Go to school? Read policies? The judges went to school to rub shoulders with those who could help them get their jobs later. They didn\’t go to study law or learn about justice. They went to learn how to scratch backs.
Read policies, Ha! Haven\’t laughed that hard in a while. How can anyone expect policy holders to actually read policies? That means they would have to stop applying makeup while driving and put down their cellphones, too. Still, those policies are so BORING! Maybe Britney could do a music video about a policy and demonstrate what an exclusion is.
I wish the insurance companies had the balls enough to pull out of LA and let them fend for themselves. Of course, the judges wouldn\’t let that happen. One cannot decide where one wishes to do business! After all, that smacks of underwriting!
Jack, your a genius. You stumbled across how we can get the public to be interested in their insurance policies and even loss prevention topics. Use celebrities! They will accomplish what judges and politicians will never accomplish. Imagine this list:
Britney video on exclusions.
Sober driving tips from (Billy Joel, Lindsey Lohan, or Mel Gibson).
Maybe bring back Britney for a presentation of the proper use of child safety seats.
What I would like to know is what about the lenders/mortgageholders who are required to make these people with mortgages have flood insurance? Surely not all homeowners in LA own their own homes outright!
Also, do the agents in LA not have flood waiver forms for them to sign that they were offered flood insurance and they declined to purchase this insurance? Even if the application did not mention flood the waivers would help to put an end to what I consider this judge\’s decision as paramount to \”insurance fraud\”.
I would bet this ruling was influenced to some degree by \”Mierzwa v. Florida Windstorm Underwriting ***\’n., 877 So. 2d 774 (Fla. 4th DCA 2004)\”. Between this and the Mississippi lawsuit by AG Jim Hood, all insurers should start to mandate proof of flood insurance or surcharge to cover these ridiculous interpretations, regardless of flood zone.
I read the postings and wondered if the writers read the same article that I did. Most comments centered on the exclusions in the policy but that is not what the lawsuit was about.
The plaintiff\’s lawyer said that there is a state-specific requirement, which says that an applicant for insurance, when signing his name to an application, must be put on notice that certain catastrophe perils are not included in the policy he is applying for. It seems not unreasonable for the LA legislators to require insurers to tell folks at the time of the sale what they are NOT covered for, as well as what they ARE covered for.
I\’m guessing the legislators tried to eliminate the \”I didn\’t read my policy\” excuse. A carrier that followed the law to the letter should have a very strong defense to a flood claim.
The pitiful aspect of this lawsuit is that a STATE facility apparently did not follow the LA statute and therefore deserves to be whacked.
Furthermore, (I love this part) this failure probably insulates the National Flood Program from loss and the rest of the country won\’t be asked to subsidize those claims. Put another way, Citizens Property Corp\’s ineptitude will bottle up (forgive the expression) the flood portion of the losses within the borders of Louisiana.
So unless you other writers live in the great State of Louisiana, just chill, OK?
Outrageous! If the Insurer is forced to pay this, next we\’ll hear that the insurer is subrogating against the Agent\’s E&O policy for failure to properly inform the client of the exclusion-if they completely understood the exclusion, they would not have had to sue the insurer for coverage,and on and on and on.Somehow it will end up with the agent being responsible. Scary, wouldn\’t you say?
Sara, I assume by your comment that you, like me, are a P&C producer. Let me ask you a question: Should an agent who fails to follow a law be answerable in Court for that failure?
Assume for a moment that the plaintiff\’s attorney is correct. His position is that the LA law required the carrier to alert the insurance purchaser to the absence of Flood coverage. The law mandates that the alert be a part of the application which the insured signs. The Judge apparently ruled that the carrier\’s failure to insert this language on the app barred it from asserting the Flood exclusion in the policy. By the way, I have not heard one LA agent rebut this position.
In my opinion, it is a small step for the carrier to ask the agent for contribution for his failure to follow the statute. The message is clear: follow the law or pay the price.
