
—Mark Twain

¹ Cal. Ins. Code § 10082.3.