All-Risk Homeowners Insurance Policy: Does it Cover Water Damage Incurred by a Broken and Deteriorated Pipe Under Your House?

Florida insurance claims_fightsforyou.netAccording to a recent case out of the Third District Court of Appeal, this type of policy can cover damages that frequently occur when a pipe failure below one’s floor or concrete slab occurs due to the pipe’s deterioration over the years.  Obviously, each homeowner’s case is different depending on the language within their respective homeowners insurance policy, as well as the facts surrounding the insurance claim loss.

In the case of Cheetham v. Southern Oak Ins. Co., 114 So.3d 257 (Fla. 3d DCA 2013), a Florida homeowner suffered damage to their home when a pipe located on the “residence premises” broke and/or collapsed due to age and deterioration (which usually provides insurance carriers ammo to deny claims under the notable and common “wear and tear exclusion”). As the pipe was located underneath the ground, debris entered the pipe, forming a blockage, which ultimately caused waste water and/or material to back up through the blocked pipe and into the “residence premises” through drains.  The homeowner filed a claim with their insurer, Southern Oak, after their home sustained water damage.   After Southern Oak denied the claim, the homeowner filed suit, claiming the loss was covered by their all-risk homeowners’ insurance policy.   In response, Southern Oak asserted that a “Water Damage” exclusion was applicable, and, therefore, the homeowners loss was not covered.

The Court noted the following relevant provisions within the policy:

HOMEOWNERS 3—SPECIAL FORM

SECTION I—PERILS INSURED AGAINST

A.  Coverage A—Dwelling And Coverage B—Other Structures

1.  We insure against risk of direct physical loss to property described in Coverages A and B.

2.  We do not insure, however, for loss:

a.  Excluded under Section I— Exclusions;

…..

c. Caused by:

…..

(6) Any of the following:

(a) Wear and tear, marring,  deterioration;

…..

Exception To c.(6)

Unless the loss is otherwise excluded, we cover loss to property covered under Coverage A or B resulting from an accidental discharge or overflow of water or steam from  within a:

(i) Storm drain, or water, steam or sewer pipe, off the “residence premises”;  or

(ii) Plumbing … system…  on the “residence premises ”.  This includes the cost to tear out and replace any part of a building, or other structure, on the “residence premises”, but only when necessary to repair the system…. However, such tear out and replacement coverage only applies to other structures if the water … causes actual damage to a building on the “residence premises”.

…..

We do not cover loss to the system … from which this water … escaped.  For purposes of this provision, a plumbing system … does not include a sump, sump pump or related equipment or a roof drain, gutter, down spout [sic] or similar fixtures or equipment.

…..

Section I—Exclusion A.3. Water Damage, Paragraphs a. and c. that apply to surface and water below the surface of the ground do not apply to loss by water covered under c.(5) and (6) above.

…..

B. Coverage C—Personal Property

We insure for direct physical loss to the property described in Coverage C caused by any of the following  perils unless the loss is excluded in Section I—Exclusions.

…..

12. Accidental Discharge Or Overflow Of Water Or Steam

a.  This peril means accidental discharge or overflow of water … from within a plumbing … system….

b. This peril does not include loss:

(1) To the system … from which the water … escaped;

…..

(3) On the “residence premises” caused by accidental discharge or overflow which occurs off the “residence premises”;  ….

…..

c. In this peril, a plumbing system … does not include a sump, sump pump or related equipment or a roof drain, gutter, downspout or similar fixtures or equipment.

d. Section I—Exclusion A.3. Water Damage, Paragraphs a. and c. that apply to surface water and water below the surface of the ground do not apply to loss by water covered under this peril.

…..

SECTION I—EXCLUSIONS

A.  We do not insure for loss caused directly or indirectly by any of the following.   Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss.   These exclusions apply whether or not the loss event results in widespread damage or affects a substantial area.

…..

3. Water Damage

Water Damage means:

a.  Flood, surface water, waves, tidal water, overflow of a body of water, or spray from any of these, whether or not driven by wind;

b. Water or water-borne material which backs up through sewers or drains or which overflows or is discharged from a sump, sump pump or related equipment;  or

c. Water or water-borne material below the surface of the ground, including water which exerts pressure on or seeps or leaks through a building, sidewalk, driveway, foundation, swimming pool or other structure; caused by or resulting from human or animal forces or any act of nature.

The Court addressed the following issues: (1) whether the all-risk policy is ambiguous where it provides for coverage for the “accidental discharge” of water “within a … plumbing … system … on the ‘residence premises’ ” caused by “deterioration,” but excludes “water damage” caused by “[w]ater or water-borne material which backs up through sewers or drains,” and (2) whether the exclusion applies when a pipe located within the plumbing system of the “residence premises” breaks due to deterioration, causing debris to enter the pipe and forming a blockage, and as a result of the blockage, waste water and/or material backed up through the blocked pipe “within” the “plumbing system” and then into the “residence premises” through drains.

The Court opined that at first glance, without examining the “Section I—Exclusions,” it would appear that the claimed loss would not be covered because the loss was caused by a deteriorated pipe, ie., one of the most common exclusions insurance carriers cite to deny homeowners insurance claims.

However, the policy also included an exception to the no-coverage provision involving “deterioration,” which provided as follows:

Exception To c.(6)

Unless the loss is otherwise excluded, we cover loss to property covered under Coverage A [Dwelling] or B [Other Structures] resulting from an accidental discharge or overflow of water … from within a:

…..

(ii) Plumbing … system … on the “ residence premises ” ….

