Thought Leadership

The defendant, San Marco, filed a property claim with its insurer, American Coastal, for damage sustained to its property after Hurricane Irma. American Coastal paid San Marco for the claimed damage. Thereafter, San Marco provided an estimate of repairs which far exceeded the prior payment and demanded appraisal, which American Coastal refused, stating it was premature in light of its ongoing investigation. In response, San Marco sued and asked the court to compel appraisal. American Coastal responded via correspondence, stating it was denying coverage based on fraud. San Marco then moved to compel appraisal, which was ultimately granted by the trial court. The Second District Court affirmed the order. Am. Coastal Ins. Co. v. San Marco Villas Condo Ass’n, Inc., 346 So. 3d 78, 79 (Fla. 2d DCA 2021). The Florida Supreme Court reviewed the applicable policy, which states: “Each party has the right to demand an appraisal whether there is a disagreement as to the ‘amount of loss.’” The Florida Supreme Court determined there was a disagreement over the amount of loss and, thus, appraisal was appropriate. Furthermore, as it relates to the coverage dispute, the Florida Supreme Court held the trial court had discretion to determine the order on which coverage and amount of loss issues are resolved due to the “retained rights provision” in the policy. Specifically, the “retained-rights” provision gives the insurer the “‘right to deny a claim’ even ‘if there is an appraisal’.” Citing to precedent, the Supreme Court ruled the retained-rights provision contemplates appraisals occurring prior to resolution of coverage. See, State Farm Fire & Cas. Co. v. Licea, 685 So. 2d 1285, 1288 (Fla. 1996) (interpreting retained-rights provision as allowing an insurer to raise – following appraisal – coverage issues like “violation of the usual policy conditions such as fraud, lack of notice, and failure to cooperate.”). 

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