Category Archives: Florida Insurance Defenses

Florida Homeowners Insurance Claims for Water Leaks and Damage, and the Constant or Repeated Seepage Exclusion

Florida Homeowners Insurance Claims and Litigation Handbook

Overview:

What happens when a homeowners insurance company denies a claim for constant or repeated seepage or leakage?

Generally, homeowners insurers’ personnel will look at the damage and, based on (1) experience or (2) an expert opinion, the insurer will determine that it is long term damage that is not covered.

If a person has a roof leak, pipe break, supply line burst, or something else that she thought happened quickly, then she might think the constant or repeated seepage exclusion is unfair.  Depending on (1) the way that the exclusion is written in the policy and (2) the investigation the homeowners insurer conducted, the homeowner might be right.

In this article, you will see what homeowners insurers need to prove that a water leak and its damage are excluded using the constant or repeated seepage exclusion for long term water damage.

So don’t forget to read all the way to the end, contact me, and subscribe.


Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook and Litigation Data Reports:

Before we go on, if you are in the Florida homeowners insurance claims industry and are looking for a guide with the key cases, strategies, laws, attorneys, and adjusters, or if you’re looking for Florida litigation data reports, please visit this page to learn more about our Florida Homeowners Insurance Claims and Litigation Handbook.


Do you think you need to understand this subject? I’d say you should be an expert on it.  

The most common dispute in the Florida homeowners insurance industry is whether water damage is covered or excluded by homeowners insurance.  Florida is a rainy and humid place, so there is plenty of water damage.  The question is whether the damage is sudden or long-term.  You better know the difference.

How do you find out the difference? Read this article to find out how homeowners insurers must prove that damage was excluded by the constant or repeated seepage exclusion.

The Policy

The exclusion has many variations; however, in general, it excludes long term water damage. With respect to the variations, some of these exclusions expressly provide that the seepage must come from within a plumbing, heating, or air system. Others contain language that excludes the leakage “whether hidden or not.” In addition, some describe the exclude time period as “weeks” or “months” whereas others specifically exclude damage that occurs over a period of more than 14 days.

Hoey v. State Farm

The main case on the issue is the Fourth DCA’s 2008 decision in Hoey v. State Farm, 988 So. 2d 99 (Fla. 4th DCA 2008). In Hoey, the Fourth DCA determined that the evidence in the record was enough to show that the insurer was entitled to a judgment that the damage was long term and, therefore, excluded from insurance coverage. By analyzing the steady increase in the water bills for roughly three months, the insurer was able to show that there was a failure in the nylon of the toilet supply line. Contrary to many of the litigated cases on this provision, this case had enough evidence in the insurer’s favor to allow the trial court to determine the insurance company clearly did not cover the damage.

Key Evidence

In cases where summary judgment is not appropriate, juries must decide whether the evidence shows that the leakage occurred for an excluded time period. Naturally, insureds’ and insurers’ attorneys should pay attention to the following factors to assess what the jury will think of the damage:

1. The Photographs

The photographs tell the story and are typically the most important evidence. Do they show staining and warping? For an insurer, it is going to be hard to convince a jury that the water loss was long term if there is no staining or warping of particle board cabinets. For an insured, if the particle board has rings and rings of deep brown stains and appears to be falling apart, then how can he or she convince a jury that the damage happened from a single leak?

The most important photographs will come from the field adjuster and, if the insurer promptly hired an engineer who quickly visited the property, then the engineer should have good photographs. Because these losses often occur in obscure areas of the property (kitchen cabinets, wall space), an insured generally does not have prior photographs of the damaged areas. Ultimately, the photographs will be the most critical evidence in the case.

2. The Water Bills

The water bills also can help guide the parties’ understanding of what happened. If there was a sudden and extreme toilet leak or pipe burst, then, depending on where the burst was, there may be a huge surge in the water bills. If the bills constantly crept up for a few months, however, that might suggest there was a pinhole leak that allowed water to seep out over a long period of time. According to the Fourth DCA, the water bills in Hoey were sufficient to allow the trial court’s finding that the damage was excluded.

3. The Experts

The experts in this field are very skilled and can provide the parties with highly detailed evaluations of an infinite amount of different types of water losses. Many of the experts I deal with rely on the studies done by Dr. Ralph Moon from HSA Engineers.I have worked with Dr. Moon a great deal. He has published volumes of studies showing what each housing material looks like after it has been exposed to water for days or months. The studies are very intricate and detailed, and, in some cases, can even tell you what temperature the water was in your case. There are several other outstanding experts that rely on Mr. Moon’s studies. I find that a lot of these experts are very good at explaining why a particular type of damage had to have been caused by long term seepage.

Despite having handled well over 100 of these types of cases, I have not had the chance to meet any experts in this area that are hired by insureds and their attorneys. I would like to hear their counterarguments to the very well reasoned theories laid out in the water duration studies I mentioned above.

If you would like a copy of any of Dr. Moon’s articles or the names of any of the other highly qualified experts, please feel free to email me. If you handle these types of cases, I highly recommend reading Dr. Moon’s articles and sharing them with your team as soon as possible. As you know, the experts will be responsible for explaining the issue to the jury.

4. The Nature of the Source

To determine whether the damage was long term, the parties have to understand the nature of the event. Was the leak coming from the roof? If so (and so long as there was not a wind event), the only seepage that could have entered must have been rain and other moisture over a period of time. If a slight “leak” caused a substantial amount of damage, that is a strong example of a long term water loss. Was the leak coming from a deficiency in the shower stall or tub surround? One might logically expect that the damage occurred each time the person showered or took a bath. Understanding the exact source of each portion of the loss is crucial to determining whether the source, by its nature, is something that would happen over time or all at once.

5. The Policy

To evaluate the claim, insurers and insureds must also go to the heart of the issue – the insurance policy. Interestingly, and as mentioned above, these policies have many variations. Not only are the excluded durations different, but the sources of the loss can often be different. For example, some policies’ constant or repeated seepage exclusions may exclude long term seepage coming only from within a plumbing, heating, or air conditioning system. If the loss was long term but not from one of those systems (for example, through the roof), then insureds and insurers might need to reevaluate whether the loss was “sudden” or not, which is also required by virtually every homeowners insurance policy. As also noted above, some policies contain language that excludes the damage “whether hidden or not.” This is arguably the first place to look when evaluating one of these claims.