The judge was following the Florida Mierzwa decision that arose from Hurricane Andrew losses. The problem is that the Mierzwa decision was based on the Florida valued policy law which is totally different from the Louisiana law. To idiot-proof it, the Florida legislature amended the law to make is clear that it didn\’t apply to excluded losses.
From an article on the subject:
QUESTION: \”Is the state of Louisiana a \’valued policy\’ state and, if so, what perils does it apply to…fire, windstorm, flood, etc.?\”
QUESTION: \”I came across an article about valued policy laws that said that insurers might have to pay flooding claims. What do you think? Here\’s an excerpt:
\”[Insurers] are facing more than ever-rising damage estimates for Hurricane Katrina. Once the waters recede, [insurers] will have to face lawsuits that will try to make them responsible for paying damages due to flooding, which homeowners policies routinely don\’t cover.
\”But a recent court decision in Florida, which required insurers in that state to cover flooding from last year\’s spate of hurricanes, has insurance lawyers predicting there will be similar court cases in Louisiana and Mississippi. If those lawsuits are successful, the price tag for [insurers] would rise substantially since so much of Katrina\’s damage is related to flooding.
\”The reason the insurance industry is concerned is that Louisiana and Mississippi have a similar statute to the one in Florida that plaintiffs successfully used last year to force insurers to pay for flood damage to homes. Those statutes, called Valued Policy Laws, say that insurers must reimburse their customers for the total value of a destroyed home if the insurers\’ premiums were calculated based on that total value. For years, insurers have interpreted these laws to mean they\’re responsible only for the amount of damage caused by something their policies covered. So, for example, if wind is half-responsible for destroying a home and flooding caused the rest of the damage, then insurers pay claims for just half the value of the home.
\”That changed suddenly in Florida last year after a state Appeals Court affirmed a lower-court decision in the so-called \’Mierzwa case,\’ ruling that insurers in such situations have to reimburse for the total loss. Stunned insurers successfully lobbied the state legislature to pass a law several months ago overturning the ruling, but the statute applies only to future events, not last year\’s hurricanes. Now, insurers are bracing for a similar battle in Louisiana and Mississippi.\”
RESPONSE:
Below is the Louisiana valued policy law [emphasis added]. As we read it, it applies to all insured perils, not just fire. So it would apply to any total loss involving an insured peril such as windstorm. It isn\’t clear to us if the valued policy law applies to a policy that doesn\’t include the peril of fire. Our presumption is that the reference to \”fire insurance policy\” refers to policies that include that peril. If that\’s the case, then the law wouldn\’t apply to a monoline windstorm policy or a flood policy. As we all know, NFIP flood policies are available only up to certain limits and not always the full value of a building.
§695. Valued policy clause; exceptions
A. Under any fire insurance policy insuring inanimate, immovable property in this state, if the insurer places a valuation upon the covered property and uses such valuation for purposes of determining the premium charge to be made under the policy, in the case of total loss the insurer shall compute and indemnify or compensate any covered loss of, or damage to, such property which occurs during the term of the policy at such valuation without deduction or offset, unless a different method is to be used in the computation of loss, in which latter case, the policy, and any application therefor, shall set forth in type of equal size, the actual method of such loss computation by the insurer. Coverage may be voided under said contract in the event of criminal fault on the part of the insured or the assigns of the insured.
B. Any clause, condition, or provision of a policy of fire insurance contrary to the provisions of this Section shall be null and void, and have no legal effect. Nothing contained herein shall be construed to prevent any insurer from cancelling or reducing, as provided by law, the insurance on any property prior to damage or destruction.
C. The liability of the insurer of a policy of fire insurance, in the event of total or partial loss, shall not exceed the insurable interest of the insured in the property unless otherwise provided for by law. Nothing in this Section shall be construed as to preclude the insurer from questioning or contesting the insurable interest of the insured.
D. This Section shall only apply to policies issued or renewed after January 1, 1992, and shall not apply to a loss covered by a blanket-form policy of insurance nor to a loss covered by a builders risk policy of insurance.
