Payment Splitting Is Denied When Coverage Is Denied

By Tiffany L. McAvoy

In a recent decision Brito v. Citizens Property Insurance Corporation, the Second District Court of Appeal reversed the Hillsborough County Circuit Court and held that payment splitting provisions are inapplicable to preclude evidence of damages in cases where coverage was denied. No. 2D2024-0664, 2025 Fla. App. LEXIS 4646 (2d DCA June 18, 2025).

The dispute in Brito arose after the Insurer denied coverage for full roof replacement.  As the case progressed towards trial, the Insurer, Citizens,  moved in limine to exclude Insured’s replacement cost value (“RCV”) estimates,  arguing that pursuant to Section 627.7011 and the policy which contained a payment-splitting provision, the proper measure of damages was the Actual Cash Value (“ACV”). The policy “covered property losses . . . at replacement cost without deduction for depreciation” and only mandated that the Insurer pay ACV while allowing it to withhold the RCV payment until work was performed. Citizens argued that the Insured’s replacement costs were not recoverable because repairs were not complete at the time suit was filed.

While the Circuit Court agreed with Citizen’s argument, and granted the motion in limine excluding Insureds damage estimates (which contained both ACV and RCV amounts), the appellate court disagreed. The Second District held that while the Policy allowed payment splitting for covered losses, this matter concerned compensation for a claim that was denied as not covered. Therefore, the Court held, Section 627.7011 and the payment splitting policy provisions were inapplicable.  The Court reasoned that when a claim is denied by an Insurer, the Insurer cannot simultaneously invoke loss payment conditions that require repair completion to withhold payment.

The Court explained that both the statute and the policy contemplate at least “some coverage” and analogized the case to Citizens Property Insurance Corp. v. Tio, 304 So. 3d 1278 (Fla. 3d DCA). In Tio, the court held that section 627.7011(3) and the policy at issue were not implicated because the Insurer there had denied the claim as not covered prior to the Insured initiating the lawsuit. However, the court in Brito noted that the majority opinion in Universal Property & Casualty Insurance Co. v. Qureshi, 396 So. 3d 564 (Fla. 4^th DCA 2024) is in direct conflict with this holding.