If you are an insured, a claims handler, or an attorney in this field, then you certainly need to understand the significance of these issues. This exclusion is as litigated as any other exclusion in any type of insurance policy. Although this was not meant to be an exhaustive review of the issues, I hope that it helped you in some way. As noted above, if you want any of the materials from Dr. Moon or you want to discuss any of the other experts in the field, please email me.

Takeaway:

At least 60% of your claims and lawsuits are probably water damage claims. It’s time to approach these on a more global level.

  • What if I told you that you could use a system to search your old claims and cases to determine how much the next case will settle for?
  • What if I told you that you could pay for the legal documents for these claims only once?

Well, its no longer 2001, and these systems are freely available.  If you want to know more about the systems we use, or you want free checklists and guides for handling water damage claims, please message me.


Questions?

If you have any questions about this article or anything else Florida homeowners insurance-related, please contact us.

Does a Defense Based on an Insured’s Failure to Submit to an Examination Under Oath Require the Insurer to Show Prejudice?

Florida Homeowners Insurance Claims and Litigation Handbook

fire 3

*April 30, 2014 Update: I want you to read this article because it has the best explanation of the hotly debated condition precedent vs. condition subsequent issue on this site; however, when you are finished, you need to read this article to learn about the latest developments from courts evaluating what type of condition the EUO provision is.*

If an EUO does not happen, can the insurer move for summary judgment and get an order by simply showing that the insurer requested the EUO and it did not happen? In other words, can an insurer obtain a summary judgment on that issue without pleading and proving prejudice? Yes and no, depending on where in Florida you live.

picture from http://www.florida-lawblog.com/2010/05/examination-under-oath-euo.html

The Fifth DCA is the DCA making some waves. While old news, the Fifth DCA in State Farm Ins. Co. v. Curran held that a failure to appear at a compulsory medical examination was a breach, but maybe not a material breach because the insurer did not plead and prove prejudice. 83 So. 3d 793 (Fla. 5th DCA 2011). Following that decision, the Fifth DCA issued another opinion denying an insurer summary judgment based on an insured’s alleged failure to submit to an EUO. Whistler’s Park, Inc. v. FIGA, 90 So. 3d 841 (Fla. 5th DCA 2012). In Whistler’s Park, Inc., the Fifth DCA considered the insured’s arguments that it responded to the insurer’s EUO request by naming a corporate representative to testify at the EUO and promising to produce the documents. The insurer had previously asked the insured to call the insurer to schedule the EUO. Leading up to the summary judgment hearing, the insured continued to offer to submit to the EUO, but did not call to schedule. The Fifth DCA once again held that the insurer’s failure to plead and prove prejudice thwarted its ability to obtain summary judgment on the EUO provision, which they called a condition subsequent. The Fifth DCA said that to show a breach of a condition subsequent was material, the insurer needs to plead and prove prejudice. So we know where the Fifth DCA stands: an insurer must plead and prove prejudice.

No other DCA has expressly taken this position. The Third DCA, however, has denied an insurer’s motion for summary judgment on the issue when counsel for the insurer asked improper questions to an insured that the insured refused to answer. De Leon v. Great American Assur. Co., 78 So. 3d 585 (Fla. 3d DCA 2011).

The Fourth, Fifth, and Second DCAs all have opinions suggesting there is no need to plead and prove prejudice. The Fourth DCA’s decision in Goldman v. State Farm suggests that an insurer does not need to plead prejudice to obtain summary judgment in that jurisdiction. 660 So. 2d 300 (Fla. 4th DCA 1995). However, the Fifth DCA in Curran suggested that a portion of the Goldman decision considered the prejudice issue when it discussed how remanding the case to proceed with the EUO would be fruitless because two years had passed since commencement of the suit. Insurers often point to two other decisions suggesting that prejudice does not need to be pled and proven to obtain summary judgment in the Second and Fifth DCAs. See Amica Mutual Ins. Co. v. Drummond, 970 So. 2d 456 (Fla. 2d DCA 2007); Starling v. Allstate Floridian Ins. Co., 956 So. 2d 511 (Fla. 5th DCA 2007).

So the answer to the question posed is, once again, that it appears to depend on the jurisdiction. In November of 2012, the Florida Supreme Court heard oral arguments in Curran. I am not sure when to expect the Florida Supreme Court to issue the order but hopefully it will shed some light on whether the Fifth DCA is right, or whether the issue will return to a bright line rule. Until the Supreme Court issues its opinion, it might be best to plead and prove prejudice just to be safe.

Florida Homeowners Insurance Claims and Litigation Handbook and Litigation Data Reports:

Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook

If you are in the Florida homeowners insurance claims industry and are looking for a guide with the key cases, strategies, laws, attorneys, and adjusters, or if you’re looking for Florida litigation data reports, please visit this page to learn more about our Florida Homeowners Insurance Claims and Litigation Handbook.

Questions?

Have any questions about Florida’s homeowners insurers, policies, and claims, please feel free to contact us.

Bankruptcy and Florida Homeowners Insurance Lawsuits and the Impact of Judicial Estoppel


Although Todd Legal, P.A. has built a system to automatically analyze and produce this result for those “in the know” using CaseGlide’s Litigation Control System, this defense is still unknown to most people handling these claims.

Do you want to learn about one of the most powerful defenses a homeowners insurer has against a homeowner?  Do you want to learn about a defense that the majority of homeowners insurers do not know even exist?  Then read this article to learn more about the doctrine of judicial estoppel.


First Party Property Insurance Blog is Proud to Announce our New E-Book: the Florida Homeowners Insurance Claims and Litigation Handbook.

You know I am always here to provide tons of value to businesses in the insurance claims industry. We spent years collecting and analyzing leading industry data, strategies, action steps, and cases to know for our clients. We decided to make this available exclusively to the First Party Property Insurance Blog Community.

In this 99 page book, we provide our readers with:

  • the 16 Strategies You Need to Know to Master Florida Homeowners Insurance Claims, including pages of Action Steps and Cases to Know for evaluating each strategy
  • the 6 Key Statutes You Need to Know to Master Florida Homeowners Insurance Claims, including Practice Tips and Cases to Know for handling each statute
  • The 3 Tools You Need in Your Florida Homeowners Insurance Claims Toolbox, including our Resources, Legal Document Library, and Affirmative Defenses analysis, and
  • our CaseGlide Florida Homeowners Insurance Databases with insurer data, attorneys, and public adjusters

We’ve been conducting Webinars and Training Sessions on this material for years, and they have always helped our clients’ businesses. The Florida Homeowners Insurance Claims and Litigation Handbook has everything you need to help your colleagues, staff, and partners master our claims industry. Our clients have used the material in this E-Book to revolutionize how they handle claims and litigation.