Acts 1991, No. 850, §1; Acts 1995, No. 737, §1. http://www.legis.state.la.us/lss/lss.asp?doc=83160.
With regard to the Florida court case referenced in the new article above, the Louisiana statute seems to clearly state that the law applies only to \”covered loss…or damage\” and flooding is an excluded loss. For reference, here is the Florida court case:
Florida Valued Policy Law Court Case (Word document)
Examining the Florida valued policy law, the court\’s decision seems incongruent with the law and how the court reached its conclusion based on the language of the law is still a mystery even after reading the court case. For example, the old law clearly stated, \”…the insurer\’s liability under the policy for such total loss, if caused by a covered peril….\” The language seems clear that the law is triggered if the total loss is caused by a covered peril. While a covered peril caused SOME loss, it didnt\’ cause the TOTAL loss…flooding, an excluded peril, contributed greatly to the total loss.
In any case, as a result, the Florida legislature amended the statute as outlined below. How this will all play out in the Katrina-impacted states remains to be seen.
New Florida Valued Policy Law
Note: The new part of the law, in response to the lawsuit above, is in red below at 627.702(1)(b).
627.702 Valued policy law.
(1)(a) In the event of the total loss of any building, structure, mobile home as defined in s. 320.01(2), or manufactured building as defined in s. 553.36(12), located in this state and insured by any insurer as to a covered peril, in the absence of any change increasing the risk without the insurer\’s consent and in the absence of fraudulent or criminal fault on the part of the insured or one acting in her or his behalf, the insurer\’s liability under the policy for such total loss, if caused by a covered peril, shall be in the amount of money for which such property was so insured as specified in the policy and for which a premium has been charged and paid.
(b) The intent of this subsection is not to deprive an insurer of any proper defense under the policy, to create new or additional coverage under the policy, or to require an insurer to pay for a loss caused by a peril other than the covered peril. In furtherance of such legislative intent, when a loss was caused in part by a covered peril and in part by a noncovered peril, paragraph (a) does not apply. In such circumstances, the insurer\’s liability under this section shall be limited to the amount of the loss caused by the covered peril. However, if the covered perils alone would have caused the total loss, paragraph (a) shall apply. The insurer is never liable for more than the amount necessary to repair, rebuild, or replace the structure following the total loss, after considering all other benefits actually paid for the total loss.
(c) It is the intent of the Legislature that the amendment to this section shall not be applied retroactively and shall apply only to claims filed after the effective date of such amendment.
(2) In the case of a partial loss by fire or lightning of any such property, the insurer\’s liability, if any, under the policy shall be for the actual amount of such loss but shall not exceed the amount of insurance specified in the policy as to such property and such peril.
(3) The provisions of subsections (1) and (2) do not apply when:
(a) Insurance policies are issued or renewed by more than one company insuring the same building, structure, mobile home, or manufactured building, and the existence of such additional insurance is not disclosed by the insured to all insurers issuing such policies;
(b) Two or more buildings, structures, mobile homes, or manufactured buildings are insured under a blanket form for a single amount of insurance; or
(c) The completed value of a building, structure, mobile home, or manufactured building is insured under a builder\’s risk policy.
(4) The amount of any loss referred to in subsection (1) or subsection (2) shall be subject to any coinsurance clause contained in the policy pursuant to s. 627.701.
(5) This section does not apply as to personal property or any interest therein, except with respect to mobile homes as defined in s. 320.01(2) or manufactured buildings as defined in s. 553.36(12). Nor does this section apply to coverage of an appurtenant structure or other structure or any coverage or claim in which the dollar amount of coverage available as to the structure involved is not directly stated in the policy as a dollar amount specifically applicable to that particular structure.
