Tag Archives: summary judgment

Florida Homeowners Insurance Claim for Long Term Water Leak Not Excluded as a Matter of Law

Florida Homeowners Insurance Claims and Litigation Handbook

Overview:

In Price v. Castle Key Indemnity Company, Florida’s Second DCA recently dealt a heavy hit to homeowners insurers’ arguments using the continuous/constant or repeated seepage defense.

Drop of water

 

Facts

The facts in Price were a prime example of a long term water damage insurance claim. The homeowners insurer gathered strong evidence, and was able to show that this leak continued for weeks and weeks without any stoppage. The insurer’s evidence was startling: over a period of more than 30 days, over 195,000 gallons of water escaped from a pipe going to the homeowner’s toilet.  Faced with this evidence, the trial court granted summary judgment for the insurer.

The Second DCA disagreed with the insurer and the trial court. The Second DCA’s reason: the terms “sudden” and “seepage” were “less than clear” when applied to these facts. Accordingly, the Second DCA determined that these words created a latent ambiguity.  The Second DCA instructed the trial court to allow a jury to determine coverage in this case, instead of a judge.

Disappointing Discussion

Although this is the most heavily litigated coverage issue in Florida homeowners insurance, the Second DCA did not take much time to explain its decision.

These long term water damage opinions don’t come often. Usually, claims do not have such egregiously long leaks, or they have some type of dispute on the duration … so they should be determined by a jury. When the rare case like this pops up, you would think the Second DCA would take the chance to explain what types of long term water damage should be covered as a matter of law under these policies; and what types shouldn’t be.

Unfortunately, the Second DCA did not take that opportunity. Moving forward, this leaves many unanswered questions, and a lot of room for interpretation for trial court judges. I wouldn’t be surprised if there were tens of thousands of pending claims with this issue. The parties and lawyers handling those cases don’t seem to have much to work with from that case, unless they are to assume every insurance policy is ambiguous.

Takeaway

In trial court hearings, this Price opinion will give homeowners’ attorneys stronger arguments, but only if the homeowners insurer tries to obtain summary judgment.  Most of these cases don’t go that route.

I would not be surprised to see other DCAs take a different approach than the Second DCA did in Price.  I doubt all courts will be willing to find that every insurance policy is ambiguous as to long term water losses. A case like this is the perfect example of a case where insurers could be granted summary judgment.

We will see how this changes the strategies. Hopefully, we will get some more opinions on this issue soon.


Have Any More Questions about Florida Homeowners Insurance Claims?

Please contact us.


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.


Here is a full copy of the order:

Download (PDF, 51KB)

 

Florida Appellate Court on Rodrigo v. State Farm and Insurance Policy Conditions Precedent After Curran

Florida Homeowners Insurance Claims and Litigation Handbook

A Florida appellate court recently made some important decisions for anyone interested in Florida homeowners insurance.  Do you need to know about the legal impact of issues with Examinations Under Oath, Proofs of Loss, and the Other Policy Conditions.  Then you must read this article.


The Fourth District Court Appeals recently issued the first decision on conditions precedent in insurance policies since the Curran case.

Download (PDF, 132KB)

Things are too busy at Todd Legal, P.A. to do the usual “deep dive” into the ruling and the impact, but I wanted to make sure everyone was aware of the decision.  As you know, we at Todd Legal provide software and other innovative services to Florida’s property insurers and their attorneys to deliver legal services that are smarter, cheaper, and quicker than what insurers have come to expect.  We are nearing the delivery stage, so I am not going to be able to timely analyze this Rodrigo decision in enough detail to assess its overall impact.

In summary, the Fourth DCA held that the proof of loss provision is still a condition precedent after Curran.  I encourage you to read the full opinion and focus on how the requirement was laid out in this policy, including the loss settlement provision.  Once again, we will await the next decision to see how courts may eventually interpret the EUO provision after Curran, but this decision certainly helps insurers and their attorneys when they try to explain to the judges that Curran may only apply to auto accident/UM cases.  I apologize for the brief analysis and will try to supplement this article in the near future.

home 3


Did this Article Answer Your Homeowners Insurance Question?

If not, please contact us.

New Florida Federal Court Decides Franqui re Florida Sinkhole Structural Damage Definition and Sinkhole Testing Requirements

Florida Homeowners Insurance Claims and Litigation Handbook

Are you up to date with the latest Florida Court rulings on homeowners insurance, sinkhole claims, and sinkhole activity?  If you aren’t sure, then make sure to check out this article!


