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 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 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.

Florida Homeowners Insurance Claims – HO-2 v. HO-3 v. HO-4 v. HO-6 v. HO-8, Insurance Policies Oh My

When living in South Florida, it is more important than ever for a homeowner or renter/tenant to secure insurance for the many different hazards that may affect one’s property.  After all, we are especially susceptible to tropical storms and Hurricanes in the Miami, Fort Lauderdale and Palm Beach areas.  Yet, even though we have not experienced a Hurricane in quite some time, having homeowners or renters  insurance can provide peace of mind given the many other perils which may occur and that can destroy one’s property, including fires, electrical surges, floods, sinkholes, tornadoes, lightning strikes, vandalism, theft, and/or sudden water losses from a burst pipe, faulty/broken plumbing or a failed seal in a water heater.

Whether your a single family homeowner that may have an HO-2, HO-3 (also know as an “All Risks” policy) or HO-8 policy, a condo owner that has an HO-6 policy, or a tenant/renter that has a an HO-4 policy, if you sustain a property loss (structure and/or personal property) and require a Miami, Florida, Hurricane or property damage insurance claim lawyer, there are legal issues an insurance company may raise depending on the type of policy you have,  and that you scratch your head and say, what is that.  Some of these issues may include the following:

    1. Actual Cash Value:  if a policy provides for actual cash value as opposed to replacement cost, this would be the amount of money it would  cost to purchase a similar item in like condition and quality in today’s market place, ie, the market value of the property that takes into consideration depreciation.  An example of depreciation is say carpet or other types of flooring that has a useful life of say 10 years but at the time of loss was 5 years old, the market value of the carpet would be less than the replacement cost, as the market value would take into consideration this wear and tear over the years and reduce the value of the property.
    2. Replacement Cost: if a policy provides for the replacement cost of damaged property, this would be the amount of money it would take to purchase the same type of property of like kind and quality in today’s market place.
    3. Alternative Living Expenses: also known as ALE, alternative living expenses may include the reasonable expenses incurred to relocate for the time it takes to repair an uninhabitable property, such as staying in a hotel for days or weeks,  excess food expenses above what one normally would spend, transportation expenses in case you need to travel greater distances than normal, and storage expenses, just to name a few.  It is important to save your receipts in order to prove that these expenses were actually incurred.
    4. Loss of Use: an interchangeable term with alternative living expenses (ALE) on a Miami, Florida, homeowners insurance policy, loss of use damages are paid when a homeowner incurs excess expenses during the time it takes to repair an uninhabitable property.
    5. Deductible: the amount of money the policy holder must pay out of pocket before the insurance company will start paying from your insurance coverage.  For instance, a Miami, Florida, homeowner may have a $5,000 deductible on a windstorm policy, and when a Hurricane damage insurance claim is made, if the property damage claim is adjusted at $15,000, the insurance company will pay you a net of $10,000, ie., minus the $5,000 deductible.
    6. Exclusion: within a homeowner’s policy, there will be certain provisions called exclusions that an insurance company may cite to in order to deny a claim.  Common exclusions cited in a homeowner’s insurance policy could include mold (given that is it something that grows over time), flood (you would need to purchase a separate flood policy), landslides/sinkholes (ie, earth movement), neglect/wear and tear (policies cover water damage caused by sudden and unexpected losses, such as a burst pipe or a water heater that explodes), a sewer backup, loss caused by intentional destruction, and ordinance/law (such as construction to bring a house up to code), just to name a few.  However, insurance companies typically offer a homeowner the opportunity to purchase coverage that normally would be excluded.

As you can see, whether you are a homeowner/tenant 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, there is a lot to think about when it comes to your insurance policy and potential property damage disputes and claims that may occur.

Florida Condo Owner Pipe Plumbing Leak Claims – It’s the Rainy Season Down in Miami, Fort Lauderdale and Palm Beach: Be Prepared

It is currently the rainy season down here in South Florida, and nothing is worse than having one of those downpours cause water damage to your house, apartment or condominium.  Whether it is a leak in your roof, flooding due to a flash flood, or even a gutter or burst pipe/plumbing that overflows with water, it is now more important than ever to have flood and/or homeowners insurance to protect you from water intrusions and the resultant water damage loss.  Many times, not only is the structure damaged, but furniture, electronics and other items are frequently ruined.