Therefore, the Court noted that based on paragraph (ii) under “Exception To c.(6),” an “accidental discharge” of water from within a plumbing system caused by deterioration is a covered loss, “[u]nless the loss is otherwise excluded.” Exclusions pertaining to water damage are found in Section I A.3. of the policy.

SECTION I—EXCLUSIONS

A. We do not insure for loss caused directly or indirectly by any of the following….

…..

3. Water Damage

Water Damage means:

a. Flood, surface water, waves, tidal water, overflow of a body of water, or spray from any of these, whether or not driven by wind;

b. Water or water-borne material which backs up through sewers or drains or which overflows or is discharged from a sump, sump pump or related equipment; or

c. Water or water-borne material below the surface of the ground, including water which exerts pressure on or seeps or leaks through a building, sidewalk, driveway, foundation, swimming pool or other structure; ….. caused by or resulting from human or animal forces or any act of nature.

The Court noted that the exclusion above related to water damage applied to damage caused by outside forces unrelated to the residence premises’ plumbing system.  As such, the Court held that “because the claimed loss in this case was caused by the deterioration of a pipe within the plumbing system, which caused water or water-borne material emanating from the residence premises’ plumbing system to back up into the residence premises,” the homeowner’s loss was a covered loss under the policy.

Moral of the Story: whether you are a homeowner that lives in Hollywood, Dania, Weston, Homestead, Plantation, Aventura, Miami Beach, Bal Harbour, Tamarac, Kendall, Boca Raton or another area within Miami, Fort Lauderdale or Palm Beach, if you sustain water or mold damage to your home due to a pipe beneath your floor or concrete slab that bursts due to deterioration or wear and tear, and if your homeowners insurance carrier denies your claim under the “wear and tear” exclusion, make sure you consult with a homeowners insurance damage claim attorney to verify whether your policy may provide you coverage notwithstanding the letter from your insurance carrier denying your claim.

Florida Condominium Hurricane/Storm Insurance Claims – Which Statute of Limitations is Applicable to my Property Loss?

Florida Condo Hurricane Damage Insurnance Claims_fightsforyou.netSo your a South Florida Homeowner who just sustained property damage as a result of a Hurricane or severe windstorm, you make a claim to your insurance company, and they either delay your claim, provide a low offer or estimate, or they deny your claim all together. As a result, you reach out to a Miami Hurricane and Storm insurance claim lawyer, asking how long do you have to file a lawsuit for breach of your insurance contract.  The answer is not so clear, although the cases referenced below suggest the statute that applies is the one in effect at the time that the policy was executed (which seemingly would be prior to the date of the loss).

As I discussed in my previous post regarding the changes in Florida law in 2011, the statute of limitations and statutory notice requirements changed for property damage and/or Hurricane/windstorm losses that occurred after May 17, 2011.  According to the current version of Florida Statute §95.11(2)(e), if you sustain a property loss on or after May 17, 2011, the Statute of Limitations for filing lawsuits on all property insurance claims (for breach of insurance contracts) is five (5) years from the date of the property loss.  Before this law went into effect, under §95.11(2)(b) a Florida homeowner could bring a lawsuit within five years from the date the last element of their breach of insurance contract cause of action accrued, ie., at the time the insurance company wrongfully denied the claim (via a denial letter) or when an undervalued/low-ball estimate was given.  Sometimes, a denied claim could have occurred over five years after the loss, wherein under the old statute, you could still file a breach of contract claim against your property insurer so long as it was filed within five years of the breach.

After the statute of limitations law changed in 2011, a number of lawsuits have been filed since then wherein the suit was filed more than five years after the property damage occurred.  In these suits, the insurance company moved to dismiss the claim based on an argument that the the new statute applied, ie., the one which says a lawsuit must be filed within five years of the Hurricane loss. However, in these cases, the court concluded that the new statute would not apply retroactively, and thus for storm losses such as Hurricanes Katrina, Wilma, Jeanne, Charlie and Frances, the statute that applied was §95.11(2)(b) (statute in effect at the time the applicable policy was executed) which provided that suit for breach of an insurance contract was to be brought within five years of the breach.

The most recent case to come out is Olear Organization, Inc. v. North Pointe Ins. Co., 2012 WL 5471789 (M.D. Fla. November 9, 2012).  In this case, an Orlando, Florida, homeowner sustained property damaged by Hurricane Charley on August 13, 2004, as well as by Hurricane Frances on September 5, 2004. The insurance company acknowledged coverage for both Hurricanes, and made partial payments under each claim under separate claim numbers. The plaintiff homeowner, however, claimed that two policy limits are available for two separate losses and that the defendant insurer has breached the policy by failing to pay for all of the losses. The homeowner thus brought suit for declaratory relief, breach of contract, etc. The insurance company moved to dismiss the Hurricane claims based on the fact that these claims were brought more than five years after the loss, ie., under the current limitations period applicable to property damage losses. The Middle District of Florida ruled that Florida Statute §95.11(2)(e), which now requires suits to be brought within five years of the date of loss (ie., the date a Hurricane strikes), was enacted on May 17, 2011, and is not to be applied retroactively. The Middle District noted that the statute to apply was the one in effect at the time the applicable policy was executed, ie., the policy in effect at the time of the loss.  See, e.g., Menendez v. Progressive Exp. Ins. Co., Inc., 35 So.3d 873, 876 (Fla. 2010)(“We look at the date the insurance policy was issued and not the date that the suit was filed or the accident occurred, because `the statute in effect at the time an insurance contract is executed governs substantive issues arising in connection with that contract.'”).  The Middle District based its decision off a couple previous decisions, one of which was a Southern District Court decision named West Palm Gardens Villas Condominium Ass’n, Inc. v. Aspen Specialty Ins. Co., 2012 WL 3017083 (S.D. Fla. June 25, 2012).

