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Category: Property Insurance

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What is an Appraisal Clause and How Does it Work?

Fri Nov 23rd, 2018 on     Property Insurance,    

In Florida — as in other states — attempting to recover fully for your property losses can be quite a challenge.  Insurers understand that you may be in a vulnerable position, and they may take advantage by undervaluing your property losses or by otherwise appraising the property at issue in a way that creates an even more lopsided dynamic. If you find yourself disagreeing with your insurer over the value of your property losses, then you may want to explore the insurance appraisal process.  “Appraisal” is an alternative dispute resolution process that is included in many property insurance policies as a voluntary option in the event of a disagreement.  It’s important to note that appraisal is not a panacea — it is problematic in many ways, though (depending on the circumstances) you may want to consider the option. Let’s take a closer look. Understanding the Appraisal Process The appraisal clause in a property insurance policy allows the policyholder to demand an appraisal of the loss when there is a disagreement.  Each party selects a competent and impartial appraiser to separately evaluate the amount of the loss at-issue.  A neutral umpire is also selected — this umpire will determine the correct amount of the loss if the two impartial appraisers cannot come to an agreement. Appraisal is binding, which is to say that the amount determined by the umpire must be accepted by each disputing party (the policyholder and the insurer). Given the high stakes of appraisal, it’s important to work […]

Benefits Available in a Property Insurance Claim

Fri Oct 26th, 2018 on     Property Insurance,    

Property insurance claims can leave many policyholders feeling vulnerable, and for good reason.  Whether they have had their home destroyed in a natural disaster, or have had their vehicle totaled in an accident, the policyholder may find that the property insurer is rather aggressive in denying, undervaluing, or otherwise mishandling their claim for benefits — given how difficult their circumstances may be at such a time, the adverse decisions of their insurer can deepen the already-significant emotional challenge. Let’s take a look at the benefits that you might be entitled to receive as a property insurance claimant. Property Insurance Benefits May Cover a Range of Losses Property insurance policies vary significantly from plan-to-plan, so there is really no “one size fits all” explanation that will be suitable for all claimants.  If you paid for a high-end homeowner’s insurance plan, for example, then your plan may feature a provision that grants you loss of use benefits, whereas if you paid for a cheaper plan, then it may lack such coverage. Loss of Use Loss of use coverage will grant you benefits to cover losses associated with: Having to rent another property to use in the interim period (until repairs can be performed, or a replacement is found) Costs for relocation Increased costs of living Storage costs For example, if you lose access to your house due to a natural disaster that destroys most of the home, then you may submit a claim and receive benefits for loss of use to cover […]

Diminution in Value and Securing Maximum Benefits

Fri Sep 28th, 2018 on     Property Insurance,    

If you are involved in a dispute with your insurer over benefits owed in the event that your property has diminished in value (following an accident), then you may be entitled to bring an action against the insurer to secure the desired benefits.  Effectively bringing a diminished value claim can be quite a challenge, however, given that Florida law does not allow such benefits recovery by default unless the insurance policy specifically empowers the claimant to recover benefits for diminution in value. What is diminution in value? Generally speaking, property — such as a motor vehicle — tends to lose value after an accident.  If it has not been adequately repaired, then the loss of value is quite obvious.  On the other hand, even if it has been repaired perfectly and returned to a condition that is otherwise impossible to differentiate from “new,” the property will lose at least some of its original value.  Purchasers who become aware of the fact that a motor vehicle has an accident history are less likely to pay as much for the vehicle than if it had not been involved in accident.  This is a fairly well-studied trend in purchasing. Given the likelihood that your property has diminished in value, adequate compensation must account for such loss.  If you are submitting a benefits claim with your insurer, then you may be wondering whether you are entitled to recover benefits that cover the diminished value of your property. Let’s take a look. Availability of First-Party […]

Can You Make a Property Insurance Claim That Includes Damage for Loss of Use?

