After years of extensive litigation, a Broward Circuit Court Judge approved a class action settlement in favor of a Class of homeowner policyholders with Defendant, Universal Property & Casualty Insurance Company (the “Insurance Company”). The Class alleged that the Insurance Company engaged in a general business practice referred to as “post-claims underwriting.” Class Representatives’ alleged that the insurance policy together with Florida law prohibited this practice. Specifically, post-claims underwriting is a practice where an insurance company accepts premiums from insureds, sometimes for years, without taking simple steps that are readily available to it to verify information on the insureds’ applications. The Class alleged that once an insured made a claim to the Insurance Company it would conduct a very simple underwriting analysis it did not do in the first place and would void the policy “ab initio” so that it could effectively deny coverage based on purported, “incorrect statements” in the applications. Although the practice is not per se illegal and Chapter 627.409, Florida Statutes allows for this practice, the Florida Office of Insurance Services, the Florida Office of the Insurance Consumer Advocate, and the Florida Legislature have all described this practice as against the public policy of Florida. Moreover, Class Representatives asserted that this practice violated public policy and the terms of the insurance policy because the Insurance Company was voiding policies ab initio, but failed to comply with the notice and cancellation provisions of its own insurance policy.
After extensive discovery and litigation, the parties reached a settlement in which the Insurance Company has reserved the amount of one million, two hundred thousand dollars ($1,200,000) as compensation to the Settlement Class (the “Class Compensation”). This is in addition to the Insurance Company acknowledging that the Class Compensation takes into account reimbursement of premiums previously returned to Class Members which insureds would have to remit to the Insurance Company in order to reinstate the policy.
In addition, the lawyers for the Class obtained and donated a Cy Pres Award in excess of $70,000.00 to the Florida Bar Foundation.
Edward Zebersky of Zebersky & Payne ; Valorie Chavin of Shmuely & Willis and Michael J. Higer of Berger Singerman represented the Class.