In West Palm Gardens Villas Condominium Association, the condominium sustained property damage in Hurricane Wilma.  After the insurance company felt that the damage was below the condo’s deductible, the condominium association disputed that the damages were below their deductible and invoked the insurance policy’s appraisal clause in order to resolve the apparent disagreement over the actual amount of the loss. The appraisal clause allegedly requires Aspen to take certain actions in compliance with the clause within twenty days of its invocation in order to finalize the appraisal process, which Aspen allegedly failed to do. Specifically, West Palm alleged that Aspen failed to name its appraiser and proceed with the appraisal process, all allegedly in breach of the Policy. The condo association subsequently brought suit for declaratory relief and breach of the insurance contract,  alleging that Aspen failed to comply with the appraisal process and that they denied coverage for the loss on October 13, 2011. Of note, the suit was brought on October 31, 2011, within five years of the alleged breach of contract.  The insurance company claimed that the claims were barred by the current statute of limitations applicable to property loss claims, namely Florida Statute §95.11(2)(e), which requires lawsuits to be brought within five years of the loss. The Southern District held that Florida Statute §95.11(2)(e) does not apply retroactively, and that §95.11(2)(b) applied at the time of this loss (which required suits to be brought within five years of the breach of contract).

Moral of the Story: Whether you are a homeowner that lives in Ocala, Delray Beach, Vero Beach, Stuart, Boynton Beach, Naples, Port Charlotte, Venice, New Port Richie, Clearwater, Punta Gorda, Fort Pierce or an area within Miami, Fort Lauderdale or Palm Beach, after a Hurricane, windstorm or other property damage loss (does not matter if it is fire, sinkhole, lighting, electrical, etc.) that occurs after May 17, 2011, if your policy of insurance was executed after that date, know that you only have five years from the date of loss to file a lawsuit.  If your policy of insurance was executed/issued prior to May 17, 2011, no matter when your loss occurs,  it appears that Florida Statute §95.11(2)(b) would be applicable, thus providing a five year statute of limitations from the date of breach of the insurance policy.  

Florida Hurricane Damage Insurance Claims – Citizens is Immune From First Party Bad Faith Suits

Florida Hurricane Damage Attorney_fightsforyou.netIf you live in South Florida and own a townhouse, condominium, house or other property, and you are insured by Citizens for Hurricane, windstorm, tornado or other storm damage, it appears that Citizens has no incentive to adjust claims in good faith given that they apparently are immune from first party bad faith lawsuits — so says the Fifth District Court of Appeal in the case of Citizens Property Insurance v. La Mer Condominium Association, 37 So.3d 988 (Fla. 5th DCA 2010).

A first party action is when a homeowner brings a claim against their own insurance company for some form of damage to their residence or property, whether it arises out of a Hurricane or other type of storm damage, or it can arise out of a pipe burst, leaky sink or toilet/washer failure.  When the claim is made, the property damage insurer may wrongfully deny your claim, delay and take forever to adjust or investigate the claim, or simply undervalue the claim by paying less than the property damage is worth.  When this occurs, a homeowner will usually hire a Hurricane damage or homeowners insurance claim lawyer to bring a lawsuit against the insurance company for breach of contract and possibly bad faith.

Well, at this time, the law forbids a homeowner from bringing a bad faith lawsuit against Citizens.  In the La Mer Condominium Association case, where the condo association apparently brought a first party bad faith insurance claim for damage arising out of a Hurricane or some other storm, the court cited to its previous decision in Citizens Property Insurance Corp. v. Garfinkel, 25 So.3d 62 (Fla 5th DCA 2009), where they held that Citizens is immune from first-party bad faith claims pursuant to sections 627.351(6)(r)(1) and 624.155(1)(b)(1), Florida Statutes.

Moral of Story:  whether you live in Coral Springs, Cooper City, Hallandale, Boca Raton, Homestead, Key Biscayne, Weston, Pompano Beach, Tamarac, Wilton Manners, Hialeah or another area within Miami, Fort Lauderdale or Palm Beach, your Florida Hurricane damage insurance attorney will not be able to bring a bad faith lawsuit against Citizens.  Clearly, this holding is a shield to Citizens and a dent in the homeowner’s arsenal in making sure their insurance claims are adjusted fairly.

For additional Hurricane damage and bad faith claim analysis, see my previous post. For additional Citizens Insurance claim denial and dispute analysis, see my previous post.

Florida Fire Damage Claim Disputes – A Bad Faith Analysis

As a South Florida homeowner, I know how hot it gets in the summer, wherein we sometimes experience extensive periods of heat, drought and lightning strikes.  These types of conditions can cause wildfires that reach your house or business, or your residence can simply experience an electrical problem or power surge, to which a fire breaks out as a result.  There are also  fires that occur due to arson, an accident (such as a product or appliance malfunction), or even a burglary gone wrong.  After a fire has devastated your home or business, several types of damage can result, including structural damage, water damage, smoke damage, roof damage, melting issues, damage to the building’s plumbing or electric systems, and damage to the personal property inside the structure (such as furniture, office equipment, appliances, clothes, papers, etc.).  A business may also suffer a significant loss of profits due to a business interruption.

