Florida homeowners insurance policies usually include conditions that require cooperation and disclosure by a policyholder to facilitate evaluation of a claim. However, the scope and nature of these disclosure duties can be a matter of considerable litigation. Insurance companies often use claims of misrepresentation and false statements as the basis for denying a claim. In certain situations, insurers attempt to avoid their contractual obligations based on the insured’s failure to provide information even when it is not expressly requested by the insurance company.
In the case of Herrera v. Tower Hill Preferred Insurance Company, the court specifically addresses the scope of an insured’s duty of disclosure under a homeowners policy. The policyholders submitted a claim for sinkhole damage. The insurance company hired Madrid Engineering Group to undertake testing and produce a report with a professional opinion regarding the cause of the loss. Madrid provided a report indicating that the loss was not the result of sinkhole damage. Rather, the insurer’s expert concluded the damage was caused by “[n]ormal shrinkage of masonry materials, [d]ifferential contraction of mortar and concrete, thermal expansion-contraction, [and] [s]mall variations in soil types.”
Based on this report, the insurer denied the claim by letter indicating that the policy expressly excludes settlement and earth movement with the exception of sinkhole damage. The insurer informed the homeowners that they could request further testing. The insurer agreed to continue its investigation with a reservation of rights pending a determination regarding sinkhole activity. The policyholders did not notify the insurer of objections to the report from the insurer’s expert nor did the homeowner request further testing. The insurer decided the claim was closed.
The policyholders then retained their own expert, Geohazards, Inc., to analyze Madrid’s report and to conduct an independent investigation. Geohazards found that sinkhole activity caused the damage. Based on the policyholders’ report, they filed a lawsuit for breach of contract against the insurer. The insurance company filed a motion for summary judgment based on the concealment provision of the policy. The trial court decided in favor of the insurer, and the insured appealed.
The concealment provision provided in pertinent part:
“2. Concealment or Fraud.
a.Under Section I – Property Coverages, with respect to all “insureds” covered under this policy, we provide no coverage for loss under Section I Property Coverages if, whether before or after a loss, one or more “insureds” have:
 Intentionally concealed or misrepresented any material fact or circumstances . . . .”
In support of its motion for summary judgment, the insurer argued that this provision prohibited the insured from concealing material information during the entire period they are seeking payment under the policy. The insurer also contended that the insured failed to comply with a condition of the policy that required the insured to cooperate with the investigation of the claim and to provide “records and documents we request”.
The appellate court rejected the insurance carrier’s arguments. The court found that the conditions apply only when the insurer admits liability but disputes the value of the claim. The court reasoned that the policy language only required disclosure of the report if it existed at the time the claim was filed but prior to denial of the claim by the insurer. The policyholders also were only required to produce documents that were “requested”, so the homeowners were not obligated to volunteer unsolicited documents.
If you have questions about Florida homeowners insurance claims, you are welcome to contact my Miami insurance claims dispute law firm. My law firm represents policyholders in claims disputes in Miami and throughout Florida. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations. No Recovery, No Lawyer Fees. Call 305-461-1095 or Toll Free 1-866-71-CLAIM.