Yesterday’s choice from Florida’s First District Courtroom of Attraction, Bailetti v. Common Property & Casualty Insurance coverage Firm, 1 highlights an more and more troublesome hurdle for policyholders who declare their insurer breached the coverage by underpaying a loss. Whereas I criticize the ruling and disagree with the precedent it has created, this is a crucial case for all who’re concerned in Florida property insurance coverage claims. It ought to be learn rigorously, because it supplies sensible classes about what to do earlier than submitting a lawsuit.
The case arose from Hurricane Sally harm to a Pensacola residence. The householders, Rodolfo Bailetti and Ana Saez, acquired a fee from Common for $8,125.20 based mostly on its discipline adjuster’s estimate. Their public adjuster believed the loss exceeded that determine by greater than $100,000, however his estimate was by no means launched into proof at trial. The householders filed a breach of contract lawsuit about 4 months after receiving the precise money worth fee, earlier than doing any important repairs.
The appellate court docket affirmed a protection verdict for Common, discovering that the insureds did not show the corporate breached the contract after they filed swimsuit. Common had paid the precise money worth, or ACV, based mostly on its adjuster’s estimate. Beneath part 627.7011(3)(a) of the Florida Statutes and the “Loss Settlement” clause within the coverage, the insurer is required to initially pay the ACV of the insured loss, after which pay any remaining substitute price quantities as repairs are carried out and bills are incurred.
The court docket reasoned that as a result of Common paid its ACV estimate and the householders supplied no proof at the moment displaying the precise money worth fee was inadequate and that no substitute price advantages have been due, there was no breach. Later estimates produced years after the loss and simply earlier than trial couldn’t show the insurer’s earlier precise money worth fee was insufficient when made.
In essence, the court docket held that the insurer meets its contractual obligation by paying a minimum of one cheap ACV estimate. As soon as that happens, the burden shifts to the insured to show that the fee did not replicate the complete precise money worth loss. With out well timed proof displaying that Common’s ACV was too low, the court docket concluded that the policyholders couldn’t prevail. The choice additionally relied on the court docket’s earlier opinion in Owners Selection v. Clarkreinforcing {that a} mere disagreement over the quantity owed, unsupported by contemporaneous proof, doesn’t set up a breach.
I don’t agree with the end result. The coverage doesn’t require a policyholder to rebuild or make repairs earlier than being entitled to the complete quantity of precise money worth fee due below the contract. Many policyholders can not start repairs when the insurer’s fee is much too small to begin the method. To require proof of incurred bills or accomplished work earlier than discovering a breach locations an unrealistic burden on householders, particularly after a catastrophic loss. If a policyholder can show that the insurer owes extra money below the phrases of the coverage, that ought to be sufficient. Partial funds which are too low by an insurer, even at precise money worth, shouldn’t excuse the duty to pay the complete quantity of the lined loss. If extra is owed, and situations precedent to restoration are met or waived, the insurer’s personal underpayment, if confirmed to be an underpayment, ought to be sufficient.
Nonetheless, the Bailet choice stands as an necessary lesson to policyholders and their attorneys that in Florida, courts are more and more targeted on the timing and sufficiency of proof when evaluating breach of contract claims. Submitting swimsuit earlier than gathering stable proof that the insurer’s fee failed to satisfy the ACV requirement may end up in dropping the case altogether, even when the insurer’s preliminary estimate was later proven to be poor.
My suggestion is to write down letters explaining the dispute and disagreement with proof and the reason why the insurance coverage firm’s place is flawed. This ought to be performed earlier than submitting swimsuit. That is good apply generally achieved by all competent attorneys in search of to resolve the matter out of the courtroom.
Thought For The Day
“It’s not solely what we do, but additionally what we don’t do, for which we’re accountable.”
— Molière
1 Bailetti v. Common Prop. & Cas. Ins. Co.No. 1D2024-1695 (Fla. 1st DCA Oct. 8, 2025).
