Insurance Services – Coverage & Bad Faith Litigation

Key Points:

• Where the language in an insurance contract is plain and unambiguous, the courts must interpret the terms of the contract according to their plain meaning as written.
• Florida Statute §627.733 only requires a nonresident owner of a vehicle to maintain PIP coverage after they have been within Florida for more than 90 days of the preceding 365 days. 
• Due to Florida’s presence requirement under Fla. Stat. §627.733 for nonresidents, an out-of-state coverage provision that only applies to unconditional out-of-state compulsory insurance laws will not provide PIP benefits in Florida.

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The recent ruling by the Fourth District Court of Appeal in T.I.O. Medical Intervention LLC a/a/o Mary Faison v. Liberty Mutual Fire Insurance Company, 373 So. 3d 341 (Fla. 4th DCA 2023) serves as a reminder to pay very close attention to the exact wording in insurance policy provisions. This case involved an insured that maintained a Georgia-based insurance policy but was involved in an accident in Florida. The insured was treated in Florida, and the plaintiff, a medical provider, submitted medical bills to the defendant insurer for reimbursement under Florida Personal Injury Protection (PIP) benefits. 

The insurer argued that the Georgia policy did not provide for Florida PIP benefits per the policy language. At the county court level, the insurer was granted summary judgment because the court found that the “clear and unambiguous” language of the Georgia policy did not provide for Florida PIP benefits. The plaintiff appealed.

On appeal, the Fourth District analyzed the specific out-of-state coverage provision. Specifically, the court noted, “Where the language in an insurance contract is plain and unambiguous, a court must interpret the policy in accordance with the plain meaning so as to give effect to the policy as written.” Wash. Nat’l Ins. Corp. v. Ruderman, 117 So.3d 943, 948 (Fla. 2013). Looking first to the subject out-of-state coverage provision, the Georgia policy stated: 

If an auto accident to which this policy applies occurs in any state or province other than the one in which ‘your covered auto’ is principally garaged, we will interpret your policy for that accident as follows:
If the state or province has:
…
A compulsory insurance or similar law requiring a nonresident to maintain insurance whenever the nonresident uses a vehicle in that state or province, your policy will provide at least the required minimum amounts and types of coverage. 

The Fourth District then looked to the presence requirement under Fla. Stat. §627.733(2) which governs PIP coverage for nonresidents:

Every nonresident owner or registrant of a motor vehicle which, whether operated or not, has been physically present within this state for more than 90 days during the preceding 365 days shall thereafter maintain security as defined by subsection (3)…

Fla. Stat. §627.733(2).

In comparing the policy provision and the relevant Florida statute, the Fourth District concluded that the Georgia policy did not provide for Florida PIP benefits. Specifically, the court noted that the Georgia policy would only provide out-of-state coverage if the state’s compulsory insurance laws require a nonresident to have insurance “whenever” they use a vehicle. Florida law does not require a nonresident owner of a vehicle to maintain PIP coverage every time they drive, only when they have been in Florida for 90 out of the last 365 days.
 
The plaintiffs did not present any evidence that the insured met the nonresident presence requirement under Fla. Stat. §627.733(2), but the Fourth District stated that it would make no difference to the court’s conclusion since Florida law does not “unconditionally require” nonresidents to have PIP coverage when they drive in Florida as considered by the policy.

The Fourth District contrasted the Georgia policy language with out-of-state coverage provisions interpreted by the Fifth and Second District Court of Appeals. In Meyer v. Hutchinson, 861 So.2d 1185, 1186-87 (Fla. 5th DCA 2003) and Jiminez v. Faccone, 98 So.3d 621 (Fla. 2d DCA 2012), the Fifth and Second Districts analyzed an out-of-state coverage provision of an insurance policy which stated:

If an insured is in another state or Canada and, as a nonresident, becomes subject to its motor vehicle compulsory insurance, financial responsibility, or similar law:

This policy will be interpreted to give the coverage required by the law… 

The Fourth District distinguished the policy provisions interpreted by the Fifth and Second Districts from the Georgia policy provision on the basis that the former policy provision would allow coverage for nonresidents who “became subject” to Florida’s PIP statute by virtue of maintaining presence in Florida for 90 days. In comparison, the Georgia policy provision does not include the same language that would afford coverage to nonresidents who maintain presence in Florida for 90 days pursuant to Fla. Stat. §627.733(2). Therefore, the Fourth District held that the Georgia policy did not provide for Florida PIP benefits, and the lower court’s entry of summary judgment in favor of the insurer was affirmed.

In light of this case, it is recommended that insurance companies review the out-of-state coverage provisions in their respective policies. As shown by this case, these provisions need to be carefully constructed so as not to afford coverage when it is not intended. They are easy to overlook, but every word is vital since courts interpret these policy provisions by their plain meaning. That is why it is important to look closely at each provision and make sure the clear meaning of the provision is what is intended. 

*Noah is an associate in our Tampa, Florida, office. He can be reached at (813) 898-1817 or NEBlake@mdwcg.com. 

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_{Defense Digest, Vol. 30, No. 1, March 2024, is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2024 Marshall Dennehey. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.}