A recent decision by the Florida First District Court of Appeals provides homeowners with the piece-of-mind that they may have homeowners insurance available to rebuild their homes that are a total loss following a hurricane.

Walter and Katherine Mathis owned a two-story home on Navarre Beach at the time Hurricane Ivan struck the Florida Panhandle in 2004.  The Mathis’ home sustained massive wind and flood damage.  The first floor was ravaged by flood water, while the remainder of the structure was shredded by high winds.
At the time of the hurricane, the Mathis’ had flood insurance with Southern Farm Bureau Casualy Insurance Company with a $250,000 policy limit, and homeowner’s insurance coverage with Florida Farm Bureau Casualty with a $295,600 policy limit.  The flood insurance obviously covered damage from flooding, while the homeowner’s policy provided coverage for wind damage, but specifically excluded coverage for flooding and other water damage.

Due to the extent of the damage to their house, and recently updated building codes in their home county, the Mathis’ were not given an option to repair their home.  They were left with no other choice but to rebuild.  Southern Farm promptly tendered its $250,000 for the flood damage, but Florida Farm Bureau refused to pay any more than $102,000.00.  The Mathises filed suit against Florida Farm Bureau under the Florida Valued Policy Law (Section 627.702, Florida Statutes) which states that if a home is declared a total loss, the homeowner’s insurer will pay the full amount for which the property was insured.
The case was tried before a jury on questions of whether the house was a total loss, and how much of the loss was attributed to wind damage.  The jury agreed that the wind damage to the amounted to a total loss of the building.  The trial court entered judgment roughly in the amount of Farm Bureau’s homeowner’s policy limit.

Florida Farm Bureau appealed seeking to receive a credit, or set off, for the flood insurance money that the Mathises had received.  However, Florida Farm Bureau forgot to ask for this credit in its original Answer to the lawsuit – and therefore waived its right to ask for it on appeal.  Additionally, there was no evidence in the trial below apportioning the actual dollar value of damage to the Mathis’ home from flooding versus wind.  The court found that the jury’s verdict was reasonable and logically based upon the evidence put before it at trial.

This decision should raise caution flags for homeowners in a similar position to the Mathises.  Homeowners making claims under both flood and homeowners’ policies need to be very careful about what kind of evidence is put forth regarding the cause (flood vs. wind) of property damage.  In the Mathis’ case, their lawyer was able to convince the trial judge that evidence of flood damage was irrelevant to the Mathis’ case regarding wind damage.  Thus, Florida Farm Bureau’s hands were somewhat tied in its efforts to blame the property damage on flooding.  Further, it seems that Florida Farm Bureau erred in arguing that the Mathis’ house was not a total loss, when by all accounts, it seemed to be.  Florida Farm Bureau may have enflamed the jury by not making such an obvious concession.

Coastal homeowners can be sure that this will not be last case on this flood versus wind damage issue.

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