Florida Supreme Court says No! – Extra-Contractual Damages cannot be Recovered against Property Insurer Absent Bad Faith Claim
Can an insured recover extra-contractual, consequential damages from its property insurer without pursuing a separate bad faith claim against the insurer? The Florida Supreme Court, quashing an order of a lower appellate court, held NO!:
[W]e conclude that extra-contractual, consequential damages are not available in a first-party breach of insurance contract action because the contractual amount due to the insured is the amount owed pursuant to the express terms and conditions of the policy. Extra-contractual damages are available in a separate bad faith action pursuant to section 624.155 but are not recoverable in this action against Citizens because Citizens is statutorily immune from first-party bad faith claims.” Citizens Property Ins. Corp. v. Manor House, LLC, 46 Fla.L.Weekly S21a (Fla. 2021).
In this case, an insured sought extra-contractual, consequential damages from its property insurer, Citizens, because the insurer failed to timely adjust the loss, pay the claim, and wrongfully denied the property insurance claim. The appellate court held that the insured could recover extra-contractual, consequential losses from the insured without pursuing a bad faith claim (notably, Citizens is statutorily immune from bad faith claims) because the damages sought are based on the insurer breaching the insurance contract—the damages were in contemplation at the time of the insurance contract–and do not require proof of bad faith. But, as shown above, the Florida Supreme Court disagreed “because the contractual amount due to the insured is the amount owed pursuant to the express terms and conditions of the insurance policy. Extra-contractual damages are available in a separate bad faith action pursuant to section 624.155….”
If you are involved in a property insurance dispute, make sure you work with counsel to preserve your rights and maximize your property insurance claim.
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