Insurance companies in Florida are increasingly invoking the right to make repairs. It creates a hornet because the policyholder can leave a delayed and insufficient repair. What then?
A new case, Vainberg v. Avatar Property & Casualty Insurance Company 1 indicates that a new contract is created by invoking the right to repair and the insurance company has obligations to perform the repair:
According to Florida law, “when the insurer makes its choice to repair, this choice is binding on the insured and creates a new agreement under which the insurer is bound to [perform repairs] within a reasonable time. & # 39; Drew 920 So. 2d at 835 (emphasis in original) (citing Travelers Indem. Co. v. Parkman 300 So. 2d 284, 285 (Fla. 4th DCA 1974)). In a situation where the repair option has been invoked, the insured and the insurer would become parties to a separate repair agreement where the insurer is obliged to carry out repairs that will satisfactorily return the insured property to its condition before the loss. See Siegle v Progressive Consumers Ins. Co. 819 So. 2d 732, 739 (Fla. 2002).
Historically, insurance companies have rarely relied on this option. It is fraught with problems including poor repair. Consequently, while analyzing this case of a repair that went wrong, the court stated:
In Drew we considered that & # 39; [w] here the insurer violates this new agreement to repair, becomes it is liable for damages caused by this crime. & # 39; 920 So. 2d at 835. As such, an insured person may be entitled to damages caused by insufficient repairs outside the scope of the insured insurance when a repair alternative has been invoked but the repairs have not been performed adequately. See id.
Here, according to Drew a repair contract was formed when the insurer completed an inspection of the property and chose to repair the complainants' damaged floors. The repair contract is separate and differs from the insurance contract between the complainant and the insurer. In accordance with this contract, the insurer employed a contractor to replace the floors. After the contractor was finished, the complainant reported to the insurer that the repairs carried out by the contractor were insufficient because they were ugly, quick fixes that reduced the appearance and value of the apartment. In accordance with Drew due to the fact that the repairs were not carried out sufficiently, the complainant claimed that they were entitled to damages caused by improper performance.
The conclusion is that insurance companies that enter the construction industry do so at their own risk. If it is a problem to get an insured paid on time for the right and the full amount of the loss covered, it actually makes doing the repair often a whole new can of worms for the insurer, which can be much more expensive than just paying the damage.
Thought for the day
You can dream, create, design and build the most wonderful place in the world. But it requires people to make the dream come true.
1 Vainberg v. Avatar Prop. & Cas. Ins. Co. 46 Fla. L. Weekly D1141d, – So.3d – (Fla. 4th DCA May 19, 2021).