We’re so confident in this E-Book that we offer you a money-back guarantee if it does not have the information you and your insurance claims business needed to improve. Click the image of the E-Book now to buy it for your friends and clients today.


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*April 30, 2014 Update: this has been one of the most popular posts on the blog.  I have heard about many carriers having success with this defense, and I have been happy to help them obtain these results.  

Make sure to read all the way to the end of this post.  I have included a link to Todd Legal, P.A.’s website outlining how carriers efficiently guarantee they always use this defense when the facts and data support it.*

If an insured has filed for bankruptcy, does it have any impact on a pending lawsuit for property damage against an insurance company? Yes, and it could result a complete defense to liability or a substitution of the trustee for the insured.

When an insured files for bankruptcy, he or she is required to disclose all pending claims to the bankruptcy court. In a Chapter 7 bankruptcy, the bankruptcy trustee gains ownership of all claims. Other types of bankruptcy can be different in that regard. Ultimately, when someone goes bankrupt, the trustee gains the standing to sue and can pursue any claims the debtor had or may have. The trustee’s goal is to make any recovery part of the bankrupt estate so that the creditors can try to recoup their losses.

Judicial estoppel is a doctrine that comes into play when an insured fails to disclose a claim to the bankruptcy court. If the insured’s bankruptcy is confirmed without disclosing a pending claim, it could be said that the insured successfully maintained the position that there was no claim in the bankruptcy court. By doing so, the insured is judicially estopped from maintaining a different position in the case against the insurer. Blumberg v. USAA Casualty Ins. Co., 790 So. 2d 1066 (Fla. 2001).  Judicial estoppel on this issue applies in every southern state except Tennessee.  See http://www.deflaw.com/articles/the-property-corner-question-of-the-month-can-an-insurer-defend-a-denial-of-a-claim-for-when-the-insureds-damaged-property-was-not-listed-in-the-insureds–bankruptcy-petition-.

Each party should pay close attention to the timeline and the bankruptcy disclosures.  If the insured has not informed the bankruptcy court, the court with the property claim might request the parties to notify the bankruptcy court to assess the trustee’s intentions.  See http://www.propertyinsurancecoveragelaw.com/uploads/file/Hadden.pdf.

Each case is different but this defense is something worth looking into very early in each case.  The trial courts are very receptive when it comes to having the power to enforce fairness.  Further, I am sure each party would prefer to find out early if one of the parties is going to be substituted out, thereby changing the whole makeup of the case.


Want to Guarantee You Never Miss this Defense Again? Hire Todd Legal, P.A.

How can you make sure that every adjuster and every attorney past, present, and future check to see if the insured went bankrupt and if he no longer owns the claim he is suing you for?  Will an email work?  No. New adjusters and attorneys will never get it.  Will a note to the file work?  Come on, give me a break.

But guess what will work?  If you shift your communication and case strategies from out of emails and Word documents and into a web-based project management portal.  Then, you can make sure every adjuster and every attorney on every case is asked whether the plaintiff is bankrupt, and you have to go no further than two clicks online to find the answer for your specific case.  I offer innovative services and software that can automatically implement the strategy changes to be consistent with the information in this article.  If you want to know more about how I can help your company or firm ensure that your strategies are up-to-date and complied with by all of your colleagues and vendors, then contact me.  Furthermore, if you want a litigation project manager with a powerful software tool that allows your attorneys to draft top-down approved legal documents in every case with the click of a button, then read more about my services here.

The more you automate these routine tasks, the more time you will have to proactively manage your claims and cases.

 


Getting Started

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Did this Article Answer Your Homeowners Insurance Question?

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Another New Florida Homeowners Insurance Late Notice Case: Hope and Cunningham v. Citizens Property Insurance Corporation


First Party Property Insurance Blog is Proud to Announce our New E-Book: the Florida Homeowners Insurance Claims and Litigation Handbook.

You know I am always here to provide tons of value to businesses in the insurance claims industry. We spent years collecting and analyzing leading industry data, strategies, action steps, and cases to know for our clients. We decided to make this available exclusively to the First Party Property Insurance Blog Community.

In this 99 page book, we provide our readers with:

  • the 16 Strategies You Need to Know to Master Florida Homeowners Insurance Claims, including pages of Action Steps and Cases to Know for evaluating each strategy
  • the 6 Key Statutes You Need to Know to Master Florida Homeowners Insurance Claims, including Practice Tips and Cases to Know for handling each statute
  • The 3 Tools You Need in Your Florida Homeowners Insurance Claims Toolbox, including our Resources, Legal Document Library, and Affirmative Defenses analysis, and
  • our CaseGlide Florida Homeowners Insurance Databases with insurer data, attorneys, and public adjusters

We’ve been conducting Webinars and Training Sessions on this material for years, and they have always helped our clients’ businesses. The Florida Homeowners Insurance Claims and Litigation Handbook has everything you need to help your colleagues, staff, and partners master our claims industry. Our clients have used the material in this E-Book to revolutionize how they handle claims and litigation.

We’re so confident in this E-Book that we offer you a money-back guarantee if it does not have the information you and your insurance claims business needed to improve. Click the image of the E-Book now to buy it for your friends and clients today.


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*April 30, 2014: There are some other late notice cases that can help you prepare your case.  Check this link to make sure you review all of the late notice cases that have recently came out.*

LATE NOTICE CASE: HOPE & CUNNINGHAM V. CITIZENS

The Third DCA just issued the latest opinion on the late notice defense:

http://www.3dca.flcourts.org/opinions/3D11-3147.pdf

As discussed in Florida Courts on the Prompt Notice Provision and New Late Notice Case, the Florida DCAs have been giving insureds and insurers a lot to work with in terms of evaluating the strengths and weaknesses of a late notice defense.

The Third DCA’s opinion in Hope & Cunningham v. Citizens changes nothing in the current late notice law, but helps to maintain the status quo. The case involved a October, 2005 Hurricane Wilma claim reported to Citizens in 2009.

The Third DCA used the “tipsy coachmen doctrine,”which allows an appellate court to affirm a trial court’s order even if the trial court made the decision for the wrong reason. The trial court granted summary judgment pursuant to the Fourth DCA’s finding in Kroener v. FIGA that the passage of two years alone was sufficient for summary judgment on the defense, without consideration of the facts that might have overcome the presumption of prejudice.