When a fire occurs, a home or business owner may seek out the assistance of a fire damage insurance claim lawyer, given that insurance companies commonly look for ways to deny a property damage claim (by claiming fraud or arson), or they fail to pay the full value of the fire damage loss.  If your fire damage claim has been denied, delayed, disputed or evaluated in bad faith by your insurance company, you may have to file a bad faith lawsuit for breach of the insurance contract.

This is the type of situation that was apparent in the case of Talat Enterprises, Inc. v. Aetna Cas. and Sur. Co., 753 So.2d 1278 (Fla. 2000), wherein a restaurant/business owner that sustained fire damage to his business brought a first party bad faith lawsuit against Aetna Insurance Company.  Apparently, after Aetna made an initial payment for damage, the business owner submitted proofs of loss for additional damages, including personal property and loss of business income.  Thereafter, an appraisal award was entered in favor of the business owner, to which Aetna paid the full amount of this award.  Sometime after Aetna’s appraisal award payment, the business owner issued a statutory notification of intent to pursue a bad faith claim against Aetna under section 624.155  of the Florida Statutes.   After the sixty day cure period expired without an additional payment, the business owner filed suit against Aetna, who moved for summary judgment.  Aetna claimed that it was entitled to judgment as a matter of law under section 624.155(2)(d) (states that “[n]o action shall lie if, within 60 days after filing notice, the damages are paid or the circumstances giving rise to the violation are corrected.”),  because it paid the underlying contract damages (ie., the appraisal award) within the sixty days from the date that the business owner filed its bad faith notice (they actually paid prior to the sixty day notice). The business owner countered that Aetna was required to pay not only the damages owed under the insurance policy, but also all extra-contractual damages flowing from Aetna’s alleged failure to make a good-faith attempt to settle his claim.

The trial court granted Aetna’s Motion for Summary Judgment, finding that Aetna “ha[d] timely paid ‘the damages’ and ha[d] corrected ‘the circumstances giving rise to the violation’ ” within the meaning of section 624.155(2)(d)., and that Aetna had satisfied the dictates of section 624.155(2)(d) by paying the restaurant owners contractual damages, i.e., the amount awarded via the appraisal award, before the expiration of the sixty-day cure period.  The trial court rejected the business owners reading of the statute as requiring the insurer to pay whatever the insured demands.  The Supreme Court agreed with the Trial Court’s reasoning (was answering a question certified as a matter of great public importance), finding that a bad faith cause of action does not even become ripe until after the 60 day notice requirement expires without any payment of the damages owed under the insurance contract.  In this case, Aetna paid the amounts owed under the insurance policy, preventing a bad faith cause of action under section 624.155 for extra contractual damages.

Moral of Story: If you are a homeowner or business owner that sustains fire damage, and your attorney brings a first party fire damage insurance claim under your insurance policy, whether you live in Miramar, Cutler Bay, Palmetto Bay, Homestead, Key West, Doral, West Kendall, Davie, Sunrise, Miami Springs, Margate, Pembroke Pines or another area within Miami, Fort Lauderdale or Palm Beach, know that if your insurance company pays an appraisal award (ie., the damages owed under the insurance contract), even if you sustain extra contractual damages, a bad faith claim is prohibited under section 624.155 given that the contractual damages have been paid.

Florida Hurricane Damage Supplemental Claims – The Need to Comply With Conditions Under the Policy

It is Hurricane season, and many South Florida Homeowners may sustain some form of damage to their residences.  When this occurs, it is very important to immediately contact your insurance company in order to comply with conditions precedent under your policy.  Reason being, the insurance carriers will deny coverage under the policy if you fail to notify them within a certain amount of time of the damage (typically 60 days), and they may ask you to sit for an examination under oath (EUO) in order to get some additional support and factual information to support your claim.  When an insured fails to comply with the policy provisions, a wind, flood or homeowners insurance carrier will refuse to make payments under the policy, and these may actually be legitimate reasons to deny coverage.

This situation was apparent in the case of Edwards v. State Farm Florida Ins. Co., 64 So.3d 730 (Fla. 3d DCA 2011), where a homeowner sustained roof damage to their residence arising out of Hurricane Frances, one of the major storms of 2004.  Because the damage was within the homeowner’s deductible, State Farm, although admitting coverage, did not make any payment under the policy.  Thereafter, four years later, the homeowner made a supplemental insurance claim via a public adjuster, claiming additional damage as a result of Hurricane Frances.  When State Farm repeatedly requested that the homeowner provide documentation of the claimed loss and submit to an examination under oath, these requests were not complied with.  The insured never submitted to an EUO, nor did he provide sufficient documentation for State Farm to evaluate the supplemental claim.  The insured apparently retained a Miami Hurricane damage insurance dispute lawyer that handles supplemental claims, given that he filed suit for breach of contract after failing to receive benefits under his policy.  The trial court granted summary judgment to State Farm, finding that the policy requirements to submit to an examination under oath (if requested, and must be at a mutually convenient place and time), as well as submit documents that accurately reflect the amount of loss claimed, were conditions precedent that the insured failed to comply with, thus relieving the insurer of its duty to make payments under the policy.  The Third District Court of Appeal affirmed the trial court’s ruling.

Moral of the Story:  Whether you are a homeowner that lives in Hollywood, Dania, Weston, Homestead, Plantation, Aventura, Miami Beach, Bal Harbour, Tamarac, Kendall, Boca Raton or another area within Miami, Fort Lauderdale or Palm Beach, if you sustain roof or other types of damage to your home due to a Hurricane, flood or windstorm, make sure you comply with the various requests of your insurance carrier which may be conditions precedent to securing benefits under the policy.  These requests could be the ones at issue in the case above, namely, a request to sit for an examination under oath, or a request for supportive documentation.  A homeowner should actually consult with a Hurricane damage insurance claim lawyer to make sure these policy provisions are complied with, thereby reducing the chance of coverage issues being raised.

