In Florida Farm Bureau Casualty Insurance v. Mathis, ____ So.3d ____ (Fla. 1st DCA April 20, 2010), a home was significantly damaged as a result of Hurricane Ivan in September 2004. The homeowners had a $250,000 flood policy and a $295,000 homeowners policy on the home.
The homeowners submitted claims to both the flood carrier and their homeowners carrier, Florida Family. The flood carrier paid its limits of $250,000 and Florida Family refused to pay its limits. Suit was filed against Florida Family and a jury found that the home was a total loss as a result of wind – a covered cause of loss under the Florida Family policy. Pursuant to Florida Statute Section 627.702 – Florida’s Valued Policy Law (VPL) – the trial court then entered final summary judgment against Florida Family for the policy limits less prior payments.
Florida Family argued that the trial court erred in not reducing the judgment by the $250,000 previously paid by the flood insurer.
The appellate court determined that there should be no such offset or reduction in the judgment. According to the 1st DCA, the juries inquiry was limited "solely to the amount of wind damage legally caused to the Mathises’ residence and whether that wind damage caused a total loss either constructively or because of the cost to repair the damage." Pursuant to the VPL Florida Family was obligated to pay its entire policy limits if the home was a total loss as a result of a covered cause of loss. Based on the juries determination the home was a total loss as a result of wind – a covered cause of loss – and therefore the homeowner was entitled to the policy limits from Florida Family.