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Uncertainty in Florida Policies: Understanding Coverage Should Not Require the Infamous Philadelphia Attorney | Property Insurance Law Team Blog



Conflicting policy provisions seem to be an increasing by-product of the ever-growing number of exclusions and limitations of coverage that insurance companies sneak into insurance companies. With the news of an upcoming special legislative session to address insurance premium increases and rumors of potential change, the best way is for homeowners to read their policies and understand what is covered in the event of a loss. The truth is, however, that reading a homeowner’s insurance policy nowadays seems like a game of “musical regulations.”

Fortunately for Florida homeowners, Florida courts have made it clear that where an insurance policy creates ambiguity, the ambiguity should be interpreted in favor of coverage and against the insurer:

We must follow the guiding principle that this court has consistently applied that insurance contracts must be interpreted in accordance with the clear language of the insurance. Furthermore, we believe that ̵

6;[i]f the relevant policy language is receptive to more than a reasonable interpretation, one that provides coverage and [other] limits the coverage, the insurance is considered to be ambiguous. ‘ An ambiguous provision is interpreted in favor of the insured and strictly against the person who established it.1

I recently handled a case involving a claim for roof damage and subsequent water and mold loss from tropical storm Claudette. Where applicable, the policy contained the following provision:

SECTION I – DANGERS INSURED AGAINST
COVERAGE A – HOUSING AND COVERAGE B –
OTHER STRUCTURES
We insure against the risk of direct loss of property described in coverage A and B only if the loss is a physical loss of property. However, we do not insure for loss “

2. Caused by:

e. Any of the following:
(1) Wear, stains, deterioration;

Under items 1 and 2, any loss of property described in Coverage A and B that are not excluded or excluded in this insurance is covered.

The policy also included support for specific provisions — Florida, which added the following exclusion languages:

The following point 2.e.9 is added
SECTION I – DANGERS INSURED AGAINST:

(9) Constant or repeated leakage or leakage of water or steam, or the presence of condensation of moisture, moisture or steam occurring over a period of weeks, months or years, whether or not it is hidden.

The insurance company finally denied the claim and relied on the exclusive language “constant or repeated leakage or leakage” to deny the subsequent water and mold loss. In addition, the insurance company focused in its rejection letter on the fact that it took several months after the storm before the homeowner reported the claim. What the carrier ignored, however, was that the insurance’s approval for limited fungus, wet or dry rot, or bacterial cover, for which the homeowner had paid a further premium, added the following languages:

SECTION I – DANGERS INSURED AGAINST
COVERAGE A – HOUSING AND COVERAGE B –
OTHER STRUCTURES

* * *
The following point 2.e.9 is added:

(9) Constant or repeated leakage or leakage of water or steam or the presence of condensation of moisture, moisture or steam for a period of 14 or more days from a plumbing, heating, air conditioning or automatic fire protection sprinkler system or from in a household appliance .

At first glance, the language of both recommendations seems to exclude the same thing – resulting from loss from “constant or repeated leakage or leakage.” However, the exclusive language added by the recommendation for restricted fungus, wet or dry rot, or bacterial cover is narrower than the approval of the special provisions — Florida. The approval for limited fungus, wet or dry rot or bacterial cover precludes “constant or repeated leakage or leakage …from inside a plumbing, heating, air-conditioning or automatic fire protection sprinkler system or from inside a household appliance. “ In other words, if the “continuous or repeated leakage or leakage” was due to something other than a plumbing system or the like, ieroof damage, the subsequent loss would be covered.

When you read the two provisions side by side, it becomes clear that the policy – as the Florida Supreme Court so eloquently described – “requires the infamous Philadelphia lawyer to understand the terms contained in it.”2 With the upcoming special legislative session to address premium increases, it is safe to assume that more changes will come. Regardless of which provisions the legislature allows insurance companies to include in homeowners’ insurance, insurance companies must still clearly and unambiguously determine the circumstances under which there is coverage.
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1 Wash Nat’l Ins. Corp. v. Ruderman, 117 So. 3d 943, 950 (Fla. 2013) (quotes Taurus Holdings, Inc. v. United States Fid. & Guar. Co., 913 So. 2d 528 (Fla. 2005) (citations omitted)).
2 Id. (quotes Hartnett v. Southern Ins. Co., 181 So. 2d 524 (Fla. 1965)).


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