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Florida Homeowners Insurance Lawyers Explain Why Legitimate Insurance Claims Disputes Often Turn on Technical Non-Compliance Rather Than the Substantive Merits of the Claim

While many homeowners pursue insurance claims for damage to their home without an experienced Miami homeowners insurance claims attorney, the technical requirements of pursuing legal remedies can make this a costly decision.  Florida insurance law involves many hypertechnical procedural and administrative requirements that can derail a valid claim.  These procedural hurdles frequently are compounded by technical minutia inserted into insurance policies that homeowners do not notice as their eyes glaze over while reading page after page of complex legal terminology.  These complicated procedural requirements might even be subject to strict timing requirements.

In this blog, our Florida homeowner insurance property damage attorneys review a case decided by the 4th District Court of Appeal of Florida, State Farm Florida Insurance v. Lime Bay Condominium, Inc.  The case provides an example of the importance of timely compliance with a notice requirement associated with the appraisal process.  The insured submitted a claim for replacement of the roof of a condominium complex after damage caused by a hurricane.  The insured submitted an estimate for repair amounting to $1.5 million.  State Farm conducted several inspections and concluded that the roof needed repair rather than replacement.  The insurer tendered $6,940 to the insured to cover the repairs in September 2006.

The insured filed a Civil Remedy Notice in February 2007, indicating an intention to file a lawsuit for breach of contract.  State Farm responded with a notice demanding an appraisal under the policy.  Lime Bay indicated it was not obliged to participate in the appraisal process because State Farm did not provide proof of compliance with the mediation notice requirement outlined in Subsection 627.7015(2), Florida Statutes (2012).  This provision requires the following: “At the time a first-party claim within the scope of this section is filed by the policyholder, the insurer shall notify the policyholder of its right to participate in the mediation program under this section.”

Lime Bay subsequently filed a breach of contract lawsuit before participating in appraisal proceedings.  The trial court abated the litigation to allow appraisal to proceed.  The insured received an appraisal award of $1.1 million.  The insured filed a motion to confirm the appraisal award, as well as for final judgment and attorney fees.  State Farm sought summary judgment based on the contention that the claim had been fully resolved through appraisal under the insurance policy, and the insurer paid the award.  Based on participation and payment of the appraisal award, State Farm contended it did not breach the terms of the insurance policy.  The trial court granted the insured’s motion and denied State Farm’s request.  The court reasoned that the insurer failed to comply with the requirement of providing mediation notice under section 626.7015.

On appeal, the 4th DCA initially noted that a “confession of judgment” generally does not require an insurer to pay the insured’s attorney fees unless the insured is forced to file a lawsuit to obtain benefits under the policy.  State Farm contended that Lime Bay breached the policy by filing its lawsuit before appraisal despite the fact the insurer invoked the appraisal provision.  The appraisal provision provided in pertinent part:

“If we and you disagree on the value of the property or the amount of loss, either may make written demand for an appraisal of the loss . . .

No one may bring legal action against us under this insurance unless:

  • There has been full compliance with all of the terms of the insurance.”

The insurance carrier contended that this language read together required the insured to participate in arbitration before filing its lawsuit.  The policyholders responded that they were not obligated to participate in the appraisal process because State Farm failed to provide notice of the insured’s mediation rights under section 626.7015.  State Farm disputed this contention by arguing that it provided notice in letters sent to the insured in March and May of 2006.  The insured argued these letters did not provide effective notice because they were untimely.  The relevant statutory language required notice to be provided “at the time of the first-party claim” according to the policyholder, so notice five months after the claim was filed violated the timing requirement.

However, the court rejected this position and sided with the insurance carrier indicating that the notice requirement does not arise until the insurer is on notice that a claims dispute has arisen.  The dispute did not become apparent until the insured rejected the repair remedy offered by State Farm, so the notice letters were provided shortly after the insurer was aware of a claims dispute.

This case demonstrates the importance of complying with notice requirements when the obligation to provide notice arises.  These kinds of details have no relationship to whether the insured suffered a covered loss, the amount of that loss, or State Farm’s conduct in offering a settlement amount far less than the appraisal award.  Although this may appear unfair to the insured, Florida insurance law is filled with such requirements.  The best approach to avoiding such pitfalls when pursuing your insurance claim is to seek prompt legal advice from an experienced Florida insurance claims attorney.

Greenberg, Stone, & Urbano:  Seeking Maximum Recovery for Policyholders from Homeowners Insurance Companies

Our Miami homeowners insurance claims attorneys at Greenberg, Stone & Urbano will tenaciously pursue the full compensation you deserve.  For over 130 collective years, our firm has assisted homeowners in pursuing insurance claims.  We seek to obtain compensation for your tangible and intangible damages.  Our skill and dedication have 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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