The October 2005 timeline
Oct. 17: Tropical Storm Wilma forms
Oct. 18: Hurricane Wilma forms
Oct. 19: Wilma reaches peak intensity of 184 mph, 882 millibars of pressure and eye diameter of 2 miles
Oct. 17-19: Wilma’s speed of intensification was unprecedented; lowest pressure ever recorded in an Atlantic hurricane and smallest eye diameter known to National Hurricane Center forecasters.
Oct. 23-24: Wilma spawned 10 tornadoes in Florida, including one in Collier County.
* * * * *
Landfall: Oct. 24 at Cape Romano, Collier County, 120 mph
Exit: Oct. 24 at Palm Beach County, 109 mph
HURRICANE WILMA FIVE YEARS LATER
- STORY: Wilma landfall site: Ecosystem struggles to recover, dome home may move
- STORY: Five years later: ‘Devastating’ Wilma hit Chokoloskee the hardest
- STORY: Five years after Hurricane Wilma hit, insurers getting new claims, lawsuits
- STORY: Five years later: Bids going out to rebuild Wilma-damaged Farmers' Market
- PHOTO GALLERY: Five year later - the Immokalee Farmers Market is still a disaster
- STORY: Historic Everglades City Hall remains a town bedrock after Wilma repairs
- PHOTO GALLERY: Cape Romano still recovering five years after Hurricane Wilma roared over
- PHOTO GALLERY: Reader photos from the Immokalee Farmers Market in the aftermath of Hurricane Wilma
- PHOTO GALLERY: View our entire photo archives from the arrival and aftermath of Hurricane Wilma
NAPLES — For condo owners at the Monaco Beach Club, the five-year anniversary of Hurricane Wilma is a bitter reminder of an insurance claim gone wrong.
The hurricane battered the Gulf-front high-rise tower in Naples, breaking windows and doors, damaging screened porches, soaking carpets in hallways, tearing off shutters and ripping away parts of the roof. A check for repairs will never come from the insurer of the building.
Every owner at the time of the storm — whether they had damage or not to their condo — ended up with an assessment of more than $100,000 to pay for repairs to the 18-story building off Gulf Shore Boulevard.
QBE Insurance, the building’s insurer, paid nothing after it accused the condominium association of inflating its claim, which originally came in at more than $20 million. After a long legal battle in Collier Circuit Court, a jury sided with QBE, which declined to provide comments for this story.
“I think the other side presented information that caused the jurors to be confused,” said Douglas Grose, a Tampa attorney who represented the condo association in the years-long legal battle. “We have one of the best judicial systems in the world. It’s not perfect in my mind.”
In June, the association lost an appeal of its case.
When fraud is found in a claim, an insurer isn’t required to pay a penny, even when there are real damages that exceed the deductible.
Monaco Beach residents weren’t alone in their fight with QBE.
When Wilma hit on Oct. 24, 2005, QBE — part of an Australian-based insurance group — was one of the largest insurers of condo associations in Florida. It has faced dozens of lawsuits for denying or delaying claims for the eight hurricanes that walloped Florida in 2004 and 2005.
Donna Berger, a Fort Lauderdale attorney who specializes in condominium law, said a typical QBE tactic has been to allege fraud whenever they have to pay a big claim.
“If they can get you to go away with less than what you are owed, or even better nothing at all, they’ve won the war,” she said. “They’ve taken your premium and you’ve gone away. You are a wonderful customer.”
Many condo owners in Florida ended up paying special assessments for Wilma repairs that should have been covered by insurance, in part because their boards didn’t know how to properly handle claims and didn’t understand their policies, she said.
“I think, unfortunately, condominium boards have their cards stacked against them,” she said. “They have their cards stacked against them when dealing with insurance giants that know the game a lot better.”
In one of her firm’s cases against QBE, a condo hit by Wilma in North Miami Beach was nearly condemned because it was waiting for the insurance money to come through before making any major hurricane repairs, she said.
The assessments at Monaco Beach Club were a big financial blow, especially to owners living off meager retirement checks.
“Anytime someone has a loss like that it’s extremely difficult on them. And that is why we are supposed to have insurance to help us through these times,” Grose said.
Court documents for the case run thousands of pages long, filling several file boxes. The homeowners association sued QBE for breach of contract to try to get its claim paid back in 2006.
The insurer argued that some of the damages sought by Monaco Beach Club were due to “wear and tear,” not Wilma, and that the claim overestimated the cost of repairs and included damages that weren’t covered by its policy.
