Survivors of the Surfside, Florida, condo collapse in June fear if they cash their checks early, they may not be able to collect on future insurance payments.  This fear is tied to a legal a process called ‘subrogation’ in which insurers can stop future payments to policyholders to reimburse themselves for losses.  Families and the survivors want to be assured that their right to collect additional compensation will remain intact.Champlain Towers South suddenly collapsed with many of the residents inside earlier this year.  The portion of the complex that was still standing was leveled in a controlled explosion meant to allow crews to continue their efforts to find missing residents.  Governor Ron DeSantis said at the time of the decision to demo, “Concerns about the remaining part of the building left few options but demolition.  Residents of the building who survived fled with whatever they had with them and had not been permitted to enter the teetering structure…I know there’s a lot of people who were able to get out, fortunately, who have things there.  We’re very sensitive to that.  But I don’t think that there’s any way you could let someone go back up into that building given the shape that it’s in now.”

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Florida state Senator Jason Pizzo said at least 25 people have now approached him with insurance concerns, and Judge Michael A. Hanzman of the 11th Circuit Court (who is overseeing the case) has stated he is asking insurance companies to make “a definitive statement to victims that they can cash their checks without compromising their future rights to collections claims, or their place in line to recover damages.”  Pizzo said, “They’re afraid to deposit the check because they don’t know if they are subrogating their rights to the insurance company to collect perhaps a much larger number.  These owners are concerned that if they accept the money, that means that they’re turning in their rights to collect.”Tasha Carter, a Florida insurance consumer advocate, said, “In this particular case, when a mortgage does exist on one of the condo units, the insurance company would make that check payable to the mortgage company and to the condo unit owner.  Because the unit no longer exists and there is an outstanding balance on the mortgage loan, we’ve run into some instances where the mortgage company is wanting to use the bulk of the insurance proceeds to pay off the remaining mortgage, which can leave the homeowner without enough funds to be able to move forward, find new housing and rebuild their lives.”David Paige, an expert witness for the insurance industry, said companies are only interested in recovering the amount they loaned out.  “Subrogation in the world of insurance, they basically go after whatever they paid,” he said.One of the condo survivors, Steve Rosenthal, had a policy for $92,000 to cover the cost of potential repairs inside his unit.  When the insurer issued the check, it was made out to him and his mortgage company.  On July 28, the company said it would sign over the check for him to deposit after he had fought with it for several weeks.  “In my situation there’s nothing to rehab; there’s no kitchen to fix, there’s no bathroom to fix,” Rosenthal said. “The building was imploded.”

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