The Third DCA said the trial court should have reviewed the plaintiff’s affidavit, the public adjuster’s report, and the roofer’s estimate to assess whether those could be sufficient to create a question of fact as to whether the plaintiffs could overcome the presumption of prejudice. The Third DCA took up that task and said that, because the evidence was merely conclusory, it did nothing to create a question of fact as to the prejudice. Accordingly, the Third DCA found that the trial court was right for the wrong reasons and Citizens was entitled to summary judgment.

This fits right in the prior analysis. Insureds must produce sufficient evidence to overcome the presumption of prejudice and the people presenting that evidence must stick to their stories. If an insured does not present evidence with specific (not conclusory), unwavering reasons as to why the insurer was not prejudiced, then summary judgment is proper.


Getting Started

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Did this Article Answer Your Homeowners Insurance Question?

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What the New Daubert Expert Witness Standard Means to You


Getting Started

New to the First Party Property Insurance Blog? Take five minutes to find the answers to your insurance questions by clicking here.


As everybody knows by now, Florida recently passed House Bill 7015. How does this new Daubert standard impact us now?

This bill changes the standard for the admissibility of expert testimony from the Frye standard to the Daubert standard. The pertinent part of the standard now codified in Fla. Stat. 90.02 is that an expert can only testify if the court determines:

(a) The testimony is based upon sufficient facts or data;

(b) The testimony is the product of reliable principles and methods; and

(c) The witness has applied the principles and methods reliably to the facts of the case.

The statute also goes on to say that it incorporates all of the prior law arising out of Daubert; therefore, the complete Daubert standard generally includes a court’s evaluation of the following factors:

(a) Whether the theory or technique is falsifiable, refutable, and/or testable;

(b) Whether it has been subjected to peer review and publication;

(c) The known or potential error rate;

(d) The standards and controls concerning its operation; and

(e) Whether the theory and technique is generally accepted by a relevant scientific community.

This a procedural statute so, from what I gather, it applies NOW. Glover v. State, 474 So. 2d 886, 891 (Fla. 1st DCA 1985).

I know that there will be a lot of Daubert challenges now in property insurance cases, and I expect them to get going very quickly in sinkhole cases. If a hurricane were to hit, I could see these challenges happening in the wind vs. rain dispute. I will have to think about how this could apply in cause and origin or duration studies for other types of water damage claims. It will be interesting to see if experts change the way they do things to try to increase their chances of passing the Daubert test. They know that, if one of the courts makes a finding that an expert cannot testify, then they will see that order come up again and again in other cases.

One might ask whether this will make any difference. Based on some preliminary research, it appears there is statistical evidence that the Daubert standard has made a HUGE difference in federal courts.

The only article I found with statistics suggested there were some incredible results from attacking experts’ science under Daubert. Here is an excerpt:

According to a PricewaterhouseCooper study, which looked at Daubert challenges post Kumho, the number of Daubert challenges to all expert witness types increased dramatically in the first decade of 2000. The study looked at federal courts and state courts utilizing Daubert and revealed that Daubert challenges to all types of experts have exploded – in the year 2000 the study noted 253 Daubert challenges, and that figure jumps to 879 in the year 2010 – amounting to an almost 250% increase. In fact, 2010 marked the year with the most Daubert challenges ever.

As if those figures aren’t daunting enough, 2010 showed a 49% success rate of Daubert challenges to expert witnesses of all types, either in whole or part. The good news, if there is any, is that the percentage of successful challenges remained fairly stable over the first decade of 2000.

The increase in Daubert challenges has occurred despite the fact that the number of filings, at least in federal court, has remained consistent over the same time period. For example, using information obtained from a website maintained by the Administrative Office of the U.S. Courts which tracked a 12 month period ending March 31, the year 2001 saw 254,523 total civil cases filed in U.S. District Courts, compared to 282,307 cases filed in 2010. Although a slight increase in filings from 2001 to 2010 is noted, it is hardly in keeping with the almost 250% increase in Daubert challenges measured using roughly the same time frame. U.S. Court of Appeals filings for that same time period were also fairly stable – in 2001 there were 56,067 cases filed as compared to 56,790 in 2010.

So for those of you who were getting sick and tired of experts seemingly being able to say just about anything, maybe this will be the saving grace. As more developments occur, I will make sure to share what I find.


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The End of Chipped Tile Claims for Florida Homeowners Insurance? Maybe – Ergas v. Universal


First Party Property Insurance Blog is Proud to Announce our New E-Book: the Florida Homeowners Insurance Claims and Litigation Handbook.

You know I am always here to provide tons of value to businesses in the insurance claims industry. We spent years collecting and analyzing leading industry data, strategies, action steps, and cases to know for our clients. We decided to make this available exclusively to the First Party Property Insurance Blog Community.

In this 99 page book, we provide our readers with:

  • the 16 Strategies You Need to Know to Master Florida Homeowners Insurance Claims, including pages of Action Steps and Cases to Know for evaluating each strategy
  • the 6 Key Statutes You Need to Know to Master Florida Homeowners Insurance Claims, including Practice Tips and Cases to Know for handling each statute
  • The 3 Tools You Need in Your Florida Homeowners Insurance Claims Toolbox, including our Resources, Legal Document Library, and Affirmative Defenses analysis, and
  • our CaseGlide Florida Homeowners Insurance Databases with insurer data, attorneys, and public adjusters

We’ve been conducting Webinars and Training Sessions on this material for years, and they have always helped our clients’ businesses. The Florida Homeowners Insurance Claims and Litigation Handbook has everything you need to help your colleagues, staff, and partners master our claims industry. Our clients have used the material in this E-Book to revolutionize how they handle claims and litigation.

We’re so confident in this E-Book that we offer you a money-back guarantee if it does not have the information you and your insurance claims business needed to improve. Click the image of the E-Book now to buy it for your friends and clients today.


