Every property insurance claim involves a “give-and-take” between the insured and the insurance carrier regarding their respective obligations under the insurance policy. For instance, upon discovery of the loss, the insured needs to act diligently in protecting the property against further damage, e.g., turn off the water supply, perform moisture remediation, tarp a leaking roof, etc. They must also report the loss promptly to their insurance company or agent and, among other things, keep an accurate record of repair expenses. The carrier, then, must do its job in responding promptly to communications from the insured, conducting a diligent investigation and adjustment of the loss, pay or deny the claim within 90 days (unless due to factors beyond its control), and attempt in good faith to settle the claim. See § 627.70131, Fla. Stat. And, above all, the insured and carrier must be truthful to one another. See, e.g., 200 Leslie Condo. Ass’n v. QBE Ins. Corp., 965 F. Supp. 2d 1386, 1403-04 (S.D. Fla. 2013); see also § 626.9541, Fla. Stat.

As attorneys, we commonly take on cases that feature failures on the part of both the insured and carrier to do what they are supposed to under the policy and Florida law. In addition to evaluating
the substance of the claim itself; was the coverage decision appropriate? Did the carrier pay enough? Identifying each and every policy obligation breach arguably committed by either side is a vital task in defending an insurance company against a lawsuit brought by the insured. In every case, you must make it a priority to firmly understand where your client may have erred. That way, you know exactly how much “glass” our house consists of before we begin slinging stones out the window at the insured. I then pick out each and every instance where the insured, their public adjuster and/or attorney, may have run afoul of their own duties under the policy. If a violation is egregious enough, certain failures may serve to bar the insured’s lawsuit and, possibly, discharge coverage in its entirety. This is especially the case in the instance of fraud. See Wong Ken v. State Farm Fire and Cas. Co., 685 So. 2d 1002 (Fla. 3d DCA 1997). Since “Florida law ‘abhors’ forfeiture of insurance coverage”, disposing of a case in this fashion is not exactly commonplace. American Integrity Ins. Co. v. Estrada, 276 So. 3d 905 (Fla. 3d DCA 2019) (citations omitted).

However, “prevailing” in a lawsuit does not always mean winning via a motion to dismiss, a motion for summary judgment, or at trial. Realistically, this most often involves negotiating a favorable and timely resolution on behalf of the client. To achieve this goal most consistently, whether on behalf of an insurance company or the insured, the attorney must approach every case as if it is going to trial. Since most cases do not contain a “smoking gun”, a good lawyer must build their case brick-by-brick. Constructing this type of defense based on policy-condition violations, even if any particular one is not severe, can leverage a favorable settlement, sway the jury at trial or, in some cases, obtain a voluntary dismissal. This approach comes in especially handy where issues
of coverage and damages are detrimental to the carrier.

The first thing to do when evaluating a new case is to create a chronology of the entire claim, from first notice of loss to the date suit was filed. As part of this, it is imperative to note the date the
loss was reported in relation to the when it occurred, and whether the insured took timely steps to mitigate further damage and make the property available for inspection. It is also important to document each and every request the carrier made to the insured, public adjuster, and/or lawyer, and exactly what was provided in response and when. Again, a late proof of loss or any one
particular policy violation is not likely to carry the day for the insurance company. However, it is a tough sell for an insured to commit multiple failures of its contracted policy obligations, and
then expect the carrier (and a jury) to disregard these failures and issue full payment on the claim. If a nicely-bundled package of multiple policy violations is presented during mediation or negotiations, the insured may face a difficult decision in turning down a reasonable settlement offer in lieu of marching forward and allowing the jury to learn of various policy compliance shortcomings.

To maintain credibility, it is also crucial for the carrier to show that it was responsive to the insured’s communications, inspected promptly, conducted a thorough investigation, and reached a timely claim decision. This is why, during the claims handling phase, documenting not only the insured’s policy condition violations, but the carrier’s own compliance and diligence, is paramount to preserving any policy-based arguments that may be available down the road. Simply memorializing telephone requests for an examination under oath, recorded statement, documents or information, by documenting them in the claim notes may not work. As many a young attorney and inexperienced adjuster often learns the hard way, if it cannot be evidenced in writing, it did not
happen. To effectively lean on a policy condition violation as a defense during litigation, the carrier should be able to show any requests were made in writing and sent to the correct physical
and/or email address. Any requests should also be clear and specific enough to allow the insured to understand what is asked for and respond appropriately.

Every case has its problems. However, it is rare we cannot find some issue to talk about in defending a first-party property claim. Often, this comes in the form of policy condition violations, which
are all-too-commonly ignored in the face of coverage and damages defenses. In most instances, however, some diligent and thorough claim handling in conjunction with good lawyering can
help resolve an otherwise dangerous claim before it turns into a lengthy and costly court battle.

William’s primary area of practice is first party property insurance litigation, both residential and commercial. He has significant experience in defending motor vehicle and premises liability injury claims, as well as third party property damage claims. Additionally, William is a member of KD’s First Party Practice Group comprised of attorneys from all firm locations who practice in first party insurance-related matters.