I can hear readers think, "Of course not, Chip! How can you produce something that does not exist?" This is what I have taught in seminars for 35 years. In fact, I often warn policyholders not to settle when the insurance company threatens not to pay a claim because there are no documents.
Yet this is exactly what an insurance company argued in a recent case.From its appeal, Heritage Property & Casualty Insurance Company claimed:
In this first party's hurricane Irma property insurance process, the court erred in forcing assessment because the plaintiff did not comply with its terms after loss that was precedent for assessment. under Florida law to maintain such records and an obligation under cultural heritage policy to submit them to Heritage upon request.
Plaintiffs fail to comply with Florida law by failing to keep board meeting minutes (allegedly due to lack of a decision-making relationship for the meetings) was a violation of policy terms after loss prior to assessment. Therefore, the mandatory assessment must be reversed.
Where is the School of Delay, Deny, and Defend 1
The relevant policy language is very standard:
3. Tasks in case of loss or damage
a. You must see that the following is done in the event of loss or damage to protected property:
(6) As often as reasonably required, let us… review your books and records… and allow us to do so. copies of your books and records.
The court had to deal with the legal argument raised by Heritage:
Under the current policy, the insured is contractually obliged to inspect and copy his existing books and registers. The simple language does not require more. Heritage claims, however, that since the words "books and journals" are undefined in the insurance and the insured works according to a statutory obligation to preserve meeting minutes, the insurance provision means that such minutes must be presented as a condition for coverage. In support of its position, it relies on Section 718,111 (12) (a) (6), Florida Statutes, which requires a tenant-owner association to retain "[a] book or books containing minutes of all meetings" as part of its official register in the state for at least seven years.
Although the policy does not explicitly refer to the law, according to Florida law, & # 39; insurances are considered to contain applicable statutes, and conflicting insurance policies must give way. & # 39; Fla. Farm Bureau Cas. Ins. Co. v. Cox 943 So. 2d 823, 832 (Fla. 1st DCA 2006), repealed on other grounds, 967 So. 2d 815 (Fla. 2007)…. According to "this assumption of incorporation, applicable laws existing at the time of a contract are entered into and form part of the contract as complete as if it had been expressly incorporated into the contract." 11 Richard A. Lord, Williston on Contract § 30:19 (4th Edition 2021)…. Contract language is therefore interpreted with regard to existing statutes, regardless of "whether the agreement relates to the applicable law." Policy a policy provision remains undefined, ordinary everyday use determines its meaning. ” Avsn. Ins. Co. by Hartford v. Com. Credit equipment. Corp. 399 So. 2d 31, 34 (Fla. 3d DCA 1981)…. Therefore, the presumption of incorporation & # 39; is generally applied in connection with contract design & # 39; (determines the legal effect of a contract) rather than contract interpretation & # 39; (determines the meaning of words used in a contract) & # 39 ;, and Heritage does not support the proposal that an undefined term should be interpreted against the insured on the basis of a statutory provision " definition ”which is neither included in the insurance nor contained in any applicable insurance statute. 11 Lord supra (footnote omitted); see also Container Corp. of Am. v. Maryland Cas. Co. 707 So. 2d 733, 736 (Fla. 1998) (If "policy language is receptive to different interpretations, it should … be interpreted in favor of the insured.") 2
[O] from analysis gives a single conclusion. Had Heritage wanted the association to record meeting minutes as a condition for coverage, it could easily have provided it. 3
This final conclusion will lead to some insurance companies reworking insurance language where this buried clause will no doubt come into play with future losses. Unfortunately, most insurance departments currently lack the power or will to go into these subtly significant policy changes.
Until then, my previous teaching is still correct— the insurance company can not require you to produce a document to avoid paying a claim where the document does not exist. The only proviso is that the policyholder for compensation costs after loss has an obligation to prove the compensation cost with receipts and cost documents in order to receive compensation costs. As part of best practice after a loss, adjusters and public adjusters should instruct policyholders that they must retain claims receipts and purchase records.
Thought For The Day
Society produces villains and education makes one villain smarter than another.
1 Jay M. Feinman. Delay, deny, defend . Delden Press. 2010.
2 Heritage Prop. & Cas. Ins. Co. v. Condo. Ass’n of Gateway House Apts. No 3D20-4561, -So. 3d -, 2021 WL 3640520 (Fla. 3d DCA August 18, 2021).