At the time of the storm, the building was valued at about $37 million. QBE’s defense team argued the board was trying to take advantage of the hurricane to improve the quality of the building, which was built in 1983.
The condo association, eager to start repairs, hired its own experts to put together a claim and started work almost immediately after the storm.
In its lawsuit, the association said QBE failed to properly investigate the claim and refused to effectively communicate with the board, delaying payment needed to shore up the building and to make timely repairs.
The claim the board submitted to QBE ran 2,500 pages long. The association president at the time signed off on it.
In court, Grose, the association’s attorney, argued that board members couldn’t be expected to understand the claim and didn’t knowingly commit fraud.
By the numbers
Damage: Wilma ($20.6 billion) was third-costliest hurricane in U.S. history behind Andrew ($26.5 billion) in 1992 and Katrina ($81 billion) in 2000. Hurricane Charley, which made landfall in Lee County in 2004, ranks fourth ($15 billion).
This is the final of three days of coverage of the effects Hurricane Wilma has had on the region, five years later.
“The board realized it was a complicated situation — that there was tremendous damages here and they hired professionals to do the evaluation and the repairs,” he said. “The board didn’t do anything wrong. They did everything they could to present a full and complete claim with the help of experts.”
Shortly after the storm, the association took out a bank loan so repairs could be made quickly. At first, owners paid only the interest on the loan, but after the association members lost the case against QBE, they were forced to pay the six-figure assessments. The cost of repairs was spread over 138 condos.
Initially, QBE told the association based on its own assessment that damages weren’t more than the deductible for its hurricane policy. Later, after reassessing the damages, the insurer found the association exceeded the deductible, which was nearly $1 million, Grose said.
In April 2008, QBE offered a settlement of $4 million, court documents show. The association’s board didn’t accept it.
During the jury trial, some owners testified the building already was undergoing a facelift when Wilma hit, and that some of the damages included in the QBE claim were paid by other insurers, who had policies for their individual condos.
According to court documents, the claim included $6.1 million for the replacement of all windows and all sliding glass doors, when not all of them were damaged by the hurricane.
Also in the claim was $500,000 for new carpeting, which already had been ordered for the renovation project before Wilma hit. The cost of the carpeting, which was sitting safely in a warehouse during the storm, was actually $158,000, QBE’s Miami attorney William Berk, told the jury.
In court, he described the damage at Monaco Beach Club as more “moderate.”
Berk couldn’t be reached for further comment. But in an interview with The Miami Herald last year, he said QBE had received 1,500 claims for damages from the eight hurricanes that hit Florida in 2004 and 2005 and that his company already had paid out $275 million.
Paula Symons, a communications consultant for QBE in Wisconsin, said she couldn’t discuss specific claims and didn’t want to respond to questions about the frequency of fraud in claims.
The Royal Marco Point 1 Condominium Association on Marco Island is still in a legal battle with QBE over its Wilma claim.
The association, overseeing 125 condos on Hideaway Beach, sued the insurer after it was forced to spend all of its maintenance reserves to take out loans and to assess its owners twice to pay for repairs because it wasn’t getting any payments on its claim. The first check from QBE didn’t come until March 15, 2006, and it was only a partial payment of $260,000, court records show.
Eventually, more payments came from QBE. But in its lawsuit, the association claims that payments still came up short, and it’s alleging bad faith on QBE’s part, which could result in a tripling of damages if a jury agrees.
The association estimates that Royal Marco Point 1 had more than $6.2 million in damages from Wilma. That included damages to roofs, windows, doors, gutters, screens, stucco, boardwalks and railings.
A trial is set for Feb. 14, 2011.
The Florida Department of Financial Services received 41 complaints about QBE from condo associations and owners related to Hurricane Wilma. In total, there were more than 60 complaints about the insurer from 2004 to 2009, with about a third of them involving delays in handling claims.
“If you don’t pay claims, insurance is a very profitable business,” attorney Grose said. “Insurance is supposed to be sold for the purpose of paying claims and to share the risk among a large number of insureds.
“To handle the claim in an adversarial manner with the insured is improper,” he said. “It’s a conflict of interest.”
More coverage of Wilma's effects after five years
Comparing the storms
Katrina ...2005.....920 mb......126..........3...........Louisiana
Andrew...1992......922 mb......167..........5..........South Florida
Charley...2004......941 mb......150..........4..........Cayo Costa
Wilma.....2005.......950 mb.....120..........3..........Cape Romano
Source: National Hurricane Center