How long must a homeowner wait before filing suit against an insurer who disputes the amount of insurance coverage?
Florida’s Second District Court of Appeal has reversed a summary judgment issued by a Pasco County court in favor of insurer Tower Hill Prime Insurance Co. and remanded the insurance coverage case for further legal proceedings.
Homeowners sued Tower Hill for breach of contract when it refused to pay their property insurance claim for sinkhole damage to their home. Tower Hill had agreed that a sinkhole was the cause of their damage, but its estimates of the cost of structural and cosmetic repairs to the home were significantly lower than estimates obtained by the homeowners. Tower Hill’s estimates were approximately $95,000, while the homeowners were told the cost could range from $193,000 to $342,000.
When it received the homeowners’ estimates, Tower Hill asked for a neutral evaluation. The homeowners, however, filed a lawsuit. The insurer then filed motions for summary judgment and succeeded in obtaining one.
In one motion, the property insurance company argued that the sinkhole damage claim was premature. Under the terms of the insurance policy, payment was not yet due; therefore, Tower Hill was not yet in breach of contract.
In its reversal of the summary judgment, however, the Second District Court of Appeal rejected this argument. According to the court, the “loss-payment provision” in the homeowners’ insurance policy permitted a suit before payment was due. The court also stated that when a carrier admits coverage in these circumstances, a summary judgment should not be granted, even if the suit is premature.
Tower Hill also said that Florida’s neutral evaluation statute and the insurance policy’s “Suit Against Us” provision impose a stay on litigation until after a neutral evaluation is complete and the neutral evaluator’s report has been filed with the court. The appeals court rejected this reading of the language, however, and did not agree that the filing of a lawsuit was barred.
The court also rejected Tower Hill’s allegation that the homeowners violated a “Duties After Loss” provision in their policy by not cooperating with the contractor Tower Hill had sent to estimate their home’s cosmetic damage. The lower court had rejected this argument as well.
The case will now return to the trial court, where it may go forward.
Insurance companies are daunting opponents, and getting the coverage to which you are entitled requires a tough, effective advocate who has mastered the terms of your insurance policy and the applicable law. Experienced, Tampa, Florida-based property insurance attorney Jeff Pekar has won victories at trial and in settlements for clients with all types of property and casualty insurance claims, including sinkhole damage. For a free initial consultation, call (813)712-8762 today.