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*April 30, 2014 Update: the marring exclusion has now been applied by three Florida appellate courts.  Read this article to get the most recent analysis of the issue here in Florida.*

For anyone that missed it, Florida’s Fourth DCA recently issued an order in Ergas v. Universal Property & Casualty finding that the “marring” exclusion barred coverage for tile damage caused by a dropped object. Depending on your background, you may or may not know that these types of claims – one crack or chip in a tile – can cost in excess of $30,000.00 per claim. You may (or may not) also be surprised to find out that there are at least hundreds, if not thousands, of these claims per year in Florida. This is a big segment of claims in South Florida, and you would be shocked at how much of an impact a decision like Ergas could have.
People familiar with this type of case know the storyline: the insured allegedly accidentally dropped something on a single tile and it cracked or dented the tile. The major problem here arises when the tile is continuous throughout the whole or most of the house, and the insureds do not have any replacement tiles. Under those facts, some insureds, public adjusters, and insureds’ attorneys would argue they were entitled to have the tile floor in their entire home replaced. Until this Ergas case, there was not any persuasive appellate court authority on the issue. Thus, insureds would request a complete replacement of the tile (well into the five figures) as a result of that single, small tile crack/dent.
The Fourth DCA in Ergas looked at several proposed definitions for the term “mar,” including “to injure, spoil, damage, ruin, detract from,” “to inflict damage,” “blemish” and “to cause harm to, spoil, or impair.” The Court found that a dropped object on tile fit any of the definitions; however, there are some important things to note. First, the footnote on page 4 suggests that the insureds did not argue that the term was ambiguous because it was over-inclusive. The Court suggested that the term could not be enforced if the Court were asked to apply it to reach an absurd result. The Court noted that Universal tried to draw the line at superficial versus substantial damage – superficial damage fell within the “marring” exclusion while substantial would not. I don’t think the Court discussed whether there was support for that argument, but this distinction certainly makes perfect sense. Overall, the Court appears to leave the door open to some new arguments, but the Court does not hint as to how it would rule if those arguments were made.
Here’s the link to the full opinion:
So, in summary, there’s no doubt that the damage fit within the exclusion, because the exclusion’s definitions show you how many types of perils it could encompass. The insureds’ attorney in Ergas argued that, because the term “marring” was placed in the policy next to the terms “wear and tear” and “deterioration,” it did not make sense to give it a definition that would encompass a peril that was allegedly sudden and accidental. In other words, they argued someone reading the policy would have thought that all of those terms referred to long term losses, whereas the insurer wants the “marring” portion of the exclusion to apply to a sudden and accidental loss. The insureds did not provide an alternative definition for the Fifth DCA to consider and, accordingly, lost.
Nevertheless, this first appellate examination of the exclusion already has policyholders’ attorneys arguing the case was wrongly decided:
It will be interesting to see how this plays out in other jurisdictions. I am aware of at least two other DCAs with the issue pending on their dockets, so we will see if the Ergas ruling makes its way around the state. It will also be interesting to see how insurers and insureds’ attorneys refine their arguments (if they preserved them) after the Ergas decision.

Getting Started

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Did this Article Answer Your Homeowners Insurance Question?

If not, then go to our Getting Started page by clicking here, where we have a guide with easy-to-find links to the laws, cases, and articles that will answer your question, or contact me.

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Florida Homeowners Insurance Sinkhole Claims Analysis: Sinkholes and MSJs on the Stabilization Repairs (Pre-408 Policies)

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*April 30, 2014: as a result in the decline in sinkhole claims, there have not been many developments on the contract for repair requirement since I first won this issue over a year ago.  

Insurance Policy

Insurance Policy

In a sinkhole case, can an insurer win a summary judgment that the insured is not entitled to coverage for subsurface repairs, even though that insured has entered into a contract for stabilization repairs in accordance with recommendations of the engineer the insured retained? Yes, even if the policy did not incorporate the statutory amendments from Senate Bill 408.

I previously obtained a summary judgment (and at least one other Judge in Hillsborough county has adopted the same position) in a Hillsborough county case where the Court ruled that:

if the insured wanted coverage for the cost of stabilization repairs, the policy and applicable statutes required the insured to enter into a contract for stabilization repairs that was in accordance with the recommendations of the engineer selected or approved by the engineer retained by the insurer.

The Court determined that, although the insured had entered into a contract for repair in accordance with her engineer’s recommendations, she still was not entitled to any coverage for stabilization repairs.

The Court cited five reasons:

1. Fla. Stat. 627.707 (5) (a) (2005) requires the coverage to be the cost of repairs recommended by the insurer’s engineer:

“if a sinkhole loss is verified, the insurer shall pay to stabilize the land and building and repair the foundation in accordance with the recommendations of the professional engineer as provided under s. 627.7073, and in consultation with the policyholder, subject to the coverage and terms of the policy.”

The engineer provided under Fla. Stat. 627.7073 is (usually) the engineer retained by the insurer; therefore, Fla. Stat. 627.707 (5) (a) requires the insurer to provide coverage in accordance with its engineer’s specifications.

2. Fla. Stat 627.7073 (1) (c) (2006) provides a presumption of correctness for purposes of relying on the insurer’s retained engineer’s recommendations:

“The respective findings, opinions, and recommendations of the professional engineer or professional geologist as to the cause of distress to the property and the findings, opinions, and recommendations of the professional engineer as to land and building stabilization and foundation repair shall be presumed correct.”

The Court understood that this was not a presumption in evidence terms; however, it was a presumption that made sense in combination with Fla. Stat. 627.707 (5) (2005) and the policy form.

3. The first half of Fla. Stat. 627.707 (5) (b) (2005) limits coverage for stabilization repairs until the insured enters into the contract for stabilization repairs covered by the insurer:

“The insurer may limit its payment to the actual cash value of the sinkhole loss, not including underpinning or grouting or any other repair technique performed below the existing foundation of the building, until the policyholder enters into a contract for the performance of building stabilization or foundation repairs. After the policyholder enters into the contract, the insurer shall pay the amounts necessary to begin and perform such repairs as the work is performed and the expenses are incurred. … “

4. The second half of Fla. Stat. 627.707 (5) (b) (2005) provides insureds with recourse in the event the stabilization repairs recommended by the insurer’s engineer are not sufficient:

“If repair covered by a personal lines residential property insurance policy has begun and the professional engineer selected or approved by the insurer determines that the repair cannot be completed within the policy limits, the insurer must either complete the professional engineer’s recommended repair or tender the policy limits to the policyholder without a reduction for the repair expenses incurred.”

5. The policy properly incorporated these provisions.

Other Notes

The Court had actually ruled against this same argument weeks before this hearing; however, when presented with a complete understanding of the statutory framework, the Court agreed that the statutes and policy require an insured to enter into a contract in accordance with the insurer’s retained engineer’s stabilization repair plan if he or she wants that coverage.

We also argue that the following two cases suggest that an insurer should be entitled to summary judgment on the cosmetic repairs when an insured has not entered into a compliant contract for stabilization repairs:

Ceballo v. Citizens, 967 So. 2d 811 (Fla. 2007) and

Slayton v. Universal Property and Casualty Ins. Co., 103 So. 3d 934 (Fla. 5th DCA 2013).

