Policyholders and Public Adjusters Beware of Claims Notice Deadlines! Florida Supplemental and Reopened Claims Statute Causes Potential Claims Denials For Otherwise Covered Claims

Florida is the only state to address and provide a statutory definition for a “re-opened claim” or a “supplemental claim.” Florida’s law is not a consumer protection law. Instead, it is an insurance company protection law. The current wording of Florida’s statute on Supplemental and Reopened claims reads as follows:

627.70132 Notice of property insurance claim.—

(1) As used in this section, the term:

(a) “Reopened claim” means a claim that an insurer has previously closed, but that has been reopened upon an insured’s request for additional costs for loss or damage previously disclosed to the insurer.

(b) “Supplemental claim” means a claim for additional loss or damage from the same peril which the insurer has previously adjusted or for which costs have been incurred while completing repairs or replacement pursuant to an open claim for which timely notice was previously provided to the insurer.

(2) A claim or reopened claim, but not a supplemental claim, under an insurance policy that provides property insurance, as defined in s. 624.604, including a property insurance policy issued by an eligible surplus lines insurer, for loss or damage caused by any peril is barred unless notice of the claim was given to the insurer in accordance with the terms of the policy within 1 year after the date of loss. A supplemental claim is barred unless notice of the supplemental claim was given to the insurer in accordance with the terms of the policy within 18 months after the date of loss. The time limitations of this subsection are tolled during any term of deployment to a combat zone or combat support posting which materially affects the ability of a named insured who is a servicemember as defined in s. 250.01 to file a claim, supplemental claim, or reopened claim.

(3) For claims resulting from hurricanes, tornadoes, windstorms, severe rain, or other weather-related events, the date of loss is the date that the hurricane made landfall or the tornado, windstorm, severe rain, or other weather-related event is verified by the National Oceanic and Atmospheric Administration.

(4) This section does not affect any applicable limitation on civil actions provided in s. 95.11 for claims, supplemental claims, or reopened claims timely filed under this section.

One issue is whether these notices have to provide estimates of damage, as I noted in Supplemental or Reopened Claims—Does the Notice Have to Include Some Type of Estimate:

What is the lesson from this holding, and does this mean that the notice does not have to include an estimate of damage? ‘Better safe than sorry’ is the lesson. Estimates and full descriptions of loss should be provided. The court noted that its holding is contrary to another appellate court, which raises the possibility that the issue could be resolved by the Florida Supreme Court. Other appellate courts could find one way or the other until this legal tie is broken.”

A federal appellate court just decided that an estimate is not required. 1 It first noted that Florida courts are split on the issue and that the Florida Supreme Court has not weighed in:

In this case, there are no relevant decisions from the Florida Supreme Court interpreting § 627.70132. Two Florida appellate courts, however, have weighed in. The first is Goldberg v. Universal Property & Casualty Insurance Co., from Florida’s Fourth District Court of Appeal. In Goldberg, the court examined whether an insured party ‘was required to submit a supplemental claim before filing suit for additional payment for’ its loss…Finding that the insured’s attempt to claim additional payment for an already adjusted loss qualified as a supplemental claim under § 627.70132, the court concluded that the insured ‘was required to file a supplemental claim setting forth those damages he sought in excess of what the insurance company had already paid.’…The court stated that a ‘competing estimate by an insured’s independent adjuster, or by a prospective contractor’ would suffice….

The second state appellate court decision on point was issued after the district court granted summary judgment to Great Lakes below. In Patios West One Condominium Association, Inc. v. American Coastal Insurance Co., Florida’s Third District Court of Appeal held that § 627.70132 does not require a notice of a supplemental claim to contain an estimate of additional damages…Instead, the statute requires only that ‘the notice of a supplemental or reopened claim (1) be ‘given to the insurer in accordance with the terms of the policy’ and (2) constitute an ‘additional claim for recovery’ for losses from ‘the same hurricane.’ ‘ Id. (quoting Fla. Stat. § 627.70132).

The Patios court explicitly rejected Goldberg’s statement that § 627.70132 required a damages estimate, reasoning that the statute’s plain text did not contain any such requirement and that the statute was not a ‘supplemental claim statute’ but a ‘notice of supplemental claim statute,’ delineating only the time period in which an insured must give notice to its insurer of the existence (but not the precise amount) of a supplemental claim. Id. It also dismissed this portion of Goldberg as nonbinding dicta.”

The appellate court followed the Patios case finding as follows:

Concourse Plaza urges this Court to follow Patios, arguing that Goldberg is both factually distinguishable and wrongly decided. We need not determine whether Goldberg would apply to this case, however, because as a federal court applying state law, we are bound to apply Patios in any event. This lawsuit originated in the Miami Division of the United States District Court for the Southern District of Florida. ‘State courts located there are within the territory of, and are bound to follow decisions issued by, the Third District Court of Appeal.’…. Therefore, because this is an appeal of a case arising out of the Miami Division, we apply the Third District Court of Appeal’s Patios decision.

…

No one disputes that Concourse Plaza’s September 2020 letter sought additional recovery for losses from the same hurricane—Hurricane Irma—as the original claim. And Great Lakes concedes that the insurance policy by itself ‘does not impose a requirement to provide an estimate of damages.’ Concourse Plaza’s September 2020 letter therefore qualifies as a notice of a supplemental claim under Fla. Stat. § 627.70132. Because it was sent within three years of the date Hurricane Irma made landfall, the provisions of Fla. Stat. § 627.70132 were satisfied.

Policyholders and public adjusters should be aware that this decision followed the law when it was first made in 2011. As Ashley Harris noted in September 10, 2020 is Not the Statute of Limitations for Hurricane Irma Claims, the older Supplemental and Reopened claims statute allowed for three years to provide notice.

Now, the newer statute has a one-year time limit for a reopened claim and 18 months for a supplemental claim. While not a statute of limitation, failure to comply with the notice provisions effectively bars further recovery. This statute is important because insurers will use it to limit the amount owed regardless of the claim’s merit.

Thought For The Day

Procrastination is like a credit card: it’s a lot of fun until you get the bill.
—Christopher Parker

1 Great Lakes Ins. SE v. Concourse Plaza A Conominium Assoc., No 22-13141 (11th Cir. Apr. 15, 2024).