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The Importance of Deadlines When Pursuing a Homeowner’s Insurance Claim

Deadlines and timing requirements can have a profound impact on the outcome of a property damage claim under a homeowner’s insurance policy.  Whether the timeline is imposed by a policy provision or Florida law, close attention must be focused on all potential deadlines when pursuing an insurance claim.  Insurance carriers increase their profits by mitigating liability for claims, so insurance company representatives cannot be relied on to guide insurers through the claims process.  The recent Florida 2nd DCA case of Axis Surplus Insurance Company v. Caribbean Beach Club Association, Inc. provides an example of an insurer’s attempt to use timing deadlines to avoid paying a legitimate claim.

The policyholder brought a damage claim after the property was subject to devastating fire damage.  While the policy covered fire damage, it excluded coverage for supplemental costs associated with bringing a structure into compliance with building codes.  However, the insured purchased an endorsement covering Ordinance or Law Coverage with a policy limit of $2,500,000 subject to an additional premium.  The special endorsement did not authorize payment until the repairs were completed, and the repairs had to be made within two years of the date of loss.  The policy provided that this deadline could be extended in writing by the insurance carrier prior to expiration of the two year period.

The insurer worked with the policyholder initially in handling the fire damage claim.  The insured expressed concerns that Lee County would enforce an ordinance referred to as the “fifty percent rule”.  Under the ordinance, a property owner was required to bring a grandfathered property into compliance with existing laws and building codes if more than fifty percent of the property had to be rebuilt.  The insured recognized that enforcement of the fifty percent rule would mean that the entire building would need to be elevated to comply with flood standards.

The insured informed the insurance company after being notified by Lee County that the fifty percent rule was being enforced.  This notice to the insurer was provided 19 months after the original date of loss.  The insurance company and property owner continued to coordinate efforts to effect repairs.  The insurer was clearly aware that the insured retained a contracting firm to perform all work, which included bringing the structure into compliance with flood elevations standards.  The insured informed the carrier that the repairs would take an additional year to complete.  The insurer was provided with the projected invoice amounting to $2.8 million, and the carrier understood that the insured believed the insurer planned to cover the entire cost.

The parties worked together consistently for 26 months from the date of loss.  At that point, the insurance company noticed the policyholder that the carrier would not cover the cost of construction associated with bringing the property into code compliance.  The insurer invoked the two year time limit for completing repairs as the basis for denial of the claim.

On appeal, the court upheld summary judgment in favor of the insured on two grounds.  First, the court found that the carrier did not suffer any prejudice given the extensive collaboration in handling the claim during the two year period following the loss.  Second, the insurer waived the two year time limit by failing to raise the issue at an earlier stage of the claims process.  The court noted the insured paid an additional premium to purchase the law and ordinance coverage.

Although the court found that the insurance company waived the policy deadline in this situation, this type of outcome is fairly rare.  Policyholders often are denied recovery under their insurance contract because they fail to comply with critical timing requirements.  An experienced Florida homeowner’s insurance attorney can guide policyholders through the claims process and past this type of potential pitfall.

Greenberg Stone and Urbano:  Seeking Maximum Recovery for Policyholders from Homeowner’s Insurance Companies

If your homeowner’s insurance company is engaging in sharp practices, our Miami Homeowner’s Insurance Lawyers at Greenberg Stone and Urbano tenaciously pursue the full value of our clients’ claims.  For over 130 collective years, our firm has assisted accident victims in personal injury and wrongful death actions across South Florida.  We seek to obtain compensation for your tangible and intangible damages, including medical bills, lost wages, pain and suffering, and more.  Our skill and dedication has earned us an AV rating from Martindale Hubbell and recognition as one of South Florida’s top firms by the Miami Herald.   Call us at (888) 499-9700 or (305) 595-2400 or visit our website to schedule your initial consultation.


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