Speaker 1: Insurance companies, like all other businesses, are in the business
to make money, and with it, the likelihood of them
losing money exceeds the likelihood of them making money.
Speaker 2: They choose generally to stop doing business.
Speaker 1: And that's I think what we're saying in Florida, with
the increased number of hurricanes and the devastation caused by
the hurricanes.
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Speaker 2: Ever, and welcome you are listening to and watching the
Financial Survival Network. I'm your host, Carrie Lutz. Well in Florida,
here north southeast, we have had quite a mess too
straight hurricanes hit. Hurricane Milton the latest, just down the
block from a nine miles uh. The tornado hit and
ripped up like a relatively new neighborhood. It's amazing. It
did a lot of damage, but the houses were still
standing afterwards, which I guess says something about our building code,
or maybe it wasn't that bad a hurricane. But the
question is when you have these mass disasters, how do
you recover small business, large business, medium size? What do
the steps you need to take put in place before
it happens so that you can recover. Baragamen is with
us now, and Braggo, it's great to have you on
the show, So tell us here you're an attorney business expert.
First disaster recovery. It's all about the planning, isn't it
one hundred percent? And the best time to plan is
before disaster happens. Now, I know that's convenient to say.
Speaker 1: Once disaster happens, well, it would have been nice to
have a plan, but of course these kinds of things, unfortunately,
will occur more frequently. So having the plan of exactly
what you need to do, having your insurance in place
to make sure you can get along with your recovery
is so critical before a disaster happens and after a
disaster happens. It's also a good opportunity to be able
to plan for the future of how you prevent something
unfortunately like this from happening to you or your business,
and if it does, how do you recover from.
Speaker 2: It all right. So, like I assume you've gone through
this before, what have you done? Have you worked on it? Yeah?
Speaker 1: So when it comes to business owners, for example, a
good way to make sure you're out ahead of it
is just making sure you've got proper insurance. For example,
a lot of business owners will have something known as
commercial general liability insurance that'll protect them from things such
as slip and falls up their property, general kind of
things such as potentially an employee driving a vehicle and
getting into into a crash, things like that. But they
also want to look at business interruption insurance, which is
insurance that covers you and your business in the event
of something catastrophic happening that interrupts it and prevents it
from being able to generate revenue. A great example of
this is a hurricane. So if a hurricane comes and
destroys your business and you're unable to earn revenue for
a while, business interruption insurance is something that can cover
you in addition to that, and by the way, that's
a separate coverage. So these are the types of things
that I encourage all business owners to talk to their
insurance brokers about. Is what kind of coverages are available
to me and my business in the event of something
like this happening. There's also special writers for things such
as flooding. Now, a lot of places, such as Florida,
will exclude flooding from general kind of disaster relief insurance.
So it's a special rider or endorsement, meaning it's something
extra you have to pay for their additional premiums sport,
and if you don't have it, the insurance company is
going to exclude any and all damage that's caused by it,
and maybe unsurprisingly, the insurance company is going to probably
claim that a lot of the damage was caused by
the flooding as opposed to the winds from the hurricane
or something else. So insurance companies out of nac for
finding ways to say, look, this was a part of
the coverage you didn't have, so of course you want
to be sure you're prepared for it ahead of something
like this happening.
Speaker 2: Right, So recently state of Florida passed a rule that
if you have citizens insurance, you must get a flood
insurance policy, which just seemed to me to be pretty outrageous.
Whether you're in a floodplane or not and you know
they are just looking out for my benefit. Why would
they do something like that.
Speaker 1: Well, it's interesting the way you have to rebibertary. The
way insurance works is it's pooled ru er risk. So
you have to have a certain number of people who
really aren't within a risk period or place to be
able to support the ones that are in a higher
risk place.
Speaker 2: The idea is is.
Speaker 1: That with everybody pooling their resources, it makes it bitter
for everybody because statistically, not everybody is going to be
adversely affected by something like this, and so it brings
down the premiums for people who are more likely to
be affected by something like this. And the idea of
if there's too few people paying into the policy or
to the insurance company, it really does increase the risk
for everybody because it increases the risk of a potential
default by the insurance company because they don't have enough
premiums collected to be able to ensure the risk. So
states like Florida and other places adding in these requirements
or to help ensure the liquidity and viability of the
insurance company to help ensure that everybody can be potentially protected.
Speaker 2: Okay, So in Florida having what they call an insurance crisis,
and you know, basically insurance companies have stopped writing policies
in Florida. What's this coming from? How did we wind
up in this situation?
