The recent decision in Fortune v. First Protective Insurance Company d / b / a Frontline Insurance of Florida's 2nd District Court cleared up a long-standing confusion about what constitutes a "cure" of a civil law notice.
In Fortune insured persons in time made a claim to their homeowners insurance policies when they suffered damage to their property from Hurricane Irma. 1 The insurer examined claims and was denied, claiming that the damage did not exceed the insured's deductible. After submitting the estimate of the public adjustment and all other material to the insurance company, the insurer referred to the evaluation process in accordance with the policy.
Subsequently, the insured filed a civil lawsuit claiming that the insurer made a lowball offer and "manifestly violated" its obligation to seek in good faith to resolve claims under applicable Florida statutes. In addition, the insured claimed that the insurer refused to reconsider its payment of benefits and the basis for payment and that the insurer "made [ed] a blind eye and refused [d] to properly adjust and settle the claim."
One month and a half after the evaluation, the insurer paid the net debt of $ 1
The insurer immediately filed a notice of termination, arguing that it "completely cured the alleged bad faith" during the period of remedy under the Florida Statutes by following the assessment process, which resolved the dispute between the parties and was approved by [the Homeowners]. The insurer succeeded, which resulted in an insurance law appeal.
On appeal, the question whether the insurer cured CRN by invoking the evaluation process and then paying the evaluation price outside the 60-day limit was 624,155 (3) (d).
Florida Statute Section 624.155 (1) (b) (1), a provision of the Florida Statute of Bad Faith, provides:
(1) Any person may bring an action against an insurance company when such person is injured:
(b) By order of any of the following acts of the insurer:
1. Not in good faith attempts to settle claims when in any case it could and should have done so, if it had acted fairly and honestly towards its insured and with due regard for her or his interests [.]
In its analysis, which strongly relied on Vest v. Travelers Insurance Company 2 the Court stated:
Although a policy requires that the mediation or evaluation process take place before an application is submitted, an assessment is not a precondition for the insurer fulfills its obligation to fairly evaluate the claim and either deny coverage or offer an appropriate amount based on the fair evaluation. . . A fair evaluation would be proof that an insurer did not act in bad faith. But a lowball offer in bad faith is not cured by an insurance company ultimately paying what it later turns out to be owed through the evaluation process.
The language of section 624.155 (3) (d) does not remedy the cure period until an evaluation is completed. Although not applicable here, see an amendment to section 624,155, which enters into force on 1 July 2019, chap. 2019-108, §§ 6, 18, Laws of Fla., Strengthens the homeowners' position that seeking an assessment is not a cure for a failure to try to settle a claim in good faith. The legislator added a new section 624.155 (3) (f) which states, "A notice required under this subsection may not be filed within 60 days after the assessment is invoked by any party to a home insurance claim." This new provision affects the time when an insured can submit a CRN but does not treat an assessment or payment of an evaluation price as a remedy for any violations alleged in the CRN. And, as homeowners claim, if an insured person cannot bring an evil act of faith until the appraisal price has been made, see Bryant 271 So. 3d at 1022, but the assessment process cures an unfaithful violation as a matter of law, then places the insured in a catch-22 situation. It would enable an insurer to act in bad faith without consequence in resolving claims as long as the insurer later pays the evaluation within the time set by the insurance policy.
Thus, the court finally rejected the insurer's argument that when the CRN does not state the amount necessary to remedy the alleged infidelity, the insurer's invocation of the evaluation process constitutes a corrective measure within the meaning of 624.155 (3) (d). The Court found that “the revocation of the assessment process and the payment of the evaluation premium after the expiry of the remedy did not clear, according to law an alleged infringement of failure to try to settle claims in good faith. ”
1 Fortune v. First Protective Ins. Co. 302 So. 3d 485, 487 (Fla. 2d Dist. App. 2020).
2 Vest v. Travelers Ins. Co. 753 So.2d 1270 (Fla. 2000).