Florida Citizens Homeowners Insurance Claim Disputes – Can I sue Citizens in the County Where I live?

hurricane blown palm treesSouth Florida homeowners still need to worry about Hurricane season, as we have a little more than two months to go.  With the passing of Hurricane Isaac, which was a tropical storm when it hit Florida, some homeowners throughout Miami-Dade, Broward and the Palm Beaches sustained some form of property damage.  Whether it was roof damage from a falling tree, window damage from a projectile, or water damage from the storm surge,  a claim will have to be made with your Hurricane, Windstorm, Flood and/or homeowners insurance company.  As a result, many South Florida homeowners have sought the assistance of a Hurricane/windstorm damage insurance claim lawyer to assist them in recovering insurance proceeds to repair their property, get alternative living expenses for the time it takes to repair the house damage, or assist them in an insurance claim dispute regarding coverage under their policy.

With Citizens being the primary insurer that insures Florida Homeowners against Hurricanes and Windstorms, South Florida homeowners who did sustain damage from Tropical Storm Isaac will likely be making a claim against Citizens in the very near future.  The question is, if Citizens provides a very low estimate or denies coverage under your policy all together, and you file a breach of insurance contract lawsuit in Miami-Dade, Broward or Palm Beach Counties, can Citizens remove the case to Leon County (ie, Tallahassee), given that is where their primary business headquarters reside.

According to the Third District Court of Appeal, they can.  In the recently decided case of Castle Beach Club Condominium, Inc. v. Citizens Property Ins. Corp., 2012 WL 3101528 (Fla. 3d DCA 2012), the Castle Beach Club Condominium sued Citizens Property Insurance Corp. (a state entity), for breach of contract and an appraisal in Miami–Dade Circuit Court. The trial court transferred the case to Leon County based upon Citizens’ assertion of Florida’s common law home venue privilege (Florida common law provides that the state and its agencies or subdivisions enjoy the home venue privilege, ie., venue in a suit against the State, or an agency or subdivision of the State, absent waiver or exception to the privilege, is proper only in the county in which the State, or the agency or subdivision of the State, maintains its principal headquarters).  The Third District Court of Appeal affirmed this decision, holding that Citizens is a state entity protected by the home venue privilege,  no exception to the home venue privilege applied, and Citizens did not waive the privilege.

Moral of the Story: If you are a homeowner that sustains roof  or water damage due to a Hurricane or windstorm, and your lawyer makes a claim against Citizens under your Hurricane/windstorm insurance policy, whether you live in Miramar, Cutler Bay, Palmetto Bay, Homestead, Key West, Doral, West Kendall, Davie, Sunrise, Miami Springs, Margate, Pembroke Pines or another area within Miami, Fort Lauderdale or Palm Beach, know that Citizens can remove the lawsuit to Leon County and force you to litigate hundreds of miles away.

Florida Hurricane/Storm Damage Insurance Claims – How Long Do I Have to Provide Notice to My Insurer Under My Insurance Policy?

Right now down here in South Florida, we are in the middle of Hurricane season, thankfully dodging a bullet down here in Miami with Tropical Storm Isaac.  Nevertheless, we were not so lucky with regards to the 2005 season, wherein Hurricane Katrina and Wilma decided to make a visit, and the 2004 season, wherein Hurricanes Frances and Jeanne decided to strike Florida.  Many homeowners throughout the Miami-Dade, Fort Lauderdale and  Palm Beach areas sustained some form of water, wind or flood damage from these storms, most notably roof and window damage.   As a result, many South Florida homeowners have sought the assistance of a Hurricane/storm damage or homeowners insurance claim lawyer to assist them in recovering moneys to fix their property (given the potential for an insurance company’s low damage estimate), or assist them in an insurance claim dispute regarding coverage under their policy.

A couple of the issues that arise quite frequently and which a homeowner should be aware of, are the notice and sworn proof of loss provisions contained within a property damage insurance policy.   Whether it is a flood, wind or homeowners insurance policy, there typically will be some type of language within the policy that states the insured shall give immediate notice to the insurance company after a loss has been incurred, and that the insured shall submit a sworn proof of loss within a certain amount of days of the loss, say 60 days.  These provisions are typically considered  “post-loss condition precedents,”  given that another provision in the policy will usually say that no action can be brought against the insurance company unless there was compliance with the policy provisions.  Given that the notice and sworn proof of loss provisions must be complied with, in cases where they are not, an insurance company may consider this a material breach of the policy by the insured, thereby allowing the insurance company to deny coverage under the policy.

Several cases have recently been decided which lend some clarity as to the amount of time an insured actually has to provide notice to their insurance company regarding a Hurricane damage claim (per the insurance policy provisions), after they have been the victim of a property damage loss.  In Kroener v. Florida Ins. Guar. Ass’n, 63 So.3d 914 (Fla. 4th DCA 2011), the Fourth District Court of Appeal held on June 22, 2011, that a homeowner who sustained interior and exterior damage (roof leak) from Hurricane Wilma and who notified their insurance company two years and two months after the loss, that this was not “prompt notice” as a matter of law (per the notice requirement in the insurance policy) and therefore barred their claims.

