Your Insurance Claim May Be Dead On Arrival and Denied if You Fail to Adhere to the Conditions Set forth in Your Insurance Policy

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Your Insurance Claim May Be Dead On Arrival and Denied if You Fail to Adhere to the Conditions Set forth in Your Insurance Policy

Your insurance claim may be dead on arrival and denied if you fail to adhere to the conditions set forth in your insurance policy.  This point is illustrated by the ongoing dispute Alfredo Hernandez (“Hernandez”) had with his insurance company, State Farm.

Hernandez was initially paid $36,858.80 for losses caused by Hurricane Wilma.

Hernandez claimed that he noticed additional damages sometime after the initial payment and proceeded to renovate the large majority of his home.  Hernandez did not contact Sate Farm before, during, or after the repairs to allow inspection and kept only minimal records of the costs associated with the repairs.

Five years later, Hernandez hired Expert Claims Adjusters to appraise the damages.  He submitted three contradictory sworn statements: one claiming he was entitled to an additional $201,038.84 in damages; a second one claiming $168,346.12 of damages; and a third saying he spent approximately $65,000.00 to make the additional repairs. State Farm eventually paid Hernandez an additional $1,300.00 but did not pay the remainder of the supplemental claim.

Hernandez filed suit and moved to compel appraisal but State Farm objected because of Hernandez’s failure to comply with post-loss obligations. The trail court granted the motion to compel finding that Hernandez had sufficiently complied with the post-loss obligations.

The Appellate Court states that the law of Florida is clear; where an insured has not complied with his post-loss obligations under the policy, a trial court is not empowered to compel appraisal.  The party seeking appraisal must comply with all post-loss obligations before the right to appraisal can be invoked under a contract.  The trial court erred in finding that sufficient compliance was adequate to compel appraisal.  Not only is full compliance with all post-loss obligation mandated by case law, it is supported by policy.  The goal of alternative dispute resolution is only furthered when the parties have a real opportunity to inspect the damages.

Hernandez failed to comply with the post-loss obligations by failing to provide immediate notice or keep records of the claimed supplemental loss; notify State Farm within 60 days after repairs are complete; or provide sufficient documentation of the damages and repairs.  Furthermore, Hernandez also submitted three different sworn statements regarding his supplemental claims.

For these reasons, the Appellate Court found the trial court erred in compelling the appraisal.