Do policyholders should adjust to post-loss obligations anew when submitting new or completely different claims that materially differ in scope or worth from the unique declare submission? I reframed the problems to raised talk about an vital and up to date Florida determination. These points come up on a routine foundation, often as a result of harm is usually hidden or policyholders don’t absolutely examine for all harm, and insurers have little incentive to take action. There has not been an excessive amount of dialogue concerning the guidelines to be adopted when a lot of these claims points come up. Treasure Cay Condominium and Frontline Insurance coverage Firm have been litigating these actual points for years following a 2017 loss. Frontline seems to have gained the day primarily based on a latest appellate ruling that upholds a trial court docket victory. 1
The trial court docket concluded there was no dispute that, after submitting a roughly $3 million supplemental declare virtually two years after Frontline issued its protection place, Treasure Cay refused to take a seat for an examination beneath oath, declined re-inspection, and failed to provide data requested by Frontline. The trial court docket discovered that these post-loss duties beneath its coverage are circumstances precedent to go well with and are strengthened by the “Authorized Motion In opposition to Us” clause. As a result of these duties weren’t happy, the court docket dominated that appraisal was not ripe and Frontline was relieved of additional obligations on the supplemental declare.
What the trial court docket truly discovered issues as a result of the Florida Third District Court docket of Attraction (DCA) affirmed. After Treasure Cay submitted a roughly $3 million bundle two years after the storm and after Frontline discovered that the loss was lower than the deductible, the insurer handled this as a “supplemental declare” beneath Florida regulation. The trial court docket dominated that the insured’s demand for appraisal didn’t erase its post-loss duties. The trial court docket discovered there was no dispute that the insured refused to take a seat for an examination beneath oath, to permit re-inspection, and to provide data associated to the complement, and that this refusal materially breached the coverage and prejudiced the insurer. On that foundation, the trial court docket granted abstract judgment and entered last judgment for the insurer. 2
The policyholder’s core argument was that appraisal was ripe and necessary as soon as a real dispute over the quantity of loss existed. By the point appraisal was invoked, the insurer had inspected, adjusted under the deductible, and there have been no unmet post-loss obligations; the later doc requests and EUO demand had been characterised as belated and extreme. From that view, the trial court docket ought to have compelled appraisal, or at the least held an evidentiary listening to on substantial compliance as a result of Treasure Cay stated it had cooperated to a significant extent, and any remaining compliance questions had been truth points for trial.
The insurer’s response was blunt, searching for a ruling the place its consumer paid nothing. It argued that invoking appraisal doesn’t finish post-loss duties. As an alternative, the insurer claimed that the insured brazenly refused to conform after presenting a multimillion-dollar “supplemental declare” beneath Florida regulation.
The insurer argued that beneath Florida’s Third DCA’s prejudice framework, a whole refusal triggers a presumption of prejudice that the insured should overcome, and Treasure Cay provided no competent rebuttal of this presumed prejudice. As a result of the dispute was authorized somewhat than factual on this matter, no evidentiary listening to was required. It argued that the breach relieved the insurer of any additional obligations, together with appraisal, and warranted abstract judgment and no fee.
On attraction, the Florida Third DCA affirmed the trial court docket’s Order in a by the court docket trend and with out full rationalization of its reasoning. In doing so, the appellate court docket pointed on to prior case precedent and famous guidelines to be adopted. It famous that an insured’s failure to adjust to post-loss duties can relieve the provider of obligations on supplemental claims. It famous that trial courts can err by compelling appraisal earlier than these post-loss duties are happy. It appeared to focus on that an Examination Below Oath is a part of these materials post-loss duties. Considerably, it additionally famous precedent that requires a significant alternate of knowledge earlier than a real disagreement exists for appraisal to start out. These appear to be the sensible guidelines the appellate panel selected to focus on in affirming the trial court docket’s Order.
There are sensible classes for policyholders and their representatives. Once you file a brand new or materially expanded declare in scope or worth, and particularly if you’re submitting a “supplemental declare” beneath Florida regulation, it’s higher to deal with it as a restart of the adjustment course of. Count on and put together for renewed requests for examinations beneath oath, contemporary website inspections, and new requests for books and data tailor-made to the brand new scope or worth. Don’t situation cooperation on appraisal or litigation positions. As an alternative, cooperate in good religion whereas preserving rights. If essential, search protecting limits somewhat than refusing outright.
Some insurance coverage corporations are merely going to argue prejudice and can use the presumption of prejudice even when it doesn’t exist. They will even take forever-lasting investigations and bait annoyed policyholders into litigation. Be cautious about submitting a lawsuit too quickly. I’d recommend that policyholders and their representatives catalog all rebuttal proof to the bias presumption in actual time. This implies conserving and discovering as a lot contemporaneous proof and documentation of circumstances, repairs, and timelines so you’ll be able to present, not simply say, that the insurer’s potential to analyze has not been impaired. I’d assume that courts will apply the presumption of prejudice rule precedent to require post-loss compliance earlier than appraisal, and {that a} refusal to cooperate and support the insurer in its investigation dangers forfeiture.
It’s a troublesome ending. This was high-risk litigation, expertly briefed and argued on each side, that in the end resulted within the forfeiture of a $3 million declare as a result of the refusal to adjust to post-loss duties after a supplemental presentation was deemed a cloth breach with presumed, unrebutted prejudice. The regulation the Third DCA selected to emphasise tells you why the result held—and what future policyholders should do otherwise to keep away from the identical destiny.
This case is a tough learn as a result of everybody lawyering it did sturdy work. I do know, and have real respect for, each the policyholder’s counsel and the insurer’s counsel. The briefing was considerate, the arguments had been crisp, and the stakes had been huge. The consequence reveals how shortly a high-dollar declare could be misplaced when cooperation turns into the bargaining chip in an insurance coverage declare dispute.
I’ve written many articles about post-loss obligations. The one on my thoughts most related to this submit is “What’s The Upside To Refusing To Seem At an Examination Below Oath?” the place I said:
I’m scripting this as a result of I routinely discipline questions asking if policyholders can refuse to go to an examination beneath oath or asking for causes which may defeat the insurer’s demand. Whereas policyholders might win the authorized argument for avoidance, policyholders mustn’t place themselves in that place if they will keep away from it. Until there are prison implications by giving the testimony, it’s an ‘every thing to lose and nothing to be gained’ from refusing to attend an examination beneath oath.
For some insurance coverage corporations and their counsel, this “you soar and I’ll let you know how excessive otherwise you lose your proper to convey a declare” place leads to endless claims investigations and refusals to take a claims place as a result of there’s at all times one thing extra that must be offered and requested. The courts and insurance coverage regulators must be cautious of this abuse as effectively and make sure there are vital cures for claims delays brought on by a lot of these actors.
Thought for the Day
“By failing to organize, you might be getting ready to fail.”
– Benjamin Franklin
1 Treasure Cay Condominium Affiliation v. Frontline Ins. Limitless Co.No. 3D-24-1196 (Fla. 3d DCA Oct. 1, 2025).
2 Treasure Cay Condominium Affiliation v. Frontline Ins. Limitless Co.No. 19-CA-000269 (Fla. Cir. Ct. – 16th Judicial Cir. June 7, 2024).
