Jeffrey P. Gale, P.A. // Mediating Disputed Residential Property Insurance Claims in Florida

home-insuranceMost homeowner and commercial residential insurance policies obligate policyholders to participate in a potentially expensive and time-consuming adversarial appraisal procedure before litigation. Here’s an example, from Allstate Insurance Company v. Suarez, 833 So. 2d 762 (Fla. 2002), of a typical contractual appraisal provision:

Appraisal. If you and we fail to agree on the amount of loss, either party may make written demand for an appraisal. Upon such demand each party must select a competent and impartial appraiser and notify the other of the appraiser’s identity within 20 days after the demand is received. The appraisers will select a competent and impartial umpire. If the appraisers are unable to agree upon an umpire within 15 days, you or we can ask a judge or a court of record in the state where the resident premises is located to select an umpire. The appraisers shall then determine the amount of loss, stating separately the actual cash value and the amount of loss to each item. If the appraisers submit a written report of an agreement to us, the amount agreed upon shall be the amount of loss. If they cannot agree, they will submit their differences to the umpire. A written award by any two will determine the amount of loss.

Cognizant of this daunting burden, the Florida Legislature enacted statute 627.7015, which provides an alternative procedure for resolving disputed property insurance claims. The essential elements of the statute are:

  • It is available before commencing the appraisal process (or before commencing litigation).
  • It may be requested only by the policyholder, as a first-party claimant, or the insurer.
  • The insurer shall bear all of the cost of conducting mediation conferences.
  • All statements made and documents produced at a mediation conference are inadmissible to prove liability or absence of liability for the claim or its value at subsequent hearings on the claim. See s. 90.408, Florida Statutes
  • If a written settlement is reached, the insured has 3 business days within which to rescind the settlement unless the insured has cashed or deposited any check or draft disbursed to the insured for the disputed matters as a result of the conference. If a settlement agreement is reached and is not rescinded, it shall be binding and act as a release of all specific claims that were presented in that mediation conference.
  • If the insurer requests the mediation, and the mediation results are rejected by either party, the policyholder is not required to submit to or participate in any contractual loss appraisal process of the property loss damage as a precondition to legal action for breach of contract against the insurer for its failure to pay the policyholder’s claims covered by the policy. (NOTE: If the insured requests the mediation, and the mediation results are rejected by either party, either side can demand participation in the appraisal process.)  

Other key considerations:

  • At the time a first-party claim within the scope of the statute is filed by the policyholder, the insurer shall notify the policyholder of its right to participate in the mediation program under this section. If the insurer fails to notify a policyholder of its right to participate in the mediation program, the policyholder is not required to submit to or participate in any contractual loss appraisal process of the property loss damage as a precondition to legal action for breach of contract against the insurer for its failure to pay the policyholder’s claims covered by the policy.
  • If an insured fails to appear at the conference, the conference shall be rescheduled upon the insured’s payment of the costs of a rescheduled conference.
  • If the insurer fails to appear at the conference, the insurer shall pay the insured’s actual cash expenses incurred in attending the conference if the insurer’s failure to attend was not due to a good cause acceptable to the department.
  • An insurer will be deemed to have failed to appear if the insurer’s representative lacks authority to settle the full value of the claim. (This does not mean that the representative must pay the full value of the claim. It only means that the representative must have the authority to pay the full value if he or she so decides. This is a common point of confusion concerning mediation.)
  • The insurer shall incur an additional fee for a rescheduled conference necessitated by the insurer’s failure to appear at a scheduled conference.

We have participated in many of these mediations. Most have resolved favorably. If there is a reasonable expectation leading up to mediation that the case may settle, the parties are well advised to come prepared with the evidence supporting their respective positions. This is because neither side will be inclined to accept the other side’s unsubstantiated claims. Solid evidence includes repair/replace estimates and photographs. If, on the other hand, it is apparent beforehand that the dispute gap will be too wide to overcome at mediation, the wise strategy may be to play matters closer to the vest. These are judgment calls the seasoned attorney will make on a case by case basis.

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Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.

While prompt resolution of your legal matter is our goal, our approach is fundamentally different. Our clients are “people” and not “cases” or “files.” We take the time to build a relationship with our clients, realizing that only through meaningful interaction can we best serve their needs. In this manner, we have been able to best help those requiring legal representation.