In Citizens Property Ins. Corp. v. Mallett, 2009 WL 485038 (Fla. 1st DCA Feb. 27, 2009), the First DCA dealt with three issues which are common in homeowners insurance claims: 1) interpreting Florida’s Valued Policy Law (VPL); 2) when payment is due under debris removal, and law and ordinance coverage; and 3) when prejudgment interest begins to running after a loss.


In Mallett, wind and flood combined to render the home a constructive total loss. Wind damage was a covered cause of loss under the Citizens’ policy, and flood damage was excluded. There was uncontroverted evidence that the wind was a “substantial” cause of the loss to the Mallett’s home. The insureds argued that under Florida Statute Section 627.702(1), Florida’s VPL, Citizens was required to pay its entire policy limits because the home was a constructive total loss, and wind substantially contributed to causing that total loss. The trial court agreed, granting summary judgment to the insured for the entire policy limits.

The 1st DCA reversed, holding that Fla. Farm Bureau Cas. Ins. Co. v. Cox, 967 So. 2d 815 (Fla. 2007) governed:

The summary judgment on appeal is expressly contrary to the holding in Cox, and accordingly, we reverse that part of the summary judgment granting the Malletts additional compensation for the damage sustained to their residence not solely attributable to wind.

However, in my mind, this still leaves open several issues. Who has the burden of proof at the trial level to prove which portion of the loss is due to the uncovered peril of flood?  Typically, if an insurer is claiming that all or a portion of a loss is due to an excluded peril, then the insurer has the burden of proving which portion of the loss is due to the excluded peril. Thus, if these two perils (wind and flood) combined to cause the loss, then does the insurance company need to prove by a preponderance of the evidence which part of the loss was due to flood? Or, does the insured have to prove which portion is due to wind?  There is also an issue raised by the “anti-concurring cause clause” that is typically present in these types of policies.

Debris Removal and Law and Ordinance Coverage

In Mallett, the insured argued that because the home was a total loss, and the insurer owed its entire policy limits under the VPL, then Citizens was required to pay out under the debris removal and the law and ordinance coverage. It is unclear from the opinion if the insureds had actually incurred these expenses, or were seeking these as additional coverages that were simply due because they had recovered the entire policy limits at the trial level.  In any event, the 1st DCA held that summary judgment was improper on the issues of debris removal and law and ordinance, and that there would need to be a trial on the issue of how much was due under these two additional coverages that was attributable to wind alone.

Prejudgment Interest

The insureds argued that they were entitled to prejudgment interest running from the date of the loss.  However, the Citizens’ policy specifically stated that Citizens was not obliged to pay a claim until twenty days after it reached a written agreement with the Malletts, or sixty days after entry of a final judgment on the claim or after the filing of an appraisal award or mediation settlement with Citizens.  Relying on this language, the court sided with Citizens and held that: “It is the terms of a contract for insurance which determine the date from which the coverage payment is due, as well as when interest is due on the amounts payable.”

Obviously, this ruling allows an insurance company to breach the insurance contract, force the insured to file suit, retain the use of the money while the case is litigated, and not be liable for interest on the money they illegally retained.

One way to possibly avoid this result is to file a Civil Remedy Notice pursuant to Florida Statute 624.155, and then seek the prejudgment interest as damages in a subsequent bad faith case.