Court sides with homeowners
Insurer found responsible for paying for wind, flood damage
as posted at www.pensacolanewsjournal.com
October, 28, 2006
by Paige St. John
TALLAHASSEE — A Florida appellate court has sided with homeowners in ruling that insurance companies are responsible for paying for wind and flood damage when a hurricane destroys a home.
Pensacola attorney Charles Beall, who represented a Santa Rosa County couple whose home was destroyed by Hurricane Ivan in 2004, called the ruling "huge." The decision was released Friday.
"Obviously, we are pleased, but I doubt the fight is over," Beall said. "I fully expect the insurance companies to fight to the bitter end."
The 2-1 decision by the 1st District Court of Appeal finds that Florida Farm Bureau Casualty Insurance must pay policy limits for homes destroyed by a hurricane, even if a majority of the damage was caused by floodwater.
The ruling is important for homeowners with claims from 2004 hurricanes, including hundreds with similar claims against Citizens Property Insurance and who have their own class-action lawsuit.
In 2005, the Legislature changed the law that is the basis of the suit in a way that bars similar claims for future storms.
Farm Bureau's lawyer, Mark Upton of Daphne, Ala., was traveling Friday and could not be reached for comment.
Ivan destroyed Eugene and Debra Cox's $65,000 Blackwater Bay home. The couple had no flood insurance.
They filed a claim with Farm Bureau for the limits of their policy coverage, which Farm Bureau rejected, saying wind and flood contributed to the home's destruction. The company offered to pay only the amount attributable to wind damage.
Santa Rosa County Circuit Judge Ron Swanson ruled in August 2005 that the company was responsible for the destroyed home -- in keeping with the Mierzwa decision in a controversial South Florida ruling on a much-older, but similar, hurricane insurance case.
Insurers argue they shouldn't be held responsible for water-related risks for which they have not also charged premiums.
The appellate court ruled that insurers cannot exclude paying for losses they determine were caused by water damage when they are paying for a home destroyed in a hurricane.
Insurance companies contested lower-court rulings to the contrary and succeeded in persuading the Legislature in 2005 to change Florida law to make it clear they don't have to pay full damages.
A separate case still is ongoing between Citizens Property Insurance and its customers. The state-run insurer of last resort contends it is not governed by the same insurance laws as private insurers, and therefore is exempt from the old "total damages" law.
"We don't have an opinion," Citizens' spokesman Rocky Scott said.
Lower courts in South Florida, Escambia and Leon County have ruled otherwise against Citizens.
The case still can be appealed to the Florida Supreme Court.
United Policyholders is a non-profit organization founded in 1991 and dedicated to educating the public on insurance issues and consumer rights. UP publishes educational materials and serves as a resource for individual and business policyholders and residents of communities with insurance problems. UP’s Amicus Project provides information to courts of law to support policyholders’ legal rights. UP unites policyholders and their advocates by sharing information. Write to UP at 110 Pacific Ave., PMB 262, San Francisco, CA. 94111, call us at (510) 763-9740, or visit our website at www.unitedpolicyholders.org.
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