As such, when one has to bring Florida Condo Owner Pipe Plumbing Leak Claims, it is important to know the types of property damage insurance coverage available, whether flood or homeowners, so that you are protected in a time of crisis.  Reason being, mold is commonly caused by water intrusions, yet one of the most common exclusions that insurance companies cite to in denying a homeowner’s insurance claim is the mold exclusion.  A Miami, Florida, property damage and homeowners insurance claim attorney can help one navigate the muddy waters of the various types of policies, so that the losses and claims that eventually occur can be dealt with.  Whether you live in Miramar, Deerfield Beach, Coconut Creek, Doral, Lauderhill, Margate, Miami Lakes, Pembroke Pines or another area throughout Miami, Fort Lauderdale or Palm Beach, it is certainly better to be informed and prepared than to suffer a non-covered property loss that causes heartache and headaches.

Florida Hurricane/Storm Damage Claims – Implied Warranty of Good Faith and Fair Dealing: Does it apply in claim by an Insured Against its Insurer for Failing to Investigate a Hurricane Loss in a Timely Manner?

It does not, so says the Florida Supreme Court in the case of QBE Ins. Corp. v. Chalfonte Condominium Apartment Ass’n, Inc. (May 2012), where Chalfonte Condominium sued their insurance company, QBE, arising out of a property damage loss from Hurricane Wilma.  Chalfonte submitted an estimate of damages to QBE on December 18, 2005, and then submitted a sworn proof of loss to QBE on July 12, 2006.  Not satisfied with QBE’s investigation and processing of its claim, Chalfonte filed suit in the United States District Court for the Southern District of Florida for among other things, breach of contract (breach of the implied warranty of good faith and fair dealing).

The jury found for Chalfonte on all of its claims, including the awarding of moneys for QBE’s breach of the implied warranty of good faith and fair dealing.  QBE would end up appealing the judgement to the Eleventh Circuit Court of Appeals, to which the Eleventh Circuit certified five questions to the Florida Supreme Court, one of which was the following:

Did Florida law recognize a claim for breach of the implied warranty of good faith and fair dealing by an insured against its insurer based on the insurer’s failure to investigate and assess the insured’s claim within a reasonable period of time?

Of note, the Florida Supreme Court recognized that “Florida courts imposed an independent duty on liability insurers to act in good faith when defending insureds against third-party claims,” and recognized a common law cause of action for bad faith within the context of third-party actions.  These  third-party bad-faith actions would involve a claim “in which an insured sues his liability insurance company for bad faith in failing to settle a claim which ultimately results in a third-party judgment against him in excess of the policy limits.”  The Florida Supreme Court then noted section 624.155 of the Florida Statutes (2009), specifically,  section 624.155(1)(b)(1), which created a statutory first-party bad-faith cause of action.    Section 624.155(1)(b)(1) states that “any person may bring a civil action against an insurer when such person is damaged…by the commission of any of the following acts by the insurer..not attempting in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests…”

After reviewing the current status of “bad faith” law, the Florida Supreme Court, while acknowledging that “Florida contract law does recognize an implied covenant of good faith and fair dealing in every contract,” concluded that this implied covenant did not create a separate first-party action against an insurance company based on its bad-faith refusal to pay a claim.  Moreover, the Court held that “such first-party claims [by Chalfonte] are actually statutory bad-faith claims that must be brought under section 624.155 of the Florida Statutes.”

Moral of the story:  Florida does not recognize a claim for breach of the implied warranty of good faith and fair dealing by an insured against its insurance company for failing to investigate a hurricane loss, as such a claim is actually a statutory bad-faith claim that must be brought under section 624.155 of the Florida Statutes.  As such, Florida Hurricane/storm damage claims lawyers in Hollywood, Dania, Weston, Plantation, Aventura, Miami Beach, Bal Harbour, Coral Gables, Kendall, Pinecrest or other areas throughout Miami, Fort Lauderdale and Palm Beach, will now have to bring such a claim as a statutory bad-faith claim.