Plus, skipping insurance shopping
A definitive decision from Florida’s highest court on whether an appraisal can be ordered before coverage issues are decided on an insurance claim, food for thought on how to manage this decision, plus a market report shows the depth of discouragement by Florida homeowners and auto insurance policyholders. It’s all in this week’s Property Insurance News.
Ruling for Appraisal: The Florida Supreme Court ruled last week that courts can compel an appraisal of a policyholder’s property loss prior to resolving any pending coverage issues. Those issues include causation, misrepresentation, and general coverage under the policy. It has been common practice for Florida courts to deny a property owner’s motion to compel appraisal during a dispute with the insurance company, until defense arguments are heard and resolved on coverage questions.
The Supreme Court upheld the decision by the Second District Court of Appeal (DCA) to require appraisal in American Coastal Insurance Co. vs. San Marco Villas Condominium Association. Such decisions by the Second and Third DCA’s have been in conflict with those of the Fourth DCA. Willam Rabb, in his Insurance Journal article on the case provides an in-depth discussion about the ruling, complete with perspective and analysis by an insurance defense lawyer. William works hard to keep the industry informed and we appreciate his coverage.
Ruling Against Appraisal: The solution for an insurance company given the above case ruling may be tighter policy language. A federal court for the Middle District of Florida last week denied a policyholder’s motion to compel appraisal in a Hurricane Ian lawsuit for breach of insurance contract. In this case, a flood insurance policy survived scrutiny by the court because policy language “cannot be stretched to mean that appraisal can be invoked whenever the parties dispute which items of property were damaged or whether those items were in fact damaged by flood waters,” according to the ruling. You can read more about this case in attorney Kelly Vogt’s blog for Clausen Miller International.
Discouraged Insurance Consumers: It seems that the tighter Florida insurance marketplace with fewer carriers writing property insurance has caused some consumers to simply give up on the idea of shopping around for a better deal, despite high prices. JD Power’s 2023 Q4 report shows declines in shopping rates in both homeowners insurance and bundled home and auto insurance by Florida consumers. “It certainly appears as though emerging capacity constraints in California and Florida have impacted consumers’ ability and/or willingness to consider moving their auto or homeowners insurance,” according to the report. Florida has the highest property insurance prices in the nation and the highest or among the highest auto insurance prices, depending on the source.
2023 Shop Rates. Source: JD Powers
LMA Newsletter of 2-5-24
