Ashley Harris | Property Insurance Coverage Law Blog | May 1, 2018
Recently, the Second District Court of Appeal affirmed the dismissal of a class action against Omega Insurance Company in which the policyholders asserted that Omega improperly required them to pay a deductible when Omega invoked its right to repair the property.
In Ganzemullers v. Omega Insurance Company,1 the policyholders suffered hail damage in March 2016 and filed a claim with their insurance carrier. Omega acknowledged coverage and invoked its right to repair the property under the policy. The policyholder was required to pay their $1000 deductible to the contractor. The policyholders then filed a class action contending that Florida law precludes the insurance carrier from requiring the payment of the deductible when the insurance carrier elects to repair a partial loss.
The policyholder argued that even though the policy may require payment of a deductible, once the insurance carrier elects to repair damaged property, whether the loss is total or partial, Florida Statute §§ 627.702(7) and 627.7011(5)(e) preclude the insurance carrier from requiring payment of the deductible.
Subsection 627.702(1) specifically deals with total losses, and subsection (7) addresses the insurance carrier’s right to repair without contribution by the insured “in lieu of any liability created by subsection (1).” These subsections preclude the insurance carrier from requiring the policyholder to make any contribution when the insurance carrier elects to make repairs in total loss situations. The parties did not dispute that deductibles are covered by the “without contribution” language.
Ultimately, the appellate court found that nothing in the statutory language suggested a statutory intent to eliminate policy deductibles for partial losses as well as total losses where the insurance carrier elects to make repairs. For this reason, the court affirmed the dismissal of the policyholders’ class action.
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1 Ganzemullers v. Omega Ins. Co., No. 2D17-1284, 43 Fla. L. Weekly D948e (Fla. 2d DCA April 27, 2018).