Florida First Party Property Damage Insurance Claim Disputes and Denials- Failing to File a Sworn Proof of Loss Could be Fatal to Your Claim

As a South Florida Homeowner, given that we have so many forms of inclement weather (Hurricanes, tornadoes, Tropical Storms, hail storms, wind storms, downpours/floods, etc.), it is very important to have insurance to combat the significant property damage caused by these occurrences. However, even if you have the necessary insurance, whether a wind, Hurricane, flood or homeowners insurance policy, if you do not comply with the many post-loss obligations under your policy, it will be like having no insurance at all. Some of the post loss obligations (usually considered conditions precedent under your policy given that the policy will say these need to be complied with prior to suit being instituted) will include notifying your insurance company within a certain amount of time of the damage (typically 60 days), they may ask you to sit for an examination under oath (EUO) in order to get some additional support and factual information on your claim, or as is discussed in this article, they may ask you to submit a sworn proof of loss (a statement under oath delineating the amount of damage that occurred, the date of loss, etc.—this is typically taken care of by a public adjuster). When an insured fails to comply with policy provisions such as these in whole or in part, a wind, flood or homeowners insurance carrier may refuse to make payments under the policy, even if the damage is caused by a covered peril.  This will thereby necessitate that one hire a Florida insurance claim lawyer to file a first party property damage lawsuit against their insurer for breach of contract, declaratory relief and/or possibly bad faith.

So, how fatal to a claim is the failing to file a sworn proof of loss before a first party property damage lawsuit is instituted against your insurance company for failure to pay benefits under your policy? Well, case law is not so clear on this subject. In Starling v. Allstate Floridian Ins. Co., 956 So.2d 511 (Fla. 5th DCA 2007), a homeowner retained a fire damage insurance claim lawyer for severe damage that was caused to her home. A breach of contract action was subsequently brought on a property insurance policy claim. Apparently, Allstate Floridian Insurance Company refused to pay benefits under the fire insurance policy because of the homeowner’s failure to timely complete sworn proof-of-loss forms (were required within 60 days of the loss). The Appellate court affirmed the trial court’s entering of summary judgment in favor of Allstate, finding that the homeowner materially breached one of the fire policy’s condition precedents, namely, failing to file a sworn proof of loss — thereby barring a jury trial on the matter. Of note, during the homeowner’s examination under oath (EUO), she testified that she had already mailed in a proof of loss form, and she also brought a partially-completed form to the EUO where it was examined by Allstate’s representative. Moreover, during the EUO, the homeowner explained that she had not yet completed the form because she had not yet been able to calculate the total value of her claim. Given the homeowners attempt to comply with the conditions precedent under her policy, the dissent in Starling cited to the Fourth District Court of Appeal’s decision of Haiman v. Fed. Ins. Co., 798 So.2d 811, 812 (Fla. 4th DCA 2001), wherein if “ ‘the insured cooperates to some degree or provides an explanation for its noncompliance, a fact question is presented for resolution by a jury’ ” on the question of whether “ ‘failure to comply with policy provisions made a prerequisite to suit’ ” constitutes a material breach of the policy so as to preclude recovery from the insurer. The dissent felt that because the homeowner partially complied with the policy requirement, and provided an explanation for her noncompliance, that a question of fact existed as to whether the homeowner materially breached her policy by waiting eight months until after the lawsuit was filed before submitting the final, notarized form.

A more recent decision came out of the Fourth District Court of Appeal (May 2012) in Correa v. Sunshine State Ins. Co., 2012 WL 1859704 (Fla. 4th DCA 2012), wherein they cited to Starling v. Allstate Floridian Ins. Co. (affirming a final summary judgment for the insurer where the insured did not complete a sworn proof-of-loss form before suing the insurer). It is presumed that the homeowner failed to file a sworn proof of loss prior to instituting suit against the Sunshine State Insurance Company, to which the trial court granted summary judgment to the insurer and barred any jury trial from occurring on the property loss. Given the Fourth District’s prior decision in Haiman v. Fed. Ins. Co., it is presumed that the insured did not attempt to cooperate to some degree or provide an explanation for their noncompliance.

Another case that also lends some clarity to this issue is First Home Ins. Co. v. Fleurimond, 36 So.3d 172 (Fla. 3d DCA 2010), wherein a homeowner sustained damage during Hurricane Wilma. The insured submitted a claim, as well as a an additional claim through a public adjuster when additional damage occurred as a result of the initial damage (roof damage allowed water to come in, thereby damaging the interior portion of the home).  When First Home Insurance Company paid less then what the insured felt the full value of the claim was, the insured  retained a Florida Hurricane damage insurance claim attorney and filed suit under the policy, demanding appraisal. The insurer opposed the appraisal demand, saying that the insured had breached his policy obligations — one of which was said to be the failure to provide a sworn proof of loss.  The Third District held that the insured’s failure to file a sworn proof of loss did not bar him from bringing suit against his homeowner’s insurer seeking appraisal of the loss he sustained in a Hurricane, even though the policy required a sworn proof of loss to be filed within 60 days of being requested by the insurer — the insurer never requested a sworn proof of loss prior to the suit being filed.

It will be interesting to see how the recent cases coming out (namely, Soronson v. State Farm Florida Ins. Co., 2012 WL 3022349 (Fla 4th DCA 2012)regarding failure to comply with conditions precedent and what amount of prejudice is created to the insurer, will affect a homeowner who files suit and may not have exactly complied with their post loss obligations under their homeowners insurance policy.

Moral of the Story: Whether you are a homeowner that lives in Orlando, Fort Myers, Naples, Bonita Springs, Port St. Lucie, the Florida Keys, Tampa, St. Petersburg, Cape Coral, Sarasota, Gainesville, Jacksonville or an area within Miami, Fort Lauderdale or Palm Beach, if you sustain roof, tile, marble, window or other types of damage to your home due to a Hurricane, flood, hail storm, windstorm or fire, it is of prime importance to make sure one complies 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 cases above, namely, the providing of a sworn proof of loss. A homeowner should actually consult with a Florida Hurricane, storm or property damage insurance claim lawyer to make sure these policy provisions are complied with, thereby reducing the chance of coverage issues being raised.  At the end of the day, these coverage denials (will actually get a denied claim letter from your insurance carrier) and disputes may prevent you from being able to have a jury trial on your first party property damage insurance claim.

For additional analysis on policy conditions precedent and/or post loss obligations, and how failure to comply with same may affect one’s ability to file a first party lawsuit against their insurer, see my previous posts on Florida Hurricane Damage Supplemental Claims and Florida Hurricane Insurance Claims and providing notice of the loss to the insurer.

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