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


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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.

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