Does Florida’s statutory duty to disclose insurance information apply to out-of-state policies?

February 10, 2015

One of the most common questions I get from insurers of out-of-state policyholders is whether they are required to honor a Florida claimant’s request for disclosure of insurance information under Florida Statute 627.4137. If the applicable policy was not delivered in Florida or issued for delivery in Florida, the short answer is “No.” Nonetheless, sometimes an insurer can best protect both its insured and itself by voluntarily providing at least some of the information outlined in the statute.

Section 627.4137 was enacted in 1982 to give claimants access to information about a defendant’s liability insurance when making settlement decisions. The statute requires a liability insurer to produce a copy of the policy and to disclose the following information, under oath, within 30 days of a claimant’s request: a) the name of the insurer; b) the name of each insured; c) the limits of liability coverage, and d) a statement of any policy or coverage defense which such insurer reasonably believes is available to such insurer at the time of filing such statement.

Out-of-state insurers whose policyholders are involved in accidents in Florida raise several concerns upon receipt of a claimant’s request for statutory disclosure. As a preliminary matter, these insurers do not have a system in place to generate an affidavit that satisfies the statute. Additionally, insurers balk at providing a copy of their insured’s policy to a stranger. They cite concerns with their insureds’ privacy. For example, the information contained in the Declarations Page can reveal the financial status of the insured by identifying the number and type of vehicles or properties owned and the insured’s address.

Whether and how to respond to each request for disclosure must be analyzed on a case-by-case basis. This article does not attempt to provide a “one size fits all solution.” Nor does this article address the separate scenario of responding to a time demand for policy limits conditioned upon “full compliance” with the statute. These demands are a common bad faith “set up.” How to respond to them warrants a discussion with your counsel relative to the particular facts of your case.

But there are some basics that may be helpful. Foreign insurers handling the occasional claim in Florida should be aware that Florida’s common law requirement of “good faith” will likely apply to any later ensuing extracontractual litigation. Under the common law, an insurer’s failure to disclose policy limits to the claimant can be grounds for extracontractual exposure. An insurer’s refusal to disclose policy limits obstructs settlement by depriving the claimant of a basis to evaluate the case. Even in California, which prohibits an insurer from disclosing policy limits to a claimant without written permission from the insured, an insurer can face extracontractual exposure for failing to seek its insured’s permission to disclose limits, when the nondisclosure prevents settlement.

Also, producing the policy itself is less critical than disclosing limits. Many times the claimant does not actually want or need a copy of the policy and is satisfied with the production of the Declarations Page as verification of the applicable limits. To the extent that the Declarations Page reveals personal information, privacy concerns can be adequately accommodated in most cases by redacting certain information from the Declarations page or obtaining the insured’s permission to produce the Declarations Page or some combination of both approaches. In the absence of a Declarations Page, the claimant’s attorney may be reluctant to accept the insurer’s word concerning the amount of the policy limits.

If the insurer is denying coverage or reserving the right to do so, the policy itself gains heightened importance. The typical Plaintiff’s attorney will want to review the policy to evaluate the strength of the insurer’s coverage defense before deciding whether to recommend that her client abandon suit against an insured with no collectible assets. Failing to produce the policy could result in a Plaintiff filing suit who might otherwise have been deterred upon receipt of a policy supporting the insurer’s coverage defense.

To sum up, an insurer’s voluntary disclosure of certain information outlined in Florida Statute 627.4137 can aid in the settlement of claims against the insured. The settlement of the claim against the insured will, in turn, protect the insurer from extracontractual exposure. Insurers should keep in mind that, to the extent, they choose to voluntarily comply with the statute, courts may hold them responsible for meeting the statutory requirements.

For any further questions, please contact Fay Ryan.