A decades-old case against Citizens Property Insurance Corp. in favor of the insurer has been settled by the Florida Supreme Court in a decision that, although expected, may have far-reaching implications on Florida’s real estate market.
The case concerned a first-party breach of contract lawsuit where the insured property tried to regain extra-contractual, consequential damages from Citizens for missed rental income totaling more than $2 million.
For nine apartment buildings destroyed by Hurricane Frances in 2004, the insured filed a lawsuit with Citizens, which it eventually paid over $1.9 million following an inspection. A pair of years later, the public adjuster of the insured urged Citizens to revive the lawsuit and subsequently lodged another $10 million claim.
Citizens made further payments totaling just over $345,000 and eventually informally calculated the real cash worth of the damage at about $5.5 million and the replacement expense value of the loss at $6.4 million. In the meantime, the public adjuster of the insured measured the worth of the depreciation cost at more than $10 million.
Ultimately, the Florida Supreme Court ruled that in the first-party violation of insurance contract litigation, extra consequential penalties are not eligible unless the statutory amount payable to the insured is the amount owing according to the terms and conditions outlined in the insurance agreement.
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