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Assessment of additional claims – are additional claims part of the loss? | Property Insurance Law Team Blog



When I first started in this industry in the early 1980s, there was no such thing as a “complementary” requirement. “Supplemental claim” is a new legal concept for property insurance laws made by the Florida Insurance Company, Office of Insurance Regulation, and codified by Florida lawmakers, which does not exist in the United States other than Florida.

The formal terminology for an “additional claim” came from insurance lobbyists who sought to shorten the claims claims for damages found after an initial notice of loss. Florida now has a fairly recent claim for loss with provisions for “supplementary”

; and “resumed claims” – conditions for property insurance that are not found anywhere else in U.S. law other than Florida. This Notices Act provides:

627.70132 Notification of non-life insurance.—

(1) As used in this section, the term:

(a) “Resumed claim” means a claim previously completed by an insurer, but resumed at the request of an insured for additional costs of loss or damage previously disclosed to the insurer.

(b) “additional claim” means a claim for additional loss or damage from the same hazard previously adjusted by the insurer or for which costs have been incurred during the completion of repairs or replacement in accordance with an open claim previously notified in due time to the insurer.

(2) A claim or resumed claim, but not a supplementary claim, under an insurance providing property insurance, as defined in page 624.604, including a property insurance issued by a qualified surplus insurer, for loss or damage caused by any danger is blocked unless if the claim has been submitted to the insurer in accordance with the terms of the insurance within 2 years after the date of loss. An additional claim is statute-barred unless notice of the additional claim has been submitted to the insurer in accordance with the terms of the insurance within 3 years after the date of the claim.

I was very much in Tallahassee during the time this language was first offered in law. There was a lot of talk about entrepreneurs often making an “addition” to their estimates. There was a lot of talk about losses where more money was demanded in what became known as an “additional claim.” I kept saying that everyone invented something – the loss is the loss, and people simply ask for greater benefits if they discover more damage or when more damage occurs, for example in the event of business interruption or extra cost of living – but we took back new conditions such as simply did not exist in the law for the insurance companies to find another way to refuse to pay for the entire loss. The whole legislative process of creating these new concepts and formalizing the slang used in the adjustment field was a mess.

After hurricanes, Florida insurance companies are trying to make the CFO and insurance chief look good by faking claims and providing stupid and completely false statistics about the number of closed claims files. After listening to the recently appointed Insurance Commissioner Altmaier rattle in front of a legislative committee in Florida about these fake statistics, which made it look like the insurance industry reacted quickly to Hurricane Irma, I stood up and explained how stupid they really were. I mentioned this problem right after Hurricane Irma Hurricane Irma claims statistics released by the Florida Department of Insuranceand said:

Insurance departments love to quote high percentages and quick claims closures. These civil servants should try to ensure prompt payment and full payment of claims and prevent consumers from being abused. They should not invent or accept false statistics just to make themselves look good.

As a result of pressure to provide favorable claims information to the Florida Office of Insurance Regulation and to get the insurance commissioner to do a “bloated” job in a timely manner and take full care of Florida policyholders, insurers had to “reopen” claims in a incredibly high pace. I had a hurricane Michael report where the policyholder called and wrote to the insurer not to “close” her claim because she was not done with her table of contents. The insurer knew more money was owed but administratively “closed” the file to meet Florida’s regulatory goals. As a result, Florida now uniquely has a term, “resumed claim,” in its property insurance law.

Who knew at the time these new conditions were created that the insurance companies would use these conditions for notification of loss to avoid assessment of the entire loss? But that’s what’s happening right now.

A recent appeals decision in Florida1 assessed that the entire refusal of a supplementary claim was not subject to assessment, even if the insurer had previously paid damages for other parts of the damage. The facts relied on by the Court were as follows:

This case is about damage that is alleged to have been caused by Hurricane Irma. Forest Mere initially submitted two claims in accordance with its policy with Heritage for roof damage to its seven condominium buildings. Heritage determined that the roof damage was covered by the policy and issued two payments to Forest Mere.

Nearly nineteen months later, Heritage received a letter from Forest Mare’s public adjuster containing a supplementary requirement to replace all windows and doors in the condominium buildings due to alleged damage from Hurricane Irma. Heritage investigated the claim but ultimately denied coverage for the supplementary claim in its entirety.

Forest Mere then filed a complaint against Heritage for breach of contract, and Forest Mere tried to force Heritage to submit to an assessment set out in the insurance policy. Heritage claimed that the assessment was inappropriate because it had never acknowledged coverage of the additional claim.

Values ​​determine the size of the loss. The valuation language says nothing about a requirement. The language says that it is an assessment of the loss. The assessment panel can come up with amounts that are much higher or much lower than what the parties claimed the loss would be. Although the parties may agree, and often do, that the assessment will be about something else, I have always said that the task of the assessment panel is to determine the full amount of the loss because that is what the policy says they should do.

So I do not agree Forest More opinion, where the Court of Appeal justified the following:

The issue in this case was recently settled in another case concerning Heritage. Looks Heritage Prop. & Cas. Ins. Co. v. Porch I on Heritage Links Ass’n, 334 So. 3d 373 (Fla. 2d DCA 2022). In that case, the insurance policy contained identical language as the insurance in this case with regard to the definition of an “additional claim” as well as rights and obligations in connection with a valuation. Just as in this case, Heritage acknowledged coverage for the claim for roof repairs but completely denied coverage for the additional claim for damage to windows and doors … We acknowledged that when an insurer allows coverage but disputes the amount of the loss, that question is appropriately referred to an assessment panel… .But we explained that when an insurer completely denies coverage for a claim, it can not be referred to assessment because it is a coverage issue that must be decided by the court….

Relying on the opinion of this Court in American Coastal Insurance Co. v. Ironwood, 330 So. 3d 570 (Fla. 2d DCA 2021), which involved almost identical facts and policy language, we concluded that the window and door requirement from Veranda was not part of the original requirement for roof damage but instead was an additional claim as defined in policy. Porch I at Heritage Links Ass’n, 334 So. 3d at 376-77. As a result, we declared that it must be treated separately from the original ceiling requirement which had been completely adjusted … And since Heritage had completely denied coverage for the window and door requirement, we considered that the district court was excluded from referring this claim to valuation.

The end result is that Florida recognizes an “additional claim” as one that is treated as a separate loss, at least for assessment purposes.

Today’s thoughts

Believe in yourself, take on your challenges, dig deep into yourself to overcome fears. Never let anyone take you down. You have to keep going.
– Chantal Sutherland
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1 Heritage Prop. & Cas. Ins. Co. v. Forest Mere Townhouse Cmty. Ass’n, No. 2D21-1470, 2022 Fla. App. LEXIS 4518 (Fla. 2d DCA July 1, 2022).


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