(6) With regard to mobile homes included in subsection (1), any total loss shall be adjusted on the basis of the amount of money for which such property was insured as specified in the policy, whether on an actual cash value basis, replacement cost basis, or stated amount, and for which a premium has been charged and paid only if the insured has elected to purchase such coverage at the inception of the policy. However, when coverage is written for a mobile home on any basis other than stated value, a complete disclosure of the relative cost between that policy and the stated value policy shall be made to the insured on a form and in a format approved by the office. Such forms shall disclose and describe the differences between the types of policies and shall be signed by the insured. Copies shall be maintained in the insurer\’s file, and a copy shall be made available to the insured. Each insurer licensed to write insurance covering mobile homes shall make such stated value coverage available at the option of the insured.
(7) Nothing herein shall be construed as prohibiting an insurer from repairing or replacing damaged property at its own expense and without contribution on the part of the insured except, as provided in subsection (6), when an insured has elected to purchase stated value coverage. Such repair or replacement of damaged property shall be in lieu of any liability created by subsection (1); and any insurer so repairing or replacing shall have no liability pursuant to subsection (1), provided such insurer returns to the named insured a portion of the premium, for all policy terms during which the policy limits were the same as those in effect on the date on which the loss occurred, equal to that portion of the premium paid for limits of insurance on the structure in excess of the cost of replacement.
(8) Any property insurer may, by an appropriate rider or endorsement or otherwise, provide insurance indemnifying the insured for the difference between the insurable value of the insured property at the time any loss or damage occurs, and the amount actually expended to repair, rebuild, or replace within this state, with new materials of like size, kind, and quality, such property as has been damaged or destroyed.
History.–ss. 606, 608, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 1, 2, ch. 79-237; ss. 1, 2, ch. 80-326; s. 1, ch. 81-280; ss. 2, 3, ch. 81-318; ss. 539, 541, 809(2nd), ch. 82-243; ss. 65, 79, ch. 82-386; s. 1, ch. 83-191; s. 114, ch. 92-318; s. 357, ch. 97-102; s. 98, ch. 2002-1; s. 1188, ch. 2003-261; s. 16, ch. 2005-111.
Note.–Consolidation of s. 627.702 and former s. 627.704.
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You really have to wonder where the Judges went to school???? Sure wish they knew how to read their policies!
Go to school? Read policies? The judges went to school to rub shoulders with those who could help them get their jobs later. They didn\’t go to study law or learn about justice. They went to learn how to scratch backs.
Read policies, Ha! Haven\’t laughed that hard in a while. How can anyone expect policy holders to actually read policies? That means they would have to stop applying makeup while driving and put down their cellphones, too. Still, those policies are so BORING! Maybe Britney could do a music video about a policy and demonstrate what an exclusion is.
I wish the insurance companies had the balls enough to pull out of LA and let them fend for themselves. Of course, the judges wouldn\’t let that happen. One cannot decide where one wishes to do business! After all, that smacks of underwriting!
Jack, your a genius. You stumbled across how we can get the public to be interested in their insurance policies and even loss prevention topics. Use celebrities! They will accomplish what judges and politicians will never accomplish. Imagine this list:
Britney video on exclusions.
Sober driving tips from (Billy Joel, Lindsey Lohan, or Mel Gibson).
Maybe bring back Britney for a presentation of the proper use of child safety seats.
What I would like to know is what about the lenders/mortgageholders who are required to make these people with mortgages have flood insurance? Surely not all homeowners in LA own their own homes outright!
Also, do the agents in LA not have flood waiver forms for them to sign that they were offered flood insurance and they declined to purchase this insurance? Even if the application did not mention flood the waivers would help to put an end to what I consider this judge\’s decision as paramount to \”insurance fraud\”.
I would bet this ruling was influenced to some degree by \”Mierzwa v. Florida Windstorm Underwriting ***\’n., 877 So. 2d 774 (Fla. 4th DCA 2004)\”. Between this and the Mississippi lawsuit by AG Jim Hood, all insurers should start to mandate proof of flood insurance or surcharge to cover these ridiculous interpretations, regardless of flood zone.
I read the postings and wondered if the writers read the same article that I did. Most comments centered on the exclusions in the policy but that is not what the lawsuit was about.
