Most insurance policies include conditions precedent that must be performed for an insured to receive benefits under the policy. Many policies contain these conditions, including homeowner's policies. The term "condition precedent" refers to required acts or omissions to be performed by the insured before the insurance carrier has a duty to pay benefits under the policy. Common examples include the duty to notify the carrier of a loss in a timely fashion and to provide a sworn proof of loss. Our Florida insurance damage attorneys recently noted a decision by the Florida 2nd District Court of Appeals, Tower Hill Select Insurance Company v. McKee. Our Miami homeowner's claims lawyers offer this decision as an example of the importance of understanding these conditions and fulfilling their terms.
South Florida Insurance Claims Lawyers Note Performance of Conditions Impacts Deadlines to Perform
The insured filed a claim with his homeowner's carrier related to property damage allegedly caused by sinkhole activity. The insurer retained an engineer who (predictably) concluded that sinkhole activity did not cause the damage to the property. Based on the engineer's opinion, the carrier denied coverage for the claim under the policy. The insured also retained an engineer who determined that sinkhole activity caused the damage to the home. After the insured's expert's submitted his report to the insurance company, the carrier denied coverage. The insured filed a lawsuit for breach of contract. The trial court granted summary judgment to the homeowner for $181,317, which included $22,429 in prejudgment interest.
On appeal, the insurance company alleged that the insured was not entitled to the recovery for the subsurface repairs because the insured failed to enter into an agreement to have the repairs performed. The insurance policy contained a provision that tracked the language of 627.707(5)(b), Florida Statutes (2010), which authorized the carrier to withhold payment of the insurance benefits based on the lack of a contract between the homeowner and the entity that was to undertake the repairs. The court found this argument persuasive and ruled that the trial court committed error by forcing the insurer to pay the claim before the insured executed a contract with the company that was to perform the repairs.
The appellate court also reversed the trial judge on the right of the insured to prejudgment interest. Section 627.70131(5)(a) granted prejudgment interest on payments made ninety days after the notice was provided to the insurance carrier or made over fifteen days after the insurance carrier was not reasonably prevented by factors beyond its control from paying the claim based on whichever deadlines occurred later. The court determined that the failure of the insured to execute an agreement for the performance of the repair work was the factor preventing the insurer from making payment under the policy. Because the insured was in control of the obstacle to the payment of benefits under the policy, the fifteen day period had not expired. Based on this finding, the court ruled the insured was not entitled to prejudgment interest under the provision.
Certain conditions must be performed subject to specific timing deadlines to avoid jeopardizing an insured's right to insurance benefits. This decision demonstrates the importance of complying with all required conditions imposed by a policy. Frequently, insurance carriers make a bogus claim that a condition precedent has not been performed, so policyholders should seek legal representation if their claim is denied on this basis. In fact, an insured should always consider talking with an experienced Miami homeowner's insurance attorney when their claim is denied.
Our Miami homeowner's claim lawyers at Greenberg, Stone & Urbano offer the assistance you need to obtain the results you desire. With over 130 collective years of experience representing policyholders across South Florida, our firm provides legal representation of unmatched excellence. Contact our firm as soon as possible to start on the road to protecting your legal rights. Our firm received an AV rating from Martindale-Hubbell and was ranked as a top firm in South Florida by the Miami Herald. Put our South Florida insurance claims lawyers to work on your case. Call us at (888) 499-9700 or (305) 595-2400 or you can visit our website to schedule your initial consultation.