We read these cases as supporting the proposition that, without the subsurface repairs, any dispute on the estimated cosmetic damages is simply premature. The insured should be giving the insurer the opportunity to coordinate performance of the stabilization repairs, then inspect the property after those repairs are complete, and then issue any supplemental payment for additional damages that might be necessary. Although the provisions at issue in Slayton and Ceballo are not identical to the sinkhole loss provisions, the sinkhole loss settlement provisions also indicate that additional damages may occur after the repairs and there may be more coverage available.

I’d be happy to provide you with copies of the orders or anything else you might need in regards to these issues.

Sinkhole Formation

Sinkhole Formation

 

Takeaway:

Do you want forms and checklists to streamline the process of obtaining these results?  If so, message me today.

Did this Article Answer Your Homeowners Insurance Question?

If not, then go to our Getting Started page by clicking here, where we have a guide with easy-to-find links to the laws, cases, and articles that will answer your question, or contact me.

Waiver and Estoppel in Florida Homeowners Insurance Claims

Florida Homeowners Insurance Claims and Litigation Handbook
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Overview:

Why is it that homeowners insurers have to wait until its too late until they find out that the homeowners have evidence to show there may be a defense for waiver and estoppel?  First, read this article to understand what waiver and estoppel is and how it is used in Florida homeowners insurance litigation.  Second, scroll to the bottom of this article to set up a free meeting with our professionals to provide you with a free Litigation Analysis that will explain how and why routine issues like these should never be noticed too late again.


Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook and Litigation Data Reports:

Before we go on, if you are in the Florida homeowners insurance claims industry and are looking for a guide with the key cases, strategies, laws, attorneys, and adjusters, or if you’re looking for Florida litigation data reports, please visit this page to learn more about our Florida Homeowners Insurance Claims and Litigation Handbook.


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Update: this is one of the most important articles on this blog to read, especially for newer attorneys and adjusters. I have helped many carriers implement protocols for ensuring that everyone knows about waiver and estoppel and to help create tools to automate the process avoiding one of these costly mistakes. You have got to understand all of these cases if you are going to litigate these cases.

Make sure to read all the way to the end of this post to learn how I propose making sure carriers cheaply guarantee they avoid waiving and being estopped from litigation defenses.*

In my experience, when I am confronted with insureds’ attorneys’ argument that the insurer was waived or estopped from asserting a defense, I know I have a good defense. For anyone who does not know, insureds’ attorneys almost always argue that some act by an insurer constituted a waiver of a particular defense. Knowing exactly what will be argued and how to respond can be the difference between winning and losing, as there are great cases that outline exactly how to respond to these arguments.

The Basics

To have waiver, you have to have (1) the existence at the time of the alleged waiver of a right; (2) the actual or constructive knowledge of that right; and (3) the intention to relinquish that right. See Leonardo v. State Farm Fire & Cas. Co., 675 So. 2d 17, 178 (Fla. 4th DCA 1996). Other than promissory estoppel, there is no creation of coverage by estoppel in Florida. See Doe v. Allstate Ins. Co., 653 So. 2d 371 (Fla. 1995). To have estoppel you must have (1) a representation as to a material fact that is contradicted by a later asserted position; (2) reliance on that representation; and (3) a change in position detrimental to the party relying on the representation and caused by the representation. See Lloyds Underwriters at London v. Keystone Equip. Fin. Corp., 25 So. 3d 89, 93 (Fla. 4th DCA 2009).

As noted below, unless you have a legal defense based on the nature of the defense provision being asserted, pay close attention to whether the party claiming the estoppel or waiver has actually presented evidence to support each of these elements.

Some Defenses Simply Cannot be Waived

An insurer can allegedly waive or be estopped from asserting a defense to an otherwise covered claim, but an insured cannot gain through estoppel or waiver a coverage that it never had. See generally Unijax, Inc. v. Factory Ass’n, 328 So. 2d 448, 455 (Fla. 1st DCA 1976). The Fourth DCA in Lloyds Underwriters at London v. Keystone Equip. Fin. Corp. provided one of the more detailed outlines of the distinction between what can and cannot be waived. 25 So. 3d 89, 93 (Fla. 4th DCA 2009). The Keystone decisions suggests that if a claim is specifically covered but was not covered for some other reason, then the insurer must timely assert that other reason when it becomes aware of its existence. In that case, you would not be re-writing the policy to provide coverage; instead, you would be rewriting the policy to avoid forfeiture. An example of something that cannot be waived is the policy limit. Nationwide Mut. Fire Ins. Co. v. Voigt, 971 So. 2d 239, 242 (Fla. 2d DCA 2008). Another example of something that cannot be waived is additional coverage provided by an endorsement that was not issued. See AIU Ins. Co. v. Block Marina Investment, Inc., 544 So. 2d 998 (Fla. 1989). Further, a policy period is not something that can be waived. U.S. Fidelity and Guar. Co. v. American Fire and Indem. Co., 511 So. 2d 624 (1987).

In sum, I think of it as follows: if deleting the provision with the defense at issue would leave a blank page without any coverage (policy period, policy limit, and I would argue, the structure covered), then it cannot be waived. If deleting the provision with the defense at issue would still leave provisions that provided coverage, then there is at least an argument that it can be waived, unless that provision is an essential part of how the coverage is distributed.

The Evidence of Waiver or Estoppel Must Be More Than an Inference

It is important to point out for the Court if the insureds’ attorney is only suggesting that there was waiver, rather than showing evidence of waiver and specific reliance on a specific position that later changed. Otherwise, an insured simply alleging that the reliance was reasonable without evidence of the same should not overcome a summary judgment on waiver or estoppel grounds See generally Reliance Mut. Life Ins. Co. of Ill. v. Booher, 166 So. 2d 222 (Fla. 2d DCA 1964); Blue Cross and Blue Shield of Florida, Inc. v. Ming, 579 So. 2d 771 (Fla. 5th DCA 1991); Carneiro Da Cunha v. Standard Fire Ins. Company/Aetna Flood Ins. Program, 129 Fl. 3d 581 (11th Cir. 1997); Unijax, Inc., 328 So. 2d at 455.

Timing to Assert the Defense

Attorneys representing insureds also will argue that the insurer waited too long to assert the defense. One example is Johnson v. Life Insur. Co. of Georgia, where the Florida Supreme Court imputed an agent’s knowledge to the insurer to prohibit the insurer from later asserting a defense based on misrepresentation in the application. 52 So. 2d (Fla. 1951). The counterargument for an insurer can be that the insurer did not have knowledge of the misrepresentation or defense until more recently, and then it acted promptly on the defense at that time. See United Services Automobile Association v. Clarke, 957 So. 2d 554 (Fla. 4th DCA 2000).

