Florida Supreme Court Says That Replacement Cost Includes Profit and Overhead

By Steven Plitt | October 30, 2013

  • October 30, 2013 at 4:13 pm
    FLORIDAAGENT says:
    Like or Dislike:
    Thumb up 4
    Thumb down 1

    Wow – I can’t believe Florida Peninsula Ins. Co would even take this case this far. They wrote a policy on RCV and didn’t take into account overhead and profit ? Did they think the contractor was going to work for free and charge wholesale cost on supplies?

    • October 31, 2013 at 8:26 pm
      Like or Dislike:
      Thumb up 1
      Thumb down 1

      FA – having just read about the “marring” case decision also in FL,
      I can understand why insurers want to exercise as much
      control as they can over claim payouts. Their problem most
      often is poorly worded policy language, lack of definitions,
      total absence of any reference to applicable case law, and a
      failure to place themselves in the shoes of their customers
      at claim time.

      On the other side of the issue are policyholders who normally
      don’t know their rights, some of whom are over reaching,
      rather than greatful for what they have, some who would be
      very happy with a patch on their tile floor if they were
      paying for it themselves, but since “XYZ Ins. Co.” is paying,
      we won’t settle for less than a whole new tile job for the
      whole house. There may be some cases where the patch will
      look really bad, just as with carpet, but a reasonable person
      would say try the patch first, then if it fails the test, do
      the rest.

      Insurers are control freaks. They act like a little peeling paint
      will cause your roof to blow off, or your gas line to explode – it won’t. A little deferred maintenance does not equate to neglect or a lack of pride in ownership. Insurers suggest that ACV is all
      they owe a claimant until replacement is made. Well, if the contract is charging us for replacement coverage, then it would see, the FL Supreme Court got his right.

      What we need it to fork it over on honest claims, and either refuse
      payment or use a reservations of rights letter noticing the insured that the insurer intends to recover from them for any payments made that the insured turns out to not have been intitled to.

  • November 4, 2013 at 10:13 am
    dick Wagner says:
    Like or Dislike:
    Thumb up 1
    Thumb down 3

    Awesome. This is a victory for the policyholder and even (to a lesser degree) the actual contractors. Both seem to be constantly taken advantage of by the insurance companies wielding their big “sledge hammer.”

  • December 4, 2019 at 5:04 am
    James Northrup says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    “However, if overhead and profit are going to be “reasonable and necessary” to the repair, then the statute mandates their payment as replacement costs irrespective of whether they were incurred.”

    This probably sums it up.

    James Northrup



Add a Comment

Your email address will not be published. Required fields are marked *

*