The plaintiff\’s lawyer said that there is a state-specific requirement, which says that an applicant for insurance, when signing his name to an application, must be put on notice that certain catastrophe perils are not included in the policy he is applying for. It seems not unreasonable for the LA legislators to require insurers to tell folks at the time of the sale what they are NOT covered for, as well as what they ARE covered for.
I\’m guessing the legislators tried to eliminate the \”I didn\’t read my policy\” excuse. A carrier that followed the law to the letter should have a very strong defense to a flood claim.
The pitiful aspect of this lawsuit is that a STATE facility apparently did not follow the LA statute and therefore deserves to be whacked.
Furthermore, (I love this part) this failure probably insulates the National Flood Program from loss and the rest of the country won\’t be asked to subsidize those claims. Put another way, Citizens Property Corp\’s ineptitude will bottle up (forgive the expression) the flood portion of the losses within the borders of Louisiana.
So unless you other writers live in the great State of Louisiana, just chill, OK?
Outrageous! If the Insurer is forced to pay this, next we\’ll hear that the insurer is subrogating against the Agent\’s E&O policy for failure to properly inform the client of the exclusion-if they completely understood the exclusion, they would not have had to sue the insurer for coverage,and on and on and on.Somehow it will end up with the agent being responsible. Scary, wouldn\’t you say?
Sara, I assume by your comment that you, like me, are a P&C producer. Let me ask you a question: Should an agent who fails to follow a law be answerable in Court for that failure?
Assume for a moment that the plaintiff\’s attorney is correct. His position is that the LA law required the carrier to alert the insurance purchaser to the absence of Flood coverage. The law mandates that the alert be a part of the application which the insured signs. The Judge apparently ruled that the carrier\’s failure to insert this language on the app barred it from asserting the Flood exclusion in the policy. By the way, I have not heard one LA agent rebut this position.
In my opinion, it is a small step for the carrier to ask the agent for contribution for his failure to follow the statute. The message is clear: follow the law or pay the price.
The judge was following the Florida Mierzwa decision that arose from Hurricane Andrew losses. The problem is that the Mierzwa decision was based on the Florida valued policy law which is totally different from the Louisiana law. To idiot-proof it, the Florida legislature amended the law to make is clear that it didn\’t apply to excluded losses.
From an article on the subject:
QUESTION: \”Is the state of Louisiana a \’valued policy\’ state and, if so, what perils does it apply to…fire, windstorm, flood, etc.?\”
QUESTION: \”I came across an article about valued policy laws that said that insurers might have to pay flooding claims. What do you think? Here\’s an excerpt:
\”[Insurers] are facing more than ever-rising damage estimates for Hurricane Katrina. Once the waters recede, [insurers] will have to face lawsuits that will try to make them responsible for paying damages due to flooding, which homeowners policies routinely don\’t cover.
\”But a recent court decision in Florida, which required insurers in that state to cover flooding from last year\’s spate of hurricanes, has insurance lawyers predicting there will be similar court cases in Louisiana and Mississippi. If those lawsuits are successful, the price tag for [insurers] would rise substantially since so much of Katrina\’s damage is related to flooding.
\”The reason the insurance industry is concerned is that Louisiana and Mississippi have a similar statute to the one in Florida that plaintiffs successfully used last year to force insurers to pay for flood damage to homes. Those statutes, called Valued Policy Laws, say that insurers must reimburse their customers for the total value of a destroyed home if the insurers\’ premiums were calculated based on that total value. For years, insurers have interpreted these laws to mean they\’re responsible only for the amount of damage caused by something their policies covered. So, for example, if wind is half-responsible for destroying a home and flooding caused the rest of the damage, then insurers pay claims for just half the value of the home.
