Insureds and Insurers Behaving Badly – Insured Who Left During EUO Given a Second Chance

First Home Ins. Co. v. Fleurimond, (Fla. 1st DCA 2010)

Upon written request for an EUO relating to a claim for damage to a home under a homeowners policy, an insured appeared without counsel, but left in the middle of the EUO after, he claimed, the examiner badgered and yelled at him. Upon retaining counsel, the insured offered to resume the EUO, but the insurer refused, stating that it was too late. Upon the insured’s filing suit demanding an appraisal, the insurer opposed the demand citing breach of policy obligations for failure to comply with the cooperation provisions. The 1st DCA affirmed the lower court’s ruling in favor of the insured, partly because the insured partially attended the first EUO and offered to resume the EUO before the suit was filed.

Appraisal is Only Covered Under Ordinance and Law Coverage if Loss Actually Occurs During Policy Period

Jossfolk v. United Prop. & Cas. Ins. Co. (Fla. 4th DCA 2013)

The roof of an insured structure was damaged and submitted for appraisal. A neutral appraisal entered an award on damages, but stated that Ordinance and Law coverage (which represents the cost of bringing any structure into compliance with applicable ordinances or laws) had not been appraised. The insurer made payment to the insured based upon the award and the insured then applied for a roofing repair permit from the City of Weston, claiming that 34% of the roof area needed repair. The City of Weston rejected the permit since the repair exceeded the area allowed by the building code to be repaired without requiring replacement of the entire roof system. The insured then asked the insurer to pay for the entire roof repair under Ordinance and Law Coverage, but the insurer declined to increase payment.

As a result, the insured filed a declaratory judgment action, seeking a ruling that the insurer must participate in an appraisal for Ordinance and Law coverage. A trial court entered final summary judgment in favor of the insured, noting the insurer’s argument that the appraiser had denied Ordinance and Law coverage. On appeal, the fourth district disagreed, concluding that Ordinance and Law coverage is not recoverable until it is incurred. Stated differently, the fourth district ruled that because no Ordinance and Law Coverage was incurred at the time of the original appraisal, the appraisal never appraised Ordinance and Law Coverage.

Property Insurer Was Not Permitted to Limit Sinkhole Coverage to Less Than Dwelling Coverage Limit

Fla. Farm Bureau Cas. Ins. Co. v. State of Fla., Office of Ins. Regulation (1st DCA 2013)

At issue in this case is the proper interpretation of Florida Statute § 627.706(1), which provides that:

Every insurer authorized to transact property insurance in this state must provide coverage for a catastrophic ground cover collapse. The insurer shall make available, for an appropriate additional premium, coverage for sinkhole losses on any structure … to the extent provided in the form to which the coverage attaches…. A policy for residential property insurance may include a deductible amount applicable to sinkhole losses equal to 1 percent, 2 percent, 5 percent, or 10 percent of the policy dwelling limits, with appropriate premium discounts offered with each deductible amount.

Relying on this statute, the Office disapproved of a property insurer’s proposed amendment to its endorsement form limiting sinkhole coverage to 25% of the overall coverage amount for the insured dwelling. The Office’s reasoning was that the statutory phrase “to the extent provided in the form to which the coverage attaches” refers to the base property insurance property and, consequently, requires insurers to offer sinkhole loss coverage in an amount equal to the dwelling coverage limit.

The property insurer appealed, arguing that this interpretation was clearly erroneous and that the form to which sinkhole loss coverage attaches is really the policy endorsement setting out the extent (limit) of such coverage, which lies solely with the discretion of the insurer. The first district affirmed, concluding that the defining the term “form” to mean the base policy is within the permissible range of interpretations and thus not clearly erroneous: “Because the deductibles are tied to casualty coverage limits in the base policy, it is reasonable to conclude that the amount of sinkhole loss coverage is intended to be the same as the amount of casualty coverage provided for in the base policy.”

An Insurance Claim That Was Over Three Years Late Was Barred From Recovery

Slominski v. Citizens Prop. Ins. Corp. (Fla. 4th DCA 2012)

Insureds filed a claim with their insurer for wind and water damage purportedly caused by Hurricane Wilma three and a half years prior. The insureds claimed that they delayed filing the claim because they originally believed the damage sustained fell below their policy’s deductible. After an investigation, the claim was denied on the basis that, due to the lapse of time since the purported date of loss, the reported damages could not be attributed to Hurricane Wilma.

After the insureds filed suit, the insurer moved for summary judgment, which was granted on the basis that the insureds’ failure to provide prompt notice of their claim prejudiced the insurer and relieved it of its duty to provide coverage. On appeal, the insureds presented depositions and affidavits of two witnesses. Both affidavits indicated that the damage was caused by Hurricane Wilma, but the depositions, which were taken prior to the affidavits, contradicted those opinions.

The fourth district noted that “a party may not file his or her own affidavit, or that of another, baldly repudiating his or her own deposition testimony to avoid the entry of a summary judgment.” It thus affirmed the trial court, observing that without the affidavits, the insureds failed to meet their burden of proving lack of prejudice to the insurer.

Carrier’s Decision to Pay the Amount of its Estimate and then Consider Supplemental Claims for Additional Damages Did Not Violate Florida Statute Section 627.7011

Slayton v. Universal Prop. & Cas. Ins. Co. (Fla. 5th DCA 2012)

A couple months after obtaining a homeowner’s insurance policy, an insured’s home suffered damage from a windstorm. The insured submitted an estimate prepared by a public adjustor for $61,638.00, although the insurer estimated the cost of repair to be $28,915.87. The insurer thus tendered a check to the insured in the amount of $27,915.87 (the total of the insurer’s estimate minus the $1,000.00 deductible), along with a letter advising that the payment did not necessarily constitute a full and final settlement of the claim and inviting the insured to submit supplemental claims for additional damages discovered in the property’s covered reconstruction and repair. Rather than filing supplemental claims, the insured sued the insurer for breach of contract, a suit which resulted in a directed verdict in the insurer’s favor.

The court reasoned that the insurer’s decision to pay the amount of its estimate (less the deductible) and then consider supplemental claims for additional damages discovered during or arising from the repairs was consistent with the terms of its insurance policy. On appeal, the insured argued that such a construction of the policy violated section 627.7011, Florida Statutes, which states that “[i]n the event of a loss for which a dwelling or personal property is insured on the basis of replacement costs, the insurer shall pay the replacement cost without reservation or holdback of any depreciation in value, whether or not the insured repairs the dwelling or property.” The fifth district summarily affirmed the trial court, noting that the insured’s statutory argument had not bee preserved.