Fri May 11th, 2018 on     Property Insurance,    

In Florida, where hurricanes, tropical storms, and other natural disasters are a regular feature of life, property insurance claims frequently involve “loss of use” coverage issues.  Standard property insurance coverage does not necessarily cover all the various losses suffered by a policyholder.  Loss of use coverage — which may be its own separate policy, or simply a provision built into an existing homeowner’s insurance or renter’s insurance policy — helps fill in the gaps, so to speak. What is the Purpose of Loss of Use Coverage, Exactly? Loss of use coverage is rather straightforward in terms of its function — simply put, it is designed to account for losses related to the policyholder’s inability to make normal use of the property.  What constitutes “use” will vary depending on the policy and depending on the particular nature of the loss. Generally speaking, most loss of use coverage makes provisions for benefits in three different and broadly-applicable situations: Heightened cost of living Loss of rental income Legal prohibition on access All this legalese may seem confusing at first glance, so let’s do a brief walk-through of some examples to clarify how it all works. Suppose that you have loss of use coverage through your existing homeowner’s insurance policy.  One day, your primary residence is severely damaged by a hurricane, and as a consequence, you are forced to move out and seek out an alternative residence (at least temporarily). The damage to your residence is significant enough that it will take up to […]

Florida Property Insurers Must Cover Damage to Personal Property Too

Fri Mar 16th, 2018 on     Property Insurance,    

Usually, property loss does not involve exclusive damage to the dwelling unit itself — there may also be damage to other, non-dwelling structures (such as a fence around the property), or more commonly, to items of personal property that also reside within the dwelling.  In some cases, the personal property of the policyholder may be of significant value, and as such, their loss may expose the policyholder to unexpected financial vulnerability. For example, suppose that you own a number of antiques of significant value.  You intend to sell them to help pay for your child’s college tuition fees.  One day, however, a fire destroys much of your home, and the antiques are damaged beyond repair.  Their value is lost in an instant.  If the insurer does not provide adequate coverage that accounts for the losses you sustained due to the damage to your personal property, then you could be left in a very challenging financial position. If you have valuable personal property, it’s therefore critical that you consult with an experienced Miami property insurance lawyer for guidance. Duty to Cover Losses Sustained Personal Property In Florida, insurance companies providing homeowner’s insurance must grant policyholders coverage for their personal property, though limits on such recovery are frequently written into the policy to minimize the insurer’s eventual liabilities. It’s worth noting that Florida law requires insurers to give a policyholder the option to exclude their personal property from coverage (so long as the policyholder gives a formal, written statement of intent).  Excluding […]

Property Insurance Provisions Must Be Construed in Favor of Coverage

Wed Feb 14th, 2018 on     Property Insurance,    

If you are challenging the wrongful denial of your property insurance claim, the insurer is likely to assert that the language in the insurance contract is rather ambiguous, and that it should be interpreted in a manner that favors them. For example, suppose that your property insurance contract includes various provisions that exclude lightning damage from coverage.  A tree near your house is hit by lightning, which results in a fire.  The fire then spreads to your house, causing it to burn down.  Would you be entitled to make a property insurance claim, given the exclusionary provision at-issue?  The insurer is likely to argue no.  On the other hand, the provision is rather ambiguous with regard to the chain of causation.  It could be argued that the damage was not directly caused by the lightning, but instead by fire, which is covered. Ambiguity has often been used by insurers to entice policyholders into signing, only later to be construed in a manner that retracts coverage, thus minimizing the potential liabilities for the insurer.  Fortunately, Florida case law favors policyholders in the interpretation of ambiguous policy language.  Let’s take a quick look. Ambiguous Property Insurance Provisions Must Be Construed in Favor of Coverage In Florida, ambiguous provisions — where true ambiguity exists — of an insurance policy must be liberally construed in favor of the policyholder (coverage), and strictly construed against the insurer.  As the policyholder, this is highly protective and is likely to benefit you when it comes to litigation […]