Then on July 18, 2012, the Fourth District decided Kramer v. State Farm Florida Ins. Co., 2012 WL 2913189 (Fla 4th DCA 2012), where a homeowner who sustained roof damage in 2004 from Hurricane Frances and Hurricane Jeanne, didn’t make a claim to their insurance company until May 2009, almost five years from the dates of loss.  The insureds did not immediately notify State Farm of the loss, nor did they submit a sworn proof of loss within 60 days of the loss (per the policy provisions).  State farm denied coverage, and the insured sued them for breach of contract under the insurance policy.  The Court noted that despite the fact that a notice of loss and a sworn proof of loss are conditions precedent to suit (because the policy also included a provision that said no action shall be brought unless there has been compliance with the policy provisions), if the insured breaches the notice provision[s], prejudice to the insurer will be presumed, but may be rebutted by a showing that the insurer has not been prejudiced by the lack of notice.  In this case, the insured was unable to rebut the presumption of prejudice, as the insured submitted an affidavit from an engineer that essentially said he could not determine the cause of the damage, whether it was from a hurricane or some other cause.  The Kramer court thus dismissed the insureds claim.  Of note, the Kramer court noted their prior decision in Kroener, stating that holding was based upon a record similar to this case, where the insurer argued that it was prejudiced by the insureds’ untimely pre-suit notice of the alleged loss, and the insureds did not come forward with counter-evidence sufficient to reveal a genuine issue as to whether the insurer was prejudiced, ie., one must still go through the analysis of whether the insurance company was prejudiced (ie., unable to determine the cause of loss) by such late notice from their insured.

Then on July 25, 2012, the Fourth District decided Soronson v. State Farm Florida Ins. Co., 2012 WL 3022349 (Fla 4th DCA 2012), where a homeowner sustained roof damage from Hurricane Wilma in 2005, yet did not notify State Farm until February 2009 (3 years 4 months) of the loss, when they filed a lawsuit against them for failing to pay benefits under their insurance policy.  The Court went through the same analysis as in the Kramer case, noting that although the homeowner failed to comply with their pre-suit notice requirements under the policy (both the immediate notice and submitting of the sworn proof of loss within 60 days of the loss), this merely created a presumption of prejudice against the insurer, but may be rebutted by a showing that the insurer has not been prejudiced by the lack of notice.  The homeowner submitted an affidavit that attached “unsworn” engineer reports.  The Court felt these documents were not sufficient to rebut the presumption of prejudice against State Farm in being unable to investigate the loss due to the late notice.  Again, the Soronson court noted their prior decision in Kroener, stating that holding was based upon a record similar to this case, where the was prejudiced by the insureds’ untimely pre-suit notice of the alleged loss, and the insureds did not come forward with counter-evidence sufficient to reveal a genuine issue as to whether the insurer was prejudiced.

Most recently, on August 1, 2012, the Fourth District decided Leben v. State Farm Florida Ins. Co., 2012 WL 3101336 (Fla. 4th DCA 2012), where a homeowner sustained roof damage from Hurricane Wilma in 2005, yet did not notify State Farm until February 2009 (3 years 4 months) of the loss, when they filed a lawsuit against them for failing to pay benefits under their insurance policy.  The Court went through the same analysis as in the Kramer and Soronson cases, noting that although the homeowner failed to comply with their pre-suit notice requirements under the policy (duty to provide  immediate notice), they were able to create an issue of fact as to the rebuttable presumption of prejudice against the insurance company. The homeowner submitted two reports, one from a leak detection company and another from a roofing company, both reports stating they could unequivocally say damage was caused by Hurricane Wilma despite the fact the homeowner made repairs after the storm. The Court felt these documents were sufficient to rebut the presumption of prejudice against State Farm in being unable to investigate the loss due to the late notice, thereby allowing them to go to trial and let a jury determine whether the late notice prejudiced State Farm’s ability to investigate the loss.

All homeowners should note that these cases above are related to Hurricane Wilma losses or before.  For analysis of statute of limitations and statutory notice requirements related to property damage and Hurricane/windstorm losses after May 17, 2011, see my previous post regarding the changes in Florida law in 2011.

Moral of the Story: Whether you are a homeowner that lives in Hollywood, Dania, Weston, Plantation, Aventura, Miami Beach, Bal Harbour, Coral Gables, Kendall, Pinecrest or another area within Miami, Fort Lauderdale or Palm Beach, after a Hurricane or windstorm, make sure to have your property inspected to determine if any damage was caused by the storm, especially the roof and windows.  That way, you will be able to comply with the notice requirements under your insurance policy and hopefully avoid an insurance claim dispute as referenced in the cases above.

Florida Condo Owner Homeowners Insurance Claims – The Condo Above Me (Second Floor Unit Upstairs) Leaked, What Are My Options?

As South Florida Condominium owners know, many things can go wrong to cause water damage (and resultant mold) to their condominium unit.  One of the most common water intrusion events that can occur is when a neighbor’s condominium unit above yours  has a water loss or water leak, which then gets into your unit through the common elements.   Whether you live in Hollywood, Dania, Weston, Plantation, Aventura, Miami Beach, Bal Harbour, Coral Gables, Kendall, Pinecrest or another area within Miami, Fort Lauderdale or Palm Beach, many unit owners are seasonal (ie., snow birds) and are thus not around to maintain their units on a monthly basis.  As such, it is not uncommon, especially during the Summer, for a neighbor’s condominium unit above yours, the unit on the second floor, the unit next to yours (unit to unit), or the unit upstairs, to experience pipe leaks, burst pipes and plumbing, broken water heaters, shower pan leaks, a pipe burst in the washer, failed pipe in the dishwasher, failed toilet seals, toilet tank leaks, window leaks and/or other types of water intrusions and condo water leaks.  Reason being, no one is living in the unit for months on end to fix any problems that may arise.  When these types of losses occur, one may seek out a Florida condominium water damage insurance claim attorney or Florida condo leak lawyer to get some guidance on how to proceed in resolving Florida condo insurance claims of this type.

