A Florida court of appeal has upheld policyholders' right to transfer their right to collect benefits from an insurance claim to contractors, reversing the court's rulings in favor of insurers.
The Florida's 3rd District Court of Appeals ruled last month that an insurer cannot get around a century of case law by awarding benefits in the insurance application instead of placing them in the policy. The appellate panel ruled that the application is part of the policy under Florida law, and courts have held since 1917 that an insurance contract cannot deprive a policyholder of a policyholder's right to grant benefits after a loss.
Samuel Alexander, who represented Extreme Emergency Fire & Water Restoration against Lloyd & # 39; s of London on appeal in the Florida case, said it was the insurance industry's latest attempt "to circumvent established case law."
"They were, in fact, trying to get the third DCA to override the Florida Supreme Court," he said during a telephone interview following the ruling.
Alexander, who owns the Alexander Appellate Law practice in the Orlando suburb of De Land, said insurers may be encouraged because of the numerous conservative appointments to the state's Supreme Court in recent years. However, he said the Supreme Court has strict rules that prevent the appeal from hearing, allowing it to set aside previous precedents without conflicting rulings from the appellate districts.
In the case of Extreme Emergency, Lloyd & # 39; s argued that it was negotiating the language prohibiting the granting of benefits, which is why the language was stated in the insurance application. The policyholder received a lower rate by agreeing to the restriction, the carrier said.
"This is pure contract freedom," said Attorney Clinton D. Flagg of Appeals against the 3rd DCA during pleadings.
Chief Judge Kevin Emas replied that he could not see how Lloyd's argument would destroy the longstanding precedent that banning benefits is contrary to public policy.
"It seems to me that the only difference is that the insurance company decided to put it in the application instead of the policy," he said.
Extreme Emergency charged Lloyd & # 39; s $ 18,458.39 for repairs to Julio and Nora Lugones' home in Homestead, Florida. Lloyd & # 39; s declined to pay, citing the anti-transfer agreement in the signed insurance application.
Judge Martin Zilber of the Miami-Dade County Circuit Court brought a lawsuit in Lloyd's favor. He accepted the insurer's argument that his case is unique, compared to previous rulings confirming policyholders' right to grant benefits, as the parties had negotiated the provision.
The 3rd DCA turned around.
“By applying a century-established Florida law to this 2017 insurance contract, the anti-assignment provision was ineffective in preventing or limiting the insured from transferring the right to pay a claim after loss without the insurer's consent, and it The fact that the anti-allocation clause is placed in the application, rather than in the policy itself, does not matter, ”said the appellate panel in an opinion written by Emas.
The case is Extreme Emergency Fire & Water Restoration LLC vs. certain insurers with Lloyd & # 39; s of London.
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