You Have a Duty to Mitigate Losses

Fri Jan 26th, 2018 on     Property Insurance,    

Property insurance policyholders have an obligation to mitigate their losses whether they’re in Florida or any other jurisdiction.  Failure to mitigate such losses can have a myriad negative consequences for the would-be claimant, up to and including a relinquishment of reimbursement rights under the insurance contract.  As such, if you have suffered various property losses for which you are entitled to be paid out, it’s important to consult with an experienced property insurance attorney as soon as is practicable — your attorney will help you identify the steps you can take to ensure that you have expended reasonable mitigation efforts, and that you remain qualified to make a claim for such property losses (pursuant to your coverage plan). Mitigation Basics All property insurance policyholders have a duty to mitigate their losses in the wake of some adverse event that causes covered losses.  Though the specific obligations imposed upon the policyholder may differ from plan to plan, as a general rule, policyholders are expected to make reasonable efforts to mitigate losses to the extent possible. Reasonable mitigation efforts do not require that you exert unlimited efforts in order to prevent further losses.  What is deemed “reasonable” will depend largely on the circumstances.  Exposing yourself to significant harm is not required, nor is the exertion of effort that may confound your abilities. For example, suppose that a tree has fallen onto your house during hurricane-force winds.  Substantial damage has been caused to your house.  When the tree fell, however, an additional nearby […]

Exclusionary Clauses in Property Insurance Policies

Fri Jan 5th, 2018 on     Property Insurance,    

In Florida, as is the case in other jurisdictions, almost all property insurance coverage includes exclusionary clauses that are meant to constrict the ability of policyholders to claim a covered loss.  Depending on the language of the insurance contract at-issue, your claim may be clearly excluded from coverage, or the exclusionary clause may be ambiguous enough that a skilled attorney can convince a court of law to find on your behalf. Fortunately for Florida policyholders, ambiguities in the language of the exclusionary clause are more favorably interpreted for the policyholders, as opposed to the insurer.  Let’s take a look at how it all works. Ambiguities and Exclusionary Clauses in Florida According to the Florida Supreme Court in Swire Pacific Holdings, Inc. v. Zurich Insurance Company, an established principle of insurance law is that — where the insurance contract may be construed either as providing or limiting coverage — the particularities of coverage must be strictly construed against the insurer.  More specifically, exclusionary clauses are construed even more strictly against the insurer than coverage clauses.  As such, ambiguities in the language of your exclusionary clause are much more likely to be construed in your favor.  An insurer cannot therefore benefit from ambiguous exclusionary clauses in the insurance contract that are intended to induce you into entering the contract, only to later interpret them in ways that circumscribe coverage and prevent you from claiming a loss. The Concurrent Cause Doctrine In Florida, the concurrent cause doctrine is applied when there are independent […]

Homeowner Loss Assessment Factors

Fri Oct 13th, 2017 on     Property Insurance,    

Most people — and especially in Florida, where tropical storms and hurricanes are a regular threat — purchase home insurance under the assumption that their insurer will make reasonable attempts to compensate them when something goes wrong and they suffer property damage.  The unfortunate reality, however, is that insurers (even in the homeowner insurance context) are in the business of minimizing their claim payouts.  If you’ve suffered property losses to your home, you may find that your insurer makes you a lowball offer, or denies your claim entirely.  In some (rare) cases, your insurer may even fail to make payments after reaching a settlement. A number of different factors can negatively affect the likelihood that an insurer will settle a claim for a reasonable value.  Consider the following non-exhaustive list. Failure to Mitigate Homeowners have a responsibility to make reasonable efforts to mitigate damages and protect their home from suffering further damages, where possible.  This may involve repairs.  For example, a homeowner cannot knowingly allow wood rot to destroy their home without making reasonable efforts to prevent the spread (perhaps by hiring a contractor to treat the rot and repair the damaged areas). Partial or Non-Disclosure of Facts Your homeowner insurance policy application should have contained a full disclosure of all material facts pertaining to the property.  If certain relevant facts were not disclosed in the application, the insurer may use that as justification to deny your claim. Event is Not Covered by the Policy Whether a given event is […]

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