The first thing the lawyer will likely do is have you put your own homeowners insurance carrier on notice.  While there are certain exclusions in the policy, your insurance company may cover some or all of the damage such as providing payments for temporary/alternative living arrangements (ALE/loss of use), as well as temporary repairs like mold remediation (one has a duty to mitigate their damages).

As for the lawyer’s investigation,  the source of the water intrusion needs to be determined. Reason being, while the unit owner above may bear some responsibility, the Condominium Association may also bear some responsibility.  Thus, the attorney will probably direct his or her investigation as to whether the upstairs water loss originated from a common element or an item that is the responsibility of the unit owner.  A Declaration of Condominium typically classifies a common element (in relation to items which are a unit owners responsibility) as as anything not touching air, ie., everything behind the walls and ceilings minus the coverings.  As for the Florida Statutes,  718.108(1) states that common elements include: (a) The condominium property which is not included within the units; (b) Easements through units for conduits, ducts, plumbing, wiring, and other facilities for the furnishing of utility services to units and the common elements; (c) An easement of support in every portion of a unit which contributes to the support of a building; and (d) The property and installations required for the furnishing of utilities and other services to more than one unit or to the common elements.  Items which are not common elements and which would be the responsibility of the second floor unit owner, would include pipes underneath the kitchen or bathroom sinks,  a toilet seal that fails or a water heater that explodes.

Certainly, if it is determined that the unit owner above had been out of the condo unit for months on end and a water leak resulted due to to their failure to maintain the inside of their property, the unit owner above will likely have some responsibility.  In this scenario, hopefully they had homeowners insurance, such that a claim can be made to their insurance company.  Even in this scenario, the condominium association still may bear some responsibility for the damage to your unit.  Where water losses are caused by sudden and unforeseeable events (the condominium association will likely argue this type of event was sudden and unforeseeable), these types of losses are considered casualties.  When a casualty occurs, a condominium association’s insurance could come into play.  Pursuant to the Declaration of Condominium, the Association will have a responsibility to maintain, repair and replace common elements.  Pursuant to Florida Statute 718.113(1), maintenance of the common elements is the responsibility of the association.  As such, if you sustained damage to your drywall or ceilings due to a water leak from the upstairs condominium unit above yours (or your neighbor’s, ie.,unit to unit), the association may be responsible for repairing these, minus the “wall coverings” such as paint or wall paper, which would still be the unit owner’s responsibility.

Another area the Association may bear some responsibility, is whether they inspected the wall crevices to see if any mold is growing due to the water loss.  Since the insides of the walls or ceilings would be considered common elements, if the association failed to make sure that these areas are mold free, and mold growth was exacerbated inside your unit as a result, the association may bear some responsibility.

As you can see, this simple situation can actually turn into a complex legal issue, where the unit owner above and the condominium association may disclaim any liability.   This is the reason it is so important for a South Florida condominium owner to have homeowners insurance to cover losses that may arise.  A homeowners insurance claim can always be made against your own insurance, with the assistance of a homeowners insurance property damage lawyer.

For additional analysis on condo issues and Florida condo insurance claims, see my previous post.

Florida Condominium Owner Insurance Claims – I Have Water Damage In My Condo Unit, What Does the Association’s Insurance Cover?

As South Florida Condominium owners know, many things can go wrong to cause a water loss in their condominium unit.  Whether you live in Miramar, Deerfield Beach, Coconut Creek, Doral, Lauderhill, Margate, Miami Lakes, Pembroke Pines or another area within Miami, Fort Lauderdale or Palm Beach, many units are over thirty years old and so it is not uncommon to experience pipe leaks, burst pipes, broken pipes, broken water heaters, failed toilet seals or even roof and window leaks.  When these types of water intrusions occur, one may seek out a condominium water damage insurance claim lawyer to get some guidance on how to proceed in resolving this property damage loss and perhaps even assert condo water damage claims.

This attorney will probably inquire as to whether the water loss was from a common element (ie., a pipe behind the drywall, a roof leak and/or cracks in the exterior stucco/wall, parts of a unit that are typically considered common elements under one’s Declaration of Condominium), or an item that is the responsibility of the unit owner, such as a toilet that fails or a water heater that explodes.  Usually, a Declaration of Condominium will state that items within a unit that touch air are the responsibility of the unit owner.

Once it is determined where the water intrusion originated from, the next big question is typically whether the water loss was the result of the negligence of the condominium association in failing to maintain the common elements.  If the water damage is determined to be caused by this (ie., water penetrated an exterior wall or its stucco, a roof leak, a common air conditioning stack fails, a common sewage pipe backs up or fails, a common pipe or plumbing fixture fails, etc.), the association could be responsible for the water damage and resulting mold that may occur.  On the other hand, many times, there are water intrusion losses caused by sudden and unforeseeable events such as Hurricanes or other wind storms, tornado’s, or possibly even a neighbors condo (or condo unit above yours) wherein a relatively new water heater simply explodes due to a faulty seal.  These types of losses are considered casualties.  When a casualty occurs, both the condominium and unit owner’s insurance could come into play.

As for a condominium association’s insurance requirements, Florida Statute §718.111(11)(f), states that a property insurance policy issued or renewed on or after January 1, 2009, for the purpose of protecting the condominium must provide primary coverage for:

1. All portions of the condominium property as originally installed or replacement of like kind and quality, in accordance with the original plans and specifications.

