Was There a Breakdown in the Claims Adjusting Process? Was the Suit a Necessary Catalyst?

On January 11, 2023, Florida’s Fourth District Court of Appeal reversed an order granting the insured attorney’s fees and costs associated with his suit for breach of insurance contract because it found the insured never informed the insurer that he disputed its estimate or coverage determination prior to filing suit. Read on to learn more!

The insured filed a claim with his homeowner’s insurer, People’s Trust, for Hurricane Irma damage. People’s Trust sent its estimate and coverage determination letter, which stated certain damages were covered and other damages not covered. People’s Trust admitted coverage for damage to the insured’s soffit and fascia and determined the the cost of repair did not exceed the insured’s deductible. People’s Trust denied coverage for the roof stating Irma was not the cause of the roof damage and also denied coverage for the interior water damage.

Significant to the Opinion is this: The 4DCA noted that the insured never informed People’s Trust that he disputed its estimate or coverage determination. It also noted he did not send People’s Trust a competing estimate or a completed sworn proof of loss. Rather, the insured filed a suit for breach of insurance contract. 

People’s Trust ultimately moved to compel appraisal, and an appraisal award was eventually entered in favor of the insured. The Fourth District reversed the trial court’s order granting the insured attorney’s fees and costs associated with his suit for breach of insurance contract. It determined the suit was not “a necessary catalyst to resolve the dispute” nor was there a “breakdown in the claims adjusting process” because there was no prior dispute as to the amount owed.

You can read the opinion here: PEOPLE’S TRUST INSURANCE COMPANY v. ERROL A. POLANCO, No. 4D22-559 

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