Speaker 1: So insurance companies, like all other businesses, are in the
business to make money. With the likelihood of them losing
money exceeds the likelihood of them making money, they choose
generally to stop doing business. And that's I think what
we're saying in Florida with the increased number of hurricanes
and the devastation caused by the hurricanes, not just in frequency,
meaning that the number of hurricanes Florida is seeing every year,
but also the significant severity of these hurricanes and how
much damage they're causing. So ultimately, going back to what
we were talking about earlier, the problem becomes, these insurance
companies are paying out far more than they're paying or
receiving in premiums is their projection, and so based on that,
they're saying, look, it really doesn't make sense for us
to continue insuring in Florida because we're going to lose money.
And I think that's what we're saying now.
Speaker 2: Well, they were claiming that there's a lot of fraud
going on with new roofs, things like that. I mean,
how much does fraud really impact insurance companies bottom lines?
Speaker 1: I have no doubt that there's some aspect of fraud
when it comes to these things, But in terms of
the overall macro perspective, the overall bleak picture perspective, I
don't really foresee a majority of the claims al anywhere
close to majority of the claims beying fraudulent claims. A
lot of insurance companies like to talk about fraud on
the insurance company, but they don't really talk about the
reverse when the insurance company is denying legitimate claims to
individuals and business owners even though they should be covered.
And recently, Governor Desantez signed a law that prevents homeowners
from being able to recover their attorney's fees when they
have to sue their insurance companies when an insurance company
doesn't pay out when they're supposed to. So said differently
and explain differently. Previously, the law allowed homeowners whose claims
were wrongfully denied to sue the insurance company and to
recover not only the money that should have been paid
to them for example, if a roof needed to be
replaced and the insurance company improperly denied it and claimed
it was fraudulent, then the homeowner can sue not only
to get the roof replaced, but also to cover their
attorney's fees for the roof replacement, because obviously the attorneys
aren't doing the work for free, and it really is
cost prohibitive a lot of times for homeowners to pay
for the attorney out of pocket. And of course an
individual homeowner is going to be at a significant disadvantage
to a multi billion dollar insurance company. So the law
was intended to designed to help homeowners and try to
even the playing field. Unfortunately, now with these changes, insurance
companies can deny it and if the homeowner sues and wins,
sure they can get the money to replace the roof,
But then now they have to pay for the attorney
s fpees out of pocket. So if you imagine if
a roof replacement is going to cost fifty thousand dollars
and the attorney spees cost twenty thousand dollars, well, now
the home only has thirty thousand dollars to replace their roof,
and you can't get it done for that now. So
the issue becomes that the increasing number of denials of
claims I think will create additional problems for homeowners who
already have the odds stacked against them when they're facing
large insurance companies.
Speaker 2: Interesting. Interesting, It's kind of hard to feel bad for
insurance company copanies, though, isn't it. I agree.
Speaker 1: I mean, we all of us, we dutifully pay in
our premiums to insurance companies with the hope and expectation
that they'll do the right thing when it comes time
for them to actually pay out. Of course, the insurance
company is betting that they won't have to pay out,
or that the number of premiums that they're going to
collect from the number of people they're going to collect
them from are going to exceed what they end up
paying out. But the issue becomes when the insurance company
puts their thumb on the scale and says, well, look, bet,
we took the bet that we won't have to pay out,
and we lost at bet. But now we're going to
just deny the claim or make homeowners go through additional
hoops or business owners go through additional hoops. They and
then ultimately deny the claim. When they know that the
claim really properly should have been paid out. A lot
of times, unfortunately, these can become wars of attrition, meaning
insurance companies just simply waiting things out for either the
homeowner or the business owner to give up because they
have so much going on. There's all this devastation in
their own lives, and then they've got to deal with
a multi billion dollar insurance company and their council.
Speaker 2: Yeah. Well, certain states regulate their insurance companies more strictly
than others. Florida is kind of it's like a less
a fair state, you know.
Speaker 1: Yes, and I'm all for capitalism, but I'm all for
capitalism done in the right way. Capitalism done in the
right way creates value for everybody. It creates a benefit
for everybody. So there is an issue of potential government overreach.
But there's also the dark side of capitalism when companies
are taking advantage of their position and power to abuse
the everyday person or business owner.
Speaker 2: Yeah, so there's a balance here somewhere. But like New
York goes much more strict that their insurance companies, and
it seems like the insurance companies in New York State
are much more solvent than the insurance companies here in Florida.
Speaker 1: And part of this could be in terms of the regulations.
The flip side of regulations are that they can add time,
burden and expense, but they can also set companies up
to be more proactive about the way they approach things
because those companies have to be more cognizant of those
rules and regulations, including rules and regulations relating to their
liquidity and how they're handling claims and how quickly they're
handling claims, as well as how much potential profit they're
allowed to earn from compared to what they're collecting in
premiums versus what they're paying out and claims, and those
kinds of additional regulations can be very beneficial to both
homeowners and business owners.
Speaker 2: Yeah. Yeah, Well, it doesn't feel like it at the time.
So we better off with a regulatory free for all here,
or are we better off with a more regulated marketplace
where where insurance companies are held more accountable.
