What Is An Insurance Breach Of Contract In Florida?
A breach of contract is a failure to fulfill the obligations or responsibilities required of a party under a legal contract or agreement. It can refer to any action or omission that violates the contract’s language, terms, or provisions by either party involved. An insurance breach of contract occurs when an insurance provider fails to fulfill the agreed-upon terms or conditions of a contract with a client (e.g., an insurance policy).
What Constitutes an Insurance Breach of Contract in Florida?
An insurance breach of contract occurs when an insurance company fails to fulfill its obligations under the terms of an insurance policy.
In Florida, insurers breach contracts when they:
- Wrongfully deny valid claims covered under policy terms despite the policyholder meeting all conditions precedent for coverage. Denials based on misapplied policy language, ignored evidence, or incorrect legal interpretations constitute breach of contract.
- Underpay covered claims by offering settlement amounts substantially below actual loss values, applying improper depreciation calculations, or failing to include all covered damage categories in settlement calculations.
- Fail to conduct adequate investigations before denying or underpaying claims. Insurers must thoroughly investigate loss circumstances, review all submitted documentation, inspect damaged property when appropriate, and obtain expert opinions when technical issues require specialized knowledge.
- Refuse to defend insureds in lawsuits when liability policies obligate insurers to provide legal defense regardless of claim merit. Defense obligations arise when allegations potentially fall within coverage grants, even if claims ultimately prove meritless.
- Delay claim payments beyond reasonable timeframes without legitimate justification. While investigating complex claims takes time, insurers cannot indefinitely delay payments on undisputed portions of claims or unnecessarily extend investigations to postpone payment obligations.
- Misrepresent policy terms by telling policyholders that coverage does not exist for particular losses when policy language clearly provides coverage, or by adding requirements not contained in policy provisions.
Florida insurance policies constitute binding contracts governed by general contract law principles. Courts interpret policies according to their plain language, construe ambiguities against the insurers who drafted the policy, and enforce reasonable policyholder expectations regarding coverage scope.
How Does Appraisal Impact Florida Insurance Breach of Contract Claims?
Appraisal provisions appearing in most Florida property insurance policies create alternative dispute resolution mechanisms for resolving disagreements regarding loss amounts.
Appraisal Clause Operation
Standard appraisal provisions allow either party to demand appraisal when disputes arise over damage amounts, requiring both parties to select competent appraisers who then jointly choose an umpire. Each appraiser evaluates damage independently, and if appraisers disagree, the umpire resolves differences. Awards signed by any two of the three appraisal panel members become binding.
Issues Subject to Appraisal
Appraisal addresses only amount-of-loss disputes, determining the extent of damage and proper valuation. Appraisal cannot resolve coverage disputes involving whether policies cover particular damage types, the applicability of exclusions, policy interpretation issues, or insurer claim-handling obligations.
Courts compel appraisal when insurers acknowledge coverage but dispute loss amounts, but deny appraisal when threshold coverage issues require judicial resolution before damage amounts matter. Parties may not use appraisal to circumvent coverage disputes that require a legal determination.
Strategic Appraisal Considerations
Policyholders evaluating whether to demand or participate in an appraisal must consider:
- Advantages include binding resolution of amount disputes without litigation expenses, faster resolution than court proceedings, expertise of construction professionals evaluating damage, and preservation of attorney fees for coverage disputes not resolved through appraisal.
- Disadvantages include limited discovery compared to litigation, inability to compel insurer document production, restrictions on presenting certain evidence types, and difficulty appealing erroneous appraisal awards that would be reviewable if issued as court judgments.
Effect on Litigation Rights
Participating in an appraisal does not waive the right to pursue breach-of-contract or bad-faith claims for delayed payments, inadequate investigations, or unreasonable claim handling. Appraisal determines only loss amounts, while litigation addresses whether insurers complied with contractual obligations and acted reasonably when evaluating claims.
Statutes of limitations continue to run during appraisal proceedings unless the parties agree to tolling or the court grants equitable tolling based on specific circumstances. Policyholders must monitor limitations deadlines carefully to preserve litigation rights if appraisal fails to resolve disputes satisfactorily.
Contact Williams Law Association, P.A. for Florida Insurance Breach of Contract Representation
We provide comprehensive legal representation for policyholders throughout Florida in insurance breach-of-contract disputes. Our expert insurance claim attorneys evaluate coverage denials, analyze policy provisions, retain expert witnesses, pursue maximum damage recovery, and hold insurance companies accountable for contractual violations.
Property owners, businesses, and condominium associations confronting insurance claim denials or underpayments should consult experienced insurance attorneys immediately to protect claim rights, preserve litigation deadlines, and pursue all available remedies. Early legal intervention often resolves disputes through negotiated settlements while preserving litigation options if insurers refuse reasonable resolution.