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When Is An Insurer Required To Pay For Reasonable Emergency Measures?


When a home sustains water damage, the property owners understandably want to take immediate action to mitigate the problem. But sometimes this means they do not take the time to read–or follow–the terms of their homeowner’s insurance policy. Many insurance contracts require advance notice or approval before undertaking even emergency repairs to a property. Such provisions help protect insurers against fraudulent or exaggerated damage claims.

Florida Appeals Court Rejects Home Contractor’s “Gotcha” Tactics Against Insurer

A recent decision from the Florida Fourth District Court of Appeals, Restoration v. Citizens Property Insurance Corporation, provides a case in point. A condominium unit in Palm Beach County sustained some water damage. The homeowners hired a restoration company to provide water removal and remediation services. Under the terms of the homeowner’s insurance policy, coverage for “reasonable emergency measures taken solely to protect covered property from further damage” was limited to $3,000 or 1 percent of the policy’s liability limits. The owners could ask to exceed the limit of the cap by asking for approval, which the insurer was required to grant or deny within 48 hours of receiving such a request. If the insurer did not answer the request within the 48-hour period, the homeowner was entitled to reimbursement for the full amount of any reasonable emergency measures.

In this case, the property owners assigned their insurance benefits to the restoration company. The company proceeded to remove damaged drywall from the property, as well as the wet, moldy portions of the affected walls. The restoration company then filed a claim with the insurance company, which was for an amount greater than $3,000.

The insurer held its ground, stating it was only required to pay up to the $3,000 cap for reasonable emergency measures. The restoration company then filed a lawsuit in Palm Beach County Circuit Court, alleging that the insurer had not responded to its claim within 48 hours and thus was on the hook for the full amount of its invoice. Essentially, the company argued that by receiving an assignment of benefits from the homeowner, that functioned as an “official request to exceed the $3,000 cap.”

The courts did not see it that way. The Fourth District, upholding a prior ruling from the Circuit Court, said the restoration company essentially engaged in a “gotcha” tactic. It sent an email to the insurance company that contained the assignment of benefits from the homeowner. What it did not contain was an explicit request to exceed the $3,000 cap. But by sending the email, the restoration company hoped to start the 48-hour clock. The Fourth District said it would “not permit such tactics.”

Speak with a Tampa Mold and Water Damage Attorney Today

Insurance policies are carefully drafted to ensure there is no ambiguity as to the obligations by all parties. And while an insurance company is required to pay any valid claims, that does not mean insured parties are relieved of their own duties to follow the terms of the policy when filing a claim. If you are an insurer involved in litigation over an improper mold or water damage claim and need representation from a qualified Tampa mold & water damage lawyer, contact HD Law Partners today.


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