TALLAHASSEE, Fla. – Nov. 27, 2007 – More than 13,000 homeowners have used the successful state mediation program set up to deal with disputed claims from the 2004 and 2005 hurricanes.

But as the number of claims from Florida’s last major storm, Hurricane Wilma, continued to come in at a steady 400 to 500 a month through the summer, almost two years after the event, state officials decided to investigate how to make the system more efficient.

For Richard Nurnbirg, who got caught in a bureaucratic snag, it played out posthumously. The Allstate Floridian Insurance Co. agreed Nov. 14 to pay his homeowners insurance claim from Hurricane Wilma. The $35,926 payment to repair the roof of the retired Allstate auto adjuster’s house will go to his estate, said his attorney, Paul Berger in Boca Raton.

Nurnbirg, 85, of Davie, died from cardiac arrest on Oct. 21, just three days before Wilma’s two-year anniversary.

Nurnbirg’s case triggered a modification to a new policy by the state Department of Financial Services, which initially denied him entry into a state mediation program designed to resolve disputes between homeowners and insurers.

And it raised questions about the definition of a dispute between homeowners and their insurance companies and when policyholders should be told that they can appeal the denial of a claim to a state-sponsored mediator at no cost to them.

But Berger, who runs the Hurricane Law Group in Boca Raton, said it’s not enough. He said he expects to file a lawsuit against the state agency in the next few days, arguing that the new mediation rules aren’t valid.

The mediation program has been successful: At least 80 percent of the hearings resulted in settlements, and other states have copied the program as a way to resolve hurricane claim disputes. Despite the passage of time, the claims still keep coming in.

Tom Terfinko, assistant consumer services director at the Department of Financial Services, said insurers were complaining that they were being required to go to mediation even when they didn’t know what the dispute with the homeowner was about. In some cases, policyholders unhappy with their original settlements had never filed notice with their insurance companies that they wanted more money, he said.

Insurers pay the $350 mediation fee, with the cost built into insurance rates for all homeowners.

“We just want to make sure it’s credible, that people are entitled to benefits,” Terfinko said.

Insurers blame aggressive public adjusters for many of the reopened claims.

Although homeowners are entitled to use adjusters, it’s only fair that insurers be told about a reopened claim and given a chance to settle it, said Sam Miller, a spokesman for the Florida Insurance Council.

But plaintiff lawyers said the Financial Services Department, run by Chief Financial Officer Alex Sink, has sold out policyholders.

The agency “has handed over the keys of the mediation program to insurance companies,” said Berger, Nurnbirg’s attorney.

Nurnbirg was one of 59 homeowners, out of more than 400 who filed for mediation after Aug. 24, that the change affected.

The new policy calls for consumer service officials at the Financial Services Department to reject mediation requests if the insurer says it has no record of a dispute. Agency officials say they also check the state’s storm claim reporting system because insurers are required to report electronic claims to the system.

Under the old rules, agency officials automatically sent a request for a mediation to the nonprofit Tallahassee-based Collins Center, which runs the program for the state.

Then there is an automatic 21-day wait for a hearing to be scheduled. During that period, an insurer can attempt to resolve a claim before mediation is scheduled.

The 21 days gave insurers time to investigate a claim for more money, even if the insurer is hearing about the reopened claim for the first time, Berger said.

“There’s no reason why it should take an insurance company more than 21 days to do a reinspection,” he said.

Insurers know when their payments are inadequate because policyholders have relayed to the companies’ adjusters what contractors said is needed to repair their homes, Berger said.

“If the payment is less than what the homeowner wanted, it should be clear there is a dispute,” he said.

Insurers do not always inform homeowners that they have the right to mediation, as the law requires, Berger said. For example, Nurnbirg’s claims file showed no evidence that Allstate informed him he could go to mediation when the company rejected his reopened claim on June 20.

Terfinko said the Financial Services Department has revised rejection guidelines in light of the state’s sending Berger an Oct. 5 letter rejecting Nurnbirg’s request to enter the mediation program “at this time.” The letter from Tracy Harry, the agency’s consumer services representative, states that Allstate never received notice that there was a claim or that Berger was representing Nurnbirg.

Nurnbirg was paid $6,234 to cover damage to his house from Hurricane Wilma on Dec. 7, 2005, according to documents Berger and state officials provided. He initially took the money without complaint, but was unable to repair his roof, which the storm had damaged severely.

“Nurnbirg kept on contacting roofers who told him that they couldn’t make partial repairs to his leaking roof because it was more than 25 percent damaged,” Berger said.

Under Florida law, a new roof is required if the old structure is damaged by more than 25 percent.

Berger said the manufacturer of the original titles on 20-year-old house also had gone out of business, meaning there was no way to do a partial repair.

“He saw his neighbors get new roofs and felt frustrated,” Berger said.

This past spring, Nurnbirg reopened his claim against his insurer and former employer.

“He couldn’t understand why Allstate was rejecting his claim,” said his son-in-law Jim Gullo. “He said, ‘Why is Allstate doing this to me?’ “

Allstate sent two new roofing inspectors on separate occasions before sending the June 20 letter to Nurnbirg denying his request. The letter states the company determined the roof damage was from wear and tear, and poor installation methods when the house was built.

Nurnbirg hired Berger in August and Berger filed for mediation on behalf of his client.

Terfinko said he has informed consumer service representatives to err on the side of the consumer on questions of whether a claim has been filed and someone is eligible for mediation.

The assistant director said he reversed the Oct. 5 mediation rejection decision on Oct. 14 to allow for a hearing after hearing more details of the Nurnbirg case from Berger.

The state agency has built safeguards under its new eligibility rules for mediation, including consumer-friendly follow-up letters to anyone rejected telling them they must file a formal claim to be eligible, Terfinko said.

Berger said that, in the meantime, an Allstate claims representative has agreed to settle the case. The company will pay almost $36,000 for a new roof on Nurnbirg’s house. But Berger added that he has an advantage over most homeowners: He knew whom to call to get the mediation rejection reversed. The average homeowner, without a lawyer, can get lost in the process.

Allstate spokesman Adam Shores said the company does not comment on individual claims.

Copyright © 2007 The Palm Beach Post, Fla., Randy Diamond. Distributed by McClatchy-Tribune Information Services.