\”That changed suddenly in Florida last year after a state Appeals Court affirmed a lower-court decision in the so-called \’Mierzwa case,\’ ruling that insurers in such situations have to reimburse for the total loss. Stunned insurers successfully lobbied the state legislature to pass a law several months ago overturning the ruling, but the statute applies only to future events, not last year\’s hurricanes. Now, insurers are bracing for a similar battle in Louisiana and Mississippi.\”
RESPONSE:
Below is the Louisiana valued policy law [emphasis added]. As we read it, it applies to all insured perils, not just fire. So it would apply to any total loss involving an insured peril such as windstorm. It isn\’t clear to us if the valued policy law applies to a policy that doesn\’t include the peril of fire. Our presumption is that the reference to \”fire insurance policy\” refers to policies that include that peril. If that\’s the case, then the law wouldn\’t apply to a monoline windstorm policy or a flood policy. As we all know, NFIP flood policies are available only up to certain limits and not always the full value of a building.
§695. Valued policy clause; exceptions
A. Under any fire insurance policy insuring inanimate, immovable property in this state, if the insurer places a valuation upon the covered property and uses such valuation for purposes of determining the premium charge to be made under the policy, in the case of total loss the insurer shall compute and indemnify or compensate any covered loss of, or damage to, such property which occurs during the term of the policy at such valuation without deduction or offset, unless a different method is to be used in the computation of loss, in which latter case, the policy, and any application therefor, shall set forth in type of equal size, the actual method of such loss computation by the insurer. Coverage may be voided under said contract in the event of criminal fault on the part of the insured or the assigns of the insured.
B. Any clause, condition, or provision of a policy of fire insurance contrary to the provisions of this Section shall be null and void, and have no legal effect. Nothing contained herein shall be construed to prevent any insurer from cancelling or reducing, as provided by law, the insurance on any property prior to damage or destruction.
C. The liability of the insurer of a policy of fire insurance, in the event of total or partial loss, shall not exceed the insurable interest of the insured in the property unless otherwise provided for by law. Nothing in this Section shall be construed as to preclude the insurer from questioning or contesting the insurable interest of the insured.
D. This Section shall only apply to policies issued or renewed after January 1, 1992, and shall not apply to a loss covered by a blanket-form policy of insurance nor to a loss covered by a builders risk policy of insurance.
Acts 1991, No. 850, §1; Acts 1995, No. 737, §1.
http://www.legis.state.la.us/lss/lss.asp?doc=83160.
With regard to the Florida court case referenced in the new article above, the Louisiana statute seems to clearly state that the law applies only to \”covered loss…or damage\” and flooding is an excluded loss. For reference, here is the Florida court case:
Florida Valued Policy Law Court Case (Word document)
Examining the Florida valued policy law, the court\’s decision seems incongruent with the law and how the court reached its conclusion based on the language of the law is still a mystery even after reading the court case. For example, the old law clearly stated, \”…the insurer\’s liability under the policy for such total loss, if caused by a covered peril….\” The language seems clear that the law is triggered if the total loss is caused by a covered peril. While a covered peril caused SOME loss, it didnt\’ cause the TOTAL loss…flooding, an excluded peril, contributed greatly to the total loss.
In any case, as a result, the Florida legislature amended the statute as outlined below. How this will all play out in the Katrina-impacted states remains to be seen.
New Florida Valued Policy Law
Note: The new part of the law, in response to the lawsuit above, is in red below at 627.702(1)(b).
627.702 Valued policy law.
(1)(a) In the event of the total loss of any building, structure, mobile home as defined in s. 320.01(2), or manufactured building as defined in s. 553.36(12), located in this state and insured by any insurer as to a covered peril, in the absence of any change increasing the risk without the insurer\’s consent and in the absence of fraudulent or criminal fault on the part of the insured or one acting in her or his behalf, the insurer\’s liability under the policy for such total loss, if caused by a covered peril, shall be in the amount of money for which such property was so insured as specified in the policy and for which a premium has been charged and paid.
