The Goff’s sustained hurricane damage to their home and submitted their claim to State Farm, their homeowners insurer. The Goffs carried a “replacement cost” policy with State Farm. State Farm’s replacement cost policy allowed State Farm to pay only the actual cash value of the loss until such time as repairs were made. Only after the repairs were actually made was State Farm required to pay the difference between the actual cash value and the replacement cost.

The estimate for the damage to the Goff’s residence included projected costs for “overhead and profit” to the general contractor. State Farm agreed that it owed the overhead and profit, but withheld a portion of the overhead and profit until such time as the repairs were made.

The Goff’s filed a declaratory judgment action arguing that State Farm cannot withhold any portion of the overhead and profit pending repairs. The trial court granted summary judgment in favor of State Farm. The 2nd DCA affirmed and held that: “We are unpersuaded by the Goffs’ argument that the policy entitles them to the total amount of overhead and profit in the actual cash value payment. Therefore, we affirm the summary judgment for State Farm on count II.” Goff v. State Farm Florida Insurance Company, 33 FLW D2833a (Fla. 2nd DCA December 12, 2008).

Importantly, this case did not deal with or mention Florida Statute Section 627.7011. Section 627.7011 was amended in 2005 (after the loss in Goff) and states in subsection (3) that:

In the event of a loss for which a dwelling or personal property is insured on the basis of replacement costs, the insurer shall pay the replacement cost without reservation or holdback of any depreciation in value, whether or not the insured replaces or repairs the dwelling or property.

Subsection (3) does not state whether it is to apply only prospectively or may also apply retroactively.