Florida Property Insurance Mediation: Does a Residential Property Damage Insurance Company Waive Their Insurance Policy Right to Appraisal by Failing to Give Notice to Its Insured of the Property Insurance Mediation Program, Within Five Days of Notice of the Claim?

Florida property damage insurance claim_fightsforyou.netAccording to a recent case out the Third District Court of Appeal, no, provided the property damage insurance carrier does in fact notify their insured of the property insurance mediation program under Florida Statute 627.7015. In Subirats v. Fidelity Nat. Property, 106 So.3d 997 (Fla. 3d DCA 2013), a homeowner had a residential property insurance policy with Fidelity, upon which they presented a claim for water damage to their home due to a plumbing failure. Fidelity notified their insured in writing of their right to participate in mediation, pursuant to section 627.7015 of the Florida Statutes, and after completing their investigation, Fidelity tendered partial payment on the claim. After the fact, the homeowner’s public adjuster notified Fidelity that the insureds were invoking the appraisal provision within the insurance policy and provided the name of their selected appraiser. The homeowner’s appraiser and Fidelity’s appraiser met and agreed to an amount for the remainder of the claim although the homeowner’s appraiser failed to sign the appraisal award — Fidelity advised of the homeowner’s appraiser’s lack of cooperation, and informed them the claim would be considered abandoned if they did not respond. When neither their appraiser nor the homeowner responded, Fidelity closed its claim file.

Thereafter, the homeowner filed a lawsuit for breach of contract (presumably by way of a Florida water leak insurance claim attorney), which the trial court stayed pending completion of an appraisal. The homeowner contended in granting the stay that the trial court erred because Fidelity waived its right to appraisal by failing to notify them of the right to mediation within five days from the date the claim was filed, pursuant to Section 627.7015, Florida Statutes (2009), and Florida Administrative Code Rule 69J–166.031. The Appellate Court disagreed.  The Third District noted that pursuant to §627.7015(7), although a complete failure to give notice excuses an insured from participating in any contractual loss appraisal process, that failure to comply with the department’s administrative rule by providing notice within five days of notice of the claim (ie., Fla. Admin. R. 69J–166.031(4)(a)(1) – “Within five days of the insured filing a first-party claim which falls within the scope of this rule, the insurer shall notify the insured of their right to participate in this program.”) did not waive Fidelity’s right to the insurance contract’s appraisal process.

The Third District further noted that the purpose of the notice provision in section 627.7015, to wit, to prevent an insurer from withholding notification and thereby trapping “an uninformed insured into the very same potentially lengthy and costly appraisal process the statute was meant to guard against,” was not thwarted. In the instant case, Fidelity did not withhold notification or “trap” the homeowner into a lengthy and costly appraisal process — to the contrary, the insurer in this case did notify the homeowner of their right to avail themselves of the statutory mediation program albeit after the five day time frame referenced in Florida’s Administrative Code.

Moral of the Story: if you own a Florida condominium, Florida town home or other type of Florida residential property, should you happen to sustain water or mold damage due to a plumbing leak or other type of water leak, whether you live in Coral Springs, Cooper City, Hallandale, Boca Raton, Homestead, Brickell, South Beach, Key Biscayne, Weston, Pompano Beach, Tamarac, Plantation, West Kendall, Cutler Bay, Palmetto Bay, Doral, Delray, Deerfield Beach or another area within Miami, Fort Lauderdale or Palm Beach, or within Miami-Dade County, Broward County, Palm Beach County or Monroe County (especially Key Largo, Key West or Marathon), know that if your homeowners insurance carrier does not notify you of the Florida Property Insurance Mediation Program at all, that the Florida residential property damage insurance carrier may waive its rights to appraisal under the insurance policy pursuant to §627.7015, to which you as the homeowner can simply file a lawsuit for breach of contract and recover your damages via the court process (given any denial, delay, undervaluing or underpaying of your Florida water damage residential property claim).

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