Florida Appellate Court Holds Insureds Established Actual Total Loss And Certifies Valued Policy Law Question To Florida Supreme Court
August, 2007
Florida’s First District Court of Appeal recently held that the insureds presented evidence necessary to establish that the damage to their home caused by Hurricane Ivan constituted a “total loss” under Florida’s Valued Policy Law. State Farm Florida Ins. Co. v. Ondis, 2007 WL 1385958 (Fla. App. 1 Dist., 2007). The Ondis court also certified to the Florida Supreme Court an issue which it had previously certified in October, 2006 in Florida Farm Bureau Cas. Ins. Co. v. Cox, 943 So.2d 823 (Fla.App. 1 Dist. 2006): whether Florida’s Valued Policy Law requires an insurance carrier to pay the face amount of its insurance policy when the insured property is primarily damaged by an excluded peril.
Facts:
Hurricane Ivan damaged the insureds’ home in September 2004. At that time, the insureds’ home was covered by a homeowner’s policy issued by State Farm Florida Insurance Company (“State Farm”). “According to the policy, damage caused by flood was not a covered peril, while damage caused by wind was covered under the provisions of the policy.” Both the insureds and State Farm agreed that the insureds’ home “sustained substantial damage from flood in the amount of $322,601.88 and that the damage attributable to wind was in the amount of $14,073.65.” On motion for summary judgment, the insureds argued that the damage caused by Hurricane Ivan rendered their home a total loss; pursuant to Florida’s Valued Policy Law, Section 627.702, State Farm is therefore required to provide coverage in the face amount of the insurance policy.
The trial court agreed with the insureds, accepting the affidavit from a public adjuster which stated the home was a total loss The trial court also considered photographs submitted by the insureds which showed “that the second story of the home was resting on its foundation.” On appeal, State Farm argued that the evidence submitted by the insureds in support of their summary judgment motion was insufficient to establish that the home was a total loss.
Analysis:
The First District Court of Appeal affirmed, relying on the “identity test” described in Lafayette Fire Ins. Co. v. Camnitz, 149 So. 653 (Fla. 1933). The identity test states that a building is considered an actual total loss “when it no longer retains its identity and the specific characteristics which define it as a building.” Pursuant to the identity test, the court held that the insureds’ home “does fall within the meaning of an actual total loss because the photographs in the record undisputedly establish that, after the hurricane damage, the home no longer retained its identity and the specific characteristics which defined it as a building.” The court also noted that notwithstanding the application of the identity test, the damage to the insureds’ home also satisfied the total loss test applied in other jurisdictions which considers whether the cost to repair the insured property exceeds the property’s value.
The Ondis court also certified an issue to the Florida Supreme Court which it had previously certified in October, 2006: “Does Section 627.702(1), Florida Statutes (2004), referred to as the Valued Policy Law, require an insurance carrier to pay the face amount of the policy to an owner of a building deemed a total loss when the building is damaged in part by a covered peril but is significantly damaged by an excluded peril?” See also Florida Farm Bureau Cas. Ins. Co. v. Cox, 943 So.2d 823 (Fla. App. 1 Dist. 2006). The Florida Supreme Court heard oral argument on this issue on June 6, 2007. Florida Farm Bureau Cas. Ins. Co. v. Cox, 948 So.2d 759 (Fla. 2007).
Learning Point:
The Ondis court readily accepted the evidence submitted by the insureds in support of their total loss argument -- photographs and a single affidavit -- despite State Farm’s argument that such evidence was insufficient. We will update you when the Florida Supreme Court answers the certified questions presented to it by the First District of Florida’s Court of Appeal in Cox and Ondis.
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