Hurricane Ian brought a significant storm surge. In some areas, the storm surge was reported to be up to 15 feet. Of course, this raises insurance questions such as what caused the damage to the property, the high winds associated with the storm or the flood. This will become a major contentious topic in insurance claims over the next few years. However, Florida’s Valued Policy Act may be able to provide some guidance.
(a) In the event of total loss of any building, structure, mobile home as defined in s. 320.01(2), or manufactured building as defined in s. 553.36(13), located in this state and insured by an insurer as a covered hazardin the absence of any change which increases the risk without the consent of the insurer and in the absence of fraudulent or criminal wrongdoing by the insured or anyone acting on his behalf, the liability of the insurer under the policy for such total loss, if caused by a covered peril; shall be in the amount for which such property was insured in the manner specified in the policy and for which a premium has been charged and paid.
(b) The intent of this subsection is not to deprive an insurer of any proper defense under the policy, to create new or additional coverage under the policy, or to require an insurer to pay for a loss caused by a peril other than the peril covered. In furtherance of such legislative intent, where a loss has been caused partly by a covered peril and partly by a non-covered peril, paragraph (a) does not apply. In such circumstances, the insurer̵7;s liability under this section shall be limited to the amount of the damage caused by the covered peril. But if the covered perils alone would have caused the total loss, clause (a) shall apply. The insurer is never liable for more than the amount necessary to repair, rebuild or replace the structure after the total loss, after taking into account all other benefits actually paid for the total loss.
In the case of Hurricane Ian, there is a combination of covered and uncovered strengths. The standard wind policy will exclude damage caused by flooding. Accordingly, Florida’s Valued Policy Act will not apply unless the covered peril alone would have caused the total loss.
If a plaintiff can prove that the wind alone caused a total loss before the storm surge, the Valued Insurance Act would require an insurer to pay the insurance proceeds.1
The next pressing question is “what constitutes a total loss?” Unfortunately, the Florida Legislature, in its infinite wisdom, offers no guidance. Fortunately, Merlin Law Group attorney Shawn Marker addressed this issue in his blog post: Navigating Florida’s Valued Policy Law – What is a Total Loss.
If you have any questions about your loss or the applicability of Florida’s valued policy law, contact the attorneys at Merlin Law Group.
1 Citizen Prop. ins. corp. v. Ashe50 So.3d 645, 652 (Fla. 1st DCA 2010).