2. All alterations or additions made to the condominium property or association property pursuant to s. 718.113(2).

3. The coverage must exclude all personal property within the unit or limited common elements, and floor, wall, and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and window treatments, including curtains, drapes, blinds, hardware, and similar window treatment components, or replacements of any of the foregoing which are located within the boundaries of the unit and serve only such unit. Such property and any insurance thereupon is the responsibility of the unit owner.

Pursuant to this statute, because drywall is not specifically excluded, that would be the responsibility of the association under its insurance policy, minus the “wall coverings” such as paint or wall paper, which would still be the unit owner’s responsibility.

This is the reason it is so important for a condo owner to have homeowners insurance to cover losses caused by a casualty, just in case damaged portions of the unit are not covered by an association’s insurance policy.

For additional analysis of condo water damage claims, see my other post.

Florida Property Damage Insurance Claims – How Long Do I Have to File a Lawsuit or Provide Notice of a Claim?

So you are a South Florida homeowner living in Coral Springs, Cooper City, Hallandale, Boca Raton, Homestead, Key Biscayne, Pompano Beach, Tamarac, Wilton Manors, Hialeah or another area within Miami, Fort Lauderdale or Palm Beach, and one day you come home to a flooded condominium or house. Your furniture is soaked, your walls have started growing toxic mold, and the home has become uninhabitable due to the significant water damage.  Thinking that you may have to file a property damage insurance claim with your homeowners insurance company, you contact a Miami, Florida Water Damage lawyer to get some information on how to file a claim.   The South Florida lawyer asks you if this was a sudden water loss from a burst pipe or water heater, was the water and property damage due to the recent Hurricane and windstorm that just occurred, or was the water damage due to normal wear and tear.  You tell the attorney that your not sure, it may have been from a roof leak.

The next question this Miami, Florida property damage insurance claim attorney asks you is how long ago did this water damage loss occur.  The reason the lawyer would ask you that is because of the changes in the law (specifically, the statue of limitations to bring a property insurance lawsuit for losses occurring on or after May 17, 2011, is now five years from the date of loss) with the governor’s signing of Senate Bill 408 (2011).  Some of the notable changes that went into effect with this bill include the following:

  • Florida Statute §95.11(2)(e): if you sustain a property loss on or after May 17, 2011, the Statute of Limitations for filing lawsuits on all property insurance claims (for breach of insurance contracts) is five (5) years from the date of the property loss.  Before this law was changed, a Florida homeowner could bring a lawsuit within five years from the date the insurance company breached the insurance contract (ie., a wrongful denial of a claim via a denial letter or an improper/lowball estimate).
  • Florida Statute §626.854(11)(a): compensation to a public adjuster for a reopened or supplemental claim may not exceed twenty (20) percent of the reopened or supplemental claim payment.
  • Florida Statute §626.854(15):  a public adjuster must ensure prompt notice of property loss claims submitted to an insurer, the public adjuster’s contract is to be provided to the insurer, the property is to be available for inspection of the loss or damage by the insurance company, and the insurance company is to be given an opportunity to interview the insured directly about the loss and claim. The insurer also must be allowed to obtain necessary information to investigate and respond to the claim.
  • Florida Statute §627.70132: a claim, supplemental claim, or reopened claim under an insurance policy that provides property insurance for loss or damage caused by the peril of a windstorm or hurricane is barred unless notice of the claim, supplemental claim, or reopened claim (ie, reporting the claim to the insurance company) was given to the insurer within three (3) years after the hurricane first made landfall or the windstorm caused the covered damage. The term “supplemental claim” or “reopened claim” means any additional claim for recovery from the insurer for losses from the same hurricane or windstorm which the insurer has previously adjusted pursuant to the initial claim.  Prior to this law change effective June 1, 2011, an insured had five years to report a claim.
  • Florida Statute §627.351(6): for any claim filed under a Citizens Property Insurance Policy as of May 17, 2011, a public adjuster may not charge, agree to, or accept any compensation or fee greater than ten (10) percent of the additional amount actually paid over the amount that was originally offered by the corporation for any one claim.  This appears to limit the ability of a public adjuster to get involved on a Citizens property loss claim until after the homeowner has made a claim and been offered property insurance loss proceeds.  This does not limit the ability of a Miami, Florida Hurricane and Windstorm damage insurance claim lawyer from getting involved from the beginning, however.
  • Florida Statute §627.7011(3)(a): as to losses for which a dwelling (house structure) is insured on the basis of replacement costs, the insurance company must initially pay at least the actual cash value of the insured loss, minus any applicable deductible. However,the insurer shall pay any remaining amounts necessary to perform such repairs as work is performed and expenses are incurred. If a total loss of a dwelling occurs, the insurance company is to pay the replacement cost coverage without reservation or holdback of any depreciation in value  pursuant to section 627.702.   As such, if work is contracted for but not done, and therefore, expenses are not incurred, the insurance company will not issue a check to their insured.
  • Florida Statute §627.706(5): any claim brought on or after May 17, 2011, including, but not limited to, initial, supplemental, and reopened claims under an insurance policy that provides sinkhole coverage, is barred unless notice of the claim was given to the insurance company within two (2) years after the policyholder knew or reasonably should have known about the sinkhole loss.

As you can see, these changes in the law (most of them taking place on May 17, 2011), will affect the ability of policy holders to bring Florida property damage insurance suits and claims, and public adjusters will be significantly affected, especially for claims on a Citizens Insurance policy.