Speaker 1: Well, when it comes to insurance companies, I think the
more critical the infrastructure or the company that's involved in
the day to day American life, I think additional regulation
is helpful in those circumstances, because when you imagine insurance companies, homeowners,
businesses around the country rely on insurance. We have so
many different types of insurance. We have health insurance, we
have car insurance, we have homeowners insurance, we have business
interruption insurance, we have commercial general liability insurance. And these
companies have tremendous sums of capital, they have a tremendous
amount of power, and they pay a lot of lobbyists
in Washington and locally to help protect their interests.
Speaker 2: And you do see the.
Speaker 1: Results of that with increasing legislation helping insurance companies many
times unfortunately at the expense of homeowners and business owners.
So in my opinion, that's cop capitalism gone wrong, where
it's almost like a reverse regulation where we're insurance companies
are having laws passed that are to their benefit and
to the detriment of the everyday American citizen.
Speaker 2: All right, well, interesting situation here that we find ourselves
in currently, and your best bet is to plan ahead
buying the more solvent and responsive insurance companies. You know,
like certain companies like Chubb and AIG who have used
in the past, you never get any problems with them.
As all as it's a legitimate claim, they pay it,
you know, rapidly, and others not so good. Right, Yeah,
that's right.
Speaker 1: And a big part of this CARRY is anybody making
an insurance claim, it would be highly beneficial for them
to make sure they document the claim properly, including with photos, videos,
making sure they've got written communications with the insurance companies
because the downside of phone calls is while you might
be able to get somebody on the line, a live person,
eventually all of the recordings, all of that data about
what was discussed is with the insurance company. Now contrast
that to sending an email. Making sure that you get
an email or even sending a fax. You've got written
documentation that shows what you sent and when, and making
sure that you've got that is so critical to show
if there is an improper delay by the insurance company
that one you sent that information and two if there
are additional problems or damages caused by the insurance company
and processing your claim, that you can make those claims later.
Because having litigated these kinds of cases, I can tell
you carry when it comes to an insurance company saying, look,
it really wasn't our fault. That's a very common defense,
and the best counter to that is saying, look, here's
the clear timeline. Here's when we sent the initial documentation
to you showing what all the damages were, and we
asked you, if there's any additional information, please let us know.
We're happy to send it over to you. And then
sending the photos in the video and any other documentation
such as receipts that you have is very very helpful.
And in that regard, making sure that you've got electronic
backed up copies of your photos, videos, and receipts is
very very helpful because a lot of times, unfortunately, when
you've got something like a hurricane and a lot of flooding,
you could have ommaculate receipts and drawers and drawers full
of paperwork that's very easy to access. But if it
gets washed away or it gets flooded and the documents
are water damaged, it's going to be very difficult for
you to be able to use that information later. So
I recommend that everybody who's listening to this start that
documentation process now, keep it organized, and keep it back up.
Things as simple as photos, videos of the things that
you have in your possession, including model numbers or serial numbers.
Speaker 2: Is very very helpful.
Speaker 1: Even the condition of the rooms or the condition of
the property in both photos and videos is very helpful
when it comes to a claim later.
Speaker 2: All right, well, I like you saying the preparation in anything,
being prepared is always the key. Even if your plan
doesn't work, at least you had a plan so you
can change. But if you don't have a plan, then
the things can go south very quickly. People want to
find out more about you, connect with you on the web.
How do you do that?
Speaker 1: Yes, so they can visit my website at www dot
LAWPLA dot com. Www dot lawpla dot com. They can
follow on Instagram at parrogpa r A g am A,
m I n E SQ, or they could check out
my YouTube channel where we provide a lot of great
tips and tricks for individuals and business owners that can
help them with their business. All of the legal things
that a lot of times business owners simply don't know
and they wish that somebody had provided that information to
them ahead of time. I wanted to make sure that
everybody has access to that, so we created a website
and a YouTube channel where we have that information available.
If they google my name or lawpla dot com, they'll
be able to find it there.
Speaker 2: All right, excellent, Well you've got a question for Paragh
or myself, shoot me an email at kl at Kerrie
Letz dot com. Link to parog site is in the
show notes to this interview on Financial Survival Network dot com.
And while you're there, sign up for your free newsletter PROG.
Thanks for filling us in helping us out. Hopefully all
of you out there, I'll find some value in this.
Always be prepared because disasters happen even in places where
you never expect them to happen, like in the mountains,
the Blue Ridge Mountains, the Smoky Mountains of North Carolina,
as we've seen over the past few weeks. Appreciate you
coming on for I can talk to you again soon.
Speaker 1: My pleasure, Garrett, thank you, thanks for listening to carry
Letz's Financial Survival Network, your solution to today's trying times.
Speaker 3: For the latest, go to Financial Survivalnetwork dot com. Financial
Survival Network
Speaker 2: Now more than ever