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Florida
Supreme Court: Insurers By Michael Peltier TALLAHASSEE — In a case that may reduce payouts to hundreds of 2004 hurricane victims, the Florida Supreme Court ruled Thursday that insurers must only pay for damage specifically covered by their policies. The 7-0 decision affects many homeowners who have not settled with their insurance companies over whether damage caused by Hurricanes Charley, Frances, Ivan, or Jeanne came from wind or flood waters, for which many homeowners are not insured. The opinion will not affect residents who have already settled with their insurance companies, attorneys familiar with the case said Thursday. Officials say most of the customers affected by the ruling are Panhandle residents who were insured by Citizens Property Insurance Corp., the state-run insurer of last resort. Citizens has 200 cases pending involving up to 1,000 individual policyholders. But some Southwest Florida residents whose homes were destroyed by flood waters and not wind will also likely see smaller payouts. "This is primarily going to affect victims of Hurricane Ivan," said Sam Miller, executive vice president of the Florida Insurance Council, an industry group. "But anyone whose home was destroyed by flood (in 2004) will also be affected." Following the 2004 hurricane season, nearly 49,000 homes — including 10,250 in Collier, Lee and Charlotte counties — were destroyed. Many homeowners challenged when insurance companies refused to pay for flood damage. They brought their cases to court. In 2005, lawmakers changed the statute at the behest of the insurance industry to state that insurers are only responsible for damages from sources outlined in their policies. Thursday’s action dealt specifically with an Escambia County man whose home was destroyed when Ivan struck the Panhandle in September 2004. Eugene Cox sought $117,000 in damages to his home Florida Farm Bureau Insurance, said Cox was entitled to $16,800, saying the rest of the damage came from flooding water, which was not covered under his policy. Last year, the 1st District Court of Appeal ruled that Farm Bureau was liable for all damages. In response, Citizens set aside $150 million to pay potential claims. On Thursday, the state high court resoundingly disagreed. "We do not find that the plain language of the statute intends that if a covered peril causes part of a total loss, that the insurer is mandated to pay for the total loss," Justice Charles Wells wrote for the majority. "We read the plain language of the statute not to reasonably support such an interpretation." The opinion pleased insurance industry representatives, who said the lower court ruling came as a huge surprise. "The (Supreme) Court ruling confirms what we were saying in 2004," said Justin Glover, spokesman for State Farm Insurance Cos. "The court got it exactly right." While an obvious disappointment to affected homeowners, Miller said the ruling was a positive development for other policyholders. "That’s money now that will go to pay future hurricane claims," Miller said. "It will increase their surplus and reduce the amount of state assessments that will have to be imposed." - - - The 2004 Hurricane Season resulted in the total loss of nearly 49,000 homes statewide, including many in Lee and Collier counties. Most claims have been paid but some are still in dispute and could be affected by Thursday’s Supreme Court ruling: TOTAL LOSS CLAIMS FOR 2004 Collier: 74 Charlotte: 8,507 Lee: 1,669 Statewide: 48,839 SOURCE: Office of Insurance Regulation
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A Feast
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