A Florida appeals court has upheld the dismissal of no less than 16 auto-window benefit award lawsuits against Progressive Insurance companies, perhaps with an exclamation mark on the enforceability of review clauses and policy language that prohibits litigation.
The 5e District Court of Appeals, based in Daytona Beach, this week ruled without comment that the Orange County County Court was justified in dismissing the lawsuits. All of the lawsuits were filed by well-known attorney for Orlando plaintiffs, Earl Higgs, on behalf of six automotive glass replacement companies.
In several cases, including At Home Auto Glass vs. Progressive American Insurance Co., sued the glass shop because Progressive had not paid the full amount of the bill filed for a windshield replacement. Driver Mary Cargle had granted benefits to At Home. But Orange County Judge Amy Carter dismissed the lawsuit, noting that the auto policy requires that disputes over the claim amount go to an outside appraiser, and that “the policy states that the defendant cannot be sued unless there is full compliance with all conditions of the policy.”
Higgs and Progressive’s attorney, Lissette Gonzalez of leading insurance firm Cole, Scott & Kissane, could not be reached for comment. But other Florida court experts said the rulings underscore that insurance policies can, in fact, require policyholders to comply with policy terms.
“I think a party to a contract can always waive their right to sue or make it conditional on meeting certain conditions,” said Robert Jarvis, a professor of law at Nova Southeastern University. Law School in Fort Lauderdale.
Such clauses make sense, he said, because they force policyholders to try things with the carrier “instead of simply running to court and suing.”
Michael Packer, of the Marshall Dennehey firm, said courts have given some policyholders a little leeway, or “substantial compliance” with the policy. But for beneficiaries of benefits, such as the autoglass companies, courts often hold them to a stricter standard.
“The courts have become exhausted by the AOB lawsuits and are less forgiving if they don’t meet one or more conditions after a loss,” Packer said in an email.
A number of insurance company officials have said AOBs are at the heart of the proliferation of lawsuits that have cost Florida insurers millions of dollars in recent years and contributed to several becoming insolvent. Data from the Florida Office of Insurance Regulation shows that from 2017 to 2020, the severity of AOB claims from homeowners was nearly double that of claims without AOBs.
Some in the industry have said the Florida legislature, which meets in another special session next month, may take further steps to curtail AOB lawsuits.
At an earlier special hearing in May, the legislature banned the award of attorney’s fees to plaintiffs in most AOB cases. That came after the 2019 reform measure, which imposed a number of other restrictions on benefits and lawsuits.
As much as homeowner AOB claims, autoglass claims have long been a thorn in the side of the industry, and industry advocates have blamed installers for an explosion of high-priced claims and for filing lawsuits too quickly. In recent years, the insurance industry supported legislation that would have banned repair shops from offering anything of value to customers in exchange for filing insurance claims for glass replacement and repair, but the measures have not survived.
In some of the recent Progressive cases, the auto shops sent the bill for more than $1,000 to the insurer, who paid only part of it. Progressive argued that the policy requires that a review process be used to determine the amount to be paid.
“We recognize that there is a dispute regarding the amount required to repair or replace the windshield and the purpose of this letter is to explain that the insurance policy stipulates that an appraisal is the method to be used to resolve the disagreement,” Progressive wrote to Apex Auto Glass in one dispute. distributions as a payment order and we have issued the payment due in accordance with the policy language.If you file a lawsuit naming our client as the transferor, we reserve the right to object to the alleged allocation of benefits.
Progressive’s motion to dismiss the lawsuit was based in part on the claim that Apex had not participated in the review process. The glass shops argued, among other things, that the insured could not find the policy at the time the claim was rejected, so was not aware of the requirements, that an appraisal was unaffordable and that appraisal was not appropriate because the dispute was about coverage, not price.
The County Court sided with Progressive on all counts.
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