William F. “Chip” Merlin Jr.
Property Insurance · Policyholder Recovery
There was no one on the policyholder side doing this on a regular basis.
Seven Miles Inland
A week after Hurricane Katrina came ashore in August 2005, Chip Merlin flew to the Mississippi Gulf Coast. "We landed on a private air strip seven miles inland, but even there, the storm surge was 12 feet high," he said. That water became the center of the insurance fight that followed. State Farm and other insurers took the position that their homeowners policies covered damage from wind but not damage from rising water, and State Farm read the anti-concurrent-causation clauses in its policies to exclude a loss that water had helped cause.
Curtis and Joan Lee's house in Diamondhead was demolished by the storm. In mediation State Farm offered them 30 cents on the dollar, and they turned it down. They were among 103 State Farm policyholders on the Mississippi coast whom Merlin's firm represented; 47 had sued the company, and 56 had hired the firm without yet filing suit. In September 2007 all 103 settled with State Farm on confidential terms, which the company said spared "our customers and our organization from time-consuming and expensive litigation." Joan Lee, who was 75, said, "It's such a relief not to have to worry about this any more." Merlin's view was that "small individuals can stand up to large insurance companies and still have a resolution that's acceptable to them."
The Oldest Applicant in the Room
In 2006, twenty-four years after he graduated from law school at the University of Florida, where he had also taken his undergraduate degree in business administration, Merlin sat for the Mississippi bar examination. "Needless to say, I was the oldest applicant in the room taking the exam," he said. His firm opened offices in Bay St. Louis and Gulfport, and Mississippi became one of thirteen jurisdictions, from New York to California, in which he is admitted to practice.
The Katrina work went on for years. In 2008 he represented the Port of New Orleans in a $150 million claim against Factory Mutual Insurance Company over the storm's damage. In June 2010 his firm settled twenty-two more State Farm cases, eighteen of them for policyholders who had come to the firm after the first settlement. Those claims turned on the same questions as before: wind against water, the anti-concurrent-causation clauses, and the policyholders' allegation that State Farm had adjusted Katrina claims under an internal "wind-water protocol" without investigating them fully. Merlin said the documents and testimony developed in the earlier cases had strengthened the later negotiations, and he objected to the protective orders that kept such material from the public: "Personally, I can't think of any social purpose that helps us, as a society, by having these protective orders."
Changing Sides
As a young lawyer, Merlin thought about the moment he would meet his maker and the words he least wanted to say then: "Hi! I just saved Travelers Insurance $25 million." He had started at a firm that did nothing but property-insurance defense, and the work showed him an imbalance. The insurance companies, he said, "had a big advantage because they had people like me who were doing it day in and day out." He left. "Switching over made sense to me," he recalled. In 1985, three years out of law school, he opened his own practice in Tampa to represent policyholders, and Merlin Law Group has done that work since, on first-party property claims and bad-faith disputes for homeowners, businesses and public entities. Many of its lawyers came, as he did, from the insurance side.
When Hurricane Andrew struck South Florida in 1992, Merlin represented policyholders through the claims that followed, and the last of his Andrew settlements came in 2000, eight years after the storm. Andrew's winds were more intense than Katrina's, but the storm covered a smaller area and brought nothing like Katrina's surge.
Three Months Later
When a dispute is about how an insurer handled a claim, the firm tries bad-faith cases. In April 2023 a Merlin Law Group trial team of Mike Duffy, Jon Bukowski and Larry Bache won a verdict of about $1.4 million in a case centered on delay and the withholding of an engineering report. Merlin wrote afterward that trying such cases teaches the public about insurer misconduct, that refusing to accept inadequate offers shows insurers how committed a policyholder's lawyers are, and that a trial lets clients "share their story" and "regain control and dignity."
He writes the Property Insurance Coverage Law Blog, which follows coverage decisions and claim practices for policyholders, public adjusters and lawyers, and in 2020 he published a 192-page guide for policyholders, "Pay Up!," subtitled Preventing A Disaster With Your Own Insurance Company. He serves on the board of United Policyholders, is a past chair of the American Association for Justice's Insurance Bad Faith Litigation Group, and trains public adjusters. By 2008 he had also run twenty-six marathons, eight of them in Boston.
He went to Houston after Hurricane Ike, to New Jersey after Superstorm Sandy, where the firm represented twenty-three municipalities and hundreds of individual policyholders, and to Puerto Rico after Hurricane Maria. Tarping, gutting, cleanup and emergency demolition can change the physical evidence quickly, and photographs, damaged materials, contents records and engineering observations taken early may later show what caused a loss and what repairs it required. The firm works with its own engineers, contractors and independent roofing consultants. Merlin and his team go to a damaged area almost as soon as a storm has passed, and the clients start coming about three months later, when the policy disputes begin.
