Yesterday’s determination from Florida’s First District Court docket of Attraction, Bailetti v. Common Property & Casualty Insurance coverage Firm, 1 highlights an more and more tough hurdle for policyholders who declare their insurer breached the coverage by underpaying a loss. Whereas I criticize the ruling and disagree with the precedent it has created, this is a vital case for all who’re concerned in Florida property insurance coverage claims. It ought to be learn fastidiously, because it supplies sensible classes about what to do earlier than submitting a lawsuit.
The case arose from Hurricane Sally injury to a Pensacola house. The householders, Rodolfo Bailetti and Ana Saez, acquired a cost from Common for $8,125.20 based mostly on its subject adjuster’s estimate. Their public adjuster believed the loss exceeded that determine by greater than $100,000, however his estimate was by no means launched into proof at trial. The householders filed a breach of contract lawsuit about 4 months after receiving the precise money worth cost, earlier than doing any vital repairs.
The appellate court docket affirmed a protection verdict for Common, discovering that the insureds didn’t show the corporate breached the contract once they filed go well with. Common had paid the precise money worth, or ACV, based mostly on its adjuster’s estimate. Beneath part 627.7011(3)(a) of the Florida Statutes and the “Loss Settlement” clause within the coverage, the insurer is required to initially pay the ACV of the insured loss, after which pay any remaining alternative price quantities as repairs are carried out and bills are incurred.
The court docket reasoned that as a result of Common paid its ACV estimate and the householders supplied no proof at the moment exhibiting the precise money worth cost was inadequate and that no alternative price advantages had been due, there was no breach. Later estimates produced years after the loss and simply earlier than trial couldn’t show the insurer’s earlier precise money worth cost was insufficient when made.
In essence, the court docket held that the insurer meets its contractual obligation by paying at the least one affordable ACV estimate. As soon as that happens, the burden shifts to the insured to exhibit that the cost didn’t mirror the total precise money worth loss. With out well timed proof exhibiting that Common’s ACV was too low, the court docket concluded that the policyholders couldn’t prevail. The choice additionally relied on the court docket’s earlier opinion in Householders Selection v. Clark, reinforcing {that a} mere disagreement over the quantity owed, unsupported by contemporaneous proof, doesn’t set up a breach.
I don’t agree with the end result. The coverage doesn’t require a policyholder to rebuild or make repairs earlier than being entitled to the total quantity of precise money worth cost due beneath the contract. Many policyholders can’t start repairs when the insurer’s cost is much too small to begin the method. To require proof of incurred bills or accomplished work earlier than discovering a breach locations an unrealistic burden on householders, particularly after a catastrophic loss. If a policyholder can show that the insurer owes extra money beneath the phrases of the coverage, that ought to be sufficient. Partial funds which can be too low by an insurer, even at precise money worth, mustn’t excuse the duty to pay the total quantity of the lined loss. If extra is owed, and circumstances precedent to restoration are met or waived, the insurer’s personal underpayment, if confirmed to be an underpayment, ought to be sufficient.
However, the Bailetti determination stands as an vital lesson to policyholders and their attorneys that in Florida, courts are more and more centered on the timing and sufficiency of proof when evaluating breach of contract claims. Submitting go well with earlier than gathering stable proof that the insurer’s cost failed to satisfy the ACV requirement may end up in dropping the case altogether, even when the insurer’s preliminary estimate was later proven to be poor.
My suggestion is to jot down letters explaining the dispute and disagreement with proof and the reason why the insurance coverage firm’s place is incorrect. This ought to be achieved earlier than submitting go well with. That is good apply generally achieved by all competent attorneys in search of to resolve the matter out of the courtroom.
Thought For The Day
“It’s not solely what we do, but additionally what we don’t do, for which we’re accountable.”
— Molière
1 Bailetti v. Common Prop. & Cas. Ins. Co., No. 1D2024-1695 (Fla. 1st DCA Oct. 8, 2025).
