Tag Archives: Water

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)

 

A $7M Alleged Insurance Fraud and the Espinosa Arrest Affidavit

Florida Homeowners Insurance Claims and Litigation Handbook

Overview:

It’s not too often that suspicions of insurance fraud lead to a lot of evidence, but First Party Property Insurance Blog’s article on this public adjuster’s alleged fraud ring has plenty of details regarding how Miami-Dade police plan to prove their case.  This is a story about arrests, fires, water leaks, public adjusters, and more.  Check this article out to learn more about the Jorge Espinosa case and what you need to know.

And check out our update from May 22, 2015 after the break.


Update

May 22, 2015

31 people have now been arrested. Police raided Espinosa’s house and arrested him for the additional charges of racketeering, arson, and grand theft. As this article explains, police allege Espinosa is responsible for 20 fires and 5 floods.

As discussed below, if this turns out to be true, this is very unfortunate. As I said one year ago on the subject, Florida’s public adjusters can make plenty of money without defrauding insurers. Most public adjusters do practice within the confines of the law, but these bad apples ruin it for everyone – increased scrutiny, increased claim costs, increased policy premiums.

Additionally, this is just more lesson for homeowners insurers. It’s 2015: technology can provides insurers with the ability to know everything about their claims in an instant. Claims professionals armed with technology identify fraud better, faster, and cheaper than professionals using antiquated claims systems.

With the right time and effort, any insurer can have automated reports on all of the key claim factors. Or, without any effort at all, any insurer can use CaseGlide to have vendors populate this data for them, and arm their claims team with actionable analytics on all of their claims.


Original Story

For those of you who missed it, Miami detectives recently concluded a thorough investigation into a potential $7.6M homeowner’s insurance fraud scheme, and arrested 22 people.

from http://4.bp.blogspot.com/-HWm_qXNcim4/TpxrZhFP7EI/AAAAAAAAAPw/SyoyB9ayj7U/s320/20070727_sbcfire_house_fire3.jpg


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.


If you haven’t heard about this fraud ring, here is the complete arrest affidavit. It’s a must read:

Download (PDF, 3.96MB)

Although I recommend reading the affidavit front to back, here is my summary:

The fraud investigation centers on Jorge Espinosa of Nationwide Adjusters, LLC.  In short, the arrest affidavit alleges that Espinosa and dozens more had a relatively complex ring involving several parties and a referral network. They allegedly had “runners” recruiting homeowners, remediation companies creating exorbitant bills, and fire and water leak creators.  Further, the arrest affidavit details that certain attorneys allegedly knew that the claims were fraudulent, not covered, yet allegedly continued to represent the homeowners.  The alleged fraud amounts to over $7M.

fire 2

Frankly, if the allegations are true, there is no place for this.  There are hundreds of Florida public adjusters and policyholders’ attorneys that make plenty of money without filing any fraudulent claims. Furthermore, claims personnel will never forget this, and now they must to increase their claim scrutiny moving forward to make sure they are doing their job, whether it means conducting more examinations under oath or enforcing other conditions precedent.  This slows the claim process for innocent homeowners. In addition, instead of helping resolve new claims, insurers must assign personnel to investigate their old claims to see if they may have been defrauded.

Ultimately, this investigation is in its very early stages.  We will see whether there is more cooperation that could result in revelations about additional schemes.

Disclaimer: All of the people in the arrest affidavit are innocent until proven guilty.  Charges are often dropped or reduced.


Takeaway:

How can something like this happen? It’s easy when homeowners insurers have hundreds of people handling claims and cases without any ability to easily share and retrieve information. Although most insurers probably had personnel talk about these things at the water cooler at lunch, only one carrier had the wherewithal to take the time to stop this alleged fraud.  What does this say about the way homeowners insurers do business?  Shouldn’t every insurer set up their staff to have the opportunity, time, and resources to conduct this investigation when they need to.

If you want to be able to have all of your claim and case information searchable, reportable, easily retrievable, and usable for the next case, please message me.


Have Any Questions?

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.

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.


Add to CartView Cart


*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

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


banner8

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.


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.

Name (required)

Email (required)

Phone Number

Comment

captcha

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.