Florida Circuit Court of Appeals Upholds Dismissal of 16 Auto Glass AOB Suits by Progressive – Insurance Journal | CarTailz

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A Florida appeals court has upheld the dismissal of as many as 16 lawsuits against progressive insurance companies relating to the assignment of auto glass benefits, perhaps putting an exclamation mark on the enforceability of valuation clauses and the wording of policies that exclude claims disputes.

the 5th The Daytona Beach District Court of Appeals ruled without comment this week that the Orange County District Court had the authority to dismiss the lawsuits. All lawsuits were filed by the Orlando plaintiffs’ well-known attorney, Earl Higgs, on behalf of six auto glass replacement companies.

In several cases, including At Home Auto Glass v. Progressive American Insurance Co., the glass store sued because Progressive did not pay the full amount of the submitted bill for a windshield replacement. Driver Mary Cargle had assigned benefits to At Home. But Orange County Judge Amy Carter dismissed the lawsuit, noting that the auto policy requires that disputes as to the amount of the claim go to an independent assessor and that “the policy states that the defendant cannot be sued.” , unless there is full compliance with all the terms of the policy.”

Higgs and Progressive’s defense attorney Lissette Gonzalez of well-known insurance defense firm Cole, Scott & Kissane could not be reached for comment. However, other Florida legal experts said the rulings underscore that insurance policies may actually require insureds to comply with insurance terms.

“I think a party can always waive its right to sue or make it conditional on meeting certain requirements,” said Robert Jarvis, law professor at Nova Southeastern University Law School in Fort Lauderdale.

Such clauses make sense, he said, because they force policyholders to try and work with the airline “instead of just running to court and filing a lawsuit.”

Michael Packer of Marshall Dennehey said the courts have given some policyholders a small latitude or “substantial compliance” with the policy. But for service recipients, such as auto glass companies, the courts often apply stricter standards.

“The courts are exhausted by the AOB lawsuits and are less forgiving if they fail to meet one or more post-loss conditions,” Packer said in an email.

A number of insurance company officials have said AOBs are at the center of a surge in litigation that has cost Florida insurers millions of dollars in recent years and helped drive several into bankruptcy. Data from the Florida Office of Insurance Regulation shows that from 2017 to 2020, the severity of homeowners’ AOB claims was almost double that of claims without AOBs.

Some in the industry have said the Florida Legislature, which will meet in another special session next month, may take further steps to limit AOB litigation.

At an earlier special session in May, lawmakers banned the award of attorneys’ fees to plaintiffs in most AOB cases. This came after the 2019 reform measure, which introduced a number of other restrictions on benefit awards and litigation.

As much as homeowner AOB claims, auto glass claims have long been a thorn in the side of the industry, and industry advocates have blamed installers for an explosion of overpriced claims and filing lawsuits too quickly. In recent years, the insurance industry has supported legislation that would have banned garages from offering customers anything of value in exchange for insurance claims for glass replacement and repair, but the measures have not survived.

In some of the recent Progressive cases, the hired dealerships sent the bill for more than $1,000 to the insurer, who only paid part of it. Progressive argued that the policy required an assessment process to be conducted to decide the amount to be paid.

“We recognize that a dispute exists regarding the amount required for windshield repair or replacement and the purpose of this letter is to explain that the insurance policy provides that an estimate is the method of resolution.” the disagreement is. Progressive wrote to Apex Auto Glass in a dispute. “Although you may have provided an alleged assignment of benefits, this correspondence does not waive any defense we may have regarding this. Specifically, we hereby treat the assignment of services as a payment order and have issued the payment due in accordance with the text of the policy. If you sue our customers as assignors, we reserve the right to object to the alleged assignment of benefits.”

Progressive’s motion to dismiss the lawsuit was based in part on its allegation that Apex did not participate in the evaluation process. The glass shops argued, among other things, that the insured could not find the policy at the time the claim failed and therefore could not know its requirements, that a rating was prohibitively expensive and that rating was not appropriate because the dispute was about coverage, not price.

The district court sided with Progressive on all counts.

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