NAMIC Joins in Amicus Brief on Florida Valued Policy Law

October 12, 2005

The National Association of Mutual Insurance Companies (NAMIC) has joined with State Farm Florida Insurance Company to file an amicus curiae brief in a case involving Florida’s valued policy law.

“NAMIC filed a friend of the court brief because our member companies believe that the valued policy law cannot create liability for an insurer for losses caused by an excluded peril,” said NAMIC Regulatory Affairs Counsel Marsha Harrison.

Citizens Property Insurance Corporation v. Scylla Properties, et al., supports the appellant Citizens position that the trial court’s rulings on issues involving Florida’s valued policy law were incorrect. The brief was filed in the District Court of Appeal for the 1st District of Florida Sept. 30.

The Citizens case, a class action law suit, arose from property damage caused in Florida by Hurricane Ivan in 2004. It was undisputed that, as a result of the hurricane, the plaintiffs’ structure was rendered a total loss by a combination of wind and flood damage. The insurer, Citizens, took the position that its liability was limited only to that portion of damage caused by wind since flood damage was excluded by its policy.

The issue presented to the trial court was the extent of insurance coverage, in view of Florida’s valued policy law, for total loss to insured structures arising from a combination of wind and flood-covered and noncovered-damage.

The trial court relied on a 2004 case decided by the 4th District Court of Appeal (Mierzwa v. Florida Windstorm Underwriting Association) to hold that, under the state’s valued policy statute, insurers who provide windstorm coverage in their policies will be required under some circumstances to pay for losses which are not insured under their policies and for which no premiums were collected.

The Florida legislature enacted a clarifying amendment to the valued policy law effective June 1, 2005, but the adverse ramifications of the Citizens and Mierzwa cases remain immense since the decisions will apply to all losses prior to the effective date of the amendment.

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