(b) The intent of this subsection is not to deprive an insurer of any proper defense under the policy, to create new or additional coverage under the policy, or to require an insurer to pay for a loss caused by a peril other than the covered peril. In furtherance of such legislative intent, when a loss was caused in part by a covered peril and in part by a noncovered peril, paragraph (a) does not apply. In such circumstances, the insurer\’s liability under this section shall be limited to the amount of the loss caused by the covered peril. However, if the covered perils alone would have caused the total loss, paragraph (a) shall apply. The insurer is never liable for more than the amount necessary to repair, rebuild, or replace the structure following the total loss, after considering all other benefits actually paid for the total loss.
(c) It is the intent of the Legislature that the amendment to this section shall not be applied retroactively and shall apply only to claims filed after the effective date of such amendment.
(2) In the case of a partial loss by fire or lightning of any such property, the insurer\’s liability, if any, under the policy shall be for the actual amount of such loss but shall not exceed the amount of insurance specified in the policy as to such property and such peril.
(3) The provisions of subsections (1) and (2) do not apply when:
(a) Insurance policies are issued or renewed by more than one company insuring the same building, structure, mobile home, or manufactured building, and the existence of such additional insurance is not disclosed by the insured to all insurers issuing such policies;
(b) Two or more buildings, structures, mobile homes, or manufactured buildings are insured under a blanket form for a single amount of insurance; or
(c) The completed value of a building, structure, mobile home, or manufactured building is insured under a builder\’s risk policy.
(4) The amount of any loss referred to in subsection (1) or subsection (2) shall be subject to any coinsurance clause contained in the policy pursuant to s. 627.701.
(5) This section does not apply as to personal property or any interest therein, except with respect to mobile homes as defined in s. 320.01(2) or manufactured buildings as defined in s. 553.36(12). Nor does this section apply to coverage of an appurtenant structure or other structure or any coverage or claim in which the dollar amount of coverage available as to the structure involved is not directly stated in the policy as a dollar amount specifically applicable to that particular structure.
(6) With regard to mobile homes included in subsection (1), any total loss shall be adjusted on the basis of the amount of money for which such property was insured as specified in the policy, whether on an actual cash value basis, replacement cost basis, or stated amount, and for which a premium has been charged and paid only if the insured has elected to purchase such coverage at the inception of the policy. However, when coverage is written for a mobile home on any basis other than stated value, a complete disclosure of the relative cost between that policy and the stated value policy shall be made to the insured on a form and in a format approved by the office. Such forms shall disclose and describe the differences between the types of policies and shall be signed by the insured. Copies shall be maintained in the insurer\’s file, and a copy shall be made available to the insured. Each insurer licensed to write insurance covering mobile homes shall make such stated value coverage available at the option of the insured.
(7) Nothing herein shall be construed as prohibiting an insurer from repairing or replacing damaged property at its own expense and without contribution on the part of the insured except, as provided in subsection (6), when an insured has elected to purchase stated value coverage. Such repair or replacement of damaged property shall be in lieu of any liability created by subsection (1); and any insurer so repairing or replacing shall have no liability pursuant to subsection (1), provided such insurer returns to the named insured a portion of the premium, for all policy terms during which the policy limits were the same as those in effect on the date on which the loss occurred, equal to that portion of the premium paid for limits of insurance on the structure in excess of the cost of replacement.
(8) Any property insurer may, by an appropriate rider or endorsement or otherwise, provide insurance indemnifying the insured for the difference between the insurable value of the insured property at the time any loss or damage occurs, and the amount actually expended to repair, rebuild, or replace within this state, with new materials of like size, kind, and quality, such property as has been damaged or destroyed.
History.–ss. 606, 608, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 1, 2, ch. 79-237; ss. 1, 2, ch. 80-326; s. 1, ch. 81-280; ss. 2, 3, ch. 81-318; ss. 539, 541, 809(2nd), ch. 82-243; ss. 65, 79, ch. 82-386; s. 1, ch. 83-191; s. 114, ch. 92-318; s. 357, ch. 97-102; s. 98, ch. 2002-1; s. 1188, ch. 2003-261; s. 16, ch. 2005-111.
Note.–Consolidation of s. 627.702 and former s. 627.704.