Federal Judge James Whittemore recently joined Judges Radabaugh, Merryday and Lazzara in finding that “structural damage” caused by sinkhole activity must mean more than “damage to the structure caused by sinkhole activity”  This litigation involved an insurance policy that did not incorporate the Senate Bill 408 “structural damage” definition; therefore, the parties disputed whether coverage for sinkhole activity required more than just cracks caused by sinkhole activity.

home 2

More specifically, the Court answered the following questions:

  • Does “structural damage” mean “damage to the structure” or does it mean something more, such as:
  • (1) the five part definition in Fla. Stat. 627.706 (2011);
  • (2) damage to the load bearing portions of the property; or
  • (3) damage that could cause the house to collapse?
  • Does an insurer with a pre-408 policy breach the policy when it does not conduct a full subsidence investigation in accordance with the pre-408 version of Fla. Stat. 627.707?

Structural Damage: The Court ruled “structural damage” in this insurance policy means “damage to the structural components of the building, excluding damage that is cosmetic in nature.”

Testing Requirements: Judge Whittemore also determined that Liberty Mutual did not breach the policy when it did not conduct a “full” subsidence investigation to eliminate sinkhole activity as a cause of the damage.

Analysis:

Here is the complete order:

Download (PDF, 829KB)

Again, we see trial courts construing the words “structural damage” to mean more than what we are used to seeing.  As you know, 20+ courts have determined “structural damage” simply meant “damage to the structure.”  This “lowered” standard resulted in any cracks triggering coverage for “sinkhole loss.”  With the newer interpretations, though, courts are now asking the homeowners’ expert to show that the sinkhole activity is causing substantial damage to important parts of the property.

As you know, this issue only remains relevant to those claims and cases arising under policies without a definition of “structural damage.”  Since late 2012, many of the insurers added a definition and removed all doubt on this issue.  Nevertheless, thousands of cases remain with these pre-408 policies, so these rulings could continue to build substantial momentum for insurers.

Conclusion:

I think the most amazing thing about this line of decisions is that this issue is still relevant in 2014.  Why is the “structural damage” issue still relevant?  If insurers had innovative services in 2006 using the same arguments they had now, they would be done paying the millions it continues to cost to litigate these issues, and the “structural damage” issue would have been irrelevant (one way or the other) 8 years ago.


Did this Article Answer Your Homeowners Insurance Question?

If not, please contact us.

Assignment of Benefit Homeowner Insurance Claims and Bill of Rights Working Group (Video)

Florida AOB & Industry Litigation Trend Report Image

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 link below to buy copies for you, your colleagues, and your partners.


Add to CartView Cart


At the Bill of Rights Working Group recent meeting, Mr. Dry Out‘s Matthew Jerabek explained his concerns with the AOB contractors in the water damage claim industry.  Below is the video of his statements to the Working Group.  To be safe, I cannot promise that his statements are true because I have zero personal knowledge regarding the allegations; however, I think anyone who handles these claims would want to have the opportunity to hear his statements.

The Video

Embedly Powered

Although this may lead some carriers to take approaches based on emotion, assignment of benefits cases are the perfect type of case for statistical data evaluations to drive decision making.  They are also the perfect type of case to use document automation and litigation project management to achieve better outcomes at a fraction of the costs.

Don’t hire attorneys to have junior associates get you nowhere on these files for thousands of dollars.  If you want checklists, guides, or legal document templates for handling claims like this one, please message me.


Questions?

Contact us.

Florida Homeowners Insurance Questions, the Loss Settlement Provision, and When is Alleged Underpayment Not a Breach of the Policy?

cover3

Overview

The Loss Settlement provision is, without a doubt, the most overlooked homeowners insurance policy provision.  There are tens of thousands of lawsuits filed every year where the parties dispute what the homeowners insurer owes to the homeowner.

Do you want to know what neither side probably looked at?  The Loss Settlement provision – the provision that actually describes the homeowners insurer’s obligation to pay a claim.  Read this article to learn more about how this provision could decide your case.

Make sure to read until the end because we offer you a free Litigation Report analyzing the ways to improve your case outcomes while paying the least amount possible.


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.


One of the most important questions in property insurance litigation is whether an insurer can obtain a summary judgment in a damages dispute. Stated otherwise, can an insurer prevail on a summary judgment motion when the insured alleges the insurer underpaid the claim? You might ask, “how is that possible?” How can an insurer and the Judge agree that even if the insurer allegedly underpaid the insured, the insurer did not breach the contract? If you can answer these questions, then you understand the difference between underpayment and breach.

ins c

To understand the answers to these questions, you must examine the Florida cases discussing loss settlement provisions. Following are some examples:

 

1. Slayton v. Universal

Download (PDF, 13KB)

Slayton holds that even if an insured allegedly underpaid pursuant to the policy, the insurer could have simultaneously complied with its policy obligations as a matter of law. While Slayton is limited to the facts and statutes at issue in the case, its rationale may be applied to any insurance dispute.