The following link from the Butler Pappas website has some great cases regarding when late might not be too late to assert a coverage defense: http://www.butlerpappas.com/512.

Conclusion

Ultimately, the case law suggests that insureds, insurers, and their attorneys should all be armed with the information they need to make sure that all bases are covered. For every argument, there is a counterargument. Without a comprehensive understanding of these issues (and the vast array of waiver and estoppel issues not addressed in this post), it could be easy to get tripped up in a hearing on these issues. The best you can do is learn the nuances, or ask someone who already has.

*April 30, 2014 Update: How does Todd Legal, P.A. prevent these mistakes from becoming too costly*

How can you make sure that every adjuster and every attorney past, present, and future check to see if there were actions or omissions that may constitute waiver and estoppel of an otherwise solid defense? Will an email work?  No. New adjusters and attorneys will never get it. Will a note to the file work?  Come on, give me a break.

But guess what will work?  If you shift your communication and case strategies from out of emails and Word documents and into a web-based project management portal.  Then, you can make sure every adjuster and every attorney on every case is asked whether there may be a waiver or estoppel issue, and you have to go no further than two clicks online to find the answer for your specific case.  What does this do?  Saves you a ton of money.  Instead of finding that out after your summary judgment or trial, Todd Legal, P.A. automatically embeds this question into every case to limit the surprises and reduce the costs resulting from a coverage decision error.

I offer innovative services and software that can automatically implement the strategy changes to be consistent with the information in this article.  If you want to know more about how I can help your company or firm ensure that your strategies are up-to-date and complied with by all of your colleagues and vendors, then contact me.  Furthermore, if you want a litigation project manager with a powerful software tool that allows your attorneys to draft top-down approved legal documents in every case with the click of a button, then read more about my services here.

The more you automate these routine tasks, the more time you will have to proactively manage your claims and cases.

Takeaway:

We have actually made these issues a “fill-in-the-blank” and “check-the-box” evaluation on our web-based software, CaseGlide.  You should, too.  Message me if you need any help turning the waiver and estoppel evaluation into a structured system to save costs and obtain better results.


Did this Article Answer Your Homeowners Insurance Question?

If not, please contact us.

The “Residence Premises” Defense in Florida Homeowners Insurance Litigation

Overview:

Do you want to know about a defense that Todd Legal, P.A. has helped create – the residence premises defense?  Do you want to know what steps you need to take to evaluate whether a homeowner must reside at the property to have coverage for a homeowners insurance claim?  Read this article, and make sure to read to the end to take advantage of our free Litigation Report offer.

First Party Property Insurance Blog is Proud to Announce our New E-Book: the Florida Homeowners Insurance Claims and Litigation Handbook.

Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook

We’re so confident in this E-Book that we offer you a money-back guarantee if it does not have the information you and your insurance claims business needed to improve. Click the image of the E-Book now to buy it for your friends and clients today.


Add to CartView Cart

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*April 30, 2014 Update: this has been one of the most popular posts on the blog and for good reason.  I have heard about many carriers having success with this defense, and a case I handled resulted in a complete defense result in the Second DCA.  

Make sure to read all the way to the end of this post to learn how I propose making sure carriers efficiently guarantee they do not fail to use this defense in any case they have.*

For HO-3 policies, insureds must reside at their property to have coverage for damage to their home; however, I am surprised to find out that not everyone knows about this coverage defense. The defense stems from the typical HO-3 policy’s definition of “residence premises,” and the clause in the building coverages portion of the policy that explains what the insurer covers.

For a property to be a “residence premises,” it must be the property where the insured resides and the property shown in the declarations pages. See Harrington v. Citizens Property Ins. Corp., 54 So. 3d 999 (Fla. 4th DCA 2010). Although the Fourth DCA in Harrington focused on the impact of the definition of an “insured location,” the Court undoubtedly held that the definition of “residence premises” requires the insured to reside at the property. Since 1983, Georgia courts have held that the defense bars coverage for property damage. See Georgia Farm Bureau Mut. Ins. Co. v. Kephart, 439 S.E. 2d 682. New York’s courts have also enforced the defense. See Marshall v. Tower Ins. C. of New York, 44 A.D. 3d 1014 (2007). Further, the Michigan Supreme Court has upheld the use of the defense. Heniser v. Frankenmuth Mut. Ins. Co., 534 S.W. 2d 502 (Mich. 1995).

Although I have not seen any Florida appellate courts rule on the exact issue of the “residence premises” definition precluding coverage for property damage to a rental or unoccupied property, the Harrington case suggests the Florida DCAs would enforce the defense. In fact, every trial court I am aware of has ruled in favor of the insurer when presented with the issue. In addition, it is important to note that insurers have strong arguments that, because the property description is an essential part of the policy’s coverage grants, this is not a defense that an insurer can waive.

Reacting to the Florida appellate authority unfavorable to insurers on the vacancy exclusion, many insurers backed off from evaluating whether insureds needed to reside at a property for there to be coverage. With the trial court momentum in the insurers’ favor, the defense is certainly worth considering and evaluating as early as possible.

*April 30, 2014 Update: Want to Guarantee You Never Miss this Defense Again? Hire Todd Legal, P.A.*

How can you make sure that every adjuster and every attorney past, present, and future check to see if the insured resided at the property? Will an email work?  No. New adjusters and attorneys will never get it. Will a note to the file work?  Come on, give me a break.

But guess what will work?  If you shift your communication and case strategies from out of emails and Word documents and into a web-based project management portal.  Then, you can make sure every adjuster and every attorney on every case is asked whether the plaintiff resided at the property, and you have to go no further than two clicks online to find the answer for your specific case.  I offer innovative services and software that can automatically implement the strategy changes to be consistent with the information in this article.  If you want to know more about how I can help your company or firm ensure that your strategies are up-to-date and complied with by all of your colleagues and vendors, then contact me.  Furthermore, if you want a litigation project manager with a powerful software tool that allows your attorneys to draft top-down approved legal documents in every case with the click of a button, then read more about my services here.

The more you automate these routine tasks, the more time you will have to proactively manage your claims and cases.

Takeaway:

If you want legal forms, templates, guides, and checklists to ensure you “check the box” on properly handling a resident premises claim (and save money along the way), please message me.

If this article did not answer your Florida homeowners insurance claims question, contact us now.

