Do policyholders need to adjust to post-loss obligations anew when submitting new or completely different claims that materially differ in scope or worth from the unique declare submission? I reframed the problems to raised focus on an vital and up to date Florida choice. These points come up on a routine foundation, normally as a result of injury is usually hidden or policyholders don’t absolutely examine for all injury, and insurers have little incentive to take action. There has not been an excessive amount of dialogue concerning the guidelines to be adopted when a lot of these claims points come up. Treasure Cay Condominium and Frontline Insurance coverage Firm have been litigating these actual points for years following a 2017 loss. Frontline seems to have received the day based mostly on a latest appellate ruling that upholds a trial courtroom victory. 1
The trial courtroom concluded there was no dispute that, after submitting a roughly $3 million supplemental declare nearly two years after Frontline issued its protection place, Treasure Cay refused to take a seat for an examination below oath, declined re-inspection, and failed to provide information requested by Frontline. The trial courtroom discovered that these post-loss duties below its coverage are situations precedent to swimsuit and are bolstered by the “Authorized Motion In opposition to Us” clause. As a result of these duties weren’t happy, the courtroom dominated that appraisal was not ripe and Frontline was relieved of additional obligations on the supplemental declare.
What the trial courtroom really discovered issues as a result of the Florida Third District Court docket of Attraction (DCA) affirmed. After Treasure Cay submitted a roughly $3 million package deal two years after the storm and after Frontline discovered that the loss was lower than the deductible, the insurer handled this as a “supplemental declare” below Florida legislation. The trial courtroom dominated that the insured’s demand for appraisal didn’t erase its post-loss duties. The trial courtroom discovered there was no dispute that the insured refused to take a seat for an examination below oath, to permit re-inspection, and to provide information associated to the complement, and that this refusal materially breached the coverage and prejudiced the insurer. On that foundation, the trial courtroom granted abstract judgment and entered closing judgment for the insurer. 2
The policyholder’s core argument was that appraisal was ripe and obligatory as soon as a real dispute over the quantity of loss existed. By the point appraisal was invoked, the insurer had inspected, adjusted under the deductible, and there have been no unmet post-loss obligations; the later doc requests and EUO demand had been characterised as belated and extreme. From that view, the trial courtroom ought to have compelled appraisal, or not less than held an evidentiary listening to on substantial compliance as a result of Treasure Cay mentioned it had cooperated to a significant extent, and any remaining compliance questions had been reality points for trial.
The insurer’s response was blunt, in search of a ruling the place its consumer paid nothing. It argued that invoking appraisal doesn’t finish post-loss duties. As a substitute, the insurer claimed that the insured brazenly refused to conform after presenting a multimillion-dollar “supplemental declare” below Florida legislation.
The insurer argued that below Florida’s Third DCA’s prejudice framework, a whole refusal triggers a presumption of prejudice that the insured should overcome, and Treasure Cay provided no competent rebuttal of this presumed prejudice. As a result of the dispute was authorized reasonably than factual on this matter, no evidentiary listening to was required. It argued that the breach relieved the insurer of any additional obligations, together with appraisal, and warranted abstract judgment and no fee.
On attraction, the Florida Third DCA affirmed the trial courtroom’s Order in a per curiam vogue and with out full clarification of its reasoning. In doing so, the appellate courtroom pointed on to prior case precedent and famous guidelines to be adopted. It famous that an insured’s failure to adjust to post-loss duties can relieve the service of obligations on supplemental claims. It famous that trial courts can err by compelling appraisal earlier than these post-loss duties are happy. It appeared to spotlight that an Examination Beneath Oath is a part of these materials post-loss duties. Considerably, it additionally famous precedent that requires a significant change of knowledge earlier than a real disagreement exists for appraisal to begin. These appear to be the sensible guidelines the appellate panel selected to spotlight in affirming the trial courtroom’s Order.
There are sensible classes for policyholders and their representatives. Once you file a brand new or materially expanded declare in scope or worth, and particularly if you’re submitting a “supplemental declare” below Florida legislation, it’s higher to deal with it as a restart of the adjustment course of. Anticipate and put together for renewed requests for examinations below oath, recent website inspections, and new requests for books and information tailor-made to the brand new scope or worth. Don’t situation cooperation on appraisal or litigation positions. As a substitute, cooperate in good religion whereas preserving rights. If obligatory, search protecting limits reasonably than refusing outright.
Some insurance coverage firms are merely going to argue prejudice and can use the presumption of prejudice even when it doesn’t exist. They may even take forever-lasting investigations and bait pissed off policyholders into litigation. Be cautious about submitting a lawsuit too quickly. I’d recommend that policyholders and their representatives catalog all rebuttal proof to the unfairness presumption in actual time. This implies maintaining and discovering as a lot contemporaneous proof and documentation of situations, repairs, and timelines so you may present, not simply say, that the insurer’s capacity to analyze has not been impaired. I’d assume that courts will apply the presumption of prejudice rule precedent to require post-loss compliance earlier than appraisal, and {that a} refusal to cooperate and support the insurer in its investigation dangers forfeiture.
It’s a tricky ending. This was high-risk litigation, expertly briefed and argued on each side, that in the end resulted within the forfeiture of a $3 million declare as a result of the refusal to adjust to post-loss duties after a supplemental presentation was deemed a fabric breach with presumed, unrebutted prejudice. The legislation the Third DCA selected to emphasise tells you why the result held—and what future policyholders should do in another way to keep away from the identical destiny.
This case is a tough learn as a result of everybody lawyering it did robust work. I do know, and have real respect for, each the policyholder’s counsel and the insurer’s counsel. The briefing was considerate, the arguments had been crisp, and the stakes had been monumental. The end result reveals how shortly a high-dollar declare will be misplaced when cooperation turns into the bargaining chip in an insurance coverage declare dispute.
I’ve written many articles about post-loss obligations. The one on my thoughts most related to this publish is “What’s The Upside To Refusing To Seem At an Examination Beneath Oath?” the place I acknowledged:
I’m penning this as a result of I routinely area questions asking if policyholders can refuse to go to an examination below oath or asking for causes which might defeat the insurer’s demand. Whereas policyholders could win the authorized argument for avoidance, policyholders mustn’t place themselves in that place if they’ll keep away from it. Except there are legal implications by giving the testimony, it’s an ‘the whole lot to lose and nothing to be gained’ from refusing to attend an examination below oath.
For some insurance coverage firms and their counsel, this “you soar and I’ll inform you how excessive otherwise you lose your proper to deliver a declare” place ends in unending claims investigations and refusals to take a claims place as a result of there may be all the time one thing extra that must be offered and requested. The courts and insurance coverage regulators must be cautious of this abuse as effectively and make sure there are important treatments for claims delays brought on by a lot of these actors.
Thought for the Day
“By failing to organize, you might be getting ready to fail.”
— Benjamin Franklin
1 Treasure Cay Condominium Affiliation v. Frontline Ins. Limitless Co., No. 3D-24-1196 (Fla. 3d DCA Oct. 1, 2025).
2 Treasure Cay Condominium Affiliation v. Frontline Ins. Limitless Co., No. 19-CA-000269 (Fla. Cir. Ct. – 16th Judicial Cir. June 7, 2024).