Rather than promote litigation, judges should do what Slayton did and allow the insurer to rely on the insured to present a genuine policy dispute before bringing a lawsuit. In Slayton, the Court held that the insured should have used the benefits the insurer paid to the insurer to repair the home and then submit a supplemental claim to the insurer if the original payment was insufficient. Instead, the insured sued the insurer without attempting to conduct the repairs with the payments provided by the insurer. Ultimately, in Slayton, the Fifth DCA upheld the trial court’s finding that the insurer, by providing the payment to the insured, complied with the policy as a matter of law.

By enforcing the loss settlement provision’s requirements, the Fifth DCA in Slayton held that the insurer did not breach the contract, even if it arguably underpaid the claim.

 

2. Ceballo v. Citizens

Download (PDF, 46KB)

In Ceballo, the insureds alleged that they proved a total loss of Ordinance and Law coverage pursuant to the Valued Policy Law statute and argued the insurer should have paid the coverage. The insureds further claimed that the insurer’s failure to pay the coverage constituted a breach of the contract. The insurer responded that before the insureds could be entitled to this coverage, the policy required the insureds to incur Ordinance and Law damages. To put this into context, the policy and statute at issue in Ceballo provides that the insureds were not entitled to replacement cost coverage until they incurred the damages. Like the Fifth DCA in Slayton, Florida’s Supreme Court in Ceballo determined that the insurer did not breach the contract despite the insureds’ allegations that the insurer underpaid. Thus, the insureds could not present a damages dispute to the jury, and the insurer was therefore entitled to judgment in its favor on that issue.

 

3. Buckley Towers v. Citizens

Download (PDF, 96KB)

Likewise, the Eleventh Circuit in Buckley Towers considered the lower court’s finding that the insured was excused from incurring damages under the policy. Similar to the policy at issue in Ceballo, the policy at issue in Buckley Towers provided that if in insured wants replacement cost coverage, it must incur the damages. If the insured does not incur the damages, the insured can only obtain actual cash value. Despite this policy requirement, the lower court held that the insurer’s alleged underpayment excused the insured’s performance in that regard.

The Eleventh Circuit Court of Appeals reversed, determining that the insured could not use the prevention of performance doctrine to avoid a requirement that the damages be incurred. Unlike the lower court, the Eleventh Circuit refused to “rewrite the policy.” The Eleventh Circuit held that the insured was required to make the repairs before he or she would be entitled to the replacement cost coverage. In other words, until the repairs were complete, the insurer was correct in issuing only the coverage for actual cash value. The court found that by using the prevention of performance doctrine, the lower court impermissibly rewrote the policy that was freely negotiated between the parties. Even when facing allegations of underpayment, the Eleventh Circuit determined the insurer did not breach as a matter of law. In short, Buckley Towers, like Ceballo and Slayton, shows that courts must adhere to the loss settlement provisions in a policy.

So what do these cases tell you?

First and foremost, beware when relying heavily on the black letter law in these cases because the statutes and policy forms have changed. Instead of focusing on the holdings of these cases, focus on the courts’ interpretations of the loss settlement provisions. In each case, the court determined that the insureds were not entitled to a trial on damages until they demonstrated compliance with the loss settlement provisions. Second, you must scrutinize your loss settlement provisions, whether you are dealing with a sinkhole claim, water claim, or tile claim, before accepting the opposing party’s allegations as fact. Ultimately, the loss settlement provision may make alleged underpayment a question for the judge and not the jury.

 Takeaway:

You shouldn’t allow your attorneys to overlook this provision, and you should have systems in place to make sure it isn’t overlooked.  Your provision is the same in every case, but it needs to be read in light of the case law.

Don’t trust this type of issue to junior associates.  Get your best management and best attorneys together, create a system for ensuring compliance, and never think about it again.

If you want checklists, guides, and legal document templates on the Loss Settlement provision, please message me.


Did this Article Answer Your Homeowners Insurance Question?

If not, contact us.

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.

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

Getting Started

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

banner8

Sponsor the First Party Property Insurance Blog

banner5

banner2

Its important to note that we are looking for sponsors and guest contributors interested in getting exposure to our thousands of loyal readers and subscribers.

Do you want your company’s name sent to the inbox of insurance company executives and adjusters, sent to thousands of attorneys, and shared with all of the largest insurance consulting companies?

Of course you do. Reach out to us and we can tell you how to reach the tens of thousands of people in the First Party Property Insurance Blog Community.

*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.