Florida Courts on the Prompt Notice Provision in Homeowners Hurricane Insurance Claims

Overview:

When is it too late to submit an insurance claim for damage to your property?  What examples have homeowners and homeowners insurers learned from?  Where can we look to for guidance when a complicated set of facts leads to some confusion about when a hurricane insurance claim (or other claims) needs to be reported to the insurance company?  Find out these answers and more by reading this article.

First Party Property Insurance Blog is Proud to Announce our New E-Book: the Florida Homeowners Insurance Claims and Litigation Handbook.

We’re so confident in this E-Book that we offer you a money-back guarantee if it does not have the information you and your insurance claims business needed to improve. Click the image of the E-Book now to buy it for your friends and clients today.


Add to CartView Cart

ins b

*April 30, 2014 Update: this has been one of the most popular posts on the blog and for good reason.  

I have heard about many carriers having success with this defense, and I have been happy to help them obtain these results.  

Click here to see all of the late notice cases that came out since this post.  

Make sure to read all the way to the end of this post to learn how I propose making sure carriers cheaply guarantee they do not fail to use this defense in any case they have.*

In the past year, the “prompt notice” provision has been the subject of many detailed Florida decisions. As mentioned in yesterday’s post, in Yacht Club v. Lexington the federal court out of Florida’s Southern District made a strong statement by recently holding that, as a matter of law, an insured could not overcome the presumption of prejudice if the accuracy of the insurer’s investigation was jeopardized in any way by the late notice.

As discussed below, after determining the notice was late, the Florida courts spend most of their energy evaluating the evidence to assess whether the insured has anyone willing to say that the delay did not inhibit the insurer in any way from determining the cause of the damage. The common theme is that if that insured’s witness “sticks to his or her story,” Florida courts could hold that a jury issue exists. If the witness shows any doubt during his or her deposition or in the affidavit, then the courts are willing to grant summary judgment.

Below I have outlined the key facts from some of the more recent, relevant holdings.

July 18, 2012

Kramer v. State Farm, 95 So. 3d 303 (Fla. 4th DCA 2012)

Holding: there was no issue of fact as to whether the insurer was prejudiced by the timing of the notice given by the insureds.

Delay: almost 5 years; the dates of loss were the dates of Hurricanes Frances and Jeanne in September of 2004, and a roof leak in 2008, and the insureds did not report the claim until May of 2009.

Evidence failing to overcome summary judgment: an affidavit from the insureds’ engineer stating that the insurer’s expert could determine the cause of the damage, that wind damage and foot traffic were “equally likely” to have caused the damage, and that resetting of tiles prior to the engineer’s inspection did not allow the engineer to assess the full extent of the damages. The Court found that the engineer’s affidavits actually bolstered the insurer’s prejudice argument.

July 25, 2012

Soronson v. State Farm, 96 So. 3d 949 (Fla. 4th DCA 2012)

Holding: there was no issue of fact as to whether the insurer was prejudiced by the timing of the notice given by the insureds.

Delay: approximately 3.5 years; the date of loss was the date of Hurricane Wilma on October 24, 2005, and the insureds did not report the claim until February of 2009.

Evidence failing to overcome summary judgment: an affidavit from the insureds with attached, unsworn engineer reports arguing that they did not make repairs and there have not been any windstorm events since Hurricane Wilma; therefore, the damage had to be caused by Wilma and the roof needed to be repaired in 2005 regardless of what occurred after.

September 7, 2012

Stark v. State Farm Florida Ins. Co., 95 So. 3d 285 (Fla. 4th DCA 2012)

Holding: there was no issue of fact as to whether the insurer was prejudiced by the timing of the notice given by the insureds.

Delay: approximately 3.5 years; the date of loss was the date of Hurricane Wilma on October 24, 2005, and the insureds did not report the claim until March 9, 2009.

Evidence overcoming summary judgment: an affidavit from the insureds’ engineer identifying the ability to, after the report date, determine the cause of loss, and an affidavit from the insureds’ public adjuster stating that the insurer’s adjuster commented that he could identify the cause of the damage.

October 3, 2012

Slominski v. Citizens Property Insurance Corporation, 99 So. 3d 973 (Fla. 4th DCA 2012)

Holding: there was no issue of fact as to whether the insurer was prejudiced by the timing of the notice given by the insureds.

Delay: approximately 3.5 years; the date of loss was the date of Hurricane Wilma on October 24, 2005.

Evidence failing to overcome summary judgment: an affidavit and deposition testimony from the insureds’ contractor stating that he could not be “100% sure” that the wind damage was caused by Wilma as opposed to Hurricane Frances in 2004, and that there was no way to differentiate water damage from one hurricane versus the other. Additionally, the insureds’ engineer had contradictory statements in his testimony versus his affidavit regarding whether he could determine when the staining and roof damage occurred. Ultimately, although the affidavits were similar to the Stark affidavits that supported the 4th DCA’s finding of a question of fact, the deposition testimony by the contractor and engineer contradicted the affidavits and, therefore, could not provide an evidentiary basis to overcome summary judgment.

April 3, 2013

1500 Coral Towers v. Citizens Property Insurance Corporation, 2013 WL 1316416 (Fla. 3d DCA 2013)

Holding: there was no issue of fact as to whether the insurer was prejudiced by the timing of the notice given by the insureds.

Delay: approximately 5 years; the date of loss was the date of Hurricane Wilma on October 24, 2005, and the insured reported the claim on June 29, 2010.

Evidence failing to overcome summary judgment: according to the Court, the closest the insured came to presenting supporting evidence was one of its engineer’s conclusory statements that the late notice did not prejudice the insurer.

Conclusion

With the hurricane claims gone for now, one question is how this applies to other types of claims. I am particularly interested in how these cases apply to claims for sinkhole damage. If an insured reports a sinkhole claim with a date of loss of two years prior to the report date and does not provide any photographs or corroborating witnesses, is there any way for an insurer to hire an expert to make an independent determination as to whether the damage existed during the claimed policy period? The answer is no, and I think this is one of the biggest issues facing Florida insurers today. If the policy coverages have changed since the date of loss (as they often have as a result of the changes to the sinkhole statutes), then isn’t the insurer prejudiced because it could not independently verify which type of coverage applied? The insurer might have had to offer coverage for cracking if the date of loss occurred, say, in 2010, but in 2012 the insurer’s policy might only provide coverage for substantial impairment of the load bearing portions of the property.

Takeaway:

If you want legal forms, templates, guides, and checklists to ensure you “check the box” on properly handling a late notice claim (and save money along the way), please message me.

Did this Article Answer Your Homeowners Insurance Question?

If not, please contact us.

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