Your Insurance Company Has Gone Belly Up, What Can You Do?

When it comes to filing a property damage claim, timing is everything. It’s crucial to be aware of the filing deadline, especially when the company you’re dealing with has gone into receivership. We’ve encountered numerous cases where this legal complexity caused unnecessary delays and confusion. Let’s delve into the intricacies of the statute of limitations for companies in receivership, provide you with the clarity you need.


The Basics of Receivership in Florida

Receivership acts as a form of legal ‘life support’ for financially struggling companies. When a company can’t meet its financial obligations, it becomes a candidate for receivership. In Florida, this usually involves the court appointing a receiver, often the Florida Department of Financial Services, to take control of the company’s assets and debts. But here’s where it gets complicated for you, the policyholder. Once a company enters receivership, the regular rules for processing claims are set aside. The receiver’s first task is to assess the company’s financial health, determine how to settle debts, and decide how to handle outstanding claims. This process can lead to significant delays in settling claims, which many clients aren’t prepared for.

Take FedNat for example. The company was ordered into liquidation by the Second Judicial Circuit Court in Leon County, Florida. With the court’s decision, a wrench has been thrown into the gears of the usual claims process. Thousands of policyholders in Florida now find themselves in a confusing situation, uncertain about when their claims will be processed or what steps they need to take next. Understanding this process is crucial, especially if you have a pending claim. Receivership can add layers of bureaucracy and waiting time, which most policyholders are not equipped to navigate. We’re not just talking about waiting a few extra days; we’re talking about weeks or even months of delays. That’s why being proactive and informed is essential in this complex landscape.


Automatic Stop on Lawsuits

When a company goes into bankruptcy or liquidation, an automatic pause is placed on ongoing lawsuits. If you have a pending case, it is temporarily halted. The next step involves waiting for a specific period before we can amend your complaint. In Florida, this typically means adding FIGA (Florida Insurance Guaranty Association) as the new defendant in your lawsuit.


The Role of FIGA in Florida Receiverships

Once a company like FedNat or United P&C goes into liquidation, FIGA steps in to cover outstanding claims. However, there are limits to what FIGA can pay. Generally, they cover up to $300,000 per claim with an additional $200,000 available for structures and contents on homeowners’ claims. No claim will be paid beyond this cap, which is vital information for Florida policyholders to know. 


The Implications for Your Pending Claims in Florida

If you have a pending claim, action needs to be taken swiftly to ensure your case isn’t adversely affected. Forms need to be filed for any pending claim before the deadline. Clients often don’t realize how long this process can take, especially when a company is in receivership. The sooner we start, the better your chances are for a successful resolution.


Act Swiftly to Protect Your Rights

Understanding the intricacies of how receivership impacts the statute of limitations can make a world of difference when you’re up against a ticking clock. Whether you’re dealing with a claim under FIGA or with a policy assumed, the procedure can be intricated and lengthy.

Call or contact us online to schedule a free consultation with an experienced commercial property attorney. Call us in Hollywood, FL. at 954-861-0833 or in Fort Myers, FL. at 239-922-1771. If you’re facing challenges with property damage claims, especially those complicated by company liquidation or receivership, don’t hesitate to reach out to us. We’re here to help. 

Don’t let your rights slip away when your insurance company goes under—take action now to secure your claim!