Archive: February 2019

Hurricane Michael has been labeled the “third-most intense Atlantic hurricane to make landfall in the United States.” As of November 26, more than 43 deaths in Florida have been linked to the disaster, with 23 of them all hitting Bay County alone. On Thanksgiving Day, thousands of Floridians remained homeless because they lost everything to the hurricane.

In addition to taking human lives, Hurricane Michael has done significant damage to Florida’s panhandle crops, which will inevitably involve a number of complicated insurance claims to be filed, as we discuss below.

Crop Producers Hardest Hit

When the hurricane hit, bell pepper, squash, and tomato producers were only approximately five days into their season, and were the hardest hit, which included approximately 200 acres of bell peppers and anywhere between 1,000 and 1,500 acres of tomatoes. According to reports, these producers lost approximately 90 percent of their crops. In addition, starting over with their crops has been tremendously difficult because the crop stakes were reportedly blown over and exposed to sun damage, and many of the packinghouses were also significantly damaged from the hurricane, leaving producers with nowhere to go to pack their products.

Any divorce finalized after December 31 will not be able to take advantage of the tax deduction, which was eliminated in the Tax Cuts and Jobs Act. The deduction disappearing has a number of couples rushing to get things finalized before 2019 arrives, as payers (in the higher income tax bracket) will no longer be able to deduct the payments on their annual returns, while recipients will no longer be paying taxes on alimony as income.

In fact, payers will now owe the Internal Revenue Service taxes on the amount paid, while recipients will owe nothing. According to reports, last year alone, close to 600,000 taxpayers claimed deductions for close to $13 billion in alimony paid the previous year. The elimination of the deduction was reportedly intended to offset budget deficits created by lowering the corporate tax rate from 35 to 21 percent.

And unfortunately, however, couples’ needing to come to an agreement isn’t the only hurdle: There must also be enough judges—and time—to sign off on divorce agreements before the end of 2018 in order for couples to take advantage of the alimony deduction. 

On December 5, Florida-based Citizens Property Insurance Corporation announced that it would be paying a number of appraisers to review various hurricane insurance lawsuits and disputes related to Hurricane Irma and expediting settlement and resolutions of these disputes. Reportedly, if the appraisers cannot come to an agreement, Citizens will resort to paying “umpires” to make binding decisions.

According to the company’s chief claims officer, the goal is to settle about 6,500 lawsuits. Still, only a reported 60 plaintiffs have accepted offers from the company since it started contacting plaintiff’s’ attorneys in mid-October, possibly because a number of claimants may realize that they will not be offered what they need directly from the company.

Hurricane Irma, Citizens Property Insurance, and Current Claims

Hurricane Irma significantly affected Citizens Property Insurance, as a number of Florida property owners had policies with the company. According to reports, just between January and October 2018, there was a 71 percent increase in lawsuits against the company, with more than 1,100 lawsuits filed each month. Of the current 6,500 open Hurricane Irma lawsuits, 84 percent reportedly involve disputes concerning how much money it will take to bring properties back to pre-loss conditions. These involve cases where Citizens either made inadequate payments to policyholders or decided that no payment was due because damage costs did not exceed deductible amounts. 89 percent of the thousands of open lawsuits originated from Broward and Miami-Dade counties, which are home to approximately 51 percent of Citizens’ policyholders.